Dewsnup v. Timm
In Dewsnup v. Timm, a 1992 decision, Dewsnup filed a Chapter 7 case in the hope of protecting two pieces of farm land. The land was worth about $39K, and it secured a note in the amount of about $120K owed to Timm and other lenders. Dewsnup filed an adversary proceeding seeking to void the lien to the extent that the debt exceeded its value. This is a form of cramdown. She made a simple argument:
1. A claim secured by a lien is a secured claim only up to the amount of the value of the property securing the claim. § 506(a)
2. The lien is void for any amount in excess of the value of the property. § 506(d).
Justice Blackmun, writing for the majority, found a circuitous way around this reading. First he uncovered an ambiguity in the language of the statute, arising from the ability of several sets of lawyers to create one. When there is an ambiguity, courts turn to principles of statutory construction. The majority relies on the rule that when a statute is amended, those changes may have unintended consequences, and the court should consider whether the intent was to change previous law. Absent an indication, other than the words of the statute, that the Congress intended to change the rule that liens pass through bankruptcy untouched, Blackmun says that he should assume no change was intended. The Bankruptcy Code wasn’t just amended, though. It was completely rewritten and reimagined. The amendment principle is not applicable. As this case shows, it not only requires a superhuman level of clarity in drafting by Congress, it requires specific legislative history as well.
Scalia dissented. He says that there is no ambiguity. Then he supports the clear meaning of the law with a strong technical argument, and eviscerates the majority argument. Of course, he couldn’t resist a jab at the majority:
Read naturally and in accordance with other provisions of the statute, this automatically voids a lien to the extent the claim it secures is not both an “allowed claim” and a “secured claim” under the Code. In holding otherwise, 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.
I agree with Scalia that there is no ambiguity. But let’s assume there is some ambiguity, as the very competent lawyers for the lender and the Solicitor General and amicus lawyers urged. After all, good lawyers should be able to offer an argument that everything is ambiguous in light of their brilliant use of their overdeveloped reasoning powers.
We need to look at this case in a more complete way. The case is about who will get the land, the lender or the owner. Neither opinion talks about this. Neither addresses the relative interests of debtor and creditor. Neither talks about the power relationships or the personal relationships. Neither talks about the obvious fact that the point of the Bankruptcy Code is to adjust the relations between debtors and creditors, and to give the honest debtor a fresh start in economic life.
The Code fixes it so that the lender gets the short end of the stick in reorganization cases under Chapter 11, and that the purpose is carried out through §§ 506(a) and (d). There has to be some reason why that rule should not apply in Chapter 7 if the lender is to win. The answer, of course, is that the majority doesn’t want the borrower to win. That view isn’t written out. Instead, Blackmun implies that Congress isn’t allowed to change a law without writing out a rationale for every single change. We know that isn’t a general rule, so we know that the hidden assumption that lenders always win was the actual grounds of the decision.
The lesson we learn from this case is that unmoored reason is a poor way to judge cases. The majority and the dissent both treat laws as if they existed in a vacuum, giving the writers the ability to turn their formidable powers of logic and deduction onto each word of a statute. The cloud of verbiage that erupts is cover for the bias of the writers. There is no justice in this method of thought.
Shelby County v. Holder
Now let’s turn our attention to Shelby County v. Holder, the Voting Rights Act case. Chief Justice Roberts asserts that things have changed in the South on voting issues. He offers as evidence for his views a chart showing a nice increase in voter registration among people of color, and ignores all other evidence detailed by Congress. He admits that this change occurred because of the VRA. But too bad. That chart is enough evidence for him to accuse Congress of not looking at current data.
The legal basis for the decision appears to be the Tenth Amendment, and something called the “principle of equal sovereignty”, which apparently is really important to Roberts. He mentions it in his decision in Northwest Austin Municipal Utility District Number One v. Holder, and points to several other cases where the term is used. Roberts asserts that this judicially created idea takes precedence over the express language of the Fifteenth Amendment, the sole purpose of which is to give Congress the power to secure the voting rights of citizens, regardless of race, color, or prior condition of servitude.
The Voting Rights Act is very unusual, he says, quoting earlier decisions, because it doesn’t apply to all of the states equally. Therefore Congress has to jump through whatever hoops the Court creates to justify exercising its power under the Fifteenth Amendment. The history that led to the adoption of the Fifteenth Amendment and its express grant of power to Congress must give way to the equal sovereignty principle.
The weakness of this argument is made clear in Justice Ginsburg’s dissent. She includes a killer line: “Throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.” But the bulk of her dissent is devoted to putting the Voting Rights Act into perspective, from an historical perspective and the perspective of the people it was designed to protect. It is profoundly human in its approach, and it demonstrates an understanding of the way societies actually work. It is a complete justification for the Voting Rights Act.
But let’s assume for the moment that the conflict Roberts sees between the Voting Rights Act as an exercise of the Fifteenth Amendment and the equal sovereignty principle is between principles of more or less equal importance. How should we select between them? In the Dewsnup case, I suggested looking at the big picture consisting of the actual conflict and the purposes of the Bankruptcy Code. In this case, we have to look at the actual conflict, and then at the broad principles of the Constitution and, indeed, the broad principles of our society.
On the first point, the conflict that led to the case is the desire of Shelby County to be free from the constraints of the VRA. Shelby County could have applied for a bailout from the preclearance provisions of the VRA, as a number of other jurisdictions have done. That would have been denied, because the Attorney General has objected to voting changes in that county recently. So it decided to attack the constitutionality of the VRA, presumably so it could make its discriminatory changes without preclearance. That purpose is not relevant to the conservatives.
Turning to general principles, what better place to look than the Preamble to the Constitution:
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
The Chief Justice and the conservatives who joined him don’t say which of those principles is furthered by their decision. They don’t offer any others. They don’t have to explain why they think they are right. And they don’t.
In this case, as in Dewsnup v. Timm and many other cases, the Supreme Court tells Congress how to legislate. They insist that Congress meet their demands for process, evidence, draftsmanship and any other hoop they can think of to reinforce their control. Scalia objects to this when he loses. Here is a piece of his dissent in the DOMA case, US v. Windsor:
This case is about power in several respects. It is about the power of our people to govern themselves, and the power of this Court to pronounce the law. Today’s opinion aggrandizes the latter, with the predictable consequence of diminishing the former. We have no power to decide this case. And even if we did, we have no power under the Constitution to invalidate this democratically adopted legislation. The Court’s errors on both points spring forth from the same diseased root: an exalted conception of the role of this institution in America.
Yes, the Supreme Court is all about power. The misuse of power in Shelby County reveals the ugly souls of the conservatives, and their ugly vision about the future of our country.
Photo by Dave Kellam under Creative Commons license