Now Playing in a Bankruptcy Court Near You
Imagine that, for the past several years, you’ve worked diligently and dutifully as a bankruptcy judge. Unlike your Article III colleagues on the federal bench, you don’t have lifetime tenure or salary protection. But that doesn’t really bother you all that much because you care about what you do and you feel you make a difference. What’s more, you love the substance of your work—applying the Bankruptcy Code day in and day out. Sure, it has its share of inconsistencies and ambiguities that present some interpretive difficulties, as any statute would, but, at the end of the day, it’s elegant and workable. And then, BAM! Your life as a judge as you know it comes to a screeching halt.
On April 20, 2005, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) into law, thus becoming Congress’s willing accomplice in committing statutory massacre. And when I say statutory massacre, I’m not even thinking about how BAPCPA substantively changes the Bankruptcy Code. Rather, I’m focusing on BAPCPA’s inartful drafting. As recently blogged by Bob Lawless over at Credit Slips: “Regardless of one’s views about the substance of the amendments, most everyone seems to agree that the legislative drafting left something to be desired.” And that’s putting it quite mildly. A quick glimpse at some of the statements from members of the bankruptcy bench during the past year gives the impression that some of the judges are not too happy with Congress.
Take, for example, Judge Lundin’s commentary on the eve of BAPCPA’s effective date, which appeared in the September 2005 issue of the American Bankruptcy Institute Journal:
Whether by design or default, bankruptcy practitioners and judges will spend decades unraveling cross-references that lead nowhere and interpreting new terms of art that fail to communicate. If the drafters intended to make bankruptcy more complicated and expensive by making the bankruptcy law less coherent and more difficult of application, they succeeded. There will be generations of “technical amendments.” Am. Bankr. Inst. J., Sept. 2005, at 1, 70.
Speaking of technical amendments to BAPCPA, consider Judge Haines’s opinion in In re McNabb:
It has been reported that a “technical amendments” bill is in the works to fix various glitches in BAPCPA, notwithstanding Congressional testimony that it was so perfect that not a word need be changed. Perhaps this is one of those glitches. If so, Congress can easily fix it. Frankly, this Court believes it should . . . . 326 B.R. 785, 791 (Bankr. D. Ariz. 2005).
Okay, okay, so maybe these two comments aren’t so bad. Perhaps a mix of tongue-in-check with a slight dose of admonition—the sort of checks-and-balances stuff the Founding Fathers had in mind with three equal branches of government, right? Well, from Judge Brook’s perspective, it seems there’s no need to sugarcoat or to be subtle. Better to come out and say what’s on your mind:
This is a case where the language of BAPCPA passed by Congress tends to defy logic and clash with common sense. This is an example of a specific revision to the Bankruptcy Code, if followed by the Court and applied as Congress seems to intend—i.e., by way of strict construction—would result in an absurd decision and totally unworkable legal precedent. These drafting problems have the potential of bringing the bankruptcy system to a halt while debtors, creditors, and the courts try to figure out just exactly what Congress intended. In re TCR of Denver, LLC, 338 B.R. 494, 495-96 (Bankr. D. Colo. 2006).
Or, better yet, why not repay the favor? If Congress wants to enact legislation that is utter nonsense from a drafting perspective, then why not issue completely nonsensical opinions commenting on that legislation? Judge Cristol did so by issuing a sua sponte order penned in the vein of Dr. Seuss’s Green Eggs and Ham:
I do not like dismissal automatic,
It seems to me to be traumatic.
I do not like it in this case,
I do not like it any place.
As a judge I am most keen
to understand, What does it mean?
How can any person know
What the docket does not show.
Before this problem gets too old
it would be good if we were told:
What does automatic dismissal mean?
And by what means can it be seen?
Are we only left to guess?
Oh please Congress, fix this mess!
Until it’s fixed what should I do?
How can I explain this mess to you?
In re Riddle, 334 B.R. 702, 703 (Bankr. S.D. Fla. 2006)
At this point, you might be thinking that this is just the sort of anecdotal evidence that leads to unjustified inferential leaps. The situation can’t be all that bad, can it? The judges surely are overreacting, feeling (1) slighted by Congress’s efforts to strip them of their discretion through provisions like means-testing through mathematical formulas and automatic dismissals and (2) insulted by lobbyists from the credit industry, including one who said that bankruptcy judges are “not real judges” and are “part of the . . . problem” with the bankruptcy system (see L.A. Times story here). Actually, the situation may be more dire than perceived.
A search of Westlaw’s FBKR-CS database, which consists of reported and unreported bankruptcy decisions and orders that are issued by all levels of federal courts, reveals that, to date, there are 538 documents that mention “BAPCPA” or “Bankruptcy Abuse Prevention and Consumer Protection Act.” Notwithstanding that this is a new law that has presented issues of first impression for courts, this strikes me as an excessive amount of opinion-writing, more than one would normally expect to see with a legislative enactment that has been in effect for less than a year. Worse yet, of those 538 documents, 40 mention the phrase “absurd result.” Even if only some of those opinions involve a BAPCPA issue where a plain language interpretation could lead to an absurd result—conceivably, a court might mention the phrase as it rejects a weak absurd-result argument—it can’t be a good sign that approximately 7.4% of the issued opinions within the year of BAPCPA’s enactment make an “absurd result” reference.
When bankruptcy judges issue commentary or opinions like the examples set forth above, Congress should pay close attention and look to clean up the terrible mess it has made. After all, these folks are among the nation’s top experts in bankruptcy. But, as persuasively argued by Melissa Jacoby, past experience has shown that it’s not likely that Congress will listen and that change will have to come from the actors within the bankruptcy system.