Consumer Bankruptcy Journal Spring 2017 - Page 20

What to Expect From Justice-To- Be Gorsuch on Bankruptcy

By Professor Jason Killborn , The John Marshall Law School

When I heard that the President had nominated 10th Circuit Judge Neil Gorsuch for the Supreme Court , I wondered what his bankruptcy-related opinions might tell us about him . Bill Rochelle beat me to it , with his characteristically insightful analysis of a few salient Gorsuch opinions . But I found three more that I thought worth highlighting , as well . A simple takeaway from all of these cases is that Gorsuch is not at all what one might call “ debtor-friendly .” In fact , I don ’ t think one of the dozen-or-so opinions I found ruled in favor of the debtor ( s ). But a more nuanced takeaway is that Gorsuch is a careful and serious jurist who will apply the letter of the law in tight and cleverly written opinions . At least he should be fairly predictable , a virtue that the person who nominated Judge Gorsuch does not share .

In the first case , In re Renewable Energy Devmt . Corp ., from July 2015 , Judge Gorsuch faithfully applies
Stern , Wellness , and Arkison in an opinion that reveals both his care and sophistication in slogging through the bankruptcy jurisdictional labyrinth . The opinion reads very much like one authored by Scalia , opening with the entertaining line , “ This case has but little to do with bankruptcy ,” and offering animated , almost theatrical back-andforth discussions of the appellant ’ s alternative “ factually intertwined ” test and other challenges .
In the second case , TW Telecom v . Carolina Internet , from 2011 , Judge Gorsuch showed that he is not slavishly bound to precedent when that reliance is shown to be misplaced . In this opinion , Judge Gorsuch addressed the longstanding 10th Circuit precedent interpreting section 362 ( a ) as NOT applying to the debtor-defendant who
pursues an appeal from a prepetition judgment against it . Candidly acknowledging that nine other Courts of Appeals had ruled otherwise , and Collier had called out the 10th Circuit for this aberrant ruling ( distinguishing postpetition litigation actions by a debtorplaintiff , which are not stayed , from those by a debtor-defendant attacking a judgment against it , which are stayed ), Judge Gorsuch curtly abandoned the 10th Circuit ’ s prior interpretation and ... got with the program .
Finally , in a third , unpublished opinion from 2008 , In re Ardese , Judge Gorsuch affirmed the somewhat controversial position that failing to list a cause of action for labor law violations and employment discrimination on the debtor ’ s schedules estopped her from pursuing that claim against her employer post-petition . In addition to relying on recent , indistinguishable 10th Circuit precedent , Judge Gorsuch took a fairly hard line against Ms . Ardese ’ s claim of lack of sophistication , as well as her attempt to reopen her bankruptcy case and have the claim administered by the trustee .

“ Judge Gorsuch took a fairly hard line against Ms . Ardese ’ s claim of lack of sophistication , as well as her attempt to reopen her bankruptcy case ...”

We should not expect a soft touch from Justice Gorsuch for pro-debtor arguments relying on rehabilitative policy . Expect Gorsuch to continue in most respects the line-toeing tendencies of his predecessor in bankruptcy matters . Not Scalia , but not far off .
20 CONSUMER BANKRUPTCY JOURNAL Spring 2017 National Association of Consumer Bankruptcy Attorneys