WHAT THE LAW IS

From the earliest days of our Republic, the role of the courts has been to “say what the law is,” as Chief Justice Marshall wrote in 1803.  Congress writes the laws; the courts interpret them.  It is a function that is sorely needed; statutory provisions can often be understood a couple of different ways, and it is impossible to predict all possible disputes that might arise at the time a law is written.  The web we weave is much too tangled for that.

The Constitution also limits the courts to deciding “cases and controversies.”  They may not give an abstract or advisory opinion.  Their decisions must be sharpened by the disagreement of two adversaries before them.  It is through this adversary process that attorneys in general and appellate attorneys in particular help the courts decide the law.

So it was with a short provision of the bankruptcy code which makes debts non-dischargeable if the credit was obtained by fraud.  There are a great many kinds of fraud – so is the bankruptcy provision limited to the most commonly understood sort – lying to the bank to get credit, that kind of thing? Or does it extend to fraudulent transfers – such as moving assets around to avoid repayment?

This was decided through a specific case, a dispute between a Texas business owner who moved assets between his companies, and his creditors.  The businessman’s attorneys presented their best arguments why the fraud exception should be limited and apply only in case of straight out lies.  The creditors’ lawyers laid out arguments to expand it to all manners of fraudulent conduct.  The courts took it all in and did their own analysis.  It came down to the U.S. Supreme Court this time, who found in favor of the creditors, reading the discharge exception more expansively.

Appellate attorneys fulfill a distinct if not unique function.  Litigants whose case proceeds to appeal should hire one with care.