1 (Slip Opini o n) OCTOBER T ERM , 20 06 Sy llabu s N O TE : Wh er e it i s feas ibl e , a s y llab u s (h ead n ot e) wil lbe rel e as ed , as is bein g d o n e incon n ecti onwithth is cas e , a tth e ti meth e op in i o n is is s u ed

. Th e s y ll abu s con s titu tes n o p a r t of th e op in i o nof th eC o u r t bu t h a s be en pre p are dbyt h e Re po rte ro f De ci sio n s fo r t h e co nveni e nce of t h e reade r . Se e United Statesv. Detro it Timbe r& Lumb er Co., 200U. S

. 3 21, 337

. 

# SUPREME CO URT O F THE UNI TED STATES
Sy llabu s 

### T RA V E L ER S CA S UAL TY & SU RE TY CO . OFAM E R I CA v . PACIFIC GAS & EL ECTRI C C O

. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 05–1 42 9. Ar g u ed Janu a r y16, 2007 —D ec ided M a r c h20, 2007 Afterr e spon den t(PG & E) filed forCh apter11 ban kr u p tc y , petition er

(Tra velers ), w h ich ha d pre vious ly is s u ed as uret yb o nd t o gua r a n t e e PG&E’s payment of state workers’ co mpen sationben efi ts, as ser t ed a c l aim in th e b a n k r u p tc yac tionto pr otec t i t self sh ou ld P G &E defau l t onth e ben efi ts. Withth e Ban k r u p tc y Cou r t ’s approv al, PG &E a g reed t o ins e rtla ngua ge in t o it s reorga niza t i on pla na n d dis c los ure s t at ement t o prot ectTra v elers in ca s e of s uch adefa ult. Additional lit iga t ion over t h e negot i a t e d la ngua ge ne vert heles s ens u ed a n d wa s u l tima telyr e solv ed bya c o u r t -appr ov ed stipu l a t ions tatin g , inter alia, th at Tr av eler s c o u l d a sser ta g e n e r a l u n s ec ur ed c l aim forattor

ney’s fees, which were authorized inthe parties’ or iginal indemnity a g reement s . When Tra v ele r s filed a namended cla i m for s uch fees , PG&E obj e ct ed b a s e d on t h e rule t h e Nint h Circuitadopt e d in it s prior Fobian dec i sionth at w h e r e th e litig ated issu es in v o lv e n o t basic cont ra ctenfor cementq u es t i ons , b u tis s u es peculia r t o federa l b a n k

ruptcy law, attorney’s fees generally will not be awarded

. The Bank

rupt c y Courtr ej e ct ed Tra v elers ’ cla i m on tha tba s i s , a n d t h e Dis t rict Courta n d t h e Nint h Circuit a ffirmed. Held: 1

. Federa l b a n krupt c yla w does notdis a llow cont ra ct -b as ed cla i ms forattor n e y ’ s fees ba sed sole l yonth e fac tth at th e fees w e r e in c u r r e d litigat ing bankruptcy law i ssues. Because the Fobianrule finds no s u pportin fed era lb a n krupt c y la w, t h e Ni nt h Circuite r red in dis a l

low i n gTr av el er s’ c l aim. Pp. 4–12. (a) The American rule that “the pr evailing litigant is o r dinarily n o t en titledto c o llec tar e as on able attor n e y s ’ fee fr om th e loser , ” Aly

esk a Pipelin e Servic e Co. v. Wilde rne ss So ciety , 421 U. S. 240, 2 47,2 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Sy llabu s may be overcome by, int er a lia, a n“ e nfor c e ab l e cont ra ct” a lloca ting such fees, Fleischman n Dis t illing Corp. v. Maier Brewing Co. , 386 U. S. 714, 717

. A c o n t r a c t alloc a t i n gattor n e y’s fees that is en for c e able u n d ersu bstan tiv e , n o nban kr u p tc y lawis allow able inban k

rupt c y ex ceptwhere t h e Ba nkrupt c y Co de provides otherwis e . Cf. Secu rity Mo rt gage Co. v. Powers , 278 U. S

. 149, 1 54. T h e Code does n o t do so h e r e . Pp. 4–5. (b ) Under t h e Ba nkrupt c y Code, t h e b a n krupt c y co urt“ s ha ll a l

low ” a c r e ditor ’ s c l aim “ex c ept to th e ex ten tth at” th e c l ai m imp lic ate s an yof n i n e en u m er ated ex c e ption s . 11 U. S. C. §502(b). Bec a u s e Travelers’ atto rney’s fees clai m has no thing to do with the exceptions set for thin§§502(b)(2)–( 9 ), it mu st be al lo w e d u n l ess it is u n e n forc e able u n d er§502(b)( 1 ), w h i chdisallow s a n y c l aim th at is “u n e n for c e able ag ain s t t h e debtoran d pr oper tyof t h e debtor , u n deran yagr e e mentor a pplicab l e la w for a rea s on ot her t h a nb e ca us e such cla i m is c o n t in g e n tor u n m atu r e d.” Pp. 5–6.

(c ) Sec t ion502(b)(1) i s mo s tn atu r a llyu n d er stood to pr ov ide th at, w i thlimited e x c e ption s , an y defen s e to a claim th a tis a v ailab l e ou t

side of th e ba n k r u p tcyc o n t ex t is also av a ilab l e inban kr u p tc y . Th is r e adin gis c o nsisten tn o t on l yw i thth e plainstatu tor ytex t , bu t also w i thth e sett led pr in c i ple th at “[c ] r e dito r s ’ en titlemen ts inban k

r u p tc yar ise in th e fir s t in sta n c e fr om th e un der l y i n gsu bstan tiv e law c r e atin gth e debtor ’ s obl i g a t i on , su bjec t to an yqu alify i n gorc o n t r a ry provisions of the Bankruptcy Code.” Raleighv. Illi nois Dept. of Reve

nue , 530 U. S. 15, 20. Th a tpr in c i ple r e qu ir es ban kr u p tc yc o ur ts to cons ults t a t e la w in det e rmining t h e va lidit y of mostcla i ms . S e e ibid

. Thus , when t h e Code us es t h e word “ c la im”

— i.e ., a “r igh tto payment,” §101(5)(A)—it is us ua lly referr i ng t o arightt o pa yment r e c o gn ized u n derstate l a w , “[u ] n l ess some feder a l in ter e st r e qu ir es a different resul t ,” Butner v. Un i t e d S t a t es , 4 40 U. S. 48, 55

. Pp. 6–7. (d) The Fobian r u l e fin d s no su ppor tin§502 orel sew h e r e infed

er al ban kr u p tc ylaw

. Th e Fo bi a ncourt di d not identify any Code pro

vis i on a s present i ng s u c hs u pport , b u tin s t ea d cit e d t hree of it s own prior decis i ons , none of w h ich iden tified an ybasis for disal l ow in ga cont ra ct ua l cla i m for a t t o rney’s fees

. Nor did t h e court ha ve occa s i on to do so; in eac hof th ose c a ses, th e attor n e y ’ s fees c l aim failed as a ma tt er of st a t e la w. The ab s e nce of s uch t e xt ua l s u ppor tis fat a lfor th e Fobianrule. See FC C v. NextWave Perso nal Communication s Inc. , 537 U. S. 293, 3 02. I nligh tof §50 2 (b)(1)’s br oad , per m issiv e s c ope, a n d t h e Court ’s prior recog n it ion t h a t“t he cha ra c t er of [acon tr ac tu al] oblig ationto paya ttor n e y ’ s fees pr esen ts n o obst ac le to en

forcing itin b a n krupt c y , ” it neces s a rily follows t h a t t h e Fobian rule ca nnots t a n d. Secu rity Mort gage, s u pra , at154. Pp. 7–10

. 2. Th e Cou r t ex pr esses n o opin ionas to PG &E’s ar g u men t s th a t3 Cite as: 54 9 U

. S. ____ (2007) Sy llabu s
u n s ec ur ed c l aims forc o n t r a c t u a l attor n e y ’ s fees, su cha s Tr av eler s’, ar e c ateg o r i c a llydisal l ow edby§506(b), w h i c hex pr esslyau th or izes such fees “[t]o the extent th at an allowed secured claim is secured by propert y[who s e] va lue [exce eds ] t h e a m ou ntof s uch cla i m,” a n d t h at s uch dis a llowa nce is confir med b yt h e Ba nkrupt c yCode’s s t ruct ure an d pu r p ose, as ex amin ed ag ai nst the backdrop of p r e-Code bank

rupt c yla w. The Courto r dina rily does no tcons ider a r gu ment s , s u c h a s t h es e, t h at were neit her r a is ed nor a ddr es s e d b e low, Cooper Ind us trie s, In c. v. A v iall Servi ces , Inc. , 543 U. S. 157, 1 6 8–16 9, an d PG &E ha s notident i fied a n y circu ms ta nces wa rra nt ing a nexc e pt ion t o t h at rule he re. PG &E’s ins i st ence t h a t it s a r gument s a r e “ f a i rly incl uded” w i th inth e qu estionpr esen te d inth e c e r t ior a r ipetitionis n o t per s u a siv e . Pp. 10–12. 167 Fed. Appx . 593, v a c ated an d r e man d ed.

ALITO , J ., deliv ered t h e opini o n forauna ni mous Court

._________________

_________________ 1 Cite as: 54 9 U

. S. ____ (2007) Opinion of t h eCourt
NOTICE: This op i n ion is subjec t to f o rmal revi si on bef o r e publicat ion in the p r eli m in ary p r in t of th e U n it edS t at es R e p o rts
. R e ad ers ar e r e qu es ted to n o tif yth e R e p o r t e rof D e c i s i on s , Su p r em e C o u r t of th e U n ited St at es , Wa s h

ington, D. C. 2054 3, of any typ o gra p hical or other f o rmal err o rs , in or der th atc o rr ect i on sm a y b e mad eb e f o r e th ep r e lim in aryp r in t go es t o p r es s . 

# SUPREME CO URT O F THE UNI TED STATES
No. 05–1 42 9 

### TRAV EL E R S C A SUALTY AN D SURETY COMPANY OF AMERIC A , PETITION ER v. PA CIFIC GA S A N D ELEC TRIC COMPANY ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE NINT H CIRCUIT [M ar c h20, 2007] 

### J USTICE 

### ALI T O 

### delivere dthe opinio n of the Court. We are asked to consider whethe r federal b ankrup t c y law preclu des an unsecured cr editor from recovering attorney’s f ees authorized by a prepetition contract an d incurred inpostpetition litigat ion. The Court of Appeals for the Ninth Circuit held, based on a rule previousl y adopted bythat cour t , that suchfees are categorically prohibited—even where the contractual allocation of attorney’s fees would be enforceable under applicabl e nonbankru ptcy law—to the exten tthe litigation involves issues of federal bankruptcy law. Because th at rule finds no supportin the B ankrup tcy Code, we vacate and remand. I Respondent Pacific Ga s and Elect r ic Compan y (P G&E ) filed a voluntary Chapter 11 bank ruptcy petition in April 2001, 11 U. S. C. §1101 et seq ., and continued thereafter to operate its business as a “debtor inpossession. ” §§1107(a), 1108. The bankruptcy filing caught the attention of peti

tioner Trav elers Casualty & Su ret yCompan y(Tra velers),2 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Opinion of t h eCourt 

### which had previously issued a $100 million su rety bond o n PG& E ’s behalf to the California Departmen t of Industrial Relations, guaranteeing PG&E ’ s payment of state work

ers’ compensation be nefits to injured employees. 1 

### I n connection with the bond, PG&E executed a series of indemnity agreements in favor of Travelers. The indem

nity agreem ents provide that PG&E will be responsible for any loss Travelers might incur i nconnection with the bonds, including any attorney’s f ees incurred in pursuing, protecting, or litigati n g Trav elers’ rights in connection with those bonds. Although no default occur r ed, Tra v elers asserted a claim in the bankruptcy action to protect itself in case PG& E defa ulted on its wor k ers’ c o mpensation benefits at some pointin the future, requiring Travelers to make payments under its bond. In response to Travelers’ claim, and with the knowledge and ap proval of the Bankruptcy Court, PG &E agreed to inse rt la nguage into its reorgani

zation planand disclos u re statement to prote ct Travelers’ right to indemnity and subrogation in the event of a de

fault by PG&E. Travelers claims, however, that P G &E then unilaterally altered the negotiated language i na wa y th at substan

tially diminished the protecti on it had been seek in g. Accordin g to Travelers, that d e velopmentresulted in additional l i tigation, but Travelers and PG&E ultimately resolved the dispute by entering into a stipulation tha t

——————

1 Ca lifornialaw req u ired PG&E t o provide workers ’ c o mpens a tion b e nefit s for its employees by eit h er (1 ) pu rcha s i ng wo rk ers ’ compens a t i on ins ura ncefrom alicensed provider of s uch ins ura n c e or (2 ) a d opt

in ga plan , w i thth e St ate’s appr ov al, to self-in s u r e . PG &E c h o se th e latter op tion, and was there fore requir ed to post security with the State t o ens ure ongoing pa ymentof ma ndat ory worke r s ’ compens a t i on ben efits. See Cal. La b. Cod e An n . §§3700 , 3701 (We s t 2 003). Tr av ele r s pos t ed t h e required s e curit yb yis s u ing a b o nd on PG&E’s b e ha lf. The bon dmakes T r av eler s liable , u p to $100 m illion , forw o r k er s’ c o mpen sa tionben efits i nth e ev en t of a defau l t byPG &E.3 Cite as: 54 9 U

. S. ____ (2007) Opinion of t h eCourt 

### was later a pproved by the Bankru ptcyCourt. In addition to accommodating Tr avelers’ substantive concerns, the stipulation stated that Travel ers “may assert its claim for attorneys’ f ees under the [i]ndemnity [a]gree m ents” (sub

ject to P G &E’s rightto object) as a general unsecured claim against PG&E. Brief for Petitioner 17. Travelers subsequentl yfiled ana m ended proof of claim seeking to recover the attorney ’s fees itincurred in con

nection with PG&E’s bankruptcy proceedings. PG&E objected, arguing that Travel ers c o uld not recover attor

ney’s fees incurred wh ile litigating issues of bankru ptcy law. The Bankr u ptcy Cour t agreed a n d rejectedTravelers’ claim on th at basis. App. to Pet. f o r Cert. 23a–25a. Trav elers appealed that ruling to the District Court. The District Court affirme d , relying on In re Fobian , 951 F. 2 d 1149 (CA9 1991), wh ich held th at “where the litigated issues involve not basic contract enforcemen tquestions, but issues peculiar to federal bankrup tcy la w, attorney ’s fees will not be awarded absent bad faith or harassment by the losing part y,” id ., at 1153. S ee App. to Pet. for Cert. 10a, 17a. Travelers a ppealed again, and th e United States Court of Appeals for the Ninth Circuit affirmed. 167 Fed. Appx. 593 (2006). The panel acknowledged that, in at least some circumstan c es, a “ ‘prevailing party in a ban kruptcy pro

ceeding may be entitled to an award of attorney fees in accordance with applicable state law . . . .’ ” Id. , at 594 (quoting In re Baroff , 1 05 F. 3d 439, 441 (CA9 1997)). Th e panel nevertheless rejected Tra v elers’ claim based on the Fobianrule, which it ci ted for the proposition that “at t or ney fees are not recov e rable inb a nkruptcy for litigating issues ‘peculiar to federal bankruptcy la w.’ ” 167 Fe d. Appx., at 5 94 (quoting Fobian , su pra , a t115 3). The pa nel explained that, because the fees cl aimed by Travelers were incurred lit igating issu es that wer e “governedentirely by4 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Opinion of t h eCourt 

### federal bankrup tcy l a w,” Tr ave l ers’ claim necessaril y failed. 2 

### 167 Fed. Appx., at 594. Travelers sought review in this Court, noting a conflict among the Courts of Appeals regarding the v a lidity of the Fobian rule. Compare Fobian , supra , at 115 3, with In re Shangra-L a , Inc

. , 167 F. 3d 843, 8 48–849 (CA4 1999). We granted certiorari to resolve that conflict, 549 U. S. ___ (2006). II Under the American Rule, “the prevailing litigant is ordinarily n o t entitled to collect a reasonabl e attorneys’ fee from the loser.” Alyeska Pipeline Servi ce Co. v. W ilder ness Society , 421 U. S. 240, 247 (1975); see Hauensteinv. Lyn

ham , 100 U. S. 483, 490–491 (1880); Arca mbelv. Wi seman , 3 Dall. 306 (1796 ). This default rule can, of course, be overcome by statu t e. Flei sch mann Di sti lling Corp. v. Maier Br ew ing Co. , 38 6 U. S. 714, 717 (1967). It canals o be overcome by an “enforceabl e contract” allocating attor

ney’ s fees. Ibid

. In a case g o verned by the Bankruptcy Act o f 1898, we observed that “[t]he ch aracter of [a contractu al] obligation to pay attorney’s fees presents no obstacle to enforcing it in bankruptcy, either as a provab le claim or by wa y of a lien upon specific pro p erty.” Se curity Mor t gageCo. v. Powers , 278 U. S. 149, 154 (1928). Similarl y, under the terms of t h e currentBankrupt c yCode, it remains tr ue that an otherwise enforceable contract allocating att o r ney’ s fees ( i. e. , one tha tis enforceable under substantive, nonbankru ptcy la w) is allowable in bankruptcy except

——————

2 Th e Cour t of Appeal s in c o rpor ated byr efer e n c eth e r e ason in gem ployed in In re DeRoche , 434 F. 3d 1 188 (C A9 200 6), w h i c hw a s dec i de d byth e same pan e l th at de c i ded th is c a s e . 167 Fed. Appx ., at 593

. Alth ou ghth e DeRoch eopini o n is longer than its count erpart in this c a se, it ad ds v e r ylittle to t h e pan e l’s ex plan ationof th e Fobianrule. See DeRoch e , supra , at 119 0 –11 92.5 Cite as: 54 9 U

. S. ____ (2007) Opinion of t h eCourt 

### where the Bank ruptcy Code provides otherwise. See 4 Collier on Bankru ptcy ¶ 506.04[ 3][a], p. 50 6–118 (rev. 15th ed. 2006) (herein a fter Collier). This case requires us to consider whether t h e Bank

ruptc y Cod e disallows contract- ba sed claims for attorney ’s fees based solely on the fact that the fees at issue were incurred litigating issu es of bank ruptcy law. We conclude that it does not. A When a deb t or declares bankruptcy, each of it s creditors is entitled to file a proo f of claim— i.e. , a docu ment provi d

ing proof of a “right to payment,” 11 U. S. C. §101(5)(A)— against the debtor’ s estate. Once a proof of claim has been filed, the court must determine whether th e claim is “ a l

lowed” under §502(a) of the Bankruptcy Code: “A claim or interest, proof of which is fi led u n der section 501 .

. . is deemed allowed, unless a party in i n terest . . . objects.” But even where a pa rty in inter e st objects, the court “shall allow” the clai m “excep t to the exte nt that ” th e claim implicates any of the ni ne exceptions enumerated in §502(b). Ibid

. Those exceptions apply where the claim at issue is “unenforceabl e against the debtor .

. . under a n y agreement or applicable law,” §502(b)(1) ; “is for un matured interest,” §502(b)(2); “is for [property tax that] exceeds the value of the [estate’ s] interest” in t h e property , §502(b)(3); “is for services of an in sider or attorney of the debtor” an d “exceeds the reasonable value of such ser

vices,” §502(b)(4); is f o r unmatured debt on certain ali

mony and child support obligations, §502 (b)(5); is fo r certain “da m ages resulting from the termination” of a lease or employment contract, §§502(b)(6) and (7); “results from a reduction, due to late payment, in the amount of

. . . credit available t o the debtor in connection with an employmen ttax on wages, salarie s , or commissions earn ed from the de btor,” §502(b)(8); or wa s brought to the court’s6 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Opinion of t h eCourt 

### attention through an untimely proof of claim, §502(b)(9). Travelers’ claim for attorney’s fe es has nothing to d o with proper ty tax, child support or alimony, services pro

vided by an attorney of the debtor, damages resulting from the termination of a lease or employment contract, or th e late payment of any employment tax. See §§502(b)(2)–(8). Nor does itappear that the proof of claim was untimely. See §502(b)(9). Thus, Travelers’ claim must be allowed under §502(b) unless it is unenforceable within the mean

ing of §502(b)(1). B Section 502(b)(1) disall ows any claim that is “unenforce

able agains t the debtor and pr ope rty of the debtor, unde r any agreem ent or applicable law for a reason other than because su ch claim is contingent or unmatured.” Thi s provision i s most naturally understood to provide that, with limited exceptions, any defense to a cl aim that is available outside of th e bankruptcy context is also avail

able inban kruptcy. Se e 4 Coll ier ¶ 502.03[2][b], at 502–2 2 (explaining that §502(b)(1) is generally u n derstood to “make available to the trustee any defense” available to the debtor “under app licable nonbankruptcy law”— i. e. , any defense that the de btor “could have interposed, absen t bankruptcy, in a suit on the [same substantive] claim by the creditor” ). This reading of §502(b)(1) is consistent not onl ywi th the plain statutory text, but also with the settled principle that “[c]reditors’ entitlements in bankruptcy arise in the first instance from the underlying substantive law creat

ing the debtor’s obligation, subject to any qualifying or contrar ypr ovisions of the Bankru ptcyCode.” Raleighv. Illinois Dep t. of Reven u e , 530 U. S. 15, 20 (2000). That principle requires bankrup tcy courts to consult state law in determining the validity of most claims. See ibid

. Indeed, we have long recognized that the “ ‘ba s ic fe de ral7 Cite as: 54 9 U

. S. ____ (2007) Opinion of t h eCourt 

### rule’ in bankruptcy is that state law governs the substance of claims, Congress having ‘generally left th e determina

tion of property rights in the as set s of abankrupt’s estate to state law.’ ” Ibid. (quoting Butnerv. Uni t ed States , 44 0 U. S. 48, 57, 54 (197 9); citation omitted). Accordingl y, when the B ankrup tcy Code uses the word “cl aim”—whic h the Code itself defines as a “right to payment, ” 11 U. S. C

. §101(5)(A)—it is usu a lly referring to a right to paym ent recognized under stat e law. As we stated in Butner , “[p]ropert y interests ar e created a n d defined by state la w,” and “[u]nless some federal in terest requires a different result, there is no reason why such interests should be analyzed differently simply because an i n terested party i s involved in a bankruptcy proceeding.” 440 U. S., at 55 ; accord, Va nston Bondholders Pro t ective Com m . v. Gree n , 329 U. S. 1 56, 161 (1946) (“What claims of creditors are valid and subsisting obligations a g ainst the bankrupt a t the time apetition in bankru ptcy is filed is a question which, in the absence of overruling federal law, is to be determined by reference to state law”). C In rejectingTra v elers’ claim for contractualattorney ’s fees, the Court of Appeals did not conclude that the claim was “unenforceable” under §502(b)(1) as a matter of appli

cable nonbankruptcy la w. Nor di d it conclude that Travel

ers’ claim was rendered unenforceable by an y provision of the Bankru ptcy Code. To the contrary, the co urt ackno w l

edged that, in at least some circumstances, a “ ‘ 

### prevailin g party in a bankruptcy proceeding may be en titled to an award of a t torney fees in accordan ce with ap p licable state law . . . .’ ” 167 Fed. Appx., at 594 (quoting Ba roff , 10 5 F. 3d, at 441). The court nevertheless rejected Travelers’ c l aim based solely on a rule of that court’s ow n creation—the so-called Fobianrule—which d i ctates that“attorney fees are not8 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Opinion of t h eCourt 

### recoverable in bankruptcy for litigating issues ‘peculiar to federal ban kruptcy law.’ ” 167 Fed. Appx., at 594 (quoting Fobian , 951 F. 2d, at 1153). The court explained that, because the fees claimed by Trav elers were incurred lit i

gating issu es that we re “govern e d entirely by federa l bankruptcy law,” 167 Fed. Appx., at 594, Tr avelers’ claim necessarily failed. The Fobianrule finds no suppor tin the B ankrup tcy Code, either in §502 or elsewhere. In Fobian , the court did not identify any pro v ision of th e Bankruptcy Code as providing s u pport for the new rule. See 951 F. 2d, at 115 3. Instead, the court cited three of its own prior decisions, In re Johnson , 756 F. 2d 738 (1985); In re Co ast Tradin g Co. , 744 F. 2d 686 (1984); and In re Ful w ile r , 624 F. 2 d 908 (1980) (per curiu m )

. Signifi c antly, in none of those cases did the court identify any basis for disallowing a contractualclaim for attorney’s f ees incurred litigating issues of federal bankruptcy law. Nor did the court have occasion to do so; in each of those cases, the claim for attorney’ s fees fail ed as a matter of state law. See John

son , supra , at 741–74 2; Coast Trading , su pra , at 693; Fulwiler , su pra , at 910. 3 

### The absence of textualsupport is fatal for t h e Fobian rule. Consistent with our prior statements regardin g

——————

3 In Joh nson , th e debtorsou gh tattor n e y ’ s fees af terth e c r e ditoru n s ucces s f ully re q u es t e d relief from t h e a u t o ma t i c st a yunder 1 1 U. S

. C. §362(d)( 1 ). T h e debtor ac kn ow ledg ed th at th e c o n t r a c tbetw eenth e par t ies en ti tl ed on lyth e cr editorto att or n e y’s fees, bu t th e debto r c l aimed th a t a Cal i for n i a s tatu te ex ten d ed th at en tit l emen t to bot h par t ies. Th e c o u r tr ejec t ed th at ar g u men t , n o tin gth at th e s tatu te applied only in the context of an “ ‘a ct ion on acont ra ct ,’ ” a n d concluding th at ar e qu estforr e lief fr om anau tom atic stayc o u l d n o tbe c o n s ider ed anac tionona c o n t r a c t
. 756 F. 2d, at 7 41– 74 2. Both Coast Trading an d Fulwiler in v o lv ed c l aims for attor n e y ’ s fees b a se d onanO r e g o n s t at ut e similar t o t h e sta t u t e atis su e in John son; t h e courtfound t h e sta t u t e in appl ic able inbothc a ses. Coast Tradi n g , 744 F. 2d, at 693; Fulwiler , 624 F. 2d, at 909– 910.9 Cite as: 54 9 U

. S. ____ (2007) Opinion of t h eCourt 

### creditors’ e n titlements in bankru ptcy, see, e.g . , Raleigh , 530 U. S., at 20, we generally presume that claims en

forceable u n der applicable state law will be allowed i n bankruptcy unless they are expressly disallowed. See 1 1 U. S. C. §502(b). Neither the court below nor PG&E has offered any reason why the fact that the attorney’s fees in this case were incurred litig ating issues of f e deral ban k

ruptc ylaw overcomes that presumption. Section 502(b)(4) is instructive on this poi n t. Tha t provision expressly dis a llows claims for a particular ca t e gory of atto rney’s fees—those “for services of an .

. . attor

ney of thedebtor,” to the extent t h e claimed fees “excee[ d] the reasonable value of such services.” The existence of that provision suggests that, in i t s absence, a claim fo r such fees would be allowed in bankruptcy to the extent enforceable under state law. The absence of an analogous provision excluding th e category of fees covered by the Fobianrule lik ewise suggests that the Code does no t categorically disallow t h em. See 4 Colli er ¶ 506.04[3][a], at 506–118 (concluding that Fobian “inverts the prop er analysis” by allowing attorney’s fees only where they are expressly authorized by the Bankruptcy Code, and ex

plaining that “a claim for attorney’s fees ar ising in th e context of l i tigating ba nkrup tcyissues must be allowed if valid under applicable state law”). Congress, of course, has the power to amend the Bank

ruptcy Code by adding a pr ovision expressl y disallowin g claims for attorney’s f ees incurred by creditors in the litigation of bankruptcy issues. But beca use no such provision exists, the Bankru ptcy Code pro v ides no basis for disallowing Tra v elers’ clai m on the grounds stated by the Ninth C i rcuit. As we explained in FCC v. N extWav eP erso nal Commu

nications I n c. , 537 U. S. 293 (2003), “where Congress has intended to provide . . . exceptions to pro v isions of the Bankru ptcy Code, it has done so clearly and expressly.”10 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Opinion of t h eCourt 

### Id ., at 302. Here, the Bankruptcy Code doe s not “clearly and express l y” compel courts to fol l ow the Fob i an rule; on the contrar y , the Cod e says nothing about unsecured claims for contractualattorney ’s fees incurred while liti

gating issues of bankruptcy la w. In light of the broad, permissive scope of §5 02(b)(1), and our prior recognition that “the c haracter of [a contrac t ual] obligation to pay attorney’ s fees presen ts no obstacle to enforcing it in bankruptcy,” it necessarily follows that the Fobian rule cannot stand. Securi ty Mortgage , 278 U. S., at 154; see Cohenv. de la Cruz , 523 U. S. 2 13, 221 (1998) (“We . .

. ‘will not read the Bankruptcy Code to erode past bank

ruptc ypra c tice absent a clear indication that Congres s intended such a depa rture’ ” (quo ting Penn sylvania Dep t. of Public Welfarev. Dave npor t , 49 5 U. S. 552, 563 (1990))). III PG& E makes no effort to defend the Fobian rule. See Tr. of Oral Arg. 28 (co n ceding tha tPG&E does not defend the Fobian rule, and ackno w ledging tha t“[t]he Fobian rule is wrong . . . as t o the distinction that i tdra w s be

tween State law and Federal liti g ation”). Instead, PG&E argues that §506(b) categorically disallows unsecured claims for contractualattorney’s fees and—noting th at Travelers’ claim is uns ecured—asks us to affirm on tha t basis. Section 506(b) provides as follows: “To the ext e nt that a nallowed secured claim is se

cured by p r operty the value of which .

. . is greater than the amount of such claim, th ere shall be allowed to the hold er of such claim, interest on suc hclaim, and any rea s onable fees, costs, or charges pro v ided for under the agreement or St ate statute under which such claim arose.” 11 U. S. C. A. §506(b) (Supp. 2006). Accordin g t o PG&E, t h is provision authorizes claims for contractualattorney’s fees to the extent th e creditor i s11 Cite as: 54 9 U

. S. ____ (2007) Opinion of t h eCourt 

### oversecured, but disallows such cl aims to the extent the creditor is either not oversecured or (like Travelers) com

pletely uns ecured. This reading of the Code , PG&E ar

gues, “is not a matter of negative implication, but of ex

plicit negation.” Brief for Respondent 18. PG&E als o argues that the stru cture andpurpose of the Bank ruptcy Code, examined against the backdrop of pre-Code bank

ruptc yla w, confirm that Cong ress did notint e nd to allow unsecured creditors to recover atto rney’ s fees. See id ., at 25–38. PG&E did not raise these arguments below. Conse

quently, none of the lower cour ts had occasion to addres s them. Norwere thes e argu ments presented in PG&E’ s brief in opposition to certior ari. PG&E nevertheless i n sists that we should address these arguments as though they we re “ f airly inclu d ed” within the question presented in Travelers’ petition for certiorar i. See id. , at 41. That contention appears to be prem ised on the theory that “the Fobian rule reaches the correct conclusion inthis case,” but “doesn’ t go far enou gh in .

. . pr eventing creditors from requiring other credito rs to pay fo r their atto rneys’ fees.” Tr. of Oral Arg. 25. We are not persuaded. We granted certiorarito resolve a conflict among the lowe r courts regarding the Fobian rule, which is analytically distinct from, and fundamen

tally at odds with, PG&E’s readin g of §506(b). 4 

### In any event, we ordi narily do n o t consider claims that were neither raised n o r addressed below, Cooper Indus

-

——————

4 PG&E’s new r e a d ing of t h e Code would prohib it alluns ecured credi

tor s fr om r e c o v e r i n g c o n t r a ctu a l, postpe tit i onattor n e y ’ s fees inban k

rupt c y pro c ee dings

— even if t h os e fees were incu rred while lit iga t ing issues of state law. See Bri ef for Respondent 17–19. T h e Fobianrul e, b ycont ra s t , would a llow s uch a recove r y—even b yu n s e cured cred i

tor s —so lon g as th e litig at i o nr e su lting in the claimedfees did not in v o lv e “issu es pec u liarto feder al ban kr u p tc ylaw

. ” See Inre Fobian, 951 F. 2d 11 49 , 1153 (CA 9 19 91).12 TRAVEL ERS CASUALTY & SURETY CO. OF AM ERICA v. PACIFIC GAS & ELEC. CO. Opinion of t h eCourt 

### trie s, Inc. v. Aviall Ser v ices, Inc. , 543 U. S. 157, 168–16 9 (2004), and PG&E has failed to identify any ci rcumstance s that would warran tan exception to that rule in this case. We therefore will not consider these arguments. 5 

### Accordin gly , we express no opinion with regard to whether, following the demise of the Fobianrule, other principles of bankruptcy law might provide an independ

ent basis for disallow i ng Travelers’ claim for attorney’s fees. We conclude only that the C o urt of App e als erred in disallowing that claim based on the fact tha tthe fees at issue were i n curred litigating issues of bankruptcy la w. * * * The judgme nt of the United State s Court of Appeals for the Ninth Circuit is t h erefore vacated, and the case is remanded for furtherproceedings consistent with th is opinion. It is so orde red.

——————

5 For similar reasons, we will not address PG&E’s argument that Tr av eler s’ c l aim sh ou ld be d e n i ed base do nth e th eor yth at th e fees a t is s u e were in cur red in con n ect i on wit ha c t i vit i es t h at were notrea son ablyn e c e ssar yto pr eser v e Tr av eler s’ righ ts an d, alte r n ativ e ly , w e re n o t au th or ized byTr av eler s’ c o n t r a ct with PG&E. Se e Brief for Re

spon den t42– 49. Th is ar gu men tw a s not addr essed below , w a s not r a ised inPG & E ’s br ief inoppositionto c e r t ior a r i , an d be ar s n o r e latio n to th e qu es tio npr esen ted. See th i s Cou r t’s Ru le 14. 1 ( a) (“O n l yth e questions setout in the p e tition, orfairly included t h erein, will be c o n s ider ed by th e Cou r t”).