Law on Rice

As far as I’m concerned, the central issue in Espinosa remains whether Congress and the judicial rule writers can change constitutional due process minimums. It has to be central because due process has really minimal requirements under Mullane and because the creditor in this case had actual notice.

I was almost convinced tonight when I read the amicus brief from the International Municipal Lawyers Association. They argued that “the due process clause requires that notice be given as, and to the extent, required by statute,” citing City of New York v. New York, New Haven & Hartford R.R., 344 U.S. 293 (1953), a Supreme Court bankruptcy case.

I said, “now we’re getting somewhere,” but when I read New York, New Haven, I was disappointed. That case turned on whether notice by publication was reasonable or not when the debtor clearly knew how to give the creditor actual notice of a pending claims bar date. Worse, the case has nothing to do with constitutional due process when a creditor received service of process, and that portion of the case the brief relies upon is dicta.

Indeed, there was a modern case that distinguished New York, New Haven for some of those reasons. In Matter of Sam, 894 F.2d 778 (5th Cir. 1990), the Fifth Circuit summarily said, “The case apparently was decided on statutory rather than constitutional grounds.”

That said, I think the Municipal Lawyers missed a valuable lesson offered by New York, New Haven but noticed by Sam. In Sam, the court reasoned that New York, New Haven turned on whether the notice received by the creditor (via publication) required additional “burdensome” steps, or not. I think had the amici picked up on that, they’d have a much stronger argument.