Lewis, Comptroller of the State of Florida v. Continental Bank Corp. et al.
494 U.S. 472 (1990)
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Rule of Law:
A case or controversy becomes moot when a change in law resolves the underlying dispute, and a party's interest in recovering attorney's fees is insufficient to create an Article III case or controversy where one no longer exists on the merits of the underlying claim.
Facts:
- Continental Bank Corporation, an Illinois-based bank holding company, sought to expand its operations into Florida.
- In 1981, Continental filed an application with the Florida Department of Banking and Finance to establish and operate an 'industrial savings bank' (ISB).
- Continental's application specified that all deposits in the proposed ISB would be insured by the Federal Deposit Insurance Corporation (FDIC) 'to the maximum extent allowed.'
- Gerald Lewis, Florida's Comptroller, refused to process Continental's application, citing state statutes that prohibited out-of-state bank holding companies from operating ISBs in Florida.
Procedural Posture:
- Continental Bank Corp. filed suit against Lewis in the U.S. District Court for the Northern District of Florida, alleging the state's statutes violated the Commerce Clause.
- The District Court granted summary judgment for Continental, holding the statutes unconstitutional.
- Florida subsequently enacted a new, non-discriminatory ban on all ISBs, but the District Court denied Lewis's motion to alter the judgment on mootness grounds.
- Lewis, the defendant-appellant, appealed to the U.S. Court of Appeals for the Eleventh Circuit.
- The Eleventh Circuit affirmed the District Court's judgment that the case was not moot, albeit on different grounds.
- Shortly before the Eleventh Circuit's decision, Congress amended the Bank Holding Company Act, the federal law governing the dispute. Lewis's petition for rehearing based on this new federal law was denied.
- Lewis, the petitioner, successfully sought a writ of certiorari from the U.S. Supreme Court.
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Issue:
Does a federal statutory amendment that authorizes the state action originally challenged as unconstitutional render the case moot, thereby preventing a federal court from adjudicating the merits of the constitutional claim?
Opinions:
Majority - Justice Scalia
Yes, the federal statutory amendment renders the case moot. Federal courts may only adjudicate actual, ongoing cases or controversies as required by Article III. Continental's only concrete interest demonstrated in the record was its application to open an FDIC-insured ISB. The 1987 amendments to the Bank Holding Company Act (BHCA) expanded the definition of 'bank' to include any FDIC-insured institution, and the BHCA expressly permits states to exclude out-of-state holding companies from owning such 'banks'. This congressional authorization means Florida may now lawfully deny Continental's application, eliminating any redressable injury and mooting the controversy. Continental's hypothetical interest in opening an uninsured bank is not part of the record and cannot sustain jurisdiction. Furthermore, an interest in attorney's fees is insufficient to create a case or controversy where none exists on the merits. The 'capable of repetition, yet evading review' exception does not apply because there is no reasonable expectation that Continental will be subjected to the same action again, and the issue is not inherently of such short duration as to evade review.
Analysis:
This case serves as a crucial precedent on the doctrine of mootness, particularly in the context of statutory changes during litigation. It solidifies the principle that a live controversy must exist at all stages of federal judicial proceedings and that a change in law can extinguish that controversy. The decision definitively separates the merits of a case from the collateral issue of attorney's fees, establishing that a plaintiff's financial interest in recouping litigation costs cannot save a moot case from dismissal. The Court's procedural resolution—vacating the lower court judgment and remanding—also provides a standard practice for handling cases that become moot on appeal due to a change in the legal framework, allowing the plaintiff an opportunity to demonstrate a continuing live controversy in the lower court.
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