PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE ET AL. v. DAVENPORT ET UX.
No. 89-156
Supreme Court of the United States
Decided May 29, 1990
Argued February 20, 1990
495 U.S. 552
Walter W. Cohen, First Deputy Attorney General of Pennsylvania, argued the cause for petitioners. With him on the briefs were Ernest D. Preate, Jr., Attorney General, John G. Knorr III, Chief Deputy Attorney General, Calvin R. Koons, Senior Deputy Attorney General, and Mary Benefield Seiverling, Deputy Attorney General.
David A. Searles argued the cause for respondents. With him on the briefs were Eric L. Frank and Henry J. Sommer.*
*Briefs of amici curiae urging reversal were filed for the United States by Solicitor General Starr, Assistant Attorneys General Dennis and Gerson, Deputy Solicitor General Roberts, and Stephen L. Nightingale; for the State of Alabama et al. by Mary Sue Terry, Attorney General of Virginia, H. Lane Kneedler, Chief Deputy Attorney General, Walter A. McFarlane, Deputy Attorney General, and Jeffrey A. Spencer, Assistant Attorney General, Don Siegelman, Attorney General of Alabama, Robert K. Corbin, Attorney General of Arizona, John K. Van de Kamp, Attorney General of California, Clarine Nardi Riddle, Acting Attorney General of Connecticut, and John J. Kelly, Chief States Attorney, Charles M. Oberly III, Attorney General of Delaware, Robert A. Butterworth, Attorney General of Florida, James T. Jones, Attorney General of Idaho, Neil F. Hartigan, Attorney General of Illinois, Linley E. Pearson, Attorney General of Indiana, Thomas J. Miller, Attorney General of Iowa, Robert T. Stephan, Attorney General of Kansas, Frederic J. Cowan, Attorney General of Kentucky, William J. Guste, Jr., Attorney General of Louisiana, James E. Tierney, Attorney General of Maine, James M. Shannon, Attorney General of Massachusetts, J. Joseph Curran, Jr., Attorney General of Maryland, Frank J. Kelley, Attorney General of Michigan, Hubert H. Humphrey III, Attorney General of Minnesota, William L. Webster, Attorney General of Missouri, Marc Racicot, Attorney General of Montana, John P. Arnold, Attorney General of New Hampshire, Peter N. Perretti, Jr., Attorney General of New Jersey, Hal Stratton, Attorney General of New Mexico, Lacy H. Thornburg, Attorney General of North
JUSTICE MARSHALL delivered the opinion of the Court.
In Kelly v. Robinson, 479 U. S. 36, 50 (1986), this Court held that restitution obligations imposed as conditions of probation in state criminal actions are nondischargeable in proceedings under Chapter 7 of the Bankruptcy Code,
I
In September 1986, respondents Edward and Debora Davenport pleaded guilty in a Pennsylvania court to welfare
In May 1987, the Davenports filed a petition under Chapter 13 in the United States Bankruptcy Court for the Eastern District of Pennsylvania. In their Chapter 13 statement, they listed their restitution obligation as an unsecured debt payable to the Department of Public Welfare. Soon thereafter, the Adult Probation and Parole Department of Bucks County (Probation Department) commenced a probation violation proceeding, alleging that the Davenports had failed to comply with the restitution order. The Davenports informed the Probation Department of the pending bankruptcy proceedings and requested that the Department withdraw the probation violation charges until the bankruptcy issues were settled. The Probation Department refused, and the Davenports filed an adversary action in Bankruptcy Court seeking both a declaration that the restitution obligation was a dischargeable debt and an injunction preventing the Probation Department from undertaking any further efforts to collect on the obligation.
While the adversary action was pending, the Bankruptcy Court confirmed the Davenports’ Chapter 13 plan without objection from any creditor.1 Although notified of the
The Bankruptcy Court subsequently held that the Davenports’ restitution obligation was an unsecured debt dischargeable under
To address a conflict among Bankruptcy Courts on this issue,2 we granted certiorari, 493 U. S. 808 (1989).
II
Our construction of the term “debt” is guided by the fundamental canon that statutory interpretation begins with the
Petitioners maintain that a restitution order is not a “right to payment” because neither the Probation Department nor the victim stands in a traditional creditor-debtor relationship with the criminal offender. In support of this position, petitioners refer to Kelly‘s discussion of the special purposes of punishment and rehabilitation underlying the imposition of restitution obligations. 479 U. S., at 52. Petitioners also emphasize that restitution orders are enforced differently from other obligations that are considered “rights to payment.”
In Kelly, the Court decided that restitution orders fall within
Contrary to petitioners’ argument, however, the Court‘s prior characterization of the purposes underlying restitution orders does not bear on our construction of the phrase “right to payment” in
Nor does the State‘s method of enforcing restitution obligations suggest that such obligations are not “claims.” Although neither the Probation Department nor the victim can enforce restitution obligations in civil proceedings, Commonwealth v. Mourar, 349 Pa. Super. 583, 603, 504 A. 2d 197, 208 (1986), vacated and remanded on other grounds, 517 Pa. 83, 534 A. 2d 1050 (1987), the obligation is enforceable by the substantial threat of revocation of probation and incarceration. That the Probation Department‘s enforcement mechanism is criminal rather than civil does not alter the restitution order‘s character as a “right to payment.” Indeed, the right created by such an order made as a condition of probation is in some sense greater than the right conferred by an ordinary civil obligation, because it is secured by the debtor‘s freedom
III
Moving beyond the language of
Section 362(a) automatically stays a wide array of collection and enforcement proceedings against the debtor and his property.3 Section 362(b)(1) exempts from the stay “the commencement or continuation of a criminal action or proceeding against the debtor.” According to the Senate Report, the exception from the automatic stay ensures that “[t]he bankruptcy laws are not a haven for criminal offenders.” S. Rep. No. 95-989, supra, at 51. Section 362(b)(1) does not, however, explicitly exempt governmental efforts to collect restitution obligations from a debtor. Cf.
We find no inconsistency in these provisions. Section 362(b)(1) ensures that the automatic stay provision is not construed to bar federal or state prosecution of alleged criminal
The United States’ reliance on
The central difficulty with the United States’ construction of
The United States’ position here highlights the tension between Kelly‘s interpretation of
Moreover, in locating Congress’ policy choice regarding the dischargeability of restitution orders in
IV
Our refusal to carve out a broad judicial exception to discharge for restitution orders does not signal a retreat from the principles applied in Kelly. We will not read the Bankruptcy Code to erode past bankruptcy practice absent a clear indication that Congress intended such a departure. Kelly, supra, at 47 (citing Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U. S. 494 (1986)). In Kelly, the Court examined pre-Code practice and identified a general reluctance “to interpret federal bankruptcy statutes to remit state criminal judgments.” 479 U. S., at 44. This pre-Code practice informed the Court‘s conclusion that
Nor do we conclude lightly that Congress intended to interfere with States’ administration of their criminal justice systems. Younger v. Harris, 401 U. S. 37, 46 (1971). As the Court stated in Kelly, permitting discharge of criminal restitution obligations may hamper the flexibility of state criminal judges in fashioning appropriate sentences and require state prosecutors to participate in federal bankruptcy proceedings to safeguard state interests. 479 U. S., at 49. Certainly the legitimate state interest in avoiding such intrusions is not lessened simply because the offender files under Chapter 13 rather than Chapter 7. Nonetheless, the concerns animating Younger cannot justify rewriting the Code to avoid federal intrusion. Where, as here, congressional intent is clear, our sole function is to enforce the statute according to its terms.
V
Restitution obligations constitute debts within the meaning of
It is so ordered.
JUSTICE BLACKMUN, with whom JUSTICE O‘CONNOR joins, dissenting.
The Court today concludes that Congress intended an obligation to pay restitution imposed as part of a state criminal sentence to be a “debt” within the meaning of the United States Bankruptcy Code. Because Congress has given no clear indication that it intended to abrogate the long “history of bankruptcy court deference to criminal judgments,” Kelly v. Robinson, 479 U. S. 36, 44 (1986), and because there is no suggestion in the Bankruptcy Code that it may be used as a shield to protect a criminal from punishment for his crime, I must disagree.
This Court carefully has set forth a method for statutory analysis of the Bankruptcy Code. See Kelly, supra; see also Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U. S. 494 (1986). When analyzing a bankruptcy statute, the Court, of course, looks to its plain language. But the Court has warned against an overly literal interpretation of the Bankruptcy Code. “‘[W]e must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.‘” Kelly, 479 U. S., at 43, quoting, as have other opinions of this Court, United States v. Heirs of Boisdore, 8 How. 113, 122 (1849). The strict language of the Bankruptcy Code does not control, even if the statutory language has a “plain” meaning, if the application of that language “will produce a result demonstrably at odds with the intention of its drafters.” United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 242 (1989). To determine the drafters’ intent, the Court presumes that Congress intended to keep continuity between pre-Code judicial practice and the enactment of the Bankruptcy Code in 1978. Midlantic, 474 U. S., at 501. For me, the statutory language, the consistent authority treating criminal sanctions as nondischargeable under the Bankruptcy Act of 1898, the absence of any legislative history suggesting that the Code was intended to change that established principle, and the strong policy of deference to state criminal judgments all compel the conclusion that a restitution order is not a dischargeable debt.
The majority appropriately begins its analysis with the language of the statute. As the majority points out, the Bankruptcy Code defines “debt” as a “liability on a claim.”
Some time ago, Justice Frankfurter pointed out: “The notion that because the words of a statute are plain, its meaning is also plain, is merely pernicious oversimplification.” United States v. Monia, 317 U. S. 424, 431 (1943) (dissenting opinion). This observation rings especially true in this case. It is not at all clear to me that the words “right to payment” plainly include an obligation resulting from a criminal restitution order. While the words may be of common usage, their meaning is not at all plain in this context. Notably absent from the Code‘s definition (and from the legislative history) of both “debt” and “claim” is any indication that Congress intended the discharge provisions to extend into the criminal sphere. Indeed, there are persuasive reasons for excluding criminal restitution from the category of “debts.” Petitioners argue—not without force—that a criminal restitution order is not a “right to payment” because neither the victim of the crime nor the Probation Department possesses a right to payment of a restitution order. Brief for Petitioners 22. Petitioners also argue that because the victim has no right of enforcement, the victim has no right to payment. Id., at 27; see also Commonwealth v. Mourar, 349 Pa. Super. 583, 603, 504 A. 2d 197, 208 (1986) (if criminal defendant fails to make restitution as ordered, victim has no right of enforcement), vacated and remanded on other grounds, 517 Pa. 83, 534 A. 2d 1050 (1987); cf. Bearden v. Georgia, 461 U. S. 660 (1983) (state court cannot constitutionally revoke probation for failure to pay a fine and make restitution without first determining the probationer‘s ability to pay). Several Bankruptcy Courts have agreed with petitioners and have decided that the definition of “debt” in the Bankruptcy Code does not include a criminal restitution order. See, e. g., In re Norman, 95 B. R. 771, 773, and n. 3 (Colo. 1989) (criminal penalties
My conclusion that the majority errs in concluding that the words “right to payment” include restitution orders is supported by the fact that such an interpretation would produce a result ““demonstrably at odds with the intention of its drafters.“” Ron Pair, 489 U. S., at 244, quoting Griffin v. Oceanic Contractors, Inc., 458 U. S. 564, 571 (1982). This Court has declared that, to effectuate Congress’ intent in enacting the Code, we must consider the language of
Because Congress’ presumed intent is to preserve pre-Code practice unless it specifically indicates otherwise, we must first consider the treatment of criminal restitution orders under the 1898 Act. That Act established two categories of debts, those that were “allowable” and those that were “provable.” “Only if a debt was allowable could the creditor receive a share of the bankrupt‘s assets.” Ibid., citing § 65a. Only provable debts were dischargeable. See § 17. The Court in Kelly explained that penalties or forfeitures owed to governmental entities generally were not allowable, § 57j; but the Act failed to state that such debts were not provable. See § 63. Given this statutory scheme, “[t]he most natural construction of the Act, therefore, would have allowed criminal penalties to be discharged in bankruptcy, even though the government was not entitled to a share of the bankrupt‘s estate.” 479 U. S., at 44-45. Nonetheless, courts consistently “refused to allow a discharge in bankruptcy to affect the judgment of a state criminal court.” Id., at 45. See, e. g., In re Abramson, 210 F. 878, 880 (CA2 1914) (“[J]udgments for penalties are not debts which can be proved or allowed as such because they are not for a fixed liability“); cf. In re Alderson, 98 F. 588 (W. Va. 1899) (the only federal-court decision found by the Kelly Court that allowed a discharge to affect a sentence imposed by a state criminal court). In fact, the judicially created exception to discharge was “so widely accepted by the time Congress enacted the new Code that a leading commentator could state flatly that ‘fines and penalties are not affected by a discharge.‘” Kelly, 479 U. S., at 46, quoting 1A Collier on Bankruptcy ¶ 17.13, pp. 1609-1610, and n. 10 (14th ed. 1978).
Thus, under the 1898 Act, criminal monetary sanctions were not allowable, provable, or dischargeable in bankruptcy. In functional terms, criminal monetary sanctions were not “debts” for the purpose of pre-Code bankruptcy proceedings. This judicially created pre-Code practice “reflected policy considerations of great longevity and importance,” that is, ““a deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings.“” Ron Pair, 489 U. S., at 245, quoting Kelly, 479 U. S., at 47.
In the face of such a longstanding principle, “a court must determine whether Congress has expressed an intent to change the interpretation of a judicially created concept in enacting the Code.” Ibid. The Court stated in Midlantic: “The normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific.” 474 U. S., at 501. There is no indication that Congress had any intent so drastically to change the established pre-Code practice regarding criminal sanctions. Although the Bankruptcy
The majority today brushes aside the rule of statutory construction outlined by this Court—a rule the Court has stressed must be used with ”particular care in construing the scope of bankruptcy codifications.” Midlantic, 474 U. S., at 501 (emphasis added). The majority insists that its holding does not signal a retreat from the principles applied in Kelly because there is a “clear indication” that Congress intended to depart from past bankruptcy practice. Ante, at 563 (emphasis added). The majority contends that Congress made that intent “clear” by its “adoption of the ‘broadest possible’ definition of ‘debt.‘” Ante, at 564. I disagree. And I am puzzled by the majority‘s position because the Court previously has rejected it expressly. See Kelly, 479 U. S., at 50, n. 12 (although the definition of “debt” was broadened, “nothing in the legislative history of these sections compels the conclusion that Congress intended to change the state of the law with respect to criminal judgments“). Moreover, it seems
“[U]nder the liquidation chapters of the Bankruptcy Act, certain creditors are not permitted to share in the estate because of the non-provable nature of their claims, and the debtor is not discharged from those claims. Thus, relief for the debtor is incomplete, and those creditors are not given an opportunity to collect in the case on their claims. The proposed law will permit complete settlement of the affairs of a bankrupt debtor, and a complete discharge and fresh start.” H. R. Rep. No. 95-595, supra, at 180 (footnote omitted).
The statutory language itself highlights this approach. The Code‘s definition of “claim” includes any right to payment that is “unliquidated,” “contingent,” “unmatured,” or “disputed,”
The majority‘s assertion that Congress’ enactment of
In addition, pre-Code Chapter XIII essentially adopted Chapter VII discharge policy, excepting from discharge all debts that were not dischargeable under Chapter VII when those debts were held by creditors who had not accepted the bankruptcy plan. See § 60 of the Act. Congress’ failure to include a parallel provision to
I do not believe that Congress so cavalierly would have disregarded the States’ overwhelmingly important interest in administering their criminal justice systems free from the interference of a federal bankruptcy judge. Every State and the District of Columbia presently authorize the use of restitution orders. See Note, Criminal Restitution as a Limited
The majority‘s decision today will have an adverse effect on the sentencing process. The judgment of sentencing courts and legislators that rehabilitation is the most effective form of punishment will be tempered by the knowledge that convicted criminals easily may avoid a sentence requiring restitution merely by obtaining a Chapter 13 discharge. Sentencing courts will be faced with a dilemma. The sentencing judge must either risk that a federal bankruptcy judge will undermine a restitution order, thus absolving the convicted criminal from punishment, or impose a harsher and less appropriate term of imprisonment, a sentence that the federal bankruptcy court will be unable to undermine. Congress surely would not have enacted legislation with such an extraordinary result without at least some discussion of its consequences.
The majority‘s holding turns Kelly around. The Kelly Court stressed this compelling federalism concern, terming it “one of the most powerful of the considerations that should influence a court considering equitable types of relief,” and recognized that it “must influence our interpretation of the Bankruptcy Code.” 479 U. S., at 49. The Court was concerned that “federal remission of judgments imposed by state criminal judges . . . would hamper the flexibility of state criminal judges in choosing the combination of imprisonment, fines, and restitution most likely to further the rehabilitative and deterrent goals of state criminal justice systems.” Ibid. The concerns of the Kelly Court are no less applicable in this
I dissent.