BankruptcyProf Blog

Scotus Wiki on Hamilton v. Lanning

http://www.scotuswiki.com/index.php?title=Hamilton%2C_Chapter_13_Trustee_v._Lanning

Oral Argument at the Supreme Court, Milavetz and Espinosa

This morning was oral argument on Milavetz and Espinosa.  It sure is a fun experience.  Without a doubt, the guy having the most fun up there is Breyer.  He asked bunches of questions with a big smile on his face - proud of himself - and then he would visit with Sonia Sotomayor next to him and Clarence Thomas on the other side.  John Roberts had a lot of questions and when he speaks, everyone listens.  You can really see the deference the other judges give him.  Stevens was pretty quiet; Thomas said not a word.  Alito always seems annoyed.

On the merits of Milavetz, I was prepared to concede that attys (me) are debt relief agencies especially when the judges were grilling the atty arguing that the statute is unconstitutional.  Breyer pointed out that the statute says anyone who is going to appear in court or anyone who undertakes legal representation of an assisted person is a debt relief agency.  That makes it clear Congress intended to include attorneys.  But when the government got up, Alito said "people don't want a debt relief agency to do their bankruptcy, they want a lawyer."  Breyer said, "What if a big firm represents someone's brother-in-law in a chapter 7, is the big firm forever after a debt relief agency?"  The answer was yes which is ridiculous.  A few of them said that the speech issue was nothing - all it means is don't tell the client something bad.  But Roberts pointed out - forcefully - that Congress is trying to accomplish something - keep people from ripping off credit card companies - by telling attorneys what not to tell their clients.  No matter how attorneys answer some of the client's questions including not answering them, could be a signal to the client which could put the atty in jeopardy.

On Espinosa,  it seems pretty clear they are going to affirm the Kozinski ruling.  They kept saying the bankruptcy judge made a mistake but that doesn't make the judgment void.  I felt bad for the lady arguing the side to reverse Kozinski.  They were kind of mocking her.  The debtor's counsel who spoke later wasn't much good either.  He suggested that no matter what the plan said, if there was no objection, it could not be attacked later except through Rule 60(b). 

The Milavetz transcript is here.  The Espinosa transcript is here.  Let me know what you think. 

   

Briefs in Espinosa Case Before the Supreme Court

You can get all of the briefs including the eight amicus briefs (including Ken Klee's brief) here.   The Schwab v. Reilly briefs are here (only three amicus briefs).   The Milavetz briefs are here.

Supreme Court Database

I will have to add this website to my sources.

NACBA Amicus Brief in Espinosa

Another great job by Tara Twomey.  You can access it here.  Oral argument is set for December 1, 2009.   

Transcript in Schwab v. Reilly

I'm finally getting a chance to read it.  You can access it here.   

Questions to the Trustee's Counsel:

JUSTICE GINSBURG: The question is whether -- the question is whether the trustee had to make an objection, when it seems really as clear as could be that what she was seeking was to keep her equipment, not to get the -- some monetary equivalent for it.

JUSTICE KENNEDY: What -- what -- what you are doing there, you -- you argue that ambiguities are construed against the person that made the form. I think that's a little harsh when the trustee is a repeat player and knows -- and know the rules.

Questions to Debtor's Counsel:

JUSTICE BREYER: How long do these creditors meetings last? How easy are they to postpone? How -how easy is it for the trustee to get the information together during the creditors meeting, et cetera, et cetera; where do I look to find out the answer to that question?

 JUSTICE SOTOMAYOR: Counsel, in -- what's interesting is that all of the circuits or most of the majority have not address -- announced the fixed rule. The rule they said is, it depends on the circumstances. And so it appears to me that most of the courts are saying to us, we don't want a default rule, because we have to see what has happened and see what has happened between the parties to determine in one situation rather than another what the intent was. It's not an irrational rule.  Why shouldn't we be considering that as an alternative? Because once we make an announcement like the one that you're proposing, it is an inducement to undervalue your property for a debtor because -- in the hopes that an overly worked trustee won't have either the time or opportunity or wherewithal to understand that the value is off and that they're going to lose something that the estate is entitled to.

Supreme Court Grants Cert in Lanning

Boy, four bankruptcy cases in one term - so far!  The 10th Circuit opinion is here.  This is about what means "projected disposable income" in chapter 13.  Doesn't sound too tough, eh?  But the code is very specific about how to compute "disposable income" and that is by looking back to income for the past six months and then subtracting amounts from a bunch of charts - that is disposable income.  Do you take that amount and "project" it into the future, i.e., the net amount computed times x months?  Or do you ignore the computations and look to the future for the result?  Lanning says you ignore the computations  Kagenveama in the 9th Circuit says you do it the way the code says even though it gets you to a ridiculous result a lot of the time.  .    

Solicitor General Supports Cert in In re Lanning

The Solicitor General has filed an invitation brief with the Supreme Court in the In re Lanning case.  Lanning presents nicely the issue of what means "projected disposable income" in chapter 13?  It reaches a contrary conclusion to Kagenveama, that is, Lanning holds that the bankruptcy court can look into the future when deciding whether or not the debtor is paying her projected disposable income into the plan, rather than the mechanical approach of Kagenveama.  Lanning is an above median debtor but only because she received a sizable one-time bonus in the previous six months.  Using the mechanical approach, she cannot make the required plan payment. The bankruptcy court took a practical approach and confirmed the plan even though the payment was below the mechanical payment approach.  Maybe we will get another Supreme Court case this year. 

Overview of Current Supreme Court Term - Georgetown Law Supreme Court Institute

Preview of this term (47 pages stolen from the Scotusbog.com which you are hereby ordered to look at every day).  . 

NACBA Brief on Supreme Court Exemption Case

The National Assn of Consumer Bankruptcy Attorneys has filed a very nice amicus brief in the Schwab v. Reilly case pending before the Supreme Court. You can acccess it here. 

Supreme Court Sets Oral Argument on Remaining Two Bankruptcy Cases this Term

Tuesday, Dec. 1, 2009:

Milavetz Gallop v. U.S, This is the case that deals with the Debt Relief Agency rules.  Are attorneys debt relief agencies? And do the new code sections infringe on the right to free speech?  

U.S. Student Aid Funds v. Espinosa.  This is the case that will resolve whether or not the chapter 13 plan can discharge a student loan without an adversary proceeding.  Kozinski wrote that service of the plan was adequate notice to the student loan lender and the lender therefore had a duty to object and was bound by the order confirming the plan when they did not object. 

Its nice that the cases are set for the same day.  Reminder, the Supremes have also accepted Schwab v. Reilly dealing with how to claim an exemption.  That case is set for oral argument on November 3. 

Thanks to Scotus.com.   

Solicitor General Amicus Brief in Exemption Case - Schwab v. Reilly

The Solicitor General supports the trustee. Its brief can be accessed here. 

Supreme Court Sets Oral Argument in Schwab v. Reilly - November 3, 2009

The Supreme Court has set oral argument in Schwab v. Reilly (08-538) for November 3, 2009, I think at 11:00 a.m.  This is the case that will decide whether an exemption claimed on Sched C protects the asset or some specific amount of the asset.  When a debtor claims stock for example as having a value of $10,000 and then exempts $10,000, is the stock exempt or just $10,000 of the stock?  In the 9th Circuit it is clearly just the value.  The trustee's failure to object to the exemption does not prevent him from selling the stock a year later; he must give the debtor the exemption amount of course.  In Schwab v. Reilly, the circuit court ruled that saying something is worth x and then exempting x results in a full exemption for the asset, not just the amount.  

I am going to go to Washington to hear oral argument for one of the three cases before the Supreme Court this term.  The other cases deal with the Debt Relief Agency rules and the effect of confirmation of a chapter 13 plan.  I'm leaning towards the confirmation order issue but have to see when argument is set.   

Sotomayor Sworn in Today

Sonia Sotomayor Confirmed Today

I'm sure you already know by now but Sonia Sotomayor won confirmation today - the nation's first Hispanic Supreme Court justice.  She'll be sworn in Saturday as the court's 111th justice, third woman and first nominee by a Democrat in 15 years. The Senate vote was 68-31 to confirm Sotomayor.

Good luck to her.  When Harry Blackmun was sworn in, some clerk walked into his office with boxes of files and told him there were 9 cases pending where the vote was split 4-4 and he needed to rule on each one so they could get them out.  Great way to start.

Sotomayor Committee Vote Today

The Judiciary Committee expects a vote today at its business meeting on Judge Sonia Sotomayor’s nomination to the Supreme Court.  After the committee’s vote, the full Senate will likely hold a vote before the August recess, by Aug. 7.

Review of My Supreme Court Book on Bankruptcy Litigation Blog

Boy, to be included in the same anything with Ken Klee is probably the highlight of my career.  Steve Jakubowski of the Coleman Law Firm in Chicago has written a review of my book, Bankruptcy Jurisprudence from the Supreme Court.  You can access the review here.  The review is posted today on his exceptional blog - Bankruptcy Litigation Blog.  Steve reviews Ken Klee's new book on the Supreme Court as well as mine and opines that they would be good reading for Sonia Sotomayor.

My book is available on Amazon.  Let me know what you think.  JH   

Witness List for Sotomayor Confirmation Hearings Starting Monday

 You can access the list with biographies here.  An exhaustive study of her rulings by the Brennan Center can be accessed here.  The study concludes she is a "mainstream judge."   

Two Los Angeles Times Articles Today on the Supreme Court

Harmonious Week for the Roberts Court here and Supreme Court Looks Over 9th Circuit's Shoulder Here. 

Supreme Court Voting for This Term

The term is not quite over yet but I enjoy fooling around with the numbers - all the data is at scotusblog.com. 

Of the 77 times the court has voted this term, Roberts was in the majority 63 times meaning he chose the author of the opinion 63 times.  Stevens chose the author 12 times when he was in the majority and Roberts was not and Scalia chose the author two times - the two times Stevens and Roberts were on the minority side togther.  Of the 12 times Stevens chose the author, he chose himself 4 times, Ginsburg 2, Kennedy 2, Thomas, Souter, and Scalia once.  There was one per curiam opinion in this group.

Kennedy was in the minority on only 5 cases the whole term.  Of the 21 5-4 rulings, Kennedy was in the majority 17 times.  Of those 17, he alligned with the "right," i.e., Scalia, Alito, Roberts and Thomas 10 times.  He aligned with the "left," 5 times, and only two times were there 5-4 opinions with some alignment other the expected right and left. 

I better go get some exercise.