SCOTUS: City can retain impounded property despite Bankruptcy automatic stay - Chicago v. Fulton (01/14/2021)

Balls and strikes...is it the right metaphor even in the most mundane sounding technical issue..what did Congress intend in enacting the "automatic stay" of 100 days of creditors actions upon the filing of a bankruptcy petition?

The difference in how judges view such question in the abstract seems to be simple umpiring.  But perhaps the consequences should be considered. 

Who, after all, gets their cars impounded for non-payment of parking tickets?  Few lawyers and law professors suffer that fate.  So in this case Samuel Alito delivers the balls and strikes opinion while Sonia Sotomayor tells us what the impact is on people like respondent George Peake whose car with 200,000 miles on the odometer was impounded and not released to him by the City of Chicago. - GWC

19-357 Chicago v. Fulton (01/14/2021)

JUSTICE ALITO delivered the opinion of the Court. When a debtor files a petition for bankruptcy, the Bankruptcy Code protects the debtor’s interests by imposing an automatic stay on efforts to collect prepetition debts outside the bankruptcy forum. Ritzen Group, Inc. v. Jackson Masonry, LLC, 589 U. S. ___, ___–___ (2020) (slip op., at 6–7). Those prohibited efforts include “any act . . . to exercise control over property” of the bankruptcy estate. 11 U. S. C. §362(a)(3). The question in this case is whether an entity violates that prohibition by retaining possession of a debtor’s property after a bankruptcy petition is filed. We hold that mere retention of property does not violate §362(a)(3). ***

JUSTICE SOTOMAYOR, CONCURRING:

***As a result, Peake’s car remained in the City’s possession for months. By denying Peake access to the vehicle he needed to commute to work, the City jeopardized Peake’s ability to make payments to all his creditors, the City included. Surely, Peake’s vehicle would have been more valuable in the hands of its owner than parked in the City’s impound lot.

***Peake’s situation is far too common. Drivers in low-income communities across the country face similar vicious cycles: A driver is assessed a fine she cannot immediately pay; the balance balloons as late fees accrue; the local government seizes the driver’s vehicle, adding impounding and storage fees to the growing debt; and the driver, now without reliable transportation to and from work, finds it all but impossible to repay her debt and recover her vehicle. See Brief for American Civil Liberties Union et al. as Amici Curiae 11–16, 31–32. Such drivers may turn to Chapter 13 bankruptcy for a “fresh start.” Marrama, 549 U. S., at 367... But without their vehicles, many debtors quickly find themselves unable to make their Chapter 13 payments. The cycle thus continues, disproportionately burdening communities of color, see Brief for American Civil Liberties Union et al. as Amici Curiae 17, and interfering not only with debtors’ ability to earn an income and pay their creditors but also with their access to childcare, groceries, medical appointments, and other necessities.