Statutory Interpretation in Bankruptcy Matters

Statutory Interpretation in Bankruptcy Matters

 
In this analysis, James Lawniczak surveys the Supreme Court's evolving approach to the interpretation of bankruptcy statutes. He explains how the Courts common law method has evolved into a "plain meaning" approach, where the Court reviews the statute and does its best to give effect to the language of the statute and the intent of Congress. This in turn has broadened, in some cases, into a "better meaning" method of statutory interpretation.
 
Mr. Lawniczak writes:  The U.S. Supreme Court's approach to the interpretation of bankruptcy statutes has changed over time. Quite some time ago, the Court used a common law approach. It would indeed start its consideration with the statutory language, just as a common law court starts its consideration with a prior court decision in another case. The Court would then use common law principles to seek out the fair and equitable result in the case pending before it, even though the statute did not necessarily lead to that result.

The Supreme Court's method of statutory interpretation then evolved into the current plain meaning approach, where the Court reviews the statute and does its best to give effect to the language of the statute and the intent of Congress, leaving the determination of what is fair and appropriate to Congress. This latter approach has been broadened in several cases, which have used a better meaning approach to interpret ambiguous statutory language, by choosing the better of the possible meanings solely from the structure of the statutory language itself.

The Constitution gives Congress the power to legislate on bankruptcy matters. Thus, the Constitution itself has determined that policy decisions on what is appropriate and fair in bankruptcy matters are for Congress and not the courts. Therefore, the appropriate approach in bankruptcy cases is indeed to give effect to the language that Congress has used in the statute.