In re Turner

• Decision Date: 11 March 1996
• Docket Number: Bankruptcy No. 95-3 1873 WDM.
• Citation: 193 BR 548
• Parties: In re Vernon Floyd and Carol Grenier TURNER, Debtors.
• Court: U.S. Bankruptcy Court — Northern District of California

193 B.R. 548 (1996)

In re Vernon Floyd and Carol Grenier TURNER, Debtors.

Bankruptcy No. 95-3 1873 WDM.

United States Bankruptcy Court, N.D. California.

March 11, 1996.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Minnie Loo, Office of U.S. Trustee, San Francisco, CA.

Jim Snyder, Tehachapi, CA, in pro. per.

MEMORANDUM DECISION

DENNIS MONTALI, Bankruptcy Judge.

I. INTRODUCTION

On January 22, 1996, a hearing was held on the United States Trustee's ("UST") motion for order to have Jim Snyder ("Snyder") show cause why (1) his fees should not be reviewed pursuant to 11 U.S.C. § 110(h)¹; and (2) he should not be fined for violation of § 110(c). Minnie Loo, Esq. appeared for the UST and Snyder appeared in propria persona.

This is a core proceeding under 28 U.S.C. § 157. A proceeding is core if it is created by Title 11 or only arises in Title 11 cases. In re Eastport Associates, 935 F.2d 1071, 1077 (9th Cir.1991). The UST's motion is made pursuant to § 110 and involves obligations created only by that statute.

For the reasons stated below, Snyder's fees will be reduced from $450 to $150, and he will be ordered to pay a fine of $150 for his violations of § 110(c).

II. FACTUAL BACKGROUND²

The facts are not in dispute. Vernon Floyd and Carol Grenier Turner ("Debtors") filed a voluntary Chapter 7 petition on May 22, 1995. At that time Debtors were not represented by an attorney. Debtors paid $450 to Snyder for assistance in filing the petition. Snyder is a "bankruptcy petition preparer" within the meaning of § 110(a)(1).³ According to Snyder, he charges between $60 and $80 per hour for typing, secretarial, paralegal and interviewing services. On at least eleven documents, each of which constitutes a "document for filing" within the meaning of § 110(a)(2), Snyder failed to subscribe his social security number ("SSN") pursuant to § 110(c)(2). Instead, Snyder used "XXXXXXXXX" as his identifying number.

Snyder purports to believe that the SSN and "government imposed numbers" in general are the "mark of the beast" described in the New Testament Book of Revelations.⁴ He thus is forbidden by his Christian belief from using an SSN. Although at one time Snyder had an SSN, he claims to have renounced it in 1974 when he learned of the religious and spiritual significance of the "mark." Snyder also seems to associate the SSN with the federal government and a kind of amorphous threat and evil embodied in it. He has expressed concern that use of an SSN may implicate him as a "federal citizen" and may result in a loss of his rights.

III. ISSUES

The UST contends that Snyder's fees are "in excess of the value of services rendered for the documents prepared" and should be accordingly reduced and the excess remitted to the bankruptcy estate as per § 110(h)(2). The UST further contends that Snyder, by failing to subscribe his SSN on documents for filing, should be fined pursuant to § 110(c).

Snyder contends that his fee is not excessive. He also contends that (1) § 110(c) only imposes a fine for failure to subscribe an "identifying number" which is not necessarily the preparer's SSN, and that he did subscribe an identifying number; (2) fining him for failure to subscribe his SSN violates his constitutional right to privacy; and (3) fining him for failure to subscribe his SSN violates his constitutional right to the free exercise of religion.

The court, sua sponte, has inquired into the possible ramifications of § 110 on Snyder's statutory rights under Section 7 of the Privacy Act of 1974 and the Religious Freedom Restoration Act of 1993.

IV. DISCUSSION

A. Snyder's Fees Are Excessive

Section 110(h)⁵ authorizes the court to disallow any excess fees paid to a preparer and to order the preparer to turn over such excess fees. This section is analogous to § 329(b), applicable to attorneys. The excessiveness or reasonableness of fees "is a question of fact to be determined by the particular circumstances of each case." 2 Collier on Bankruptcy ("Collier") ¶ 329.04 (collecting cases under § 329(b)).

Snyder's fee of $450 is unreasonable and excessive based on the amount of work done (eleven documents prepared) and the nature of that work (primarily typing). See Collier ¶ 110.09 (collecting cases reducing, under § 110(h), fees charged in excess of about $50 to $100). Based on the extent of Snyder's work for the Debtors, the quality of which is not challenged by the UST, and given the specifics of the Debtors' case, the court determines $150 to be a reasonable fee.⁶

B. Required Use of Social Security Number Under § 110(c)

Section 110(c)⁷ requires a bankruptcy petition preparer to subscribe his or her SSN to "documents for filing." Collier ¶ 110.03. Subsection (c)(1) requires an identifying number; subsection (c)(2) defines the identifying number as the preparer's SSN; subsection (c)(3) imposes a fine for failure to comply with subsection (c)(1). Snyder argues that since a fine is imposed only for violation of subsection (c)(1) and since subsection (c)(1) mentions nothing about an SSN, he cannot be fined for failing to use his SSN. Snyder's reading would emasculate subsection (c)(2) despite its mandatory language, and ignores the plain meaning of § 110(c) as a whole and the "settled rule that a statute must, if possible, be construed in such a fashion that every word has some operative effect." U.S. v. Nordic Village, 503 U.S. 30, 35, 112 S.Ct. 1011, 1015, 117 L.Ed.2d 181 (1992).

Snyder failed to subscribe his SSN on any document he prepared on behalf of Debtors. He filed eleven such documents. Because § 110(c) requires subscription of a preparer's SSN, Snyder may be required to pay a fine unless his failure is excused for reasonable cause.

C. Section 110(c) Does Not Violate Snyder's Constitutional Right to Privacy

"The Supreme Court has limited the constitutional right to privacy to interferences with a person's most basic decisions about family and parenthood . . . as well as bodily integrity." California v. Federal Communications Commission, 75 F.3d 1350, 1361 (9th Cir.1996) (internal quotations omitted). "The constitutional right to privacy embodies only those personal rights that can be deemed `fundamental' or `implicit in the concept of ordered liberty.'" McElrath v. Califano, 615 F.2d 434, 441 (7th Cir.1980) (quoting Roe v. Wade, 410 U.S. 113, 152, 93 S.Ct. 705, 726, 35 L.Ed.2d 147 (1973)).

The § 110(c) requirement that Snyder disclose his SSN on documents for filing does not violate his constitutional right to privacy. "Mandatory disclosure of one's social security number does not so threaten the sanctity of individual privacy as to require constitutional protection." Doyle v. Wilson, 529 F.Supp. 1343, 1348 (D.C.Del. 1982). See also California v. FCC, 75 F.3d 1350, 1361 (no privacy right to protection from disclosure of telephone numbers via caller identification services); McElrath 615 F.2d at 441 (privacy rights not violated where mother must disclose SSNs of her children in order to receive welfare benefits); Doe v. Sharp, 491 F.Supp. 346, 350 (D.Mass. 1980) (same). Snyder's interest here is seemingly even less "fundamental" or "implicit in the concept of ordered liberty" than were the interests of the plaintiff mothers in McElrath or Sharp, so requiring him to disclose his SSN in this context does not violate his constitutional right to privacy.

D. Section 110(c) Does Not Violate The Privacy Act of 1974

The Privacy Act of 1974, Pub.L. 93-579, § 7, 88 Stat. 1996, 1909, codified at 5 U.S.C. § 552a, note ("Privacy Act") makes it unlawful for any "government agency to deny to any individual any right, benefit or privilege . . . because of such individual's refusal to disclose his" SSN.⁸ Privacy Act § 7(a)(1). But this proviso does not apply to "any disclosure which is required by Federal statute." Privacy Act § 7(a)(2)(A). Bankruptcy Code § 110(c), a federal statute, requires disclosure of a petition preparer's SSN, thus rendering the prohibition in § 7(a) of the Privacy Act inapplicable here.

Section 7(b) of the Privacy Act does require that any "government agency which requests an individual to disclose his" SSN must "inform the individual whether . . . disclosure is mandatory . . ., by what statutory . . . authority such number is solicited, and what uses will be made of it." At least one commentator has suggested that this last requirement of § 7 of the Privacy Act may apply to § 110(c). Collier ¶ 110.03. However, even assuming the UST or the clerk of the bankruptcy court were agencies for purposes of the statute, no "request" has been made for Snyder's SSN. Instead, through § 110(c), Congress has directed that bankruptcy petition preparers subscribe their SSN's on documents for filing. The UST is enforcing a Congressional directive, not "requesting" anyone's SSN. The clerk receives documents for filing but does not police their content or form or request that certain information be included.⁹ Section 7(b) of the Privacy Act is thus inapplicable. Snyder's rights under § 7 of the Privacy Act are not violated by § 110(c).

E. Section 110(c) Does Not Violate Snyder's Constitutional Right to the Free Exercise of Religion

The Free Exercise Clause of the First Amendment provides that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. . . ." U.S. Const., Amdt. 1. The First Amendment thus prohibits governmental regulation of religious beliefs as such; compelled affirmation of religious belief; punishment of expressions of religious doctrine it believes to be false; or imposition of special disabilities based on religious status or views. Employment Division v. Smith, 494 U.S. 872, 877, 110 S.Ct. 1595, 1599, 108 L.Ed.2d 876 (1990). But the Free Exercise clause does not

relieve an individual of the obligation to comply with a valid and neutral law of general applicability on the ground that the law proscribes (or prescribes) conduct that his

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