Kontrick v. Ryan – Oral Argument – November 03, 2003

Media for Kontrick v. Ryan

Audio Transcription for Opinion Announcement – January 14, 2004 in Kontrick v. Ryan

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William H. Rehnquist:

We’ll hear argument now in No. 02-819, Patrick J. Kontrick v. Robert A. Ryan.

Mr. Poor.

E. King Poor:

Mr. Chief Justice, and may it please the Court:

This case presents a single question: Can the deadline for objecting to a bankruptcy discharge be altered by equitable exceptions?

To answer that question, we start with the language of the rules.

Bankruptcy Rule 4004 states that an objection to discharge must be filed no later than 60 days after the first date set for the meeting of creditors.

This rule also allows for an extension of the time, but only by motion and only if that motion is filed, quote, before the time expires.

Ruth Bader Ginsburg:

Mr. Poor, may I suggest that the question you have raised is not the one that I understood this case to involve.

It’s not whether the provision allows for equitable exceptions, it’s whether you forfeited that claim, the claim that it does not… whether you forfeited it by letting the thing go past your answer.

You didn’t raise it in your answer.

You let the case go off on summary judgment on the merits and remained silent until after there was an adverse judgment against you.

So at least in my thinking, the forfeiture question, whether you forfeited, the argument that you would now like us to treat as the question presented, that is the threshold question.

E. King Poor:

And I… and I would agree with Your Honor that the question of waiver, or sometimes referred to as forfeiture, is… is part of… that is the question that’s before your Court, whether that… the fact that we had not raised it until some later date is something that can be waived or forfeited.

Sandra Day O’Connor:

Well, Mr. Poor–

–I… I would agree with Justice Ginsburg that that’s the way that the question reads on the petition for writ of certiorari.

It’s helpful that you did set forth, that the parties did set forth in the joint appendix the chronology here.

I take it that the first time your client raised the late filing issue was June 23, 2000, or am I wrong about that?

E. King Poor:

No, Your Honor.

We raised it in March of 2000 in a motion to reconsider, but we also have maintained–

David H. Souter:

Oh, that was in the motion to reconsider?

E. King Poor:

–Correct, but I would hasten to add that we have steadfastly maintained that we raised it in opposition to the motion for summary judgment in that we specifically said that the family account claim was not in the original complaint, and that to be timely, a claim had to be in that… that original complaint.

Now–

Ruth Bader Ginsburg:

But in that very pleading you asked the court to strike a number of things in the complaint, and yet you did not ask to strike the family account claim.

E. King Poor:

–Well, Your Honor, we have maintained that we did and in the context of this–

Ruth Bader Ginsburg:

But you didn’t… did you expressly say that you wanted those certain allegations struck?

E. King Poor:

–Well, we did as best we could at the time because this was part of a–

Ruth Bader Ginsburg:

Did you… did you say, court, strike these allegations?

E. King Poor:

–Yes.

Ruth Bader Ginsburg:

Yes, the answer is yes?

E. King Poor:

Yes, we believe we… we did, Your Honor.

Ruth Bader Ginsburg:

And you did not say, strike with respect to this allegation?

E. King Poor:

Not specifically as to that, and that’s… and that’s what the… what the bankruptcy court found.

However, at the time this was part of a mass of other allegations, and we felt that we had raised it sufficiently by–

Ruth Bader Ginsburg:

What was your reason for distinguishing the two, for saying strike others, but as to this one all that you did was mention that it wasn’t in the original complaint?

E. King Poor:

–Well, we felt that that was… at the… in the opposition we raised the 4004 untimeliness issue.

There were just a number of others that were not even in the… any complaint.

Ruth Bader Ginsburg:

Well, if we’re going to get into all of that, then they would say there’s a relation back and none of those issues are really before.

We took the issue on the pure question of whether or not, assuming that you were late in objecting that that… that that’s a bar.

E. King Poor:

That’s correct, Your Honor, and I–

Sandra Day O’Connor:

Mr. Poor, there are cases with which I’m sure you’re familiar where a statute of limitations has been held to be deemed waived, even though there’s nothing in the statute itself talking about waiver.

E. King Poor:

–That’s correct, Your Honor.

Sandra Day O’Connor:

And this is much like that, is it not?

There’s a provision in the rules for a deadline for making a claim, but perhaps as in a statute of limitations case, it’s not an extension of time to find a waiver.

It’s… it’s a different concept, and maybe should be viewed much like a waiver of a statute of limitations.

E. King Poor:

Well, in this case, Your Honor, this deadline is very much unlike a classic statute of limitations where you have a, say, a 2-year statute.

This is different because here the language of the 60 days is modified or altered by Bankruptcy Rule 4… 9006(b).

The rulemakers didn’t stop with the 60-day deadline.

They stated that this rule will be incorporated into a special subgroup of other rules that may only be extended, quote, to the extent and under the conditions stated.

Sandra Day O’Connor:

But what’s your answer to the argument that a waiver is not an extension, it’s a waiver?

That’s a different kettle of fish.

E. King Poor:

Well, it… any… any attempt to excuse a late filing, whether it is waiver, equitable estoppel, and it could be waiver in the sense of it’s an implied waiver where a debtor, by inaction, does not raise it, or it could be a situation where there’s a stipulation by the debtor to… with the creditor and says, after the deadline the creditor goes to the debtor and says, I want you to stipulate to a late time period.

In the language here, if you take the plain language of 4004 and 9006(b), that plain language simply does not allow for any type of equitable exceptions, whether they’re deemed to be waiver or forfeiture or if–

Sandra Day O’Connor:

But you could make the same argument for an ordinary statute of limitations that doesn’t talk about waiver or equitable alteration.

E. King Poor:

–You… and that’s correct, Your Honor, for an ordinary statute of limitations.

This one is different for this reason, that the presumption here is that when the drafters adopted 9006, what they did was they patterned it after Federal Rule of Civil Procedure 6(b), almost… almost virtually identically, and the language of 6(b), on which 9006(b) is patterned, has had a long history of being… had an established meaning as setting jurisdictional deadlines and… for its own subgroup of rules, and those rules, as this Court held in the Robinson case, we must presume that rules that are based on that 6(b) rule are presumed to be… to have the same meaning, that is, in the words of the Robinson case, as mandatory and jurisdictional.

Sandra Day O’Connor:

Well, do you think that Rule 4004(a) limits the Court’s subject matter jurisdiction?

E. King Poor:

Not in the least, Your Honor, and I think that’s a very important distinction in this case, because I think that’s where the court below got off the trail in focusing on the concept of subject matter jurisdiction.

This case does not deal with subject matter jurisdiction.

That’s the idea that… whether the court has the competency.

We’re not saying that the, for instance, the Circuit Court of Cook County was the proper court to hear this objection.

E. King Poor:

In this case we’re talking about an entirely different concept, and that is jurisdiction used in the sense that a court may not extend a deadline beyond the plain meaning of the rule with any type of equitable exception, whether it’s called–

Ruth Bader Ginsburg:

Why do you pin the word jurisdiction on it at all when rules, whether bankruptcy rules or creditor rules, cannot alter or affect the Court’s jurisdiction?

That’s what both rules’ enabling acts say, so whatever it is, it… if it is jurisdiction, then it violates… the rule violates the statute.

The rule isn’t passed by Congress.

E. King Poor:

–I… and I… I, Your Honor, and as I recall in Your Honor’s concurrence in the Carlisle case, you pointed out that to use the term subject matter jurisdiction for something like this, for a time prescription, is… is anomalous, where in… in this case if we’re not… we’re not dealing with subject matter jurisdiction, we’re talking about jurisdiction as a shorthand for a time–

Ruth Bader Ginsburg:

You’re talking about a rigid time limit, a time limit that cannot be extended for good cause.

E. King Poor:

–Exactly, and I… I know there are a number of courts that decline to even use the term jurisdiction, because they think that that’s probably not the best term to use.

It’s used by many courts.

Ruth Bader Ginsburg:

Could you… could you have, according to your analysis of what this animal is, here you made your motion to reconsider after the summary judgment motion was granted, but before judgment was entered–

E. King Poor:

Correct.

Ruth Bader Ginsburg:

–final judgment was entered.

Suppose final judgment had been entered.

Could you then come into the court and say, sorry, court, I forgot to tell you that you couldn’t enter any judgment here because an unalterable time bar had passed?

E. King Poor:

I think, so long as it’s within the same proceeding, Your Honor, you could, and that’s… that was the holding in the Kirsch case, which the Seventh–

Ruth Bader Ginsburg:

How about initially on appeal?

Suppose you… you suffered the adverse judgment in the bankruptcy court and then you want to raise that, after all, the complaint was untimely, on appeal for the first time?

E. King Poor:

–I think that that would probably be a rare instance, but I think that in… if it is jurisdictional or unalterable, then so long as it’s within the same proceeding that’s just… that is part of what a jurisdictional rule is.

Ruth Bader Ginsburg:

Do you have any authority with respect to this kind of rule, a rigid time limit, that it’s okay to untimely bring that to the court’s attention?

I mean, all the precedent that your brief cites are cases where the party who opposes the time extension timely brings up that the complaint was untimely.

E. King Poor:

We have cited a number of those, Your Honor, in our… both our opening brief and our reply brief, and I would invite the Court’s attention to–

Ruth Bader Ginsburg:

Where the defendant was untimely… that–

E. King Poor:

–Yes, Your Honor.

Ruth Bader Ginsburg:

–where as here?

E. King Poor:

Yes, and… and even more extreme, a more extreme example, if I would invite the Court’s attention to the Dollar case, where after the time limit had passed, the creditor went to the debtor and says… said I want you to extend the time limit, and for whatever reason, the debtor said, okay, I’ll agree to that, and then they brought that to the bankruptcy court for approval and the bankruptcy court said, no, this is a jurisdictional time limit, you can’t have a side deal with a creditor–

Ruth Bader Ginsburg:

That was a case where the court made an… an initial ruling without having expended any time in adjudicating the case.

Here, you present the situation where the court grants a motion for summary judgment and then the debtor says, sorry, court, you never should have adjudicated this.

We didn’t tell you, but now you have to erase all… everything that you did.

E. King Poor:

–Well–

Ruth Bader Ginsburg:

I did… was not aware of such a case.

E. King Poor:

–Well, there… there are a number of them where they’re not raised in the… there’s a whole spectrum.

E. King Poor:

They’re not raised in the answer–

Ruth Bader Ginsburg:

Raised after the case is adjudicated on the merits?

E. King Poor:

–Yes.

The Kirsch case is one case where it… actually after trial, in Kirsch, the court found that since the rule… and I… it was not alterable under the plain meaning of the twin here, this 4004, 4007, that that could not be altered, even after a trial, and as I recall, the Poskanzer case is yet another one of those where–

Ruth Bader Ginsburg:

Who made those decision where the–

E. King Poor:

–The… the Kirsch case is from the bankruptcy court in the Northern District of Illinois, and… and the Poskanzer case is from New Jersey and we cite a number of them in page 16 and in our footnote on that–

Antonin Scalia:

–The… the law… like… like the time limit here, the law is unalterable, and if you fail to make a legal argument at the trial level, you’re not normally permitted to raise that argument on appeal where you haven’t raised the objection below.

E. King Poor:

–That–

Antonin Scalia:

The court… the court doesn’t say, well, the law is unalterable so you’re entitled to… to raise this point at any stage in the proceeding.

That’s… that’s just not the way we do things, and that’s why we do have this terminology jurisdictional.

There is something special about that, but the mere fact that something is unalterable certainly doesn’t allow you to raise it whenever you like.

E. King Poor:

–Well, Your Honor, the… to go back to the… the concept of… of waiver or… or forfeiture, if the rule is… is truly jurisdictional, using the shorthand that it cannot be altered, then–

Antonin Scalia:

No, no, no.

That was the point of… of my question.

It is not a synonym for… for the term jurisdictional that it can’t be altered.

There are a lot of things that… that can’t be altered which you’re not allowed to raise late.

E. King Poor:

–But if… if the rule itself, for instance, does not allow a… a debtor and a creditor to extend this time line themselves, then it would be, I submit, anomalous to allow the debtor to do, by inaction, what the Court could never do on its own or… or permit a rule that says that–

Antonin Scalia:

Well, that… that’s like saying you cannot let the defendant change the law by merely failing to raise a legal objection that was fully available.

He’s not changing the law, he’s just forfeited the… that… the benefit of that provision of law.

E. King Poor:

–Well, if it can be forfeited, Your Honor, then I would submit that it can also be waived.

It could be… and–

Stephen G. Breyer:

What’s… what’s the citation of that?

I mean, you refer to Rule 6, and Rule 6 governs a whole lot of famous time limits, new trials, 60(b) motions, et cetera.

So, therefore, there must be a lot of cases where the following thing happened: Somebody made a motion under Rule 59, or whatever it is, out of time, all right, a day late–

E. King Poor:

–A day–

Stephen G. Breyer:

–A day late.

E. King Poor:

–Right.

Stephen G. Breyer:

And then nobody said a word about it.

Then one year later, for the first time on appeal, the other side says, oh, I agree we never said a word about this before so we’re raising it now for the first time, and the court said, fine, you can raise it for the first time.

Now, what are the cases that hold that?

Stephen G. Breyer:

I mean, I’m not saying there aren’t any, I haven’t faced this before, but I would have thought it comes up million… you know, quite a lot of times where people forget to… or they don’t care or whatever it is, and they raise something very late.

What are those cases?

E. King Poor:

Well, I… I would invite the Court’s attention to the cases that we cite on pages 16 and 17, such as the… the Rinde case, debtor failed to plead–

Stephen G. Breyer:

No, I’m not talking about bankruptcy.

I’m talking about Rule 6, ordinary civil cases.

E. King Poor:

–Well, I can… I can point the Court to a case that is in that 6(b) family, in the Criminal Rule 45(b).

Stephen G. Breyer:

I’m talking about civil rules of procedure, ordinary civil cases.

Probably there are, I would guess conservatively 100,000 cases a year that may fall into this category.

In a certain percentage of those, the deadlines will be missed–

E. King Poor:

And–

Stephen G. Breyer:

–and in a certain percentage of that percentage, the other side will have said nothing–

E. King Poor:

–And–

Stephen G. Breyer:

–waking up on appeal.

E. King Poor:

–And in–

Stephen G. Breyer:

And then there must be a lot of cases, if you’re right, that would say, that’s okay.

I’m just repeating myself because I think there are no cases and I think, to me, that shows you’re wrong, but now I’m open to hearing that there are a lot or even one.

E. King Poor:

–Well, I would… I would invite the Court to the Kirsch case that we cite in our brief.

Stephen G. Breyer:

Is Kirsch a bankruptcy case?

I’m not talking about a bankruptcy case.

District court… that’s a district court case.

E. King Poor:

In… in Kirsch, the court relied upon that 6(b) analysis in a case called Hulson from the Seventh Circuit, where just such a thing happened where after the… after trial the… the party did not… did not file his Rule 59 motion on time and actually the other side… they stipulated to an untimely rule… they stipulated to it, and then on appeal in that case they… the Seventh Circuit said, we don’t care if you stipulated to it, it’s untimely and you cannot–

Stephen G. Breyer:

All right, so that would definitely support you, and what’s the name of that case?

E. King Poor:

–That’s Hulson, [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Stephen G. Breyer:

All right.

E. King Poor:

And that’s… and that was the basis… that was the basis of this whole analysis in the Kirsch case.

John Paul Stevens:

Under your… your view of the law, could the respondent here, the creditor have argued that this amendment relates back to the complaint?

E. King Poor:

Relation back has never been in our–

John Paul Stevens:

Could he… could he have made that argument under your view of the law, post-judgment, after you… March 2000, it was decided in 1980… 90… 99, March 2000, you object.

At that point, could the creditor say, oh, well, this relates back, it’s okay?

E. King Poor:

–He… he could have, Your Honor.

David H. Souter:

All right.

Well, then what you’re doing is you’re putting this issue potentially in the appellate courts.

We don’t do that sort of thing.

It’s… it’s for the trial judge to say it relates back or not.

E. King Poor:

Well–

David H. Souter:

And that’s… that’s… you put all of the parties in a very difficult position by your rule.

Didn’t the court of appeals said… say you didn’t suggest that it related back, therefore, they’re assuming it didn’t?

E. King Poor:

–That’s correct, that we… we… we’ve never argued the… there’s never… the relation back issue was never before the Seventh Circuit.

John Paul Stevens:

I’m not saying it is before, but I’m saying under your view, under your framework, it would be very difficult to handle that at such a late point, and it’s a legitimate argument that they could have made.

E. King Poor:

If they… they raised it on appeal, as it might be a… an issue.

I think it’s probably more likely in the trial court, but yes, I would agree with Your Honor on that.

Ruth Bader Ginsburg:

Mr. Poor, I’m still looking for that case that you cited, because at least the two cases that you relied on principally, Taylor and Carlisle, those were both cases where the untimeliness point was timely raised.

E. King Poor:

That is true, Your Honor, both in Taylor and Carlisle it was raised, but I would suggest that in Taylor, if the Court did not allow a late extension based upon a bad faith claim of exemption–

Ruth Bader Ginsburg:

Well, the rule says good faith isn’t an excuse, so–

E. King Poor:

–And–

Ruth Bader Ginsburg:

–But… but you are arguing that an untimely raising of the lack of timeliness is okay, and neither Carlisle nor Taylor stand for that proposition.

E. King Poor:

–Well, they do in a broader sense, Your Honors, that they do not… I would submit that they do not allow any kind of equitable–

Ruth Bader Ginsburg:

They were both cases where the objection to the untimeliness was timely made, right?

E. King Poor:

–That’s correct.

Ruth Bader Ginsburg:

So then they could not have considered the case such as this one where the objection is untimely made?

E. King Poor:

And that… what that gets… what that gets back to our point in our brief that in the Santos case that the Seventh Circuit relied upon most heavily here, they did what I would call a pick and choose of different type of equitable exceptions.

In–

Ruth Bader Ginsburg:

I didn’t think that forfeiture was an equitable exception.

E. King Poor:

–Well, in–

Ruth Bader Ginsburg:

There is a difference between waiver, which is a conscious act, and forfeiture, which is rule that says, if you don’t raise the point, which is the ordinary consequence of not raising a defense, if you don’t raise it and the time to amend passes and you have a judgment on the merits, you can’t go back to square one and said, oh, sorry, I should have put it in my answer, but–

E. King Poor:

–Well, our… our biggest point here, Your Honor, is that either these rules set time limits that cannot be altered by any type of equitable doctrine, be it forfeiture, waiver, or equitable estoppel, I mean, either all of those are in or–

Ruth Bader Ginsburg:

–I didn’t think that forfeiture was an equitable doctrine.

E. King Poor:

–Well, I… I guess in this case we’ve always talked about waiver as… as what we’re talking about here in terms of… it was an implied waiver in terms of… it was inaction… inaction by the debtor–

William H. Rehnquist:

Well, you’re… you’re talking about the same thing as implied exceptions to the statute of limitations that, you know, the statute may have run but there are certain exceptions where the thing will still be considered.

E. King Poor:

–That’s… that’s correct, Your Honor.

E. King Poor:

If… a tolling type, and I think that’s what we’re getting at here is are there tolling-type exceptions to this language and I come back… we come back to the point that if this rule was designed by the rulemakers to track the language of 6(b) and not allow any type of exception, whether it’s equitable tolling or… or whatever, then either… either all those exceptions come in or they… or they don’t, because–

Antonin Scalia:

But… but you cite only… in response to Justice Breyer, you cite only one 6(b) case that you’re aware of that applied the principle you’re arguing for here, namely that a late-raised objection will… will be heard, right?

It isn’t an exception.

The point is, I think some of us have been pointing out to you, is our belief, which you could try to disabuse us of, that this has nothing to do with exceptions.

We’ll assume there are no exceptions no matter what, but there can be a rule of law that you win and there are no exceptions, but still, because you didn’t raise the point, you lose it.

That has nothing to do with exceptions.

It has to do with the normal rule, in a court you have to raise a point.

Now that’s what I’m interested in.

E. King Poor:

–And–

Stephen G. Breyer:

And that’s what I wonder… I’m asking because Rule 6, I think, would be analogous to that and so if you… there are some cases–

E. King Poor:

–And I would… the Hulson case is an excellent example.

Ruth Bader Ginsburg:

–Which case?

Because I’m looking for it in your brief.

E. King Poor:

No, it’s in the… the Kirsch… the Kirsch–

Ruth Bader Ginsburg:

Cited by another case, right?

E. King Poor:

–That’s correct.

Antonin Scalia:

It’s cited in Kirsch?

E. King Poor:

Yeah, but… and the… the other point I would make, though, is that the… the overall concept here is this case is really no different than the Carlisle case in that if the claimant Carlisle, one day late, or the… the motion one day late could not be extended because of attorney error–

Ruth Bader Ginsburg:

But Mr. Poor, it can’t be like Carlisle because the Government timely made that objection.

E. King Poor:

–But the… the question, Your Honor, is… I would come back to this: Could the Government waive the… the objection deadline in 45(b)?

And I think the answer, and I think this is where this all comes together, all of this comes together in this point, is that the Government could not waive that 45(b) deadline, and that 45(b) deadline is the same as 6(b) and it’s the–

Ruth Bader Ginsburg:

So you think that case stands for the proposition that the Government had said nothing and the court had said, I considered this, I grant the motion to acquit, that the Government could then come in and say, oh sorry, we forgot to tell you that this was one day late and so you couldn’t consider it.

E. King Poor:

–If there are… I would submit, Your Honor, that if these… if these deadlines are such that they may not be–

Ruth Bader Ginsburg:

But the… the opinion of this Court certainly doesn’t give any basis for that… for such a judgment.

E. King Poor:

–Well, it dealt with the idea it was their inherent power to do that, but if… if the Court allows a rule that says the Government can waive this or the Government can… if the Government can stipulate to it, which is, in effect, a waiver-type argument, then I think that that pretty much unravels Carlisle.

If the Government is able to stipulate to a late… a late time period by either action or inaction, then I think that unravels Carlisle and all these 6(b) family of cases.

William H. Rehnquist:

Do you wish to reserve the balance of your time, Mr. Poor?

E. King Poor:

I do, Mr. Chief Justice.

Very well.

Mr. Figliulo we’ll hear from.

James R. Figliulo:

Mr. Chief Justice, and may it please the Court:

The best way for me to understand this case is just to walk through the case.

This is a… an adversary proceeding.

Rule 4004 deals with the time for filing a complaint objecting to discharge, and that specifically is provided as an adversary proceeding.

Once we move into the realm or the arena of an adversary proceeding, the rules are pretty clear.

If… if the complaint is late, the plaintiff runs the risk of losing his case if the defense is timely raised, but there’s obligations that shift to the defendant once we’re in the adversary proceeding.

The defendant has to answer–

Antonin Scalia:

Mr. Figliulo, do you know of any case in which an objection could be waived and yet prior to the time of waiver, the parties could not, by stipulation, eliminate the objection?

James R. Figliulo:

–There’s a… a bankruptcy case that holds that, but I don’t think… I don’t think that’s right.

I think the–

Antonin Scalia:

Well–

James R. Figliulo:

–I think you can’t agree–

Antonin Scalia:

–that… that holds what?

You… you think… you think the parties can waive the limitation of… of 4004?

James R. Figliulo:

–I believe they can, yes.

Antonin Scalia:

The parties, if they get together, can waive it?

James R. Figliulo:

Yes, I… I believe they can.

Antonin Scalia:

All right.

James R. Figliulo:

And I think… I think–

Antonin Scalia:

I have trouble… I have trouble with that.

James R. Figliulo:

–Here… here’s… here’s–

Antonin Scalia:

I can’t imagine that… that you’re unable to, by stipulation, agree to eliminate it, but you can… one of the parties can nonetheless waive it.

That… that’d be a very unusual–

James R. Figliulo:

–I think the statute of limitations is a personal defense and–

Antonin Scalia:

–It can be waived.

James R. Figliulo:

–therefore, it can be waived, and there’s tolling agreements that are entered into regularly–

Antonin Scalia:

Exactly.

James R. Figliulo:

–with respect to statute of limitations–

Antonin Scalia:

Right.

James R. Figliulo:

–and I think it could apply to 4004(a) as well.

Antonin Scalia:

So you think the what’s his case is wrong… what was the name of the one that–

James R. Figliulo:

I think it was Barley, In re Barley, Your Honor.

I think that case said that the stipulation was not–

David H. Souter:

–And was that a case in which the… in which the court expressly addressed the issue and say… and said, I’m not going to allow… I’m not going to permit the extension of time?

James R. Figliulo:

–I think that was.

David H. Souter:

That… that’s… that’s far different than just a waiver.

James R. Figliulo:

I do understand.

David H. Souter:

There the judges said, you’re… we’re not going to allow you to delay the processes of this court, and that’s quite different than parties simply doing it on their own without the judges’ intervention.

James R. Figliulo:

I agree, Your Honor, and the rule, like Rule 6(b) or 9000(6)(b) focuses on motions for extension and enlargement and it is strict and it does provide the guidelines for the court to follow, but I–

Antonin Scalia:

I… I’m not sure what you’re saying now.

You–

James R. Figliulo:

–Well–

Antonin Scalia:

–you think in Barley, when the parties signed an agreement to extend the time limit, the court should have accepted?

James R. Figliulo:

–I believe that, yes.

John Paul Stevens:

Okay.

James R. Figliulo:

But I think the court… the reason in the court, as I understood it, was that they could not agree to do that because extensions and enlargement of time is governed by the rule and that it wasn’t permitted by the rule.

But in this case I think we have a classic situation where we have a limitations period that’s the… it should have been raised in the answer.

It was not raised in the answer.

It wasn’t raised until after the court granted summary judgment.

That’s a classic case of an implied waiver of a limitations defense and the court recognized that at the bankruptcy level, it’s been recognized that way at the district court level, it’s been recognized that way by the Seventh Circuit, and it’s a, I think, 100 percent right.

It’s also directly in accord with the background principles of waiver that apply to any civil-type action.

Ruth Bader Ginsburg:

Would you agree… do you agree with the Government that if the statute in question, not the bankruptcy rule, but at 157(b)(2)(J), if that required timely objection as some other statutes in the bankruptcy realm do, then you would lose, if the statute rather than the rule required timely objection?

James R. Figliulo:

I think if the statute provided… if Section 157 provided timely, like it does for abstention, I think that would make the rules more of an exercise of the code and perhaps a stronger basis for arguing the mandatory strictness of the rules.

I do not think it would make it jurisdictional.

William H. Rehnquist:

Well, many… many statute of limitations are, of course, enacted by the legislature rather than by rule, and nonetheless you have tolling there, do you not?

James R. Figliulo:

Exactly, Your Honor.

In fact, traditionally, and as this Court has recognized from time to time, that statute of limitations, which are phrased in mandatory terms, are silent with respect to whether certain exceptions or defenses traditionally apply, but regularly apply those, and that would apply particularly here where the bankruptcy court is a court of equity, and waiver is one of those principles.

Antonin Scalia:

In the typical case there’s not a whole bunch of people who are hanging on the resolution of this issue.

I mean, what’s involved here is, I mean, it… it says no later than 60 days after the first date set for meeting of creditors.

The problem is you have a whole bunch of people who don’t know what their rights are going to be until this matter is settled and it… it seems to me that it’s… it’s quite reasonable to insist upon compliance with that time limit no matter what, because there are other people’s interests involved.

James R. Figliulo:

Your Honor, I don’t quarrel with the fact that the time limit is important and it serves a valid purpose, but when we look at waiver… and we’re not talking about exceptions to extend time here, we’re looking at the defendant’s objection to… to assert a timely objection to the untimeliness of the complaint.

That promotes banality because that brings the issue to a head and it… it conserves judicial… it does everything waivers should do.

Antonin Scalia:

But are you–

–Except… except that it does not lead to the conclusion that they should be able voluntarily to agree to extend the time period, which… which is a position you support?

James R. Figliulo:

It’s a position I support but it’s not critical to the–

Antonin Scalia:

Well–

James R. Figliulo:

–position that we advocate, but I do think it’s right, because I do think–

John Paul Stevens:

–Well, would you… would you agree that a district court could override that determination of the parties, say I’m not going to allow the late filing?

Other… the rights of other persons are involved and the district court in the hypothetical case says, I know this is not jurisdictional but it is within my control.

James R. Figliulo:

–I think the… the bankruptcy court level, that probably would be within the court’s discretion, but I… my view is that it’s… it’s like a tolling agreement and it should be permitted, because a statute of limitations or a limitations period is a personal defense.

Now, if there’s extraordinary circumstances where the court refuses to enforce the agreement, I can’t conceive of why that would be permitted.

David H. Souter:

Isn’t the difference between the statute of limitations and the case we’ve got here that in the statute of limitations case we make the assumption that the only two interested parties are the plaintiff and the defendant, and if they don’t care, why should anybody else?

In this case, however, there are other interested parties and there is a pretty well-articulated governmental interest in wrapping this up quickly.

So it seems to me that in… in the bankruptcy case, the court would have every reason, if it was brought to its attention, e.g., in the form of a stipulation, to say, no, I’m going to keep the ball rolling fast.

Isn’t that the distinction?

James R. Figliulo:

Your Honor, I think that’s a sound distinction.

I… I happen to believe that dischargeability is a complaint for objecting to dischargeability primarily affects the objecting party and the debtor, and while there may be other rights of people implicated, it’s still very personal with respect to the debtor and the creditor who’s making the objection to discharge.

And that would also be even more true with respect to dischargeability of particular debts as in 4007.

So I understand the policy consideration, there is a distinction there.

I… I’ve probably bitten off more than I should have with respect to whether that can be agreed on or not–

David H. Souter:

You don’t have to maintain that.

[Laughter]

Why don’t you recognize that–

James R. Figliulo:

–But I do–

Ruth Bader Ginsburg:

–that this is simply… the question is essentially, where does one draw the line?

And one might say, even if the objection to the timeliness isn’t raised in the initial answer, it could be raised in an amendment to the answer.

It could even be raised in opposition to the summary judgment motion.

But there comes a point where it’s too late to make that objection, and that’s essentially the question for us: Where do you draw the line when it’s too late?

Now, it could be on appeal, it could be after adjudication on the merits in the trial court.

So on that question of where do we draw the line about raising this objection, what is your position?

James R. Figliulo:

–I know that in this case, once… once the court adjudicates the merits, it is waived, it’s over, it’s too late.

I would–

Ruth Bader Ginsburg:

And that’s all you have to maintain to prevail here?

James R. Figliulo:

–I do believe… I do believe that whether there’s been an implied waiver or a waiver has some of a fact inquiry that’s necessary.

It can be as early as the failure to raise it in the answer, but I do recognize the liberal rules of amendment to answers and that may be permitted it by the court in its discretion, so it’s not a bright line before judgment, it’s not bright line where you draw the line, in my judgement, but in… and certainly once the court rules, it’s too late.

John Paul Stevens:

I have one question of bankruptcy practice.

You just… you can tell me how it works.

Is the… is the order for the first meeting of creditors, which is what triggers the… the time limit here, is… does that date often fluctuate the… the order of the first meeting of creditor and then they’ll… and then they’ll change it?

James R. Figliulo:

No, that… it’s pretty set, Your Honor.

That… it can happen, but that’s unusual.

The date is… the set… there’s notice that goes out and it’s a relatively fixed point in time from which these deadlines then are calculated.

Ruth Bader Ginsburg:

There was a timely complaint filed and it is a little odd that it was never argued that, well, this is really within the… within the frame of the original complaint, so it… it should relate back.

Why didn’t you argue that?

James R. Figliulo:

Your Honor, that was argued before the bankruptcy court.

The bankruptcy court did not discuss it at all in its opinion.

It was argued before the district court.

It wasn’t discussed by the district court at all.

My client represented himself pro se before the Seventh Circuit.

It was not raised in the briefs on appeal, so with respect to whether that’s an alternative grounds for affirmance, that’s been waived, somewhat ironically, but I think it has been.

John Paul Stevens:

If you’re through I’d like to ask you an irrelevant question.

I don’t want to take your time.

I noticed Judge Schwartz ordered a special hearing on sanctions at the end of the proceeding.

What happened at that hearing?

James R. Figliulo:

Your Honor, I wasn’t involved at that time.

My… my understanding is that there was a lot of stuff going back and forth and there was a sanction of attorneys’ fees of $1,000 or $1,500 assessed.

That’s… that’s what my recollection is.

John Paul Stevens:

I gather it was a pretty acrimonious proceeding in the district court.

James R. Figliulo:

It… it was, Your Honor.

It’s former partners and we know that–

Stephen G. Breyer:

Is your view on this as a bankruptcy attorney thinking, I mean, I don’t see that it affects your client one way or the other, but, I mean, obviously the Solicitor General in this case has suggested an affirmance on the very narrow ground that maybe they’re quite right about what the rule should be interpreted, but still they lost the chance to raise the rule because they didn’t raise it.

Stephen G. Breyer:

All right, that’s a very narrow ground.

On the other hand, the split in the circuits is more on the broader question of how absolute are these rules in… how absolute are the deadlines in this particular rule, and that’s a broader question, which is also a possible ground for affirmance, so either way your client would win.

But, as a bankruptcy lawyer, what’s your opinion?

James R. Figliulo:

–My… and I approach this with little trepidation, but I believe equitable exceptions, the traditional equitable exceptions of tolling and equitable estoppel, continue to apply and should apply to Rule 4004(a) and 4007.

I don’t think they’ve been expressly abrogated.

I think they’re such a powerful part–

Stephen G. Breyer:

A problem then about the other part that says you can’t extend the deadlines in this main part except for the reasons that are there given, which is good cause, et cetera, what do we do about that?

James R. Figliulo:

–I… I think the… the… Rule 9006(b) or 6(b), it eliminates excusable neglect as a grounds for extending time for a late-filed motion, but I don’t think it eliminates equitable tolling.

I think it’s different.

I think tolling and excusable neglect overlap some cases, and to the extent it’s excusable neglect, it’s not grounds for extension, but a… a true tolling–

Ruth Bader Ginsburg:

What would be a cause for tolling if excusable neglect is out of it?

It seems to me that this rule is saying there are no exceptions, period, and to say that even if you can show good cause you don’t get it extended, but there’s some other equitable.

James R. Figliulo:

–I… it’s a relatively… I think equitable tolling, in the context of this rule, is relatively narrow exception, it’s not… it’s little broader than the unique circumstances that relate to if a party’s misled by a rule of court.

But I do think that it can… there can be circumstances, for example, if a client’s lawyer dies right before the deadline is… passes, and there’s–

Antonin Scalia:

Why isn’t that excusable neglect?

James R. Figliulo:

–I don’t think it’s neglect.

I… I think there’s equitable tolling and… and that… that’s why I do think it survives in some way, but I… it’s not critical to our position.

Our position is waiver.

I think we’re classically correct.

It’s approached under the adversary proceeding rules, which engage all the rules of civil procedure, which we all know about, it’s a familiar arena, and it should apply as… as it has been applied by the lower courts, and I ask that this Court affirm it.

Thank you very much.

William H. Rehnquist:

Thank you, Mr. Figliulo.

Mr. Jones, we’ll hear from you.

Kent L. Jones:

Mr. Chief Justice, and may it please the Court:

I have very little to add to what’s already been said because basically what’s been said by respondent is our view as well, which is that this is a question of waiver, not a question of enlargement or extension of the time to file a timely complaint, and the one thing I do want to add, though, is that the court of appeals, it seems to us, correctly pointed out that there is a rules-based answer to the waiver question as well as the general principles that we have articulated.

The rules-based answer is alluded to by respondent, which is the Rule 4004(d) expressly incorporates through Part 7 of the bankruptcy code the pleading requirements of 8(c) of the Federal Rules of Civil Procedure.

Now, that means that the… the debtor has an obligation to plead his affirmative defenses at the answer or they would be treated as waived.

This was an affirmative defense, and so just by applying the rules it was subject to waiver when it was not raised in the answer.

We think the court was right in exercising its discretion to determine that when it’s not raised until after the trial, or in this case after summary judgment was entered, it’s plainly too late, and it was waived.

William H. Rehnquist:

Mr. Jones, when… at what point in that spectrum would it have been tiled permissible to allow it?

Kent L. Jones:

The broad answer to that question… well, the first answer is, that’s not been raised.

They’ve… they’ve suggested it can’t be waived, not that the court abused its discretion.

The answer to your question, though, is that it’s… if it would not be too late to amend the answer, then it’s not forfeited or waived.

William H. Rehnquist:

Well, when is it too late to amend the answer?

Kent L. Jones:

That’s… there’s a… a whole body of precedent about that, and as respondent correctly says, it’s clearly too late once the judgment has been determined.

If–

William H. Rehnquist:

Now wait, do you mean judgment is… is determined, or judgment is entered?

Kent L. Jones:

–In this case judgment was announced after the trial.

I… let me back up.

I think that it’s… the court retains discretion to allow an amendment up to the pre-trial stage.

Up to the pre-trial answer, the court sometimes allows complaints to be amended in its discretion, and–

William H. Rehnquist:

Well, quite frequently, does it not, at pre-trial?

Kent L. Jones:

–Not infrequently, but it’s also the case that sometimes amendments are denied at that point because of the particularity, facts of the case.

But my point is simply, at this stage of the case it’s clearly have been waived and… and–

William H. Rehnquist:

Well, now, at this stage of the case, judgment had not yet been entered, but the motion for summary judgment had been granted.

You… are you saying it can never be done at that stage?

Kent L. Jones:

–It would be… I… I think that it… it might be not an abusive discretion… there’s a lot of nots there.

A court might be able to exercise discretion if it thought in the circumstances it was appropriate, but it is a matter committed to the discretion of the trial court, and certainly at that stage it was well within its discretion, and again, that issue hasn’t been presented or raised.

What was raised is the idea you can’t waive it, and the reason that it was raised in that fashion is they said it’s jurisdictional.

But it’s… but they’ve conceded, both in their reply brief and in… and in court today, that it doesn’t affect the subject matter jurisdiction of the court.

And the cases are clear that–

Antonin Scalia:

How do you… how do you reconcile your view about the court having such broad discretion with… with the wording of 4004(b), which says that on motion, the court may for cause extend the time, but the motion shall be filed before the time has expired?

And what you’re saying is, well, it really doesn’t matter, the court has discretion to go ahead even though the motion wasn’t filed before the time has expired.

Kent L. Jones:

–I’m sorry, Justice Scalia.

The question that I was answering was whether the court had discretion to accept the late-raised objection to the late complaint.

Antonin Scalia:

I’m sorry.

Kent L. Jones:

And that’s a different… and I do think the court has that discretion.

Whether it had… would have had discretion to allow a late complaint at that… at some later point really isn’t before the Court, because they haven’t claimed that there is any equitable grounds for enlarging or extending the deadline, so that question isn’t presented.

Antonin Scalia:

I don’t… you’re distinguishing between granting… I’m sorry… granting–

Kent L. Jones:

The–

Antonin Scalia:

–granting a late-raised objection and granting a late-filed complaint?

Kent L. Jones:

–Correct.

Antonin Scalia:

Okay.

Kent L. Jones:

Under ordinary principles of 8(c) and the Rules of Federal Procedure which are applicable here.

My point is that a court could allow the late-raised defense that it… that the complaint was untimely, up to some point it would have discretion to do that, but it exercised its discretion not to allow that late-raised objection, late-raised defense in this case.

Ruth Bader Ginsburg:

Well, the rule on amendment, which the pleading rules, the Federal rules would apply, says that it should be… if after you miss the time limit in which you are allowed to amend as a matter of right, then you may or may… and with the court’s permission, and leave shall be freely given when justice so requires.

Kent L. Jones:

That’s the discretionary standard and I don’t… I will be frank, I do not know if there’s a case that says that discretion stops at this point.

That’s not before the Court.

It would just be odd for the Court to exercise such discretion after it had already determined that the judgment should be awarded to one of the parties.

That’s all I was trying to say.

John Paul Stevens:

At the outset you said there’s a text-based or a rule-based–

Kent L. Jones:

Rule-based.

John Paul Stevens:

–And that’s 4000(e)?

Kent L. Jones:

4004(b).

John Paul Stevens:

4004(e)?

Kent L. Jones:

B.

Stephen G. Breyer:

Where is… where is that?

Kent L. Jones:

It’s at–

Stephen G. Breyer:

Was that in… did you make that argument in your brief?

Kent L. Jones:

–We did not make that argument.

The respondent made the argument and the court of appeals made the point.

That provision is quoted in footnote 3 of respondent’s brief.

It’s a very short provision.

It just says that the… the procedures of Part 7 will have governed, and then Rule 7008 says that incorporates Rule 8(c) of the Federal Rules of Civil Procedure.

Now, we have not addressed the question of whether equitable exceptions would be available under this rule, but we do think that the Court’s decision in the Santos case provides a sensible explanation of how to address that question.

In Santos, the Court made the point that the rules appear to say you cannot extend by excusable neglect, but that doesn’t preclude equitable estoppel, because estoppel is based on the misconduct of the debtor, excusable neglect is the neglect of the creditor.

So not allowing an extension for neglect doesn’t preclude allowing an extension for estoppel.

Stephen G. Breyer:

So you think this is a totally different issue and it’s a much broader issue and more important–

Kent L. Jones:

This is a much… this is–

Stephen G. Breyer:

–And you think, in other words, if they had come in and said, hey, we… I’ve been taking all the money out of wife’s account, putting… put it in… you know, I put it all in her name, ha ha ha, and I had hired people to prevent the creditor from ever finding out, that then the correct defense there would be equitable estoppel, which is an enlargement of the time period?

Kent L. Jones:

–If the… if I understood your hypothetical, if the basis of the estoppel was that–

Stephen G. Breyer:

I’m… I’m assuming they acted very inequitably.

Kent L. Jones:

–that we were unable to find… they hid from us what they were doing–

Stephen G. Breyer:

Yes, yes.

Kent L. Jones:

–yes, I think that would apply.

But I should also point out that in that specific factual scenario, 727(d) of the bankruptcy code would allow the discharge to be reopened in–

Stephen G. Breyer:

You see, that… that’s the argument the other way.

The argument the other way is you don’t really need to import these defenses into the rule itself because there are other ways in the bankruptcy law that an unfair kind of conduct that can be dealt with.

Kent L. Jones:

–If, to the extent that there are other ways to deal with it, then equity doesn’t need to step in if there’s an adequate legal remedy.

But if… when there’s not an adequate answer in the code to this… to whatever facts come up about the estoppel situation, we would think that the rules don’t preclude the court–

Sandra Day O’Connor:

Mr. Kent, as I remember the… this case itself, the debtor was never secretive about what he had done.

He told the creditors, he told everybody, yeah, I took my name off the account–

Kent L. Jones:

–Yes.

Ruth Bader Ginsburg:

–but I continued to deposit my salary in it, I continued to pay the family expenses from it.

It wasn’t concealed.

Kent L. Jones:

It’s a hypothetical–

Stephen G. Breyer:

It’s a hypothetical case.

I’m trying to get to the issue the… that’s bothering me.

Can you just give me one word about whether my belief about the Rule 6… it refers to a new trial motion in a civil case, motion to amend the opinion, JNOV, all those time limits it says are absolute.

Now, I take it it’s never been held or isn’t at least normally held that a lawyer can sit there, notice that the time limits weren’t complied with, wait to see if he wins, and then if he loses, bring it up for the first time on appeal.

Am I right about that?

Because they’re saying, no, I’m not right about it.

Kent L. Jones:

–Well, I… I think you’re right about that that you can waive an argument of any… based on those rules in… in the trial court, but let me–

Ruth Bader Ginsburg:

Is it… do you know of any case, Mr. Kent, because those are all motions that are brought after the trial, after the adjudication, and I’m can’t imagine a scenario where a lawyer who won would then… and the other party moves for a new trial… would then say nothing.

Kent L. Jones:

–I’m not familiar with a case of that type, but there… I can imagine that there’s a case out there that says something along the following, that this Court’s jurisdiction, by statute, is based on the requirement, for example, that there be a notice of appeal filed within 30 days.

William H. Rehnquist:

Thank you, Mr. Jones.

Mr. Poor, you have 2 minutes remaining.

E. King Poor:

I’d like to return to the… the fundamental point is when these were adopted, 9006(b) was patterned after 6(b), and that identical language, as this Court instructed in the Robinson case, should be read to be mandatory and jurisdictional, that is, not waiveable.

And if we look at a case like Santos, there’s nothing in the language that allows Santos to pick and choose between… between saying equitable estoppel would… would not apply but waiver would apply.

The only possible way you can get there in Santos is not through the text, not through the language, which Robinson has told us is mandatory and jurisdictional.

E. King Poor:

The only way you can get there is through the… a policy argument that says, we think it’s a good idea not to have equitable estoppel, but on the other hand, yeah, for policy reasons, we… we should allow waiver to apply.

And if you allow waiver, whether it is waiver in the implied sense of inaction or waiver in the express sense of allowing a stipulation, in that case, you will have really taken what is in the text and these are no longer jurisdictional rules without exception.

Rather, they have become rules that the parties themselves may change, and this deadline has never been like a statute of limitations.

It has always been different.

It allows the parties to, before there’s any… before there’s any adjudication, any deadline, to take discovery and move the deadline along.

That’s not like a typical statute of limitation, and the reason for that is the text.

The text says it may only be extended to the extent and under the conditions stated, the exact language that was at issue in Carlisle and in Robinson, and we would submit that you have to read the same language in the same way, whether it’s 9006(b), 6(b), Criminal Rule 45(b), they all are based on the same language.

William H. Rehnquist:

Thank you, Mr. Poor.

The case is submitted.