« Rent-to-Own Hair Weaves | Main | Nortel: The CBI Case of the Century (So Far) »

Caulkett: SCOTUS Hands BoA a Victory

posted by Adam Levitin

The Supreme Court ruled unanimously in favor of Bank of America in Caulkett v. Bank of America. Basically the Court found itself bound by its previous decision in Dewsnup and didn't think that any of the distinctions presented (by yours truly among others) between Dewsnup and Caulkett were compelling. I continue to disagree, not least because the Court never explains why the distinctions weren't compelling, or even state what those distinctions were.  Given the lengthy opinions that the Court usually issues, I'd like to think that it could have taken the time to explain itself in this regard, if only to help guide future litigants. 

What all this means is that that I owe Bob Lawless a dinner:  I had been much more optimistic about the outcome of the case following oral argument.


This is too negative a view. They did not engage the arguments because they for unspecified reasons chose not to engage the amici briefs. This is maybe a slightly negative signal for those inclined to overrule Dewsnup (myself included), because if the votes have been there, the Court's overruled precedents "unrequested" by the parties before when amici come in and scream. But the bizarre procedural posture of this case -- with the debtor protesting repeatedly it did not want to overrule Dewsnup -- makes it deeply plausible that the Court didn't think they were in the best position to overrule a statutory precedent without better teeing up both sides the argument. Hence, the footnote.

First and most importantly, I think you owe me a scotch. I had said I would buy dinner if the debtor won. Don't worry, it will be very good scotch. But, you have learned a valuable lesson of not betting with your heart. My years in Las Vegas taught me something.

I agree it is too negative a view. We need to remember that the Supreme Court bankruptcy opinions often make things worse. This one did not make anything worse, and that is a small victory in some way. Think of the paean in Stern v. Marshall to Article III courts being bulwarks of liberty. It is not far-fetched to imagine a different opinion that would have waxed eloquent about the sacred status of liens. We avoided that result.

As to stare decisis, I think it is impossible to say what might have happened had the debtor argued to overrule Dewsnup. To steal an expression from a friend of mine, this was not their first rodeo. If the justice wanted to overrule Dewsnup, they would have done so.

Not sure if the Court would overrule itself in situation where the bank and the borrower had special "reliance interest." Lien retention or stripping are property and contract rights where the Court is very hesitant in changing its past impressions. Also, there was nothing very compellingly provided in the case for gutting Dewsnup which was more based on policy and other consideration. Caulkett stood under the dense shadows of Dewsnup, as the Sun was not lit bright enough to take the shades away.

Thank you Adam, and to all of you that tried to make this one happen for debtor's rights for a fresh start, from those of us in the trenches. We live to fight another day.

The take away from this, in my cynical view, is that the big banks basically run the country to the point that all nine supreme court justices will take a bank's side no matter how compelling the side of the non-bank party, even if they obviously don't want to rule in a bank's favor.

Some will try to deny this immutable truth and reality, and we can pretend that the opinion is sound in legal reasoning (even though you complain that the "Court never explains why the distinctions weren't compelling, or even state what those distinctions were") when in fact its just the court taking the side of the bank and making up a justification for it later. There's no argument that is the most business friendly court that ever was, and that a small minority of business friendly law firms handle the most supreme court cases heard, and naturally, the insular echo chamber that the court has become give credence that we must all bow to the banks and nearly all laws written must be interpreted in their favor.

The professor in the strip tease article linked above seems flummoxed that "that there is strong support on the Court for overruling Dewsnup, but that some Justices are hesitant to do so without full briefing and argument on the point?"

Again, this is just dancing around the painfully obvious truth, that the banks are the unstated Rex or King of the land, our overlords to whom we must bow and rule in favor of every time.

You can call my arguments ridiculous or incredulous, but back away from the facade of the legal charade that is played by the court, and take an objective view of it all, and you'll understand that the banks have been dealt a hand they will never lose.

The comments to this entry are closed.


Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.



  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless ([email protected]) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.