SUPREME COURT DECLINES TO REVIEW MARYLAND DECISION THAT GOVERNING LAW PROVISION CAN OVERRIDE FEDERAL PREEMPTION

The United States Supreme Court earlier this month denied the petition for certiorari in Chevy Chase Bank, F.S.B. v. Wells, No. 03-918 (Apr. 5, 2004). On February 9, 2004, we reported that the Maryland Supreme Court found in Wells v. Chevy Chase Bank F.S.B. 377 Md. 197 (2003), that a federal savings bank’s contractual undertakings are not preempted under 12 C.F.R. § 560.2. In Wells, credit cardholders sued the issuing bank for breach of a credit card agreement that expressly selected as its governing law Subtitle 9 of Title 12 of Maryland’s Commercial Law on the basis that fees were increased without the notice required by Subtitle 9. The Court remanded Wells so that the lower court could apply state law contract interpretation to determine the parties’ rights and briefs in support of Chevy Chase Bank’s petition for certiorari. As a result of the Supreme Court’s action, the Maryland decision will stand.