United States v. Nordic Village, Inc. - Oral Argument - December 09, 1991

United States v. Nordic Village, Inc.

Media for United States v. Nordic Village, Inc.

Audio Transcription for Opinion Announcement - February 25, 1992 in United States v. Nordic Village, Inc.

Audio Transcription for Oral Argument - December 09, 1991 in United States v. Nordic Village, Inc.

William H. Rehnquist:

We'll hear argument next in No. 90-1629, United States v. Nordic Village, Inc.--

Mr. Seamon.

Richard H. Seamon:

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

This case arises under the Bankruptcy Code.

The trustee in bankruptcy appointed for the respondent--

Harry A. Blackmun:

Mr. Seamon, before you get started, don't our rules provide that briefs should have a summary of the argument?

Richard H. Seamon:

--That's correct.

Harry A. Blackmun:

Is the Solicitor General's office subject to those rules?

Richard H. Seamon:

Yes, I believe it is.

Harry A. Blackmun:

Where is the summary of argument in your brief?

Richard H. Seamon:

It is lacking one, and that is an oversight for which I apologize the Court.

Harry A. Blackmun:

Would you say that again?

I didn't hear it.

Richard H. Seamon:

That was an oversight for which I apologize to the Court.

The... to continue, the trustee in bankruptcy appointed for the respondent in this case, Nordic Village, brought this adversary proceeding and recovered a 20,000 dollar money judgment against the Internal Revenue Service.

The Sixth Circuit upheld the judgement on the ground that the United States had waived sovereign immunity under section 106(c) of the Bankruptcy Code.

Thus, the issue is whether section 106(c) of the code authorizes a bankruptcy trustee to recover money from the Government.

This Court previously addressed the scope of section 106(c) in a case involving an individual State, namely, Hoffman v. Connecticut Department of Income Maintenance.

In Hoffman, the Court concluded that section 106(c) does not authorize monetary relief against the States.

We submit that the same conclusion should apply in cases involving the United States.

The facts of this case are undisputed and may be summarized briefly.

Nordic Village was a restaurant in Lake County, Ohio, that filed a petition for relief under Chapter 11 in March 1984.

After the petition was filed, the IRS filed a proof of claim against the estate seeking payment of overdue employment taxes.

Also, after the petition was filed, an officer of Nordic Village, Josef Lah, drew a check for 26,000 dollars on Nordic Village's corporate bank account which he used to get a 20,000 dollar cashier's check payable to the IRS.

Mr. Lah delivered the 20,000 dollar check to the IRS and had them apply it against his personal taxes.

The trustee for Nordic Village then brought this action seeking to recover the 20,000 dollar payment on the grounds that it was an unauthorized postpetition transfer.

The bankruptcy court agreed, and held that the transfer was voidable, and entered the 20,000 dollar judgment against IRS.

And the District Court for the Northern District of Ohio affirmed.

On appeal to the Sixth Circuit, the Government argued that the 20,000 dollar judgment was barred by sovereign immunity.

The Government relied on the decision in Hoffman.