Emory Law students present bankruptcy brief at U.S. Supreme Court

March 18, 2013

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Left to right: Ed Philpot, law student and team leader for the Petition for Certiorari; Rachel Erdman, law student ; Louis Laverone, law student, ELSSCAP executive director and team leader for the Brief on the Merits. Seated: Scott Forbes, law student;  Sarah Shalf, ELSSCAP faculty advisor; and Michael Wiseman, law student.

Atlanta attorney Thomas M. Byrne will deliver oral argument today at the United States Supreme Court in a case brought by the Emory Law School Supreme Court Advocacy Project (ELSSCAP), the nation's only student-run Supreme Court litigation group. ELSSCAP law students participated in the drafting of the certiorari petition that persuaded the Court to hear the case.  

Bullock v. BankChampaign, N.A. will be heard to resolve a circuit court split decision regarding interpretation of a provision of the Bankruptcy Code—specifically, whether a fiduciary's misconduct must be committed with the intent to defraud or the equivalent in order to prevent a debt from being discharged. Such misconduct is referred to as "defalcation" in the code.  

"Many lawyers aspire to argue before the Supreme Court throughout their career," says Robert Schapiro, dean of Emory Law. "Thanks to the invaluable assistance of Mr. Byrne, our students have an opportunity to participate in a Supreme Court case while still in law school." Byrne is a partner in Sutherland Asbill & Brennan LLP.  

Bullock concerns a family dispute over administration of a trust whose sole asset was a $1 million death benefit from the father's life insurance policy. Byrne and ELSSCAP represent the petitioner, who was the trustee.  

"Under the Bankruptcy Code, 'defalcation' can be a basis for refusing to grant discharge of a debt," Byrne says. "In our case, there is a judgment of a state court for breach of fiduciary duty relating to a family trust, but it acknowledges the debtor had no apparent malicious intent as to the trust and that there was no actual loss of trust principal."   

The circuit courts are inconsistent on what mental state must be shown to prevent discharge of a fiduciary's debt. Byrne and ELSSCAP argue that the Supreme Court should adopt the holdings of the First and Second Circuits, whose interpretation of the Bankruptcy Code requires that the fiduciary have acted with the same wrongful intent required in securities fraud cases.   

Students also worked with professor Sarah Shalf, ELSSCAP's faculty advisor and director of the law school's Externship and Professionalism Programs, and with James Engelthaler of Thigpen, Behel, Engelthaler & Scott, counsel for ELSSCAP's client in the lower appellate courts.  

ELSSCAP was founded in 2010 by third-year Emory Law student Kedar Bhatia and the late professor David J. Bederman. The group is organized and staffed entirely by student volunteers. Its board evaluates and selects cases, then partners with pro bono attorneys to recruit clients and draft briefs to present to the Supreme Court. In 2012, an ELSSCAP amicus brief was cited in a dissenting opinion by Justice Stephen Breyer, in Florence v. Board of Chosen Freeholders of County of Burlington