Orders: Bankruptcy case granted

UPDATE 2:25 p.m. for action on Texas death penalty case, 05-1167

The Supreme Court agreed on Monday to spell out the right of a debtor to change a Chapter 7 proceeding into a Chapter 13 case. The case is Marrama v., Citizens Bank of Massachusetts (05-996). A Chapter 7 case involves disposal of a bankrupt’s assets to pay off creditors, while Chapter 13 allows for restructing of debts to try to salvage more of the debtor’s assets.

Monday’s Orders List can be found here.

In the new bankruptcy case, the First Circuit Court ruled that the right to convert to a Chapter 13 proceeding is not absolute, and can be denied in some circumstances. The appeal of Robert Louis Marrama argues that the actual language of the federal bankruptcy law does make that right absolute. In his case, the conversion was denied on the basis of a bankruptcy court finding that the request was made in bad faith.

Marrama, who ran a flooring business, went bankrupt after he was ordered to pay in full a line of credit he had from Citizens Bank. The bank took possession of all of his assets, and he became unemployed and had no regular income — and thus was barred from filing his bankruptcy petition under Chapter 13. Thus, he filed under Chapter 7. In that proceeding, the trustee took over Marrama’s house in Maine where he was living at the time. His home in Gloucester, Mass., was exempted from bankruptcy, so he moved back in there. Once he got a job with his brother’s flooring company, Marrama sought to convert the case to Chapter 13 so that he could deal with mortgages that arose from his financial problems, and thus keep his homes. The bank and the trustee objected to the conversion, and that was denied.

Marrama’s appeal to the Supreme Court argued that lower courts are split on the conversion issue.

The Court, in the only other case granted Monday, agreed to decide whether state convictions for attempted burglary — a defined under Florida law — qualify as a violent felony for purposes of mandatory sentences under the federal Armed Career Criminal Act.The case is Alphonso James v. U.S. (05-9264). James’ petition raised two other issues, including the constitutionality of the federal “felon-in-possession” law, but the Court confined its review to the burglary question (Question 2 in the petition).

Once again, Justice Clarence Thomas voiced his view — so far, not shared openly by any other member of the Court — that the Court should reconsider its ruling in Almendarez-Torres v. U.S., a 1998 decision that provides the only exception to the jury role that the Court has mandated in the Apprendi v. New Jersey line of cases. Thomas said “it is time for this Court to do its part” in addressing whether that decision continues to be valid. In the Apprendi cases, the Court has ruled that a jury, not a judge, must decide every fact — except a prior conviction — that is used to enhance a criminal sentence. Almendarez-Torres is the source of the prior conviction exception. Thomas spoke out anew in dissent as the Court refused to hear three cases raising the issue — Rangel-Reyes v. U.S. (05-10706) , Shuman v. U.S. (05-10743), and Banegas-Hernandez v. U.S. (05-10815). Thomas’ comments can be found here

Answering Thomas, Justice John Paul Stevens said he continued to believe that the 1998 ruling was wrong, but added “that is not a sufficient reason for revisiting the issue.” The denial of a jury trial on that issue, Stevens said, “will seldom create any significant risk of prejudice to the accused.” Besides, he said, “countless judges in countless cases have relied upon Almendarez-Torres in making sentencingdeterminations. The doctrine of stare decisis provides a sufficeint basis for the denial” of review in the three new cases, he added. Stevens’ comments can be found here.

Among other orders issued Monday, the Court asked the U.S. Solicitor General for the federal government’s views on the authority of states to limit wireless service companies when they switch contract terms without notice or consent of the customers. The case is Hatch (Attorney General of Minnesota) v. Cellco Partnership, et al. (05-1159) — involving the first state wireless consumer protection law in the nation. The Eighth Circuit Court ruled that the Minnesota law was preempted by federal law because it amounted to a fixing of wireless service rates.

The Court, in another order, passed up a chance to resolve two important issues under the RICO anti-racketeering law that it failed to decide last week in resolving pending cases. The Court simply denied review of DuPont Company v. Living Designs (05-1136), which raised questions about the definition of “enterprise” under RICO and whether, in fraud cases under RICO, the lawsuit must show injury that resulted from a reliance upon the fraud.

The Court also refused a plea by the state of Texas to put an end to the long-running legal saga over Johnny Paul Penry, a death row inmate convicted of a 1979 stabbing murder. The Texas Court of Criminal Appeals overturned Penry’s latest death sentence in October 2005 over the use of a “catchall” jury instruction and its impact on evidence about mental impairment. An earlier post about Texas’ new appeal in the case (Texas v. Penry, 05-1167) can be found here.