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UNITED STATES v. KRAS

decided: January 10, 1973.

UNITED STATES
v.
KRAS



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK.

Blackmun, J., delivered the opinion of the Court, in which Burger, C. J., and White, Powell, and Rehnquist, JJ., joined. Burger, C. J., filed a concurring opinion, post, p. 450. Stewart, J., filed a dissenting opinion, in which Douglas, Brennan, and Marshall, JJ., joined, post, p. 451. Douglas and Brennan, JJ., filed a dissenting opinion, post, p. 457. Marshall, J., filed a dissenting opinion, post, p. 458.

Author: Blackmun

[ 409 U.S. Page 435]

 MR. JUSTICE BLACKMUN delivered the opinion of the Court.

The Bankruptcy Act and one of this Court's complementary Orders in Bankruptcy impose fees and make the payment of those fees a condition to a discharge in voluntary bankruptcy.

Appellee Kras, an indigent petitioner in bankruptcy, challenged the fees on Fifth Amendment grounds. Upon receiving notice of the constitutional issue in the District Court, the Government moved to intervene as of right under 28 U. S. C. § 2403 and Rule 24 (a) of the Federal Rules of Civil Procedure. Leave to intervene was granted. The District Court held the fee provisions to be unconstitutional as applied to Kras. 331 F.Supp. 1207 (EDNY 1971). It reached this conclusion in the face of an earlier contrary holding by a unanimous First Circuit. In re Garland, 428 F.2d 1185 (1970), cert. denied, 402 U.S. 966 (1971). Pursuant to 28 U. S. C. § 1252, the Government appealed. We noted probable jurisdiction. 405 U.S. 915 (1972).

I

Section 14 (b)(2) of the Bankruptcy Act, 11 U. S. C. § 32 (b)(2), provides that, upon the expiration of the time fixed by the court for filing of objections, "the court shall discharge the bankrupt if no objection has been filed and if the filing fees required to be paid by this title have been paid in full." Section 14 (c), 11 U. S. C. § 32 (c), similarly provides that the court "shall grant the discharge unless satisfied that the bankrupt . . . (8) has failed to pay the filing fees required to be paid by this title in full." Section 59 (g), 11 U. S. C. § 95 (g), relates to the dismissal of a petition in bankruptcy and states that "in the case of a dismissal for failure to pay the costs," notice to creditors shall not be required. Three separate sections of the

[ 409 U.S. Page 436]

     Act thus contemplate the imposition of fees and condition a discharge upon payment of those fees.

Three charges are imposed: $37 for the referee's salary and expense fund, $10 for compensation of the trustee,*fn1 and $3 for the clerk's services. §§ 40 (c)(1), 48 (c), and 52 (a), 11 U. S. C. §§ 68 (c)(1), 76 (c), and 80 (a). These total $50.*fn2 The fees are payable upon the filing of the petition. Section 40 (c)(1), however, contains a proviso that in cases of voluntary bankruptcy, all the fees "may be paid in installments, if so authorized by General Order of the Supreme Court of the United States."

The Court's General Order in Bankruptcy No. 35 (4), as amended June 23, 1947, 331 U.S. 873, 876-877, 11 U. S. C. App., p. 2210, complements § 40 (c)(1) and provides that, upon a proper showing by the bankrupt, the fees may be paid in installments within a six-month period, which may be extended not to exceed three months.*fn3

[ 409 U.S. Page 437]

     II

Robert William Kras presented his voluntary petition in bankruptcy to the United States District Court for the Eastern District of New York on May 28, 1971. The petition was accompanied by Kras' motion for leave to file and proceed in bankruptcy without payment of any of the filing fees as a condition precedent to discharge. The motion was supported by Kras' affidavit containing the following allegations that have not been controverted by the Government:

1. Kras resides in a 2 1/2-room apartment with his wife, two children, ages 5 years and 8 months, his mother, and his mother's 6-year-old daughter. His younger child suffers from cystic fibrosis and is undergoing treatment in a medical center.

2. Kras has been unemployed since May 1969 except for odd jobs producing about $300 in 1969 and a like amount in 1970. His last steady job was as an insurance agent with Metropolitan Life Insurance Company. He was discharged by Metropolitan in 1969 when premiums he had collected were stolen from his home and he was unable to make up the amount to his employer. Metropolitan's claim against him has increased to over $1,000 and is one of the debts listed in his bankruptcy petition. He has diligently sought steady employment in New York City, but, because of unfavorable references from Metropolitan, he has been unsuccessful. Mrs. Kras was employed until March 1970, when she was

[ 409 U.S. Page 438]

     forced to stop because of pregnancy. All her attention now will be devoted to caring for the younger child who is coming out of the hospital soon.

3. The Kras household subsists entirely on $210 per month public assistance received for Kras' own family and $156 per month public assistance received for his mother and her daughter. These benefits are all expended for rent and day-to-day necessities. The rent is $102 per month. Kras owns no automobile and no asset that is non-exempt under the bankruptcy law. He receives no unemployment or disability benefit. His sole assets are wearing apparel and $50 worth of essential household goods that are exempt under § 6 of the Act, 11 U. S. C. § 24, and under New York Civil Practice Laws and Rules § 5205 (1963). He has a couch of negligible value in storage on which a $6 payment is due monthly.

4. Because of his poverty, Kras is wholly unable to pay or promise to pay the bankruptcy fees, even in small installments. He has been unable to borrow money. The New York City Department of Social Services refuses to allot money for payment of the fees. He has no prospect of immediate employment.

5. Kras seeks a discharge in bankruptcy of $6,428.69 in total indebtedness in order to relieve himself and his family of the distress of financial insolvency and creditor harassment and in order to make a new start in life. It is especially important that he obtain a discharge of his debt to Metropolitan soon "because until that is cleared up Metropolitan will continue to falsely charge me with fraud and give me bad references which prevent my getting employment."

The District Court's opinion contains an order, 331 F.Supp., at 1215, granting Kras' motion for leave to file his petition in bankruptcy without prepayment of fees. He was adjudged a bankrupt on September 13,

[ 409 U.S. Page 4391971]

     . Later, the referee, upon consent of the parties, entered an order allowing Kras to conduct all necessary proceedings in bankruptcy up to but not including discharge. The referee stayed the discharge pending disposition of this appeal.

III

In the District Court Kras first presented a statutory argument -- and, alternatively, one based in common law -- that he was entitled to relief from payment of the bankruptcy charges because of the provisions of 28 U. S. C. § 1915 (a).*fn4 This is the in forma pauperis statute that has its origin in the Act of July 20, 1892, c. 209, 27 Stat. 252. See also 28 U. S. C. §§ 832-836 (1940 ed.).

The District Court rejected the argument despite the seeming facial application of § 1915 (a) to a bankruptcy proceeding as well as to any other. It reached this result by noting that § 51 (2) of the Bankruptcy Act, as originally adopted in 1898, 30 Stat. 558, had provided for a waiver of fees upon the filing of an affidavit of inability to pay; that by the passage of the Referees' Salary Bill in 1946, 60 Stat. 326, bankruptcy petitions in forma pauperis were abolished, H. R. Rep. No. 1037, 79th Cong., 1st Sess., 6 (1945); S. Rep. No. 959, 79th Cong., 2d Sess., 7 (1946); and that the 1946 statute, being later and having a positive and specific provision for postponement of fees in cases of indigency, overrode the earlier general provisions of § 1915 (a). 331 F.Supp., at 1209-1210. To the same effect are

[ 409 U.S. Page 440]

     Kras contends that his case falls squarely within Boddie. The Government, on the other hand, stresses the differences between divorce (with which Boddie was concerned) and bankruptcy, and claims that Boddie is not controlling and that the fee requirements constitute a reasonable exercise of Congress' plenary power over bankruptcy.

IV

Boddie was a challenge by welfare recipients to certain Connecticut procedures, including the payment of court fees and costs, that allegedly restricted their access to the courts for divorce. The plaintiffs, simply by reason of their indigency, were unable to bring their actions. The Court reversed a district court judgment that a State could limit access to its courts by fees "which effectively bar persons on relief from commencing actions therein." 286 F.Supp. 968, 972. Mr. Justice Harlan, writing for the Court, stressed state monopolization of the means for legally dissolving marriage and identified the would-be indigent divorce plaintiff with any other action's impoverished defendant forced into court by the institution of a lawsuit against him. He declared that "a meaningful opportunity to be heard" was firmly imbedded in our due process jurisprudence, 401 U.S., at 377, and that this was to be protected against denial by laws that operate to jeopardize it for particular individuals, id., at 379-380. The Court then concluded that Connecticut's refusal to admit these good-faith divorce plaintiffs to its courts equated with the denial of an opportunity to be heard and, in the absence of a sufficient

[ 409 U.S. Page 442]

     countervailing justification for the State's action, a denial of due process, id., at 380-381.

But the Court emphasized that "we go no further than necessary to dispose of the case before us." Id., at 382.

"We do not decide that access for all individuals to the courts is a right that is, in all circumstances, guaranteed by the Due Process Clause of the Fourteenth Amendment so that its exercise may not be placed beyond the reach of any individual, for, as we have already noted, in the case before us this right is the exclusive precondition to the adjustment of a fundamental human relationship. The requirement that these appellants resort to the judicial process is entirely a state-created matter. Thus we hold only that a State may not, consistent with the obligations imposed on it by the Due Process Clause of the Fourteenth Amendment, pre-empt the right to dissolve this legal relationship without affording all citizens access to the means it has prescribed for doing so." Id., at 382-383.

MR. JUSTICE DOUGLAS, concurring in the result, rested his conclusion on equal protection rather than due process. "I do not see the length of the road we must follow if we accept my Brother HARLAN's invitation." Id., at 383, 385. MR. JUSTICE BRENNAN concurred in part, for he discerned no distinction between divorce and "any other right arising under federal or state law" and he, also, found a denial of equal protection. Id., at 386, 387. Mr. Justice Black dissented, id., at 389, feeling that the Connecticut court costs were barred by neither the Due Process Clause nor the Equal Protection Clause of the Fourteenth Amendment.

Just two months after Boddie was decided, the Court denied certiorari in Garland. 402 ...


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