PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
H&R BLOCK EASTERN ENTERPRISES,
INCORPORATED,
Plaintiff-Appellant,
v.
SARAH BLOOM RASKIN, In her
official capacity as Commissioner No. 08-2162
of the Division of Financial
Regulation of the Maryland
Department of Labor, Licensing
and Regulation,
Defendant-Appellee.
H&R BLOCK EASTERN ENTERPRISES,
INCORPORATED,
Plaintiff-Appellee,
v.
SARAH BLOOM RASKIN, In her
official capacity as Commissioner No. 08-2163
of the Division of Financial
Regulation of the Maryland
Department of Labor, Licensing
and Regulation,
Defendant-Appellant.
Appeals from the United States District Court
for the District of Maryland, at Baltimore.
Marvin J. Garbis, Senior District Judge.
(1:07-cv-01822-MJG)
2 H&R BLOCK v. RASKIN
Argued: October 29, 2009
Decided: January 15, 2010
Before MOTZ and KING, Circuit Judges, and
Anthony J. TRENGA, United States District Judge
for the Eastern District of Virginia, sitting by designation.
Vacated and remanded by published opinion. Judge King
wrote the opinion, in which Judge Motz and Judge Trenga
joined.
COUNSEL
ARGUED: Jerrold Joseph Ganzfried, HOWREY, LLP,
Washington, D.C., for Appellant/Cross-Appellee. Jonathan R.
Krasnoff, OFFICE OF THE ATTORNEY GENERAL OF
MARYLAND, Baltimore, Maryland, for Appellee/Cross-
Appellant. ON BRIEF: Matthew M. Neumeier, Gabriel A.
Crowson, HOWREY, LLP, Chicago, Illinois; William Mur-
phy, Jr., Richard V. Falcon, THE MURPHY FIRM, Balti-
more, Maryland, for Appellant/Cross-Appellee. Douglas F.
Gansler, Attorney General of Maryland, Baltimore, Maryland,
for Appellee/Cross-Appellant.
OPINION
KING, Circuit Judge:
In 2007, Plaintiff H&R Block Eastern Enterprises, Incorpo-
rated ("Block"), instituted a three-count civil action in the
District of Maryland, seeking declaratory and injunctive relief
with respect to enforcement of Maryland’s Credit Services
H&R BLOCK v. RASKIN 3
Businesses Act (the "CSBA"). See Md. Code Ann., Com. Law
§§ 14-1901 to -1916. More specifically, Block sought to bar
the Commissioner of the Division of Financial Regulation of
the Maryland Department of Labor, Licensing, and Regula-
tion (the "Commissioner") from enforcing the CSBA against
Block. In cross-motions for partial summary judgment, Block
and the Commissioner each requested that the district court
assume the CSBA applies to Block and decide whether fed-
eral law preempts the CSBA as to Block. In disposing of these
motions, the district court assumed the applicability of the
CSBA and awarded partial summary judgment to each party,
ruling that certain of the CSBA’s provisions are preempted.
See H&R Block E. Enters., Inc. v. Turnbaugh, No. 1:07-cv-
01822 (D. Md. July 30, 2008) (the "Memorandum Decision").1
Both parties appeal from the district court’s Memorandum
Decision and subsequent judgment. Block contends that the
court erred by failing to declare the CSBA entirely preempted,
while the Commissioner maintains that the court erred in find-
ing any portion of the CSBA preempted. Nevertheless, before
we can determine whether the CSBA is in any facet pre-
empted, we must determine whether the district court erred in
not analyzing, as the first step in the preemption analysis,
whether the CSBA in fact applies to Block. As explained
below, we conclude that the court erred in that respect and
therefore vacate and remand.
I.
A.
Block, a Missouri corporation, is one of the largest tax-
services providers in the United States. One of the products
Block offers is a "refund anticipation loan" (an "RAL"),
1
Block commenced this action against Commissioner Charles Turn-
baugh. Shortly thereafter, Sarah Bloom Raskin, the named appellee and
cross-appellant in this matter, replaced Turnbaugh as the Commissioner.
4 H&R BLOCK v. RASKIN
which is a short-term loan secured by a consumer’s antici-
pated tax refund. Although Block provides its customers with
loan application forms, any RALs flowing therefrom are actu-
ally made by HSBC Bank U.S.A., N.A. ("HSBC Bank").
After evaluating a Block customer’s loan application and
deciding to make an RAL, HSBC Bank forwards its loan dis-
bursement check to Block, which then delivers the check to
the borrower.
Between 2005 and 2007, the Commissioner repeatedly
threatened to enforce the CSBA against Block and other tax
preparers, asserting that businesses "arranging RALs who
receive a fee either from the lender or the consumer must
[comply with the CSBA]." J.A. 51.2 Thus, on July 11, 2007,
Block filed its complaint in this matter (the "Complaint"),
seeking declaratory and injunctive relief with respect to the
Commissioner’s view of the CSBA. In Count I of the Com-
plaint (the "Coverage Count"), Block alleged, and requested
the court to declare, that Block is not a "credit services busi-
ness" under the CSBA, thereby precluding application of the
CSBA to Block.3 In the alternative, Block alleged in Counts
II and III (collectively, the "Preemption Counts") that the
National Bank Act, in conjunction with the regulations pro-
2
Citations herein to "J.A. ___" refer to the contents of the Joint Appen-
dix filed by the parties in this appeal.
3
The CSBA, by its terms, applies to a "credit services business," which
is defined therein as
any person who, with respect to the extension of credit by others,
sells, provides, or performs, or represents that such person can or
will sell, provide, or perform, any of the following services in
return for the payment of money or other valuable consideration:
(i) Improving a consumer’s credit record, history, or rating
or establishing a new credit file or record;
(ii) Obtaining an extension of credit for a consumer; or
(iii) Providing advice or assistance to a consumer with regard
to either subparagraph (i) or (ii) of this paragraph.
Md. Code Ann., Com. Law § 14-1901(e)(1).
H&R BLOCK v. RASKIN 5
mulgated thereunder (collectively, the "NBA"), preempts the
CSBA from being applied to Block.4 Block thus requested
that the court enter a declaratory judgment and enjoin the
Commissioner from enforcing the CSBA against it.5
On April 25, 2008, Block moved for partial summary judg-
ment, seeking such relief on the Preemption Counts only. In
its supporting memorandum, Block requested that the district
court "assume, arguendo, that Block is a ‘credit services busi-
ness’ under the [CSBA] and that the statute applies to [RALs]
. . . that Block customers obtain from HSBC Bank." J.A. 172.
Block specified, however, that it did not "concede that it is a
‘credit services business’" and that it reserved "the right to
prove that it is not subject to the CSBA" in the event the court
rejected its motion. Id. On May 30, 2008, the Commissioner
filed a cross-motion for partial summary judgment on the Pre-
emption Counts and also posited that the court could "assume,
arguendo, that Block meets the definition of a credit services
business." Id. at 336. The Commissioner’s cross-motion
sought a judgment to the effect that the NBA does not pre-
empt the CSBA.
B.
On July 30, 2008, after conducting oral argument on the
cross-motions, the district court filed its Memorandum Deci-
sion, which assessed only the Preemption Counts. The court,
acting on the parties’ suggestion that it assume that the CSBA
4
The NBA, codified at 12 U.S.C. §§ 1 et seq., vests in nationally char-
tered banks enumerated powers and "all such incidental powers as shall be
necessary to carry on the business of banking." 12 U.S.C. § 24 Seventh.
5
In the Complaint, Block alleges federal question jurisdiction under
§ 1331 of Title 28, which grants a district court "original jurisdiction of all
civil actions arising under the Constitution, laws, or treaties of the United
States." Because Block sought, inter alia, injunctive relief on the basis of
preemption, its Complaint presents a federal question which the federal
courts have jurisdiction to resolve. See Verizon Md. Inc. v. Pub. Serv.
Comm’n of Md., 535 U.S. 635, 642 (2002).
6 H&R BLOCK v. RASKIN
applies to Block, awarded limited summary judgment relief to
each party. More specifically, the court concluded that the
NBA preempts three of the CSBA’s consumer-protection pro-
visions, awarding partial summary judgment to Block with
respect to those provisions. The court further concluded, how-
ever, that none of the CSBA’s remaining provisions were pre-
empted by the NBA and otherwise awarded partial summary
judgment to the Commissioner on the Preemption Counts.
The Memorandum Decision did not address the Coverage
Count, nor did it assess the issue of whether the CSBA applies
to Block, instead accepting the parties’ assumption of such
applicability. In that respect, the Memorandum Decision sim-
ply recited that, "[f]or purposes of the instant motions, the
parties agree that the Court should assume that Block is a
‘Credit Services Business’ as that term is defined in . . . the
CSBA." Memorandum Decision 4.
Thereafter, on August 28, 2008, the parties jointly filed a
Stipulation of Dismissal, pursuant to Federal Rule of Civil
Procedure 41(a)(1)(A)(i), with respect to the Coverage Count.6
The parties further requested therein that the district court
enter final judgment pursuant to Rule 58(d). As in its support-
ing memorandum, however, Block reserved in the Stipulation
of Dismissal "all its rights to bring an action seeking relief
similar to that sought in [the Coverage Count] in Maryland
state court with respect to the applicability of the Maryland
[CSBA]." H&R Block E. Enters., Inc. v. Turnbaugh, No.
1:07-cv-01822 (D. Md. Aug. 28, 2008) (Docket No. 28). On
September 3, 2008, the court, acting on the Stipulation of Dis-
missal, dismissed the Coverage Count without prejudice and
entered final judgment on the Preemption Counts in accor-
dance with its Memorandum Decision.
Two separate appeals resulted from the district court’s
Memorandum Decision. First, Block appealed from the judg-
6
For whatever reason, the parties chose not to include the Stipulation of
Dismissal in the Joint Appendix filed in this appeal.
H&R BLOCK v. RASKIN 7
ment to the extent that its motion for partial summary judg-
ment on the Preemption Counts was denied. Second, the
Commissioner cross-appealed the court’s ruling with respect
to the provisions of the CSBA that the court deemed to be
preempted by the NBA. We possess jurisdiction pursuant to
28 U.S.C. § 1291.7
II.
We review de novo a district court’s award of summary
judgment. See PCS Phosphate Co. v. Norfolk S. Corp., 559
F.3d 212, 217 (4th Cir. 2009). We also review de novo an
issue of subject matter jurisdiction, see Lontz v. Tharp, 413
F.3d 435, 439 (4th Cir. 2005), regardless of whether the dis-
trict court analyzed the issue, see Friedman’s Inc. v. Dunlap,
290 F.3d 191, 197 (4th Cir. 2002) ("[W]hether we are pre-
sented with a live case or controversy is a question we may
raise sua sponte . . . .").
III.
In addressing these appeals, we must first determine
whether the district court erred by not determining, as the first
step in its preemption analysis, whether the CSBA applies to
Block. Because we conclude that the court so erred, we vacate
and remand without further addressing the propriety of the
court’s preemption rulings, so that the district court can
7
On appeal, neither party initially addressed whether the CSBA applies
to Block or whether the district court’s assumption of applicability ren-
dered its Memorandum Decision advisory. As a result, we alerted the par-
ties to expect questions at oral argument relating to, inter alia, subject
matter jurisdiction. In particular, we advised the parties to be prepared to
address the implications of the Stipulation of Dismissal, including whether
the parties were effectively seeking an advisory opinion and whether we
have subject matter jurisdiction. After oral argument, we requested and
received supplemental briefing on these issues, in which the parties pri-
marily focused on whether Block possessed Article III standing to chal-
lenge the CSBA.
8 H&R BLOCK v. RASKIN
decide in the first instance whether Block is a "credit services
business" under the CSBA.
A.
The heart of Block’s Complaint is that, by virtue of the
Supremacy Clause of the Constitution, the NBA preempts the
CSBA as applied to Block.8 Federal law may preempt state
law in three ways, denominated as express preemption, field
preemption, and conflict preemption. See College Loan Corp.
v. SLM Corp., 396 F.3d 588, 595–96 (4th Cir. 2005). For its
contention that the NBA preempts the CSBA, Block invokes
the doctrine of conflict preemption, "which occurs when a
state law actually conflicts with federal law." Anderson v.
Sara Lee Corp., 508 F.3d 181, 191 (4th Cir. 2007) (internal
quotation marks omitted).9
Assessing a conflict preemption claim requires "a two-step
process of first ascertaining the construction of the two stat-
utes and then determining the constitutional question [of]
whether they are in conflict." Chi. & N. W. Transp. Co. v.
Kalo Brick & Tile Co., 450 U.S. 311, 317 (1981) (internal
quotation marks omitted). In making this determination, a
court "should not seek out conflicts . . . where none clearly
exists." College Loan Corp., 396 F.3d at 598 (internal quota-
tion marks and alteration omitted). Rather, the state statute
must clearly "stand[] as an obstacle to the accomplishment
and execution of the full purposes and objectives of Con-
gress." Chi. & N. W. Transp. Co., 450 U.S. at 317. Thus, it
8
The Supremacy Clause renders the Constitution and laws of the United
States "the supreme Law of the Land . . . any Thing in the Constitution
or Laws of any State to the Contrary notwithstanding." U.S. Const. art. VI,
cl. 2.
9
In contrast to conflict preemption, express preemption occurs "when
Congress has clearly expressed an intention to [preempt state law]," and
field preemption takes place "when Congress has clearly intended, by leg-
islating comprehensively, to occupy an entire field of regulation." College
Loan Corp., 396 F.3d at 595–96.
H&R BLOCK v. RASKIN 9
is settled that a federal court, before ruling that a federal law
preempts a state statute, must determine that the state statute
(here, the CSBA) stands as an obstacle to the objectives of the
federal law (here, the NBA). See United States v. Onslow
County Bd. of Educ., 728 F.2d 628, 635 (4th Cir. 1984).
B.
In order to properly dispose of the Preemption Counts, the
district court was obligated to first assess whether the CSBA
actually applies to Block. After all, if the CSBA is not appli-
cable, its consumer-protection provisions cannot stand as an
obstacle to what are, according to Block, federally authorized
practices under the NBA.10 To conclude that the NBA pre-
empts certain of the CSBA’s provisions, as applied to Block,
without first assessing whether the CSBA actually applies to
Block, amounts to "seek[ing] out conflicts . . . where none
clearly exists." College Loan Corp., 396 F.3d at 598. The
CSBA’s applicability was thus an essential element of each of
the Preemption Counts, irrespective of whether the parties
ultimately stipulated to the Coverage Count’s dismissal.11
10
The district court was not bound by the parties’ suggestion that it
should assume that the CSBA applies to Block, because a court is not
required "to accept what in effect [is] a stipulation on a question of law."
U.S. Nat’l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439,
448 (1993); see also T I Fed. Credit Union v. DelBonis, 72 F.3d 921, 928
(1st Cir. 1995) ("Issues of law are the province of courts, not of parties to
a lawsuit . . . .").
11
Block maintains that our decision in Jimenez v. BP Oil, Inc., supports
its contention that the district court appropriately assessed the Preemption
Counts without first determining whether the CSBA applies to Block. See
853 F.2d 268 (4th Cir. 1988). Although in Jimenez we assumed the appli-
cability of a Maryland statute and proceeded directly to the parties’ pre-
emption claims, the defendant there asserted a facial preemption challenge
— predicated on field preemption — to the state statute. See id. at 272.
Block, on the other hand, asserts an "as applied," conflict preemption chal-
lenge to the CSBA. The district court, of course, could not conclude that
federal law preempts the CSBA, as applied to Block, without first deter-
mining whether the CSBA actually applies to Block. We thus find Block’s
reliance on Jiminez unpersuasive.
10 H&R BLOCK v. RASKIN
In asking the district court to proceed directly to the con-
flict analysis, without first independently determining whether
the CSBA actually applies to Block, the parties were effec-
tively seeking an advisory opinion. Had the court ruled
against Block on the Preemption Counts by determining that
the NBA does not in any respect preempt the CSBA, Block
could then proceed to state court — as it reserved the right to
do — and further litigate its contention (made in the Coverage
Count) that the CSBA is wholly inapplicable to it. Indeed,
even in the current posture of this litigation, nothing precludes
Block from taking such an approach.12 Thus, the court’s ruling
on the Preemption Counts, as set forth in its Memorandum
Decision, was neither "binding" nor "conclusive" on Block,
rendering its opinion advisory. See Chi. & S. Air Lines, Inc.
v. Waterman S.S. Corp., 333 U.S. 103, 114 (1948).
The court need not have rendered such an advisory opinion,
however, because the CSBA’s applicability remains an unre-
solved and essential legal issue in deciding the Preemption
Counts. Thus, the court could have — indeed, it should have
— issued a binding and conclusive ruling by first determining
whether the CSBA applies to Block. Because the court failed
to do so, we must vacate the judgment and remand for a deter-
mination of whether Block is a "credit services business"
under the CSBA.13 If the court concludes that the CSBA
applies to Block, it may then complete its assessment of the
Preemption Counts.
12
Emphasizing the unconventional nature of such an approach, the Stip-
ulation of Dismissal of the Coverage Count would potentially make a
Maryland state court a de facto appeals court for Block.
13
The question of whether Block qualifies as a credit services business
may well be predicated, at least in part, on factual and legal determinations
best examined in the first instance by the district court. See Caspary v. La.
Land & Exploration Co., 707 F.2d 785, 788 n.5 (4th Cir. 1983) ("In deter-
mining state law . . . where there is no clear precedent, courts of appeal
are disposed to accord substantial deference to the opinion of a federal dis-
trict judge because of his [or her] familiarity with the state law which must
be applied.").
H&R BLOCK v. RASKIN 11
IV.
Pursuant to the foregoing, we vacate the judgment of the
district court and remand for such other and further proceed-
ings as may be appropriate.
VACATED AND REMANDED