Court Opinion

ID: 9432017
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:33:57.124284+00
Date Added: 2024-06-11T17:23:31.651963
License: Public Domain

Justice Blackmun,
with whom Justice O’Connor joins, dissenting.
The Court today concludes that Congress intended an obligation to pay restitution imposed as part of a state criminal sentence to be a “debt” within the meaning of the United States Bankruptcy Code. Because Congress has given no clear indication that it intended to abrogate the long “history of bankruptcy court deference to criminal judgments,” Kelly v. Robinson, 479 U. S. 36, 44 (1986), and because there is no suggestion in the Bankruptcy Code that it may be used as a shield to protect a criminal from punishment for his crime, I must disagree.
*565This Court carefully has set forth a method for statutory analysis of the Bankruptcy Code. See Kelly, supra; see also Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U. S. 494 (1986). When analyzing a bankruptcy statute, the Court, of course, looks to its plain language. But the Court has warned against an overly literal interpretation of the Bankruptcy Code. “‘[W]e must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.’” Kelly, 479 U. S., at 43, quoting, as have other opinions of this Court, United States v. Heirs of Boisdoré, 8 How. 113, 122 (1849). The strict language of the Bankruptcy Code does not control, even if the statutory language has a “plain” meaning, if the application of that language “will produce a result demonstrably at odds with the intention of its drafters.” United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 242 (1989). To determine the drafters’ intent, the Court presumes that Congress intended to keep continuity between pre-Code judicial practice and the enactment of the Bankruptcy Code in 1978. Midlantic, 474 U. S., at 501. For me, the statutory language, the consistent authority treating criminal sanctions as nondischargeable under the Bankruptcy Act of 1898, the absence of any legislative history suggesting that the Code was intended to change that established principle, and the strong policy of deference to state criminal judgments all compel the conclusion that a restitution order is not a dischargeable debt.
The majority appropriately begins its analysis with the language of the statute. As the majority points out, the Bankruptcy Code defines “debt” as a “liability on a claim.” 11 U. S. C. § 101 (11). The term “claim,” in turn, is defined as a “right to payment.” § 101(4)(A). The question then becomes whether it is clear from the statutory language alone that a restitution order is a “right to payment,” or whether the statutory language, “at least to some degree, [is] open to interpretation.” Ron Pair, 489 U. S., at 245-246 (emphasis *566added). The majority simply asserts that the plain meaning of “right to payment” is an “enforceable obligation,” which gives a restitution order the “character” of a “right to payment.” Ante, at 559. I cannot accept this easy conclusion.
Some time ago, Justice Frankfurter pointed out: “The notion that because the words of a statute are plain, its meaning is also plain, is merely pernicious oversimplification.” United States v. Monia, 317 U. S. 424, 431 (1943) (dissenting opinion). This observation rings especially true in this case. It is not at all clear to me that the words “right to payment” plainly include an obligation resulting from a criminal restitution order. While the words may be of common usage, their meaning is not at all plain in this context. Notably absent from the Code’s definition (and from the legislative history) of both “debt” and “claim” is any indication that Congress intended the discharge provisions to extend into the criminal sphere. Indeed, there are persuasive reasons for excluding criminal restitution from the category of “debts.” Petitioners argue — not without force — that a criminal restitution order is not a “right to payment” because neither the victim of the crime nor the Probation Department possesses a right to payment of a restitution order. Brief for Petitioners 22. Petitioners also argue that because the victim has no right of enforcement, the victim has no right to payment. Id., at 27; see also Commonwealth v. Mourar, 349 Pa. Super. 583, 603, 504 A. 2d 197, 208 (1986) (if criminal defendant fails to make restitution as ordered, victim has no right of enforcement), vacated and remanded on other grounds, 517 Pa. 83, 534 A. 2d 1050 (1987); cf. Bearden v. Georgia, 461 U. S. 660 (1983) (state court cannot constitutionally revoke probation for failure to pay a fine and make restitution without first determining the probationer’s ability to pay). Several Bankruptcy Courts have agreed with petitioners and have decided that the definition of “debt” in the Bankruptcy Code does not include a criminal restitution order. See, e. g., In re Norman, 95 B. R. 771, 773, and n. 3 (Colo. 1989) (criminal penalties *567and fines are not “debt[s]” as defined under § 101(11) of the Code; because crime victim has no “right to payment,” restitution is not a “debt”); In re Pellegrino, 42 B. R. 129, 132 (Conn. 1984) (since “crime victim has no ‘right to payment,’ restitution is not a ‘debt’ under Bankruptcy Code § 101(11)”; In re Magnifico, 21 B. R. 800 (Ariz. 1982) (criminal restitution not a “debt” contemplated by Bankruptcy Code); In re Button, 8 B. R. 692, 694 (WDNY 1981) (“From these definitions [of ‘debt,’ ‘[c]laim,’ and ‘[creditor’], it does not appear that restitution could be considered a debt”); accord, In re Kohr, 82 B. R. 706, 712 (MD Pa. 1988); In re Oslager, 46 B. R. 58 (MD Pa. 1985); In re Mead, 41 B. R. 838 (Conn. 1984). Other Bankruptcy Courts, to be sure, have determined that the definition of “debt” does include restitution obligations. See, e. g., In re Vandrovec, 61 B. R. 191 (N. D. 1986). At the least, these varied interpretations of the Code by bankruptcy judges are evidence that the phrase “right to payment,” when applied to restitution orders, is “subject to interpretation.” Kelly, 479 U. S., at 50. The statute, on its face, is not self-defining and surely does not compel the result that criminal restitution orders constitute “debts.”
My conclusion that the majority errs in concluding that the words “right to payment” include restitution orders is supported by the fact that such an interpretation would produce a result “‘demonstrably at odds with the intention of its drafters.’” Ron Pair, 489 U. S., at 244, quoting Griffin v. Oceanic Contractors, Inc., 458 U. S. 564, 571 (1982). This Court has declared that, to effectuate Congress’ intent in enacting the Code, we must consider the language of § 101 “in light of the history of bankruptcy court deference to criminal judgments and in light of the interests of the States in unfettered administration of their criminal justice systems.” Kelly, 479 U. S., at 44. That deference was reflected in the judicial interpretation of the discharge provisions of the Bankruptcy Act of 1898, ch. 541, 30 Stat. 544. In Kelly, the Court discussed at length the customary pre-Code practice of *568holding that criminal monetary sanctions were not discharge-able in bankruptcy. See 479 U. S., at 44-45. The Court explained that the new Code was enacted in 1978 to replace the 1898 Act and noted: “The treatment of criminal judgments under the Act of 1898 informs our understanding of the language of the Code.” Id., at 44.
Because Congress’ presumed intent is to preserve preCode piactice unless it specifically indicates otherwise, we must first consider the treatment of criminal restitution orders under the 1898 Act. That Act established two categories of debts, those that were “allowable” and those that were “provable.” “Only if a debt was allowable could the creditor receive a share of the bankrupt’s assets.” Ibid., citing § 65a. Only provable debts were-dischargeable. See §17. The Court in Kelly explained that penalties or forfeitures owed to governmental entities generally were not allowable, §57j; but the Act failed to state that such debts were not provable. See § 63. Given this statutory scheme, “[t]he most natural construction of the Act, therefore, would have allowed criminal penalties to be discharged in bankruptcy, even though the government was not entitled to a share of the bankrupt’s estate.” 479 U. S., at 44-45. Nonetheless, courts consistently “refused to allow a discharge in bankruptcy to affect the judgment of a state criminal court.” Id., at 45. See, e. g., In re Abramson, 210 F. 878, 880 (CA2 1914) (“[JJudgments for penalties are not debts which can be proved or allowed as such because they are not for a fixed liability”); cf. In re Alderson, 98 F. 588 (W. Va. 1899) (the only federal-court decision found by the Kelly Court that allowed a discharge to affect a sentence imposed by a state criminal court). In fact, the judicially created exception to discharge was “so widely accepted by the time Congress enacted the new Code that a leading commentator could state flatly that ‘fines and penalties are not affected by a discharge.’” Kelly, 479 U. S., at 46, quoting 1A Collier on Bankruptcy ¶ 17.13, pp. 1609-1610, and n. 10 (14th ed. 1978).
*569Those courts addressing criminal restitution orders “applied the same reasoning to prevent a discharge in bankruptcy from affecting such a condition of a criminal sentence.” 479 U. S., at 46. As a result, when Congress enacted the Bankruptcy Code in 1978, there existed an “established judicial exception to discharge for criminal sentences, including restitution orders.” Ibid. See also Zwick v. Freeman, 373 F. 2d 110, 116 (CA2 1967) (“[Gjovernmental sanctions are not regarded as debts even when they require monetary payments”). Because criminal sanctions were not dischargeable, they were also not “provable,” as the two terms tended to merge in pre-Code practice. See Collier, supra, at ¶ 17.05, p. 1587 (pre-Code practice held that “[f lines for violation of law, and forfeitures, are not provable [for purposes of §63], and, therefore, not dischargeable” (footnotes omitted)).
Thus, under the 1898 Act, criminal monetary sanctions were not allowable, provable, or dischargeable in bankruptcy. In functional terms, criminal monetary sanctions were not “debts” for the purpose of pre-Code bankruptcy proceedings. This judicially created pre-Code practice “reflected policy considerations of great longevity and importance,” that is, “‘a deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings.’” Ron Pair, 489 U. S., at 245, quoting Kelly, 479 U. S., at 47.
In the face of such a longstanding principle, “a court must determine whether Congress has expressed an intent to change the interpretation of a judicially created concept in enacting the Code.” Ibid. The Court stated in Midiantic: “The normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific.” 474 U. S., at 501. There is no indication that Congress had any intent so drastically to change the established pre-Code practice regarding criminal sanctions. Although the Bankruptcy *570Code definition'of “debt” is a broad one, “nothing in the legislative history [of the Bankruptcy Code provisions] compels the conclusion that Congress intended to change the state of the law with respect to criminal judgments.” Kelly, 479 U. S., at 50, n. 12; see also Midlantic (despite Code language that the dissent labeled “absolute in its terms,” 474 U. S., at 509, the Court refused to find that Congress had implicitly abrogated a judicially created pre-Code limitation on abandonment powers). Indeed, “[i]n light of the established state of the law — that bankruptcy courts could not discharge criminal judgments,” the Kelly Court expressed “serious doubts whether Congress intended to make criminal penalties ‘debts’ within the meaning of § 101(4).” 479 U. S., at 50. If Congress had intended such a radical change, surely it would have spoken more clearly. In my view, Congress’ attitude towards criminal sanctions is most clearly indicated in the statement that “[t]he bankruptcy laws are not a haven for criminal offenders.” H. R. Rep. No. 95-595, p. 342 (1977) (discussing automatic stay provisions).
The majority today brushes aside the rule of statutory construction outlined by this Court — a rule the Court has stressed must be used with “particular care in construing the scope of bankruptcy codifications.” Midlantic, 474 U. S., at 501 (emphasis added). The majority insists that its holding 'does not signal a retreat from the principles applied in Kelly because there is a “clear indication” that Congress intended to depart from past bankruptcy practice. Ante, at 563 (emphasis added). The majority contends that Congress made that intent “clear” by its “adoption of the ‘broadest possible’ definition of‘debt.’” Ante, at 564. I disagree. And I am puzzled by the majority’s position because the Court previously has rejected it expressly. See Kelly, 479 U. S., at 50, n. 12 (although the definition of “debt” was broadened, “nothing in the legislative history of these sections compels the conclusion that Congress intended to change the state of the law with respect to criminal judgments”). Moreover, it seems *571more likely that the broader definition was enacted simply to redress the problems created by the restrictive definitions of “allowable” and “provable” claims under the Act that made it impossible for some debtors to resolve all their civil liabilities in bankruptcy. Of particular concern were contingent and unliquidated claims that were “nonprovable” under the Act:
“[U]nder the liquidation chapters of the Bankruptcy Act, certain creditors are not permitted to share in the estate because of the non-provable nature of their claims, and the debtor is not discharged from those claims. Thus, relief for the debtor is incomplete, and those creditors are not given an opportunity to collect in the case on their claims. The proposed law will permit complete settlement of the affairs of a bankrupt debtor, and a complete discharge and fresh start.” H. R. Rep. No. 95-595, supra, at 180 (footnote omitted).
The statutory language itself highlights this approach. The Code’s definition of “claim” includes any right to payment that is “unliquidated,” “contingent,” “unmatured,” or “disputed,” 11 U. S. C. §101(4)(A), but does not include any modifier that in any way suggests the incorporation of criminal sanctions.
The majority’s assertion that Congress’ enactment of § 523 (a)(7) evidences a “clear indication” to abrogate pre-Code rulings that criminal sanctions were neither provable nor dis-chargeable in bankruptcy is similarly unconvincing. Under § 523(a)(7), a debt is not dischargeable “to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty.” § 523(a)(7). The majority reasons that if restitution obligations were not debts, there would be no need to except them from discharge; therefore, it says, Congress clearly intended that criminal restitution orders be considered debts. Because § 523(a)(7) does not apply to all Chapter 13 proceedings, the majority contends that criminal restitution obligations should be con*572sidered dischargeable debts under Chapter 13. Ante, at 562-563. Again, I disagree. The enactment of this single provision of the Bankruptcy Code does little to demonstrate clear congressional intent to change traditional pre-Code practice. Even if § 523(a)(7) can be interpreted as making criminal restitution orders not dischargeable, this does not mean that Congress intended to make criminal restitution orders debts. Under pre-Code practice, nondischargeability of a criminal restitution order would be evidence that it was not a debt at all. Congress gave no indication that it intended to break with this pre-Code conception of dischargeability when it enacted § 523(a)(7).
In addition, pre-Code Chapter XIII essentially adopted Chapter VII discharge policy, excepting from discharge all debts that were not dischargeable under Chapter VII when those debts were held by creditors who had not accepted the bankruptcy plan. See § 60 of the Act. Congress’ failure to include a parallel provision to § 523(a)(7) in Chapter 13, far from demonstrating a clear intent to make fines discharge-able in Chapter 13, is more likely a carryover from pre-Code practice, where Chapter XIII relied on Chapter VII’s discharge provisions. “If Congress had intended, by § 523(a)(7) or by any other provision,” to change the pre-Code practice of holding monetary sanctions not allowable, provable, or dis-chargeable in bankruptcy, “‘we can be certain that there would have been hearings, testimony, and debate concerning consequences so wasteful, so inimical to purposes previously deemed important, and so likely to arouse public outrage.’” Kelly, 479 U. S., at 51, quoting Powell, J., dissenting, in TVA v. Hill, 437 U. S. 153, 209 (1978).
I do not believe that Congress so cavalierly would have disregarded the States’ overwhelmingly important interest in administering their criminal justice systems free from the interference of a federal bankruptcy judge. Every State and the District of Columbia presently authorize the use of restitution orders. See Note, Criminal Restitution as a Limited *573Opportunity, 13 New Eng. J. on Crim. & Civ. Confinement 243-244, n. 9 (1987). A bankruptcy court discharge of a criminal restitution order is a deep intrusion by the federal courts into the State’s sovereign power. It vacates a criminal sentence that has presumably been entered in full accord with all substantive and procedural mandates of the Constitution. I seriously doubt that “Congress lightly would limit the rehabilitative and deterrent options available to state criminal judges.” Kelly, 479 U. S., at 49.
The majority’s decision today will have an adverse effect on the sentencing process. The judgment of sentencing courts and legislators that rehabilitation is the most effective form of punishment will be tempered by the knowledge that convicted criminals easily may avoid a sentence requiring restitution merely by obtaining a Chapter 13 discharge. Sentencing courts will be faced with a dilemma. The sentencing judge must either risk that a federal bankruptcy judge will undermine a restitution order, thus absolving the convicted criminal from punishment, or impose a harsher and less appropriate term of imprisonment, a sentence that the federal bankruptcy court will be unable to undermine. Congress surely would not have enacted legislation with such an extraordinary result without at least some discussion of its consequences.
The majority’s holding turns Kelly around. The Kelly Court stressed this compelling federalism concern, terming it “one of the most powerful of the considerations that should influence a court considering equitable types of relief,” and recognized that it “must influence our interpretation of the Bankruptcy Code.” 479 U. S., at 49. The Court was concerned that “federal remission of judgments imposed by state criminal judges . . . would hamper the flexibility of state criminal judges in choosing the combination of imprisonment, fines, and restitution most likely to further the rehabilitative and deterrent goals of state criminal justice systems.” Ibid. The concerns of the Kelly Court are no less applicable in this *574case. Congress’ intent to invalidate the results of state criminal proceedings is far from clear. There is simply no suggestion that Congress intended to depart from pre-Code practice and encroach so deeply upon the States’ administration of their criminal justice systems. In the absence of evidence of congressional intent to the contrary, the statutory construction rule set forth in Kelly and Midlantic requires a determination that the Bankruptcy Code does not permit convicted criminals to discharge their restitution obligations in Chapter 13 proceedings. I would therefore refuse to allow the Bankruptcy Code to become a sanctuary for a criminal trying to avoid the punishment meted out by a state-court judge.
I dissent.