Opinion ID: 196479
Heading Depth: 2
Heading Rank: 2

Heading: Appeals and Lower Court Error

Text: 29 Having concluded that the issue of whether federal credit unions qualify as government units under 11 U.S.C. Sec. 523(a)(8) remains an open issue, we move on to consider a second, but not unrelated, procedural question: Does the district court's decision not to evaluate TIFCU's appeal from the bankruptcy court's denial of its Motion to Amend the Agreed Statement of Fact preclude us from addressing that issue? The answer to this question is an unqualified no. A district court's failure to decide an issue raised by a party and adequately supported by the facts contained in the record does not move that issue beyond an appellate court's purview. Estate of Soler v. Rodriguez, 63 F.3d 45, 53 (1st Cir.1995) (citing Willhauck v. Halpin, 953 F.2d 689, 704 (1st Cir.1991)). 30 In this circuit, [a]n appellate court is not limited to the legal grounds relied upon by the district court, but may affirm on any independently sufficient grounds. Id.; see also Polyplastics, Inc. v. Transconex, Inc., 827 F.2d 859, 861 (1st Cir.1987); Casagrande v. Agoritsas, 748 F.2d 47, 48 n. 1 (1st Cir.1984) (per curiam). While it is axiomatic that, except in exceptional circumstances, parties may not surprise appellate courts with new issues, we do not find ourselves faced with a situation in which a party has conjured up an issue for appellate review without first presenting it to the trial court. See Johnston v. Holiday Inns, 595 F.2d 890, 894 (1st Cir.1979); see also Teamsters, Chauffeurs, Warehousemen & Helpers Union, Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir.1992); McCoy v. Massachusetts Institute of Technology, 950 F.2d 13 (1st Cir.1991), cert. denied, 504 U.S. 910, 112 S.Ct. 1939, 118 L.Ed.2d 545 (1992) (It is hornbook law that theories not raised squarely in the district court cannot be surfaced for the first time on appeal.). TIFCU raised the issue of its status as a government instrumentality on two separate occasions. Its effort to amend the Agreed Statement of Facts and to, thereby, correct the erroneous legal conclusion that federal credit unions are not government units, coupled with its appeal of the bankruptcy court's denial of that motion, preserved the issue for our review. 31 TIFCU has fulfilled its obligation to squarely raise those issues most pertinent to the resolution of its entire case. See id. We think it worth noting, however, that we would be able to reach the issue of whether federal credit unions are governmental units even if TIFCU had done nothing. Contrary to what debtor might have us believe, the rule that binds parties to their arguments is not inflexible. Johnston, 595 F.2d at 894. [A]ppellate court[s] ha[ve] discretion, in ... exceptional case[s], to reach virgin issues. United States v. La Guardia, 902 F.2d 1010, 1013 (1st Cir.1990); United States v. Mercedes-Amparo, 980 F.2d 17, 18-19 (1st Cir.1992); accord Singleton v. Wulff, 428 U.S. 106, 121, 96 S.Ct. 2868, 2877-78, 49 L.Ed.2d 826 (1976); G.D. v. Westmoreland School District, 930 F.2d 942, 950 (1st Cir.1991) (holding that in exceptional circumstances appellate courts may review issues of law inadequately raised at trial); United States v. Krynicki, 689 F.2d 289, 291-92 (1st Cir.1982). 32 Our recent decision, National Ass'n of Social Workers v. Harwood, 69 F.3d 622, 628 (1st Cir.1995), stands for the proposition that cases involving important constitutional or governmental issues may be exceptional and, as such, there should be a full treatment of all legal issues involved, whether squarely introduced by the parties or not. See Baybank-Middlesex v. Ralar Distributors, Inc., 69 F.3d 1200, 1202 (1st Cir.1995); cf. Lebron v. Nat'l R.R. Passenger Corp., --- U.S. ----, ----, 115 S.Ct. 961, 965, 130 L.Ed.2d 902 (1995) (permitting a party to raise an issue it expressly disavowed and did not raise until after certiorari was granted) (parties ... [will] not [be] limited to the precise arguments they made below). National Ass'n of Social Workers addressed the constitutionality of Rhode Island House of Representatives Rule 45, banning lobbyist and lobbying from the floor of the House while the House is in session.... Id. at 625. The district court held that Rule 45 violated the free speech clause of the First Amendment. We reversed the district court, holding that legislative immunity thwarted the constitutional attack, even though that issue had not previously been raised by either of the parties. We departed from the rule limiting parties to their lower court arguments because we recognized the issue presented by the case as important, of great public moment. Id. at 628. It implicated matters as basic as federalism, comity, and respect for the independence of democratic institutions. Id. National Ass'n of Social Workers makes us doubly certain of the procedural propriety of deciding this case. The present case fits squarely into the mold cast by National Ass'n of Social Workers and the cases we have deemed exceptional in the past. See United States v. La Guardia, 902 F.2d 1010, 1013 (1st Cir.1990); United States v. Krynicki, 689 F.2d 289, 291-92 (1st Cir.1982). We are convinced that a miscarriage of justice would be worked by a failure to address the governmental status of federal credit unions because the governmental issues that question implicates are so important. The continued viability of educational loan programs and the stability of federal credit unions impact the health of the national economy and the country's educational system. As we indicated in the previous section, whether federal credit unions qualify as government units under Section 523(a)(8) is strictly a question of law and can be resolved on the basis of the existing record. La Guardia, 902 F.2d at 1013. It requires no additional factfinding or further argument; the parties are not prejudiced in any way by the lack of another opportunity to reargue their case. 33 We think it likely that questions about the government unit status of federal credit unions will resurface in future cases, in virtually identical terms. Id. The dischargeability of loans under Section 523(a)(8) continues to be a heavily litigated area. Finally, we are convinced that the result achieved by the district court was correct. And [i]n the review of judicial proceedings ... [it] is settled that, if the decision below is correct, it must be affirmed, although the lower court relied upon a wrong ground or gave a wrong reason. Helvering v. Gowran, 302 U.S. 238, 245, 58 S.Ct. 154, 158, 82 L.Ed. 224 (1937). 34 We can identify no legitimate reason to decline to chart the alternative course we see in this case. Additionally, we are certain that remanding at this point in the case would be a colossal waste of judicial resources. See Securities and Exchange Commission v. Chenery Corporation, 318 U.S. 80, 88, 63 S.Ct. 454, 459-60, 87 L.Ed. 626 (1943). Nothing would be gained by asking the district court to reinstate its holding and to tackle a legal question which falls well within our current power to formulate. Id. Accordingly, we proceed. 35