Source: http://www.chanrobles.com/usa/us_supremecourt/479/36/case.php
Timestamp: 2018-08-21 19:29:42
Document Index: 791990993

Matched Legal Cases: ['§523', '§ 523', '§ 101', '§ 63', '§ 17', '§ 17', '§ 523', '§ 523', '§ 523', '§ 53', '§ 101', '§ 101', '§ 726', '§ 523', '§ 524']

In 1980, Carolyn Robinson pleaded guilty to larceny in the second degree. The charge was based on her wrongful receipt of $9,932.95 in welfare benefits from the Connecticut Department of Income Maintenance. On November 14, 1980, the Connecticut Superior Court sentenced Robinson to a prison term of not less than one year nor more than three years. The court suspended execution of the sentence and chanroblesvirtualawlibrary
The Connecticut Probation Office did not respond to this letter until February 1984, when it informed Robinson that it chanroblesvirtualawlibrary
Because the Connecticut statute does not allow the victim to enforce a right to receive payment, the court concluded chanroblesvirtualawlibrary
42 B.R. at 137. Thus, the Bankruptcy Court held that the bankruptcy discharge had not affected the conditions of Pellegrino's probation. The United States District Court for chanroblesvirtualawlibrary
Having concluded that restitution obligations are debts, the court turned to the question of dischargeability. The court stated that the appropriate Connecticut agency probably could have avoided discharge of the debt if it had objected under §§523(a)(2) or 523(a)(4) of the Code. [Footnote 3] As no objections to discharge were filed, the court concluded that the State could rely only on § 523(a)(7), the subsection that provides for automatic nondischargeability for certain debts. [Footnote 4] chanroblesvirtualawlibrary
Offshore Logistics, Inc. v. Tallentire, 477 U. S. 207, 477 U. S. 221 (1986) (quoting Mastro Plastics Corp. v. NLRB, 350 U. S. 270, 350 U. S. 285 (1956) (in turn quoting @ 49 U. S. 122 (1849))). In this case, we must consider the language of §§ 101 and 523 chanroblesvirtualawlibrary
Second, § 63 established the separate category of "provable" debts. See 3A Collier on Bankruptcy 1163 (14th ed. 1975). Section 17 provided that a discharge in bankruptcy "release[d] a bankrupt from all of his provable debts," subject to several exceptions listed in later portions of § 17. Although § 17 specifically excepted four types of debts from discharge, it did not mention criminal penalties of any kind. The most natural construction of the Act, therefore, would chanroblesvirtualawlibrary
In re Moore, 111 F.1d 5, 148-149 (WD Ky. 1901). [Footnote 6] chanroblesvirtualawlibrary
State v. Mosesson, 78 Misc.2d 217, 218, 356 N.Y.S.2d 483, 484 (1974) (citations omitted). [Footnote 7] Thus, Congress enacted the Code in 1978 against the background of an established judicial exception to discharge for criminal sentences, including restitution orders, an exception created in the face of a statute drafted with considerable care and specificity. chanroblesvirtualawlibrary
Our interpretation of the Code also must reflect the basis for this judicial exception, a deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings. The right to formulate and enforce penal sanctions is an important aspect of the sovereignty retained by the States. This Court has emphasized repeatedly "the fundamental policy against federal interference with state criminal prosecutions." Younger v. Harris, 401 U. S. 37, 401 U. S. 46 (1971). The Court of Appeals nevertheless found support for its holding in the fact that Connecticut officials probably could have ensured continued enforcement of their court's criminal judgment against Robinson had they objected chanroblesvirtualawlibrary
Also, as Robinson's attorney conceded at oral argument, some restitution orders would not be protected from discharge even if the State did appear and enter an objection to discharge. For example, a judge in a negligent homicide case might sentence the defendant to probation, conditioned on the defendant's paying the victim's husband compensation for the loss the husband sustained when the defendant killed his wife. It is not clear that such a restitution order would chanroblesvirtualawlibrary
Bank of Marin v. England, 385 U. S. 99, 385 U. S. 103 (1966). This Court has recognized that the States' interest in administering their criminal justice systems free from federal interference is one of the most powerful of the considerations that should influence a court considering equitable types of relief. See Younger v. Harris, supra, at 401 U. S. 44-45. This reflection of our federalism also must influence our interpretation of the Bankruptcy Code in this case. [Footnote 11] chanroblesvirtualawlibrary
This language is subject to interpretation. On its face, § 523(a)(7) certainly does not compel the conclusion reached by the Court of Appeals, that a discharge in bankruptcy voids restitution orders imposed as conditions of probation by state courts. Nowhere in the House and Senate Reports is there any indication that this language should be read so intrusively. [Footnote 13] chanroblesvirtualawlibrary
Our reading of § 523(a)(7) differs from that of the Second Circuit. On its face, it creates a broad exception for all penal sanctions, whether they be denominated fines, penalties, or forfeitures. Congress included two qualifying phrases; the fines must be both "to and for the benefit of a governmental unit," and "not compensation for actual pecuniary loss." Section 523(a)(7) protects traditional criminal fines; it codifies the judicially created exception to discharge for fines. We must decide whether the result is altered by the two major differences between restitution and a traditional fine. Unlike chanroblesvirtualawlibrary
Although courts differed as to the boundaries of the exception, particularly in cases involving nonmonetary sanctions or sanctions imposed in civil proceedings, the reasoning of Moore was widely accepted. See, e.g., Parker v. United States, 153 F.2d 66, 71 (CA1 1946) (citing Moore and noting that "[i]t was not in the contemplation of Congress that the federal bankruptcy power should be employed to pardon a bankrupt from the consequences of a criminal offense"); Zwick v. Freeman, 373 F.2d 110, 116 (CA2 1967) (citing Moore and stating that "governmental sanctions are not regarded as debts even when they require monetary payments"). We have found only one federal court decision allowing a discharge under the Act to affect a sentence imposed by a criminal court. In re Alderson, 98 F.5d 8 (W. Va. 1899).
Petitioners failed to assert timely objections to the discharge of respondent Robinson's restitution debt, and the chanroblesvirtualawlibrary
The Court concludes that a criminal restitution obligation is nondischargeable under 11 U.S.C. § 523(a)(7) because it is chanroblesvirtualawlibrary
Conn.Gen.Stat. § 53a-30(a)(4) (1985) (emphasis added). Were the restitution order purely penal, the statute would not connect the amount of restitution to the damage imposed. Tying the amount of restitution to the amount of actual damage sustained by the victim strongly suggests that the payment is meant to compensate the victim. This comports with the theory underlying restitution sanctions. Restitution is not simply a punishment that incidentally compensates the victim. Indeed, compensation is an essential element of a restitution scheme, under which a wrong to the victim of a crime must be redressed not just by penalizing the offender but by restoring chanroblesvirtualawlibrary
Nor do I accept that we can avoid the consequences of respondent's discharge in bankruptcy by finding that the restitution obligation was not a "debt." First, the scope of debts under the Code is expansive. "Debt" is defined in 11 U.S.C. § 101(11) as "liability on a claim," and "claim" is defined in § 101(4) as a "right to payment." The legislative history of the Code indicates that "claim" was to be given the "broadest possible definition." H. R. Rep. No. 95-595, p. 309 (1977); S. Rep. No. 95-989, p. 22 (1978); see also Ohio v. Kovacs, 469 U. S. 274, 469 U. S. 279 (1985) ("[I]t is apparent that Congress desired a broad definition of a claim'"). In light of the broad scope of "debt" under the Code, I agree with the chanroblesvirtualawlibrary
In re Robinson, 776 F.2d 35-36. On the contrary, Congress plainly intended that fines, penalties, and forfeitures be deemed debts eligible to participate in the distribution of the bankruptcy estate, and the statute provides explicitly for that participation. See 11 U.S.C. § 726(a)(4). [Footnote 2/5] The very fact that fines, penalties, and forfeitures are made nondischargeable under § 523(a)(7) indicates that they were deemed "debts;" if they were not debts, they would not be affected by discharge, see 11 U.S.C. § 524, and there would be no need to make them nondischargeable.
Id. at 437 U. S. 185. I would affirm the judgment and permit Congress, if it were so inclined, to chanroblesvirtualawlibrary