Bankruptcy and the U.S. Supreme Court

Turning at last to the Supreme Court's bankruptcy decisions, some descriptive statistics about the Court's bankruptcy jurisprudence illuminate the domain of the project. Since enactment of the Bankruptcy Code in 1978, the Supreme Court has adjudicated eighty-two cases involving the constitutionality or application of that statute (eighty cases with full argument and two “per curiam” summary reversals). This is about 2.5 percent of all of the civil cases the Court has adjudicated during the relevant time period (from October Term 1982, when the first case reached the Court, through the most recently concluded Term of the Court). As Figure 4.1 shows, the cases have not come evenly over time, but have trended upward and downward with three distinct peaks of activity. The earliest peak came from about 1989 to 1996, with the first set of major issues reaching the Court under the Bankruptcy Code. The second peak, from 2002 to 2004, is a little harder to understand, but presumably reflects the sharp upturn in bankruptcy filings about that time. The third peak, if it can yet be called that, is the upturn in cases the last several years, reflecting for the most part issues raised by the enactment of BAPCPA in 2005 and the Great Recession that followed close upon its heels.

I start with the two-part thesis explored by the book as a whole: First, that the institutional structure of the Code (specifically – Congress's decision not to vest administration of the bankruptcy process in an administrative agency) leaves the Court systematically underinformed about the importance of the Bankruptcy Power and the relief it provides. Second, that this vacuum leads the Justices to underweight that interest when they decide cases involving bankruptcy issues. The first place to look, at the level of the Court as a whole, is the extent to which the Court has decided those cases in a way that gives an expansive interpretation of the Bankruptcy Code. There is some subjectivity in that determination, but by my coding of the cases, the Court has voted for an expansive interpretation of the Bankruptcy Power in thirty-two of the cases, about 39% of the time. Because close cases are the ones in which the law is likely to be least determinative, those are the cases in which any disposition toward or against a broad reading of the Code could be seen most clearly.