McGarry & McGarry, LLC v. Rabobank, N.A.
Filed opinion of the court by Judge Posner. AFFIRMED. Richard A. Posner, Circuit Judge; Daniel A. Manion, Circuit Judge and Ann Claire Williams, Circuit Judge. [6814485-1]  [16-3164]
United States Court of Appeals
For the Seventh Circuit
MCGARRY & MCGARRY, LLC,
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 16 C 5978 — Milton I. Shadur, Judge.
ARGUED JANUARY 5, 2017 — DECIDED JANUARY 26, 2017
Before POSNER, MANION, and WILLIAMS, Circuit Judges.
POSNER, Circuit Judge. Bankruptcy Management Solu‐
tions, Inc. (“BMS” for short) provides a variety of adminis‐
trative services, including software and banking services, to
bankruptcy trustees. See www.google.com/?gws_rd=ssl#q=
Bankruptcy+Management+Solutions%2C+Inc (visited Jan.
26, 2017). It is not a bank, but it uses a bank, Rabobank,
N.A., as the depositary for the banking services that BMS
provides to bankruptcy trustees through its software. Ra‐
bobank appears to be the largest provider of depositary ser‐
vices to such trustees, just as BMS apparently is the largest
supplier to them of software that makes it easier for a bank‐
ruptcy trustee to manage a bankruptcy by helping him keep
track of documents, distribute money to creditors, and com‐
ply with reporting obligations.
Eugene Crane, the trustee in the bankruptcy of a compa‐
ny named Integrated Genomics, Inc., hired BMS to provide a
variety of services in Integrated’s bankruptcy proceeding.
The parties’ contract required the trustee to hire Rabobank to
provide banking services to him in the proceeding and to
deposit with the bank substantially all of the funds in any
bankruptcy estate in which the trustee uses BMS’s services.
A separate contract between the trustee and the bank, to
which BMS was not a party, authorized Rabobank to with‐
draw from the funds a monthly fee for the services it renders
in the bankruptcy proceeding. These contracts may have
been the product of a prior agreement between BMS and
Rabobank in which BMS promised Rabobank that it would
require trustees who used its services to hire Rabobank and
Rabobank promised BMS that it would remit to BMS a por‐
tion of the fees it obtained.
The plaintiff, a law firm, was a modest creditor of Inte‐
grated and filed a claim in the bankruptcy proceeding, at the
conclusion of which it received a distribution of $12,472.55.
It would have received $12,666.90 had not the trustee de‐
ducted $194.35 to pay for a small part of Rabobank’s fee for
providing banking services to him, and even more had Ra‐
bobank paid interest on the bankruptcy estate’s deposits,
which it did not.
The plaintiff alleges that the three contracts—between
Rabobank and BMS, between the trustee and BMS, and be‐
tween the trustee and Rabobank—violated 12 U.S.C.
§ 1972(1)(E), a section of the Bank Holding Company Act
that states that “a bank shall not in any manner extend cred‐
it, lease or sell property of any kind, or furnish any service,
or fix or vary the consideration for any of the foregoing, on
the condition or requirement … that the customer shall not
obtain some other credit, property, or service from a compet‐
itor of such bank, a bank holding company of such bank, or
any subsidiary of such bank holding company, other than a
condition or requirement that such bank shall reasonably
impose in a credit transaction to assure the soundness of the
credit.” The plaintiff argues that by requiring the trustee in
the Integrated bankruptcy to obtain banking services exclu‐
sively from Rabobank, the bank conditioned its provision of
services on the trustee’s not obtaining equivalent services
from a competitor of that bank, and so violated the Act.
The district judge was right to reject the argument. The
plaintiff fails to distinguish between exclusive dealing and a
single transaction. Had Rabobank conditioned its provision
of services to trustee Crane on his agreeing never to hire any
bank other than Rabobank in any bankruptcy proceeding in
which he’s the trustee, that would be exclusive dealing. But
if, as in this case, all Crane decides is that he needs a bank—
not a bunch of banks—to provide banking services to him in
a particular bankruptcy of which he’s the trustee, there is no
exclusivity; in his next trusteeship Crane will be free to hire a
different bank. He may well hire Rabobank the next time
too, assuming he wants to hire BMS, since BMS and Ra‐
bobank work closely together and in the present case BMS
made it a condition of agreeing to work with the trustee that
he hire Rabobank. But again it would be a decision based on
the trustee’s needs in a new and different case, not based on
a commitment made before the new case existed. Although
Crane has agreed that in any future case in which he is a
trustee and hires BMS he will hire Rabobank as well, he has
not committed to hiring BMS, and if he doesn’t then he
won’t have to hire Rabobank. The fact that he prefers to
work with these two companies is not a commitment not to
work with any others and therefore to deal exclusively with
Exchange National Bank of Chicago v. Daniels, 768 F.2d 140,
143 (7th Cir. 1985), “construed [12 U.S.C.] § 1972 as prohibit‐
ing exclusive dealing practices—those that attempt to pre‐
vent customers from dealing with other banks.” The cus‐
tomer in this case was trustee Crane. No one forced him to
deal with BMS and Rabobank. He chose to deal with them
rather than with other suppliers of banking services because
they’re highly experienced in the provision of the services
that the trustee required. Suppose your doctor tells you to
take an 81 mg aspirin every night before going to bed, in or‐
der to reduce the likelihood of a heart attack. So you go and
buy a small bottle of Bayer 81 mg aspirin. After a while it
runs out and you buy another, identical, bottle of Bayer 81
mg aspirin. And so on indefinitely. Could a competitor of
Bayer sue you for engaging in exclusive dealing, because
you refuse to deal with Bayer’s competitors? No, and the
premise of the plaintiff’s suit is as flimsy.
There is another ground on which the plaintiff’s claim
must be rejected. The only quantified harm he incurred was
the $194.35 fee deducted from his share of the distribution of
the bankrupt’s assets to the creditors in order to compensate
Rabobank for a share of the services that the bank had ren‐
dered in the bankruptcy proceeding—had rendered to all the
creditors, including the plaintiff. There is no evidence, or
even an argument, that the fee was exorbitant, or that it
would have been any lower had the trustee been allowed to
hire a different bank or a plurality of banks.
The judgment of the district court dismissing the plain‐
tiff’s suit with prejudice is
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