court i represent the california public utilities commission and i'm arguing on behalf of all of helminths helen's here the commission numerous agencies of the state of california which are represented by the attorney general the city and county of san francisco and the california law a plan shall move into section five provide adequate means for the plans implementation and quote under the syntax of the key test one bankruptcy laws are displaced to the extent that they would otherwise apply to what a plan shall provide in other words the bankruptcy code requires a plan that includes the elements specified in section eleven twenty three the notwithstanding clause pre amps non bankruptcy laws those specified in this section and quote so in other words the domain of the preemptive laws is limited to that that would otherwise regulate what is to be contained in the reorganization plan not speeding it would have  state and local governments over debtors implementing a plan of reorganization or work with a nation second piccies arguments fall far short of demonstrating the clear and manifest purpose of congress as the presumption against preemption occurs simply by virtue of listing a transaction in the disclosure statement whether or not the preempted laws are you identified to the bankruptcy judge and the parties much less whether there's an opportunity for judicial inquiry  originally in acted already imply adly preempted all of this regulatory law that isn't an argument about implied preemption as applied to the and this particular case it's rather an effort to reconcile the legislative it believed that sales of in state generation facilities by vertically integrated utilities would enable generators to divert electricity away from california or to withhold electricity and could result in supply utility the decision whether to maintain for good structured vertically integrated electric utilities or whether to encourage or mandate desegregation is among the most fundamental current policy choices and utility regulation the federal power act reserves that policy choice of the states fiji has never disputed that point and the states in turn are approaching this policy question in different ways depending on local conditions and views according to the website of the inner energy information administration of the u s department of energy as of february two thousand and three seventeen states and the district of columbia were actively pursuing some form of restructuring for of electric deregulation after california down but not out surveys the policy issues we provided the citation of the court room floor now even apart from section three seventy seven california law requires prior approval by the public the nation's largest privately owned hydroelectric system without review one of the california environmental quality act of any environmental impact that the disaggregation transactions may have as a whole i've already explained th theory of automatic and self executing preemption is that regulatory laws are preempted in the words of the disclosure statement whether specified here or not and four of but neither a utility debtor nor respectfully even a bankruptcy judge has the institutional competence or democratic mandate to formulate a state's energy policy and that's what's involved here your argument is in the sense of if anybody's going to screw it up  legislature exactly this is a policy question consigned by the federal power act of the legislature it's usually momentous policy question for each state states can resolve that question differently depending on depending on local conditions like the price of electricity and supply issues and the bankruptcy code should not upset the regulatory balance struck by the relationship between federal energy regulation and state energy regulation  position would allow a debtor to undertake a merger under a plan even if that merger would be in violation of the clinton act or a state and i trust laws some of which regulate mergers or offer another example chapter include laws regulating the press preventing a proposed one time sale or abandonment of environmentally hazardous property so p g nice theory in the fact would overturn the result which by the supreme court in the mid atlantic case as applied to plan implementation and many many other examples could be given me with the following textual question i'm just reading eleven twenty three a which provides of course notwithstanding any otherwise of placable non bankruptcy as you would have us read that there is expressed preemption and that not all non bankruptcy laws what non bankruptcy laws are expressed preempted by th state laws or provisions in a debtors corporate charter requiring for example board approval before plan may propose the charter amendment are required by subsection eight secs this is a real concern  well let me be very clear i see i'm eating into my rebuttal time but i want to impress your your your your question of course we don't see the state law regulating the contents of charter provisions i preempted as we say in our reply brief in fact it's clear from the history of the code that those laws are not preempted on the bankruptcy code doesn't allow we organize debtor attack a charter provision that is substantively illegal under state law but the bankruptcy code does provide that the plan they propose a charter amendment required by a sex without first obtaining the approval of the board of directors charter amendment is then approved through the plan of voting by classes or cram down and a confirmation order stipulated in the bankruptcy code rather than for example voting by shareholders which might be the process for consumer protection laws laws regulating going out of business sales and laws governing the sale of regulated items raising from guns to pharmaceuticals to fertilizer if the denver public utility wanted to sell environmentally sensitive watershed lambs p g nice theory when we have state law requiring regulatory approval if the debtor wanted to demolish a historically significant building in order to maximize the value of the debtors property in a plan p g nice theory would require that result sales taxes for example are plainly non bankruptcy laws that would otherwise fly to a single property pursuant to a plan the bankruptcy code simply doesn't subjugate state briefing in this case is devoted to showing the court that there's really nothing to worry about here we have been accused them dangling the proverbial parade of horribles before the court and there is a long briefing as to why the reach sanction ongoing activity out of compliance with either law we are advised that there are structural limitations within the crowd that would prevent even those transactions from taking from being conducted in a way that was out of need look no further than the transactions proposed in this case to see why that is the genie proposes to transfer as license to operate a nuclear power plant to a different answer to such transfers under ordinary federal law must be approved by the nuclear regulatory commission which determines whether the trance really will happen that's a start shackle ability and financial wherewithal to operate the plant safely into the future as we e s interpretation of the bankruptcy code should the nuclear regulatory commission refuse to transfer the license they would assert authority under the provisions that issue here to preempt the expert exclusively by the back of c how will creditors ensure speak classified what is the plan provide with restructure the treatment of creditors who are impaired these are matters that virtually by definition are covered encountered but it does it does seem to me that in this case the reason that they thought they were doing a great deal in nine hundred eighty four is that in fact all the way back to nineteen thirty four and  paper reorganization principally and with respect to that it's been clear for a long time that it was a purely federal matter but let me return to the point that any means what it says here because look at eleven twenty five d it goes out of its way to specify the very limited role that regulators have even when they are complaining about the inadequacy of the disclosure of plan content in eleven twenty five d it says that they have a right to be heard but not heeded basically they're allowed to comment but the governing law the governing of all is purely federal on the question of adequacy of disclosure now what sense would it or if it's not fine there's another provision of the federal bankruptcy code that provides the substantive power and they point to eleven twenty four to the fact is that both branches of  argument are wrong the simple implementing provision of transferring property is not always fine under state law section three seventy seven in california shows you why that so i radical position here is the one that says we're simply going to pick the crops out from under the bankruptcy code by a limiting the affirmative authority that courts have relied on implicitly and sometimes explicitly for decades with respect to their claim that eleven twenty four to you is really the source of authority for those implementing transactions that involve impairing because the code in light of its structure and language and history could only have been read to take away from the states the invitation they had been extended from nineteen thirty deciding at the moment of implementation which might take days or weeks for bureaucratic reasons but conceptually could happen all at once it's a phase shift as would be a quantum theory of something going from state  one organization to another and it is a federal province and the role of the states is by invitation of the federal government let me if i could go back to nineteen thirty four make sure i understood your answer thousand and seventy eight the bankruptcy code took away the invitation that the public utilities had so that in one nine hundred seventy nine they would have no longer been invited  transactions not only in the public utilities area but in telecommunications and other areas but i would be prepared to argue even in the absence of that clarifying language that there was a very strong case to be made the reason is not true as mr rymer claims that we concede the contrary the reason is that there's nothing new about the position that the implementing transactions are governed exclusively by federal law but if you look authority for the transactions it described and that's the key that is the question is is the language here and its predecessor going all the way back to nineteen thirty eight and then one hundred thirty four empowering or is it opinion making it look like even when that language was gone there was simply a background principle that said that state law governs the fact is that if you look at the learned hand opinion they cite in baker share it turns out he was policy namely the parts that deal with the choice of directors of the reorganized corporation eleven twenty three eight seven and eleven twenty nine eighty five open the window for state public policy th when they are both federal then you have a problem of harmonization and that is the problem with which federal courts have struggled from the very beginning as to what state law is displaced i think you're getting a very wrong impression except they're going to be some federal non bankruptcy last wish this was does not apply in the same with my state look i understand just lester that it would be i think that's what you're saying i'm not exact no i'm sorry i'm not quite saying that if  year and says here are three rules that you cannot ever violate one of which is you can't violate trading with the react in the way you transfer assets including in bankruptcy but they don't write that as an amendment to favored i understand what you're saying but as soon as you saying that any doesn't mean any and i'm not sure the barrier of force and quite blunt force of the supremacy clause means that any has to mean any with respect to state law once an doesn't mean any with respect to federal law well i think we have a long metaphysical discussion of whether it's a matter of any something else or whether it's a matter of having to swear to inconsistent federal laws with each other crucial it's one thing to say that the precise interface of federal and state law will be worked out case by case over time as the law operates but it's another thing to say that the underlying legality of reorganizing transactions in the first place whether there's any affirmative authority for them in the federal law and if there is it displaces state law is up for grabs until you have as applied litigation no one is going to lend billions of dollars to a bankruptcy court seemed to think that it had license to way to mix and match that is to look bob hope at the importance of the state policy as it came up and at the nature of the federal policy and to come up with a its own a kind of junior varsity congress which we don't think a bankruptcy court is authorized to be very different from putting a revised program out the public and waiting for eternal lawsuits years later when the point is that those eternal lawsuits would make it impossible to get the money upfront in the first place so reorganizations would fail and the economic importance of the bankruptcy corporation in accord with federal law or questions of taking your over your time thank you very much your argument we'll hear rebuttal argument this time galaxy our position on a sex is absolutely consistent with our position or only with our general position on the meaning of the notwithstanding clause as i indicated in my opening argument our position is that sub displacing regulatory laws and indeed as the opening brief discusses the chandler acts specifically amended the prior bankruptcy act to remove a section of the full power and authority clause precisely for the reason that it might have you look at the text of the seventy eight version of eleven twenty three eight if you look at the presumption against preemption we submit that are humans plainly wrong thank you very much thank both council all council for their arguments they are really quite helpful as difficult complicated cases i'd hate to be responsible for the lawyer fees represented in this room that was before the case just argued will be submitted for the sr gen try to get a decision to you promptly