The United States Supreme Court granted on March 10 the petition for certiorari in the W.D. Va. chapter 7 attorneys' fee case, as shown here and here, under the name of John M. Lamie v. U.S. Trustee. Mr. Lamie, the Abingdon bankruptcy attorney, is represented by Thomas C. Goldstein, whose claims to fame include this Supreme Court blog. Mr. Goldstein has argued a number of cases before the Supreme Court and was the winning counsel in this case (involving criminal procedure) the Supreme Court decided on March 4. decided on March 4.
The background of Mr. Lamie's case involves a number of interesting issues. The bankruptcy case was filed under Chapter 11 and the client gave Mr. Lamie a $5,000 "retainer," an amount deposited as pre-paid fees. On the motion of the U.S. trustee, the Bankruptcy Court converted the case to Chapter 7. When Mr. Lamie made an application to be paid, the U.S. Trustee Ms. Garber objected to his being paid with the money on deposit.
The Bankruptcy Court by Judge Stone ruled partially Mr. Lamie's favor, rejecting the idea that pre-petition retainers were assets of the estate, but held that he could not collect post-conversion fees. The District Court by Judge Jones affirmed, in a published opinion. Eventually, the parties reached a settlement and as a condition of that agreement, they tried to get the District Court to withdraw its opinion, but Judge Jones refused (in this opinion), so both parties appealed. Judge Jones' refusal to withdraw his opinion is interesting in itself, and not the only time he has made such a decision, the other being this case. The judge's concerns seem particularly appropriate in litigation where the parties include a public official such as the U.S. Trustee, who (at least in theory) is in a position to litigate the same issue over and over, settling cases and having bad precedents withdrawn, until she (or he) gets the ruling she wants.
The Fourth Circuit affirmed in part and reversed in part in a split decision, rejecting Mr. Lamie's arguments on the issue of whether Congress changed the language of the Code in 11 U.S.C. 330(a) by mistake in eliminating a provision for attorneys' fees to counsel for Chapter 7 debtors. The idea of what amounts to a typographical omission in the U.S. Code raises all kinds of issues - like when should a court even begin to look for missing language if the meaning of what remains is plain on its face. Judge Niemeyer and Judge Karen Williams went with the "plain language" of the statute, while acknowledging that there are some good reasons to believe that Congress made the mistake Mr. Lamie is claiming. Judge Blaine Michael dissented on the statutory construction issue, siding with the "scrivener's error" theory. In deciding the case, the panel acknowledged that any decision it made would widen the split in the circuits on this point. Now, the Supreme Court will resolve the conflict.
News accounts of the Lamie case include this one from a newspaper in Utah.