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Changes to Federal Rules 2005 - Bankruptcy
In effect on December 1, 2006


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DAVID F. LEV1
CHAIR
PETER G. McCABE
SECRETARY
COMMITTEE ON RULES OF PRACTICE AND PROCEDURE Agenda E-18 B)
OF THE Rules
JUDICIAL CONFERENCE OF THE UNITED STATES September 2005
WASHINGTON, D.C. 20544
CHAIRS OF ADVISORY COMMITTEES
SAMUEL A. ALITO, JR.
APPELLATE RULES
THOMAS S. ZlLLY
BANKRUPTCY RULES
LEE H. ROSENTHAL
CIVIL RULES
SUSAN C. BUCKLEW
CRIMINAL RULES
JERRY E. SMITH
EVIDENCE RULES
TO: Honorable David F. Levi, Chair
Standing Committee on Rules of Practice
and Procedure
FROM: Honorable Thomas S. Zilly, Chair
Advisory Committee on Bankruptcy Rules
DATE: May 2,2005
RE : Report of the Advisory Committee on Bankruptcy Rules
I. Introduction
The Advisory Committee on Bankruptcy Rules met on March 10- 1 1, 2005, in Sarasota, Florida. The purpose of this report is to outline actions taken by the Advisory Committee at its spring meeting. The Advisory Committee considered public comments regarding the preliminary draft of proposed amendments to Bankruptcy Rules 1009,2002(g), 4002, 5005(c), 7004(b)(9), 7004(g), 9001, and 9036, and Schedule I of Official Form 6 that were published in August 2004 and the preliminary draft of the proposed amendment to Rule 5005(a)(2) that was published in November 2004. After review of the public comments. the Committee gave its final approval to various proposed amendments which we ask the Standing Committee to approve. The proposed amendments to Rules 2002(g), 9001, and 9036 were approved by the Committee by an email ballot and by the Standing Committee before the meeting.
Ill. Action items
(A) Proposed Amendments to Bankruptcy Rules 1009,4002, 5005(a)(2), 5005(c), 7004(b)(9), and 7004(g) Submitted for Final Approval by the Standing Committee and Submission to the Judicial Conference.*
The Advisory Committee on Bankruptcy Rules recommends that the Standing Committee approve the following amendments for submission to the Judicial Conference.
1. Public Comment.
The proposed amendments to Bankruptcy Rules 1009, 4002, 5005(c), 7004(b)(9), and 7004(g), and Schedule I of Official Form 6 were published for comment in August 2004. The proposed amendment to Rule 5005(a)(2) was published for comment in November 2004. Public hearings on the proposed amendments were scheduled for February 3 and February 7,2005. There was only one timely request to appear at a hearing and that commentator agreed to submit his comments in writing. The comments on the proposals are summarized immediately following the text of each rule to which the particular comment applied. After review of the comments, the Advisory Committee approved the following proposed amendments either as published or with slight changes that are described in the Changes Made After Publication section. The Committee recommends to the Standing Committee that final approval be given to each of the following amendments:
2. Synopsis of Proposed Amendments:
(a) Rule 1009. This amendment would require the debtor to submit a corrected social security number when the debtor becomes aware of an error in a previously submitted statement.
(c) Rule 5005(a)(2). This amendment would allow courts to permit or require electronic filings. The Advisory Committee voted to amend the published rule to add a new second sentence as follows: "Courts requiring electronic filing shall reasonably accommodate parties who cannot feasibly comply with the mandatory electronic filing rule". This change was made in light of the public comments expressing concerns about the burden upon pro se and other litigants who would find it difficult to comply with mandatory filing requirements.
*The advisory committee withdrew the proposed amendment to Rule 4002 for further consideration in light of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Pub. Law No. 109-8).
Rule 5005(c). This amendment adds district judges and the clerk of the bankruptcy appellate panel to a list of persons who can transmit erroneously delivered papers to the clerk of the bankruptcy court.
Rule 7004(b)(9). This amendment removes "or statement of affairs" from the rule. The Advisory Committee voted to amend the Committee Note to explain the removal of this language.
Rule 7004(g). This amendment revises the method of service of a summons and complaint on the attorney for the debtor whenever an entity serves the debtor with a summons and complaint.
An amendment to Schedule I to Form 6 was approved by the Advisory Committee. After the meeting, however, the amendment was referred back to the Forms Subcommittee for further review in light of the bankruptcy legislation.
3. Text of Proposed Amendments to Rules 1009,4002, SOOS(a)(2), 5005(c), 7004@)(9), and 7004(g)
The text of the proposed amendments and Committee Notes, summaries of the comments which apply to each of the proposed amendments, and changes made since , publication are attached to this report.
ATTACHMENTS
Text of proposed amendments recommended for approval and Committee Notes, summaries of the comments on each proposed amendment, and changes made since publication.
PROPOSED AMENDMENTS TO THE FEDERAL RULES OF BANKRUPTCY PROCEDURE*
Rule 1009. Amendments of Voluntary Petitions, Lists, Schedules and Statements.
* * * * *
(c) STATEMENT OF SOCIAL SECURITY NUMBER.
If a debtor becomes aware that the statement of social security number submitted under Rule 1007(f) is incorrect, the debtor shall promptly submit an amended verified statement setting forth the correct social security number.
The debtor shall nive notice of the amendment to all of the entities required to be included on the list filed under Rule 1007(a)( 1 ) or (a)(2).
(d) TRANSMISSION TO UNITED STATES TRUSTEE.
The clerk shall kdndh promptly transmit to the United States trustee a copy of every amendment filed or submitted under pinmmkb subdivision (a)= (b). or (cler-tb-) of this rule.
* ~ e w material is underlined; matter to be omitted is lined through.
COMMITTEE NOTE
Subdivision (c). Rule 2002(a)(l) provides that the notice of the $ 341 meeting of creditors include the debtor's social security number. It provides creditors with the full number while limiting publication of the social security number otherwise to the final four digits of the number to protect the debtor's identity from others who do not have the same need for that information. If, however, the social security number that the debtor submitted under Rule 1007(f) is incorrect, then the only notice to the entities contained on the list filed under Rule 1007(a)(l) or (a)(2) would be incorrect. This amendment adds a new subdivision (c) that directs the debtor to submit a verified amended statement of social security number and to give notice of the new statement to all entities in the case who received the notice containing the erroneous social security number.
Subdivision (d). Former subdivision (c) becomes subdivision (d) and is amended to include new subdivision (c) amendments in the list of documents that the clerk must transmit to the United States trustee.
Other amendments are stylistic.
Changes Made After Publication: No changes since publication.
Public Comment on Proposed Amendments to Rule 1009:
1. Comment 04-BK-039 Submitted by the State Bar of California Committee on Federal Courts. The Committee supports the amendment without qualification.
Rule 5005. Filing and Transmittal of Papers
(a) FILING.
* * * * *
(2) Filing by Electronic Means. A court may by local rule permit or require documents to be filed, signed, or verified by electronic means that are consistent with technical standards, if any, that the Judicial Conference of the United States establishes. A local rule may require filing by electronic means only if reasonable exceptions are allowed. A document filed by electronic means in compliance with a local rule constitutes a written paper for the purpose of applying these rules, the Federal Rules of Civil Procedure made applicable by these rules, and 9 107 of the Code.
* * * * *
(c) ERROR IN FILING OR TRANSMITTAL. A paper intended to be filed with the clerk but erroneously delivered to the United States trustee, the trustee, the attorney for the trustee, a bankruptcy judge, a district judge, the clerk of the bankruptcy appellate panel, or the clerk of the district court shall, after the date of its receipt has been noted thereon, be transmitted forthwith to the clerk of the bankruptcy court. A paper intended to be transmitted to the United States trustee but erroneously delivered to the clerk, the trustee, the attorney for the trustee, a bankruptcy judge, a district judge, the clerk of the bankruptcy appellate panel, or the clerk of the district court shall, after the date of its receipt has been noted thereon, be transmitted forthwith to the United States trustee. In the interest of justice, the court may order that a paper erroneously delivered shall be deemed filed with the clerk or transmitted to the United States trustee as of the date of its original delivery.
COMMITTEE NOTE
Subdivision (a). Amended Rule 5005(a)(2) acknowledges that many courts have required electronic filing by means of a standing order, procedures manual, or local rule. These local practices reflect the advantages that courts and most litigants realize from electronic filings. Courts requiring electronic filing must make reasonable exceptions for persons for whom electronic filing of documents constitutes an unreasonable denial of access to the courts.
Experience with the rule will facilitate convergence on uniform exceptions in an amended Rule 5005(a)(2).
Subdivision (c). The rule is amended to include the clerk of the bankruptcy appellate panel among the list of persons required to transmit to the proper person erroneously filed or transmitted papers.
The amendment is necessary because the bankruptcy appellate panels were not in existence at the time of the original promulgation of the rule. The amendment also inserts the district judge on the list of persons required to transmit papers intended for the United States trustee but erroneously sent to another person. The district judge is included in the list of persons who must transmit papers to the clerk of the bankruptcy court in the first part of the rule, and there is no reason to exclude the district judge from the list of persons who must transmit erroneously filed papers to the United States trustee.
Changes Made After Publication: The published version of the Rule did not include the sentence set out on lines 7- 10 above. The Advisory Committee concluded, based on the written comments received and additional Advisory Committee consideration, that the text of the rule should include a statement regarding the need for courts to protect access to the courts for those whose status might not allow for electronic participation in cases. The published version had relegated this notion to the Committee Note, but further deliberations led to the conclusion that this matter is too important to leave to the Committee Note and instead should be included in the text of the rule.
Public Comment on Proposed Amendment to Rule 5005(a):
1. Comment 04-BK-003 Submitted by Mr. Henry Sommer. Mr. Sommer asserts that the rule should provide exceptions for both pro se filers and attorneys who do not generally appear in bankruptcy cases. These attorneys may be assisting debtors through pro bono programs, or they may just happen to have an occasional client who may need bankruptcy relief, or who is a creditor in a case, and the cost of participating electronically in the matter in the bankruptcy court is prohibitive. He urges the Committee to consider amending the proposal to provide in the rule itself for such exceptions.
2. Comment 04-BK-013 Submitted by the Defense Contract Management Agency, an Agency of the Department of Defense.
The Agency expressed concern that the mandatory electronic filing rule would constitute a form of consent to be served electronically.
The memorandum transmitting the proposed amendment indicates that the rule is not intended to constitute such a form of consent, and that the courts with electronic filing have uniformly allowed entities to "opt out" of the electronic service system. The Agency suggests that this uniform practice be codified in the rule rather than left unsaid on the assumption that current practices will continue.
3. Comment 04-BK-016 Submitted by the American Bar Association. The ABA has adopted a policy standard which it suggests the Committee should consider in proposing amendments to Rule 5005(a)(2). Specifically, Standard 1.65(c)(ii) provides that a mandatory electronic filing rule must either be at no cost or must include a provision for waiver of such fees as appropriate, and it must include exceptions to assure equal access to the courts for those who are disabled or otherwise face barriers to entry into the court system.
The policy also requires adequate advance notice of the implementation of mandatory electronic filing programs and that the courts provide adequate training for use of these processes. The ABA asks that these standards be imported into the rule to ensure as complete access to the courts as possible.
4. Comment 04-BKO-020 Submitted by Mr. Eliot S. Richardson.
Mr. Richardson indicates that he has had experience as a pro se litigant, and he suggests that the rule provide for full access to the court records both at the courthouse and remotely, as well as providing filing assistance for pro se parties. He also asserts that any file standards adopted to implement mandatory electronic filing should be limited to non-proprietary files such as PDF and RTF.
5. Comment 04-BK-025 Submitted by the National Association of Consumer Bankruptcy Attorneys. NACBA recognizes the many advantages to electronic filing, and it notes that since many of its members are regular users of electronic filing systems it is somewhat against their self-interest to oppose the proposed amendment.
Nonetheless, they assert that the rule should be revised to protect access to the courts for attorneys who may handle only a few cases a year, perhaps as a part of a volunteer lawyer program, as well as legal services attorneys with limited resources. They also propose that the adoption of the amendment be deferred until exceptions to its reach are set out in the rule itself.
6. Comment 04-BK-036 Submitted by the Access to Justice Technology Bill of Rights Committee of the Washington State Access to Justice Board. The Committee offered a lengthy comment on the proposed amendment to Rule 5005(a)(2). The group has engaged in a multi-year study of these issues that led to the promulgation by the Washington State Supreme Court of an Order adopting the Committee’s Access to Justice Technology Principles.
The comments, authored by Former Superior Court Judge Donald J.
Horowitz as chair of the Committee, note that the courts need to act efficiently and economically. Nevertheless, the courts are not a business, and access to the courts is a more important principle than judicial economy or efficiency. He also lists groups that would be particularly disadvantaged by the proposed amendments. In addition to the pro se filers identified by other comments, this comment lists the incarcerated, the elderly, the disabled, persons who don't know how to use the technology, persons in rural areas, and persons who cannot gain access to the technology, wherever they may reside. He notes especially that lawyers in rural areas may have the hardware to file electronically, but that there may be issues of broadband capacity to handle the amount of data that may need to be filed electronically.
The comment asserts that the rule should include specific exclusions for appropriate circumstances, and it offers the Washington State Rule GR 30 as an example. That rule, however, specifically provides that electronic filing is purely permissive. Any person may file documents in hard copy, and the filing must be accepted.
7. Comment 04-BK-037 Submitted by HALT, An Organization of Americans for Legal Reform. This organization represents the interests of consumers of legal services and seeks to make the civil justice system more accessible and accountable. It expressed concern that the rule, as proposed, will limit access to the courts by pro se litigants, a group that the organization notes is more significant in bankruptcy than in general civil litigation. They suggest that the material in the Committee Note to the Rule should be moved into the text of the rule and suggest adding the following sentence to the end of subdivision (a)(2) of Rule5005: Courts requiring electronic filing must make exceptions for parties such as pro se litigants who cannot easily file by electronic means, allowing such parties to file manually upon showing of good cause.
8. Comment 04-BK-038 Submitted by the Self Help Committee of the Northwest Women's Law Center. This Comment also asserts that the rule should not apply to pro se litigants. The Center assists 3,000 to 5,000 telephone callers annually by providing information and directing them to resources, including attorneys. In their experience, approximately 25% of the callers do not or cannot hire an attorney, so they are aware of the need for access to the courts by pro se parties. They have surveyed their callers and their data indicates that at least 65% of their survey participants prefer hard copies of documents rather than email or other electronic versions of the materials. They also suggest increasing technical assistance at the courts.
9. Comment 04-BK-039 Submitted by The State Bar of California Committee on Federal Courts. This Committee of the State Bar generally favors the proposed amendments to Civil Rule 5, Appellate Rule 25, and Bankruptcy Rule 5005(a)(2). The Committee recognizes the advantages of electronic filing and concludes that the references in the Committee Notes that courts should be sensitive to the needs of those who may not be able to access the court and that local experience should be used to determine the extent and nature of exceptions to the requirement that documents be filed electronically is sufficient. The Committee also agrees with the statement contained in the transmittal memorandum for the amendments that the filing of a document electronically does not constitute agreement to be served electronically. Therefore, this Committee supports the proposal and suggests no changes.
10. Comment 04-BK-040 Submitted by The State Bar of California Standing Committee on the Delivery of Legal Services.
The Committee supports the proposal but states that there should be exceptions made for pro se filers and attorneys who lack the technological resources to file papers electronically. They note in particular that legal aid offices and some pro bono attorneys may not have the technological capacity to file documents electronically.
They also suggest that the courts ensure that sufficient technical support personnel are available to help persons unfamiliar with the electronic filing process.
11. Comment 04-BK-041 Submitted by Mr. Richard Zorza. Mr.
Zorza, an attorney in Washington, D.C., noted that he "works extensively with many groups dealing with issues facing the unrepresented" although his comments are submitted individually.
Mr. Zorza notes that the courts have thus far taken a practical approach to ensuring access to the courts for the unrepresented, but he suggests that it is inadvisable to rely on this experience as opposed to including an appropriate provision in the rule itself. He further argues that leaving the crafting of exceptions to the local courts may lead to further inconsistencies, and that attempts to codify specific exceptions will face a wide range of pitfalls. Instead, Mr. Zorza proposes that the rule be amended to limit its application to parties represented by counsel. Thus, his comment is consistent with a number of others that urged the Committee to include within the rule a specific exception for pro se parties.
Public Comment on Proposed Amendments to Rule 5005(c):
1. Comment 04-BK-039 Submitted by the State Bar of California Committee on Federal Courts.
The Committee supports the amendment without qualification.
Rule 7004. Process; Service of Summons, Complaint
* * * * *
(b) SERVICE BY FIRST CLASS MAIL.
* * * * *
(9) Upon the debtor, after a petition has been filed by or served upon the debtor and until the case is dismissed or closed, by mailing a copy of the summons and complaint to the debtor at the address shown in the petition ztfhim or to such other address as the debtor may designate in a filed writing
* * * * *
(g) f&mg&dj SERVICE ON DEBTOR'S ATTORNEY.
If the debtor is represented by an attorney, whenever service is made upon the debtor under this Rule, service shall also be made upon the debtor's attorney by any means authorized under Rule 5(b) F. R. Civ. P.
COMMITTEE NOTE
Under current Rule 7004, an entity may serve a summons and complaint upon the debtor by personal service or by mail. If the entity chooses to serve the debtor by mail, it must also serve a copy of the summons and complaint on the debtor's attorney by mail. If the entity effects personal service on the debtor, there is no requirement that the debtor's attorney also be served.
Subdivision (b)(9). The rule is amended to delete the reference in subdivision (b)(9) to the debtor's address as set forth in the statement of financial affairs. In 1991, the Official Form of the statement of financial affairs was revised and no longer includes a question regarding the debtor's current residence. Since that time, Official Form 1, the petition, has required the debtor to list both the debtor's residence and mailing address. Therefore, the subdivision is amended to delete the statement of financial affairs as a document that might contain an address at which the debtor can be served.
Subdivision (g). The rule is amended to require service on the debtor's attorney whenever the debtor is served with a summons and complaint. The amendment makes this change by deleting that portion of Rule 7004@)(9) that requires service on the debtor's attorney when the debtor is served by mail, and relocates the obligation to serve the debtor's attorney into new subdivision (g).
Service on the debtor's attorney is not limited to mail service, but may be accomplished by any means permitted under Rule 5(b) F. R.
Civ. P.
Changes Made After Publication: The Committee Note was amended to add the final paragraph of the Note. The new paragraph describes the reason for the deletion of the reference in the rule to the statement of affairs as a source for the debtor's address. This was a secondary reason for amending the rule, and even in the absence of public comment on the proposed amendment, the Advisory Committee believes that the additional explanation in the Committee Note is appropriate.
Public Comment on Proposed Amendments to Rule 7004:
1. Comment 04-BK-039 Submitted by the State Bar of California Committee on Federal Courts. The Committee supports the amendment without qualification.


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