Legislative Highlights Jul/Aug 2004

<p>The Federal Courts Improvement Act of 2004 (S. 2396)
would amend both Title 28 and Title 11 of the U.S. Code.Section 1412 of
Title 28, dealing with venue changes applicable to both cases and
proceedings in bankruptcy, nowclarifies that the district court, "on its

own motion or on timely motion of a party in interest," may transfer a
case ora proceeding "in the interest of justice or for the convenience
of the parties." This emphasizes the courts' inherentability to transfer

cases where the interest of justice or convenience for the parties
warrants such actions.</p><p>Section 107 of Title 11, which sets forth the
ability of the bankruptcy court to fashion and enter appropriateorders
dealing with the need to protect an entity's interest in legally
recognized confidential matters such astrade secrets and to protect
against matters that are "scandalous or defamatory," would be expanded
to deal withthe recognized right of privacy in the computer age, where
the detailed information in the debtor's file(schedules, financial
statement of affairs and related pleadings) are readily available to
anyone with access to acomputer. A new subsection (c) would enable the
bankruptcy court, for cause, to fashion and enter anappropriate order in

order to protect any person (which by §101 definition excludes
"governmental units") from:</p><ol><li>any "means of identification" as
defined under §1028 (d) (IV) of Title 18.</li><li>information that could

cause undue annoyance, embarrassment, oppression or risk of injury to
persons or property.</li></ol><p>Essentially, these new provisions are
designed to cope with the inevitable problems arising from identity
theft.While these new provisions provide the bankruptcy court with a
legal basis for dealing with this type of problem,there still remains
the dilemma of what information should be made available. In providing
legitimate parties ininterest with information that can be utilized to
discover property of the estate, or to uncover fraud or otherwrongdoing,

there will be necessarily a tension between providing access to such
personal and financialinformation, which might be used to injure the
person or property of the honest debtor. It is inevitable, as
thesematters progress, and in view of the expanded use of computers in
providing such information to the public at large,that bankruptcy courts

will be called upon to enter protective orders to limit the disclosure
of personal and financialinformation contained in the bankruptcy
schedules and related pleadings to only identifiable parties in
interest.</p><p>Finally, in keeping with this protective approach to
personal identification in connection with a filed bankruptcycase,
§342(c) of Title 11 would be further amended to require that all
notices to creditors contain only the last fourdigits of the taxpayer's
identification number.</p><p>—<i>Hon. Roger M. Whelan</i>