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Web posted and Copyright © February 1, 2004, American Bankruptcy Institute.

Should the "Plain Meaning" Always Prevail?
Supreme Court Hears Oral Argument on the Omission of "Debtor's Attorney" in §330(a)(1)

Written by:
Hon. Roger M. Whelan
Robert M. Zinman ABI Resident Scholar; Alexandria, Va.

rwhelan@abiworld.org

Of critical interest to debtor attorneys is the Supreme Court's present consideration of the issue arising from the omission of "debtor's attorney" from the list of eligible persons to receive payment from estate funds under 11 U.S.C. §330(a)(1). This case, John M. Lamie v. U.S. Trustee, was submitted after oral argument on Nov. 10, 2003, and a decision will likely be rendered by the Court this spring.

Prior to the 1994 amendments to the Code, this statutory provision provided for compensation "...to a trustee, to an examiner, to a professional...or to the debtor's attorney...." Because this same preparatory language now omits "debtor's attorney," the bankruptcy and appellate courts have taken conflicting views as to the significance and legal effect of this omission. The debtor's attorney, the petitioner in this case, ably argued that based on pre-amendment practice and caselaw, coupled with reference to the language in §329 that addresses payments made "...for services rendered or to be rendered in contemplation of or in connection with the case by such attorney...," as well as the reference to "or attorney" in (a)(1)(A), that the omission of "debtor's attorney" was an oversight or unintentional omission. Pointed questions by the Court, however, reflect that at least some of the Justices are concerned that the omission does not appear to be an oversight because of Congress's failure to correct this seeming omission in subsequent technical correction bills. This is best illustrated by Justice O'Connor's question, "Congress had this problem brought to its attention a number of times and has chosen not to enact something, putting that language back in. That I find somewhat persuasive." Questioning from other members further reflects a concern that the Court is being asked to add something to the statute that was, for whatever reason, omitted. This concern was raised by the following comment from Justice Breyer, "What I'm having problems with here is that I don't see any way to read this language so that it comes out in your favor without putting in three words that aren't there." In other words, it is one thing to deal with superfluous words, but to read into the statute words that are not there (or as in this case omitted) is something else again.

The U.S. Trustee's position, as forcefully presented by the assistant to the Solicitor General, is directed to the clear and unambiguous language of the statute. In addressing the Court's concern with the sole reference to "attorney" in (a)(1)(A), and that this reference could, consistent with the petitioner's argument, include a debtor's attorney, the respondent replied that this term is superfluous in the sense that their reading of the statute comes out the same way because the term may be "nothing more than a subset of professional persons." In addressing the Court's concern with the language in preceding §329, which refers to "services rendered or to be rendered in contemplation of or in connection with the case," the respondent argues that this section specifically deals with the requirement of disclosure by a debtor's attorney and stands independent of the provisions in §330(a). Finally, responding to the Court's (Justice Ginsburg) reference to Collier on Bankruptcy, which takes the position that the deletion of "debtor's attorney" represents a fundamental change in the law because the terms "to be rendered in connection with the case," would be superfluous to the extent that debtor's attorneys are now excluded in §330(a)(1), the respondent restated its position that §329 "operates independently and requires a disclosure of all free agreements whether or not there is compensation..."

In analyzing these issues as ably presented by both sides, it is interesting to note that in considering this section of the Code and its deletion of the reference to "debtor's attorneys," the statute added subsection (a)(4)(B), which specifically deals with allowance of reasonable compensation for "debtor's attorney" in chapter 12 and 13 cases. Whether this omission was merely an oversight or was an intentional departure from the prior statutory provision may well be ultimately answered by Justice Scalia's opinion in Hartford Underwriters Insurance Co. v. Union Planters Bank N.A., 530 U.S. 1 (2000), in which the Supreme Court, adhering to a plain meeting approach to statutory interpretation, stated: "[I]n answering this question, we begin with the understanding that Congress says in a statute what it means and means in a statute what it says there." Connecticut Nat. Bank v. Germain, 503 U.S. 249, 254 (1992). That case involved the issue as to the right of a non-trustee to surcharge a secured creditor's collateral when the statutory provision (11 U.S.C. §506 (c)) refers only to "the trustee..." The petitioners' primary argument in that case relied on the fact that the statute did not limit its application "only" to a trustee. As in Hartford, one of the arguments advanced by the petitioner in this case is that the statutory language does not limit compensation only to those designated in §330 (a) (1).

The Court in Hartford addressed this argument by stating, "this theory—that the expression of one thing indicates the inclusion of other unless exclusion is made explicit—is contrary to common sense and common usage." Whether and to what extent the Supreme Court will see fit to deviate from the reasoning set forth in Hartford remains to be seen; to the extent that the Court adopts the petitioner's argument, we may well see Justice Scalia repeating his dissenting admonition in Dewsnup v. Timm, 502 U.S. 410 (1992), where he admonished that "the Court replaces what Congress said with what it thinks Congress ought to have said—and in the process disregards, and hence impairs for future use, well-established principles of statutory construction."


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