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"Don't give me so much that you've given me nothing" - Remembering M. Caldwell Butler's Contribution to Bankruptcy Law

posted by Melissa Jacoby

Former Virginia Congressman M. Caldwell Butler died last week. He is widely known for his role in the Nixon impeachment proceedings, his efforts to limit extensions of the Voting Rights Act, and his support for ensuring legal representation for low-income individuals. But Congressman Butler is also a major figure in the history of bankruptcy law. He was a principal co-sponsor of the Bankruptcy Reform Act of 1978 that serves as the foundation of the modern bankruptcy system. Professor and lawyer Kenneth N. Klee worked closely with Congressman Butler on the House Judiciary Committee in the 1970s. I asked Professor Klee to share a few words of remembrance with us, which I repeat in their entirety here:

I first met M. Caldwell Butler in 1975 when he became the Ranking Minority Member of the Subcommittee on Civil and Constitutional Rights of the House Judiciary Committee. Caldwell was most interested in the Voting Rights Act legislation and finding a way for the South to get out from under the Act. In his view, Washington was improperly interfering with the sovereignty of the southern states based on predicate acts that had long since ceased to serve as a basis for federal control. He asked me to draft a series of amendments that would permit the South to extricate itself from the Voting Rights Act. The requirements to regain sovereignty were quite demanding, to the point that the amendments became known as the "impossible bailout."  Nevertheless, the amendments did not come close to passing. It was evident that there were no circumstances under which the majority in Congress wanted to let the southern states out from the Voting Rights Act.

Caldwell assumed his responsibilities over bankruptcy legislation with diligence and good cheer. His fabulous sense of humor carried us through many long markup sessions during which the members of the Subcommittee read the bankruptcy legislation line by line. He had a sharp legal mind and deep curiosity. He also was very practical and to the point. He was fond of telling me "don't give me so much that you've given me nothing."

It was a privilege and honor to work with him. The bankruptcy community should join in paying him tribute.

                        -- Ken Klee

Congressman Butler made another round of contributions to bankruptcy reform in the 1990s. The fact that they are not all reflected in today's Bankruptcy Code makes this story more pressing, not less. Well over a decade after he had returned to the practice of law in Virginia, Congressman Butler was appointed to the National Bankruptcy Review Commission, for which I was a staff attorney. Expressing satisfaction with the 1978 Code, the House Judiciary Committee directed this Bankruptcy Commission to focus, for two years, on "reviewing, improving, and updating the Code in ways which do not disturb the fundamental tenets of current law."  Not one to leave the heavy lifting to others, even in a pro bono post, Congressman Butler stepped up to the challenge of forging a compromise, among those with diverging politics and views, to improve the consumer bankruptcy system.

Congressman Butler hoped his package of consumer bankruptcy reforms would garner unanimous support among the nine members of the Bankruptcy Commission. Actually, he did a lot more than hope. He listened. He studied. He discussed. His proposals evolved, and he explained exactly how and why. In August 1997, the final hour of difficult deliberations, the package received a majority vote, but his wish for consensus was not granted. His efforts nonetheless had been principled, transparent, and consistent with the mission that Congress had set. You couldn't ask for more.

The practicality that Professor Klee noted about Congressman Butler's 1978 bankruptcy reform work was very much on view in the 1990s (the sense of humor too).  Congressman Butler wanted to understand the dynamics that shape consumer bankruptcy law in real life, not just in theory or in the heads of Washington policymakers. He truly appreciated the fundamental balance between fairness to creditors and a real fresh start for honest debtors, and knew that both elements required more than lip service.

Congressman Butler had a particular interest in student loans and encouraging education. Not satisfied with oft-stated justifications for making student loans presumptively nondischargeable, Congressman Butler was the leading proponent in the Bankruptcy Commission for repealing section 523(a)(8) of the Bankruptcy Code. Making this change would have brought student loans into alignment with other consumer debts, drawing on other potent tools in the Code to police and deter misuse. Since 1997, Congress has sent student loan nondischargeability in the opposite direction. Even more student loans are nondischargeable today, with even harder-to-defend policy justifications. Given the calls for student loan relief and number of bills in Congress, I don't think we have seen the last of Congressman Butler's ideas. 

So M. Caldwell Butler should be remembered for his contributions to the substance, but also the process, of bankruptcy reform, both when his proposals became law and when they did not. Congressman Butler's papers, including those relating to his House Judiciary Committee work and the Bankruptcy Commission, are housed at Washington & Lee University. Insights on Congressman Butler's Judiciary Committee work can also be found in Professor Klee's papers at the National Bankruptcy Archives at the University of Pennsylvania. Highly recommended reading. 

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