WASHINGTON - The insurance industry is likely to get more time to study two bank insurance cases - a setback for those who had hoped the Supreme Court would agree this summer to hear them.
Ann M. Kappler, a partner at Jenner & Block who is coordinating the insurance industry's legal strategy, said Wednesday she was planning to ask the court for another 30 days to appeal a decision by a federal appeals court in Cincinnati allowing Owensboro National Bank of Kentucky to sell insurance in small towns.
Currently, the industry has until July 14 to file that appeal. An extension would push that due date back to August, well after the court recesses for the summer.
Ms. Kappler already asked the court in late May for another 30 days to respond to Barnett Banks Inc.'s appeal of a decision by the federal appeals court in Atlanta preventing banks from selling insurance. Her response was originally due July 7.
However, it is the request in the Owensboro case that will push the court's decision past the August break, since the Justices could have decided to take it up separately.
"That means the petitions will not be circulated before the term is over, and (the issue) will be considered at the start of the next term," said David Roderer, a partner at Winston & Strawn who represents a number of banking trade groups on insurance issues.
Mr. Roderer said the delay could affect Glass-Steagall reform efforts, noting that lawmakers are more likely to act if they know a judicial solution is imminent. "Having the fact on hand would be more convincing than just arguments that we expect the court to hear this," he said.
But Philip S. Corwin, director and counsel at the American Bankers Association, said delay shows how worried insurance agents are of losing.
"If they were so confident, they wouldn't be trying to put off a decision by the U.S. Supreme Court," Mr. Corwin said. "To some extent, this may help us."
The dispute in both cases involves the power of national banks to sell insurance to residents in towns with fewer than 5,000 residents. The lower courts are split, with some ruling that the National Bank Act permits the sales while others saying the McCarran-Ferguson Act allows states to block them.
Bankers want to expand in insurance, seeing it as a new source of fee income. Insurance agents see banks as mammoth competitors who would put them out of business.
The delay doesn't mean the insurers won't appeal Owensboro. In fact, Ms. Kappler said the industry is committed to the appeal, ending speculation among some banking attorneys that it would leave the case alone.
"We decided we couldn't let the Owensboro decision stand, and we didn't want to run the risk that the court would pick another case and rule in a way that would overturn Barnett," she said.
Ms. Kappler said she wanted the delays for two reasons. First, it allows her to file her appeal in Owensboro and her response in Barnett at the same time.
Second, it allows a similar case from Louisiana to reach the justices before they decide which case to hear.
Legal experts said such delay requests are almost always granted. If they are, an announcement as to whether the court will hear the cases should come on Oct. 2. Arguments would follow later this year or early next.
