Opinion ID: 1440037
Heading Depth: 2
Heading Rank: 1

Heading: Debt Relief Agencies

Text: Initially, we address whether attorneys fall within the Code's definition of debt relief agencies. If they do not, we will have no need to address the constitutionality of §§ 526(a)(4) and 528(a)(4) and (b)(2), which only apply to debt relief agencies. See Holtan v. Black, 838 F.2d 984, 986 n. 3 (8th Cir.1988) (Federal courts must avoid passing upon constitutional questions unless they are essential to the disposition of the issues before them.) (citing Three Affiliated Tribes v. Wold Engineering, 467 U.S. 138, 157, 104 S.Ct. 2267, 81 L.Ed.2d 113 (1984) (It is a fundamental rule of judicial restraint, however, that this Court will not reach constitutional questions in advance of necessity of deciding them)). The term debt relief agency means any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer under section 110, but does not include (A) any person who is an officer, director, employee, or agent of a person who provides such assistance or of the bankruptcy petition preparer; (B) a nonprofit organization that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986; (C) a creditor of such assisted person, to the extent that the creditor is assisting such assisted person to restructure any debt owed by such assisted person to the creditor; (D) a depository institution (as defined in section 3 of the Federal Deposit Insurance Act) or any Federal credit union or State credit union (as those terms are defined in section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of such depository institution or credit union; or (E) an author, publisher, distributor, or seller of works subject to copyright protection under title 17, when acting in such capacity. 11 U.S.C. § 101(12A) (emphasis added). Further, the Code defines the term bankruptcy assistance to mean: any goods or services sold or otherwise provided to an assisted person with the express or implied purpose of providing information, advice, counsel, document preparation, or filing, or attendance at a creditors' meeting or appearing in a case or proceeding on behalf of another or providing legal representation with respect to a case or proceeding under this title. Id. at § 101(4A) (emphasis added). Additionally, the Code defines the term assisted person as any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $164,250. [3] Id. at § 101(3). The plaintiffs argue that attorneys are not debt relief agencies because the definition of debt relief agencies makes no direct reference to attorneys, even though attorney is a defined term in the Code, id. at § 101(4), [4] but does include the term bankruptcy petition preparer which, by definition, excludes debtor's attorneys and their staff. See 11 U.S.C. § 110(a)(1). [5] Plaintiffs contend that the omission of any reference to attorneys or lawyers while specifically including bankruptcy petition preparers shows Congress's intent to exclude attorneys from the definition of debt relief agencies. Because the plaintiffs contend that constitutionality issues arise in §§ 526(a)(4) and 528(a)(4) and (b)(2) if attorneys are debt relief agencies, they assert that the doctrine of constitutional avoidance should be used to interpret debt relief agency to exclude attorneys and thus avoid the potential constitutional issues. Conversely, the government argues that attorneys are debt relief agencies because the broadly worded definition of the term plainly includes attorneys, see 11 U.S.C. § 101(12A) (defining debt relief agency as any person who provides any bankruptcy assistance to an assisted person in return for the payment), and providing legal representation is included in definition of bankruptcy assistance. See id. at 101(4A) (bankruptcy assistance means any goods or services sold or otherwise provided to an assisted person with the express or implied purpose of providing... advice, counsel, ... or legal representation with respect to a case or proceeding under this title). Whether attorneys fall within the Code's definition of debt relief agencies is an issue of first impression among the Courts of Appeals. Although the plain language of the definition appears to include bankruptcy attorneys and does not appear to be ambiguous, lower [c]ourts that have addressed the issue of whether attorneys are debt relief agencies have not been unanimous. In re Irons, 379 B.R. 680, 685 (Bankr.S.D.Tex.2007) (citing cases). Nevertheless, the majority of courts have held that compensated bankruptcy attorneys are debt relief agencies as that term is defined in the Code. Id. (finding debtor's counsel was a debt relief agency); Olsen v. Gonzales, 350 B.R. 906 (D.Or.2006) (same); In re Robinson, 368 B.R. 492 (Bankr. E.D.Va.2007) (finding debtor's counsel was debt relief agency); Hersh v. United States, 347 B.R. 19 (N.D.Tex.2006) (finding that bankruptcy attorneys are debt relief agencies); In re Norman, No. 06-70859, 2006 WL 3053309 (Bankr.E.D.Va.2006) (finding debtor's counsel qualified as a debt relief agency); but see In re Attorneys at Law and Debt Relief Agencies, 332 B.R. 66 (Bankr.S.D.Ga.2005) (holding that attorneys are not debt relief agencies); In re Reyes, 361 B.R. 276 (Bankr.S.D.Fla. 2007) (finding that attorneys, generally, are not debt relief agencies, but ruling that debtor's counsel in case at bar was not a debt relief agency because service was provided pro bono and thus counsel did not receive valuable consideration in return for the bankruptcy assistance provided). In this case, the district court acknowledged that the definition of debt relief agency, at first glance, appeared to include attorneys, but it ultimately relied on the doctrine of constitutional avoidance to conclude that attorneys did not fall within the definition because if they did portions of §§ 526 and 528 would be unconstitutional as applied to attorneys. The doctrine of constitutional avoidance dictates that where an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress. Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988). Thus, if interpreting debt relief agency to include attorneys would raise serious constitutional problems, then we should look for another interpretation that may fairly be ascribed to the definition that does not raise these concerns. Id. at 576-77, 108 S.Ct. 1392. We will not, however, adopt an alternative interpretation that is plainly contrary to the intent of Congress. Id. at 575, 108 S.Ct. 1392. We review the district court's statutory interpretation de novo. United States v. Mendoza-Gonzalez, 520 F.3d 912, 914 (8th Cir.2008). To interpret the statute we first determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Id. (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)). If so, we apply the plain language of the statute. Id. A mere disagreement among litigants over the meaning of the statute does not prove ambiguity; it usually means that one of the litigants is simply wrong. Bank of Am. Nat'l Trust & Sav. Ass'n v. 203 N. LaSalle St. P'ship, 526 U.S. 434, 461, 119 S.Ct. 1411, 143 L.Ed.2d 607 (1999). The plain reading of the definition of debt relief agency, and the defined terms that make up that definition, leads us to conclude that attorneys who provide bankruptcy assistance to assisted persons are unambiguously included in the definition of debt relief agencies. See Olsen, 350 B.R. at 912 ([I]t is the plain language of the Act that leads to the conclusion that attorneys are to be included in the definition of `debt relief agency,' and [t]hus, further use of the tools of statutory construction is not necessary). The statutory language sweeps broadly and clearly covers the legal services provided by attorneys to debtors in bankruptcy unless excluded by another provision. Congress specifically listed five exclusions from the definition of debt relief agency, and if it meant to exclude attorneys from that definition it could have explicitly done so. Id. ; 11 U.S.C. § 101(12A). Moreover, if attorneys were not included in the definition of debt relief agencies, Congress would have had no reason to include § 526(d)(2), which expressly provides that nothing in §§ 526, 527, or 528 (the sections covering debt relief agencies) shall be deemed to limit or curtail the authority or ability of a State ... to determine and enforce qualifications for the practice of law under the laws of that State; or of a Federal court to determine and enforce the qualifications for the practice of law before that court. 11 U.S.C. § 526(d)(2)(A) and (B). The legislative history provides further indication that attorneys are included in the definition. See H.R.Rep. No. 109-31, 109th Cong. 1st Sess. at 4 (April 8, 2005) (The bill's consumer protections include provisions strengthening professionalism standards for attorneys and others who assist consumer debtors with their bankruptcy cases) (emphasis added). [6] Because attorneys were not specifically excluded from the definition of debt relief agencies, we hold that attorneys that provide bankruptcy assistance to assisted persons are debt relief agencies as that term is defined by the Code. Interpreting the definition of debt relief agency to exclude bankruptcy attorneys would be contrary to Congress's intent.