Court Opinion

ID: 8497518
Source: CourtListenerOpinion
Date Created: 2022-11-22 22:41:51.777365+00
Date Added: 2024-06-11T16:50:33.552570
License: Public Domain

HOFFMAN, Bankruptcy Judge,
Concurring.
While I agree that this matter should be remanded to the bankruptcy court to determine whether and to what extent PREPA supplied goods or something other than goods to PMC, I believe it is incumbent upon us as de novo reviewers of issues of law to instruct the bankruptcy court as to the proper legal standard to apply to its fact finding enterprise. As to issues of law, “[u]nder the de novo standard of review, “we consider a matter anew, as if no decision had been rendered previously.’ ” Calderon v. Lang (In re Calderon) 507 B.R. 724, 728 (9th Cir. BAP 2014) (quoting Mele v. Mele (In re Mele), 501 B.R. 357, 362 (9th Cir. BAP 2013)).
The issue of law that is squarely before us is what is the meaning of the word “goods” as used in § 503(b)(9) of the Bankruptcy Code. Since the Code lacks a definition we must fashion one. That definition ought not to be susceptible to variations in application by state or territory. The Bankruptcy Code is federal law. See, e.g., Gallivan v. Springfield Post Rd. Corp., 110 F.3d 848, 851 (1st Cir.1997) (“Its [§ 503(b)] requirements are to be assessed under federal law.”); In re Erving Indus., Inc., 432 B.R. at 366 n. 23 (“The Court remains mindful, however, that § 503(b)(9) is federal law. As such, the definition of goods is also [a] matter of federal, and not state, interpretation.”); In re Pruitt, 401 B.R. 546, 555 (Bankr. D.Conn.2009) (“Specifically, the ultimate amount, character and class of a creditor’s claim for purposes of treatment in the bankruptcy case is determined solely by the rules and principles of the federal bankruptcy law.”). One of the Bankruptcy Code’s guiding principles is uniformity, especially when it comes to the treatment of creditor claims. See, e.g., Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356, 377 n. 13, 126 *395S.Ct. 990, 163 L.Ed.2d 945 (2006) (“Congress has the power to enact bankruptcy laws the purpose and effect of which are to ensure uniformity in treatment of state and private creditors.”); In re Pilgrim’s Pride Corp., 421 B.R. at 236 (“One of the cardinal rules of bankruptcy law is that similarly situated claims should receive the same treatment.”). For this reason the decision of the Supreme Court of Puerto Rico in Pueblo v. Uriel Alvarez, supra, commended to us by counsel for PREPA, offers no assistance.
The majority notes that in defining the term “goods” in § 503(b)(9) most courts have adopted the definition of goods contained in § 2-105(1) of the Uniform Commercial Code. Indeed, one district court has noted that “[e]very bankruptcy court to consider the issue ... has applied the Uniform Commercial Code definition.” GFI Wis., Inc., 440 B.R. at 797. I see no reason to swim against the current.6 As the court in Erving observed: “Given the wide usage and acceptance of the definition of goods found in the UCC at § 2-105(1), it is hardly plausible that Congress expected bankruptcy judges to roll up their sleeves and set to work re-inventing the proverbial wheel and divining a more amorphous ‘common understanding’ of the term.” 432 B.R. at 365. This approach also fosters uniformity. Like the bankruptcy court in Circuit City, I do “not believe that Congress intended a disparate application of the term ‘goods,’ but rather contemplated a consistent, uniform approach to its interpretation. 416 B.R. at 535.
I would remand this case to the bankruptcy court with instructions to determine on the facts of the case whether PREPA’s § 503(b)(9) request for payment of administrative expense is allowable and to apply the definition of goods in accordance with § 2-105(1) of the model UCC.

. The fact that Puerto Rico has not adopted the UCC is irrelevant. As stated in Erving: Although the [cjourt has not identified any state laws which deviate from the definition of goods found in § 2-105 ..., the [cjourt agrees with the court’s conclusion in Pilgrim’s Pride that "the appropriate definition of goods for the purpose of Code § 503(b)(9) is that found in the ‘model’ UCC,” 421 B.R. at 236-37, and not any particular permutation adopted by an individual state. Of course, decisions interpreting the meaning of goods under § 2-105 will provide bankruptcy courts with a wealth of persuasive and insightful guidance. But to the extent that differences arise from "local enactments of the UCC or the variances in its interpretation by the courts of the states,” the [c]ourt agrees that federal bankruptcy courts should be reluctant to give those variances effect under federal law.” Id.
432 B.R. at 366 n.23.