With his decision in In re Attorneys at Law and Draft Relief Agencies, 332 B.R. 66, (Bank. S.D. Ga. 2005), on the applicability of the Debt Relief Agency provisions to attorneys, Judge Lamar W. Davis Jr. not only takes the bull by the horns, but literally throws it to the ground. Unfortunately, this particular bull is not likely to stay thrown and will doubtlessly rise to gore lawyers who provide bankruptcy advice to assisted persons. The group of lawyers gored by the DRA sections, as many commentators have already noted, is not limited to those representing consumer debtors. Attorneys that represent creditors who themselves fall within the definition of an assisted person may also acquire the DRA taint.
While I, as do many others, like Judge Davis' result, his analysis and reasoning simply do not withstand critical analysis. Judge Davis acknowledges that the language of §101(12A), "all persons," is certainly broad enough to encompass attorneys. With that starting point, one must analyze §101(12A) to determine whether Congress intended to exclude attorneys from the definition of a debt relief agency. Judge Davis' analysis starts with the observation that, while extremely broad, the definition of a DRA in §101(12A) does not include the term "attorney". He then uses this point coupled with various theories to conclude that Congress did not intend to include attorneys within the scope of the Debt Relief Agency provisions of the Code, §§526, 527 and 528.
Judge Davis starts with the nonremarkable proposition that as a matter of plain language, the terms "attorney" and "debt relief agency" are not synonymous, nor under common understanding do they each include the other. Applying the plain-meaning rule, Judge Davis reaches a conclusion that the terms be applied using their ordinary meaning. Whatever the ordinary meaning of "debt relief agency" may be, what Judge Davis overlooks is that in §101(12A) Congress is providing a definition of that term. It is therefore necessary to examine the plain meaning of the words in §101(12A), not the plain meaning of the phrase "debt relief agency." A debt relief agency is defined by §101(12A) as "any person who provides bankruptcy assistance to an assisted person." "Person" in turn is defined as including an individual, partnership or corporation [§101(41)]. Attorneys clearly fall within the definition of a person. Consequently, we must look to the rest of §101(12A) to see if attorneys are excluded. There are five exceptions in §101(12A): (1) the agent/employee of the person providing the assistance, (2) IRC §501(c)(3) organizations, (3) a creditor assisting the assisted person in restructuring the debt owed to the creditor, (4) certain financial institutions and (5) authors, publishers and distributors of copyrighted works. An individual attorney may fall within one or more of the enumerated exceptions; however, attorneys, as a class, do not. Since Congress has specifically enumerated the exceptions to the definition of a DRA, the canon of statutory construction expressio unis est exclusio alterius creates an inference that items not mentioned were excluded by deliberate choice, not inadvertence. This point is bolstered by one of the points relied upon by Judge Davis: that §101(12A) includes a bankruptcy petition preparer, but the definition of a bankruptcy petition preparer in §110(a) specifically excludes attorneys.1 When Congress intends to exclude attorneys it knows how to do so, and it, as noted below, steadfastly declined to accept the invitation to exclude attorneys from the definition and operative effects of a DRA.
While I wholeheartedly agree with Judge Davis that a law should be given a sensible interpretation, and a literal interpretation avoided where it would lead to absurd consequences, the problem in applying that maxim of statutory construction in this case is that excluding attorneys would be inconsistent with the legislative purpose. The provisions of §§526, 527 and 528 are easily applied to debtors' attorneys, and in fact, some of the provisions would not apply to nonattorneys. On the other hand, application to attorneys who represent creditors falling within the scope of the definition of an assisted person, while within the scope of the plain meaning, is problematical and possibly an absurdity. Most of the requirements of §§526-528 would be inapplicable, and it certainly does not appear to be consistent with the legislative purpose that was, at least ostensibly, to provide added protection to consumer debtors.
While Judge Davis is unable to "conceive that Congress would ever take such an astounding step toward the federal regulation of professionals without forthrightly and expressly stating its intent," the long history of this provision that shows Congress did in fact loudly telegraph its intent. In its initial two incarnations, Congress clearly indicated that the definition of a DRA included attorneys as well as nonattorneys [see, e.g., H.R. Rep. 105-540, pt. 1 at 77 (1998) (H.R. 3150); H.R. Rep. 106-123, pt. 1 at 120 (1999) (H.R. 833)]. In the 107th, 108th and 109th Congresses, the section-by-section analyses of the bills did not use the express language including attorneys that appeared in connection with the committee reports in the 105th and 106th Congresses. However, the history of S. 256, which became Pub. Law 109-8, does not support Judge Davis' conclusion; in fact, it eviscerates it. When S. 256 came on for debate on the Senate floor, Sen. Feingold offered a series of amendments, including Senate Amendment 93, to add " other than an attorney or an employee of an attorney" after the word "person" in §101(12A). Senate Amendment 93 was withdrawn as part of a compromise agreement on the package [151 Cong. Rec. S2462-63 (daily ed. March 10, 2005)]. During the markup session in the House Judiciary Committee, Rep. Watt offered an identical amendment. That proposed amendment was rejected by voice vote [H.R. Rep. 109-31, pt. 1, at 520, 522-23 (2005)].
Congress was certainly not unaware of the fact that, as written, the net cast by §101(12A) was interpreted as ensnaring attorneys. See, e.g., ABA Letter to Sen. Leahy, Chairman of the Senate Judiciary Committee, dated Aug. 30, 2001 (recommending an amendment to §101(12A) as was proposed in the 109th Congress by Sen. Feingold and Rep. Watt);2 ABA Letter to Rep. Cannon, Chairman of the House Subcommittee on Commercial and Administrative Law, Committee on the Judiciary, dated March 4, 2003 (same recommendation as in 2001);3 and ABA Letter to Rep. Sensenbrenner, Chairman of the House Committee on the Judiciary dated March 11, 2005 (reiterating the position of the ABA of 2001 and 2003).4 Judge Davis also cannot conceive that this would have gone unnoticed and undebated by the states. However, many state bars also opposed these provisions, including the state bars of Arizona, Illinois, Iowa, Maryland, Missouri, Minnesota, North Carolina, Ohio, Oregon, Tennessee, Utah, Virginia, Washington and Wisconsin.5
While no one can dispute that the regulation of the practice of law has historically been left for the most part to the states, Judge Davis cites no authority that precludes Congress from regulating practice in federal courts. Indeed, Congress does regulate practice and procedure in federal courts, including regulation of attorneys, both directly and through the Rules Enabling Act.6 Nor do I doubt that Judge Davis would even fleetingly entertain the argument that the Southern District of Georgia lacked the power to regulate attorneys practicing before that court, which power, to the extent it exists, while considered inherent, is subject to Congressional fiat.
While I, as do most if not all those with whom I have discussed the subject, believe that the DRA provisions are an unwise exercise of that power, the inescapable conclusion must be that Congress did not intend to exclude attorneys from the definition of a Debt Relief Agency in §101(12A). This is indeed unfortunate, as application of the provisions of §§526, 527 and 528 to attorneys, whether representing debtors or creditors, will have a very debilitating impact of the attorney-client relationship where the client is an "assisted person." But as the Supreme Court has stated, [t]he fact that Congress may not have foreseen all of the consequences of a statutory enactment is not sufficient reason for refusing to give effect to its plain meaning.7"
1While Judge Davis appears to imply that §110(a) excludes all attorneys, as amended by BAPCPA the exclusion is limited to attorneys for the debtor.
2Accessible at http://www.abanet.org/poladv/letters/107th/bankruptcy083001.html.
3Accessible at http://www.law.unlv.edu/faculty/bam/bkreform2003/aba‑letter.pdf.
4Reprinted in H.R. Rep. 109-31, pt. 1 at 527B32 (2005).
5ABA Fact Sheet Bankruptcy Attorney Liability Legislation, Feb. 25, 2005, accessible at http://www.abanet.org/poladv/priorities/brattyliabilityfactsheet_109thC….
628 U.S.C. §§2071-2077; see e.g., FED. R. CIV. P. 11; FED. R. BANK. P. 9011.
7Union Bank v. Wolas, 502 U.S. 151, 158 (1991).