Legal Document

112 S.Ct. 2242 504 U.S. 753 119 L.Ed.2d 519 John R. PATTERSON, Trustee, Petitionerv.Joseph B. SHUMATE, Jr. No. 91-913. Argued April 20, 1992. Decided June 15, Syllabus Respondent Shumate was a participant in his employer's pension plan, which contained the anti-alienation provision required for tax qualification under Employee Retirement Income Security Act of 1974 (ERISA). The District Court rejected contention that interest plan should be excluded from bankruptcy estate § 541(c)(2) Bankruptcy Code, excludes property debtor is subject to restriction on transfer enforceable "applicable nonbankruptcy law." court held, inter alia, latter phrase embraces only state law, not federal law such as ERISA, and Shumate's did qualify protection spendthrift trust law. ordered paid over petitioner, trustee estate. Appeals reversed, ruling 541(c)(2). Held: plain language Code ERISA establishes an qualified constitutes law" purposes Pp. 757-766. (a) Plainly read, encompasses any relevant including ERISA. section contains no limitation relating source its text nowhere suggests refers, petitioner contends, exclusively Other sections reveal Congress knew how restrict scope applicable "state so with some frequency. Its use broader strongly it intend manner contends. 757-758. (b) this ERISA-qualified satisfies literal terms Internal Revenue requiring provide benefits may assigned or alienated clearly impose "restriction transfer" debtor's "beneficial interest" within 541(c)(2)'s meaning, question comply those requirements. Moreover, restrictions are "enforceable," by 541(c)(2), since gives participants right sue enjoin acts violate statute plan's terms. 759-760. (c) Given clarity statutory text, bears "exceptionally heavy" burden persuasion intended limit exclusion Union Bank v. Wolas, 502 ----, 527, 116 514. He has satisfied burden, several challenges Court's interpretation 541(c)(2)—that refuted contemporaneous legislative materials, renders superfluous 522(d)(10)(E) exemption payments, frustrates Code's policy ensuring broad inclusion assets estate—are unpersuasive. 760-765. 943 F.2d 362 (CA 4 1991), affirmed. BLACKMUN, J., delivered opinion unanimous Court. SCALIA, filed concurring opinion. G. Steven Agee, Roanoke, Va., petitioner. Kevin Huennekens, Richmond, respondent. Christopher J. Wright, Washington, D.C., amicus curiae special leave Justice BLACKMUN 1 11 U.S.C. We must decide case whether law," whether, accordingly, exclude 2 * Joseph Shumate, Jr., employed 30 years Coleman Furniture Corporation, where he ultimately attained position president chairman board directors. approximately 400 other employees were Corporation Pension Plan (Plan). all requirements (ERISA) favorable treatment Code. In particular, Article 16.1 206(d)(1) 29 1056(d)(1) ("Each shall provided alienated"). App. 342. valued at $250,000. 93-94. 3 1982, petition Chapter converted 7 proceeding trustee, Roy V. Creasy, appointed. himself encountered financial difficulties 1984. His case, too, proceeding, Patterson appointed trustee. Creasy terminated liquidated Plan, providing full distributions except Shumate. then adversary against Western Virginia recover benefit turn asked United States Virginia, already had jurisdiction related compel pay directly him. subsequently consolidated district action. Pet. Cert. 53a-54a. 5 held reference "nonbankruptcy embraced Corp., 83 B.R. 404, 406 (1988). Applying trust. Id., 406-409. also alternative argument even if could entitled 522(b)(2)(A), allows exempt "any Federal 409-410. 54a-55a. 6 Fourth Circuit reversed. (1991). relied earlier decision Anderson Raine (In re Moore), 907 1476 (1990), another panel described holding, subsequent instant "ERISA-qualified plans, definition have non-alienation provision, constitute 'applicable law' contain interests." F.2d, 365. Thus, Ibid. declined consider 522(b). 365-366. granted certiorari, --- 932, 117 104 (1992), resolve conflict among Courts estate.1 II A. 8 our view, determinant. See Toibb Radloff, 501 111 2197, 2199, 115 145 Section provides following otherwise "property estate" 541(a)(1) Code: 9 "A beneficial title." (emphasis added). 10 natural reading entitles Nothing 541 Reading term include well comports references sources reveals, significantly, Congress, when desired do so, See, e.g., 109(c)(2) (entity chapter authorized "by State law"); 522(b)(1) (election exemptions controlled "the debtor"); 523(a)(5) (a debt alimony, maintenance, support determined "in accordance territorial dischargeable); 903(1) ("a prescribing method composition indebtedness" municipalities binding nonconsenting creditors); see §§ 362(b)(12) 1145(a). Congress' contends.2 12 does petitioner's limited enforce according Ron Pair Enterprises, Inc., 489 235, 241, 109 1026, 1030, 103 290 (1989). B 13 Having concluded we next determine issue here 14 states "[e]ach alienated," 1056(d)(1), imposes coordinate 26 401(a)(13), general rule "[a] unless part thus similar restrictions. CFR 1.401(a)-13(b)(1) 15 Furniture's complied these specifically stated: "No benefit, "shall alienation, sale, transfer, assignment, pledge, encumbrance charge, seizure, attachment legal, equitable process." 16 trustees fiduciaries discharge their duties documents instruments governing plan." 1104(a)(1)(D). A participant, beneficiary, fiduciary, Secretary Labor file civil action "enjoin act practice" violates plan. 1132(a)(3) (5). Indeed, itself vigorously enforced ERISA's prohibition assignment alienation benefits, declining recognize implied exceptions bar. Guidry Sheet Metal Workers Fund, 493 365, 110 680, 107 782 (1990).3 17 III 18 Petitioner raises conclusion. however, persuading us 530, 514 19 first contends materials demonstrate extend Although courts "appropriately refer statute's history ambiguity," U.S., S.Ct., 2200, obviates need inquiry. ibid.; 1030; Davis Michigan Dept. Treasury, 803, 809, n. 3, 1500, 1504, 891 (1989).4 20 Even discern "clearly expressed intention" contrary result reached above. Consumer Product Safety Comm'n GTE Sylvania, 447 102, 108, 100 2051, 2056, 64 766 (1980). brief, quotes House Senate reports accompanying Reform 1978 purportedly reflect "unmistakable" congressional intent plans trusts. Brief 38. Those briefest discussions addressing Report states: "Paragraph (2) subsection . preserves extent H.R.Rep. 95-595, p. 369 (1977); S.Rep. 95-989, (1978), U.S.Code Cong. & Admin.News 1978, pp. 5787, 5869, 6325 (§ "preserves trust"). introductory additional statement new "continues protected creditors 176, 6136. These meager excerpts best meaning By means they sufficient basis concluding, derogation clear language, provision's scope. 21 construction pursuant estate, superfluous. 24-33. Under 522(d)(10)(E), who elects set forth 522(d) receive "a payment stock bonus, pension, profitsharing, annuity, contract ., reasonably necessary dependent debtor." If goes, there would been reason create interests elsewhere statute. 22 Petitioner's surplusage fails, exempts much category than excludes. For example, established governmental entities churches Subchapter I requirement 206(d)(1). 1003(b)(1) (2); 1.401(a)-13(a) So, preferential 408 (individual retirement accounts) excepted requirement. 1051(6). because lack interest5 nevertheless exempted 522(d)(10)(E).6 Once concedes 522(d)(10)(E)'s applies more containing provisions, Tr. Oral Arg. 10-11; 31, collapse. C 23 Finally, holding 37; (estate comprised "all legal commencement case"). As initial matter, think mistakes admittedly includable "policy" underlying whole. event, considerations clear, believe preferable one urges upon us. 24 First, today ensures will vary based beneficiary's status. Butner States, 440 48, 55, 99 914, 918, 59 136 (1978) (observing "[u]niform interests" prevents party 'receiving windfall merely happenstance bankruptcy,' " quoting Lewis Manufacturers National Bank, 364 603, 609, 81 347, 350, 323 (1961)). previously outside context. (1990) (labor union constructive official breached fiduciary embezzled funds). Declining context minimizes possibility engage strategic manipulation laws order gain access inaccessible funds. Seiden, Cases: Do Conflict Whether Debtor's Interest Rights Qualified Can Used Pay Claims?, 61 Am. Bankr.L.J. 301, 317 (1987) (noting inconsistency creditor reach debtor-participant's garnishment collection but indirectly filing place involuntarily"). 25 Our appropriate effect goal protecting benefits. 1001(b) (c). This "if worker promised defined retirement—and fulfilled whatever conditions obtain vested benefit—he actually it." Nachman Corp. Benefit Guaranty 446 359, 375, 1723, 1733, 354 furtherance principles, recently Guidry, notwithstanding strong contrary, exception allowed labor corrupt official. explained: "Section 206(d) reflects considered choice, safeguard stream income pensioners (and dependents, be, perhaps usually are, blameless), others securing relief wrongs done them. made, undertake task." 376, 687. 27 apply equal, greater, force present 28 furthers important ERISA: uniform national Fort Halifax Packing Co. Coyne, 482 1, 9, 2211, 2216, 96 (1987). Construing security governed left vagaries IV light conclusion respondent's qualifies 522(b)(2)(A). judgment 31 It ordered. 32 concurring. 33 today, join, prompts observations. 34 When isolation, phenomenon three thought synonym mystifying. together rest (in chose as, logically enough, law"), calls into culture far departed attention lacking agreed-upon methodology creating interpreting longer makes sense talk government laws, men." 35 Speaking methodology: good analysis proceeds assumption phrases provisions highly consistency usage same presumed. Ante, 758, 2. application normal obvious principle merit comment, explicitly it, favor one-subsection-at-a-time approach, very Term. Dewsnup Timm, 773, 777-778, 903 (1992); id., ---- - 775-776 (SCALIA, dissenting). "[W]e express opinion," said, "as words [at issue] different Code." 778, 3. search neutral rational interpretive now come rest, symbol profession remain scales, see-saw. Compare Gladwell Harline Harline), 950 669 (CA10 1991) (ERISA cert. pending, 91-1412; Velis Kardanis, 949 78 (CA3 (same); Patterson, (CA4 (this case; same); Forbes Lucas Lucas), 924 597 (CA6) (same), denied, 2275, 114 726 (1991); 1990) Heitkamp Dyke Dyke), 1435 (CA5 Daniel Pacific Nat. Daniel), 771 1352 (CA9 1985) 475 1016, 106 1199, 89 313 (1986); Lichstrahl Bankers Trust Lichstrahl), 750 1488 (CA11 Samore Graham Graham), 1268 (CA8 1984) Goff Taylor Goff), 706 574 1983) (same). appears construed 1125(d) (adequacy disclosure "otherwise Stanley Hotel, 926, 931 (Bkrtcy.Ct.D.Colo.1981) includes securities law); 108(a) (referring limitations fixed Ahead Length, 157, 162-163 (Bkrtcy.Ct.SDNY 1989) Racketeer Influenced Corrupt Organizations Act); Motor Carrier Audit Collection Lighting Products, 113 424, 425-426 (ND Ill.1989) Interstate Commerce 108(b) time pleadings, notices, etc., Eagle-Picher Industries, Inc. U.S.App.D.C. 307, 321-322; 937 625, 639-640 (1991) Tort Claims Act). view correctness decisions, note accords prevailing interpretations Morrison-Knudsen Constr. Director, OWCP, 461 624, 633, 2045, 2050, 76 194 (1983) (recognizing "that word presumed subsections statute"). Service least occasion espoused disqualify taking advantage available McLean Central Southeast Southwest Areas 762 1204, 1206 1985); 1481. ignoring relying isolated misconceived analytical task. 1359-1360; 1490; 1271-1272; 581-582. separate immediate receive, entire undistributed corpus Harline, 675; 81-82. Arnopol, Including Benefits Estate: Proposal Harmonizing 56 Mo.L.Rev. 491, 535-536 acknowledge breadth exemption. Goff, 587 "reaches array employment both unqualified plans") (footnote omitted); Graham, 1272 non-ERISA plans"). Mo.L.Rev., 525-526, 552-553; 318

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