Document: 492 U.S. 96 109 S.Ct. 2818 106 L.Ed.2d 76 Martin W. HOFFMAN, Trustee, Petitionerv.CONNECTICUT DEPARTMENT OF INCOME MAINTENANCE et al. No. 88-412. Argued April 19, 1989. Decided June 23, Syllabus Section 106(c) of the Bankruptcy Code provides that "notwithstanding any assertion sovereign immunity" provision contains " 'credi or,' 'entity,' or 'governmental unit' applies to governmental units," § 106(c)(1); and "a determination by court an issue arising under such a binds 106(c)(2). Petitioner Hoffman, bankruptcy trustee in two unrelated Chapter 7 proceedings, filed separate adversarial proceedings Court. One was "turnover" proceeding 542(b) against respondent Connecticut Department Income Maintenance recover Medicaid payments owed for services rendered bankrupt convalescence home. The other, Revenue Services, sought 547(b) avoid payment state taxes, interest, penalties as preference amount already paid. Respondents moved dismiss both actions barred Eleventh Amendment. Court denied motions on ground Congress, enacting 106(c), had abrogated States' Amendment immunity from §§ 547(b), which contain "trigger" words enumerated 106(c)(1), Congress authority do so Clause Constitution. respondents appealed District Court, United States intervened. reversed without reaching congressional authority. Appeals affirmed, concluding 106(c)'s plain language abrogates only extent necessary determine State's rights debtor's estate does not abrogate recovery avoided preferential transfer money turnover proceeding. Held: judgment is affirmed. 850 F.2d 50 (CA2, 1988), Justice WHITE, joined THE CHIEF JUSTICE, O'CONNOR, KENNEDY, concluded did States. has made intention unmistakably clear provision's language. narrow scope waivers certain particular claims 106(a) (b) make it unlikely adopted broad abrogation making subject all provisions containing trigger words. If did, would apply over 100 provisions. 106(c)(2), subsection (c)(1) conjunction "and," narrows type relief section applies, since, unlike (b), provide express authorization monetary Thus, State files no proof claim be bound, like other creditors, discharge debts, including unpaid but recovery. Under this construction, waives Federal Government bound Court's issues even when appear itself court's jurisdiction. In contrast, petitioner's argument sections supply recovery, have exactly same effect if (c)(2) been omitted. This persuaded use word "determine" Code's jurisdictional provision, 28 U.S.C. 157(b)(1), contrary. That authorizes judges "cases" "proceedings," issues, "enter appropriate orders judgments," merely bind units their determinations. Petitioner's reliance legislative history policies underlying also misplaced, since they are based text statute thus cannot used whether intended Pp. 100-104. SCALIA, although Amendment, affirm Appeals' power immunity. It makes sense constitutional principle judicial extend suit directly one its citizens unless consents sued hold at time can override exercise Article I powers. P. 105. J., announced delivered opinion, REHNQUIST, C.J., O'CONNOR JJ., joined. concurring post, p. opinion judgment, MARSHALL, dissenting BRENNAN, BLACKMUN, STEVENS, joined, 106. 111. Hartford, Conn., petitioner. Thomas Merrill, Washington, D.C., federal respondent. Clarine Nardi Riddle, WHITE KENNEDY join. 1 presented case Code, 11 2 Hoffman Willington Convalescent Home, Inc. (Willington), Edward Zera proceedings. On behalf Willington, he Court—a Maintenance. $64,010.24 during March 1983 contract with Connecticut. closed 1983. At time, $121,408 past overpayments received, 3 likewise Services. penalties, month prior Zera's filing issued tax warrant resulting $2,100.62. See 547(b). 4 each dismiss, reasoning Constitution, Art. I, 8, cl. 4. intervened because challenge constitutionality 72 B.R. 1002 (Conn.1987). held read 106, unequivocally 5 Second Circuit affirmed (1988). "only state's estate." Id., 55. not, according ourt Appeals, specifically rejected expression intent contained required Atascadero Hospital v. Scanlon, 473 234, 242, 105 3142, 3147, 87 171 (1985). Because brought petitioner were within 6 Circuit's decision conflicts decisions Third Vazquez Pennsylvania Dept. Public Welfare, 788 130, 133, cert. denied, 479 936, 107 414, 93 365 (1986), Seventh McVey Trucking, Secretary Illinois, 812 311, 326-327, 484 895, 108 227, 98 186 (1987). We granted certiorari resolve conflict, 488 1003, 781, 102 773 (1989), we now affirm. follows: "(a) A unit deemed waived respect property arose out transaction occurrence unit's arose. 8 "(b) There shall offset allowed interest estate. 9 "(c) Except provided subsections (a) notwithstanding immunity— "(1) title 'creditor,' units; 10 "(2) units." Neither nor 106(b) basis here, file either Instead, relies asserts subjects "governmental includes States, 101(26), 106(c)(1). Both 542(b), words—"an entity" pay debt estate, circumstances creditor." Therefore, reasons, those immunity," 12 disagree. As repeatedly stated, court, parties dispute otherwise bar these actions, must "unmistakably statute." supra, U.S., S.Ct., 3147; see Dellmuth Muth, 491 223, 227-228, 2397, 2399-2400, 181 (1989); Welch Texas Highways Transp., 483 468, 474, 2941, 2946, 97 389 (1987) (plurality opinion). our view, satisfy standard. 13 Initially, argues. carefully limits waiver requiring arise claim. Subsection ereign immunity, limited value interpretation however, limit number With "limit," scattershot fashion 14 believe 106(c)(2) operates further limitation applicability narrowing applies. "and." "determination" "issue" "binds differs significantly wording "claim," defined "right payment." 101(4)(A). Nothing similar 15 more indicative declaratory injunctive than clause echoes 505, "the may legality tax," 505(a)(1), obviously should require State. therefore construe authorizing construction debts bankruptcy, Neavear Schweiker, 674 1201, 1204 (CA7 1982); cf. Gwilliam 519 407, 410 (CA9 1975), subjected 16 suggestion amicus 157(b)(1) (1982 ed., Supp. V), Brief INSLAW, Inc., Amicus Curiae 10-11. judge Moreover, give render irrelevant immunity." well, 101(26) (defining unit" "United States"), determinations courts jurisdiction courts. See, e.g., Neavear, 1204. 17 contends supplies interpretation, ignores entirely limiting Indeed, interpreted petitioner, totally "It duty 'to effect, possible, every statute,' Menasche, 348 528, 538-539, 75 513, 520, 99 L.Ed. 615 (1955) (quoting Montclair Ramsdell, 147, 152, 391, 395, 27 431 (1883)), neither his suggests gives (c)(2). 18 Finally, misplaced. He points floor statements "section permits debtor possession assert avoiding powers ainst unit." 124 Cong.Rec. 32394 (1978) (statement Rep. Edwards); id., 33993 Sen. DeConcini). construed referring cases retains possessory ownership seeks recover, 20, cites example Whiting Pools, 462 198, 103 2309, 515 (1983) (holding Internal Service could turn tangible retained ownership). 19 weakness fundamental, properly recognized. observed 230, 2401, "[l]egislative generally will inquiry into Amendment." statute, committee reports unnecessary, satisfied. 228-229, 2400-2401. Similarly, attempts light unavailing. These arguments so, too, helpful determining command 2401. 20 Since need address power. Cf. Union Gas Co., 1, 2273, (1989). 21 ordered. concurring. 22 Although agree SCALIA Clause, majority addresses instead question expressed latter question, join plurality's opinion. 23 judgment. 24 concur "petitioner's [Bankruptcy] Ante, 104. reach conclusion, "Congress ibid., so. explained my part 35-42, 2299-2303, established Hans Louisiana, 134 504, 33 842 (1890), 'a own extends, sued,' 486, 2952, opinion), quoting Hans, 21, 509 (Harlan, concurring), involved Congress' Commerce there b sis treating differently. Accordingly, necessity considering possess. 25 whom STEVENS join, dissenting. 26 (Code), satisfies requirement clear." clearly authorize proceeding, respectfully dissent. states that, words—"creditor," "entity," unit"—applies [the States]" (emphasis added). drafters fully aware law order effective." DeConcini); Employees Missouri Health 411 279, 285, 1614, 1618, 36 251 (1973). They three steps. First, eliminated "any 106(c). Second, included elsewhere Code. Third, court. What plurality sees redundancy reasonably understood evidence importance attached ensuring express.1 By terms, distinction between permit relief, judgments. Nevertheless, placing heavy emphasis concludes entirety, "more recovery." 102. justifies conclusion accepting analog dealing while rejecting equally compelling analogy V). But trying force meaning through competing analogies provisions, decisive weight explicit abrogating 29 correctly overwhelm voluntary set forth (b). refer declarative rests mistaken assumption words." then raises specter "§ provisions," offering virtually endless opportunities judgments 30 truth, most contemplate Some role creditors entities, debtor.2 Others "creditors," "entities," units" relief.3 Only handful triggered "creditor," include case, i.e., giving 547, "entities" belonging debtor. 542.4 rather reading isolation does, way possible appreciate Kelly Robinson, 36, 43, 353, 358, 216 (1986) (Code integrated whole). 31 expressly terms "creditor" treated ordinary "creditors" who relatively small today's exempt crucial efficacy careful choice turns preferred actors.5 allowing recapture 90 days before petition filed, prevents anxious grabbing insolvent hence getting fair share. After today, financial problems strong incentive collect whatever can, fast doing pushes bankruptcy. Ordinary soon realize receive share; very existence cause turn, increase pressure 328 (CA7), (1987).6 designed prevent third keeping refusing debtor, thereby aiding reorganization affairs orderly equitable distribution 202-203, 2312-2313, (1983). Exempting well undermines important policy goals 32 My requires me decide so.7 2284, (1989) opinion); 57, 2296 (WHITE, judgment), reason treat differently, plenary national economic activity. Federalist 42, 271 (C. Rossiter ed. 1961) (J. Madison) (describing "intimately connected"); cf., ante, (SCALIA, judgment). For reasons 34 BLACKMUN joins, 35 While MARSHALL'S think explain why lends added support statute. administration process 1973, five years enacted, Commission Laws proposed bill enacted apparently concerns completely H.R.Rep. 95-595, 317 (1977); S.Rep. 95-989, (1978), U.S.Code Cong. & Admin.News 1978, 5787. initial legislation drafted compulsory counterclaims offsets, 106(b). after became reported Senate House Committees, restored large first 1973. Whereas Laws' proposal application statutory sponsors statements: 37 "The comply effective. codifies re Gwilliam, 407 (9th Cir., Dolard, 282 permitting dischargeability liabilities owing taxes . [S]ubsection (c) n matters well. example, unit; contrary report H.R. 8200 overruled." later added: 38 "Section 547(b)(2) amendment adopts rejects alternative relating avoidance unit. provided, overrules result transfers." 32400 34000 39 primary object indicates cover "other well," transfers. return real damages prospective appropriate. 40 fact paragraph paragraphs Committee explains rewritten eliminate section. Given apparent phrase ("[e]xcept (b)") constituted declaration new additional mechanism derogate subsections. 41 effects Government, municipalities alike, 101(21), clearest using supports reading. settled liberally remedial purposes. Block Neal, 460 289, 298, 1089, 1094, 67 (1983); Yellow Cab 340 543, 554-555, 71 399, 406-407, 95 523 (1951); Larson Domestic Foreign Corp., 337 682, 709, 69 1457, 1471, 1628 (1949) (Frankfurter, dissenting); Great Northern Life Ins. Co. Read, 322 47, 59, 64 873, 879, 88 1121 (1944) Finley 490 545, 578-580, 2022-2023, 2011, 104 593 (STEVENS, dissenting). rule applied defendant State, municipality. Jenkins, 274, 281-282, 2463, 2468, 229 (whether enhancement reasonable attorney's fee 1988 party awarded State). Not surprisingly, allows preferences WJM, Massachusetts 840 996, 1001 (CA1 1988); 326-327 (1987); 1202-1204 Rhode Island Ambulance Begin, 92 4, 6-7 (Bkrtcy.Ct., RI Tew Arizona Retirement System, 78 328, 329-331 (SD Fla.1987); Gingold 80 555, 561 ND Ga.1987); R L Refunds 45 733, 735 WD Ky.1985); Gower Farmers Home Administration, 519, 521-522 MD Ga.1982); Remke, 299, 300-302 ED Mich.1980). leading commentator reads Collier ¶ 106.04 (15th 1989). 303(b)(1) (permitting involuntary debtor); 303(c) (giving do); 303(j) (requiring notice case); 341(a) meeting "creditors"); 343 examine 349(b)(3) (revesting "entity" dismissed); 361 (setting adequate protection interests "entity"); 363(c)(2)(A) (preventing use, lease, sale cash collateral assets absent consent interested 501 502 (regulating proofs 506(a) (granting secured status lien 553 setoff 702(a) 705 qualified right vote creditors' committee); 507 726 priorities 727(c) discharge); 1102 (providing appointed 1109(b) heard issue); 1121(c) plan). assume reject executory contracts unexpired leases circumstances); 505 ankruptcy liability 525 (protecting government discrimination licensing employment); 1141 (binding confirmed plan discharging claims); 1142 performance act carry plan); 1143 fails perform participating assets). Several 362(h) V) individual injured willful violation automatic stay actual and, where appropriate, punitive damages. words, Prime, Illinois 44 924, 925-927 Mo.1984); Gillman Board Trustees Alpine School Dist., 788-790 Utah 1984). When wanted grant special treatment, term 101(35) "person" unit"); 346(f) withhold local wages salaries); 362(b)(4) (5) (exempting enforce police regulatory powers); 362(b)(9) unit's" issuance deficiency); 507(a)(7) (creating high priority units"); 523(a)(1) (7) fines payable 523(a)(8) student loans guaranteed 1129(d) (barring confirming principal purpose taxes). understanding members Conference Congress. Edwards) (§ situations assert[s] DeConcini) (same). provides: Power To establish uniform Bankruptcies throughout States." Const.,

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