Campbell Law School Moot Court Team Finds Competitive Success Arguing BAPCPA’s Amendments to the Automatic Stay
By Over the past year, many law students have faced unique challenges while competing on behalf of advocacy programs that have been modified in response to the COVID-19 pandemic. Namely, virtual competition platforms have become commonplace and fundamentally changed the nature of many advocacy competitions. Throughout the past few months, Campbell Law School’s Moot Court Team has worked diligently to respond to this adversity and succeeded.
In February, Savannah Singletary and I were honored to win the American College of Bankruptcy Fourth Circuit Moot Court Competition. We had the pleasure of being coached by Pam McAfee of Ellis & Winters and Margaret Westbrook of K&L Gates, who each dedicated extensive time and resources to prepare us for the competition. Pam and Margaret also coached the 2L team of Diane Ford and Breann Burns, who competed exceptionally and have great potential to win the competition next year. Additionally, we were fortunate to have multiple bankruptcy judges and attorneys volunteer to help us practice our oral arguments: Judges Humrickhouse, Warren, and Callaway, former Judge and Campbell Law Dean J. Rich Leonard, and attorneys Brian Darer, Chris Waivers, Bill Janvier, Lisa Sumner, Brittany Levine, and Grant Simpkins.
Overall, this experience was invaluable. There are few (if any) better ways to sharpen advocacy skills than intense oral arguments with real-world practitioners. Ironically, the Zoom platform assisted us to some degree as we were able to practice amongst ourselves more often than otherwise. Moreover, through using virtual platforms, we gained a better idea of the practical issues with which attorneys are dealing on an everyday basis during the pandemic. Thus, in addition to the extensive benefits of competing in moot court competitions, we learned to become versatile in response to adversity in order to advocate successfully.
This year’s competition involved two issues concerning the automatic stay; these two issues are subjects of current circuit splits. The first issue was whether bankruptcy courts have discretion to adjudicate a dispute involving an automatic stay violation notwithstanding an enforceable prepetition arbitration agreement entered between the parties. The second issue was whether 11 U.S.C. § 362(c)(3)(A) terminates the automatic stay entirely after thirty days, or only as it applies to the debtor’s personal liability and non-estate assets.
The first issue features evolving jurisprudence involving the Federal Arbitration Act (FAA). Although the Supreme Court has never refused to uphold a valid arbitration agreement — absent a statutory congressional mandate to do so — some bankruptcy courts have done so. Specifically, these courts conclude that enforcing arbitration agreements, in some cases, would inherently conflict with the Bankruptcy Code’s underlying purposes of centralized dispute resolution and facilitating equitable distributions.
The second issue involves interpreting a rather confusing statutory provision enacted through the Bankruptcy Abuse Protection and Consumer Protection Act (BAPCPA). Section 362(c)(3)(A) provides that if a debtor has filed for Chapter 7, 11, or 13 twice in a year, the automatic stay shall terminate after thirty days “with respect to the debtor.” The textualist approach contends that the phrase “with respect to the debtor” operates to only terminate the automatic stay in part while keeping the stay intact as to estate property in order to protect the debtor and creditors. See, e.g., Rose v. Select Portfolio Servicing, Inc.; in re Thu Thi Dao. In contrast, a slim minority of courts have concluded that the statute is ambiguous and consulted the legislative history, which almost certainly favors terminating the stay entirely. In re Smith; in re Jupiter. Specifically, these courts emphasize that terminating the stay entirely is the only realistic method to deter serial bankruptcy filings, one of the core purposes of BAPCPA.
Interestingly, North Carolina bankruptcy courts were some of the first to address this issue. See in re Jones (holding that the automatic stay only terminates with respect to actions against the debtor and the debtor’s property, but not property of the estate); in re Paschal. As a result, the Jones and Paschal decisions are each routinely referenced by courts involved in the circuit split. In fact, they were even referenced in the record for our competition. However, since 2018, there has been conflicting authority as to how the issue lies in the Eastern District of North Carolina. See in re Dev, (disagreeing with Jones and holding that the automatic stay terminates in its entirety). As a result, as is the case with many other jurisdictions, debtors and practitioners are left uncertain as to the potentially significant effects of a second-time bankruptcy filing.
Ultimately, both of these issues feature compelling arguments for each side, and it will be interesting to see how the Supreme Court rules and might rule in the future if it opts to hear and decide a relevant case. In any event, I will remember — and benefit from — this experience throughout my legal career.
Benjamin Aydlett is a third-year law student at Campbell Law School, a member of the Campbell Law Review, and a competitor on the Campbell Law Moot Court Team. The Bankruptcy Blog is grateful for Ben’s submission and happy to report on the competitive successes and development of future members of the Bar.