Monday, January 07, 2013

The Leif and Times of Judge Clark (Pt. One)

Twenty-five years ago, the Fifth Circuit appointed a former Lutheran minister who had been licensed a scant seven years to the bankruptcy bench in San Antonio.   With the retirement of Judge Leif M. Clark on October 20, 2012, another long-serving Western District judge has moved on to a new stage of life.  While Judge Clark may be departing the bench, he leaves practitioners with a body of work which can be characterized as thoughtful, controversial and occasionally irreverent but never dull.   
To do justice to Judge Clark would require me to quit my job and write for at least a year.   Since I have a family to feed, I will focus on just a few highlights here.   I am sure that others can add to what I have written and I encourage them to respond in the comments section. 
Personal History

Leif Clark (pronounced “Lâfe” not “Leaf”) earned a Masters of Divinity degree from Evangelical Lutheran Theological Seminary in Columbus, Ohio and served in specialized ministries for the American Lutheran Church.   He graduated from the University of Houston School of Law (where he graduated with honors and was an editor on the law review).   He went to work for Cox & Smith in San Antonio.

In 1987, the Fifth Circuit appointed Judge Clark to the Bankruptcy Court for the Western District of Texas.   Over the course of his judicial career, he sat in San Antonio, Austin, Waco and El Paso.  Judge Clark has written approximately 400 opinions according to LEXIS, but the total is probably higher.  He helped to design and administer a judicial training program for USAID, training judges in Ukraine, Poland, Latvia and Romania.    For sixteen years, he taught American constitutional law to foreign students as part of the International Masters of Laws Program for McGeorge School of Law in Salzburg, Austria.    He was actively involved in helping to develop international insolvency law. Judge Clark also served as an adjunct professor teaching bankruptcy at the University of Texas Law School.

Judge Clark sang in Judge Richard Schmidt’s band, including such hits as “I Can’t Get to Confirmation” and a song about the 1111(b) election.   

Although Rule 9037 would not allow me to say this in a document filed with the Bankruptcy Court, according to his biography for the National Bankruptcy Conference:
Judge Clark takes special pride in what he deems his most important accomplishments - his son, Harrison (born in 2003) and his daughter, Carson Renee (born in early 2006).
Since leaving the bench, Judge Clark has opened a solo practice for mediation and arbitration.   He can be reached at     

Sun Country Development

One of Judge Clark’s earliest contributions to Bankruptcy jurisprudence came while he was still a practicing attorney.   In Matter of Sun Country Development, Inc., 764 F.2d 406 (5th Cir. 1985), the Fifth Circuit made the rather unremarkable statements that good faith depends on “the totality of circumstances” and that it is satisfied when a plan is proposed “with the legitimate and honest purpose to reorganize and has a reasonable hope of success.”   However, the seminal line in the opinion, one which effectively put an end to the doctrine of artificial impairment in the Fifth Circuit was:
Congress made the cram down available to debtors; use of it to carry out a reorganization cannot be bad faith.
 Id. at 408.   I am told that this line came from Judge Clark’s brief and it has been cited by numerous cases over the years.

Judge Clark’s Love of Colorful Analogies

Judge Clark had a love for the colorful analogy which he used to great effect in his opinions.   In Mahoney v. Washington Mutual, Inc. (In re Mahoney), 368 B.R. 579 (Bankr. W.D. Tex. 2007), Judge Clark gave an extended dissertation on whether sacrificing a goat to Mercury could be an act to collect a debt which would violate the discharge.   He wrote:

A creditor, smarting from the write-off of his loan, privately sacrifices a goat to Mercury, the Roman god of merchants, believing devoutly that Mercury will see to it that the debtor repays the creditor in full. The creditor takes no actions to publicize his sacrifice. He has no reason to believe that the debtor believes in Mercury, or cares about goats. Certainly, the sacrifice is an intentional act, and it was subjectively intended to collect the debt. Indeed, it might be easy to show that the creditor, "with malice aforethought," had every intent to violate the dickens out of the bankruptcy discharge. But so what? All the intention in the world would not convert the creditor's sacrifice into "an act to collect, recover, or offset" the debt in question.  Intentionally performing a useless and ineffective act cannot violate section 524(a) because a useless and ineffective act will not count as a proscribed act within the meaning of the statute -- regardless of the avowed "intent to violate the discharge injunction."

Our goat sacrificing example above is a helpful, if fanciful, illustration of this principle. Most reasonable people will readily agree that goat sacrificing is not an act likely to be effective in collecting, recovering or offsetting the debt in question. But let's suppose that, before the fated sacrifice, the creditor first sends a photo of the unfortunate goat to the debtor with a note saying "Pay me or the goat is cabrito!" These additional facts are enlightening, but we still do not know whether they are sufficient to count as an act to collect, recover, or offset the debt, because we cannot yet gauge the likely impact of this threat on the debtor. If, however, the facts also showed that the debtor is also a devout believer in Mercury -- or a deeply committed animal rights activist -- then we might have enough facts to suggest that the note and the photo count as an act to collect on a debt -- even without the actual sacrifice. This final fact shows the coercive impact of the missive, sufficient to fairly describe the act as likely to be effective to collect a debt. We can now say, on these facts, that sending such a missive to such a debtor could work as a collection device. On the other hand, if the evidence showed that the debtor believes that all Mercury worshipers are idiots, and couldn't care less about killing goats, then the creditor's threatened sacrifice, and its publication of that threat to the debtor still lack coercive impact, and so would not likely count as an act to collect a debt.
Id. at 587, 588.

In another opinion, Judge Clark used a personal example to demonstrate the lack of utility of multi-part tests.

A person is sent into a crowded room with directions to find Judge Clark by applying the following multi-factor test: (1) tall, (2) blond hair, (3) angular features, (4) dressed stylishly, and (5) having a resonant voice. The person returns with David Bowie in tow. If the person had simply been given a recent picture of Judge Clark (which would have been worth far more than all the factors one could write down on a piece of paper), chances are he would have quickly returned with the judge, not the singer.

Official Committee of Unsecured Creditors v. Grant Thornton (In re Schlotzky’s, Inc.), 351 B.R. 430, 435, n. 9 (Bankr. W.D. Tex. 2006).   I don't know.   When Judge Clark wasn't wearing a robe, I might have had trouble distinguishing him from David Bowie.

On another occasion, Judge Clark used the Brooklyn Bridge to explain why claiming an exemption is not sufficient to grant title to the object claimed, even in the absence of a timely objection.
Just in case there is any confusion, let’s suppose I claim an exemption on the Brooklyn Bridge, and you fail to timely object to my exemption claim. Is the sainted bridge thus exempt? Technically, section 522(l) says it is. But of course, what difference does my exemption claim make if Hizzoner, Mayor Bloomberg, comes to court and successfully establishes that, in fact, the Brooklyn Bridge is not my bridge to claim, but is safely still the property of the City of New York, safely untarnished by my exercise in hubris? None at all you correctly reply, none whatsoever.
In re Rendon, No. 06-52501 (Bankr. W.D. Tex. 2006)(available here).   

Finally, although Judge Clark insists that he does not want this to be his legacy, he once cited an Adam Sandler movie in denying a pro se motion “for being incomprehensible.”
Or, in the words of the competition judge to Adam Sandler’s title character in the movie, “Billy Madison,” after Billy Madison had responded to a question with an answer that sounded superficially reasonable but lacked any substance,
Mr. Madison, what you've just said is one of the most insanely idiotic things I've ever heard. At no point in your rambling, incoherent response was there anything that could even be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.
Deciphering motions like the one presented here wastes valuable chamber staff time, and invites this sort of footnote.
Factac v. King (In re King), No. 05-5171 (Bankr. W.D. Tex. 2006)(available here).   

In Part Two, I will focus on some of Judge Clark's more substantive opinions.

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