“The judgment is affirmed by an equally divided Court.” With that one sentence, the Supreme Court case of Hawkins v. Community Bank of Raymore, Case No. 14-520 came to an end. The first 4-4 decision from the Court since the death of Justice Antonin Scalia leaves unresolved, at least on a national level, whether the Board of Governors of the Federal Reserve acted within its authority when it revised Reg. B and changed the definition of “applicant” under the Equal Credit Opportunity Act to include the spouses of persons who guaranty commercial debt. Under Eighth Circuit precedent, guarantors do not have standing to bring Reg. B claims. In the Sixth Circuit, they do. Other circuits will now be able to weigh in with their own opinions.
Perhaps of more significance, the Hawkins case illustrates what might happen to other cases pending before the Court, particularly as the amount of time the Court must function with 8 justices increases. When the Court heard argument in the Hawkins case on the first day of the term, some Court observers wondered why the Court was taking the time to deal with a seemingly trivial issue. Others described the case as a “palate-cleanser;” something to warm up the justices after the acrimonious “jiggery-pokery” which prevailed late in the prior term. At oral argument, the justices confirmed they understood the true issue in the Hawkins case was not really lending discrimination, but rather agency power, with several questions focused on whether Congress’ use of the word “applicant” might be broad enough to include guarantors and whether various dictionary definitions of “applicant” might shed light on the issue, and whether Justice Breyer could be said to be an “applicant” if he applies on behalf of his grandson for kindergarten. Given the issue involved, and given that the decision resulted in a 4-4 split following Scalia’s death, it seems reasonable to conclude that the case was originally to be decided 5-4 in favor of the bank, thus curtailing the agency’s action. Such a ruling would have set precedent on a national level and would have provided an opportunity for the majority to author an opinion on the limits of agency rule-making. Scalia’s sudden death changed that trajectory and instead of a 5-4 majority, the case was resolved as a 4-4 split, leaving the ultimate decision for another day, and for another case.