Highlights from the National Conference of Bankruptcy Judges Day 3

I only attended two panels today before heading for the airport, so this post will be considerably shorter than the previous ones.

Ethics

The panel on To Tweet or Not to Tweet: Ethical Issues in Utilizing Social Networking Tools provided the all important ethics credit. They walked through a series of hypotheticals. Some of the more interesting were whether it is ethical to use a tracking device on your associate’s phone to locate him, whether a second chair lawyer should tweet during trial and whether a judge should be Facebook friends with an attorney appearing in her court. The answers were: yes, if it is a real emergency and you have given prior notice; no, the associate should be paying attention to the trial, not divulging confidential information; and maybe, so long as you really are friends and you are prepared to recuse yourself.

The panel felt that you should not blog about a client’s case without their consent. This is a sensitive issue. I have blogged about a few of my cases, but only if they resulted in a published opinion which would not be embarrassing to the client. I am planning to blog about my experiences in an unusual case that is ongoing, but not until it is over.

Now you can claim self-study ethics credit for reading this post.

Supreme Court Review

This was a very interesting panel featuring Judge Margaret Mahoney, Eric Brunstad and Brett Weiss. I am not going to discuss the cases themselves, since I have already written about them, but will summarize some of the larger conclusions.

The panel was unsure whether Milavetz prohibited advice on pre-petition planning, such as buying a more expensive car to tip the means test. However, they did say that the opinion allow counsel to have “full and frank and robust discussions” with the client. So perhaps the line is that you can talk about it, but not recommend it.

The Lanning case proved that the Supreme Court can make for some unusual alliances. The Chapter 13 trustee, who argued for a mechanical approach to determining projected disposable income, was supported by NACBA, while the Debtor was supported by the United States.

Brett Weiss was kind enough to quote the following passage from this blog:

The majority wants the Bankruptcy Code to make sense. Justice Scalia is willing to be a minority of one for the proposition that when Congress passes laws that are foolish or just plain wrong, that the courts have an obligation to throw their words back at them and yield a foolish judgment

Then he said thank goodness the Supreme Court did not follow Justice Scalia.

Lanning showed the victory of pragmatism over formalism. The panel encouraged lawyers to take the time to educate appellate judges with how bankruptcy actually works because the way bankruptcy works in fact is more unspoken than in other areas of the law.

Schwab v. Reilly was dismissed as a case that could be overcome through better software. Justice Thomas said that the problem with the debtor’s claim of exemption was that she claimed a specific dollar value rather than saying she was claiming 100% of the value. Apparently the Rules Committee is considering a change to the Official Form to allow this. In the meantime, software vendors are already responding to the decision.

Espinosa was considered to be in line with other Supreme Court opinions on finality of confirmation orders. The issue to be considered in litigating these cases is notice. Did they clearly say what they were trying to accomplish? Did the creditor receive actual notice? The Court appeared to be saying that deviant plan provisions were not a major risk because courts would exercise their independent duty to review plans and weed out the bad ones even where there wasn’t an objection. The panel thought this ignored the practical realities of a bankruptcy judge’s docket.

Finally, a cute story to end with. The first time that Eric Brunstad argued before the Supreme Court, he brought his six year old daughter with him. She brought her teddy bear. However, the marshals would not allow a teddy bear in the Supreme Court and took the stuffed bear into custody. After the argument, his daughter ran up to him and said, “Teddy’s in prison. The Martians have him.” When you receive a bad ruling, you can always say “The Martians got my case.”