Opinion ID: 430537
Heading Depth: 1
Heading Rank: 4

Heading: reasoning

Text: 38 Despite the failure of the Bankruptcy Act to include section 407 in its lengthy list of statutes repealed or modified by the new Code and the dearth of legislative history indicating that such an appeal was intended, the district court held that the Code repealed section 407 by implication. The court placed great emphasis on the bankruptcy court's unquestioned authority to garnish funds from the federal government and the Congressional intent to make Chapter 13 relief available to social security recipients. As a matter of statutory construction, it held that 11 U.S.C. sections 522 and 541 of the Code could not be reconciled with section 407, and that the more recent act was a specific statute that overruled the prior, more general provisions of section 407. We disagree with these conclusions. 39 The Supreme Court has held repeatedly that a cardinal rule of statutory construction is that repeals by implication are disfavored. Tennessee Valley Authority v. Hill, 437 U.S. 153, 189-90, 98 S.Ct. 2279, 2299, 57 L.Ed.2d 117 (1978); Radzanower v. Touche Ross & Co., 426 U.S. 148, 154, 96 S.Ct. 1989, 1993, 48 L.Ed.2d 540 (1976); United States v. United Continental Tuna Corporation, 425 U.S. 164, 168, 96 S.Ct. 1319, 1322, 47 L.Ed.2d 653 (1976); Morton v. Mancari, 417 U.S. 535, 549-50, 94 S.Ct. 2474, 2482, 41 L.Ed.2d 290 (1974). 6 Among the narrow exceptions to this commandment are 40 two well-settled categories of repeals by implication--(1) where provisions in the two acts are in irreconcilable conflict, the later act to the extent of the conflict constitutes an implied repeal of the earlier one; and (2) if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate similarly as a repeal of the earlier act. But, in either case, the intention of the legislature to repeal must be clear and manifest.... 41 Radzanower v. Touche Ross & Co., supra, 426 U.S. at 154, 96 S.Ct. at 1993, quoting Posadas v. National City Bank, 296 U.S. 497, 503, 56 S.Ct. 349, 352, 80 L.Ed. 351 (1936). Furthermore, the Court has been particularly reluctant to repeal by implication any statute that is not mentioned when a later act lists laws that it repeals or modifies. Blanchette v. Connecticut General Insurance Corps. (Regional Rail Reorganization Cases), 419 U.S. 102, 129, 95 S.Ct. 335, 351, 42 L.Ed.2d 320 (1974); Sinclair Refining Co. v. Atkinson, 370 U.S. 195, 204, 82 S.Ct. 1328, 1333, 8 L.Ed.2d 440 (1962); Laurens Federal Savings and Loan v. South Carolina Tax Commission, 365 U.S. 517, 523, 81 S.Ct. 719, 722, 5 L.Ed.2d 749 (1961). 42 In deciding that sections 522 and 541 could not be reconciled with section 407, the district court found a repeal by implication of section 407 in Chapter 13 cases to be essential so that the new Code is not emasculated. The new Code is a statutory scheme, the integrity of which must be preserved.... [R]emoval of social security recipients from the purview of Chapter 13 would block one of the main purposes of the 1978 revision. 6 B.R. at 749. The district court and appellees contend that a refusal to repeal section 407 would impinge upon the estate definition of section 541 and render the exemptions of section 522 moot and meaningless. The Court of Appeals for the Eleventh Circuit has accepted this argument. A narrow implied limitation of section 407 appears to be the only way to effectuate the operation of a Chapter 13 plan for an individual whose regular income consists of social security benefits. United States v. Devall, 704 F.2d 1513, 1518 (11th Cir.1983). 43 We think this states matters too broadly. Retaining section 407 in Chapter 13 cases limits the chapter's override of anti-assignment provisions, 11 U.S.C. Sec. 541(c)(1), to those statutes specified elsewhere in the 1978 Act. And while our reading of the Code also suggests that sections 522(b)(2)(A) and 522(d)(10) are hortatory reaffirmations of the uncontested fact that social security payments only become part of a debtor's estate if he chooses to include them, such a construction hardly presents the kind of positive repugnancy between sections 407 and Chapter 13 that must exist for a court to declare a repeal by implication. Tennessee Valley Authority v. Hill, supra, 437 U.S. at 190, 98 S.Ct. at 2299, quoting Wood v. United States, 41 U.S. (16 Pet.) 342, 363, 10 L.Ed. 987 (1842). Rather, it leaves unimpaired Congress' desire to open Chapter 13 to social security recipients whose income is sufficiently stable and regular to enable them to make regular payments. 11 U.S.C. Sec. 101(24). As a practical matter, a willing debtor can simply sign his check over to the trustee. This averts burdensome administrative problems for the government, permits a needy debtor to retain the funds if they prove necessary for his or her immediate survival, prevents social security funds from being consumed by attorney fees, and obviates the need for intrusion on the important protection of social security benefits from attachment and garnishment. 44 Turning to the second possible basis for repeal by implication, it cannot fairly be said that the later act covers the whole subject of the earlier one and is clearly intended as a substitute ... The district court accepted the trustee's contention that the new Code constitutes a specific statement concerning the rights of debtor social security recipients that overrode the more general section 407. Such an analysis misstates the nature of the conflict between the two statutes. This exercise in statutory construction concerns the validity of an attempt to assign social security benefits. The 1935 Act is addressed wholly to the topic of social security benefits and through section 407 specifically prevents judicial intrusion into the benefit payment process. The Bankruptcy Reform Act, on the other hand, addresses the rights and duties of debtors and creditors and addresses social security beneficiaries only to invite them to voluntarily participate in the Chapter 13 system. In no way does Chapter 13 cover the whole subject of the Social Security Act. 45 Indeed, the committees concerned with the Social Security system--the House Ways and Means and Senate Finance panels--played no part in drafting the new Code. The respective Judiciary Committees, on the other hand, possess no jurisdiction over social security and never seriously confronted the issue of benefit assignment. Thus the legislation they produced cannot reverse repeated expressions of congressional opposition to benefit garnishment. Consequently, the present legislative morass resembles the one untangled in Tennessee Valley Authority v. Hill, supra, 437 U.S. at 191-92, 98 S.Ct. at 2300. There the Court ruled that expenditure bills originating in the Appropriations Committees that contained funding for the Tellico Dam did not repeal by implication a provision of the Endangered Species Act that forbade construction of the dam because it would exterminate the snail darter. Cryptic hints from the bankruptcy code-writing committees are no better a basis for repealing the welfare provision at issue here. 46 Finally, even if we read sections 522(b)(2)(A), 522(d)(10) and 541(c)(1) as expressing a policy of limiting anti-assignment provisions, the contrary message conveyed by the failure to include section 407 on the list of statutes repealed or modified by the Code precludes us from any finding that Congress' intention was clear and manifest. United States v. Borden Co., 308 U.S. 188, 198, 60 S.Ct. 182, 188, 84 L.Ed. 181 (1939). The omission of section 407 from that list is all but prima facie proof that its repeal was not intended. As the Supreme Court wrote in Sinclair Refining Company v. Atkinson, supra, 370 U.S. at 209-10, 82 S.Ct. at 1336: 47 ... The question of whether existing statutes should be continued in force or repealed is, under our system of government, one which is wholly within the domain of Congress. When the repeal of a highly significant law is urged upon that body and that repeal is rejected after careful consideration and discussion, the normal expectation is that courts will be faithful to their trust and abide by that decision. 48 While the debate and discussion here was negligible, Congress made clear that it understood how the new Code would affect prior legislation when it assembled its list of voided or altered statutes. Nothing in the legislative history convinces us that the decision to omit section 407 from that list was inadvertent rather than deliberate. 49 Presented with no compelling indications that Congress intended to repeal section 407, we have no power to change deliberate choices of legislative policy that Congress has made within its constitutional powers. Sinclair Refining Company v. Atkinson, supra, 370 U.S. at 215, 82 S.Ct. at 1339.