case, Northbrook Bank or Reserve Bank. Northbrook Bank's position on the
ultimate merits is untenable as a matter of substantive law, while
Reserve Bank's position on its motion is equally untenable as a
As for Northbrook Bank, there is no question that:
(1) Federal law restricts liability of a Federal Reserve Bank to its
immediate sender. Section 16 of the Federal Reserve Act,
12 U.S.C. § 360, and Regulation J thereunder, 12 C.F.R. § 210.2
(e) and 210.-6(a) (1980); Colonial Cadillac, Inc. v. Shawmut Merchants
Bank, N. A., 488 F. Supp. 283, 285 (D.Mass. 1980); Dempster Plaza State
Bank v. Valley Bank of Nevada, No. 80 C 2611 (N.D. Ill. Sept. 23, 1980).
(2) Such federal law preempts any inconsistent state law. Colonial
Cadillac, 488 F. Supp. at 285-86. Thus if Northbrook Bank is not Reserve
Bank's immediate sender (as it cannot be under the definition of Section
210.2(e) of Regulation J),*fn1 Reserve Bank cannot be liable to
Northbrook Bank and must be dismissed from this action.
As for Reserve Bank, however, there is equally no question that:
(1) Fed.R.Civ.P. 7(a) does not permit a reply by Northbrook Bank to
Reserve Bank's answer (including its affirmative defense) except by court
order, which has not been obtained. It certainly does not require a
responsive pleading by Northbrook Bank.
(2) Fed.R.Civ.P. 8(d) therefore treats all averments of Reserve Bank's
answer and affirmative defense as denied or avoided by Northbrook Bank.
(3) For purposes of Reserve Bank's motion for judgment on the
pleadings, the Court is therefore left with the Complaint which states
Plaintiff [Northbrook Bank] placed said check into the
collection process and on October 12, 1978 it was
presented to Palos for payment by The Federal Reserve
Bank of Chicago ("Federal")
and with the controverted allegations of Reserve Bank's answer and