The passing of Justice Scalia may mean significant changes for creditor-debtor law in the long term. Odds are that President Obama will nominate a moderate to the highest Court to take Scalia's place, and that nominee will be approved by the Senate.
The appointment is most likely to occur this summer for two reasons. First, and considering that the nomination process for a Supreme Court justice lasts months anyway, it would throw a cog into the workings of the Court to appoint a new Justice towards the end of the Court's year, after cases have been briefed, argued by the parties, and discussed in conference by the surviving Justices. Conversely, approving a new Justice in the summer allows that Justice to be moved into the court offices, hired staff and law clerks, and be ready when the Court takes up new cases in November, thus avoiding the potential for 4-4 deadlocks for two Court terms.
Second, Republican Senators facing primary contests in this curious election year will not want to face the voters back home if a moderate makes his way onto the Court. But after the primary, those Senators who survive and face hotly contested races will not want to face allegations from their Democratic challengers that they have engaged in obstructionist tactics.
So, we are likely to end up with a new Justice this summer, and that Justice is likely to be a moderate, in consideration of the Republican Party's majority in the Senate which is capable of blocking more liberal nominees. This will move the Court squarely to where it really needs to be, which is a moderate middle-of-the-road Court overall.
A more moderate Court in this instance means not only a less conservative Court, but also a Court that does not lean so heavily towards the strict interpretation of the Constitution and federal statutes, but instead will be inclined to give the lower courts greater leeway to fulfill what those courts see as the general purposes behind the laws, however they are worded.
This has the potential for significant ramifications for creditor-debtor law, to which Scalia had taken some interest before his passing.
For instance, it was Scalia who wrote the 2014 Opinion in Law v. Siegal, which held that a Bankruptcy Court had no power under the Bankruptcy Code to "surcharge" an otherwise exempt asset of the debtor, because of the debtor's misconduct. Prior to this Opinion, the Bankruptcy Court would allow, for example, a creditor to execute against a debtor's exempt IRA if he debtor had moved funds offshore.
It was also Scalia who wrote the 1999 Opinion in Grupo Mexicano de Sarrollo v. Alliance Bond Fund, which held that no federal "common law" existed to allow creditors to seek an injunction preventing a Mexican company from transferring assets out of the U.S. to keep those creditors from collecting against those assets.
In general, Scalia took a very inflexible black-letter-law approach to collection law, which basically told Congress that "if you want creditors to be able to do something, then you need to specifically authorize it by statute."
While this may sound appealing in the abstract, it actually cuts against the grain of creditor-debtor law whereby the courts have traditionally been given considerable leeway to come up with novel and not-expressly-authorized means of enforcing their judgments, i.e., protecting creditors against debtors who are attempting to abscond with their assets. A more moderate Court might be inclined towards returning these implied powers to the courts, and take the more traditional approach of "If Congress doesn't want the Courts from doing something to enforce their judgments, then Congress needs to specify those limitations."
In other words, we are now more likely to see the Courts used their unspecified "general powers" to enforce judgments, and this will be good news for creditors and bad news for debtors.
Of course, this changes will be as slow to take effect as Scalia was during this long tenure to make his changes in the first place. The law is typically a glacier -- you can't actually perceive it to be moving, but you need to compare where it was and is every ten years of so to see how it has changed.
But changes are likely coming, albeit at the glacial pace.
This article at http://onforb.es/24g0PWz
