PATTERSON, TRUSTEE v. SHUMATE
No. 91-913
Supreme Court of the United States
Argued April 20, 1992—Decided June 15, 1992
504 U.S. 753
G. Steven Agee argued the cause and filed briefs for petitioner.
Kevin R. Huennekens argued the cause for respondent. With him on the brief were Robert A. Lefkowitz and Daniel A. Gecker.
Christopher J. Wright argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Starr, Acting Assistant Attorney General Bruton, Deputy Solicitor General Mahoney, Gary D. Gray, and Bridget M. Rowan.*
*David B. Tatge, pro se, filed a brief of amicus curiae urging reversal. With him on the brief was Dwight D. Meier.
Briefs of amici curiae urging affirmance were filed for the American Society of Pension Actuaries by David R. Levin; for the Chamber of Commerce of the United States of America by Stephen A. Bokat, Robin S. Conrad, and Mona C. Zeiberg; for the ERISA Industry Committee et al. by John M. Vine and Thomas M. Christina; for Hallmark Cards, Inc., by M. Theresa Hupp, David C. Trowbridge, and James B. Overman; for Lincoln National Corporation by Brian J. Martin; for Wal-Mart Stores, Inc., et al. by Phillip R. Garrison; and for Ronald J. Wyles et al. by David H. Adams.
Briefs of amici curiae were filed for the American College of Trust and Estate Counsel by Alvin J. Golden and C. Wells Hall III; and for Eldon S. Reed by Cathy L. Reece and Gary H. Ashby.
The Bankruptcy Code excludes from the bankruptcy estate property of the debtor that is subject to a restriction on transfer enforceable under “applicable nonbankruptcy law.”
I
Respondent Joseph B. Shumate, Jr., was employed for over 30 years by Coleman Furniture Corporation, where he ultimately attained the position of president and chairman of the board of directors. Shumate and approximately 400 other employees were participants in the Coleman Furniture Corporation Pension Plan (Plan). The Plan satisfied all applicable requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and qualified for favorable tax treatment under the Internal Revenue Code. In particular, Article 16.1 of the Plan contained the antialienation provision required for qualification under
In 1982, Coleman Furniture filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code. The case was converted to a Chapter 7 proceeding, and a trustee, Roy V. Creasy, was appointed. Shumate himself encountered financial difficulties and filed a petition for bankruptcy in 1984. His case, too, was converted to a Chapter 7 proceeding, and petitioner John R. Patterson was appointed trustee.
Creasy terminated and liquidated the Plan, providing full distributions to all participants except Shumate. Patterson
The District Court rejected Shumate‘s contention that his interest in the Plan should be excluded from his bankruptcy estate. The court held that
The Court of Appeals for the Fourth Circuit reversed. 943 F. 2d 362 (1991). The court relied on its earlier decision in In re Moore, 907 F. 2d 1476 (1990), in which another Fourth Circuit panel was described as holding, subsequent to the District Court‘s decision in the instant case, that “ERISA-qualified plans, which by definition have a nonalienation provision, constitute ‘applicable nonbankruptcy law’ and contain enforceable restrictions on the transfer of pension interests.” 943 F. 2d, at 365. Thus, the Court of
We granted certiorari, 502 U. S. 1057 (1992), to resolve the conflict among the Courts of Appeals as to whether an antialienation provision in an ERISA-qualified pension plan constitutes a restriction on transfer enforceable under “applicable nonbankruptcy law” for purposes of the
II
A
In our view, the plain language of the Bankruptcy Code and ERISA is our determinant. See Toibb v. Radloff, 501 U. S. 157, 160 (1991). Section 541(c)(2) provides the following exclusion from the otherwise broad definition of “property of the estate” contained in
“A restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable nonbankruptcy law is enforceable in a case under this title.” (Emphasis added.)
Reading the term “applicable nonbankruptcy law” in
B
Having concluded that “applicable nonbankruptcy law” is not limited to state law, we next determine whether the antialienation provision contained in the ERISA-qualified Plan at issue here satisfies the literal terms of
Section 206(d)(1) of ERISA, which states that “[e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated,”
Coleman Furniture‘s pension plan complied with these requirements. Article 16.1 of the Plan specifically stated: “No benefit, right or interest” of any participant “shall be subject1
Moreover, these transfer restrictions are “enforceable,” as required by
The antialienation provision required for ERISA qualification and contained in the Plan at issue in this case thus constitutes an enforceable transfer restriction for purposes of
III
Petitioner raises several challenges to this conclusion. Given the clarity of the statutory text, however, he bears an “exceptionally heavy” burden of persuading us that Congress intended to limit the
A
Petitioner first contends that contemporaneous legislative materials demonstrate that
Even were we to consider the legislative materials to which petitioner refers, however, we could discern no “clearly expressed legislative intention” contrary to the result reached above. See Consumer Product Safety Comm‘n v. GTE Sylvania, Inc., 447 U. S. 102, 108 (1980). In his brief, petitioner quotes from House and Senate Reports accompanying the Bankruptcy Reform Act of 1978 that purportedly reflect “unmistakable” congressional intent to limit
B
Petitioner next contends that our construction of
Petitioner‘s surplusage argument fails, however, for the reason that
C
Finally, petitioner contends that our holding frustrates the Bankruptcy Code‘s policy of ensuring a broad inclusion of assets in the bankruptcy estate. See id., at 37;
First, our decision today ensures that the treatment of pension benefits will not vary based on the beneficiary‘s bankruptcy status. See Butner v. United States, 440 U. S. 48, 55 (1979) (observing that “[u]niform treatment of property interests” prevents “a party from receiving ‘a windfall merely by reason of the happenstance of bankruptcy,‘” quoting Lewis v. Manufacturers National Bank, 364 U. S. 603, 609 (1961)). We previously have declined to recognize any exceptions to ERISA‘s antialienation provision outside the bankruptcy context. See Guidry v. Sheet Metal Workers Nat. Pension Fund, 493 U. S. 365 (1990) (labor union may not impose constructive trust on pension benefits of union official who breached fiduciary duties and embezzled funds). Declining to recognize any exceptions to that provision within the bankruptcy context minimizes the possibility that creditors will engage in strategic manipulation of the bankruptcy laws in order to gain access to otherwise inaccessible funds. See Seiden, Chapter 7 Cases: Do ERISA and the Bankruptcy Code Conflict as to Whether a Debtor‘s Interest in or Rights Under a Qualified Plan Can be Used to Pay Claims?, 61 Am. Bankr. L. J. 301, 317 (1987) (noting inconsistency if “a creditor could not reach a debtor-participant‘s plan right or interest in a garnishment or other collection action outside of a bankruptcy case but indirectly could reach the plan right or interest by filing a petition . . . to place the debtor in bankruptcy involuntarily“).
Our holding also gives full and appropriate effect to ERISA‘s goal of protecting pension benefits. See
“Section 206(d) reflects a considered congressional policy choice, a decision to safeguard a stream of income for pensioners (and their dependents, who may be, and perhaps usually are, blameless), even if that decision prevents others from securing relief for the wrongs done them. If exceptions to this policy are to be made, it is for Congress to undertake that task.” 493 U. S., at 376.
These considerations apply with equal, if not greater, force in the present context.
Finally, our holding furthers another important policy underlying ERISA: uniform national treatment of pension benefits. See Fort Halifax Packing Co. v. Coyne, 482 U. S. 1, 9 (1987). Construing “applicable nonbankruptcy law” to include federal law ensures that the security of a debtor‘s pension benefits will be governed by ERISA, not left to the vagaries of state spendthrift trust law.
IV
In light of our conclusion that a debtor‘s interest in an ERISA-qualified pension plan may be excluded from the property of the bankruptcy estate pursuant to
The judgment of the Court of Appeals is affirmed.
It is so ordered.
JUSTICE SCALIA, concurring.
The Court‘s opinion today, which I join, prompts several observations.
When the phrase “applicable nonbankruptcy law” is considered in isolation, the phenomenon that three Courts of Appeals could have thought it a synonym for “state law” is mystifying. When the phrase is considered together with the rest of the Bankruptcy Code (in which Congress chose to refer to state law as, logically enough, “state law“), the phenomenon calls into question whether our legal culture has so far departed from attention to text, or is so lacking in agreed-upon methodology for creating and interpreting text, that it any longer makes sense to talk of “a government of laws, not of men.”
Speaking of agreed-upon methodology: It is good that the Court‘s analysis today proceeds on the assumption that use of the phrases “state law” and “applicable nonbankruptcy law” in other provisions of the Bankruptcy Code is highly relevant to whether “applicable nonbankruptcy law” means “state law” in
