In an 8-1 decision authored by Justice Kagan, the Supreme
Court ruled today that an ownership expense is not "applicable" under
the Means Test unless the Debtor has an actual payment. Ransom v. FIA Card
Services, No. 09-907 (1/11/11).
Justice Kagan framed the issue in this manner:
This case concerns the specified expense for
vehicle-ownership costs. We must determine whether a debtor like petitioner
Jason Ransom who owns his car outright, and so does not make loan or lease
payments, may claim an allowance for car-ownership costs (thereby reducing the
amount he will repay creditors). We hold that the text, context, and purpose of
the statutory provision at issue preclude this result. A debtor who does not
make loan or lease payments may not take the car-ownership deduction.
Opinion, pp. 1-2.
Justice Kagan described the means as designed to "help ensure that debtors
who can pay creditors do pay them." Opinion, p. 2.
The Dictionary Approach to Ordinary Meaning
Justice Kagan used an ordinary meaning analysis and a dictionary to conclude
that the ownership expense was not applicable.
The key word in this provision is "applicable": A debtor may
claim not all, but only "applicable" expense amounts listed in the Standards.
Whether Ransom may claim the $471 car-ownership deduction accordingly turns on
whether that expense amount is "applicable" to him.
Because the Code does not define "applicable," we look to the ordinary meaning
of the term. (citation omitted). "Applicable" means "capable of being applied:
having relevance" or "fit, suitable, or right to be applied:
appropriate."Webster's Third New International Dictionary 105 (2002). See also
New Oxford American Dictionary 74 (2d ed. 2005) ("relevant or appropriate"); 1
Oxford English Dictionary 575 (2d ed. 1989) ("[c]apable of being applied" or
"[f]it or suitable for its purpose, appropriate"). So an expense amount is
"applicable" within the plain meaning of the statute when it is appropriate,
relevant, suitable, or fit.
What makes an expense amount "applicable" in this sense (appropriate, relevant,
suitable, or fit) is most naturally understood to be its correspondence to an
individual debtor's financial circumstances. Rather than authorizing all
debtors to take deductions in all listed categories, Congress established a
filter: A debtor may claim a deduction from a National or Local Standard table
(like "[Car]Ownership Costs") if but only if that deduction is appropriate for
him. And a deduction is so appropriate only if the debtor has costs
corresponding to the category covered by the table-that is, only if the debtor
will incur that kind of expense during the life of the plan. The statute
underscores the necessity of making such an individualized determination by
referring to "the debtor's applicable monthly expense amounts," (citation
omitted)-in other words, the expense amounts applicable (appropriate, etc.) to
each particular debtor. Identifying these amounts requires looking at the
financial situation of the debtor and asking whether a National or Local
Standard table is relevant to him.
If Congress had not wanted to separate in this way debtors who qualify for an
allowance from those who do not, it could have omitted the term "applicable"
altogether. Without that word, all debtors would be eligible to claim a
deduction for each category listed in the Standards. Congress presumably
included "applicable" to achieve a different result.
Opinion, pp. 6-8.
This passage is the heart of the opinion. One word used according to its
ordinary meaning decides the issue.
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