United States v. Estate of Romani

PETITIONER: United States
RESPONDENT: Estate of Romani
LOCATION: National Endowment for the Arts

DOCKET NO.: 96-1613
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: Supreme Court of Pennsylvania

CITATION: 523 US 517 (1998)
ARGUED: Jan 12, 1998
DECIDED: Apr 29, 1998

Kent L. Jones - Department of Justice, argued the cause for the petitioner
Patrick F. McCartan - Argued the cause for the respondents

Facts of the case

Both a judgment lien and federal tax liens encumbered the real property of Francis Romani's Pennsylvania estate, worth $53,001, following his death. The estate's administrator sought a county court's permission to transfer the property to the judgment creditor. The Government objected to the conveyance, arguing that 31 USC section 3713(a), which provides that a Government claim "shall be paid first" when a decedent's estate cannot pay all of its debts, prioritized its payment. Nevertheless, the court authorized the conveyance. Ultimately, the Pennsylvania Supreme Court affirmed. The court concluded that Federal Tax Lien Act of 1966 modified the Government's preference and recognized the priority of many state claims over federal tax liens.


Does the federal priority statute, 31 USC section 3713(a), require that that a federal tax claim be given preference over a judgment creditor's perfected lien on real property where such a preference is not authorized by the Federal Tax Lien Act of 1966?

Media for United States v. Estate of Romani

Audio Transcription for Oral Argument - January 12, 1998 in United States v. Estate of Romani

William H. Rehnquist:

We'll hear argument next in Number 96-1613, United States v. The Estate of Francis Romani.

Mr. Jones, you may proceed whenever you're ready.

Kent L. Jones:

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

On the date of his death Francis Romani owned real property worth about 50,000 dollars.

That property was subject to a private judgment lien and to a laterfiled Federal tax lien.

Both of the liens were for amounts that exceeded the value of the estate, and the estate therefore brought this case to determine whether the claim of the United States or the claim of the private judgment creditor should be paid first.

The answer to that question appears in the direct text of what is known as the absolute priority statute.

Since 1797, that statute has provided a simple rule for the narrow category of cases in which the United States seeks to recover a claim against an insolvent estate.

Anthony M. Kennedy:

Well, the statute is different in this respect.

Until the revision of the statute in question, which I think was 1982, it talked in terms of debt.

3713(a) at page 2 of your brief talks about claim, and it seems to me that a... that the word claim may be quite different than debt.

Claim sounds to me as... has the connotation of something that's not... that's ambulatory, or that hasn't been executed yet, whereas debt sounds as if it's something that's fixed.

Kent L. Jones:

When Congress enacted that provision in 1982 they said it was a formal change of language that was not intended to change the scope of the statute.

Anthony M. Kennedy:

But the language still is different.

Kent L. Jones:

The language is--

Anthony M. Kennedy:

One is claim, and the other is debt.

Kent L. Jones:

--The language is different, but Congress didn't intend it to have a different meaning, but moreover--

William H. Rehnquist:

How do you know that?

Kent L. Jones:

--That's... the legislative history--

William H. Rehnquist:

Well, but, you know we don't always pay a lot of attention to legislative history.

Kent L. Jones:

--It's... you may not always pay a lot of attention to it, but in the context where a change has been made to words, and the question is whether that changed the meaning of the statute, it's appropriate to look to the legislative history, especially when Congress says in that history, we're not changing the meaning.

That should be authoritative.


William H. Rehnquist:

A committee says in that regard.

Kent L. Jones:

--That's correct.

There is an answer, I think, in any event to your question apart from that, and that is... I may be... I may have the wrong case, but I think it's United States v. Moore where the Court said that whether the claim is unliquidated or not, it's still covered by the absolute priority statute.

But the importance of the absolute priority statute is that it provides the simple rule that the United States shall be paid first.

William H. Rehnquist:

Well then, what's the point of 6321 and 6323(a), which deal specifically with tax liens?

Kent L. Jones:

Yes, that's indeed the ultimate question in the case.