CA1: the interaction of sentencing, bankruptcy, collateral consequences of a non-conviction , and criminal law

Larson v. Howell, No. 07-1925.  Two homestead exemption in a row.  This one is more interesting the previous one, because “as a matter of first impression, [requires the First] to determine whether the state crime of negligent vehicular homicide qualifies as a "criminal act" which would cap a debtor's homestead exemption to $125,000 under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), Pub. L. No. 109-8, § 322(a), 119 Stat. 23, 97 (codified at 11 U.S.C. § 522(q)(1)(B)(iv)).”  While the debtor admitted facts in the above case, the case was continued for a year while a civil suit continued.  The debtor claimed the state-law-based homestead exemption of $500,000.

The First holds that after the debtor was convicted of “negligent homicide” in state court under Mass. Gen. Laws ch. 90, § 24G(b), the mental state implicit in admissions pursuant to that section trigger the cap.

People that hate America stop reading here.  Everyone else read on.

The bankruptcy trustee and the debtor both think that “"criminal act" language requires a level of mens rea beyond mere negligence; (2) the disposition in the state court was insufficient to establish a "criminal act"; and (3) Massachusetts public policy requires that homestead exemptions be liberally construed.”  The Bankruptcy Court disagreed.

The First says that the statutory text is unambiguous, so legislative history accompanying a version of the bill that was never enacted doesn’t matter.   And, as a statutory matter, the Bankruptcy Code is more concerned with (for the purposes of this provision – but not others) whether the conduct “arises” from a criminal act.  Other sections explicitly say “convicted.”   The First then goes on to say that she “effectively” plead guilty by admitting the facts because state law says that this is possibel. Mass. Gen. Laws ch. 278, § 18.  But, the First (in a footnote) says it isn’t reaching the question of whether a Bankruptcy court can collaterally attack facts found in state-court proceedings.

Update: A helpful commentator points this out, which puts it all into perspective.

Massachusetts is unusual in criminalizing ordinary negligence rather than "criminal negligence" in traffic cases. The conduct required to trigger the exemption now varies significantly from state to state.

Admissions to sufficient facts are common in motor vehicle homicide cases because of the 15 year license suspension required on formal conviction.

I think this is another example of Federal judges in Massachusetts not understanding that there is a well-developed criminal justice system in that state which relies on a complex interaction between the judiciary, the legislature, prosecutors and litigants to dish out justice.  (My guess is that it is probably more enlightened than the FSGs, because the people involved in writing it have real experience from all ends of the criminal justice system.)  See our post on this here.

Comments

[JFC]

A literally correct reading of the statute that clearly contradicts its intent. The law intends to trigger the cap if the mental state is reckless but says that a criminal conviction is good enough. Massachusetts is unusual in criminalizing ordinary negligence rather than "criminal negligence" in traffic cases. The conduct required to trigger the exemption now varies significantly from state to state.

Admissions to sufficient facts are common in motor vehicle homicide cases because of the 15 year license suspension required on formal conviction.

[S. COTUS]

Thanks. I added your comments to the post, since I think people need to understand that Mass actually was trying to accomplish some good w/ its procedures.