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Guess Who's Coming to Lunch?

posted by Elizabeth Warren

Judge Martin Isgur attended a Houston debtor's counsel luncheon in which the speaker, MMI's CEO menionted the company's policy against hiring any person who had filed for bankruptcy.  It is easy to imagine the thought bubble over Judge Isgur's head: "525?"  So the judge launched an investigation.  In re Credit Counseling in the Southern District of Texas, No. MC-07-301 (Bankr. S.D. Tex. 2/15/07).

Eric Van Horn, a former student of Jay Westbrook and now an attorney with Diamond McCarthy, emailed to point out the irony:  The same Congress that wanted to limit judicial discretion in dealing with the parties in court (e.g., creating automated tests for substantial abuse and disposable income), told the judges to get out there and police those credit counselors.  Sec. 111(e) authorizes the district court (and therefore the bankruptcy court?) to launch an independent investigation based on whatever he learns wherever he learns it.  Here, lunch results in an investigation.

The old-timers like to talk about the big shift in 1978 that pushed judges away from the role of administrator and into the role of independent judge.  It seems that Sec. 111(c) reverses that trend.  For a thoughtful discussion of the law on point, see Steve Sather's post on the matter. 

The 2005 amendments are full of surprises, including re-thinking the guest list for who is invited to lunch.

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