OCTOBER TERM, 2002
Syllabus
FEDERAL COMMUNICATIONS COMMISSION
v.
NEXTWAVE PERSONAL COMMUNICATIONS INC. ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT
No. 01-653. Argued October 8, 2002-Decided January 27, 2003*
Pursuant to provisions of the Communications Act of 1934
authorizing the Federal Communications Commission (FCC) to award
spectrum licenses to small businesses through competitive bidding,
and to allow them to pay for the licenses in installments, the FCC
auctioned off certain broadband personal communications services
licenses to respondents (hereinafter NextWave). NextWave made a
down payment on the purchase price, signed promissory notes for the
balance, and executed agreements giving the FCC a first lien on,
and security interest in, NextWave's rights and interest in the
licenses, which recited that they were conditioned upon the full
and timely payment of all monies due the FCC, and that failure to
comply with this condition would result in their automatic
cancellation. NextWave eventually filed for Chapter 11 bankruptcy
protection and suspended payments to all creditors, including the
FCC, pending confirmation of its reorganization plan. The FCC
objected to the plan, asserting that NextWave's licenses had been
canceled automatically when the company missed its first payment
deadline, and announced that NextWave's licenses were available for
auction. The Bankruptcy Court invalidated the cancellation of the
licenses as a violation of various Bankruptcy Code provisions, but
the Second Circuit reversed, holding that exclusive jurisdiction to
review the FCC's regulatory action lay in the courts of appeals.
After the FCC denied NextWave's petition for reconsideration of the
license cancellation, the District of Columbia Circuit held that
the cancellation violated 11 U. S. C. § 525(a), which provides:
"[A] governmental unit may not ... revoke ... a license ... to ...
a debtor ... solely because such ... debtor ... has not paid a debt
that is dischargeable in the case."
Held: Section 525 prohibits the FCC from revoking
licenses held by a bankruptcy debtor upon the debtor's failure to
make timely payments to the FCC for purchase of the licenses. It is
undisputed that the FCC
*Together with No. 01-657, Arctic Slope Regional Corp. et al. v.
NextWave Personal Communications Inc. et al., also on certiorari to
the same court.
294
294 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
Syllabus
is a "governmental unit" that has "revoke[d]" a "license," and
that NextWave is a "debtor" under the Bankruptcy Act. Pp.
301-308.
(a) The Court rejects petitioners' argument that the FCC did not
revoke NextWave's licenses "solely because" of nonpayment under §
525(a). The fact that the FCC had a valid regulatory motive for its
action is irrelevant. Section 525 means nothing more or less than
that the failure to pay a dischargeable debt must alone be the
proximate cause of the cancellation, whatever the agency's ultimate
motive may be. Pp. 301-302.
(b) The FCC's contention that regulatory conditions like full
and timely payment are not properly classified as "debts" under §
525(a) fails. Under the Bankruptcy Code, "debt" means "liability on
a claim," § 101(12), and "claim," in turn, includes any "right to
payment," § 101(5)(A). The plain meaning of a "right to payment" is
nothing more nor less than an enforceable obligation, regardless of
the Government's objectives in imposing the obligation.
E.
g.,
Pennsylvania Dept. of Public Welfare v.
Davenport, 495
U. S. 552, 559. Also rejected is petitioners' argument that
NextWave's obligations are not "dischargeable" under § 525(a)
because it is beyond the bankruptcy courts' jurisdictional
authority to alter or modify regulatory obligations.
Dischargeability is not tied to the existence of such authority.
The Bankruptcy Code states that confirmation of a reorganization
plan discharges the debtor from
any debt that arose before
the confirmation date, 11 U. S. C. § 1141(d)(1)(A), and the only
debts it excepts from that prescription are those described in §
523, see § 1141(d)(2).
Ohio v.
Kovacs, 469 U. S. 274, 278.
Petitioners' contention that the D. C. Circuit has no power to
modify or discharge a debt is irrelevant to whether that court can
set aside agency action that violates § 525, which is all that it
did when it prevented the FCC from canceling licenses because of
failure to pay debts dischargeable by bankruptcy courts. Pp.
302-304.
(c) Finally, this Court's interpretation of § 525 does not, as
petitioners contend, create a conflict with the Communications Act
by obstructing the functioning of that Act's auction provisions.
Nothing in those provisions demands that cancellation be the
sanction for failure to make agreed-upon periodic payments or even
requires the FCC to permit payment to be made over time. What
petitioners describe as a conflict boils down to nothing more than
a policy preference on the FCC's part for (1) selling licenses on
credit and (2) canceling licenses rather than asserting security
interests when there is a default. Such administrative preferences
cannot be the basis for denying NextWave rights provided by a law's
plain terms. P. 304.
254 F.3d
130, affirmed.
295
SCALIA, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, KENNEDY, SOUTER, THOMAS, and
GINSBURG, JJ., joined, and in which STEVENS, J., joined as to Parts
I and II. STEVENS, J., filed an opinion concurring in part and
concurring in the judgment,
post, p. 308. BREYER, J., filed
a dissenting opinion,
post, p. 310.
Acting Solicitor General Clement argued the cause for petitioner
Federal Communications Commission in No. 01653. With him on the
briefs were Deputy Solicitor General Wallace, Jeffrey A. Lamken,
William Kanter, Jacob M. Lewis, John A. Rogovin, Daniel M.
Armstrong, and Joel Marcus. Jonathan S. Franklin argued the cause
for petitioners Arctic Slope Regional Corp. et al. in No. 01-657.
With him on the briefs was Lorane F. Hebert.
Donald B. Verrilli, Jr., argued the cause for respondents in
both cases. With him on the briefs were Ian Heath Gershengorn,
William M. Hohengarten, Thomas G. Hungar, Douglas R. Cox, Miguel A.
Estrada, G. Eric Brunstad, Jr., and Deborah L. Schrier-Rape.
Laurence H. Tribe argued the cause and filed a brief for
Creditors NextWave Communications, Inc., as
amici curiae
urging affirmance. With him on the brief were
Charles Fried
and
Elizabeth Warren.t
JUSTICE SCALIA delivered the opinion of the Court.
In these cases, we decide whether § 525 of the Bankruptcy Code,
11 U. S. C. § 525, prohibits the Federal Communications Commission
(FCC or Commission) from revoking licenses held by a debtor in
bankruptcy upon the debtor's failure to make timely payments owed
to the Commission for purchase of the licenses.
tBriefs of
amici curiae urging affirmance were filed for
Airadigm Communications, Inc., by
Richard P. Bress and
James F.
Rogers; for Urban Comm-North Carolina, Inc.,
et al. by
Charles J.
Cooper, David H. Thompson, Preben
Jensen, and
Charles E. Simpson; for Professor Kathryn R.
Heidt,
pro se; and for Senator Patrick Leahy et al. by
Walter Dellinger and
Jonathan D. Hacker.
296
296 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
I
In 1993, Congress amended the Communications Act of 1934 to
authorize the FCC to award spectrum licenses "through a system of
competitive bidding." 48 Stat. 1085, as amended, 107 Stat. 387, 47
U. S. C. § 309(j)(1). It directed the Commission to "promot[e]
economic opportunity and competition" and "avoi[d] excessive
concentration of licenses" by "disseminating licenses among a wide
variety of applications, including small businesses [and] rural
telephone companies." § 309(j)(3)(B). In order to achieve this
goal, Congress directed the FCC to "consider alternative payment
schedules and methods of calculation, including lump sums or
guaranteed installment payments ... or other schedules or methods
.... " § 309(j)(4)(A).
The FCC decided to award licenses for broadband personal
communications services through simultaneous, multipleround
auctions.
In re Implementation of Section 309(j) of the
Communications Act-Competitive Bidding, 9 FCC Rcd. 2348, ~~ 54,
68 (1994). In accordance with §§ 309(j) (3)(B) and (4)(A), it
restricted participation in two of the six auction blocks (Blocks
"c" and "F") to small businesses and other designated entities with
total assets and revenues below certain levels, and it allowed the
successful bidders in these two blocks to pay in installments over
the term of the license. 47 CFR § 24.709(a)(1) (1997).
Respondents NextWave Personal Communications, Inc., and NextWave
Power Partners, Inc. (both wholly owned subsidiaries of NextWave
Telecom, Inc., and hereinafter jointly referred to as respondent
NextWave), participated, respectively, in the FCC's "C-Block" and
"F-Block" auctions. NextWave was awarded 63 C-Block licenses on
winning bids totaling approximately $4.74 billion, and 27 F-Block
licenses on winning bids of approximately $123 million. In
accordance with FCC regulations, NextWave made a downpayment on the
purchase price, signed promissory notes for the balance, and
executed security agreements that the FCC per-
297
fected by filing under the Uniform Commercial Code. The security
agreements gave the Commission a first "lien on and continuing
security interest in all of the Debtor's rights and interest in
[each] License." Security Agreement between NextWave and FCC ~ 1
(Jan. 3, 1997),2 App. to Pet. for Cert. 402a. In addition, the
licenses recited that they were "conditioned upon the full and
timely payment of all monies due pursuant to ... the terms of the
Commission's installment plan as set forth in the Note and Security
Agreement executed by the licensee," and that "[f]ailure to comply
with this condition will result in the automatic cancellation of
this authorization." Radio Station Authorization for Broadband PCS
(issued to NextWave Jan. 3, 1997),2 App. to Pet. for Cert.
388a.
After the C-Block and F-Block licenses were awarded, several
successful bidders, including NextWave, experienced difficulty
obtaining financing for their operations and petitioned the
Commission to restructure their installmentpayment obligations. See
12 FCC Rcd. 16436, ~ 11 (1997). The Commission suspended the
installment payments, 12 FCC Rcd. 17325 (1997); 13 FCC Rcd. 1286
(1997), and adopted several options that allowed C-Block licensees
to surrender some or all of their licenses for full or partial
forgiveness of their outstanding debt. See 12 FCC Rcd. 16436, ~ 6;
13 FCC Rcd. 8345 (1998). It set a deadline of June 8, 1998, for
licensees to elect a restructuring option, and of October 29, 1998,
as the last date to resume installment payments. 13 FCC Rcd. 7413
(1998).
On June 8, 1998, after failing to obtain stays of the election
deadline from the Commission or the Court of Appeals for the
District of Columbia Circuit, NextWave filed for Chapter 11
bankruptcy protection in New York. See
In re NextWave Personal
Communications, Inc., 235 B. R. 263, 267 (Bkrtcy. Ct. SDNY
1998). It suspended payments to all creditors, including the FCC,
pending confirmation of a reorganization plan. NextWave initiated
an adversary proceed-
298
298 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
ing in the Bankruptcy Court, alleging that its $4.74 billion
indebtedness on the C-Block licenses was avoidable as a "fraudulent
conveyance" under § 544 of the Bankruptcy Code, 11 U. S. C. § 544,
because, by the time the Commission actually conveyed the licenses,
their value had declined from approximately $4.74 billion to less
than $1 billion. The Bankruptcy Court agreed l-ruling in effect
that the company could keep its C-Block licenses for the reduced
price of $1.02 billion-and the District Court affirmed.
NextWave
Personal Communications, Inc. v.
FCC, 241 B. R. 311,
318319 (SDNY 1999). The Court of Appeals for the Second Circuit
reversed, holding that, although the Bankruptcy Court might have
jurisdiction over NextWave's underlying debts to the FCC, it could
not change the conditions attached to NextWave's licenses.
In re
NextWave Personal Communications, Inc., 200
F.3d 43, 55-56 (1999)
(per curiam). The Second Circuit
also held that since, under FCC regulations, "NextWave's obligation
attached upon the close of the auction," there had been no
fraudulent conveyance by the FCC acting in its capacity as
creditor.
Id., at 58.
Following the Second Circuit's decision, NextWave prepared a
plan of reorganization that envisioned payment of a single lump sum
to satisfy the entire remaining $4.3 billion obligation for
purchase of the C-Block licenses, including interest and late fees.
The FCC objected to the plan, asserting that NextWave's licenses
had been canceled automatically when the company missed its first
payment deadline in October 1998. The Commission simultaneously
announced that NextWave's licenses were "available for auction
under the automatic cancellation provisions" of the FCC's
regulations.
Public Notice, Auction ofC and F Block Broadband
PCS Licenses, 15 FCC Rcd. 693 (2000). NextWave sought
1 We do not reach the merits of the determination that the
licenses should be valued as of the time they were conveyed, rather
than as of the time NextWave won the auction entitling it to
conveyance.
299
emergency relief in the Bankruptcy Court, which declared the
FCC's cancellation of respondent's licenses "null and void" as a
violation of various provisions of the Bankruptcy Code.
In re
NextWave Personal Communications, Inc., 244 B. R. 253, 257-258
(Bkrtcy. Ct. SDNY 2000). Once again, the Court of Appeals for the
Second Circuit reversed.
In re Federal Communications
Commission, 217 F.3d
125 (2000). Granting the FCC's petition for a writ of mandamus,
the Second Circuit held that "[e]xclusive jurisdiction to review
the FCC's regulatory action lies in the courts of appeals" under 47
U. S. C. § 402, and that since the reauction decision was
regulatory, proclaiming it to be arbitrary was "outside the
jurisdiction of the bankruptcy court." 217 F. 3d, at 139, 136. The
Second Circuit noted, however, that "NextWave remains free to
pursue its challenge to the FCC's regulatory acts."
Id., at
140.
NextWave filed a petition with the FCC seeking reconsideration
of the license cancellation, denial of which is the gravamen of the
cases at bar.
In the Matter of Public Notice DA 00-.1,9
Auction of C
and F Block Broadband PCS Licenses, Order on
Reconsideration, 15 FCC Red. 17500 (2000). NextWave appealed
that denial to the Court of Appeals for the D. C. Circuit pursuant
to 47 U. S. C. § 402(b), asserting that the cancellation was
arbitrary and capricious, and contrary to law, in violation of the
Administrative Procedure Act, 5 U. S. C. § 706, and the Bankruptcy
Code. The Court of Appeals agreed, holding that the FCC's
cancellation of NextWave's licenses violated 11 U. S. C. § 525:
"Applying the fundamental principle that federal agencies must obey
all federal laws, not just those they administer, we conclude that
the Commission violated the provision of the Bankruptcy Code that
prohibits governmental entities from revoking debtors' licenses
solely for failure to pay debts dischargeable in bankruptcy."
254 F.3d
130, 133 (2001). We granted certiorari. 535 U. S. 904
(2002).
300
300 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
II
The Administrative Procedure Act requires federal courts to set
aside federal agency action that is "not in accordance with law," 5
U. S. C. § 706(2)(A)-which means, of course,
any law, and
not merely those laws that the agency itself is charged with
administering. See,
e. g., Citizens to Preserve Overton Park,
Inc. v.
Volpe, 401 U. S. 402, 413-414
(1971) ("In all cases agency action must be set aside if the action
was 'arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law' or if the action failed to meet
statutory, procedural, or constitutional requirements"). Respondent
contends, and the Court of Appeals for the D. C. Circuit held, that
the FCC's revocation of its licenses was not in accordance with §
525 of the Bankruptcy Code.
Section 525(a) provides, in relevant part:
"[A] governmental unit may not ... revoke ... a license ... to
... a person that is ... a debtor under this title ... solely
because such ... debtor ... has not paid a debt that is
dischargeable in the case under this title .... " 2
2 The full text of 11 U. S. C. § 525(a) reads as follows:
"Except as provided in the Perishable Agricultural Commodities
Act, 1930, the Packers and Stockyards Act, 1921, and section 1 of
the Act entitled 'An Act making appropriations for the Department
of Agriculture for the fiscal year ending June 30, 1944, and for
other purposes,' approved July 12, 1943, a governmental unit may
not deny, revoke, suspend, or refuse to renew a license, permit,
charter, franchise, or other similar grant to, condition such a
grant to, discriminate with respect to such a grant against, deny
employment to, terminate the employment of, or discriminate with
respect to employment against, a person that is or has been a
debtor under this title or a bankrupt or a debtor under the
Bankruptcy Act, or another person with whom such bankrupt or debtor
has been associated, solely because such bankrupt or debtor is or
has been a debtor under this title or a bankrupt or debtor under
the Bankruptcy Act, has been insolvent before the commencement of
the case under this title, or during the case but before the debtor
is granted or denied a discharge, or has not paid a debt that is
dischargeable in the case under this title or that was discharged
under the Bankruptcy Act."
301
No one disputes that the Commission is a "governmental unit"
that has "revoke[dJ" a "license," nor that NextWave is a "debtor"
under the Bankruptcy Act. Petitioners argue, however, that the FCC
did not revoke respondent's licenses "solely because" of
nonpayment, and that, in any event, NextWave's obligations are not
"dischargeable" "debt[sJ" within the meaning of the Bankruptcy
Code. They also argue that a contrary interpretation would
unnecessarily bring § 525 into conflict with the Communications
Act. We find none of these contentions persuasive, and discuss them
in turn.
A
The FCC has not denied that the proximate cause for its
cancellation of the licenses was NextWave's failure to make the
payments that were due. It contends, however, that § 525 does not
apply because the FCC had a "valid regulatory motive" for the
cancellation. Brief for Petitioners Arctic Slope Regional Corp. et
aL 19; see Brief for Petitioner FCC 17. In our view, that factor is
irrelevant. When the statute refers to failure to pay a debt as the
sole cause of cancellation ("solely because"), it cannot reasonably
be understood to include, among the other causes whose presence can
preclude application of the prohibition, the governmental unit's
mo
tive in effecting the cancellation. Such a reading would
deprive § 525 of all force. It is hard to imagine a situation in
which a governmental unit would not have some further motive behind
the cancellation-assuring the financial solvency of the licensed
entity,
e. g., Perez v.
Campbell, 402 U. S. 637 (1971);
In re The Bible Speaks, 69 B. R. 368, 374 (Bkrtcy. Ct. Mass.
1987), or punishing lawlessness,
e. g., In re Adams, 106 B.
R. 811, 827 (Bkrtcy. Ct. NJ 1989);
In re Colon, 102 B. R.
421, 428 (Bkrtcy. Ct. ED Pa. 1989), or even (quite simply) making
itself financially whole. Section 525 means nothing more or less
than that the failure to pay a dischargeable debt must alone be the
proximate cause of the cancellation-the act or event that triggers
the agency's decision to cancel,
302
302 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
whatever the agency's ultimate motive in pulling the trigger may
be.
Some may think (and the opponents of § 525 undoubtedly thought)
that there
ought to be an exception for cancellations that
have a valid regulatory purpose. Besides the fact that such an
exception would consume the rule, it flies in the face of the fact
that, where Congress has intended to provide regulatory exceptions
to provisions of the Bankruptcy Code, it has done so clearly and
expressly, rather than by a device so subtle as denominating a
motive a cause. There are, for example, regulatory exemptions from
the Bankruptcy Code's automatic stay provisions. 11 U. S. C. §
362(b)(4). And even § 525(a) itself contains explicit exemptions
for certain Agriculture Department programs, see n. 2,
supra. These latter exceptions would be entirely superfluous
if we were to read § 525 as the Commission proposes-which means, of
course, that such a reading must be rejected. See
United
States v.
Nordic Village, Inc., 503 U. S. 30, 35-36
(1992).
B
Petitioners contend that NextWave's license obligations to the
Commission are not "debt[s] that [are] dischargeable" in
bankruptcy. 11 U. S. C. § 525(a). First, the FCC argues that
"regulatory conditions like the full and timely payment condition
are not properly classified as 'debts'" under the Bankruptcy Code.
Brief for Petitioner FCC 33. In its view, the "financial nature of
a condition" on a license "does not convert that condition into a
debt."
Ibid. This is nothing more than a retooling of
petitioners' recurrent theme that "regulatory conditions" should be
exempt from § 525. No matter how the Commission casts it, the
argument loses. Under the Bankruptcy Code, "debt" means "liability
on a claim," 11 U. S. C. § 101(12), and "claim," in turn, includes
any "right to payment," § 101(5)(A). We have said that "[c]laim"
has "the broadest available definition,"
Johnson v.
Home
State Bank, 501 U.
S. 78, 83 (1991), and have held that the
303
"plain meaning of a 'right to payment' is nothing more nor less
than an enforceable obligation, regardless of the objectives the
State seeks to serve in imposing the obligation,"
Pennsylvania
Dept. of Public Welfare v.
Davenport, 495 U. S. 552, 559
(1990). See also
Ohio v.
Kovacs, 469 U. S. 274 (1985). In
short, a debt is a debt, even when the obligation to pay it is also
a regulatory condition.
Petitioners argue that respondent's obligations are not
"dischargeable" in bankruptcy because it is beyond the
jurisdictional authority of bankruptcy courts to alter or modify
regulatory obligations. Brief for Petitioners Arctic Slope Regional
Corp. et al. 28-29; Brief for Petitioner FCC 30-31.
Dischargeability, however, is not tied to the existence of such
authority. A preconfirmation debt is dischargeable unless it falls
within an express exception to discharge. Subsection 1141(d) of the
Bankruptcy Code states that, except as otherwise provided therein,
the "confirmation of a plan [of reorganization] ... discharges the
debtor from
any debt that arose before the date of such
confirmation," 11 U. S. C. § 1141(d)(1)(A) (emphasis added), and
the only debts it excepts from that prescription are those
described in § 523, see § 1141(d)(2). Thus, "[e]xcept for the nine
kinds of debts saved from discharge by 11 U. S. C. § 523(a), a
discharge in bankruptcy discharges the debtor
from all debts
that arose before bankruptcy. § 727(b)."
Kovacs, supra,
at 278 (emphasis added).
Artistically symmetrical with petitioners' contention that the
Bankruptcy Court has no power to alter regulatory obligations is
their contention that the D. C. Circuit has no power to modify or
discharge a debt. See Brief for Petitioner FCC 31-32; Brief for
Petitioner Arctic Slope Regional Corp. et al. 32, n. 9. Just as the
former is irrelevant to whether the Bankruptcy Court can discharge
a debt, so also the latter is irrelevant to whether the D. C.
Circuit can set aside agency action that violates § 525. That court
did not seek to modify or discharge the debt, but merely prevented
the FCC from
304
304 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
violating § 525 by canceling licenses because of failure to pay
debts dischargeable by bankruptcy courts.
C
Finally, our interpretation of § 525 does not create any
conflict with the Communications Act. It does not, as petitioners
contend, obstruct the functioning of the auction provisions of 47
U. S. C. § 309(j), since nothing in those provisions demands that
cancellation be the sanction for failure to make agreed-upon
periodic payments. Indeed, nothing in those provisions even
requires the Commission to permit payment to be made over time,
rather than leaving it to impecunious bidders to finance the full
purchase price with private lenders. What petitioners describe as a
conflict boils down to nothing more than a policy preference on the
FCC's part for (1) selling licenses on credit and (2) canceling
licenses rather than asserting security interests in licenses when
there is a default. Such administrative preferences cannot be the
basis for denying respondent rights provided by the plain terms of
a law. "'[W]hen two statutes are capable of coexistence, it is the
duty of the courts, absent a clearly expressed congressional
intention to the contrary, to regard each as effective.'" J.
E.
M. Ag Supply, Inc. v.
Pioneer HiBred International,
Inc., 534 U. S.
124, 143-144 (2001) (quoting
Morton v.
Mancari,
417 U. S. 535,
551 (1974)). There being no inherent conflict between § 525 and the
Communications Act, "we can plainly regard each statute as
effective." J.
E. M., supra, at 144. And since § 525
circumscribes the Commission's permissible action, the revocation
of NextWave's licenses is not in accordance with law. See 5 U. S.
C. § 706.
III*
The dissent finds it "dangerous ... to rely exclusively upon the
literal meaning of a statute's words,"
post, at 311
(opinion
*JUSTICE STEVENS does not join this Part.
305
of BREYER, J.). Instead, it determines, in splendid isolation
from that language,3 the
purpose of the statute, which it
takes to be "to forbid discrimination against those who are, or
were, in bankruptcy and, more generally, to prohibit governmental
action that would undercut the 'fresh start' that is bankruptcy's
promise,"
post, at 313. It deduces these language-trumping
"purposes" from the most inconclusive of indications. First, the
ambiguous title of § 525(a), "Protection against discriminatory
treatment,"
ibid. This, of course, could as well refer to
discrimination against
impending bankruptcy, aka insolvency.
Second, its perception that the other prohibitions of § 525(a)
apply only to acts "done solely for bankruptcy-related reasons."
Ibid. We do not share that perception. For example, the
prohibition immediately preceding the one at issue here forbids
adverse government action taken because the debtor "has been
insolvent before the commencement of the case under this title, or
during the case but before the debtor is granted or denied a
discharge." That seems to us clearly tied to insolvency alone (plus
the mere fact of subsequent or contemporaneous bankruptcy), and
does not require some additional motivation based on bankruptcy.
The dissent's third indication of "purpose" consists of the
ever-available snippets of legislative history,
post, at
314-315.
The dissent does eventually get to the statutory text at issue
here: Step two of its analysis is to ask what interpretation of
that text could possibly fulfill its posited "purposes." 4
3 The portion of the dissenting opinion that deduces the
statute's purposes, Part II,
post, at 313-315, contains no
discussion of the portion of § 525(a) at issue here.
4 The second of the purposes, by the way-prohibiting government
action that "would undercut the 'fresh start' that is bankruptcy's
promise,"
post, at 313-plays no real role in the dissent's
analysis, if indeed such a circular criterion could ever playa role
in any analysis. The whole issue before us can be described as
asking what the Bankruptcy Code's promise of a "fresh start"
consists of. Rather than reframing the question, our interpretation
concretely accords a "fresh start" where the dissent would
306
306 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
"One obvious way," the dissent concludes, "is to interpret the
relevant phrase, 'solely because' of nonpayment of 'a debt that is
dischargeable,' as requiring something more than a purely factual
connection .... The statute's words are open to the interpretation
that they require a certain relationship between (1) the
dischargeability of the debt and (2) the decision to revoke
the license."
Post, at 316. To demonstrate that "openness,"
the dissent gives the example of a "rule telling apartment owners
that they cannot refuse to rent 'solely because a family has
children who are adopted.'"
Post, at 319. Such a rule, it
says quite correctly, is most reasonably read as making the
adoptive nature of the children part of the prohibited motivation.
But the example differs radically from the cases before us in two
respects: (1) because an adopted child is the exception rather than
the rule, and (2) because the class of children other than adopted
children is surely not a disfavored one. In the cases before us, by
contrast, the descriptive clause describes the rule rather than the
exception. (As the dissent acknowledges, "virtually all debts" are
dischargeable,
post, at 310.) And the debts that do not fall
within the rule (nondischargeable debts) are clearly disfavored by
the Bankruptcy Code. To posit a text similar to the one before us,
the dissent should have envisioned a rule that prohibited refusal
to rent "solely because a family has children who are no more than
normally destructive." Would the
"no-more-than-normaldestructiveness" of the children be a necessary
part of the apartment owner's motivation before he is in violation
of the rule? That is to say, must he refuse to rent specifically
because the children are no more than normally destructive?
Of course not. The provision is most reasonably read as
establishing an
exception to the prohibition, rather than
adding a motivation requirement: The owner may refuse to rent to
families with destructive children. And the same is obvi-
not-where there is revocation of a license solely because of a
bankrupt's failure to pay dischargeable debts.
307
ously true here: The government may take action that is
otherwise forbidden when the debt in question is one of the
disfavored class that is nondischargeable.
In addition to distorting the text of the provision, the
dissent's interpretation renders the provision superfluous. The
purpose of "forbid[ding] discrimination against those who are, or
were, in bankruptcy,"
post, at 313, is already explicitly
achieved by
another portion of § 525(a), which prohibits
termination of a license "solely because [the] bankrupt or debtor
is or has been ... a bankrupt or debtor under the Bankruptcy
Act." 11 U. s. C. § 525(a) (emphasis added). The dissent would have
us believe that the language "solely because [the] bankrupt or
debtor ... has not paid a debt that is dischargeable" merely
achieves the very same objective through inappropriate language. We
think Congress meant what it said: The government is not to revoke
a bankruptcy debtor's license solely because of a failure to pay
his debts.
The dissent makes much of the "serious anomaly" that would arise
from permitting "every car salesman, every residential home
developer, every appliance company [to] threaten repossession of
its product if a buyer does not pay," but denying that power to the
government alone,
post, at 312. It is by no means clear than
any anomaly exists. The car salesman, residential home developer,
etc., can obtain repossession of his product only (as the dissent
acknowledges) "if [he] has taken a security interest in the
product,"
ibid. It is neither clear that a private party
can take and enforce a security interest in an FCC license,
see,
e. g., In re Cheskey, 9 FCC Rcd. 986, ~ 8 (1994), nor
that the FCC
cannot. (As we described in our statement of
facts, the FCC purported to take such a security interest in the
present cases. What is at issue, however, is not the enforcement of
that interest in the bankruptcy process,5 but rather elimination of
the li-
5 The FCC initially participated in the bankruptcy proceedings
as a creditor. See,
e. g.,
In re NextWave Personal
Communications, Inc., 235
308
308 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
Opinion of STEVENS, J.
censes through the regulatory step of "revoking" themaction that
the statute specifically forbids.) In any event, if there is an
anomaly it is one that has been created by Congress-a state of
affairs the dissent does not think intolerable, since its own
disposition creates the anomaly of allowing the government to
reclaim its property by means other than the enforcement of a
security interest, but not permitting private individuals to do
so.
***
For the reasons stated, the judgment of the Court of Appeals for
the District of Columbia Circuit is
Affirmed.
JUSTICE STEVENS, concurring in part and concurring in the
judgment.
Because these are such close cases, it seems appropriate to
identify the considerations that have persuaded me to join the
majority. When I first read 11 U. S. C. § 525(a), I thought it was
not intended to apply to cases in which the licensor was also a
creditor, but rather, as JUSTICE BREYER persuasively argues, was
merely intended to protect the debtor from discriminatory license
terminations. I remain persuaded that that is the principal purpose
of the provision. It is significant, however, that the first words
in the section describe three exceptions for statutes, one of which
contains language remarkably similar to the language in the
security
B. R. 314 (Bkrtcy. Ct. SDNY 1999). However, after NextWave
prepared a plan of reorganization the FCC asserted that the
licenses had been automatically canceled and gave notice of its
intent to reauction them. The Second Circuit treated this decision
as "regulatory," and thus outside the scope of the Bankruptcy
Court's jurisdiction. See
In re Federal Communications
Commission, 217 F.3d
125, 139, 136 (2000). The decision by the D. C. Circuit
recognized and seemingly approved that distinction. See
254 F.3d
130, 143 (2001).
309
agreements executed by respondents in these cases.1 Those
exceptions introduce an ambiguity.
On the one hand, they indicate that Congress did not intend §
525(a) to limit the Executive's right to condition the retaining of
a federal license on considerations similar to those on which a
creditor relies. The reasons for making an exception for licenses
to deal in perishable commodities would seem equally applicable to
licenses to exploit the public airwaves. Indeed, there is probably
a greater public interest in allowing prompt cancellation of
spectrum licenses than of commodities dealers' licenses because of
the importance of facilitating development of the broadcast
spectrum.
On the other hand, the exceptions demonstrate that Congress
realized the breadth of the language in § 525(a). Rather than make
a categorical exception that would have accommodated not only the
three cases expressly covered by the text, but also cases like the
ones before the Court today, the drafters retained the broad
language that the Court finds decisive. That language endorses a
general rule that gives priority to the debtor's interest in
preserving control of an important asset of the estate pending the
completion of bankruptcy proceedings.
I do not believe that the application of that general rule to
these cases will be unfair to the Federal Communications Commission
either as a regulator or as a creditor. If the
1 The Perishable Agricultural Commodities Act, 1930, provides,
in part:
"Whenever an applicant has paid the prescribed fee the Secretary
... shall issue to such applicant a license, which shall entitle
the licensee to do business as a commission merchant ... , but said
license
shall automatically terminate ... unless the licensee
... pays the applicable renewal fee[} [T]he license of any
licensee
shall terminate upon said licensee ... being discharged
as a bankrupt, unless the Secretary finds upon examination of
the circumstances of such bankruptcy ... that such circumstances do
not warrant termination." 7 U. S. C. § 499d(a) (emphases
added).
The security agreements between NextWave and the Government
provided that "the License shall be automatically canceled" upon
NextWave's defaulting on an installment payment. 2 App. to Pet. for
Cert. 409a.
310
310 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
BREYER, J., dissenting
bankrupt licensee is unable to fulfill other conditions of its
license, the regulator may cancel the licenses for reasons that are
not covered by § 525(a).2 Moreover, given the fact that the
Commission has a secured interest in the license, if the licensee
can obtain the financing that will enable it to perform its
obligations in full, the debt will ultimately be paid. In sum, even
though I agree with JUSTICE BREYER'S view that the literal text of
a statute is not always a sufficient basis for determining the
actual intent of Congress, in these cases I believe it does produce
the correct answer.
JUSTICE BREYER, dissenting.
The statute before us says that the Government may not revoke a
license it has granted to a person who has entered bankruptcy
"solely because [the bankruptcy debtor] ... has not paid a debt
that is dischargeable in [bankruptcy]." 11 U. s. C. § 525(a)
(emphasis added). The question is whether the italicized words
apply when a government creditor, having taken a security interest
in a license sold on an installment plan, revokes the license not
because the debtor has gone bankrupt, but simply because the debtor
has failed to pay an installment as promised. The majority answers
this question in the affirmative. It says that the italicized words
mean
"nothing more or less than that the failure to pay a
dischargeable debt must alone be the proximate cause of the
cancellation-the act or event that triggers the agency's decision
to cancel, whatever the agency's ultimate motive ... may be."
Ante, at 301-302 (emphasis added).
Hence, if the debt is a dischargeable debt (as virtually all
debts are), then once a debtor enters bankruptcy, the Gov-
2 The Senate Report explained that § 525(a) "does not prohibit
consideration of other factors, such as future financial
responsibility or ability, and does not prohibit imposition of
requirements such as net capital rules, if applied
nondiscriminatorily." S. Rep. No. 95-989, p. 81 (1978).
311
ernment cannot revoke the license-irrespective of the
Government's motive. That, the majority writes, is what the statute
says. Just read it. End of the matter.
It is dangerous, however, in any actual case of interpretive
difficulty to rely exclusively upon the literal meaning of a
statute's words divorced from consideration of the statute's
purpose. That is so for a linguistic reason. General terms as used
on particular occasions often carry with them implied restrictions
as to scope. "Tell all customers that ... " does not refer to every
customer of every business in the world. That is also so for a
legal reason. Law as expressed in statutes seeks to regulate human
activities in particular ways. Law is tied to life. And a failure
to understand how a statutory rule is so tied can undermine the
very human activity that the law seeks to benefit. "No vehicles in
the park" does not refer to baby strollers or even to tanks used as
part of a war memorial. See Fuller, Positivism and Fidelity to
Law-A Reply to Professor Hart, 71 Harv. L. Rev. 630, 663
(1958).
I
In my view this statute's language is similarly restricted.
A restriction implicitly limits its scope to instances in which
a government's license revocation is related to the fact that the
debt was dischargeable in bankruptcy. Where the fact of bankruptcy
is totally irrelevant, where the government's action has no
relation either through purpose or effect to bankruptcy or to
discharge ability, where consequently the revocation cannot
threaten the bankruptcy-related concerns that underlie the statute,
then the revocation falls outside the statute's scope. Congress
intended this kind of exception to its general language in order to
avoid consequences which, if not "absurd," are at least at odds
with the statute's basic objectives. Cf.
United States v.
Kirby, 7 Wall. 482, 486 (1869) ("All laws should receive a
sensible construction. General terms should be so limited in their
application as not to lead to injustice, oppression, or an absurd
consequence").
312
312 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
BREYER, J., dissenting
The Court's literal interpretation of the statute threatens to
create a serious anomaly. It seems to say that a government cannot
ever enforce a lien on property that it has sold on the
installment plan as long as (1) the property is a license, (2) the
buyer has gone bankrupt, and (3) the government wants the license
back solely because the buyer did not pay for it. After all, in
such circumstances, it is virtually
always the case that the
buyer will not have paid a debt that is in fact "dischargeable,"
and that "event" alone will have "trigger[ed]" the government's
"decision" to revoke the license. See
supra, at 310.
Yet every private commercial seller, every car salesman, every
residential home developer, every appliance company can threaten
repossession of its product if a buyer does not pay-at least if the
seller has taken a security interest in the product.
E. g.,
Farrey v.
Sanderfoot, 500 U. S. 291, 297
(1991). Why should the government (state or federal), and the
government alone, find it impossible to repossess a product,
namely, a license, when the buyer fails to make installment
payments?
The facts of these cases illustrate the problem. NextWave bought
broadcasting licenses from the Federal Communications Commission
(FCC) for just under $5 billion. It promised to pay the money under
an installment plan. It agreed that its possession of the licenses
was "conditioned upon full and timely payment," that failure to pay
would result in the licenses' "automatic cancellation," that the
Government would maintain a "fi[r]st lien on and continuing
security interest" in the licenses, and that it would "not dispute"
the Government's "rights as a secured party." 2 App. to Pet. for
Cert. 388a, 392a-393a, 402a-404a. N extWave never made its
installment payments. It entered bankruptcy. And the FCC declared
the licenses void for nonpayment. In a word, the FCC sought to
repossess the licenses so that it could auction the related
spectrum space to other users. As I have said, the law ordinarily
permits a
313
private creditor who has taken an appropriate security interest
to repossess property for nonpayment-even after bankruptcy. See,
e. g., Farrey, supra, at 297. Would Congress want to say
that the Government cannot
ever do the same?
II
To read the statute in light of its purpose makes clear that
Congress did not want
always to prohibit the Government from
enforcing a sales contract through repossession. Nor did it intend
an interpretation so broad that it would threaten unnecessarily to
deprive the American public of the full value of public assets that
it owns. Cf. 47 U. S. C. §§ 309(j)(1)-(4) (authorization of
spectrum auctions with restrictions "to protect the public
interest"). Congress instead intended the statute's language to
implement a less far-reaching, but more understandable, objective.
It sought to forbid discrimination against those who are, or were,
in bankruptcy and, more generally, to prohibit governmental action
that would undercut the "fresh start" that is bankruptcy's promise,
see
Grogan v.
Garner, 498 U. S. 279, 286
(1991). Where that kind of government activity is at issue, the
statute forbids revocation. But where that kind of activity is not
at issue, there is no reason to apply the statute's
prohibition.
The statute's title, its language, and its history all support
this description of its purpose. The title says, "Protection
against discriminatory treatment." 11 U. S. C. § 525(a). The
statute's text, read as a whole, see Appendix,
infra,
strongly suggests that bankruptcy-related discrimination is the
evil at which the statute aims. A phrase is sometimes best known by
the statutory company it keeps. See,
e. g.,
Gutierrez
v.
Ada, 528 U.
S. 250, 255 (2000). And here the relevant phrase is immersed
within language that describes a host of acts, including discharges
from employment and refusals to hire, and forbids them only where
done solely for bankruptcy-related reasons, i.
e., a
person's being a bank-
314
314 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
BREYER, J., dissenting
ruptcy debtor, having been a bankruptcy debtor, or having become
insolvent before or during a bankruptcy case. See Appendix,
infra.
The statute's history demonstrates an antidiscriminatory
objective. House and Senate Reports describe the relevant section,
§ 525(a), as "the anti-discrimination provision." S. Rep. No.
95-989, p. 81 (1978) (hereinafter S. Rep.); H. R. Rep. No. 95-595,
p. 367 (1977) (hereinafter H. R. Rep.). The House Report says that
its "purpose ... is to prevent an automatic reaction against an
individual for availing himself of the protection of the bankruptcy
laws."
Id., at 165. In describing related provisions, the
House Report refers to an intent to prevent the Government from
punishing "bankruptcy per se" by denying "a license, grant, or
entitlement" on the premise "that bankruptcy itself is sufficiently
repre[h]ensible behavior to warrant ... a sanction."
Id., at
286. It adds that the overriding goal was "to eliminate any special
treatment of bankruptcy" in laws of the United States.
Id.,
at 285.
In addition, the House and Senate Reports describe § 525(a) as
an effort to codify this Court's holding in
Perez v.
Campbell, 402
U. S. 637 (1971). S. Rep., at 81; H. R. Rep., at 165, 366. The
Court there held that the federal Bankruptcy Act pre-empted a state
statute that suspended the driver's license of any person who had
not paid a motor accident judgment (explicitly including a judgment
discharged by bankruptcy). 402 U. S., at 652. The Court rested its
holding on the theory that the state statute's failure to exempt
discharged debts "frustrate[d] the full effectiveness" of the
Bankruptcy Act's promise of a "fresh start."
Ibid.
Further, the House Report, along with House floor statements,
assured the enacting Congress that the statute would allow
"governmental units to pursue appropriate regulatory policies." E.
g., H. R. Rep., at 165. It was not meant "to interfere with
legitimate regulatory objectives," 123 Congo
315
Rec. 35673 (1977) (remarks of Rep. Butler); see also H. R. Rep.,
at 286. It might seem fair to count as one such objective the
receipt by the public of payment for a partially regulated public
asset that the public, through the Government, has sold. Cf. 47 U.
S. C. § 309(j)(3)(C).
Finally, nothing in the statute's history suggests any
congressional effort to prevent Government repossession where
bankruptcy-related concerns, such as "fresh start" concerns, have
no relevance. The statute does contain exemptions, but those
exemptions, for agriculture-related licenses, are not to the
contrary. 11 U. S. C. § 525(a). As I read the statute, the
exemptions simply excuse, say, meatpacking licensing agencies from
a rule that would otherwise forbid taking negative account of, say,
a prior bankruptcy (say, by providing that a license "shall
terminate upon [the] licensee ... being discharged as a bankrupt,"
7 U. S. C. § 499d(a); see
ante, at 308-309, and n. 1
(STEVENS, J., concurring in part and concurring in judgment)). To
read them as permitting consideration of former bankruptcies where
the food supply is at issue makes them understandable. To read them
as support for the majority's view-as authorizing the Government to
revoke meatpacking, but only meatpacking, licenses upon
nonpayment-makes little sense to me.
The statute's purposes, then, are to stop bankruptcyrelated
discrimination and to prevent government licensors from interfering
with the "fresh start" that bankruptcy promises, but not to prevent
government debt-collection efforts where these concerns are not
present. Unlike the majority, I believe it possible to interpret
the statute's language in a manner consistent with these
purposes.
III
The provision's congressional authors expected courts to look
for interpretations that would conform the statute's language to
its purposes. They conceded that the provision's
316
316 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
BREYER, J., dissenting
"ultimate contours" were "not yet clear." H. R. Rep., at 165.
But they said that the courts would determine "the extent of the
discrimination that is contrary to bankruptcy policy."
Ibid.
And they thought the courts would do so "in pursuit of sound
bankruptcy policy." S. Rep., at 81; H. R. Rep., at 367.
One obvious way to carry out this interpretive mandate is to
interpret the relevant phrase, "solely because" of nonpayment of "a
debt that is dischargeable," as requiring something more than a
purely factual connection, i.
e., something more than a
causal connection between a government's revocation of a license
and nonpayment of a debt that is, merely
in fact,
dischargeable. The statute's words are open to the interpretation
that they require a certain relationship between (1) the
dischargeability of the debt and (2) the decision to revoke
the license. That necessary relationship would exist if the debt's
discharge ability played a role in the government's decisionmaking
through motivation-if, for example, the fact that the debt was
dischargeable (or the fact of bankruptcy, etc.)
mattered to
the FCC. The necessary relationship would also exist if the
government's revocation interfered in some significant way with
bankruptcy's effort to provide a "fresh start." But otherwise,
where the fact of dischargeability is irrelevant, where it has
nothing to do with the government's decision either by way of
purpose or effect, the government's license revocation would fall
outside the scope of the provision.
This interpretation is consistent with the statute's language.
It simply takes account not only of the statutory language's
factual content-i.
e., its reference to a debt that is
in
fact dischargeable-but also its intended significance. A debt's
discharge ability cannot simply be a coincidence but must bear a
meaningful relation to the prohibited government action. Cf.
Staples v.
United States, 511 U. S. 600, 619-620
(1994) (statute forbidding possession of a machinegun requires not
simply that the gun,
in fact, discharge auto-
317
matically, but also that the defendant know that the gun meets
the statute's description).
This interpretation is consistent with several lower court
efforts to interpret the statute. See,
e. g., Toth v.
Michigan State Housing Development Authority, 136 F.3d
477, 480
(CA6), cert. denied, 524 U. S. 954 (1998);
In re Exquisito Services, Inc., 823 F.2d
151, 153
(CA5 1987);
In re Smith, 259 B. R. 901,
906 (Bkrtcy. App. Panel CA8 2001). But see
In re Stoltz,
315 F.3d
80 (CA2 2002). It would avoid handicapping government
debt collection efforts in ways that Congress did not intend. It
would further the statute's basic purpose-preventing discrimination
and preserving bankruptcy's "fresh start." And it would avoid
interfering with legitimate public debt collection efforts. An
individual could not generally promise to pay for a public asset,
go into bankruptcy, avoid the payment obligation, and keep the
asset-even in the absence of the evils at which this statute is
aimed.
This statutory approach is far from novel. Well over a century
ago, the Court interpreted a statute that forbade knowing and
willful obstruction of the mail as containing an implicit exception
permitting a local sheriff to arrest a mail carrier.
United
States v.
Kirby, 7 Wall., at 485-487. Justice Field,
writing for the Court, pointed out that centuries earlier the
British courts had interpreted a statute making it a felony to
break out of prison not to extend to a breakout when the prison is
on fire.
Id., at 487. And, similarly, the courts of Bologna
had interpreted a statute punishing severely "'whoever drew blood
in the streets'" not to extend to a surgeon faced with an
emergency.
Ibid. "[C]ommon sense," wrote Justice Field,
"accepts" these rulings.
Ibid. So too does common sense
suggest that we should interpret the present statute not to extend
to revocation efforts that are no more closely related to the
statute's objectives than are baby strollers to the "vehicles"
forbidden entry into the park. See
supra, at 311.
318
318 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
BREYER, J., dissenting
IV
The majority responds to my concerns in several ways.
First, it characterizes the dissent in a slightly exaggerated
manner, stating, for example, that I have "determine[d]" the
statute's
"purpose" in "splendid isolation from [its]
language," that bankruptcy's "fresh start" objective "plays no real
role in [my] analysis," and that that "criterion" is, in any event,
"circular."
Ante, at 305, and n. 4. I would refer the reader
to Parts II and III above (which contain considerable discussion of
statutory language and statutory history) and, in particular, to
the discussion of
Perez, a decision that relied upon the
"fresh start" objective in a way that the statute seeks to codify
and that my own suggested interpretation of the statute
incorporates. In my view, the language of the statute taken as a
whole-including its "insolvency" language,
ante, at
305-strongly suggests that Congress intended bankruptcy to have
something to do with the forbidden government action. See Appendix,
infra.
Second, the majority argues that my interpretation makes the
statute's "dischargeable debt" provision "superfluous," given
language forbidding revocation because a person" 'is ... a
[bankruptcy] debtor.'"
Ante, at 307 (emphasis deleted). I do
not see how that is so. A refusal to issue, say, a new dry
cleaner's license "solely because" a bankruptcy debtor once failed
to pay for other dry cleaner's licenses (now discharged debts) is
not necessarily the same as a refusal to issue a new license
"solely because" the debtor "has been ... a bankrupt," 11 U. S. C.
§ 525(a). And the statute's separate provisions simply cover this
differentiated bankruptcyrelated waterfront.
Third, the majority returns to the statutory language
prohibiting a government from revoking a license "solely because
[the bankrupt debtor] ... has not paid a debt that is
dischargeable,"
ibid. Ante, at 306-307. To my ear, this
language suggests a possible connection between dischargeability
and revocation. I have tried to test my linguistic
319
sense through analogy, imagining, for example, a regulatory rule
telling apartment owners that they cannot refuse to rent "solely
because a family has children who are adopted" (which,
notwithstanding the majority's complex discussion of "destructive
children,"
ante, at 306, seems linguistically comparable).
This language suggests the need for a connection between (1) the
fact of adoption and (2) the refusal (thereby exempting an owner
who accepts no children at all). Is it not, like the statute's
language, at least open to such an interpretation? That is the
linguistic point. It opens the door to a consideration of context
and purpose-which,
in any event, are relevant to determine
whether the statute contains an implicit exemption, see
supra, at 317.
Finally, the majority points out that, in the wake of a
complicated procedural history, these cases are now not about
"enforcement of [a security] interest in" the Bankruptcy Court.
Ante, at 307, and n. 5. But the majority's interpretation
certainly seems to cover that circumstance, and more. Under the
majority's understanding, a government creditor who seeks to
enforce a security interest in a broadcasting license (after the
bankruptcy stay has been lifted or after bankruptcy proceedings
terminate) would be seeking to repossess, and thereby to revoke,
that license "solely because" of the debtor's failure to pay a
"dischargeable" debt. After all, under such circumstances, "failure
to pay" the debt that is
in fact dischargeable would "alone
be the proximate cause" of the government's action.
Ante, at
301. It is "the act or event that triggers the agency's decision to
cancel, whatever the agency's ultimate motive."
Ante, at
301-302.
If I am right about this, the majority's interpretation means
that private creditors, say, car dealers, can enforce security
interests in the goods that they sell, namely, cars, but
governments cannot enforce security interests in items that they
sell, namely, licenses. (Whether a private party can "take and
enforce a security interest in an FCC license,"
ante, at
307, is beside this particular point.)
320
320 FCC
v. NEXTWAVE PERSONAL COMMUNICATIONS INC.
BREYER, J., dissenting
The matter is important.
In these very cases, the
Government sought to retake its licenses through enforcement of its
security interest. See,
e. g., In re NextWave Personal
Communications, Inc., 241 B. R. 311, 321 (SDNY) (affirming
denial of the Government's motion for relief from the automatic
stay under 11 U. S. C. § 362(d)(1)), rev'd,
200
F.3d 43, 45-46, 62, and n. 1
(CA2 1999) (reversing that
affirmance). The Court of Appeals for the District of Columbia
Circuit indicated that the FCC's revocation of the licenses, see
ante, at 307-308, is properly characterized as foreclosure
on collateral-i.
e., as an attempt to enforce liens. See
254 F.3d
130,
151 (CADC 2001); cf.
In re Kingsport Ventures,
L. P., 251 B. R. 841, 844 (ED Tenn. 2000) (private party's
power to use "revocation" to enforce interest in a license). But
because the Court of Appeals rested its decision on § 525(a)
grounds, it did not determine whether bankruptcy's automatic stay
blocked such foreclosure. 254 F. 3d, at 148-149, 156. See generally
11 U. S. C. §§ 362(a)(4)-(5) (staying enforcement of liens).
Consequently, if the majority believes that § 525(a) permits the
Government to enforce security interests in its license collateral,
it should remand these cases, permitting the Court of Appeals to
decide whether other bankruptcy provisions (such as § 362) block
the Government's efforts to do so.
I emphasize the point because the majority is right in thinking
that lien-enforcement difficulties create much of the anomaly I
fear-in effect divorcing the majority's reading from the statute's
basic purpose. Is it not reasonable to ask for reassurance on this
point, to ask what future interpretive corollary might rescue
government lien-enforcement efforts from the difficulties the
majority's statutory interpretation seems to create? Unless there
is an answer to this question, the majority's opinion holds out no
more than a slim
possibility of ad hoc adjustment based upon
future need. And such an adjustment, if it comes at all, may amount
to mere judicial
321
fiat-used to rescue an interpretation that rests too heavily
upon linguistic deduction and too little upon human purpose.
V
Because the Government, asserting its security interest, may be
able to show that revocation here bears no relationship to the
debt's "discharge ability" and would not otherwise improperly
interfere with the Code's "fresh start" objective, I would vacate
the Court of Appeals' judgment and remand for further proceedings.
I respectfully dissent.
APPENDIX TO OPINION OF BREYER, J.
The full text of 11 U. S. C. § 525(a) states:
"Protection against discriminatory treatment
"(a) Except as provided in the Perishable Agricultural
Commodities Act, 1930, the Packers and Stockyards Act, 1921, and
section 1 of the Act entitled 'An Act making appropriations for the
Department of Agriculture for the fiscal year ending June 30, 1944,
and for other purposes,' approved July 12, 1943, a governmental
unit may not deny, revoke, suspend, or refuse to renew a license,
permit, charter, franchise, or other similar grant to, condition
such a grant to, discriminate with respect to such a grant against,
deny employment to, terminate the employment of, or discriminate
with respect to employment against, a person that is or has been a
debtor under this title or a bankrupt or a debtor under the
Bankruptcy Act, or another person with whom such bankrupt or debtor
has been associated, solely because such bankrupt or debtor is or
has been a debtor under this title or a bankrupt or debtor under
the Bankruptcy Act, has been insolvent before the commencement of
the case under this title, or during the case but before the debtor
is granted or denied a discharge, or has not paid a debt that is
dischargeable in the case under this title or that was discharged
under the Bankruptcy Act."
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