Court Opinion

ID: 9493343
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:05:46.478759+00
Date Added: 2024-06-11T17:55:47.702728
License: Public Domain

MICHAEL DALY HAWKINS, Circuit Judge,
dissenting:
This is an issue about which reasonable minds can differ. I take a different view than the majority because I believe that the rule established today will make the job of bankruptcy trustees measurably more difficult. I also think that some entirely meritorious claims against those who engage in fraudulent transfers will be lost as a result
The majority concludes that Rule 9006(a) cannot be used to extend the preference period because 11 U.S.C. § 547(b) is not an “applicable statute” and because application of the rule to the preference period would violate the Rules Enabling Act. As to the first point, I simply note that every court to consider the issue has assumed or concluded that section 547(b) is an “applicable statute” under Rule 9006(a). See e.g., In re Nelson, 959 F.2d 1260, 1266 (3rd Cir.1992); Harbor Nat’l Bank of Boston v. Sid Kumins, Inc., 696 F.2d 9, 10 (1st Cir.1982); In re Prior, 176 B.R. 485, 497 (Bankr.S.D.Ill.1995); In re Levinson, 128 B.R. 365, 366 (Bankr.S.D.N.Y.1991); In re J.A.S. Markets, Inc., 113 B.R. 193, 197 (Bankr.W.D.Pa.1990); In re Mailbag International, Inc., 28 B.R. 905, 909 (Bankr.D.Conn.1983); In re Grimaldi, 3 B.R. 533, 535 (Bankr.D.Conn.1980).
Even' the appellant in this case appears to concede that section 547(b) is an “applicable statute.” MBNA has argued only that application of Rule 9006(a) to the preference period would violate the Rules Enabling Act, not that section 547(b) is not an “applicable statute.” The majority has raised this issue on its own. And while the majority’s analysis is certainly plausible, I do not find it strong enough to overcome the consensus among the courts that section 547(b) is an “applicable statute” under Rule 9006(a).
*1074As to the majority’s second conclusion, I disagree that application of Rule 9006(a) to the preference period is substantive rather than procedural. The Supreme Court has stated that a rule is not substantive merely because it has incidental effects on substantive rights and that procedural rules “may and often do affect the rights of litigants.” Hanna v. Plumer, 380 U.S. 460, 465, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) (quoting Mississippi Pub. Corp. v. Murphree, 326 U.S. 438, 445, 66 S.Ct. 242, 90 L.Ed. 185 (1946)). Thus, although a statute of limitations defines the statutory period within which a plaintiff may file a lawsuit, this court and most others have held that application of Rule 9006(a) and Federal Rule of Civil Procedure 6(a) to statutes of limitations is allowable under the Rules Enabling Act. See In re Victoria Station Inc., 840 F.2d 682, 684 (9th Cir.1988); Hart v. United States, 817 F.2d 78, 80 (9th Cir.1987); In re Hill, 811 F.2d 484 (9th Cir.1986); Bartlik v. U.S. Dep’t of Labor, 62 F.3d 163, 166 (6th Cir.1995); see also 4A Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure § 1163, at 465 n. 12 (2d. ed.1987) (listing cases).
The majority argues that section 547(b) is different because it does not require any affirmative act by the trustee, but rather creates a statutory period within which certain transfers are avoidable. I find this distinction unpersuasive. Rule 9006(a) and Federal Rule of Civil Procedure 6(a) ensure that parties will not be frustrated by an inconveniently placed weekend or holiday. And like the trustee in this' case, a party can be frustrated by an inconveniently placed weekend or holiday regardless of whether he is required to perform an affirmative act.
The majority also argues that unlike the filing of a complaint or motion, a transfer can occur at any time, including a weekend. But under Barnhill v. Johnson, 503 U.S. 393, 396, 112 S.Ct. 1386, 118 L.Ed.2d 39 (1992), a transfer does not occur until the check is honored by the debtor’s bank. Thus, unless a debtor’s bank is open on a weekend, it is unlikely that transfers will occur between Friday and Monday.
I would reverse the summary judgment grant and remand, through the district court, back to the bankruptcy court to resolve the Trustee’s claim on the merits.