Source: https://www.legalcrystal.com/case/106298/kelly-vs-robinson
Timestamp: 2020-01-25 08:01:34
Document Index: 142438345

Matched Legal Cases: ['§ 523', '§523', '§ 523', '§101', '§ 101', '§ 57', '§ 65', '§ 57', '§ 523', '§ 101', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 27', '§ 27', '§ 48', '§ 101', '§ 101', '§ 726', '§ 523', '§ 524', '§ 523', '§ 523', '§ 623', '§ 101', '§ 623', '§ 3579', '§ 17', '§ 101', '§ 523', '§ 1328', '§ 78', '§ 1328']

Kelly Vs Robinson - Citation 106298 - Court Judgment | LegalCrystal
Kelly Vs. Robinson - Court Judgment
LegalCrystal Citation legalcrystal.com/106298
Decided On 1986
Case Number 479 U.S. 36
kelly v. robinson - 479 u.s. 36 (1986) u.s. supreme court kelly v. robinson, 479 u.s. 36 (1986) kelly v. robinson no. 85-1033 argued oct. 8, 1986 decided nov. 12, 1986 479 u.s. 36 certiorari to the united states court of appeals for the second circuit syllabus in 1980, respondent pleaded guilty in a connecticut state court to a larceny charge based on her wrongful receipt of welfare benefits from the connecticut department of income maintenance. she was sentenced to a prison term, but the court suspended execution of the sentence and placed her on probation for five years. as a condition of probation, the court ordered respondent to make restitution through monthly payments to the connecticut office of adult.....
Kelly v. Robinson - 479 U.S. 36 (1986)
U.S. Supreme Court Kelly v. Robinson, 479 U.S. 36 (1986)
Held: Section 523(a)(7) preserves from discharge in Chapter 7 any condition a state criminal court imposes as part of a criminal sentence. Thus, restitution obligations, imposed as conditions of probation in state criminal proceedings, are not dischargeable. Pp. 479 U. S. 43 -53.
widely accepted judicial exception to discharge for criminal sentences, including restitution obligations imposed as part of such sentences. In construing the scope of bankruptcy codifications, this Court has followed the rule that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific. Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U. S. 494 . Pp. 479 U. S. 43 -47.
(b) The basis for the judicial exception here is the deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings. Although it might be true that Connecticut officials could have ensured continued enforcement of the criminal judgment against respondent by objecting to discharge under the Code, that fact does not justify an interpretation of the Code that is contrary to the long-prevailing view that fines and penalties are not affected by a discharge. Moreover, reliance on a right to appear and object to discharge would create uncertainties and impose undue burdens on state officials. The prospect of federal remission of judgments imposed by state criminal judges would hamper the flexibility of those judges in choosing the combination of imprisonment, fines, and restitution most likely to further the rehabilitative and deterrent goals of state criminal justice systems. Pp. 479 U. S. 47 -49.
(c) On its face, § 523(a)(7) does not compel the conclusion that a discharge voids restitution orders imposed as conditions of probation by state courts. Nothing in the House and Senate Reports indicates that this language should be read so intrusively. Section 523(a)(7) protects traditional criminal fines. Although restitution, unlike traditional fines, is forwarded to the victim and may be calculated by reference to the amount of harm the offender has caused, neither of the statute's qualifying clauses -- namely, the fines must be "to and for the benefit of a governmental unit," and "not compensation for pecuniary loss" -- allows the discharge of a criminal judgment that takes the form of restitution. The decision to impose restitution generally does not turn on the victim's injury, but on the penal goals of the State and the defendant's situation. Pp. 479 U. S. 50 -53.
POWELL, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and BRENNAN, WHITE, BLACKMUN, O'CONNOR, and SCALIA, JJ., joined. MARSHALL, J., filed a dissenting opinion, in which STEVENS, J., joined, post, p. 479 U. S. 53 .
placed Robinson on probation for five years. As a condition of probation, the judge ordered Robinson to make restitution [ Footnote 1 ] to the State of Connecticut Office of Adult Probation (Probation Office) at the rate of $100 per month, commencing January 16, 1981, and continuing until the end of her probation. [ Footnote 2 ]
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 ]
The Court of Appeals' decision focused primarily on the language of §§101 and 523 of the Code. Of course, the "starting point in every case involving construction of a statute is the language itself." Blue Chip Stamps v. Manor Drug Stores, 421 U. S. 723 , 421 U. S. 756 (1975) (POWELL, J., concurring). But the text is only the starting point. As JUSTICE O'CONNOR explained last Term:
"' I n expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.''"
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 United States v. Heirs of Boisdore, 8 How. 113, 49 U. S. 122 (1849))). In this case, we must consider the language of §§ 101 and 523
Courts traditionally have been reluctant to interpret federal bankruptcy statutes to remit state criminal judgments. The present text of Title 11, commonly referred to as the Bankruptcy Code, was enacted in 1978 to replace the Bankruptcy Act of 1898, ch. 541, 30 Stat. 544. [ Footnote 5 ] The treatment of criminal judgments under the Act of 1898 informs our understanding of the language of the Code.
First, § 57 of the Act established the category of "allowable" debts. See 3 Collier on Bankruptcy Ś 57 (14th ed. 1977). Only if a debt was allowable could the creditor receive a share of the bankrupt's assets. See § 65a. For this case, it is important to note that § 57j excluded from the class of allowable debts penalties owed to government entities. That section provided:
In re Moore, 111 F. 145, 148-149 (WD Ky. 1901). [ Footnote 6 ]
This reasoning was so widely accepted by the time Congress enacted the new Code that a leading commentator could state flatly that "fines and penalties are not affected by a discharge." See 1A Collier on Bankruptcy Ś 17.13, pp. 1609-1610, and n. 10 (14th ed. 1978).
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.
Id. at 474 U. S. 501 (quoting Swarts v. Hammer, 194 U. S. 441 , 194 U. S. 444 (1904)) (citations omitted).
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
to discharge under § 523(c). Although this may be true in many cases, it hardly justifies an interpretation of the 1978 Act that is contrary to the long-prevailing view that "fines and penalties are not affected by a discharge," 1A Collier on Bankruptcy Ś 17.13, p. 1610 (14th ed. 1978).
Moreover, reliance on a right to appear and object to discharge would create uncertainties and impose undue burdens on state officials. In some cases it would require state prosecutors to defend particular state criminal judgments before federal bankruptcy courts. [ Footnote 8 ] As JUSTICE BRENNAN has noted, federal adjudication of matters already at issue in state criminal proceedings can be "an unwarranted and unseemly duplication of the State's own adjudicative process." Perez v. Ledesma, 401 U. S. 82 , 401 U. S. 121 (1971) (opinion concurring in part and dissenting in part). [ Footnote 9 ]
This prospect, in turn, would hamper the flexibility of state criminal judges in choosing the combination of imprisonment, fines, and restitution most likely to further the rehabilitative and deterrent goals of state criminal justice systems. [ Footnote 10 ] We do not think Congress lightly would limit the rehabilitative and deterrent options available to state criminal judges.
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 ]
In light of the established state of the law -- that bankruptcy courts could not discharge criminal judgments -- we have serious doubts whether Congress intended to make criminal penalties "debts" within the meaning of § 101(4). [ Footnote 12 ] But we need not address that question in this case, because we hold that § 523(a)(7) preserves from discharge any condition a state criminal court imposes as part of a criminal sentence.
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 ]
TVA v. Hill, 437 U. S. 153 , 437 U. S. 209 (1978) (POWELL, J., dissenting).
Because criminal proceedings focus on the State's interests in rehabilitation and punishment, rather than the victim's desire for compensation, we conclude that restitution orders imposed in such proceedings operate "for the benefit of" the State. Similarly, they are not assessed "for . . . compensation" of the victim. The sentence following a criminal conviction necessarily considers the penal and rehabilitative interests of the State. [ Footnote 14 ] Those interests are sufficient to place restitution orders within the meaning of § 523(a)(7).
The requirement that creditors object to discharge is limited on its face to ŚŚ (2), (4), and (6) of § 523(a). Because Ś 7 is not listed there, debts described in that paragraph are automatically nondischargeable, under the general rule prescribed in the opening clause of § 523(a) (providing that a "discharge under section 727 . . . of this title does not discharge an individual debtor from any debt" listed in the paragraphs that follow).
For the section-by-section analysis in the legislative Reports, see H. R. Rep. No. 95-595, p. 363 (1977); S. Rep. No. 95-989, p. 79 (1978). For explanations of the section by commentators, see 3 Collier on Bankruptcy Ś 523.17 (15th ed. 1986);1 W. Norton, Bankruptcy Law and Practice § 27.37 (1982). In fact, both of these commentators expressly state that the language does not have the intrusive effect sought by Robinson. See Collier Ś 523.17 at 523-123, n. 4; Norton § 27.37, at 55, n. 2.
We acknowledge that a few comments in the hearings and the Bankruptcy Laws Commission Report may suggest that the language bears the interpretation adopted by the Second Circuit. But none of those statements was made by a Member of Congress, nor were they included in the official Senate and House Reports. We decline to accord any significance to these statements. See McCaughn v. Hershey Chocolate Co., 283 U. S. 488 , 283 U. S. 493 -494 (1931); 2A N. Singer, Sutherland on Statutory Construction § 48.10, pp. 319 and 321, n. 11 (4th ed. 1984).
majority goes to considerable lengths to excuse this default. Respondent concedes that the restitution obligation would not have been discharged had petitioners objected in a timely fashion. Tr. of Oral Arg. 30. [ Footnote 2/1 ] When notified of respondent's bankruptcy proceeding, however, petitioners did nothing. They were told that they could file an objection to Robinson's discharge, but did not do so. Robinson's counsel informed the Connecticut Office of Adult Probation (Probation Office) of Robinson's discharge and of Robinson's belief that she need make no further payments, but the Probation Office did not respond. Not until almost three years after Robinson's discharge in bankruptcy did the Probation Office inform Robinson that it did not consider the debt discharged, and that it intended to enforce the restitution order.
The Court charitably attributes petitioners' inaction to the fact that, from the start, petitioners took the position they assert here. Ante at 479 U. S. 39 . But their representations at oral argument suggest only that they failed to object because "state agencies were admittedly somewhat confused on how to handle it," Tr. of Oral Arg. 9, and were "a little perplexed because this was the first time it happened." Id. at 16. Petitioners seek a broad construction of the statute to excuse their confusion-induced waiver of the right to object and thereby guarantee that Robinson's restitution obligation would not be discharged. In my opinion, however, the statute cannot fairly be read to arrive at the result the majority reaches today.
Ibid. I find unconvincing the majority's conclusion that the criminal restitution order at issue here is not "compensation for actual pecuniary loss." [ Footnote 2/2 ] While restitution imposed as a condition of probation under the Connecticut statute is in part a penal sanction, it is also intended to compensate victims for their injuries. The statute permits a court to require a defendant, as a condition of his probation, to
the victim, as far as possible, to "the position that [he] would have been in if the original criminal act had never occurred." R. Barnett & J. Hagel, Assessing the Criminal: Restitution, Retribution, and the Legal Process, in Assessing the Criminal: Restitution, Retribution, and the Legal Process 1, 27 (1977); see also id. at 25-28. That the victim has no control over whether restitution will be imposed or in what sum does not mean that the restitution is not compensation for actual pecuniary loss. [ Footnote 2/3 ]
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
In re Robinson, 776 F.2d 30, 38 (CA2 1985). [ Footnote 2/4 ]
In re Robinson, 776 F.2d at 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.
TVA v. Hill, 437 U. S. 153 , 437 U. S. 195 (1978). Congress might have amended the Code to achieve the result reached here had it confronted the question, but
Id. at 437 U. S. 185 . I would affirm the judgment and permit Congress, if it were so inclined, to
amend the Bankruptcy Code specifically to make criminal restitution obligations nondischargeable in bankruptcy. [ Footnote 2/6 ] I respectfully dissent.
Rather than argue solely that the restitution order fits precisely within the language of § 523(a)(7), the Court appears to rely in part on the fact that, prior to the enactment of the Bankruptcy Code, fines and penalties were rendered nondischargeable in bankruptcy under a judicially created exception to discharge. The majority contends that "Congress enacted the Code in 1978 against the background of an established judicial exception to discharge for criminal sentences," ante at 479 U. S. 46 , and that Congress should not be deemed to abrogate judicially created law unless it makes explicit the intent to do so. But, far from abrogating judicially created law making fines and penalties nondischargeable as a general matter, Congress has codified that law and added the requirements of § 523(a)(7). The historical basis of the exception does not negate the additional limitations expressed in the statute.
The other qualification in § 623(a)(7), that the fine, penalty, or forfeiture must be "payable to and for the benefit of a governmental unit," is not a consideration here, because the restitution order in this case meets this requirement. It does so, however, only because the victim of Robinson's larceny was a government agency. Where the victim is a private individual, it could not legitimately be said that restitution payments destined for that individual are made "for the benefit of a governmental unit." Restitution intended to repay a private victim for the damage done to him is only "for the benefit of a governmental unit" in the sense that the State, which comes within the definition of "governmental unit," see 11 U.S.C. § 101(21), is benefited every time justice is served. The Court appears to take this approach, stating: "The criminal justice system is not operated primarily for the benefit of victims, but for the benefit of society as a whole." Ante at 479 U. S. 52 . If the requirement is to be read so broadly, however, any fine, penalty, or forfeiture would be for the benefit of a governmental unit, making this qualification in § 623(a)(7) superfluous.
Though Connecticut does not permit the victim to enforce the restitution order as a civil judgment, other jurisdictions do. See, e.g., 18 U.S.C. § 3579(h) (any order of restitution imposed by a federal court "may be enforced by the United States or a victim named in the order to receive the restitution in the same manner as a judgment in a civil action"); Ga.Code Ann. § 17-14-13(a) (1982) ("A restitution order shall be enforceable as is a civil judgment by execution"). Under such statutes, it would be even more difficult to argue that a criminal restitution order does not create a "right to payment" and is consequently not a "debt." Compare In re Pellegrino , 42 B.R. 129, 132 (Bkrtcy.Ct.Conn. 1984) ("Since a crime victim has no right to payment,' restitution is not a `debt' under Bankruptcy Code § 101(11)"), with In re Newton, 15 B.R. 708, 710 (Bkrtcy. Ct. ND Ga. 1981) (holding that, since Georgia law provided for enforcement of restitution orders by the victim, "in Georgia, an order of restitution is a debt").
The Court's solution only postpones the problem: its holding that the restitution obligation is nondischargeable under § 523(a)(7) leaves open the possibility that such obligations will be dischargeable under Chapter 13. See 11 U.S.C. § 1328(a), 3 W. Norton, Bankruptcy Law and Practice § 78.01 (1981); 5 Collier on Bankruptcy Ś 1328.01[1][c] (15th ed. 1986) (broader discharge intended as incentive for debtors to complete performance under Chapter 13 plans); but see In re Newton, supra, at 710 (holding restitution order nondischargeable under § 1328). The Court's opinion therefore does not lay to rest the difficulties the courts will have in coordinating the Bankruptcy Code with state criminal restitution statutes.