PARKS v. MBNA AMERICA BANK

Respondent's Petition for Review

Cal.June 21, 2010

IN THE SUPREME COURTOF THE STATE OF CALIFORNIA 2 = COURT SALED PARKS, ET AL., PLAINTIFFSANDAPPELLANTS, JUN 21 2010 vs, aticte | arich Glerk Frederick K. ONIICN rRNA AMERICA BANK,N.A. (USA), Deouty DEFENDANTAND RESPONDENT. AFTER A DECISION BY THE COURT OF APPEAL, FOURTH APPELLATE DISTRICT, DIVISION THREE, CASE NO. G040798 REVERSING A JUDGMENT OF THE SUPERIOR COURT OF CALIFORNIA, COUNTY OF ORANGE CASE No. 04CC00598 THE HONORABLEGAIL S. ANDLER, JUDGE PETITION FOR REVIEW ARNOLD & PORTER LLP ARNOLD & PORTER LLP NancyL.Perkins* Laurence J. Hutt (State Bar No. 066269) 555 Twelfth Street, NW 777 South Figueroa Street, 44th Floor Washington, D.C. 20004 Los Angeles, California 90017-5844 Telephone: (202) 942-5000 Telephone: (213) 243-4000 Facsimile: (202) 942-5999 Facsimile: (213) 243-4199 OfCounsel Counselfor Respondent MBNA America Bank, N.A., now known as FIA Card *To seek admission pro hac vice Services, N.A. SERVICE ON THE ATTORNEY GENERAL AND THE DISTRICT ATTORNEY REQUIRED BY CAL. BUS. & PROF. CODE § 17209 AND CAL. RULES OF COURT, RULE 8.29(b) TABLE OF CONTENTS Page INTRODUCTION..... ec ccccscescecesescceeseceeceeecseesresaeseeaesesessssavsesesessseeonesaseses 1 ISSUES PRESENTED FOR REVIEW.........ecescescssscseesescseseseeneceseessesseneeeees2 WHY REVIEW SHOULD BE GRANTED 0...cceecessseeesenseneeeseeeneeees3 BACKGROUND AND PROCEDURAL HISTORY..........cceeeessseseseeeetees5 A. The Trial Court Proceeding$S.........cee eesescesscsessessseseneessenesesenensesens 5 B. The Court of Appeal’s Decision...cccccesssesseeeseeeetteseeeseeeeneneenes7 ARGUMENT..........ccccescssssscesececesceesesesseceesessaeesaesasessececesseeesssneesusessesaseerensenees9 lL ROSE WAS CORRECTLY DECIDED AND THE COURT OF APPEAL ERRED IN ISSUING A DIRECTLY CONTRARY RULING ON THE SAME ISSUES OF FEDERAL LAW.000.0... ce eesscessseesesseseeesceseeeessessanenensenees9 II. THE COURT OF APPEAL’S DECISIONIS IN CONFLICT WITH LONGSTANDINGU.S. SUPREME COURT PRECEDENT AS WELL AS NUMEROUS RULINGS BY THE LOWER FEDERAL COURTS AND BY VARIOUSSTATE COURTS..00..ceeccsssessescseseeseetsssesseeseneanenes 12 A. The Court of Appeal Misconstrued the Proper Test for Preemption Under the National Bank ACct...............c 12 B. There is No Case Law Supporting the Evidentiary Requirement Announced by the Court of Appeal.................. 15 C. The Court of Appeal’s Evidentiary Requirement Is At Odds With the Fundamental Purpose of Preemption and Sound Public Policy............cccsseseseereereees 18 If]. THE COURT OF APPEAL ERRED IN HOLDING THE OCC’S DULY PROMULGATED PREEMPTION REGULATIONTO BE INVALID.........ccccsessssssesssesssssscesersseveeeesscees20 A. The Court of Appeal’s DecisionInvalidating Section 7.4008 Conflicts With the Growing Body of Case Law Applying the OCC’s Preemption Regulations... eecsssssscsessssssssssssesensssesccscsssevssessseeseeeareees20 B. The Court of Appeal Ignored the Scopeofthe OCC’s Regulatory Authority and Misinterpreted the Nature of the OCC’s Preemption Regulations.................22 TV. CONCLUSIONonececececeeessesesesesesseecscssesessessscsescscsesvanenaneaeecaeseseseees27 -ii- TABLE OF AUTHORITIES Page(s) FEDERAL CASES Aguayo v. U.S. Bank, 658 F. Supp. 2d 1226 (S.D. Cal. 2009)... ceececesececesescssesceecenes 21 American Bankers Association v. Lockyer, 239 F. Supp. 2d 1000 (E.D. Cal. 2002) weeeeeeeeeees 15, 16, 17 Anderson Nat’! Bank v. Luckett, 321 U.S. 233 (1944)...cee ccccscsscccsscecessceccssessesssecesssssesessussecseesees 12 Augustine v. FIA Card Services, N.A., 485 F. Supp. 2d 1172 (E.D. Cal. 2007) ..ccccecceesceesscesssssesssesees 20 Barnett Bank v. Nelson, S17 US. 25 (1996)... cccecssssssscscsscssccscscsssssssesesssesaecasscsuseaesarespassim Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005)... eececscsssssscccssersccssestecsesecesssesecsuessserssecseceess 9 Conference ofState Bank Supervisors v. Conover, 710 F.2d 878 (D.C. Cir. 1983)...cccscesscssscsscescsscescesessceseee 23, 24 Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004)... eeccesscscsccssscssceccssscsesceesesecssessscseseveeece 16 Cuomov. Clearing House Association, 557 U.S. - , 129 S. Ct. 2710 (2009) voceeceeeeeeeeee 1, 24, 25, 26 In re Countrywide Fin. Corp. Mortgage Marketing and Sales Practices Litigation, 601 F. Supp. 2d 1201 (S.D. Cal. 2009)...ceeeeseseccseesceesecee 21 Easton v. Iowa, 188 U.S. 220 (1903)...cececesscsscsecssescssceccersecssseececsssessescstscesesees 13 Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141 (1982)cesccscsccssecsesscsssccecsesssssccssseseeceeaecs 23, 27 Franklin National Bank v. New York, 347 U.S. 373 (1954)... ccessccsessssscsesssssecsesessecenscees 3, 10, 11, 17, 19 - ili - Fultz v. World Sav. & Loan Ass'n, 2008 WL 4131512 (W.D. Wash. Aug. 18, 2008)...eeeeeeeeeeee 21 Hines v. Davidowitz, 312 U.S. 52 (1941)...ececceseessscseeeseesssessessecesessecessseseeaeesseessneeess 12 Inv. Co. Inst. v. Camp, 401 US. 617 (1971)eeeeeeeesceseseeesceeeeesecessaeseeeenseeetsseeeseeenses 22 Kauinui v. Citibank (S. Dakota), 2009 WL 3530373 (D. Haw. Oct. 28, 2009)... eeeeeeereeeeeeeetens 21 Marquette Nat’] Bank v. First ofOmaha Corp., 439 U.S. 299 (1978)... ceccecesscssscesceseceeteeceessesseeecsecesseeseeseaeeeseseenens 14 Martinez v Wells Fargo Home Mortg., Inc., 598 F.3d 549 (9th Cir. 2010) wo.eeeeseeeeeeeeeseesenetseesenseeessees 4,21 McClellan v. Chipman, 164 U.S. 347 (1896)...ee ccccecsceeceseccetseseeesecsersersesesasseesesesseeeneneeas 12 Monroe Retail, Inc. v. RBS Citizens, N.A., 589 F.3d 274 (6th Cir. 2009) oo...ecccsseecssneeceessseeeecseesceeteeeesseeens 4 Montgomery v. Bank ofAm., 515 F. Supp. 2d 1106 (C.D. Cal. 2007)...eeeeeeseeecssesesesaeeneee 21 Nat’l Bank v. Commonwealth, 76 U.S. (9 Wall.) 353 (1869) 0...ccc ceccsecssteceseesessteeeseeeeeseeeeeesans 12 NationsBank ofN.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251 (1995) 0... ccecssceessseessceccsaccssesseessceseaceeaeeeseesseeessnees 22 O’Donnell v. Bank ofAm., 2010 WL 934153 (N.D. Cal. Mar. 15, 2010)...........:cscccsssessreeeenees 21 Rose v. Chase Bank USA, N.A., 513 F.3d 1032 (9th Cir. 2008) ..... eee eeeeeeceseseeetseeeceseneereeteees passim Rose v. Chase Manhattan Bank USA, 396 F. Supp. 2d 1116 (C.D. Cal. 2005) oo.eeeeeeteeeeeees 8, 11, 21 Smiley v. Citibank, 517 U.S. 735 (1996).......ccccsssssecsssecssscesseeessscesceneseseesesceeeeaeceseeeseeeens 27 -iv- Trombley v. Bank ofAm., - F. Supp. 2d -, 2010 WL 2202110 (D.R.I. June 3, 2010) ......0..... 21 United States v. Shimer, 367 U.S. 374 (1961)...cee cccsccsssscssscsccsssessscesecsatccsssesecsuceseeessnarens 27 Wachovia Bank, N.A. v. Burke, 414 F.3d 305 (2d Cir. 2005) ooo...cccccscsscccsscssesscsseceeesescescetasees 23 Wachovia Bank, N.A. v. Watters, 334 F. Supp. 2d 957 (W.D. Mich. 2004) wo...eeeeesesceeees 23, 24 Watters v. Wachovia Bank, N.A., 550 ULS. 1 (2007)...cc cecccecescscsscccessssscessscssssscescesssseceeceneaspassim Weiss v. Wells Fargo Bank, 2008 WL 2620886 (W.D. Mo. July 1, 2008)........ceceeeeeseeeeee 21 STATE CASES Barrett v. Rosenthal, 40 Cal. 4th 33 (2006) oo...ccceeccsscssceesssccecssnseesscsesscesssecseseesens 4,10 Citibank, (S.D.), NA v. Eckmeyer, 2009 WL 1452614 (Ohio Ct. App. May 8, 2009)...cesses 4 Citibank, S_D., N.A. v. Palma, 646 S.E.2d 635 (N.C. Ct. App. 2007) 0... cccccscesccsscsscsessessscsccteesees 4 Etcheverry v. Tri-Ag Service, Inc., 22 Cal. 4th 316 (2006)on.ceescssessssessssesseseaeeseesessvseeseessessves 9,10 In re Farm Raised Salmon Cases, 42 Cal. 4th 1077 (2008) 0...cccccccccsccssscscessesssseesssecstcesteecsees 18 Mech. Contractors Ass’n. v. Greater Bay Area Ass’n., 66 Cal. App. 4th 672 (1998)..... ec csessesssessesessesssseessescsssssesssevsseenaes 9 Miller v. Bank ofAm., N.A. (U.S.A.), 170 Cal. App. 4th 980 (2009) 00... csccsssecseeseeesrsesseseenens 4, 20, 24 Patterson v. Citifinancial Mtg. Corp., - N.W.2d -, 2010 WL 2076774 (Mich. Ct. App. May 25, 2010)...ccesscssssesesssssessssssscsscsesescneves 4 People v. Bradley, 1 Cal. 3d 80 (1969) oonecccccessesessssssstssssesessesessssrssesseesessesersesece, 9 Perdue v. Crocker National Bank, 38 Cal.3d 913 (1985) oo ccccesscscscescesescsceeseececeees 1, 15, 24, 25, 26, 27 Smiley v. Citibank (S.D.), N.A., 11 Cal. 4th 138 (1995), aff'd, 517 U.S. 735 (1996)........ 5, 13, 14, 22 Smith v. Wells Fargo Bank, 135 Cal. App. 4th 1463 (2005) w....cccccscsccesecsssesssessesscsssscesesesecees 4 Spielholz v. Super. Ct., 86 Cal.App.4th 1366, 1371 (2001) wo. eeeseccesecssscsessessscssescsseseees 18 STATUTES AND REGULATIONS V2 U.S.C. § LD ccecccecsessesssseeseessssssassussesessessssucsesassesatarcarsusatsesasssssesssessececese, 21 12 U.S.C. § 21 et Sequeceeecessecsessesssesessssssssssssssesersseatsssssssussessessessasescesees 1, 22 12 U.S.C. § 24(Seventh) 0.0... ceseccscssssessessssscssssasssesscsesassussssaressessesseseseseesece. 7 12 U.S.C. § 26 oe ececccessessessesstsseesessecsessessssacsusssessssesasasesussssestsssssstesseseeceee, 22 12 U.S.C. § 43(a) ccceeeesessssesscsesscssesstssesussassessussesssaucsussessresesensees 24, 26 12 US.C. § 81-928... eeeecesssssessessssssssssssssscussesasassussessssssessessecsseeseees 22 12 U.S.C. § 93a vce eccecceceessssessesessssscsesstesessseesarsesstsucsessesesusssssceves 21, 22, 24 12 ULS.C. § 181-200... ececsessessesessesssscsstesseseseesessussesssssesssssssscereeseecs 22 12 U.S.C. § 481ccccssceesesssesessssescesessssssstssusassussnsusessussvssssussscssescereneess 22 12 U.S.C. § 484ceecesesesssscsessssessssscssssessssssesusetsessesassessscsscevarcaseee 25 12 U.S.C. § 1464(a) oeeecccecsessesesssssessesssessessvsussesecsesessesassucssssscapaceses 23 Bus. & Prof. Code § 17200 ef s€q...ccccccscscssssssssssesessssseseseseses 6, 8, 9, 10, 11 Civil Code § 1748.13 oeeccssssessesssessescsssscssssssssessesesseassnsnssessesses 15, 16-17 Civil Code § 1748.9 ooccscsscscsessescsssssssssesessceecessesucscacatsseaveesereeserspassim 12 CAFR. § 7.4007 ooo cecesecssesssesscssssssssssssssssnsecassratsesesesesseacseseseees 3, 20, 25 -vi- 12 CAFR. § 7.4008 ooo. ccccscssessssscsssssssscsesssssesecsessessssssrsseseteesesececeesPassim 12 CLFLR. § 7.4008(d)(1)..esceccsescssssssessssstssssestscssessssscssessecssessssesseseseceece 7,21 12 CLPLR. § 7.4008(d)(2)....ecsesscssssssesssssssessssesssecsssessscssessisssssesssesessercesseces 16 12 C.F.R. § 7.4008(d)(2)(Viii) ....cccscsesccsesssescsesesscssseccsesssecssesssesseeeeees 7, 16, 20 12 CAFR. § 7.4009 00. ccecssessescsssssssessssessssssssessusssussssecsssssssseseserssaseesesss 4, 25 12 CPLR. § 34.4 ooecccccssesssecsssscssscssssessvcsssessssssasessessussessssssesseesses 3, 20, 25 12 CAPR. § 560.2 ooesecessesscsssssecsssecssecsssesssscssesesavestsssssssuessusssisessessusereceeseees 16 OTHER AUTHORITIES ULS. Const, art. VI, Ch. 2 oo.ecccccccssesssssssssscssssessessesessesssarssesesseeseesececeecseescees 4 Cong. Globe, 38™ Cong,, 1° Sess. 1873 ...ccccsssssssssssssssesessssessccssseccceseececsees. 13 48 Fed. Reg. 54,319 oo. ecceccsssssssscsssesssesssssssesssecersscsssssusssesssasssesssessaseeseces 26 A8 Fed. Reg. 54,320 ooo.cecccscssscsssessssssssssssseseseraresssessesssessusssisesaresseseveseeseees 26 49 Fed. Reg. 28,237 ....ceecseessssssssessnsesssessssssssessssssusssussssessesssssssesssssessceneeses 26 49 Fed. Reg. 28,238 ooo... scceesssssssseessecssssssssessecssssesssessasssessucssressatesseseseseeseses 26 69 Fed. Reg. 1904 oocccccssssssssssssssssussssesecsassessessssesssssssssscissrseserseseecees 27 - Vii - To the Honorable ChiefJustice and the Honorable Associate Justices of the California Supreme Court: Defendant and Respondent MBNA America Bank, N.A. (“MBNA”) respectfully petitions this Court for review of the decision by the Court of Appeal, Fourth District, Division Three, reversing thetrial court’s judgment dismissing the claim against MBNA brought by Appellant Alan Parks (“Parks”).! A copy of the Court ofAppeal’s decision (the “Decision’’), whichis reported at 184 Cal. App. 4th 652 (2010), is attached as Exhibit A hereto. INTRODUCTION In the Decision, the Court ofAppeal explicitly rejected the directly relevantruling of the Court ofAppeals for the Ninth Circuit, in a case involving the same California statute at issue here, in the context of an identical claim against MBNA, on a question offederal law. See Decision at 8, 19 (citing Rose v. Chase Bank USA, N.A., 513 F.3d 1032 (9th Cir. 2008)). According to the Court ofAppeal, the Ninth Circuit’s decision in Rose, despite its indisputable relevance, is inconsistent with controlling authority. Rather than following Rose, and relying instead on a decision of this Court more than two decades ago, Perdue v. Crocker National Bank, 38 Cal.3d 913 (1985), as well as comments in Cuomov. Clearing House Association, 557 U.S. - , 129 S. Ct. 2710 (2009) - which, like Perdue, is readily distinguishable from this case - the Court of Appeal reversed the trial court’s ruling that Parks’ claim is preempted by federal law. Specifically, the Court ofAppeal held that the National Bank Act (“NBA”), 12 U.S.C. § 21 et seq., and the implementing regulations of the Office of the Comptroller ofthe Currency (“OCC”) do not preempt Parks’ attempted Through change ofname, MBNA America Bank, N.A. is now known as FIA Card Services, N.A. It remains a national bank. (AA 1317-19.) application of Civil Code § 1748.9 (“§ 1748.9”) to MBNA,a national bank duly chartered under the NBA andsupervised and regulated by the OCC. Moreparticularly, the Court of Appeal held, directly contrary to Rose, that establishing preemption under the NBA requires an evidentiary showing. Further, the Court of Appeal declared the OCC preemption regulation upon which Roserelied, 12 C.F.R. § 7.4008 (“Section 7.4008”), invalid as a matter of law. See Decision at 15 (acknowledging that Section 7.4008 “if valid, expressly preempts section 1748.9.”). The Court ofAppealthereby rejected not only Rosebut, also, a federal regulation that has been applied and uniformly deemedvalid by other state and federal courts sinceits promulgation in 2004. ISSUES PRESENTED FOR REVIEW 1. Whether the Court ofAppealerred in holding that § 1748.9 is not preemptedonits face by the NBA underwell-established principles articulated by the U.S. Supreme Court, thereby creating a direct conflict with Ninth Circuit law, which has reached precisely the opposite result on the samelegal issue in a recent case involving near-identical allegations. 2. Whether the Court ofAppealerred in holding that the OCC, a federal agency within the U.S. Department ofthe Treasury, lacked authority to promulgate Section 7.4008 and,therefore, that Section 7.4008 does not preempt § 1748.9, even though both California and federal courts have previously applied that regulation and parallel regulations to preempt application ofparticular state-law limitations on the exercise by national banksoftheir federally granted lending powers. WHY REVIEW SHOULD BE GRANTED Review should be granted to secure uniformity of decision. The Court ofAppeal’s Decision is in direct conflict with the ruling of a unanimouspanelofthe Ninth Circuit in Rose. The Court of Appeal explicitly rejected Rose and its proper application of the well-established principles ofNBA preemptionarticulated by the U.S. Supreme Court. See Decision at 8, 19. In so doing, the Court of Appeal misconstrued the fundamentaltenets of the U.S. Supreme Court’s landmark decisions in Watters v. Wachovia Bank, N.A., 550 U.S. 1 (2007), Barnett Bank v. Nelson, 517 U.S. 25 (1996), and Franklin National Bank v. New York, 347 U.S. 373 (1954), which, as the Rose court recognized, compelthe conclusionthat “the NBA preempts the disclosure requirements of Cal. Civ. Code § 1748.9, insofar as those requirements apply to national banks.” Rose, 513 F.3d at 1038. Unlike any other court that has addressed preemption under the NBA,the Court ofAppeal held that an evidentiary showing is needed to demonstrate NBA preemption. See Decision at 14. This holding directly conflicts with the numerous decisions of both federal and state courts holding state law preempted by the NBA ontheface ofthe pleadings, including decisions concerning state disclosure requirements. See, e.g., Franklin, 347 U.S. at 377-78. The Court ofAppeal’s divergent holding ignores what other courts haveeither explitly or implicitly recognized: a state law’s conflict with the Congressional objectives underlying the NBA ~ ensuring uniformity of regulation of national banks’ banking operations - is a matter of law that can be determined without reference to evidentiary proof. Further, the Decisionis also in conflict with an entire body of federal and state court case law relying on the OCC’s preemption regulations promulgated in 2004 - Section 7.4008 and its companion regulations, 12 -3- C.F.R. §§ 34.4 (governingreal estate lending), 7.4007 (governing deposit- taking), and 7.4009 (governingnational bank operations generally). The Court of Appealin Parks is the only court ~ out of dozens, including the Ninth and Sixth Circuits and district courts within those Circuits; appellate courts of other states; and even the California Court ofAppealin other cases - that hasfailed to treat the OCC’s preemption regulationsasvalid. See, e.g., Martinez v Wells Fargo Home Mortg., Inc., 598 F.3d 549, 555-58 (9th Cir. 2010); Monroe Retail, Inc. v. RBS Citizens, N.A., 589 F.3d 274, 281-83 (6th Cir. 2009); Miller v. Bank ofAm., N.A. (U.S.A.), 170 Cal. App. 4th 980, 987 (2009); Smith v. Wells Fargo Bank, 135 Cal. App. 4th 1463 (2005); Patterson v. Citifinancial Mtg. Corp., No. 287270, - N.W.2d -, 2010 WL 2076774 (Mich. Ct. App. May 25, 2010); Citibank, S.D., N.A.v. Palma, 646 S.E.2d 635, 638 (N.C. Ct. App. 2007); Citibank, (S.D.), NA v. Eckmeyer, No. 2008-P-0069, 2009 WL 1452614, slip op. at {J 33-39 (Ohio Ct. App. May 8, 2009). These conflicts should not be perpetuated. The Decision affects thousandsofnational banks, disrupting a schemeoffederal regulation upon which they and their regulators rely. It also invites pernicious consequences, including forum shopping, which this Court has recognized flow from inconsistent federal and state court rulings on a single legal question. See Barrett v. Rosenthal, 40 Cal. 4th 33, 58 (2006) (“Adopting a rule ofliability. . . that diverges from the rule announcedin [federal court] . .. would be an open invitation to forum shopping by defamation plaintiffs.”). And where the question is a pure question of federal law, such as preemption under the Supremacy Clauseofthe U.S. Constitution, U.S. Const., art. VI, cl. 2, a divergentstate appellate court decision should be reviewed by this Court. Reviewalso should be granted because, even absent the conflict between the Decision and both federal and otherstate court decisions, the -4- issues presented are important questions of law. The standardsfor assessing whetherfederal banking law preempts state law are determinative of the permissible practices of national banks in a myriad of circumstances, affecting virtually every aspect of the business of banking by national banks. Absent clarity and uniformity in those standards, national banks are left rudderless in a sea of regulatory uncertainy, without the predictability andbright-line principles needed to operate efficiently or effectively. The Decision thereby runs headlonginto the very purpose ofNBA preemption of state law: to enable national banksto operate underthe “conditions for uniformity and efficiency that would otherwise obtain.” Smiley v. Citibank (S.D.), N.A., 11 Cal. 4th 138, 158 (1995), aff'd, 517 U.S. 735 (1996). Evenifpreemption itself were not such an importantissue, the Decision would merit review. The Court ofAppeal held that the OCC lacked the powerto promulgate Section 7.4008 - a regulation that, as the Court ofAppealitself expressly acknowledged, underwentall the proper rulemaking procedures required by federal law. Decision at 16. That holding implicates not only Section 7.4008, but also the other preemption regulations adopted by the OCC and,indeed,the parallel preemption regulations promulgated by the Office of Thrift Supervision (“OTS”), the sister agency ofthe OCC within the U.S. Departmentofthe Treasury that regulates federal savings associations. A decision with ramifications of this magnitudecries out for higher court review. Both to secure uniformity of decision andto settle important questions of law, the Court should grant MBNA’sPetition for Review. BACKGROUND AND PROCEDURAL HISTORY A. The Trial Court Proceedings On June 30, 2004, Appellant Parks filed the instant putative class action lawsuit in the Superior Court for the County of Orange against MBNA.(AA 55.)> MBNA is, and has been since 1991, a federally chartered national bank. (AA 127, 1319.) Inits Capacity as a national bank, MBNAoffers loansto its customers nationwide, including in California. The type of loan at issue in Parks’ suit, a “convenience check” loan, is extended byuse of a “preprinted check or draft” (a “convenience check”), which bankstypically mail to credit card customers with a monthly account statementorin a separate mailing with an enclosedoffer. A recipientof such a check mayuse the check in lieu ofhis or hercredit card or a cash advanceand, just as when usingthe card, incur a charge and fees againsthis or her credit card account. See Rose, 513 F.3d at 1034-35 (describing convenience checks). With reference to these convenience check offers, Parks asserted a single cause of action against MBNAbasedsolely upon the “unlawful” prong of California’s Unfair Competition Law, Bus. & Prof. Code § 17200 et seg. (“UCL”). (AA 63.) Specifically, Parks alleged MBNAviolatedthe UCLbyfailing to include in its convenience checkoffers the informational disclosures mandated by § 1748.9. Id. Those disclosures must (i) be on the front of an attachmentto the checks, (ii) be clear and conspicuous,and(iii) include:“(1) [a statement t]hat ‘use of the attached check ordraft will constitute a charge against your credit account[;]’ (2) [t]he annual percentage rate and the calculation of finance charges . . . associated with the use of the attached checkor draft[; and] (3) [w]hether the finance chargesare triggered immediately upontheuseofthe check ordraft.” Civ. Code § 1748.9. Parks sued MBNAindividually and purportedly on behalf of a putative California class. (AA 58-61.) In response to Parks’ suit, MBNA movedforjudgment on the pleadings, based on two separate and independentgroundsfor federal * “A ”refers to the Appellant’s Appendix. preemption. First, MBNAasserted Parks’ suit was expressly preempted by Section 7.4008, which explicitly providesthat state laws that “obstruct, impair, or condition a national bank’s ability to fully exerciseits Federally authorized non-real estate lending powers,” including those “requiring specific statements, information, or other content” in “credit solicitations,” are “not applicable to national banks.” 12 C.F.R. § 7.4008(d)(1), (d)(2)(viii) (emphases added). Second, MBNAcontendedParks’ suit was impliedly preempted by the NBA,because Parks sought to condition MBNA’sexercise of its power to “loan[ ] money on personalsecurity,” 12 U.S.C. § 24(Seventh), upon compliance with § 1748.9. (AA 114-17.) Following the Ninth Circuit’s decision in Rose, thetrial court granted MBNA’s motion,holding that, on its face, § 1748.9 is preemptedas applied to MBNA. (AA 1562-63.) Parks timely appealed. B. The Court of Appeal’s Decision The Court of Appeal expressly rejected Rose and reversed thetrial court’s judgment. Decision at 19-20. While recognizing that“[iJnall material respects, Rose is factually identical to the case before us,” andthat, even whentheyare notdirectly on point, “federal decisions may be particularly persuasive whenthey interpret federal law,” the Court of Appealelected its own, novelreading of the NBA,contrary to Rose and the U.S. Supreme Court authorities relied on in Rose. Jd. at 4, 11-14. According to the Court of Appeal, because § 1748.9 does notforbid the exercise of a banking power authorized by the NBA,it does not, onits face, conflict with the NBA. The Court ofAppealalso found that, although a state law may be preempted by the NBAevenifthe state law does not have such a prohibitive effect, such preemption depends on evidentiary proofthat the state law “significantly impairs” an NBA-authorized national banking power. Jd. at 11. Despite the contrary rulings of many other courts, including Rose, dismissing state law claims as preempted by the -7- NBAbasedsolely on the pleadings, the Court ofAppeal held that MBNA would have to marshalfactual evidence to provethat § 1748.9, as applied to MBNA,“significantly impairs” MBNA’s powerto loan money on personalsecurity. /d. at 12, 14. The Court ofAppeal went on to reject the alternative basis for preemption relied on by MBNAhere and by the Ninth Circuit in Rose: express preemption Section 7.4008.° The Court of Appealexplicitly acknowledged that“[i]t is clear that [Section 7.4008],if valid, expressly preempts section 1748.9.” Jd. at 15. The Court of Appealalso acknowledgedthat the OCC followedall ofthe proper proceduresin adopting Section 7.4008, and that the “OCC hadauthority to issue regulations interpreting the preemptive effect of the NBA and otherfederal law on state law with regard to national banks.” Jd. at 16. Nevertheless, the Court ofAppealheld that the regulation was invalid. Jd. at 19. In conclusion, while expressing “reluctan[{ce] to creat a split of authority with the Ninth Circuit on a point of federal law,” id., the Court of Appeal reacheda decision directly contrary to Rose, holding that“thereis no basis for preempting section 1748.9 without a factual record.” Jd. at 20. > The Decision implies that the Ninth Circuit in Rose did not rely on Section 7.4008. See Decision at 7-8. In fact, the Ninth Circuit expressly held that “the district court correctly found that . . . Plaintiffs’ UCL claims ... are preempted by the NBA and OCCregulations.” Rose, 513 F.3d at 1038 (citing Rose v. Chase Manhattan Bank USA, 396 F. Supp. 2d 1116, 1123 (C.D. Cal. 2005) (emphasis added). Although the Ninth Circuit pointed to the Rose plaintiffs’ “unfair” and “deceptive” UCLclaimsin this context, rather than specifically to the “unlawful” UCL claim,it plainly found that Section 7.4008 preempted the application of § 1748.9 toa national bank. ARGUMENT I. ROSE WAS CORRECTLY DECIDED AND THE COURT OF APPEAL ERREDIN ISSUING A DIRECTLY CONTRARY RULING ON THE SAMEISSUES OF FEDERAL LAW. Asthe Court of Appeal recognized, under this Court’s well-settled precedent, the courts of California may, andin certain cases should, follow relevant Ninth Circuit precedenton issues controlled by federal law. See Decisionat4 (citing Etcheverry v. Tri-Ag Service, Inc., 22 Cal. 4th 316, 320-321 (2000), overruled on another grounds, Bates v. Dow Agrosciences LLC, 544 U.S. 431, 437, 452 (2005)); see also People v. Bradley, | Cal. 3d 80, 86 (1969). Where a California state court is faced with a question of federal law in a factual setting identical to one already addressed by the Ninth Circuit, as is the case here, the policy reasons for adherenceto the federal court’s decision are exceptionally compelling. See, e.g., Mech. Contractors Ass’n. v. Greater Bay Area Ass’n., 66 Cal. App. 4th 672, 683 (1998) (“[W]ere we to adopta rule different from the Ninth Circuit, we would encourage California litigants to forum shop between California’s _ federal andstate courts .... This is a relevant and important consideration that supports adopting the [Ninth Circuit’s] rule.”). Considering these principles, the Court of Appeal was boundto deviate from the holdingin Rose onlyif controlling authority compelled a different result. As the Court ofAppeal acknowledged, “[i]n all material respects, Rose is factually identical to the case before us.” Decision at 4 (citation omitted).‘ Despite this express acknowledgment, and without pointing to any controlling authority dictating a result contrary to Rose, the The only significant difference between this case and Roseis that in Rose, the plaintiffs asserted two additional UCL claims, one for “unfair” conduct andthe other for “fraudulent” conduct. The Ninth Circuit held all three claims, including the “unlawful” claim identical to Parks’ claim here, were preempted under the NBA. See Rose, 513 F.3d at 1038. Court of Appeal proceededto reach a decision in direct conflict with Rose. This wasclearerror, as Rose is fully consistent with the NBA preemption precedents of the U.S. Supreme Court, as well as with NBA preemption “decisions of the lower federal courts . . . [that] are ‘both numerous and consistent.’ ” Barrett, 40 Cal. 4th at 58 (quoting Etcheverry, 22 Cal. 4th at 320-21). In Rose, a unanimouspanelof the Ninth Circuit, following well- established and binding U.S. Supreme Court precedent, affirmed dismissal of the plaintiffs’ UCL claims, including the “unlawful”claim identical to Parks’ claim here, based on preemption by the NBA and Section 7.4008. 513 F.3d at 1037-38. Relying on the U.S. Supreme Court’s controlling opinions in Watters, Barnett Bank, and Franklin, the Ninth Circuit held the UCLcould not be used to require a national bank’s adherence to § 1748.9, because the NBA explicitly grants federally chartered banks the power to loan moneyon personalsecurity withoutlimitation by state law. Id. at 1037. Because the power to loan money on personalsecurity is the power pursuant to which a national bank extends credit to its cardholders via conveniencechecks, and there is no indication that Congress intendedthat powerto be subject to local restriction, “Congress is presumed to have intended to preemptstate laws such as Cal. Civ. Code § 1748.9.” /d. (citing Barnett Bank, 517 U.S.at 33-35; Franklin, 347 U.S. at 378; Watters, 530 U.S. at 18). Recognizing this, the Rose court squarely held: “[{T]he NBA preempts the disclosure requirements of [§] 1748.9, insofar as those requirements apply to national banks.” /d. at 1038. In addition, the Ninth Circuit explicitly affirmed the trial court’s decision that Section 7.4008 preemptedthe plaintiffs’ claims. See id. at 1038 (“From the face of Plaintiffs’ complaint, the district court correctly found that . . . Plaintiffs’ UCL claims . . . are preempted by the NBA and -10- OCC regulations.”(citing Rose, 396F. Supp. 2d at 1123)) (emphasis added). Further, the Rose Court expressly addressed and rejected the Suggestion that an evidentiary showing is required as part of a preemption analysis. Noting the plaintiffs’ requestin the alternative for a remandto the district court for “discovery regarding the issue of whetherthe state law constitutes a ‘significant’ impairmentor interference with the purposes of the National Bank Act,” the Ninth Circuit held that the preemptive scope of the NBAis appropriate for determination on a pleading motion andthat an evidentiary showingofinterference or burdenis not needed. See id. at 1038 n.4 (“Given the prior holdings ofBarnett Bank and Franklin, . . . it appearsthat no amount ofdiscovery would change thecentral holding that Congress intended for the NBA to preemptstate restrictions on national banks such as Cal. Civ. Code § 1748.9 here.”). Thetrial court here was presented with a set offacts and a claim premised, like Rose, entirely upon the purportedfailure ofMBNAto includein its convenience check offers the disclosures set forth in § 1748.9. Thetrial court was askedto interpret and apply federal preemption principles based onthe samestatute, regulation, and binding U.S. Supreme Court authority already addressed by the Ninth Circuit. By following Rose, the trial court adheredto the well-established principles articulated by this Court regarding the optimal uniformity of federal and state court rulings. The Court ofAppeal, however,explicitly chose to “create a split of authority with the Ninth Circuit Court ofAppeals on a point of federal law.” Decision at 19. National banks in California now face the prospect ofliability in state court for conductthat is perfectly lawful under applicable federal court case law. The Court ofAppeal expressed “reluctan(ce]” with respect to this adverse result, but stated thatits “understanding of the authorities . . . require[d]’”it to reject the holding of -ll- Rose. Id. As discussed below, however, the authorities upon which the Court of Appeal relied, when properly analyzed, compel adherenceto, not deviation from, Rose. If. THE COURT OF APPEAL’S DECISIONIS IN CONFLICT WITH LONGSTANDING U.S. SUPREME COURT PRECEDENT AS WELL AS NUMEROUSRULINGSBY THE LOWER FEDERAL COURTS AND BY VARIOUS STATE COURTS. A. The Court of Appeal Misconstrued the Proper Test for Preemption Underthe National Bank Act. The Court of Appeal adopted a standard for preemption underthe NBAthat effectively undermines years of U.S. Supreme Court Jurisprudence. The Court of Appeal observed that the NBA preemptsstate laws “forbidding, or impairing signficantly, the exercise of a power explicitly granted to national banks by the NBA.” Decisionat 11. Implicitly purporting to rely on Barnett Bank, which used the words “prevent or significantly interfere” in holding a Florida law preempted by the NBA(see 517 U.S.at 33), the Court of Appeal went on to adopt a requirementforfactual proof of preemption that has no foundation in the case law andis at odds with both Congressional intent and sound public policy.” Indeed, Barnett Bankitself involved no such showing. > The “preventorsignificantly interfere” language is one among many formulations of the standard for preemption under the NBA.See, e.g., Watters, 550 U.S.at 13 ( “Beyond genuine dispute, state law may not... curtail or hinder a national bank’s efficient exercise of any . . . power, incidental or enumerated under the NBA.”) (emphases added); Barnett Bank, 517 U.S.at 33-34 (stating that the NBA preemptsstate law that “encroac[hes] on the rights and privileges of national banks,” “hampe[rs] national banks’ functions, “or ‘interfere[s] with, or impair[s] [national banks’ ] efficiency in performing the[ir] functions.”) (quoting Anderson Nat’l Bank v. Luckett, 321 U.S. 233, 247-52 (1944); McClellan v. Chipman, 164 U.S. 347, 358 (1896); Nat’] Bank v. Commonwealth, 76 U.S. (9 Wall.) 353, 362 (1869)); see also Hines v. Davidowitz, 312 U.S. 52, 67 (1941) (“This Court, in considering the validity of state laws in the light of treaties or federal laws touching the same subject, has made use of the following expressions: conflicting; contrary to; occupying the field; repugnance; (Footnote Cont'd on Following Page) -12- Nocourt, to MBNA’s knowledge,has everheld that evidentiary proofis required to determineif a state law interferes with a national bank’s exercise ofits banking powers. Andthe fact that the Barnett Bank Court used the term “significant” hardly implies that a finding of a “significant impairment” for preemption purposesrequiresfactual evidence. Whatthe U.S. Supreme Court has deemedcritical to an NBA preemption analysis is determiningif state law stands as an obstacle to Congress’ intent that national banks’ banking activities be subject to a uniform set offederal regulations. See, e.g., Watters, 550 U.S.at 13-14 (“Diverse and duplicative superintendence of national banks’ engagement in the business of banking, we observed over a century ago,is precisely what the NBA was designed to prevent ....”); Easton v. Iowa, 188 U.S. 220, 229 (1903) (describing Congress’ intent that national banks operate under“a system extending throughoutthe country, and independent.. . of state legislation which,ifpermitted to be applicable, might impose limitations andrestrictions as various and as numerous as the states’’) (emphasis added); see also Cong. Globe, 38" Cong., 1Sess. 1873 (1864) (“[A national bank must be] plac[ed] ... above all chanceofcriticism, impeachment, or question from State legislation, so that no State... can interfere in any way withits solidity, with the uniformity ofits operation, or with its completest efficiency.”) (emphasis added)(statement of Sen. Sumner). Asthis Court recognized in Smiley, allowing a single state to dictate credit-related mandates for national banks would render the bank’s lending activities “subject to the varying laws ofthe several states - a result that (Footnote Cont’d From Previous Page) difference; irreconcilability; inconsistency; violation; curtailment; and interference.”). The Court of Appeal, by monolithically focusing on the “significantly impair” standard, ignored these other, alternativetests. -13- might ‘throw into confusion the complex system of modern interstate banking’ and thereby undermine the conditions for uniformity and efficiency that would otherwise obtain.” 11 Cal. 4th at 158 (emphasis added) (quoting Marquette Nat’! Bank v. First ofOmaha Corp., 439 U.S. 299, 312 (1978)). That is precisely the result of the Court of Appeal’s Decision here. The Court ofAppeal ignored the inherently significant impairment a unique state disclosure mandate inflicts on a national bank’s ability to function as Congress intended. Allowing onestate to impose uponnational banksspecific credit-related disclosure requirements necessarily opens the door to 50 varying sets of requirements (indeed, potentially to many more, as municipalities and other localities may choose to adopt their own specific disclosure mandates). To comply, national banks would need to track, analyze, and establish specific compliance mechanismsfor each of the myriad separate and distinct disclosure mandates,just to be able to exercise the lending powerexplicitly granted to them by Congress. Thatis the exact situation Congress intended to prevent. The “significance” of the impairmentin this context, within the meaning ofBarnett Bank and Watters, is not merely the degree to which any one particular state’s disclosure requirements impede a national bank’s exercise of banking activities; rather, it is also the burden of complying with multiple and potentially contradictory regulations imposed by as many as 50 states and many more municipalities or other localities. No factual showing is needed to recognize the inherentsignificance of the burden the Court of Appeal’s Decision places on national banks’ability to exercise their lending power as intended by Congress. -14- B. There is No Case Law Supporting the Evidentiary Requirement Announcedby the Court of Appeal. The sole case discussed by the Court of Appealin announcingits “evidentiary” requirement was American Bankers Association v. Lockyer, 239 F. Supp. 2d 1000 (E.D.Cal. 2002), a district court case decidedpriorto Rose and before the OCC adopted Section 7.4008. See Decision at 12-14.° To the extent that Lockyer could be read to suggest a need for an evidentiary showing, Lockyeris inconsistent with, and must yield to, the subsequentappellate decision in Rose. In any event, Lockyer provides no support for a categorical requirement for evidentiary proofto establish preemption. The court in Lockyer was required to analyze evidenceofthe impact ofthestate law at issue, Civil Code § 1748.13, on the national bank plaintiffs because the banks offered such evidence, in conjunction with their alternative argumentfor relief under the Dormant Commerce Clause of the U.S. Constitution, which does require an evidentiary showing. See Lockyer, 239 F. Supp. 2d at 1006. Additionally, the plaintiff banksin Lockyer did not challenge the California law onthebasis that it imposed conditions or restrictions on their federally authorized power to make loans, as MBNA does here and as Chasedid in Rose. Rather, they “maintain[ed] that section 1748.13 interfere[d] with the federal powerto lend money throughits imposition of costly operational and administrative burdens on national banks’ lending activities.” Jd. at 1016. Therefore, the Lockyercourt had no occasion to consider whetherthe only waya plaintiff national bank may establish ° The Court ofAppealalso cited this Court’s decision in Perdue (see Decision at 14); however, Perdue plainly did not endorse any blanket rulerequiring evidence to demonstrate preemption ofstate law. The Perdue Court merely suggestedthat, in a case involving allegations of “unreasonable”or “unconscionable” conduct, an undue impact on a national bank’sfederally authorized activities might not be evident on theface of the pleadings. See Perdue, 38 Cal. 3d at 943-44. -15- preemption is by an evidentiary showing that the state statute “significantly interferes” with the exercise ofits federally authorized banking powers. Becausea case is not authority for issues not actually litigated and decided, see, e.g., Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 170 (2004), Lockyer does not support the Court of Appeal’s holding that an evidentiary showing of“significant burden”is required to establish NBA preemption. Moreover, any examination ofLockyer must be informed by the fact that the OCC had not yet promulgated Section 7.4008at the time Lockyer wasdecided, and, thus, the Lockyer court did not have the benefit of Section 7.4008in interpreting the then-existing NBA preemption law. Had Section 7.4008 beenin effect at the time, the Lockyer court presumably would have found the California statute at issue to be expressly preempted from application to national banks. In particular, the “minimum payment warning”provision ofthe California statute at issue, referred to by the Court ofAppeal here (see Decision at 13), would be expresslypreempted by Section 7.4008(d)(2), because the “minimum payment warning” provision (like Section 1748.9 here) “requir[ed] specific statements . . . to be included in . . . credit-related documents”ofnational banks, which Section 7.4008 prohibits. 12 C.F.R. § 7.4008(d)(2)(viii). Indeed, the Lockyer court did find the “minimum payment warning” to be expressly preempted as applied to federal savings associations, based on an OTSregulation that is substantively identical to Section 7.4008. See Lockyer, 239 F. Supp. 2d at 1010-11, 1020 (applying 12 C.F.R. § 560.2). Contrary to the Court ofAppeal’s suggestion, becausethe Lockyer court found such express preemption of the “minimum payment warning” requirement with respect to federal savings associations, it did not have to, and ultimately did not, decide the question ofNBA preemption ofthat specific requirement. Instead, finding that the various provisions of Civil -16- Code § 1748.13 were not severable and could not be applied differently to different federally chartered financial institutions, the court held that the statute was “constitutionally inapplicable in its entirety to all federally chartered credit card issuers.” Lockyer, 239 F. Supp. 2d at 1021 (emphasis added). . The Court of Appeal’s reliance on Lockyer here, therefore, was misplaced. And,while citing relevant U.S. Supreme Court precedent, see Decision at 9-11 (citing Franklin, Barnett Bank, and Watters), the Court of Appealignoredthe teaching of that precedent - in particular, Franklin. The bank in Franklin did not provethat the New Yorklaw at issue - which simply prohibited the use of the word “saving”or “savings”by a national bank - imposedanyparticular costs on nationalbanks. No evidence was adduced in Franklin to establish the magnitude of the impact on bank business ofthe bank’s inability to use the proscribed words. Nevertheless, the Supreme Court found that the New Yorkstatute was inapplicable to national banks because Congress hadgranted national banks the power“to receive deposits without qualification or limitation,” and there was “no indication that Congress intended to make this phase ofnational banking subject to local restrictions.” Franklin, 347 U.S. at 376, 378 (emphasis added). Stated differently, the Court found the New York statute in Franklin was preempted because Congressdid not intend to condition or to restrict national banks’ receipt of deposits based on compliance with state laws. There wasno discussion or suggestion of any “evidence”that this result was impermissible; yet, the Court held the New York law imposed an impermissible burden on the actual receipt of those deposits. Preemption in this case, as in Franklin, is clear on the face ofthe pleadings. There is no support in any precedent, either controlling or not, for the Court of Appeal’s self-created requirement for “evidence”to demonstrate NBA preemption. -17- C. The Court of Appeal’s Evidentiary RequirementIs At Odds With the Fundamental Purpose of Preemption and Sound Public Policy. Beyonddeparting from established law, the Court ofAppeal’s unprecedented “evidentiary” requirement would have multiple pernicious practicalresults - all at odds with the very purpose ofpreemption. As an initial matter, it would be impracticable, if not impossible, to extrapolate one national bank’s evidentiary showingofthe “significant” impairment imposedbya state law on the bank’s banking operationsto that law’s effect on national banksas a whole. A single state law would likely have different quantitative effects from bank to bank. Therefore, the courts’ assessmentofthe “significance” of the impactofa given state law could differ markedly from case to case, with the result ofpotentially conflicting judgments asto a singlestate law’s applicability to different national banks. The Court ofAppeal’s “evidentiary” requirement would thereby eviscerate any possible “bright-line”rule of law for NBA preemption, turning a pure issue of law’into a factual test with results that could, and likely would, vary widely from bank to bank. Under such a regimen, national banks would nolonger have any reliable guidelines regarding whichstate laws are preempted from application to their banking activities. No national bank could know for sure in advance whether any particular state law mightor might not applytoit, despite priorlitigation resolving the question for one or more other national banks. Withoutitself undertaking litigation to obtain a resolution ofthe preemption question asto it, no national bank could confidently plan its operations to be in compliance with applicable law. Indeed, precisely because nocase has required an See Inre Farm Raised Salmon Cases, 42 Cal. 4th 1077, 1099 n.10 (2008), cert. denied, 129 S. Ct. 896 (U.S. 2009) (“federal preemption presents a pure question of law”(citing Spielholz v. Super. Ct., 86 Cal.App.4th 1366, 1371 (2001))). - 18 - evidentiary showing,there is not even an accepted yardstick against which to measure the “significance” of the impact of particular state laws on a particular national bank. The novelrule adopted by the Court ofAppeals would thus seriously undermine national bank efficiency and economy,as well as spawn a proliferation oflitigation. Each national bank would haveto litigate its ownindividual cases, marshaling new andindividual factual evidence,to demonstrate that state law applied to it would, in fact, cause a “signficant” impairmentin its banking operations. This would impose undue, inefficient, and highly costly burdenson the courts, as well as on national banks themselves. Finally, an evidentiary test for NBA preemption could have the perverse effect of discouraging national banks from enhancing the efficiency of their operations through modern technology. If the only way a national bank could provethat state-by-state compliance with state law constitutes a “significant” impairment wereto produce evidence ofhigh costs (whatever degree ofcosts a particular judge might deem “significant”), there would be an inherentincentive to avoid operational cost-reductions through enhancements to efficiency. Such an incentive would be flatly contrary to Congress’ intent that state law not “curtail or hindera national bank’s efficient exercise of any . . . power, incidental or enumerated under the NBA.” Watters, 550 U.S. at 15 (citing Barnett Bank, 517 U.S. at 33-34; Franklin, 347 U.S.at 375-379) (emphasis added). The unprecedented requirementfor evidentiary proof ofpreemption created by the Court ofAppeal is not what Congress intended in enacting the NBAandis contrary to sound public policy. This Court should grant review to correct the Court of Appeal’s misjudgmentofthetest for preemption under the NBA. -19- Hil. THE COURT OF APPEAL ERRED IN HOLDING THE OCC’S DULY PROMULGATED PREEMPTION REGULATIONTO BE INVALID. A. The Court of Appeal’s Decision Invalidating Section 7.4008 Conflicts With the Growing Body of Case Law Applying the OCC’s Preemption Regulations. Reviewis also merited on the wholly independent groundthat the Decision, unlike any otherjudicial ruling, declares invalid the OCC’s non- real estate lending preemption regulation, Section 7.4008. The Court ofAppeal explicitly found that Section 7.4008,“if valid, expressly preempts § 1748.9.” Decision at 15.2 The question engaged by the Court of Appeal, therefore, was whether Section 7.4008is valid. In answering that question in the negative, the Court ofAppealerroneously rejected the shared view of every court that has addressedthe question, as well as the implicit views of the multitude of courts, federal andstate, that have applied the regulation without questioning its validity. As the Court ofAppeal acknowledged,“[i]n addition to the district court in Rose, several other courts have applied [Section] 7.4008 . . . to invalidate state laws as applied to national banks,” including the Court of Appealitself. Zd. at 15 (citing Miller, 170 Cal. App.4th at 987; Augustine v. FIA Card Services, N.A., 485 F. Supp. 2d 1172, 1175-1176 (E.D.Cal. 2007)). Indeed, even with respect to preemption of state-law disclosure requirements alone, courts have repeatedly applied Section 7.4008 andits companion preemptionregulations, 12 C.F.R. § 7.4007 (governing deposit- taking and related activities) and 12 C.F.R. § 34.4 (governing real estate 5 Section 7.4008 provides: “A national bank may makenon-realestate loans without regardto state law limitations concerning. . . [d]isclosure and advertising, including laws requiring specific statements, information, or other content to be includedin credit application forms, credit solicitations, billing statements, credit contracts or other credit-related documents. . 2. 12 C.F.R. § 7.4008(d)(2)(viii). -20- lending), to hold such requirements preempted. See, e.g., Martinez, 598 F.3d at 557; O'Donnell v. Bank ofAm., No. C-07-04500 RMW, 2010 WL 934153, at *4 (N.D. Cal. Mar. 15, 2010); In re Countrywide Fin. Corp. Mortgage Marketing and Sales Practices Litigation, 601 F. Supp. 2d 1201, 1223 (S.D. Cal. 2009); Kauinui v. Citibank (S. Dakota), No. 09-000258 ACK-BMK,2009 WL 3530373, at *7 (D. Haw. Oct. 28, 2009); Fultz v. World Sav. & Loan Ass'n, No. C08-0343RSL, 2008 WL 4131512,at *2 (W.D. Wash. Aug. 18, 2008); Montgomery v. Bank ofAm., 515 F. Supp. 2d 1106, 1108, 1114 (C.D. Cal. 2007). In applying Section 7.4008 and its companion preemption regulations, most courts have taken it as axiomatic that the regulations are valid. However, several courts, including the district court in Rose, have explicitly considered and confirmed the OCC’s authority to issue the regulations. As these courts have recognized, “the OCCis authorized to issue rules and regulations as necessary to preserve the purpose and sound operation of the national banking system.” Aguayov. U.S. Bank, 658 F. Supp. 2d 1226, 1231 (S.D. Cal. 2009) (citing 12 U.S.C. § 93a). “This authority includesinterpretation of state law preemption under the NBA .. . [and] OCCregulations carry the same weight as federal statutes when considering questions of state law preemption.” Jd. (citing Rose, 396 F. Supp. 2d at 1122 (“[T]he Court finds that Section 7.4008 is a reasonable andrational exercise of the OCC’s rule making authority ....”)); see also, e.g., Trombley v. Bank ofAm., Civil No. 08-cv-456-JD, - F. Supp. 2d -, 2010 WL 2202110, *4 (D.R.I. June 3, 2010) (“Pursuantto [12 U.S.C. §§ 1, 93a], the OCC promulgated regulations regarding whether, and to what extent, state laws are preempted. Specifically, ... 12 C.F.R. § 7.4008(d)(1) (2007)”); Weiss v. Wells Fargo Bank, No. 07-5037-CV-SW-WAK,2008 WL 2620886,at *3 (W.D. Mo.July 1, 2008) (“The OCCis the bank’s regulator andit has broad rule-making authority. Under 12 U.S.C. § 93a, -21- the OCCis authorized ‘to prescribe rules and regulationsto carry out the responsibilities of the office’... . [Pursuant to that authority, the OCC] amend[ed] the preemption rules in 2004 to specifically include consumer protection provisions.”) (internal quotation marks andcitations omitted). The courts have thereby both expressly and implicitly recognized the OCC’s authority to adopt Section 7.4008 andits companion preemption regulations. In ruling to the contrary, the Court ofAppeal departed from a growing body ofconsistent federal and state court case law, creating a conflict this Court should immediately resolve. B. The Court of Appeal Ignored the Scope of the OCC’s Regulatory Authority and Misinterpreted the Nature of the OCC’s Preemption Regulations. The NBA charges the OCC with the comprehensive authority and responsibility to charter, oversee, examine, supervise and discipline national banks, includingall aspects oftheir organization, incorporation, examination, operation, and dissolution.” To enable the OCC to fulfill its statutory obligations, the NBA expressly delegates plenary powerto the OCC “to prescribe rules and regulationsto carry out the responsibilities of the office.” 12 U.S.C. § 93a. This Court has explicitly recognized the broad regulatory authority Congress granted to the OCC under the NBA. See Smiley, 11 Cal. 4th at 156-57 (“[T]he Comptroller ofthe Currency... ‘is charged with the enforcementofthe [federal] banking laws.’ ”) (citations omitted), (quoting Jnv. Co. Inst. v. Camp, 401 U.S. 617, 627 (1971); NationsBank ofN.C., N.A. v. Variable Annuity Life Ins. Co., 513 US. 251, 256-57 (1995)), aff'd 517 U.S. 735 (1996). Congress’ broad statutory delegation ofpower to the OCC closely parallels the delegation of rulemaking power to the OTS under the Home See 12 U.S.C. §§ 21, 26, 81-92a, 181-200, 481. -22- Owners’ Loan Act, 12 U.S.C. § 1464(a),'° with respect to which the U.S. Supreme Court has observed: “It would have been difficult for Congress to give the [agency] a broader mandate.” Fid Fed Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141, 161 (1982). Such a broad delegation ofregulatory authority “suggests that Congress expressly contemplated, and approved, the [agency]’s promulgation of regulations superseding state law.” Jd. at 162. Thus, as the courts have previously concluded,“[s]o long as he does not authorize activities that run afoul of federal laws governing the activities of the national banks, . . . the Comptroller has the power to preemptinconsistent state law.” Conference ofState Bank Supervisors v. Conover, 710 F.2d 878, 885 (D.C. Cir. 1983) (emphasis added); accord Wachovia Bank, N.A. v. Burke, 414 F.3d 305, 314 (2d Cir. 2005) (“Federal courts have recognized that the OCC mayissue regulations with preemptive effect.”); Wachovia Bank, N.A.v. Watters, 334 F. Supp. 2d 957, 964-65 (W.D. Mich. 2004)(“{T]he OCC holds broad and pervasive authority to regulate national banking associations. .. . In light of this statutory authority, it was within the OCC’s authority to promulgate [a regulation preempting state law].”), aff'd in part, 431 F.3d 556 (6th Cir. 2005), aff'd, 550 U.S. 1 (2007). Indeed, as the Court of Appealitself observed, see Decisionat 16, the NBAnotonly implicitly grants the OCC authority to issue preemption regulations; it also explicitly confirms the OCC’s authority to determinethe statute’s preemptive scope - in particular, with respect to state consumer protection laws. In amending the NBA in 1994, Congressspecifically 10 ~[T]he Director [of the OTS] is authorized, under such regulations asthe Director mayprescribe[,] to provide for the organization, incorporation,examination, operation, and regulation of . . . Federal savingsassociations. . . . givingpamary consideration ofthe best practices ofthriftinstitutions in the United States.” 12 U.S.C. § 1464(a). -23- authorized the OCC to make determinations “that Federal law preempts the application to a national bank of any State law regarding community reinvestment, consumer protection, fair lending, or the establishment of intrastate branches,” so long as those determinations undergo notice-and- comment procedures. 12 U.S.C. § 43(a). This additional grant of authority plainly confirms that Congress anticipated and intended that the OCC make determinations on preemptionofstate law as applied to national banks. Thus, as the Court of Appeal expressly acknowledged, the “OCC had authority to issue regulations interpreting the preemptive effect of the NBAandotherfederal law on state law with regard to national banks.” Decision at 16. And, as the Court ofAppealalso expressly acknowledged, the OCC “follow[ed] the proper proceduresin enacting [Section 7.4008].” Id. Yet, despite this specific recognition, and the undisputed understanding that “Federal regulations may preemptstate law just as fully as federal statutes,” id. at 15 (citing Miller, 170 Cal. App.4th at 984)(internal quotation marks omitted), the Court ofAppeal declared Section 7.4008 invalid for lack of OCC regulatory authority. Jd. at 19. The Court of Appeal faulted MBNAfor not being able to pointto a more express statement of such authority than 12 U.S.C. §§ 43(a) and 93a. See id.(citing the dissent in Watters, 550 U.S.at 44). But the preemptive effect of the OCC’s regulations “does not invalidate them unless Congress has expressed,either explicitly or implicitly, an intent that preemptionis not within the Comptroller’s power.” Conover, 710 F.2d at 883. Congress has not actedto alter or nullify Section 7.4008 sinceits adoption in 2004. Thus, the Court ofAppeal had nobasis upon whichto declare Section 7.4008 invalid. Indeed, the sole purported basis for the Court ofAppeals unprecedented ruling regarding Section 7.4008 was the U.S. Supreme Court’s opinion in Cuomoandthis Court’s opinion in Perdue. Seeid. at -24.- 16-19. However, neither Cuomo nor Perdue involved Section 7.4008 or any of its companion preemption regulations (12 C.F.R. §§ 34.4, 7.4007, 7.4009), and both those cases andthe regulations they involved are readily distinguishable. First, the regulation in Cuomodid not purport to preemptstate substantive law at all; rather, it concerned state supervisory and enforcementauthority over national banks with respectto state lawsthat indisputably are not preempted by federal law. Seeid. at 2718 (“{T]he Comptroller’s rule says that the State maynot enforceits valid, non-pre- empted lawsagainstnational banks.”). Any reliance on Cuomo,therefore, is wholly misplaced. Second, the fundamental purposeofthe regulations in both Cuomo and Perdue wasdifferent from that of Section 7.4008. In both Cuomo and Perdue, the regulations were interpretiverules, and the issue was whether the OCCproperly interpreted the text of the NBA. In Cuomo,the question was whether the OCChad properly interpreted, by regulatory definition, the term “visitorial powers” in the NBA, 12 U.S.C. § 484. See Cuomo 129 S. Ct. at 2714-15 (stating the question presented to be “whether the Comptroller’s regulation . . . can be upheld as a reasonable interpretation of the National Bank Act.”). In Perdue, the question was whether the OCC’s now-superseded “interpretive” rule on preemption relating to bank service charges was“a reasonableinterpretation of the controlling statutes.” Perdue, 38 Cal. 3d at 941. In both cases, the Courts found that the text of the NBA could not support the OCC’s statutory interpretation. In Cuomo, the Court found the OCC’sinterpretation of the term “visitorial powers” as including enforcement authority was not“reasonable”in light of historical interpretationsofthe term. Cuomo, 129 S. Ct. at 2715; see also Decision at 17 (discussing the Cuomo Court’s criticism of the OCC’s“interpretation” -25- of the NBA language). Thus, the Court held the OCC’s regulation was invalid to the extentthatit interpreted the term “visitorial powers”in the NBAto meanstate enforcement authority as well as “sovereign oversight and supervision.” Cuomo, 129 S. Ct. at 2715-18. Similarly, in Perdue, this Court rejected the interpretation ofthe OCCin a regulation expressly purporting to interpret statutory law. See Interpretive Ruling Concerning National Bank Service Charges, 48 Fed. Reg. 54,319 (Dec. 2, 1983), 49 Fed. Reg. 28,237 (July 11, 1984) (stating that the rule at issue in Perdue was an “interpretive rule”); Perdue, 38 Cal. 3d at 941 (holding that the regulation was “not a reasonable interpretation of the controlling statutes”). The Perdue Court, upon finding no statutory textual basis for the rule’s purported “interpretation,” concluded that the rule was,in effect, “legislati{ve]” in nature and could not “be enacted in the guise ofstatutory interpretation.” 38 Cal. 3d at 941. That wasfatal to the regulation,as legislative rules must undergo notice-and-comment rulemaking procedures, and the OCCrulehadnot undergonethose procedures. See 48 Fed. Reg. at 54,320 (“[For] interpretive rulings such as this . . . a notice ofproposed rulemakingis not required.”); 49 Fed. Reg.at 28,238 (same). However, the Court in Perdue did not opine, and had no occasionto opine, on whetherthe rule would have been valid if it had been intendedasa “legislative” rule and had been duly promulgated pursuant to notice-and-commentprocedures.!! In contrast, Section 7.4008 does not purport to “interpret” the NBA. Unlike the OCC’sinterpretative regulations at issue in Cuomo and Perdue, Section 7.4008 represents an “unambiguousintent to preempt state law.” ' As noted, pursuant to 12 U.S.C. § 43(a) - enacted eleven years afterPerdue was decided - OCC “interpretive” rulings on preemption involvingstate laws addressing consumer protection or bank branching now must,like all “legislative” rules, undergo notice-and-comment rulemaking. - 26 - 38 Cal. 3d. at 940 n.36; see 69 Fed. Reg. 1904 (“The OCCis adoptingthis final rule [Section 7.4008] to specify the types of state lawsthat do not apply to national banks’ lending . . . activities ....”). And, as the Court of Appeal acknowledged, see Decision at 16, Section 7.4008is a “full-dress regulation, issued by the Comptroller himself and adopted pursuantto the notice-and-commentproceduresofthe Administrative Procedure Act designed to assure due deliberation.” Smiley v. Citibank, 517 U.S. 735, 741 (1996). Assuch,the regulation represents “ ‘a reasonable accommodation of conflicting policies that were committed to the agency’s care bystatute.’ ” de la Cuesta, 458 U.S. at 154 (quoting United States v. Shimer, 367 US. 374, 383 (1961)). Given the well-established precedent confirming the OCC’s authority under the NBAto issue preemptive regulations, and the lack of any authority to the contrary, the Court ofAppeal had no groundfor declaring Section 7.4008 invalid. IV. CONCLUSION The Court ofAppeal’s Decision represents a radical departure from NBApreemption precedent. It announces standards novel to courts and to litigants andis contrary to sound public policy. Moreover, it declares invalid a federal regulation numerousfederal and state courts have both expressly and implicitly found valid. This Court should grant MBNA’s petition to resolve the conflicts created by, and the importantquestions of law inherentin, the Decision of the Court ofAppeal. DATED: June 21, 2010 ARNOLD & PORTER LLP py:cZaacrenee, Hee/met: LAURENCEJ. HUTT Attorneys for Respondent -27- CERTIFICATION OF WORD COUNT (Cal. Rules of Court, Rule 8.504(d)) Ascounsel for Respondentin this appeal, I certify that this Petition for Review consists of 8,396 words, including footnotes, but excluding the title page, tables, certification, date and signature block, as counted by the Microsoft “word count”tool in the Word program usedto prepare this brief. DATED: June 21, 2010 ARNOLD & PORTER LLP ayLaunmec SL.bute. LAURENCE J.HUTT = * Attorneys for Respondent - 28 - EXHIBIT A Filed 5/12/10 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE ALLAN PARKS, Plaintiff and Appellant, G040798 V. (Super. Ct. No. 04CC00598) MBNA AMERICABANK,N.A., OPINION Defendant and Respondent. Appeal from a judgmentofthe Superior Court of Orange County, Gail Andrea Andler, Judge. Reversed. Rosner & Mansfield, Michael R. Vachon; Law Office of Michael R. Vachon and Michael R. Vachonfor Plaintiff and Appellant. Amold & Porter, Laurence J. Hutt, Teri R. Richardson, and ChristopherS. Tarbell for Defendant and Respondent. Edmund G. Brown Jr., Attorney General, Frances T. Grunder, Assistant Attorney General, Kathrin Sears and Sheldon H.Jaffe, Deputy Attorneys General, for the Attorney Generalof the State of California as Amicus Curiae upon the request of the Court of Appeal. Horace G.Sneed,Director of Litigation, and Douglas B. Jordan, Senior Counsel, for the Office of the Comptroller of the Currency Administrator of National Banks as Amicus Curiae upon the request of the Court of Appeal. Civil Code section 1748.9 (section 1748.9) requires credit card issuers engaged in extending credit to cardholders by means of a “preprinted check or draft” (known as “convenience checks”in the industry) to “disclose on the front of an attachmentthatis affixed by perforation or other meansto the preprinted check or draft, in clear and conspicuouslanguage,all of the following information: [{] (1) That ‘use of the attached check ordraft will constitute a charge against your credit account.’ [§] (2) The annualpercentagerate andthe calculation offinance charges, as required by Section 226.16 of Regulation Z of the Code of Federal Regulations, associated with the use of the attached checkor draft. [{] (3) Whether the finance charges are triggered immediately upon the use ofthe check or draft.” Alleging systematic violations of section 1748.9, plaintiff Allan Parks filed a class action lawsuit against defendant MBNA America Bank, N.A. (MBNA)! for its purportedly unlawful business practices under Business and Professions Code section 17200 et seq. MBNAis a national banking association, organized underthe laws ofthe United States and regulated by the Office of the Comptroller of the Currency (OCC). (See 12 U.S.C. § 1 et seq.) Thetrial court granted judgmentonthe pleadings to MBNA, following Rose v. Chase Bank USA, N.A.(9th Cir. 2008) 513 F.3d 1032 (Rose)in finding section 1748.9 preempted by federal law applicable to national banks. We conclude l MBNArenameditself as FLA Card Services, N.A. Nevertheless, for the sake of simplicity, we shall follow the parties in continuing to refer to defendantas MBNA. section 1748.9 is not, on its face, preempted and therefore reverse. Section 1748.9 does not preclude national banks from exercising their authority to lend money on personal security under section 24 oftitle 12 of the United States Code (Seventh). Furthermore, without a factual record, a court cannot concludethat section 1748.9 significantly impairs national banks’ authorizedactivities.” FACTS Asthe court granted judgmenton the pleadings to MBNA,we assumethe truth of, andliberally construe,all properly pleaded factual allegations in Parks’s complaint. (Stone Street Capital, LLC v. California State Lottery Com. (2008) 165 Cal.App.4th 109, 116 (Stone Street).) In February 2003, MBNAissued a credit card to Parks. MBNAsent several preprinted drafts to his residence (and the residencesofother similarly situated proposed class members)in late 2003. The drafts sent to Parks and the other proposed class membersdid not contain any ofthe three disclosures required by section 1748.9. Parks used twoofthe preprinted drafts; other proposed class members useddrafts sentto them. Parks (andthe other class members) incurred finance charges and interest charges for each transaction, as interest accrued asofthe date of the transactions (there was no “grace period”asis typicalin credit card transactions). Parks, on behalf of himself and all others similarly situated, sued MBNAin June 2004 for its alleged violations of Business and Professions Code section 17200et seq. Several years into the litigation, MBNA renewed a previously rejected motion for judgmentonthepleadings, basing its renewed motion on subsequentcase law - Rose, , WegrantParks’s motion requesting that we take judicial notice ofa conference report of the United States Congress andcertain materials in the Federal Register. supra, 513 F.3d 1032. The court granted MBNA’s motion and entered Judgmentagainst Parks. DISCUSSION Wereview the judgment de novo,as it was based onthetrial court’s grant ofMBNA’s motion for judgmenton the pleadings. (StoneStreet, supra, 165 Cal.App.4th at p. 116.) In all material respects, Rose, supra, 513 F.3d 1032,is factually identical to the case before us. In Rose, class action plaintiffs sued Chase Bank USA, N.A. (Chase) for its alleged violations of section 1748.9. (Rose, at pp. 1034-1035.) The convenience checks provided by Chaseto its cardholders lacked disclosures required undersection 1748.9. (Rose, at p. 1035.) Thedistrict court granted Chase’s motion for judgment on the pleadings and the Ninth Circuit Court ofAppeals affirmed. (/d. at p. 1036.) Both courts held federal law preempted section 1748.9 as applied to national banks. (Rose, at pp. 1037-1038; Rose v. Chase Manhattan Bank USA (C.D.Cal. 2005) 396 F.Supp.2d 1116, 1122-1123.) Parks asserts Rose was wrongly decided. Weare not bound to follow federal court precedent; however, “‘numerousandconsistent”federal decisions may be particularly persuasive when they interpret federal law. (Etcheverry v. Tri-Ag Service, Inc. (2000) 22 Cal.4th 316, 320-321, overruled on another ground in Bates v. Dow Agrosciences LLC (2005) 544 U.S. 431, 437, 452.) If we are persuaded federal law preempts section 1748.9 as applied to national banks, the supremacyclause (U.S. Const., art. VI, cl. 2) obligates this court to honor federal law by holding section 1748.9 inapplicable to MBNA. Uncontroverted Legal Framework Webegin our analysis by setting forth several uncontroversial propositions. First, “federal law can preemptstate law in oneofthree ways: (1) expressly; (2) by actually conflicting with state law; or (3) by exclusively occupying a legislative field.” (Miller v. Bank ofAmerica, N.A. (2009) 170 Cal.App.4th 980, 984 (Miller).) Second, federal banking law sometimes, butnot always, preemptsstate regulation as applied to national banks. “Businessactivities of national banks are controlled by the National Bank Act (NBA or Act), 12 U.S.C. § 1 et seq., and regulations promulgated thereunder by the [OCC]. [Citations.] Asthe agency charged by Congress with supervision of the NBA, OCC oversees the operationsofnational banks andtheir interactions with customers.” (Watters v. Wachovia Bank, N.A. (2007) 550 U.S. 1, 6 (Watters).) “[F]ederal contro] shields national banking from unduly burdensome and duplicative state regulation. [Citations.] Federally chartered banks are subjectto state laws of general application in their daily business to the extent such laws do not conflict with the letter or the general purposes of the NBA.” (dd. at p. 11.) Third,national banks are authorized by the NBA “to carry on the business of banking . . . by loaning money onpersonal security ....” (12 U.S.C. § 24 (Seventh).) It is uncontested that federal law authorizes MBNAto extend credit by way of convenience checksto Parksand other credit card customers. (Cf. Smiley v. Citibank (1995) 11 Cal.4th 138, 146-147 [“It is clear that national banksare authorized to conduct credit card programs,to issue credit cards to holders, and to provide money thereunderto such personsandto others on their behalf in exchange for goods or services”].) But there is no referenceto state law in the text of the NBA with regard to the business of loaning moneyon personal security. The NBA doesnotexplicitly answer whether state law requiring particular disclosures in connection with convenience checksis preempted. Fourth, OCCissued regulations in 2004that purport to explain whichstate lawspertaining to non-realestate lending powers ofnational banks are preempted. In 5 relevantpart, these regulations provide: “(1) Except where made applicable by Federal law, state laws that obstruct, impair, or condition a national bank’s ability to fully exercise its Federally authorized non-realestate lending powersare not applicable to national banks. [{] (2) A national bank may make non-real estate loans without regard to state law limitations concerning: [9] . . . [J] (viii) Disclosure and advertising, including lawsrequiring specific statements, information, or other contentto be included in credit application forms,credit solicitations,billing statements, credit contracts, or other credit- related documents.” (12 C.F.R. § 7.4008(d) (2010).) “State laws on the following subjects are not inconsistent with the non-real estate lending powers of national banks and apply to national banksto the extentthat they only incidentally affect the exercise of national banks’ non-real estate lending powers: [{] (1) Contracts; [{] (2) Torts; [{] (3) Criminal law; [] (4) Rights to collect debts; [1] (5) Acquisition and transfer of property; [{] (6) Taxation; [J] (7) Zoning; and [4] (8) Any other law the effect of which the OCC determinesto beincidental to the non-real estate lending operations of national banks or otherwise consistent with the powersset out in paragraph(a)ofthis section.” (12 C.F.R. § 7.4008(e) (2010) fn. omitted.) Fifth, the federal Truth in Lending Act (TILA), title 15 of the United States Codesection 1601 et seq., and its accompanying regulations (Regulation Z), 12 Code of Federal Regulations part 226.1 (2009) et seq., require specific disclosures by businesses offering consumercredit (including national banks issuing credit cards). TILA grants the Board of Governorsofthe Federal Reserve System (and not OCC) powerto prescribe regulations andcarry out the purposes of TILA. (15 U.S.C. §§ 1602(b), 1604(a).) MBNAis compelled by TILA and Regulation Z (not to mention contract law)to disclose 3 Paragraph(a) of 12 Code of Federal Regulations part 7.4008 (2010) provides: “A national bank may make,sell, purchase, participate in, or otherwise deal in loansandinterests in loans that are not secured byliens on,or interests in, real estate, subject to such terms, conditions, andlimitations prescribed by the [OCC] and any other applicable Federal law.” the terms of the convenience checksit offers to consumers. But nothing in federal law specifies that such disclosures must be provided in “an attachmentthat is affixed by perforation or other meansto the preprinted check or draft... .” (§ 1748.9, subd. (a).) Moreover, nothing requires use of the precise language required in section 1748.9, subdivision (a)(1) - “That ‘use of the attached checkor draft will constitute a charge against your credit account.’” Subject to certain exceptions, TILA does not “annul, alter, or affect the lawsofanyState relating to the disclosure of information in connection with credit transactions, except to the extent that those lawsare inconsistent with the provisionsofthis subchapter, and then only to the extent of the inconsistency.” (15 U.S.C. § 1610(a)(1).) Neither party contendssection 1748.9 is preempted by TILA or is otherwise inconsistent with TILA. The Rose Cases Holding Section 1748.9 is Preempted Thedistrict and circuit courts in Rose engagedin slightly different analyses. The Ninth Circuit observed that Congress explicitly granted national banks the powerto loan money onpersonalsecurity and that Chase exercised this power by extending credit via convenience checks. (Rose, supra, 513 F.3d at p. 1037.) The court distilled the following rule from Supreme Court precedent: “Where, as here, Congress has explicitly granted a powerto a national bank withoutanyindication that Congress intended for that powerto be subjectto localrestriction, Congress is presumed to have intended to preempt state laws such as Cal. Civ. Code § 1748.9.” (Jbid.) Giventhestated legal rule and the circumstances ofthe case, the Rose court held it was required by Supreme Court precedent to conclude section 1748.9 was preempted. (Rose, at p. 1038.) Rose relied on three Supreme Court casesin support ofits conclusion: Watters, supra, 550 U.S.at p. 18; Barnett Bank ofMarion County, N.A. v. Nelson (1996) 517 U.S. 25, 33-35 (Barnett); and Franklin Nat. Bank ofFranklin Square v. People (1954) 347 U.S. 373, 378 (Franklin). (Rose, at pp. 1037-1038.) The Rose district court began with a similar analysis. (Rose v. Chase Manhattan Bank USA, supra, 396 F.Supp.2d at pp. 1119-1120.) In addition,the district court proceededto analyze 12 CodeofFederal Regulations part 7.4008(d) (2010). (Rose v. Chase Manhattan Bank USA, supra, at pp. 1121-1 122.) Thedistrict court found part 7.4008(d) to be compatible and consistent with prior Supreme Court decisions. (Rosev. Chase Manhattan Bank USA,supra,at p. 1121.) The district court further found part 7.4008(d) to be “a valid exercise of the Comptroller’s power to preempt inconsistent state law” (Rose v. Chase Manhattan Bank USA, supra, at pp. 1121-1122) under the notice and commentrulemaking proceduresprescribedbytitle 12 ofthe United States Code section 43. This regulation preempts section 1748.9 because it deems inapplicable to national banksstate laws that “obstruct, impair, or condition a national bank’s ability to fully exercise its Federally authorized non-real estate lending powers”(12 C.F.R. § 7.4008(d)(1) (2010)) andit authorizes a “national bank [to] make non-real estate loans without regard to state law limitations concerning: [{] ... [9] [d]isclosure and advertising, including laws requiring specific statements, information,or other content to be includedin. . . credit-related documents” (12 C.F.R. § 7.4008(d)(2)(viii) (2010); Rose v. Chase Manhattan Bank USA, supra, at pp. 1121-1122.) We mustaffirm the judgmentifweagree either that the result in Rose, supra, 513 F.3d at page 1037, follows from Supreme Court precedent, or that 12 Code of Federal Regulations part 7.4008(d) (2010) is a validly enacted regulation that preempts by its own force section 1748.9. No Preemption by the NBA As noted above, the NBA(in particular, 12 U.S.C. § 24 (Seventh)) provides little guidance on the question of whetherstate laws requiring disclosuresin addition to those required by federal consumerprotection law should be preempted when applied to national banks. Unlike the Ninth Circuit Court of Appeals, we do not think United States Supreme Court authorities provide an easy answereither.’ In Franklin, New York passed a law prohibiting all entities other than state- chartered savings banksor savings and loan associations from making “‘use of the word “saving” or “savings”or their equivalentin its banking orfinancial business, or use any advertisement containing the word “saving” or “savings,” or their equivalent... .”” (Franklin, supra, 347 U.S. at p. 374, fn. 1.) Federal law authorized national banks to receive “‘savings deposits.” (/d. at p. 375.) The appellant violated the state law by using “the word ‘saving’ and‘savings’ in advertising, in signs displayed in the bank, on its deposit and withdrawalslips, and in its annual reports.” (/d. at p. 376.) The Supreme Court found a “clear conflict” between New York’s law and federal law. (Jd. at p. 378.) The Supreme Court held national banks must be permitted to accept savings deposits; further, national banks may notberestricted from describing or advertising its services as savings accounts becausethisis necessary to compete in the business of accepting deposits in the banking industry. (/bid.) In Barnett, the Supreme Court was presented with the question of “whether a federalstatute that permits national banksto sell insurance in small towns pre-empts a state statute that forbids them to do so.” (Barnett, supra, 517 U.S. at p. 27.) The Florida statute at issue stated, “in essence, that banks cannotsell insurance in Florida - except 4 In contrast, the extent of preemption is much clearer with regardto state regulation of allowable interest rates or late fees through usury laws. (See, e.g., 12 U.S.C.§ 85 [authorizing national banks to charge “interest at the rate allowed by the laws of the State . .. where the bank is located”]; Marquette Nat. Bank ofMpls. v. First of OmahaServ. (1978) 439 U.S. 299, 313, 318 [holding the NBA permits national banksto charge interest on any loan up to the maximum rate allowed by the single state where the bank is “located,” regardless of usury lawsin the state where the consumer loan is provided (the “exportation” doctrine)]; Smiley v. Citibank (South Dakota), N.A. (1996) 517 U.S. 735, 745-747 [deferring to reasonable OCC interpretation in concluding late fees are included in NBA’sdefinition of“interest” and these fees are therefore exclusively regulated by the national bank’s home state].) that an unaffiliated small town bank . . . maysell insurance in a small town.” (/d. at p. 29.) The court first observed there was noirreconcilable conflict between the two statutes: national banks could comply with both federal law andstate law by not acting as an insuranceagentin Florida. (Id. at pp. 31-32.) But the Court concludedthe federal grant of authority - “national banks “may... act as the agent’ for insurance sales[ (12 U.S.C. § 92)]” - was designed to grant“a broad, nota limited, permission.” (/d. at p. 32.) The court next summarized relevant law: “(Normally Congress would not wantStates to forbid, or to impair significantly, the exercise of a power that Congress explicitly granted. Tosaythis is not to deprive States of the powerto regulate national banks, where(unlike here) doing so doesnot preventor significantly interfere with the national bank’s exercise of its powers.” (Jd. at p. 33.) The court held the Florida statute was preempted. (Jd.at pp. 37, 43.) In Watters, the Supreme Court was faced with the question of whether national banks’ “operating subsidiaries” (whichare state-chartered entities) are properly regulated by state regulators via licensing schemes, reporting requirements, and visitorial powers(the last being the regulatory powerto conductaudits and surveillance of the regulated entity). (Watters, supra, 550 U.S.at p. 7.) The court reiterated: “States are permitted to regulate the activities of national banks where doing so does not prevent or significantly interfere with the national bank’s orthe national bank regulator’s exercise of its powers. But whenstate prescriptions significantly impair the exercise of authority, enumerated or incidental under the NBA,the State’s regulations must give way.” (/d. at p. 12.) The Supreme Court concludedthat, because national banks were authorized by statute andregulation to do business through non-bank operating subsidiaries and because federal law vestedvisitorial powersovernational bankssolely to the OCC,national banks’ operating subsidiaries are subject solely to the visitorial oversight of the OCCandnotstate regulators. (/d. at pp. 20-21; see 12 U.S.C. § 484(a) [No nationalbank shall be subject to any visitorial powersexcept as authorized by 10 Federal law’].) The Supreme Court’s interpretation comported with 12 Code of Federal Regulationspart 7.4006 (2010), which provides that state laws applied to operating subsidiaries “to the same extent that those laws apply to the parent national bank” (Watters, at p. 20), but the court explicitly declined to clarify whether the OCC’s regulation was owed anydeference. (Id. at p. 21 y In sum,accordingto pertinent Supreme Court conflict preemption precedents, the NBA precludesstates fromforbidding, or impairing significantly, the exercise of a powerexplicitly granted to national banks by the NBA. Onits face, section 1748.9 does notforbid the exercise of a banking power authorized by the NBA. Section 1748.9 does not bar national banks from loaning money on personalsecurity through convenience checks. Instead, section 1748.9 is a generally applicable disclosure law applying to any “credit card issuer that extends credit to a cardholder through the use of a preprinted check... .” (§ 1748.9, subd. (a).) Rather than forbidding the loaning of moneyvia convenience checks,section 1748.9, subdivision (a), merely requires “clear and conspicuous”disclosures ofthree items of information and requires those disclosures to be attached to the convenience checks. But the question remains whether section 1748.9 significantly impairs the exercise of the powerto lend moneyonpersonal security. The court’s grant ofjudgment on the pleadings precludes an examinationofthe factual question ofhow national banks are actually burdened by section 1748.9. Clearly, section 1748.9 facially imposes some burden (whethersignificant or not) on national banks. And regardless ofthe particular burden imposed by section 1748.9, MBNAandothernational banks would prefer to avoid navigating particular regulatory regimes in each of the 50 states. Does section ° Three members of the Watters court dissented; one point of contention was the OCC’s aggressive efforts to preempt state law. (Watters, supra, 550 U.S.at p. 44 (dis. opn. of Stevens,J.) (“Never before have we endorsed administrative action whose sole purpose wasto preemptstate law rather than to implement a statutory command”].) 11 1748.9 (or any similar state disclosure law) amountto a significant impairment of MBNA’s powerto loan money on personal security as a matter oflaw? An affirmative answerto this question would have the benefit of establishingclarity in the law. National banks could safely ignore section 1748.9 and other state disclosure laws without considering whethera particular statute will be preempted based ona trial court’s factualfindings. (See Rose, supra, 513 F.3d at p. 1037 [“Where, as here, Congress has explicitly granted a powerto a national bank without any indication that Congress intended for that powerto be subject to localrestriction, Congress is presumedto have intended to preemptstate laws such as Cal. Civ. Code § 1748.9”].) Butour role, of course, is not to divine the best policy. Weare tasked with deciding whether the NBA (whichisitself silent on the question ofdisclosure obligations) preempts section 1748.9, not whether Congress should have preemptedall state consumer disclosure laws whenit enacted TILA or the NBA. And, according to the United States Supreme Court, the preemptiontest is not whetherthe law causes “any” impairmentofthe exercise of banking powers; the test is whether such impairmentis “significant.” Onefederaldistrict court case explored the preemption question with regard to the extensive disclosure requirements mandated by Civil Code section 1748.13. (American Bankers Association v. Lockyer (E.D.Cal. 2002) 239 F.Supp.2d 1000 (American Bankers).) A variety of federally regulatedfinancialinstitutions (including but notlimited to national banks chartered underthe NBA)challengedthevalidity of Civil Code section 1748.13 on the groundsthatit was preempted by various federal banking laws. (American Bankers, at pp. 1001-1002, 1006.) The banksintroduced evidence showingestimatedcosts ofcompliance with thestatute. (/d. at p. 1005.) The court ultimately granted summary judgmentand a permanent injunction to the banks, 12 prohibiting California from enforcingthe statute againstall federally chartered credit card issuers. (/d. at p. 1022.) The American Bankers court first explained that TILA’s “savings clause” (15 U.S.C. § 1610(a)(1)) is expressly limited to TILA and doesnot purport to preclude other federal law from preemptingstate regulation of disclosures. (American Bankers, supra, 239 F.Supp.2d at p. 1009.) As to the NBA,the court, reviewing the evidence and deferring to an OCC amicus brief and opinionletter, concluded Civil Code section 1748.13 imposed substantial monetary and non-monetary burdensonnational banks. (American Bankers, at pp. 1016-1018.) The court further indicatedits agreement with OCC’sposition (in 2002) that certain “de minimus” disclosure requirements might not be preempted by federal law. The court opinedthat one portion ofthe statute fell within the de minimus exception asits effects were salutary andits burdens were minimal. (d. at pp. 1019- 1020; see Civ. Code, § 1748.13, subd. (a)( 1) [*A credit card issuer shall, with each billing statement provided to a cardholderin this state, provide the following on the front of the first page ofthe billing statementin type no smaller than that required for any other required disclosure, but in no case in less than 8-point capitalized type: [{] (1) A written statementin the following form: ‘Minimum Payment Warning: Makingonly the minimum paymentwill increasethe interest you pay andthe timeit takes to repay your balance’”].) But the court ultimately concluded that Civil Code section 1748. 13, subdivision (a)(1), could not be severed from the remainderofthestatute in order to be enforced only against somefederally charteredinstitutions (the national banks). (American Bankers, at pp. 1020-1021.) American Bankers is a mixed bag for the parties in this case. On the one hand,the ultimate result was the preemption of Civil Code section 1748.13, a California statute that regulates disclosures provided bycredit card issuers. On the other hand, the statute at issue in American Bankers is lengthy anddetailed, and the court reachedits 13 decision only after considering actual evidenceofthe burdens placed on banking institutions. Under American Bankers, some disclosure laws are simply not significant enough to be preempted. Moreover, our California Supreme Court endorsed leaving some NBA preemption decisions opento factual proof in a different context 25 years ago: “Although conceivably information not contained in the pleadings mightlead to a different conclusion, such informationis not before us in reviewing a judgment upon demurrer. We cannot presume, without evidence, that prohibiting a national bank from setting unreasonableprices or enforcing an unconscionable contract will render that bank less efficient, less competitive or less able to fulfill its function in a national banking system.” (See Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 943-944 (Perdue) [discussed belowin detail].) Weconclude that whena state disclosure requirement doesnot, onits face, forbid or significantly impair national banks from exercising a powergrantedto it by Congress under the NBA,national banks claiming preemption must makea factual showingthat the disclosure requirementsignificantly impairs the exercise of the relevant poweror powers. Section 1748.9 does not, on its face, significantly impair federally authorized powers under the NBA.It consists of a brief disclosure requirement that applies only to convenience checks. Ofcourse, given the proceduralposture of this case, MBNAhasnotyet had an opportunity to submit evidenceestablishing a significant impairment. Weneednotelucidate a precise “yardstick for measuring whena state law ‘significantly interferes with’ . . . the exercise of national banks’ powers.” (American Bankers, supra, 239 F.Supp.2d at p. 1017 [noting the absence of such a yardstick, commenting that the “threshold of preemption is in some cases remarkably low,” but also indicating “other burdensare insufficient to warrant preemption”].) 14 No Preemption by 12 Code ofFederal Regulations part 7.4008 “Federal regulations may preemptstate law justas fully as federal statutes.’””” (Miller, supra, 170 Cal.App.4th at p. 984.) A regulation issued by OCC, 12 Code of Federal Regulations part 7.4008(d) (2010), purports to preempt the application of certain state laws to national banks. In additionto the district court in Rose, several other courts have applied 12 Code of Federal Regulations part 7.4008 (2010)to invalidate state lawsas applied to national banks. (See Miller, supra, 170 Cal.App.4th at pp. 985-988 [without examining validity of OCC regulations, holding Civ. Code, §§ 9 & 11 to be preempted by 12 C.F.R. § 7.4008(d)(2)(iv) (2010)): Augustine v. FIA Card Services, N.A. (E.D.Cal. 2007) 485 F.Supp.2d 1172, 1175-1176 [claims underCalifornia unfair competition law against credit card issuer for retroactively increasing interest rates preempted by 12 C.F.R. § 7.4008(d)(2)(iv) (2010)].) It is clear that 12 Code of Federal Regulations part 7.4008(d) (2010), if valid, expressly preempts section 1748.9. This regulation deems inapplicableto national banksstate lawsthat “obstruct, impair, or condition a national bank’s ability to fully exercise its Federally authorized non-realestate lending powers” (12 C.F.R. § 7.4008(d)(1) (2010)) andit authorizes a “national bank [to] make non-real estate loans without regard to state law limitations concerning: [{] ..- [9] [d]isclosure and advertising, including laws requiring specific statements, information, or other content to be includedin. . . credit-related documents” (12 C.F.R. § 7.4008(d)(2)(viii) (2010)). In light ofthis clear, specific language, it would be disingenuousto claim that section 1748.9 falls within one of the generalcategories identified in 12 Code of Federal Regulations part 7.4008(e)(8) (2010), in whichstate law is not preempted (e.g., state law pertaining to contracts, torts, or “[a]ny other law the effect of which the OCC determines to be incidental to the non-realestate lending operationsofnational banksor otherwise consistent with the powersset out in paragraph (a) ofthis section”). 15 Parks claims 12 Code of Federal Regulations part 7.4008 (2010) is invalid insofar as it purports to preemptsection 1748.9. The thrust of Parks’s argumentis that OCClacked authority to essentially announcethat the NBA preemptedthe field of disclosure law (or, more broadly, consumerprotection law) with regard to national banks. Asdiscussed above, the NBAitself hastraditionally been interpreted as preempting state consumerprotection legislation that conflicted with the NBA’s terms by foreclosing bankingactivities authorized by the NBA or by imposing unreasonable burdens on national banksin their exercise ofpowers authorized by the NBA. Nothing suggests OCC failed to follow the proper procedures in enactingits tule,i.e., notice and commentrulemakingproceduresprescribed bytitle 12 of the United States Codesection 43. (See Rose v. Chase Manhattan Bank USA, supra, 396 F.Supp.2d at pp. 1121-1122.) This statute contemplates that OCC will issue “opinion letter[s]” and “interpretive rule[s]” on the question of whether “[f]ederal law preempts the application to a national bank of . . . State law regarding . . . consumerprotection [and] fair lending... .” (12 U.S.C.§ 43(a).) Thus, OCC had authority to issue regulations interpreting the preemptive effect of the NBA andother federal law on state law with regard to national banks. Andit is not disputed by Parks that OCC complied with the proceduresrequired bytitle 12 of the United States Code section 43. The question before us is whether the OCC’s regulation - a blanketban onallstate disclosure requirements applying to national banks - is substantively valid. The United States Supreme Court recently concluded OCC wenttoo far in issuing a different regulation pertaining to preemption. (See Cuomov. C.learing House Assn L.L.C. (2009) U.S. ___-*[129 S.Ct. 2710] (Cuomo).) The pertinent regulation definesvisitorial powersto include “[e]nforcing compliance with any applicable federal or state laws concerning [activities authorized or permitted pursuant to federal banking law].” (12 C.F.R. § 7.4000(a)(2)(iv) (2010); Cuomo,at p. 2715.) As explained in Watters, supra, 550 U.S. 1, only OCC may exercise visitorial powers over national banks 16 and their operating subsidiaries. (Cuomo, at p. 2717.) Thus, 12 Code of Federal Regulationspart 7.4000(a)(2)(iv) (2010) “prohibits the States from ‘prosecuting enforcementactions’ exceptin ‘limited circumstances authorized by federallaw.’” (Cuomo,at p. 2715.) New York’s Attorney General(first Eliot Spitzer, and then Andrew M. Cuomo)appealed the lower courts’ determination that they were precluded by federal law from investigating national banks and bringing enforcement actions against national banksfor alleged violations ofstate fair lending laws. (Jd. at p. 2714.) “Underthe familiar Chevron"! framework, [courts] defer to an agency’s reasonable interpretation ofa statute it is charged with administering.” (Cuomo, supra, 129 S.Ct. at p. 2715.) OCC “can give authoritative meaning to the [NBA] within the bounds of . . . uncertainty [inherentin the law].” (Jbid.) “But the presence of some uncertainty does not expand Chevron deference to cover virtually any interpretation of the National Bank Act.” (/bid.) The Supreme Court found the OCC rule would produce absurd results, in that some state regulation is not preempted by the NBA but state regulators would be precluded from enforcing such regulations. (Jd. at p. 2718.) Further, the court observed the OCC rule “attempts to do what Congress declined to do: exempt national banks from all state banking laws, or at least state enforcement of those laws.” (Id. at p. 2720.) The court vacated the portion of a lower court injunction against the New York Attorney General that precluded him from bringing judicial enforcement actions against national banks. (Id. at p. 2722.) In Perdue, supra, 38 Cal.3d at pages 937-939, our Supreme Court held an OCC regulation purporting to preemptall state laws limiting bank service charges to be invalid. The regulation provided “that state laws limiting bank service charges ‘are preempted by the comprehensivefederal statutory scheme governing the deposit-taking function of national banks ....’” (/d. at p. 938.) The Perdue court found “no Chevron U.S.A. Inc. v. Natural Resources Defense (1984) 467 U.S. 837. 17 comprehensive federal statutory scheme governing the taking of deposits. There is one relevant statute, Section 24 of the National Bank Act, and that merely authorizes banksto accept deposits. Section 24 may by implication also authorize banksto charge for deposit-related services as an incidental power necessary to carry on the business of receiving deposits, but such implied authority does not constitute a regulatory scheme so comprehensiveas to displace state law.” (Jbid.) After construing relevant Supreme Court authority, the Perdue court concluded that OCC’s rule was“not a reasonable interpretation of the controlling statutes. [Citation.] It is not an attemptto interpret the language ofthestatute,fill in the gaps in the statutory coverage, or to explain how the Comptroller will exercise his discretion. Instead, the regulation, insofar as it claims federal preemption, represents legislation of far-reaching character and effect, of a type never considered by Congress, which would radically alter the respective roles of the states and the Comptrollerin the regulation of bank-depositor contracts. Such legislation cannot be enacted in the guise of statutory interpretation.” (Perdue, supra, 38 Cal.3d at p. 941, fns. omitted.) The Perdue court reversed the judgmentgranted to defendants following a successful demurrerto contract and unfair competition claims madebyplaintiffs, holding: “We cannot presume, without evidence,that prohibiting a national bank from setting unreasonableprices or enforcing an unconscionablecontract will render that bank less efficient, less competitive or less ableto fulfill its function in a national banking system.” (Id. at pp. 943-944.) The skepticism previously expressed by both the California Supreme Court and United States Supreme Court regarding some of OCC’s preemption regulationsis readily applied to the circumstance before us. (See also Hood v. Santa Barbara Bank & Trust (2006) 143 Cal.App.4th 526, 547-548 [declining to defer to OCC’s preemption regulations].) The language of 12 Code of Federal Regulationspart 7.4008(d) (2010) does not suggest a reasonable attempt to describe and interpret the reach ofNBA preemption. (12 U.S.C. § 43 [authorizing OCCto issue opinionletters or interpretative 18 rules on the scope of federal preemption].) Rather, the regulation exempts national banks from all state disclosure requirements, even though neither the NBA nor TILA expressed an intentionto create this bright line exemption. MBNAclaimsthat greater deference should be shown to OCC because 12 Code of Federal Regulationspart 7.4008(d) (2010)is allegedly not an “interpretive rule” authorized by section 43 oftitle 12 of the United States Code. Instead, according to MBNA,part 7.4008(d) represents “plenary”legislative rulemaking authorized bytitle 12 of the United States Code section 93a (the OCC “is authorized to prescribe rules and regulationsto carry out the responsibilities of the office”). The premise behind this argumentis that OCC,like any duly authorized federal agency, can issue substantive regulations through notice-and-commentrulemakingthat, of their own force, preempt state law. We agree with MBNAthatlegislative rules issued by federal agencies can preemptstate law,if such rules are within the powerdelegated to the agency by Congress. (See, e.g., Fidelity Federal Sav. & Loan Ass’n v. De La Cuesta (1982) 458 U.S. 141, 153-170 [agency’s regulation authorizing use of “due-on-sale”clause preempts state law limiting use of such provisions].) No authority, however,is provided by MBNAforthe proposition that Congress has delegated the power to OCC to take “administrative action whose sole purpose [is] to preemptstate law rather than to implement a statutory command.” (Watters, supra, 550 U.S.at p. 44 (dis. opn. of Stevens, J.).) Although weare reluctantto create a split of authority with the Ninth Circuit Court ofAppeals on a point of federal law, our understanding of the authorities discussed above requires usto doso: Itis still possible MBNA may demonstratethat section 1748.9 imposes burdenson national banksthatsignificantly impair the authority 19 granted to it by the NBA. Butthereis nobasis for preempting section 1748.9 without a factual record.’ DISPOSITION The judgmentis reversed. Parks shall recover his costs on appeal. IKOLA,J. WE CONCUR: MOORE,ACTINGP.J. ARONSON,J. Interestingly, in its two-page amicusbrieffiled at the invitation ofthis court, OCC did notassert that 12 Code of Federal Regulationspart 7.4008(d) (2010) requires this court to find section 1748.9 is preempted. The OCC did not mentionits regulationsin its brief. Instead, the OCC “fully concursin the Ninth Circuit’s analysis in its opinion”in Rose, supra, 513 F.3d. 1032, which did notrely on 12 Code ofFederal Regulations part 7.4008(d) (2010). 20 PROOF OF SERVICE Parks, et al. v. MBNA America Bank, N.A. (USA) I am employedin the County of San Francisco , State of California. I am over the age of 18 and nota party to the above-entitled action. My business address is One Embarcadero Center, 22"! Floor, San Francisco, CA 94111-3711. On June 21, 2010, I served the foregoing documentdescribed as a PETITION FOR REVIEW by placing a true copy thereofenclosed in sealed envelope(s) addressed as follows: Michael Vachon Law Office of Michael Vachon 16935 West Bernardo Drive, Suite 175 San Diego, CA 92127-1100 Counselfor Plaintiffs andAppellants District Attorney for the County of Orange 401 Civic Center Drive Santa Ana, CA 92701 Sheldon H.Jaffe Clerk of the Court Deputy Attorney General California Superior Court, California DepartmentofJustice County of Orange 455 Golden Gate Ave., Suite 11000 Civil Complex Center San Francisco, CA 94102-7004 751 West Santa Ana Blvd. Santa Ana, CA 92701 Clerk of the Court Office of the Comptroller of the Currency California Court of Appeal Litigation Department Fourth Appellate District Attn: Douglas Jordan, Senior Counsel Division Three 250 E Street S.W. 601 West Santa Ana Blvd Washington, DC 20219-4515 Santa Ana, CA 92701 Appellate Coordinator Office of the Attorney General Consumer Law Section 300 S. Spring Street Los Angeles, CA 90013-1230 By U.S. mail. I enclosed the documentin a sealed envelope or package addressedto the personsat the addresses above and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this business’ practice for collecting and processing correspondencefor mailing. On the same day the correspondenceis placed for collection and mailing,it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. [am employed in the county where the mailing occurred. The envelope or package was placed in the mailat San Francisco, California. Mi STATE:I, Marie Ticzon, declare under penalty ofperjury underthe lawsofthe State of California that the foregoing is true and correct. Executed on June 21, 2010, at San Francisco, California. da Y g -