BankruptcyProf Blog

New Study on Justice Scalia Statutory Interpretation

I found a great new article on Justice Scalia, thanks to Professor David Hricik's Statutory Construction Blog.  Written by Professor Miranda McGowen at the University of San Diego, it is entitled, "Do as I Do, not as I say: An Empirical Investigation of Justice Scalia's Ordinary Meaning Method of Statutory Interpretation."  Studying Scalia's dissents for the past twenty years she concludes,

"This study shows that Justice Scalia consults an eclectic set of extrinsic materials when he is construing statutes.  He in fact uses essentially the same broad set of materials that other justices use—except for legislative history.

"This also study found that Justice Scalia’s methodology is eclectic, too.  In a quarter of the issues in this sample, Justice Scalia abandoned textualism in favor of overtly common law methods.  When interpreting regular statutes, his presumption in favor of ordinary meaning did little work for him; in a majority of cases Justice Scalia construes words in statutes in light of their specialized, legal meanings or the meaning they have accrued in case law or in common law, not their ordinary meaning.

"Whatever Justice Scalia says about his interpretive theory, he is as purposivist of a judge as they come.  The data show that he interprets statutes in light of purpose as frequently as the rest of the Court.  Purpose rather than text sometimes drives his interpretation; if statutory purpose requires it, he will sometimes adopt second-best textual interpretations.

"The purposes he attributes to statutes do not come from his theory of interpretation, for he claims that purpose analysis is generally improper, unless the text indicates the statute’s purpose.  Nor do they come from the legislative materials, for he considers them too unreliable and too easily manipulated to provide judges with the proper amount of constraint.

"Sometimes Justice Scalia does infer statutory purpose from the text, and sometimes from agency regulations.  But frequently, his sense of a statute’s purpose comes from earlier Court decisions and lower court decisions.  Indeed, this is so often the case that his statutory interpretation practice bears an uncanny resemblance to the kind of common law interpretation of statutes he has decried in his theoretical writings."

Article on "Borrowed Regulations": The IRS's Ability to Decide Who Qualifys for Chapter 7

I highly recommend a new article published in the Norton Bankruptcy Law Advisor by Professor Matthew Stevenson and Kristin Hickman: The Administrative Law of Borrowed Regulations: Legal Questions Regarding the Bankruptcy Law's Incorporation of IRS Standards.  The article can be accessed here.   

From the abstract:  "To what extent, if at all, should bankruptcy courts defer to IRS statements, contained in documents other than the Standards themselves, about how the Standards should be applied?  May the IRS alter the Standards for its own purposes but not for bankruptcy purposes, or vice versa?  What procedures must the IRS use when it modifies the Standards, especially in light of the fact that the Standards now have an apparently binding effect in bankruptcy cases?"

Article From Judge Bruce Markell on Individual Chapter 11 Cases

Thanks to Bob Hiller for his post:

Subject: Individual Debtors in Chapter 11 after BAPCPA
"The Sub Rosa Subchapter: Individual Debtors in Chapter 11 after BAPCPA"

University of Illinois Law Review, Vol. 2007, p. 67
UNLV William S. Boyd School of Law Legal Studies Research Paper No. 08-03

BRUCE MARKELL, William S. Boyd School of Law, UNLV

In reforming the bankruptcy laws in 2005, Congress added several provisions to the Bankruptcy Code regarding the use of chapter 11 by individuals. These changes radically alter the basic chapter 11 rules with respect to individuals; among the most significant change is that postfiling service income, previously allocated to the individual debtor alone (and not available to pay prefiling creditor claims), was made property of the estate available to pay prefiling creditor claims. This article surveys the changes made and their possible impact, and suggests that they are sufficiently radical to have warranted a separate subchapter of chapter 11.

Payday Lenders and Bankruptcy

There are more payday lender storefronts today than McDonalds, so says Professor Paige Skiba.  Does 30 million lenders at 450% have any correlation with bankrptcy filings?  Definitely she concludes.  You can find the article here or at www.creditslips.org.   

Informative Insight on Appellate Briefs

This is a very informative post I received in an email today from the LA County Bar Assoc.  It is by Professor Scott Wood at Loyola Law School who questions a research attorney with 20 years experience with the California Court of Appeals.  You can access the article here. 

One great comment is that the appellant should concentrate on his best few arguments, (i.e., he says "how many errors can the trial judge make?), the respondent should make every argument possible since the court must affirm if any argument supports the result. 

Trying to Protect a Crook? File for the non-Crook Spouse

Here is the CDCBAA Newsletter for February, 2008.  It has an article about this topic by Dennis McGoldrick, former chapter 7 trustee in Los Angeles.  The subject is the little known and less understood "community property discharge" in Section 524.   

Chapter 15

There has been a lively discussion of chapter 15 on one of the list serves.  I thought the law review article cites might be helpful.  See Brooklyn Journal of International Law . . . a symposium volume entitled "Bankruptcy in the Global Village:  The Second Decade."  The volume can be found online here.

From Professor Jay Westbrook:  Avoidance Of Pre-Bankruptcy Transactions In Multinational Bankruptcy Cases, 42 Tex. Int'l L.J. 899 (2007); Universalism and Choice of Law, 23 Penn State Int. L.J. 625 (2005); Choice of Avoidance Law in Global Insolvencies, 17 Brook. J. Int. L. 499 (1991).

Also, as many of you know, Judge Samuel Bufford is writing a book on chapter 15.   I will post when it becomes available. 

JH

Great Kozinski Article on Writing Briefs and Oral Advocacy

Kozinski, Alex, The Wrong Stuff, 1992 B.Y.U. L. Rev. 325.  This article is 15 years old but is or should be mandatory reading in every law school writing or advocacy class.  It is actually a speech Judge Kozinski gave at BYU.  He subtitled it - How to Lose an Appeal.  As sarcastic as ever, Kozinski sets forth a great compendium of "don'ts" when writing and presenting your appeal. 

• "First, you want to tell the judges right up front that you have a rotten case. The best way to do this is to write a fat brief.  So if the rules give you 50 pages, ask for 75, 90, 125--the more the better.  Even if you don't get the extra pages, you will let the judges know you don't have an
  argument capable of being presented in a simple, direct, persuasive fashion.  Keep in mind that simple arguments are winning arguments; convoluted arguments are sleeping pills on paper.
• Bind your brief so that it falls apart when the judge gets about half way through it.  Also--this is a biggie-- make sure your photocopier is low on toner or scratch the glass so it will put annoying lines on every page. The judge won't even be able to decipher what you wrote, much less what you meant.
• [W]inning arguments should not only be buried, they should also be written so as to be totally unintelligible.  Use convoluted sentences; leave out the verb, the subject, or both.  Avoid periods like the plague. Be generous with legal jargon and use plenty of Latin. And don't forget the acronyms in bureaucratese.
• [P]ick a fight with opposing counsel.  Go ahead, call him a slime.  Accuse him of lying through his teeth. [In one particular case], I found myself cheering for the lawyers and forgot all about the legal issues.
• You can always create a diversion by attacking the district judge.  You might start out by suggesting that he must be on the take because he ruled against you.  Or that he is senile or drunk with power, or just plain drunk.
• Block quotes, by the way, are a must; they take up a lot of space but nobody reads them. Whenever I see a block quote I figure the lawyer had to go to the bathroom and forgot to turn off the merge/store function on his computer.
• A good way to improve your chances of losing is to overclaim the strength of your case.  When it's your turn to speak, start off by explaining how miffed you are that this farce--this travesty of justice--has gone this far when it should have been clear to any dolt that your client's case is ironclad.  Now the reason this is a good tactic is that it challenges the judges to get you to admit that there is just some little teensy-weensy weakness in your case.
• When you feel you've got them good and lathered, move into the next phase: stonewalling. What you want to avoid at all costs is giving a short, direct answer to the question.  Instead, tease the judge, equivocate, make him rephrase the question. The point is to get the judge really committed to the question so that the lack of a good answer will take on monstrous significance. A good way to start is by ridiculing the question: "I was afraid the court would get sidetracked down a blind alley by this red herring."
• An alternative to stonewalling--and one of my personal favorites--is cutting off a judge's question.  Doing this gives you several important advantages.  First, it's rude, and if you're out to lose your case, there is really no substitute for offending the guy who's about to decide your case.  Beyond that, cutting off the judge mid-question sends an important message: Look here your honor, you think you're so clever, but I know exactly what is going on inside that pointed little head of yours. Then again, cutting the judge off gives you an opportunity to answer the wrong question.

One comment which kind of surprised me is that the judges know the law.  Its likely one of the three wrote the opinion on one of the important cases relating to the issue at hand.  Consentrate on the facts and be sure to know the record inside and out.      

Great Insight on Credit Card Lending to "Bankrupts"

Professor Katie Porter has a great article on the practices of the credit card industry in lending to persons after they have filed bankruptcy.  Bankrupt Profits: The Credit Industry’s Business Model For Postbankruptcy Lending, Katherine Porter, College of Law, University of Iowa.  Using significant empirical data, she establishes that the credit card industry tells Congress that debtors are low-lifes who run up their credit card on frivolities intending to file bankruptcy to avoid repayment.  In reality, the industry views debtors as "new meat," a new source of profit. 

She says,

"This Article’s key finding is that creditors repeatedly solicit debtors to borrow after bankruptcy. Families receive dozens of offers for new credit in each month immediately after their bankruptcy discharge.  Some offers specifically target these families based on their recent financial problems, using bankruptcy as an advertising lure."

Her findings are based on a "core sample" of "1,250 consumer bankruptcy cases, consisting of 780 Chapter 7 bankruptcies and 470 Chapter 13 bankruptcies."  She analyzed the cases at the outset and did telephone interviews one and three years later. 

"Credit solicitation of recent bankruptcy debtors is rampant.  Nearly all debtors stated that they had received offers for credit in the first months following their bankruptcy.  One year postbankruptcy, these families reported that creditors sent them an average of more than fourteen credit offers per month."

Her findings are that 25% of the debtors had obtained new credit within one year of the filing.

"Two paradoxes emerge.  Debtors report more difficulty in obtaining secured loans than unsecured loans.  Also, debtors who chose Chapter 13 (repayment) bankruptcy instead of Chapter 7 (liquidation) bankruptcy have fewer opportunities to borrow.  Rather than identifying them to creditors as a 'responsible' borrower, repaying a portion of their past debts actually hinders a family’s access to future credit.  On the whole, the credit industry treats former Chapter 7 bankruptcy debtors as valuable customers, seeking to profit by loading these families with new debt immediately after bankruptcy."

"Chapter 13 families are significantly less likely to receive credit offers than Chapter 7 families.  The reported rate for Chapter 13 families is significantly lower than the fraction of Chapter 7 debtors (96.1 percent) who receive credit offers after filing bankruptcy.  At least in the short-term, Chapter 13 seems to be a modest deterrent to the credit industry’s efforts to turn bankrupt families into customers."

She concludes, "lenders’ intense solicitation of postbankruptcy families is consistent with an understanding of the consumer bankruptcy system as a refuge for decent, honest families reacting to adverse events such as job loss or illness."