Adam H. Morse (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} adamhmorse) wrote,@ 2004-03-27 10:36:00 |
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Lamie v. U.S. Trustee
Lamie v. U.S. Trustee, 02-693. Justice Kennedy wrote the majority opinion, which was joined by Chief Justice Rehnquist and all the associate Justices except for Justice Stevens and, as to one section, Justice Scalia. Justice Stevens wrote an opinion concurring in the judgment, which Justices Souter and Breyer joined.
Scrivener's errors are errors introduced inadvertently in the drafting of a statute when a staffer fails to write the law correctly and no one notices in time. Applying statutes with scrivener's errors creates a persistent problem: should the courts follow what the law says, or what Congress meant it to say? In this case, the Supreme Court addressed when attorneys can receive fees from a bankruptcy estate in a chapter 7 proceeding. Applying section 330 of the Bankruptcy Code despite the possible error, the Court affirmed the decisions of the courts below that attorneys are only entitled to fees if they have been appointed under section 327. Because the legislative history indicates that Congress was aware of the error, the Court's decision is correct.
The Majority Opinion
Justice Kennedy began by describing the statutory history. Congress amended the Bankruptcy code in 1994. Congress amended one of the provisions, section 330, and eliminated the phrase "or to the debtor's attorney" from the list of professionals who can receive fees in a bankruptcy proceeding. The new text is grammatically flawed, because it lacks a conjunction, and is not parallel with a subprovision's language, which retains the phrase "or attorney." Section 330 still allows compensation of an attorney who is "a professional person employed under Section 327." The circuit courts have split as to whether it still permits an attorney who is not employed under Section 327 to receive compensation.
Justice Kennedy then described the procedural history. The petitioner represented a firm in its chapter 11 proceeding, while the firm acted as a debtor-in-possession. After three months, the U.S. Trustee moved to convert the proceeding into a chapter 7 liquidation, and the court granted the motion. The petitioner had been acting under section 327, but he continued to represent the firm in the chapter 7 proceedings despite no longer being covered under section 327. He then filed for fees after the conversion to a chapter 7 proceeding, the trustee objected, and the bankruptcy court denied the fees, although he was compensated for his services during the chapter 11 proceedings. The district court and Fourth Circuit Court of Appeals both affirmed, noting that the plain language of the statute only provided for fees for attorneys appointed under section 327. The Supreme Court granted certiorari to resolve the circuit split.
The majority opinion started the analysis by reciting the petitioner's arguments for why the statute is ambiguous. The petitioner argued that the statute contains a clear error, because the lack of parallelism demonstrates that Congress either erred by deleting the first reference to attorneys or by retaining the second reference. He also argued that the missing conjunction demonstrated the existence of a drafting error that rendered the meaning of the provision ambiguous.
The Court rejected the analysis that ambiguity can be created by comparing the current statute's grammatical flaws with the unflawed statute before amendment. Instead, the Court reasoned, if the statute is ungrammatical but clear, its clear meaning should be applied. The missing "or" does not create any ambiguity because the word that should be included was obvious. While the text is not parallel, the second reference to attorneys can be sensibly interpreted as referring to lawyers who are professionals appointed under section 327. While it is surplusage, the preference for reading a statute to avoid interpretations that make some words surplus is weaker than the preference for applying the plain meaning of the words.
The Court also considered and rejected the suggestion that the statute was absurd under the appeals court's interpretation. The petitioner suggested that this would unreasonably eliminate the availability of attorneys for debtors in bankruptcy. However, attorneys for personal bankruptcies can still receive compensation under another provision, and attorneys who are properly appointed under section 327 by the trustee can still receive compensation under this provision. Prior to the Chapter 7 proceeding, the debtor can prepay for a lawyer's services. To avoid expanding on Congress's command, even if that command is harsh, the Court held that the statute should be given its plain interpretation.
Justice Kennedy then wrote another section, for a smaller majority of seven because Justice Scalia refused to join it. He noted that the legislative history adds more confusion, rather than clarifying the meaning of the provision. No legislative history explains the change, suggesting that it may have been a scrivener's error. However, other changes were apparently intended to reduce abuses in fee awards. Furthermore, while Congress took with one hand, it gave with the other, putting in a new section authorizing fee awards in chapter 12 and 13 personal bankruptcies, suggesting that the omission in the chapter 7 and 11 context was deliberate. In any event, the House passed the provision after the omission, and its effect, was drawn to its attention by a professional organization representing the attorneys most likely to be effected, which noted the change but did not object. In light of that history, Justice Kennedy concluded that the Court could not be confident from the legislative history, thus encouraging reliance on the plain text. If Congress did not intend this result, it retains the power to amend the statute.
The Concurrence in the Judgment
Justice Stevens wrote an extremely brief concurrence. He began by stating that when there is a possible scrivener's error, the courts should look to the legislative history to determine whether the error should be corrected through judicial interpretation. He then noted that the error, if any, was brought to the attention of Congress, which declined to correct it. Combined with the fact that the majority's interpretation is much more natural based on the language, he agreed that the petitioner's interpretation should be rejected.
Analysis
The interesting question in this case is process. The justices followed three different approaches to dealing with a possible scrivener's error. Justice Scalia took the extreme position, although without writing separately: relying on the fact that the language could be sensibly interpreted without looking at the legislative history, he declined to consider it at all. Justice Kennedy took a middle route: while he says that the statute is unambiguous, and thus that examining the legislative history is unnecessary, he examined it anyway, and concluded that it did not provide a clear answer. Justice Stevens takes the most extreme approach in the other direction: because the text, while intelligible, suggests an error on Congress's part, he looked to the legislative history, but concluded that the legislative history supports the more natural interpretation.
Justice Stevens's approach is the strongest. Scrivener's errors raise a special problem of statutory interpretation, because effectuating the will of the legislature can be at odds with giving effect to the text as its actually written. Justice Scalia's approach treats this as a highly formalist game. If Congress makes an error, too bad for them: an error introduced by sloppy editing is the same as a formal policy choice, carefully made. I think this misstates the courts' role in interpreting statutes. Courts should seek to effectuate the will of the legislature. When the text is clear, it should be followed. But where there is evidence that Congress simply screwed up, forcing Congress to take action is pointless. It's true that Congress can fix its errors, but that's true either way. The question is which side of the question should be given the tremendous advantage of inertia. After all, this circuit split persisted for years: one of the sides was wrong, but Congress, because of the demands on its schedule and possible splits of opinion, did not correct either interpretation. Allowing an error by a staffer to shape the law until Congress musters the will to act serves no sensible purpose. However, once Congress was made aware of the possible error before passing the law, that analysis falls apart. If it was a scrivener's error, it's safe to say it would have been fixed before the law was passed; at the drafting and debate stage, fixing an error has relatively low costs. As a result, the statute should be given its straight-forward reading, because Congress ratified any possible error through inaction.
Lamie v. U.S. Trustee, 02-693. Justice Kennedy wrote the majority opinion, which was joined by Chief Justice Rehnquist and all the associate Justices except for Justice Stevens and, as to one section, Justice Scalia. Justice Stevens wrote an opinion concurring in the judgment, which Justices Souter and Breyer joined.
Scrivener's errors are errors introduced inadvertently in the drafting of a statute when a staffer fails to write the law correctly and no one notices in time. Applying statutes with scrivener's errors creates a persistent problem: should the courts follow what the law says, or what Congress meant it to say? In this case, the Supreme Court addressed when attorneys can receive fees from a bankruptcy estate in a chapter 7 proceeding. Applying section 330 of the Bankruptcy Code despite the possible error, the Court affirmed the decisions of the courts below that attorneys are only entitled to fees if they have been appointed under section 327. Because the legislative history indicates that Congress was aware of the error, the Court's decision is correct.
The Majority Opinion
Justice Kennedy began by describing the statutory history. Congress amended the Bankruptcy code in 1994. Congress amended one of the provisions, section 330, and eliminated the phrase "or to the debtor's attorney" from the list of professionals who can receive fees in a bankruptcy proceeding. The new text is grammatically flawed, because it lacks a conjunction, and is not parallel with a subprovision's language, which retains the phrase "or attorney." Section 330 still allows compensation of an attorney who is "a professional person employed under Section 327." The circuit courts have split as to whether it still permits an attorney who is not employed under Section 327 to receive compensation.
Justice Kennedy then described the procedural history. The petitioner represented a firm in its chapter 11 proceeding, while the firm acted as a debtor-in-possession. After three months, the U.S. Trustee moved to convert the proceeding into a chapter 7 liquidation, and the court granted the motion. The petitioner had been acting under section 327, but he continued to represent the firm in the chapter 7 proceedings despite no longer being covered under section 327. He then filed for fees after the conversion to a chapter 7 proceeding, the trustee objected, and the bankruptcy court denied the fees, although he was compensated for his services during the chapter 11 proceedings. The district court and Fourth Circuit Court of Appeals both affirmed, noting that the plain language of the statute only provided for fees for attorneys appointed under section 327. The Supreme Court granted certiorari to resolve the circuit split.
The majority opinion started the analysis by reciting the petitioner's arguments for why the statute is ambiguous. The petitioner argued that the statute contains a clear error, because the lack of parallelism demonstrates that Congress either erred by deleting the first reference to attorneys or by retaining the second reference. He also argued that the missing conjunction demonstrated the existence of a drafting error that rendered the meaning of the provision ambiguous.
The Court rejected the analysis that ambiguity can be created by comparing the current statute's grammatical flaws with the unflawed statute before amendment. Instead, the Court reasoned, if the statute is ungrammatical but clear, its clear meaning should be applied. The missing "or" does not create any ambiguity because the word that should be included was obvious. While the text is not parallel, the second reference to attorneys can be sensibly interpreted as referring to lawyers who are professionals appointed under section 327. While it is surplusage, the preference for reading a statute to avoid interpretations that make some words surplus is weaker than the preference for applying the plain meaning of the words.
The Court also considered and rejected the suggestion that the statute was absurd under the appeals court's interpretation. The petitioner suggested that this would unreasonably eliminate the availability of attorneys for debtors in bankruptcy. However, attorneys for personal bankruptcies can still receive compensation under another provision, and attorneys who are properly appointed under section 327 by the trustee can still receive compensation under this provision. Prior to the Chapter 7 proceeding, the debtor can prepay for a lawyer's services. To avoid expanding on Congress's command, even if that command is harsh, the Court held that the statute should be given its plain interpretation.
Justice Kennedy then wrote another section, for a smaller majority of seven because Justice Scalia refused to join it. He noted that the legislative history adds more confusion, rather than clarifying the meaning of the provision. No legislative history explains the change, suggesting that it may have been a scrivener's error. However, other changes were apparently intended to reduce abuses in fee awards. Furthermore, while Congress took with one hand, it gave with the other, putting in a new section authorizing fee awards in chapter 12 and 13 personal bankruptcies, suggesting that the omission in the chapter 7 and 11 context was deliberate. In any event, the House passed the provision after the omission, and its effect, was drawn to its attention by a professional organization representing the attorneys most likely to be effected, which noted the change but did not object. In light of that history, Justice Kennedy concluded that the Court could not be confident from the legislative history, thus encouraging reliance on the plain text. If Congress did not intend this result, it retains the power to amend the statute.
The Concurrence in the Judgment
Justice Stevens wrote an extremely brief concurrence. He began by stating that when there is a possible scrivener's error, the courts should look to the legislative history to determine whether the error should be corrected through judicial interpretation. He then noted that the error, if any, was brought to the attention of Congress, which declined to correct it. Combined with the fact that the majority's interpretation is much more natural based on the language, he agreed that the petitioner's interpretation should be rejected.
Analysis
The interesting question in this case is process. The justices followed three different approaches to dealing with a possible scrivener's error. Justice Scalia took the extreme position, although without writing separately: relying on the fact that the language could be sensibly interpreted without looking at the legislative history, he declined to consider it at all. Justice Kennedy took a middle route: while he says that the statute is unambiguous, and thus that examining the legislative history is unnecessary, he examined it anyway, and concluded that it did not provide a clear answer. Justice Stevens takes the most extreme approach in the other direction: because the text, while intelligible, suggests an error on Congress's part, he looked to the legislative history, but concluded that the legislative history supports the more natural interpretation.
Justice Stevens's approach is the strongest. Scrivener's errors raise a special problem of statutory interpretation, because effectuating the will of the legislature can be at odds with giving effect to the text as its actually written. Justice Scalia's approach treats this as a highly formalist game. If Congress makes an error, too bad for them: an error introduced by sloppy editing is the same as a formal policy choice, carefully made. I think this misstates the courts' role in interpreting statutes. Courts should seek to effectuate the will of the legislature. When the text is clear, it should be followed. But where there is evidence that Congress simply screwed up, forcing Congress to take action is pointless. It's true that Congress can fix its errors, but that's true either way. The question is which side of the question should be given the tremendous advantage of inertia. After all, this circuit split persisted for years: one of the sides was wrong, but Congress, because of the demands on its schedule and possible splits of opinion, did not correct either interpretation. Allowing an error by a staffer to shape the law until Congress musters the will to act serves no sensible purpose. However, once Congress was made aware of the possible error before passing the law, that analysis falls apart. If it was a scrivener's error, it's safe to say it would have been fixed before the law was passed; at the drafting and debate stage, fixing an error has relatively low costs. As a result, the statute should be given its straight-forward reading, because Congress ratified any possible error through inaction.
