Judge Isgur Cites to the Gettysburg Address as Basis for Rejecting "First Blush" Interpretation of BAPCPA's Multiple Serial Filer Stay Provisions

Houston's Bankruptcy Judge Marvin Isgur, the leading author of opinions of first impression interpreting BAPCPA's provisions as they relate to consumer debtors (see here, here (Charles case), here, and here), tackles another thorny issue of first impression in In re Toro-Arcila, 2005 WL 3370045 (Bankr. S.D. Tex., 12/12/2005). By way of background, BAPCPA's provisions distinguish between "multiple serial filers" (2 or more cases were dismissed in year before the present case filed) and "single serial filers" (only 1 case dismissed in year before the present case filed). Single serial filers get the benefit of the automatic stay for the first 30 days of the case, but the filing is presumed in bad faith and can be rebutted only by clear and convincing evidence that the filing was not in bad faith. Judge Isgur recently developed two handy charts to guide judges and lawyers through the thicket of rules addressing the issues that must be examined in determining whether the stay should be extended as to a single serial filer (see here).

In this case, Judge Isgur addresses a separate issue: if the single serial filer fails to get the stay extended under Code section 362(c)(3), can the debtor move under Code section 362(c)(4)(B) for reimposition of the stay despite the fact that this Code section appears "at first blush" to be for the benefit only of multiple serial filers?

In concluding that what appears to be true "at first blush" is actually incorrect, Judge Isgur rejects the statute's apparent "plain meaning." To do otherwise, he concludes, would effectively render exactly 278 words in BAPCPA superfluous, a result Congress could not have intended. Judge Isgur then somehow remarkably divines that, "coincidentally," the Gettysburg Address (which he quotes in its entirety, and is always worth rereading) of President Abraham Lincoln was also 278 words. From this coincidental fact, Judge Isgur concludes, tongue-in-cheek:

Although the meaning of this subsection [of BAPCPA] cannot be compared to the importance of the Gettysburg Address, the Court presumes that Congress did not codify words of comparable length with no meaning whatsoever.

As to the statutory provisions of BAPCPA in question, in concluding that "the 'first blush' intepretation is incorrect," Judge Isgur draws not only upon the Gettysburg Address, but upon well developed countervailing principles of statutory construction to avoid rendering whole sections of the statute superfluous. Given that, per Bankruptcy Judge Robert Mark, BAPCPA "is not a model of clarity," and per Judge Isgur, BAPCPA can be "particularly difficult to parse and, at worst, virtually incoherent" (see here), Judge Isgur's dance around the "plain" or "first blush" meaning provides the bankruptcy judge and practitioner with some important tools for preventing BAPCPA from becoming the statutory nightmare it has the potential to be. He writes:

At first blush, § 362(c)(4) appears to apply only to multiple repeat filers and not to first-time repeat filers.... The problem with the "first blush" interpretation is that it renders virtually all of § 362(c)(4)(D) to be meaningless surplusage. Section 362(c)(4)(D)(i)(I) applies to all creditors in all cases governed by § 362(c)(4)(A). If the "later case" referred to in § 362(c)(4)(B) must be a later case of a type described in § 362(c)(4)(A), then there will be no instances in which the language in §§ 362(c)(4)(D)(i)(II), (D)(i)(III), or (D)(ii) would ever be considered. Such an interpretation violates a basic tenet of statutory interpretation. "It is 'a cardinal principle of statutory construction' that 'a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.'" TRW, Inc. v.. Andrews, 534 U.S. 19, 31 (2001) (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)).
The Court recognizes that "[s]urplusage does not always produce ambiguity and our preference for avoiding surplusage constructions is not absolute." Lamie v. U.S. Trustee, 540 U.S. 526, 536 (2004). However, in Lamie, the Court was concerned that a single word--perhaps inadvertently included in the statute-- would produce surplusage. In this case, the surplusage would constitute an entire section comprised of 278 words and multiple paragraphs. The Court is unable to locate any authority for such a wholesale disregard of the normal method of statutory construction. [FN2]
[FN2] Coincidentally, Lincoln's address at Gettysburg was also 278 words in length: [entire 278 word address omitted] .... Although the meaning of this subsection cannot be compared to the importance of the Gettysburg Address, the Court presumes that Congress did not codify words of comparable length with no meaning whatsoever.
In reviewing a statute to determine whether words should be treated as surplusage, Lamie also directs the Court to determine if the words would render the meaning of the statute repugnant to the intent of the drafters. In this case, there is no repugnance. Giving meaning to subsection (D) would merely give a first-time repeat filer the same hearing rights as a multiple repeat filer.

Although this reading creates other interpretive problems (as set forth below), the Court concludes that it must read § 362(c)(4)(D) along with §§ 362(c)(4)(B) and (C) to provide meaning to the statute as a whole and to implement Congressional intent....

As set forth above, subsection (D) provides a rebuttable presumption that certain cases have not been filed in good faith. Read together with subsections (B) and (C), the Court concludes that Congress intended for subsection (B) to apply to cases in which there is a timely request that the stay be imposed, whether the case is the first repeat filing or a subsequent repeat filing. This interpretation gives meaning to subsection (D) and provides a more consistent application of §§ 362(c)(3) and (4).

Of course, the Court recognizes that the interpretation set forth in this opinion is not without its own problems. This interpretation makes the phrase "the later case" in § 362(c)(4)(B) lose its apparent reference. The phrase facially appears to refer to the later case of the cases described in § 362(c)(4)(A). Moreover, it creates a statutory structure where certain provisions of § 362(c)(4) apply to §§ 362(c)(3) and (4). Neverthelsss, when Congress (within this section) intended to refer and incorporate a specific prior subparagraph, it did so. Section 362(c)(4)(C) explicitly refers to § 362(c)(4)(B) ("a stay imposed under subparagraph (B)"); the same is true of § 362(c)(4)(D) ("for purposes of subparagraph (B)"). There is no such reference to subparagraph (A) within the text of subparagraph (B). The usual rule is that "when the legislature uses certain language in one part of the statue and different language in another, the court assumes different meanings were intended." Sosa v. Alvarez-Machain, 542 U.S. 692, 712 n. 9 (2004) (quoting 2A N. Singer, STATUTES AND STATUTORY CONSTRUCTION § 46:06, p. 194 (6th ed. 2000)). After full consideration, the Court concludes that the "first blush" interpretation is incorrect. The Court will give meaning to the entirety of the statute and will not incorporate an exclusive reference to subparagraph (A) that Congress did not choose to insert.

Accordingly, the Court concludes that the Debtor may obtain a hearing on his motion. Of course, pending consideration by the Court, there is no stay.

© Steve Jakubowski 2005