Perroton, In re

• Citation: 958 F.2d 889
• Decision Date: 17 September 1991
• Docket Number: No. 89-15420,89-15420
• Parties: , 26 Collier Bankr.Cas.2d 890, 22 Bankr.Ct.Dec. 1152, Bankr. L. Rep. P 74,510 In re Jon Robert PERROTON, Debtor. Jon Robert PERROTON, Appellant, v. Nancy L.G. GRAY, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 889

958 F.2d 889

60 USLW 2590, 26 Collier Bankr.Cas.2d 890,

22 Bankr.Ct.Dec. 1152, Bankr. L. Rep. P 74,510

In re Jon Robert PERROTON, Debtor Jon Robert PERROTON, Appellant, v. Nancy L.G. GRAY, Appellee.

No. 89-15420.

United States Court of Appeals, Ninth Circuit.

Submitted Sept. 17, 1991 ^*.

Submission Withdrawn Sept. 27, 1991.

Resubmitted Feb. 24, 1992.

Decided March 9, 1992.

Jon Robert Perroton, pro se.

Appeal from the Ninth Circuit Bankruptcy Appellate Court.

Before CHOY, ALARCON and T.G. NELSON, Circuit Judges.

CHOY, Circuit Judge:

Jon R. Perroton, proceeding pro se, appeals from the Bankruptcy Appellate Panel's (BAP) dismissal of his appeal for failure

                to pay the filing fees required by 28 U.S.C. §§ 1930(b) & (c) and from the denial of his related motion to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a).   Finding that under § 1915(a) the bankruptcy court lacks the authority to waive prepayment of filing fees, we AFFIRM
                

FACTUAL AND PROCEDURAL BACKGROUND

On January 3, 1989 the BAP notified Perroton that his appeal would be dismissed unless he paid the $105.00 filing fee required by §§ 1930(b) & (c) (items 9 and 16 on the schedule of fees prescribed by the Judicial Conference of the United States). On January 21, 1989 Perroton filed a motion to pursue his appeal in forma pauperis pursuant to 28 U.S.C. § 1915(a). ¹ The BAP issued an order on February 15, 1989 denying Perroton's motion and notified him that his appeal would be dismissed unless he paid the filing fee within fifteen days of the date of the order. On March 6, 1989 Perroton filed with the BAP a notice of appeal to this Circuit. Over one month later, on March 22, 1989 the BAP dismissed Perroton's appeal for failure to pay the appropriate filing fee.

On September 27, 1991 this panel ordered the Office of the United States Trustee for the Northern District of California to file an amicus brief addressing the question of whether the Supreme Court's holding in United States v. Kras, 409 U.S. 434, 440, 93 S.Ct. 631, 635, 34 L.Ed.2d 626 (1973), also applies to the additional fees prescribed by 28 U.S.C. § 1930(b) and (c). ² Kras held that under the Bankruptcy Act all parties were required to pay commencement fees for filing a petition for bankruptcy and that the earlier pauperis statute which contained the same language as § 1915(a), was not applicable to bankruptcy proceedings under the Act. Kras, 409 U.S. at 439-40, 93 S.Ct. at 634-35. ³ We asked that, in addition to presenting original research and analysis on this question, the Trustee critique the rationales set forth in a number of cases which either followed, limited, or rejected the holding of Kras as applied to §§ 1930(b) & (c) fees and that he examine the legislative history of 1930 to determine whether that history reveals Congress's intent, if any, to render Kras applicable to subsections (a), (b), and/or (c). The Trustee filed his amicus brief on November 6, 1991 and Perroton failed to file a reply brief although he was given leave to file one.

ANALYSIS

1. Caselaw Regarding the Bankruptcy Court as a "Court of United States"

Under § 1915(a) "[a]ny court of the United States may authorize the commencement, prosecution or defense of any suit, action or proceeding, civil or criminal, or appeal therein, without prepayment of fees and costs or security therefor...." 28 U.S.C. § 1915(a) (emphasis added). Section 451 contains the definitions for various Only four reported cases have addressed whether a bankruptcy court is "court of the United States" under § 451 in the context of the bankruptcy court's authority to act under § 1915(a). In re Broady, 96 B.R. 221 (Bankr.W.D.Mo.1988); In re Shumate, 91 B.R. 23 (Bankr.W.D.Va.1988); In re Bauckey, 82 B.R. 13 (Bankr.N.J.1988); In re Sarah Allen Home, Inc., 4 B.R. 724 (Bankr.E.D.Pa.1980). Both the Broady and Bauckey courts denied the petitioners leave to file in forma pauperis after concluding that a bankruptcy court is not a "court of the United States" under § 1915(a). The courts reasoned that a "court of the United States," as defined by 451, is one created under Article III of the Constitution and that the provisions of Title 28 relating to a "court of the United States," therefore, are applicable only to Article III courts. Broady and Bauckey concluded that, since bankruptcy courts are not Article III courts whose judges are entitled to hold office during good behavior, they lack the authority to waive prepayment of filing fees under § 1915(a). Broady, 96 B.R. at 222-23; ⁴ Bauckey, 82 B.R. at 14; ⁵ see Sarah Allen, 4 B.R. at 726-27. ⁶ Similarly, a number of courts have held that a bankruptcy court is not a "court of the United States" under § 451 and therefore lacks the authority to act under other sections of Title 28 where this phrase is used. In re Arkansas Communities, Inc., 827 F.2d 1219, 1221 (8th Cir.1987) (questionable whether a bankruptcy court is a "court of the United States" under 451 and therefore it lacks power to award attorney fees under 28 U.S.C. § 1927); In re Memorial Estates, 116 B.R. 108, 110 (Bankr.N.D.Ill.1990) (a bankruptcy court is not a "court of the United States" under 451 and thus has no power under 28 U.S.C. § 1927); In re Richardson, 52 B.R. 527, 531-32 (Bankr.W.D.Mo.1985) (same); see In re Becker's Motor Transp., 632 F.2d 242, 246-47 (3d Cir.1980) (bankruptcy court not a "court of the United States" under 451 and therefore it is not prohibited under 28 U.S.C. § 2201 from issuing declaratory relief with respect to tax liability), cert. denied, 450 U.S. 916, 101 S.Ct. 1358, 67 Shumate is the only case holding that a bankruptcy court is a "court of the United States" under § 451 and thus that it has the authority to waive fees under § 1915(a). ⁸ In Shumate the debtor filed a petition to appeal an order of the bankruptcy court in forma pauperis under § 1915(a) and the defendant argued that the bankruptcy court is not a "court of the United States" under § 451 and therefore lacked the authority to grant leave to proceed in forma pauperis. The defendant noted that in the Bankruptcy Act of 1978 Congress amended § 451 to include the bankruptcy court as "court of the United States," but that the amendment was deleted before it took effect. See infra section 3 (discussing the legislative history of § 451). The defendant contended that this deletion indicated that the bankruptcy court was not intended to be a "court of the United States" under § 451.

                terms used throughout Title 28.   Under that section a "court of the United States" is defined as "the Supreme Court of the United States, courts of appeals, district courts constituted by chapter 5 of this title, including the Court of International Trade and any court created by Act of Congress the judges of which are entitled to hold office during good behavior."  28 U.S.C. § 451
                L.Ed.2d 341 (1981); 7 see also In re Korhumel Indus., Inc., 103 B.R. 917, 920-21 (Bankr.N.D.Ill.1989) (although a bankruptcy court is not a "court of the United States" and lacks power to grant declaratory judgments under 28 U.S.C. § 2201 it does have the power to do so under 28 U.S.C. § 157(a) because the new Bankruptcy Code contemplates this type of delegation).   But see In re TCI Ltd., 769 F.2d 441, 448-49 (7th Cir.1985) (affirming bankruptcy court order of sanctions under 28 U.S.C. § 1927 without even considering whether the bankruptcy court is a "court of the United States" under 451);  In re Chisum, 68 B.R. 471, 473 (Bankr. 9th Cir.1986) (same), aff'd on other grounds, 847 F.2d 597, cert. denied, 488 U.S. 892, 109 S.Ct. 228, 102 L.Ed.2d 218 (1988);  In re Wonder Corp. of America, 109 B.R. 18, 27-28 (Bankr.Conn.1989) (citing TCI Ltd. and Chisum as support for holding that the bankruptcy court is a "court of the United States" under § 451 and thus has power to act under 28 U.S.C. § 1927)
                

In reaching its conclusion the Shumate court discussed the decisions in Sarah Allen, In re Palestino, 4 B.R. 721 (Bankr.M.D.Fla.1980), ⁹ and Bauckey. The court noted that according to its reading of Bauckey, the Bauckey court found that Kras and 1930(a) controlled when dealing with the issue of a bankruptcy court waiver of filing fees for initiating a petition for bankruptcy and that the statement in Bauckey regarding the bankruptcy court as a "court of the United States" under § 1915(a) was therefore dictum. Shumate, 91 B.R. at 26. The court declined to follow that dictum for two reasons. First, the court concluded that the case before it was more like Palestino and Sarah Allen than Bauckey because the need to proceed in forma pauperis on appeal is related closely to the need to have rights adjudicated by the trial court in adversary proceedings and that it would be incongruous to allow a party to proceed in forma pauperis in the initial proceeding and yet deny it on appeal. Id. at 26. Second, the court concluded that bankruptcy judges are judges entitled to "hold office during good behavior" under § 451. The court based this conclusion on the language of 28 U.S.C. §§ 152(e), ¹⁰

151, ¹¹ and 152(a)(1) ¹² and on the fact that the language of § 451 neither specifically requires that the judges of a "court of the United States" be Article III judges nor, does it make good behavior the only condition for their service. Id. at 26.

2. Examining the Statutory Language

When interpreting a statute a court first must examine the statutory language. United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981). If the language of the statute is clear and unambiguous, judicial inquiry is complete and that language controls absent rare and exceptional circumstances. Id.; Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981). Moreover, in statutes that contain statutory definition sections it is commonly understood that such definitions establish meaning where the terms appear in that same Act. 2A Norman J. Singer, Sutherland on...