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Asset Management Holdings, LLC v. Alelia Hernandez (In re Hernandez)

Summarizing by Lars Fuller

Kenneth Benjamin v. United States of America

Case Type:
Consumer
Case Status:
Reversed and Remanded
Citation:
18-20185 (5th Circuit, Jul 25,2019) Published
Tag(s):
Ruling:
The plain meaning of section 405(h) of the Social Security Act did *not* bar a bankruptcy court from exercising jurisdiction over the debtor's claims under 28 USC 1334. The Fifth Circuit sided with the Ninth Circuit in finding the statute to be clear and unambiguous. The sentence in question only barred jurisdiction under 28 USC 1331 and 1346. There was no way to read in a statutory bar to bankruptcy jurisdiction under the plain language. The Court of Appeals rejected the majority view from other Circuits, which all considered legislative history to interpret congressional intent.
Procedural context:
Appeal from the District Court, which affirmed the Bankruptcy Court's order dismissing the debtor's claims against the Social Security Administration for lack of jurisdiction.
Facts:
The Chapter 7 debtor (Benjamin) brought an action against the Social Security Administration (SSA) for wrongfully withholding benefits owed to his sister. The SSA moved to dismiss on the basis that 42 USC 405(h) barred the bankruptcy court from exercising jurisdiction under 28 USC 1334. The statute itself says: "No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under [Title II of the Social Security Act]." The Bankruptcy Court granted the SSA's motion to dismiss, concluding that bankruptcy jurisdiction could be inferred in the statutory bar. The District Court affirmed. On appeal, the Fifth Circuit found the statutory language clear and unambiguous. Thus, without the need to confer legislative history to interpret the statutory meaning, the Court of Appeals found no statutory bar to bankruptcy jurisdiction. The dismissal was reversed. On remand, the Fifth Circuit also provided guidance on how to read the statute regarding which claims could be considered by the bankruptcy court.
Judge(s):
Clement, Graves and Oldham

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