Sinclair, Matter of

• Decision Date: 18 January 1989
• Docket Number: No. 89-1093,89-1093
• Citation: 870 F.2d 1340
• Parties: , 19 Bankr.Ct.Dec. 386, Bankr. L. Rep. P 72,825 In the Matter of Russell E. SINCLAIR, Sr. and M. Marguerite Sinclair, Debtors-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1340

870 F.2d 1340

57 USLW 2598, 19 Bankr.Ct.Dec. 386, Bankr.

L. Rep. P 72,825

In the Matter of Russell E. SINCLAIR, Sr. and M. Marguerite Sinclair, Debtors-Appellants.

No. 89-1093.

United States Court of Appeals Seventh Circuit.

Submitted Jan. 18, 1989. ^*

Decided March 28, 1989.

Paul H. Lauber, Forrell & Long, Godfrey, Ill., for debtors-appellants.

Clifford C. Emons, Schwarz, Self, Emons & McDonald, Jerseyville, Ill., for defendant-appellee.

Before WOOD, Jr., and EASTERBROOK, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

EASTERBROOK, Circuit Judge.

This case presents a conflict between a statute and its legislative history. The Sinclairs, who have a family farm, filed a bankruptcy petition in April 1985 under Chapter 11 of the Bankruptcy Act of 1978. In October 1986 Congress added Chapter 12, providing benefits for farmers, and the Sinclairs asked the bankruptcy court to convert their case from Chapter 11 to Chapter 12. The bankruptcy judge declined, and the district court affirmed. Each relied on Sec. 302(c)(1) of the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986, Pub.L. 99-554, 100 Stat. 3088:

The amendments made by subtitle B of title II shall not apply with respect to cases commenced under title 11 of the United States Code before the effective date of this Act.

The Sinclairs rely on the report of the Conference Committee, which inserted Sec. 302(c)(1) into the bill:

It is not intended that there be routine conversion of Chapter 11 and 13 cases, pending at the time of enactment, to Chapter 12. Instead, it is expected that courts will exercise their sound discretion in each case, in allowing conversions only where it is equitable to do so.

Chief among the factors the court should consider is whether there is a substantial likelihood of successful reorganization under Chapter 12.

Courts should also carefully scrutinize the actions already taken in pending cases in deciding whether, in their equitable discretion, to allow conversion. For example, the court may consider whether the petition was recently filed in another chapter with no further action taken. Such a case may warrant conversion to the new chapter. On the other hand, there may be cases where a reorganization plan has already been filed or confirmed. In cases where the parties have substantially relied on current law, availability [sic] to convert to the new chapter should be limited.

H.R.Conf.Rep. 99-958, 99th Cong., 2d Sess. 48-49 (1986), U.S.Code Cong. & Admin.News 1986, pp. 5227, 5249-5250. The statute says conversion is impossible; the report says that conversion is possible and describes the circumstances under which it should occur.

Which prevails in the event of conflict, the statute or its legislative history? The statute was enacted, the report just the staff's explanation. Congress votes on the text of the bill, and the President signed that text. Committee reports help courts understand the law, but this report contradicts rather than explains the text. So the statute must prevail. Such is the holding of In re Erickson Partnership, 856 F.2d 1068 (8th Cir.1988).

Yet the advice from the Supreme Court about how to deal with our situation seems scarcely more harmonious than the advice from the legislature. The reports teem with statements such as: "When we find the terms of a statute unambiguous, judicial inquiry is complete", Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981). See also, e.g., United States v. Ron Pair Enterprises, Inc., --- U.S. ----, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989) ("where, as here, the statute's language is plain, 'the sole function of the courts is to enforce it according to its terms.' "); Burlington Northern R.R. v. Oklahoma Tax Commission, 481 U.S. 454, 461, 107 S.Ct. 1855, 1859, 95 L.Ed.2d 404 (1987); United States v. Locke, 471 U.S. 84, 95-96, 105 S.Ct. 1785, 1792-93, 85 L.Ed.2d 64 (1985); TVA v. Hill, 437 U.S. 153, 184 n. 29, 98 S.Ct. 2279, 2296 n. 29, 57 L.Ed.2d 117 (1978); Packard Motor Car Co. v. NLRB, 330 U.S. 485, 492, 67 S.Ct. 789, 793, 91 L.Ed. 1040 (1947); United States v. Shreveport Grain & Elevator Co., 287 U.S. 77, 83-84, 53 S.Ct. 42, 44, 77 L.Ed. 175 (1932); Wisconsin R.R. Commission v. Chicago, Burlington & Quincy R.R., 257 U.S. 563, 588-89, 42 S.Ct. 232, 237-38, 66 L.Ed. 371 (1922); Caminetti v. United States, 242 U.S. 470, 490, 37 S.Ct. 192, 196, 61 L.Ed. 442 (1917). Less frequently, yet with equal conviction, the Court writes: "When aid to the construction of the meaning of words, as used in the statute, is available, there certainly can be no 'rule of law' which forbids its use, however clear the words may appear on 'superficial examination.' " United States v. American Trucking Associations, Inc., 310 U.S. 534, 543-44, 60 S.Ct. 1059, 1064, 84 L.Ed. 1345 (1940) (footnotes omitted), repeated in Train v. Colorado Public Interest Research Group, Inc., 426 U.S. 1, 10, 96 S.Ct. 1938, 1942, 48 L.Ed.2d 434 (1976). See also, e.g., California Federal Savings & Loan Association v. Guerra, 479 U.S. 272, 284, 107 S.Ct. 683, 691, 93 L.Ed.2d 613 (1987); Church of the Holy Trinity v. United States, 143 U.S. 457, 459, 12 S.Ct. 511, 512, 36 L.Ed. 226 (1892). Some cases boldly stake out a middle ground, saying, for example: "only the most extraordinary showing of contrary intentions from [the legislative history] would justify a limitation on the 'plain meaning' of the statutory language." Garcia v. United States, 469 U.S. 70, 75, 105 S.Ct. 479, 482, 83 L.Ed.2d 472 (1984). See also, e.g., Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982); Ford Motor Credit Co. v. Cenance, 452 U.S. 155, 158 n. 3, 101 S.Ct. 2239, 2241 n. 3, 68 L.Ed.2d 744 (1981). This implies that once in a blue moon the legislative history trumps the statute (as opposed to affording a basis for its interpretation) but does not help locate such strange astronomical phenomena. These lines of cases have coexisted for a century, and many cases contain statements associated with two or even all three of them, not recognizing the tension.

What's a court to do? The answer lies in distinguishing among uses of legislative history. An unadorned "plain meaning" approach to interpretation supposes that words have meanings divorced from their contexts--linguistic, structural, functional, social, historical. Language is a process of communication that works only when authors and readers share a set of rules and meanings. In re Erickson, 815 F.2d 1090 (7th Cir.1987). What "clearly" means one thing to a reader unacquainted with the circumstances of the utterance--including social conventions prevailing at the time of drafting--may mean something else to a reader with a different background. Legislation speaks across the decades, during which legal institutions and linguistic conventions change. To decode words one must frequently reconstruct the legal and political culture of the drafters. Legislative history may be invaluable in revealing the setting of the enactment and the assumptions its authors entertained about how their words would be understood. It may show, too, that words with a denotation "clear" to an outsider are terms of art, with an equally "clear" but different meaning to an insider. It may show too that the words leave gaps, for short phrases cannot address all human experience; understood in context, the words may leave to the executive and judicial branches the task of adding flesh to bones. These we take to be the points of cases such as American Trucking holding that judges may learn from the legislative history even when the text is "clear". Clarity depends on context, which legislative history may illuminate. The process is objective; the search is not for the contents of the authors' heads but for the rules of language they used.

Quite different is the claim that legislative intent is the basis of interpretation, that the text of the law is simply evidence of the real rule. In such a regimen legislative history is not a way to understand the text but is a more authentic, because more proximate, expression of legislators' will. One may say in reply that legislative history is a poor guide to legislators' intent because it is written by the staff rather than by members of Congress, because it is often losers' history ("If you can't get your proposal into the bill, at least write the legislative history to make it look as if you'd prevailed"), because it becomes a crutch ("There's no need for us to vote on the amendment if we can write a little legislative history"), because it complicates the task of execution and obedience (neither judges nor those whose conduct is supposed to be influenced by the law can know what to do without delving into legislative recesses, a costly and uncertain process). Often there is so much legislative history that a court can manipulate the meaning of a law by choosing which snippets to emphasize and by putting hypothetical questions--questions to be answered by inferences from speeches rather than by reference to the text, so that great discretion devolves on the (judicial) questioner. Sponsors of opinion polls know that a small change in the text of a question can lead to large differences in the answer. Legislative history offers wilful judges an opportunity to pose questions and devise answers, with predictable divergence in results. These and related concerns have lead to skepticism about using legislative history to find legislative intent. E.g., Blanchard v. Bergeron, --- U.S. ----, 109 S.Ct. 939, 946-47, 103 L.Ed.2d 67 (1989) (Scalia, J., concurring); Covalt v. Carey Canada Inc., 860 F.2d 1434, 1438-39 (7th Cir.1988); Electrical Workers v. NLRB, 814 F.2d 697, 712-15 (D.C.Cir.1987), and id. at 715-20 (Buckley, J., concurring); FEC v. Rose, 806 F.2d 1081, 1089-90 (D.C.Cir.1986); Wallace v. Christensen, 802 F.2d 1539, 1559-60 (9th Cir.198...