OPINION OF THE COURT
LAMIE V. UNITED STATES TRUSTEE
540 U. S. ____ (2004)
SUPREME COURT OF THE UNITED STATES
NO. 02-693
JOHN M. LAMIE, PETITIONER
v. UNITED STATES
TRUSTEE
on writ of certiorari to the united states court of
appeals for the fourth circuit
[January 26, 2004]
Justice Kennedy delivered the
opinion of the Court.
Section 330(a)(1) of the
Bankruptcy Code, 11 U. S. C. §330(a)(1), regulates court
awards of professional fees, including fees for services rendered
by attorneys in connection with bankruptcy proceedings. Petitioner,
a bankruptcy attorney, sought compensation under the section for
legal services he provided to a bankrupt debtor after the
proceeding was converted to a chapter 7 bankruptcy. His application
for fees was denied by the Bankruptcy Court, the District Court,
and the United States Court of Appeals for the Fourth Circuit. Each
court held that in a chapter 7 proceeding §330(a)(1) does not
authorize payment of attorney’s fees unless the attorney has been
appointed under §327 of the Code. See 11 U. S. C. §§327 and
701
et seq. Petitioner was not so appointed, and his fee
request was denied. Having granted the petition for certiorari to
review this holding, we now affirm.
I
In 1994 Congress amended the
Bankruptcy Code. Bankruptcy Reform Act of 1994 (Act), 108 Stat.
4106. The subject of professional fees was addressed and
comprehensive changes were made. See 3 Collier on Bankruptcy ¶
;330.LH[5], pp. 330–75 to 330–76 (rev. 15th ed. 2003). Most of the
changes served to clarify the standards for the award of
professional fees; but various courts disagree over the proper
interpretation of the portion of the statute relevant to this
dispute, concerning attorney’s fees.
The Act replaced the predecessor section to
the one in issue here. Compare 108 Stat. 4130–4131 (§224(b) of the
Act amending 11 U. S. C. §330(a)), with 11 U. S. C.
§330(a) (1988 ed.). Before the 1994 Act, §330(a) had read as
follows:
“(a) After notice to
any
parties in interest and
to the United States trustee and a
hearing, and subject to sections 326, 328, and 329
of this
title, the court may award to a trustee,
to an
examiner,
to a professional person employed under section
327 or 1103
of this title, or to the debtor’s
attorney—
“(1) reasonable compensation for actual,
necessary services rendered by such trustee, examiner, professional
person, or attorney … and by any paraprofessional persons employed
by such trustee, professional person, or attorney . . . ; and
“(2) reimbursement for actual, necessary
expenses.”
Ibid. (emphasis added to highlight text later
deleted).
Pursuant to the 1994 Act, 11 U. S. C.
§330(a)(1) now reads as follows:
“(a)(1) After notice to the parties in interest and
the United States Trustee and a hearing, and subject to sections
326, 328, and 329, the court may award to a trustee, an examiner, a
professional person employed under section 327 or 1103—
“(A) reasonable compensation for actual,
necessary services rendered by the trustee, examiner, professional
person, or attorney and by any paraprofessional person employed by
any such person; and
“(B) reimbursement for actual, necessary
expenses.”
As can be noted, the 1994 enactment’s principal,
substantive alteration was its deletion of the five words at the
end of what was §330(a) and is now §330(a)(1): “or to the debtor’s
attorney.”
The deletion created apparent legislative
drafting error. It left current §330(a)(1) with a missing “or” that
infects its grammar (
i.e., “an examiner, [or] a
professional person …”). Furthermore, the Act’s inclusion of the
word “attorney” in §330(a)(1)(A) defeats the neat parallelism that
otherwise marks the relationship between §§330(a)(1) and
330(a)(1)(A) (
i.e., in §330(a)(1): “trustee, … examiner,
[or] professional person;” in §330(a)(1)(A): “trustee, examiner,
professional person, or attorney”) and so casts some doubt on the
proper presence of “attorney.” That the pre-1994 text had no
grammatical error and was parallel in its structure strengthens the
sense that error exists in the new text.
The Courts of Appeals for the Fifth and
Eleventh Circuits, when asked to interpret current §330(a)(1),
concluded that its language was plain irrespective of these quirks
and history. Under the statutory language as written, those courts
held, fees may be awarded to attorneys for services rendered only
to the extent they are payments to “a professional person employed
under §327,” see,
e.g., §327(a) (authorizing an appointed
trustee in a chapter 7 bankruptcy action to “employ one or more
attorneys … to represent or assist the trustee in carrying out the
trustee’s duties under this title”); §327(e) (authorizing an
appointed trustee in a chapter 7 bankruptcy action to “employ, for
a specified special purpose, other than to represent the trustee in
conducting the case, an attorney that has represented the debtor,
…”). See
In re Pro-Snax Distributors, Inc., 157
F. 3d 414 (CA5 1998);
In re American Steel Product,
Inc., 197 F. 3d 1354 (CA11 1999). The Courts of Appeals
for the Second, Third, and Ninth Circuits, in contrast, concluded
that the text’s apparent errors rendered the section ambiguous,
requiring consideration of the provision’s legislative history.
That history, those courts held, shows Congress intended §330(a)(1)
to continue to allow compensation of chapter 7 debtors’ attorneys,
irrespective of qualification under §327.
In re Ames Dept.
Stores, Inc., 76 F. 3d 66 (CA2 1996);
In re Top
Grade Sausage, Inc., 227 F. 3d 123 (CA3 2000);
In re Century Cleaning Services, Inc., 195 F. 3d
1053 (CA9 1999). See also 3 Collier on Bankruptcy,
supra,
¶ ;330.LH[5], at 330–75 to 330–76.
This interpretive divide became relevant to
petitioner in his representation of Equipment Services, Inc. (ESI).
ESI retained petitioner to prepare, file, and prosecute a chapter
11 bankruptcy proceeding on its behalf. He did so, all the while
representing ESI with the approval of the court under §327. See
In re Equipment Services, Inc., 290 F. 3d 739,
742 (CA4 2002) (case below). See also 11 U. S. C. §1107(a)
(authorizing debtor-in-possession to exercise the statutory rights
and powers of an estate trustee, including to retain counsel under
§327). Three months into the chapter 11 reorganization, the United
States Trustee (Government) filed a motion to convert the action
into a chapter 7 liquidation proceeding. The court granted the
Government’s motion and appointed an estate trustee pursuant to
§701, 11 U. S. C. §701(a). This terminated ESI’s status as
debtor-in-possession and so terminated petitioner’s service under
§327 as an attorney for the debtor-in-possession. Yet petitioner
continued to provide legal services to ESI, the debtor, even though
he did not have the trustee’s authorization to do so. He prepared
reports detailing debts incurred and property acquired since the
initial filing; he amended asset schedules; and he appeared at a
hearing on an adversary complaint.
In due course petitioner filed an application
seeking fees under §330(a)(1) for the time he spent on ESI’s behalf
after the chapter 7 conversion. The Government objected to the
application. It argued that §330(a)(1) makes no provision for the
estate to compensate an attorney not authorized under §327. The
court agreed and denied the fees.
In re Equipment
Services, Inc., 253 B. R. 724 (Bkrtcy. Ct. WD Va. 2000).
(Petitioner was paid fees for the services he provided to ESI
before conversion of the proceeding to chapter 7 and when ESI was
the debtor-in-possession. The parties do not contest those
fees.)
Petitioner unsuccessfully sought reversal of
the Bankruptcy Court’s determination, first from the District
Court, see
In re Equipment Services, Inc., 260
B. R. 273 (WD Va. 2001), then from the Court of Appeals, see
290 F. 3d 739. Both courts concluded the plain language of
§330(a)(1) controlled and that attorneys who provide services to
debtors in chapter 7 proceedings must be hired by the trustee under
§327 to be eligible for compensation. The Court of Appeals
acknowledged that its holding deepened the divide among the various
Circuits, but held fast to the statute’s plain language,
“particularly because application of that plain language supports a
reasonable interpretation of the Bankruptcy Code,” 290 F. 3d,
at 745. We granted the petition for certiorari,
538 U. S. 905 (2003),
and now resolve the issue.
II
Petitioner argues that the
existing statutory text is ambiguous and so requires us to consult
legislative history to determine whether Congress intended to allow
fees for services rendered by a debtor’s attorney in a chapter 7
proceeding, where that attorney is not authorized under §327. He
makes the case for ambiguity, for the most part, by comparing the
present statute with its predecessor. Thus, he says the statute is
ambiguous because subsection (A)’s “attorney” is “facially
irreconcilable” with the section’s first part since
“[e]ither Congress inadvertently omitted the
‘debtor’s attorney’ from the ‘payees’ list, on which the court of
appeals relied, or it inadvertently retained the reference to the
attorney in the latter, ‘payees list’ .” Brief for Petitioner
17.
Similarly, with respect to the missing conjunction
“or” he says,
“[t]here is no apparent reason, other than a
drafting error, that Congress would have rewritten the statute to
produce a grammatically incorrect provision.”
Ibid.
This is the analysis followed
by the Courts of Appeals that hold the statute is ambiguous. See
In re Top Grade Sausage,
supra, at 129 (noting
in its search for ambiguity that “[p]rior to amendment, it was
undisputed that the repetition of officers in §330(a)(1)(A) was
meant to parallel the officers previously listed in §330(a)(1)”);
see also
In re Century Cleaning Services,
supra, at 1057–1058 (engaging in same resort to previous
enactment to inquire as to the current text’s ambiguity). One
determines ambiguity, under this contention, by relying on the
grammatical soundness of the prior statute. That contention is
wrong.
The starting point in discerning congressional
intent is the existing statutory text, see
Hughes Aircraft
Co. v.
Jacobson,
525 U. S. 432, 438
(1999), and not the predecessor statutes. It is well established
that “when the statute’s language is plain, the sole function of
the courts—at least where the disposition required by the text is
not absurd—is to enforce it according to its terms.”
Hartford
Underwriters Ins. Co. v.
Union Planters Bank,
N. A., 530
U. S. 1, 6 (2000) (internal quotation marks omitted) (quoting
United States v.
Ron Pair Enterprises,
Inc., 489
U. S. 235, 241 (1989) (in turn quoting
Caminetti v.
United States, 242 U. S. 470, 485
(1917))). So we begin with the present statute.
A
The statute is awkward, and even
ungrammatical; but that does not make it ambiguous on the point at
issue. In its first part, the statute authorizes an award of
compensation to one of three types of persons: trustees, examiners,
and §327 professional persons. A debtor’s attorney not engaged as
provided by §327 is simply not included within the class of persons
eligible for compensation. In subsection (A) the statute further
defines what type of compensation may be awarded: compensation that
is reasonable; and for actual, necessary services; and rendered by
four types of persons (the same three plus attorneys). Unless the
applicant for compensation is in one of the named classes of
persons in the first part, the kind of service rendered is
irrelevant.
The missing conjunction “or” does not change
our conclusion. The Government points to numerous federal statutes
that inadvertently lack a conjunction. They are read, nonetheless,
for their plain meaning. See Brief for Respondent 17, n. 4.
Here, the missing conjunction neither alters the text’s substance
nor obscures its meaning. This is not a case where a “not” is
missing or where an “or” inadvertently substitutes for an “and.”
The sentence may be awkward; yet it is straightforward.
Subsection (A)’s nonparalleled fourth category
of persons who can render compensable services does not cloud the
statute’s meaning. Petitioner reasons that since the section is a
single sentence, and since it appears to strive for parallelism
between those authorized to receive fees and those whose services
are compensable, there is an ambiguity as to what “attorney” in
§330(a)(1)(A) refers to in §330(a)(1). He also points to
neighboring §331, which provides for both debtors’ attorneys and
§327 professional persons to receive interim compensation after an
order for relief is entered but before an application for §330 fees
is filed. He argues that since §331 contemplates debtors’
attorneys’ receiving interim compensation there is reason to
conclude that “attorney” in §330(a)(1)(A) refers to debtors’
attorneys in §330(a)(1), though they go unmentioned in that
clause.
Subsection (A)’s “attorney,” however, can be
read in a straightforward fashion to refer to those attorneys whose
fees are authorized by §330(a)(1): attorneys qualified as §327
professional persons, that is, in a chapter 7 context, those
employed by the trustee and approved by the court. See §327(a)
(appointed trustee may “employ one or more attorneys … to represent
or assist the trustee in carrying out the trustee’s duties under
this title); §327(e) (appointed trustee may “employ, for a
specified special purpose, other than to represent the trustee in
conducting the case, an attorney that has represented the debtor,
…”). Likewise, §331’s reference to interim compensation for
debtors’ attorneys most straightforwardly refers to debtors’
attorneys authorized under §327.
It must be acknowledged that, under our
reading of the text, the word “attorney” in subsection (A) may well
be surplusage. Subsection (A)’s reference to §327 professional
persons undoubtedly includes attorneys, as much as does
§330(a)(1)’s reference to professional persons. That is not
controlling, however. Surplusage does not always produce ambiguity
and our preference for avoiding surplusage constructions is not
absolute. See
Chickasaw Nation v.
United
States, 534
U. S. 84, 94 (2001) (the preference “is sometimes offset by the
canon that permits a court to reject words ‘as surplusage’ if
‘inadvertently inserted or if repugnant to the rest of the
statute’ ”). Where there are two ways to read the text—either
attorney is surplusage, in which case the text is plain; or
attorney is nonsurplusage (
i.e., it refers to an ambiguous
component in §330(a)(1)), in which case the text is
ambiguous—applying the rule against surplusage is, absent other
indications, inappropriate. We should prefer the plain meaning
since that approach respects the words of Congress. In this manner
we avoid the pitfalls that plague too quick a turn to the more
controversial realm of legislative history.
B
The plain meaning that §330(a)(1)
sets forth does not lead to absurd results requiring us to treat
the text as if it were ambiguous. See
supra, at 6 (citing
Hartford Underwriters). Petitioner disagrees and argues
that our interpretation will “entail an inexplicable, wholesale
departure from . . . the guiding principle of the ‘prompt and
effectual administration’ of federal bankruptcy law.” Brief for
Petitioner 30. He says that our reading “attribute[s] to Congress
an illogical, penny-wise and pound-foolish determination to
eliminate entirely—as a purportedly asset-preserving
measure—compensation that is essential to debtors’ receipt of legal
services.”
Id., at 35.
These arguments overstate the
effect of §330(a)(1). Under the text’s instruction compensation
remains available to debtors’ attorneys through various permitted
means. First, while §330(a)(1) requires proper authorization for
payment to attorneys from estate funds in chapter 7 filings, it
does not extend throughout all bankruptcy law. Compensation for
debtors’ attorneys in chapter 12 and 13 bankruptcies, for example,
is not much disturbed by §330 as a whole. See,
e.g., 11 U.
S. C. §330(a)(4)(B) (“In a chapter 12 or chapter 13 case in
which the debtor is an individual, the court may allow reasonable
compensation to the debtor’s attorney”).
Compensation for debtors’ attorneys working on
chapter 7 bankruptcies, moreover, is not altogether prohibited.
Sections 327 and 330, taken together, allow chapter 7 trustees to
engage attorneys, including debtors’ counsel, and allow courts to
award them fees. See §§327(a) and (e). Section 327’s limitation on
debtors’ incurring debts for professional services without the
chapter 7 trustee’s approval is not absurd. In the context of a
chapter 7 liquidation it advances the trustee’s responsibility for
preserving the estate.
If we add to all this the apparent sound
functioning of the bankruptcy system under the plain meaning
approach, petitioner’s arguments become unconvincing. Seeming order
has attended the rule’s application for five years in the Fifth
Circuit and for four years in the Eleventh Circuit. See
In re American Steel Product, Inc., 197 F. 3d
1354 (CA11 1999);
In re Pro-Snax Distributors,
Inc., 157 F. 3d 414 (CA5 1998). It appears to be routine
for debtors to pay reasonable fees for legal services before filing
for bankruptcy to ensure compliance with statutory requirements.
See generally Collier Compensation, Employment and Appointment of
Trustees and Professionals in Bankruptcy Cases ¶ ;3.02[1],
p. 3–2 (2002) (“In the majority of cases, the debtor’s counsel
will accept an individual or a joint consumer chapter 7 case only
after being paid a retainer that covers the ‘standard fee’ and the
cost of filing the petition”). So our interpretation accords with
common practice. Section 330(a)(1) does not prevent a debtor from
engaging counsel before a chapter 7 conversion and paying
reasonable compensation in advance to ensure that the filing is in
order. Indeed, the Code anticipates these arrangements. See,
e.g., §329 (debtors’ attorneys must disclose fees they
receive from a debtor in the year prior to its bankruptcy filing
and courts may order excessive payments returned to the
estate).
C
Petitioner’s argument stumbles on
still harder ground in the face of another canon of interpretation.
His interpretation of the Act—reading the word “attorney” in
§330(a)(1)(A) to refer to “debtors’ attorneys” in §330(a)(1)—would
have us read an absent word into the statute. That is, his argument
would result “not [in] a construction of [the] statute, but, in
effect, an enlargement of it by the court, so that what was
omitted, presumably by inadvertence, may be included within its
scope.”
Iselin v.
United States, 270 U. S. 245, 251
(1926). With a plain, nonabsurd meaning in view, we need not
proceed in this way. “There is a basic difference between filling a
gap left by Congress’ silence and rewriting rules that Congress has
affirmatively and specifically enacted.”
Mobil Oil Corp.
v.
Higginbotham, 436 U. S. 618, 625
(1978).
Our unwillingness to soften the
import of Congress’ chosen words even if we believe the words lead
to a harsh outcome is longstanding. It results from “deference to
the supremacy of the Legislature, as well as recognition that
Congressmen typically vote on the language of a bill.”
United
States v.
Locke, 471 U. S. 84, 95 (1985)
(citing
Richards v.
United States, 369 U. S. 1, 9
(1962)).
Adhering to conventional doctrines of
statutory interpretation, we hold that §330(a)(1) does not
authorize compensation awards to debtors’ attorneys from estate
funds, unless they are employed as authorized by §327. If the
attorney is to be paid from estate funds under §330(a)(1) in a
chapter 7 case, he must be employed by the trustee and approved by
the court.
III
Though we find it unnecessary to
rely on the legislative history behind the 1994 enactment of
§330(a)(1), we find it instructive that the history creates more
confusion than clarity about the congressional intent. History and
policy considerations lend support both to petitioner’s
interpretation and to the holding we reach based on the plain
language of the statute.
Petitioner, for instance, cites
evidence supporting the conclusion that a scrivener’s error
obscures what was Congress’ real intent. For over 100 years
debtors’ attorneys have been considered by Congress and the courts
to be an integral part of the bankruptcy process. See Bankruptcy
Act of 1898, ch. 541, §§59(d) and 64(b), 30 Stat. 561, 563. See
also
In re Kross, 96 F. 816 (SDNY 1899). It is fair
to doubt that Congress would so rework their longstanding role
without announcing the change in the congressional record. Cf.
Cohen v.
de la Cruz, 523 U. S. 213, 221
(1998) (“We … will not read the Bankruptcy Code to erode past
bankruptcy practice absent a clear indication that Congress
intended such a departure” (internal quotation marks and citation
omitted)).
The legislative processes behind the change
also lend some support to petitioner’s claim. In 1994 the original
proposed draft of new §330(a)(1) featured two changes: stylistic
changes throughout the section and the addition of a new provision
giving the Government a right to object to fee applications. See S.
540, 103d Cong., 1st Sess. (1993), reprinted in S. Rep. No.
103–168 (1993). The right to object provision was added at
§330(a)(1)’s end. Thus it came immediately after the critical text
“or to the debtor’s attorney,” which the draft edited to read “or
the debtors
[sic] attorney.”
Ibid. Before voting
the Act into law, however, Congress amended the proposed draft. See
140 Cong. Rec. 8383 (1994) (setting out amendment 1645 to
S. 540). Amendment 1645 made only two changes to §330(a)(1):
It deleted the Government’s right to object provision and the
critical words (“or the debtors
[sic] attorney”). The rest
of the original proposed draft remained intact. Legislative history
explains the first deletion, for the provision was installed
elsewhere, as new §330(a)(2). Nothing, however, explains the
second.
That the Government’s right to object was
deleted and reinstated (i.e., reorganized), while the
words at issue, which had preceded the moved provision, were
deleted with no notation in the legislative history suggests the
scrivener just reached too far in his deletion. These factors
combined to convince a leading treatise on bankruptcy law, Collier,
that the deletion was a scrivener’s error and ought not have any
effect. See 3 Collier on Bankruptcy ¶ ;330.LH[5], at 330–75 to
330–76.
There are other aspects of the
legislative record, however, that undermine this interpretation.
These considerations suggest Congress may have intended the change
the scrivener worked. For example, amendment 1645 was part of a
reform Act designed to curtail abuses in fee awards, according to
statements by the amendment’s sponsor. See 140 Cong. Rec., at 28753
(statement of Sen. Metzenbaum). These abuses were not ghosts seen
only by Congress. Some bankruptcy courts had reached the same
conclusion. See, e.g., In re NRG Resources,
Inc., 64 B. R. 643 (Bkrtcy. Ct. WD La. 1986). The
deletion at issue furthered this reform by ensuring that chapter 7
debtors’ attorneys would receive no estate compensation absent the
trustee’s authorization of their work. This objective is not
inconsistent with the interest of involving debtors’ attorneys in
bankruptcy proceedings. As noted, the Act still allows debtors’
attorneys to be compensated in different ways. See supra,
at 9–11.
Amendment 1645, viewed in its
entirety, gives further reason to think Congress may have intended
the change. The amendment added a new section that authorizes fee
awards to debtors’ attorneys in chapter 12 and 13 bankruptcies. 140
Cong. Rec., at 8383 (setting out new 11 U. S. C.
§330(a)(4)(B)). Since the amendment’s deletion of “or the debtors
[sic] attorney” from the original proposed draft affected
chapter 12 and 13 debtors’ attorneys as much as chapter 7 debtors’
attorneys, §330(a)(4)(B) shows a special intent to authorize the
formers’ fee awards in the face of the new, broad
exclusion.
If Congress’ action does not prove
the point, the House of Representatives’ inaction may. The House
passed the Act after having the deletion, as well as its impact,
called to its attention. See Bankruptcy Reform: Hearing before the
Subcommittee on Economic and Commercial Law of the House Committee
on the Judiciary, 103d Cong., 2d Sess., 551 (1994). The National
Association of Consumer Bankruptcy Attorneys (NACBA), which
represents those lawyers most likely to be affected by §330(a)(1)’s
change, declined to object to the deletion. Ibid. (noting
the deletion but stating that the NACBA did “not oppose” Amendment
1645’s passage). This alert, followed by the Legislature’s
nonresponse, should support a presumption of legislative awareness
and intention. The Act may now contain surplusage, along with
grammatical error; but that may have been the result of trying to
make the substantive change with the fewest possible textual
alterations or of an error by the scrivener in carrying out the
change.
These competing interpretations of
the legislative history make it difficult to say with assurance
whether petitioner or the Government lays better historical claim
to the congressional intent. The alert to the change in policy was
given, to be sure, before the House passed the final version, but
that particular circumstance cannot bear too much weight. The alert
was not the subject of testimony from any witness at the
congressional hearing. It consisted of but two sentences contained
within 472 pages of written statements delivered to the legislative
subcommittee for its August 17, 1994, hearing day. Those 472 pages
were added to 236 pages of prepared statements and testimony
transcribed from the day’s testifying witnesses. Within the NACBA’s
filing, the two relevant sentences appear on the 18th page of the
27-page report. Nothing in the legislative history confirms that
this particular point bore on the congressional deliberations or
was given specific consideration.
These uncertainties illustrate the
difficulty of relying on legislative history here and the advantage
of our determination to rest our holding on the statutory
text.
* * *
If Congress enacted
into law something different from what it intended, then it should
amend the statute to conform it to its intent. “It is beyond our
province to rescue Congress from its drafting errors, and to
provide for what we might think … is the preferred result.”
United States v. Granderson, 511 U. S. 39, 68 (1994)
(concurring opinion). This allows both of our branches to adhere to
our respected, and respective, constitutional roles. In the
meantime, we must determine intent from the statute before us. The
judgment of the Court of Appeals is affirmed.
It is so ordered.
Justice Souter and Justice Breyer join
this opinion in its entirety. Justice Scalia joins this opinion
except for Part III.
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