NCBA Files Amicus Before the U.S. Supreme Court | United States v. Miller

On Friday, September 27, 2024, we filed an Amicus Brief in the Supreme Court case, United States v. Miller, No. 23-824. The Supreme Court granted certiorari on the following question: Whether a bankruptcy trustee may avoid a debtor’s tax payment to the United States under Section 544(b) when no actual creditor could have obtained relief under the applicable state fraudulent-transfer law outside of bankruptcy.

We extend our gratitude to Brit Suttell and Mike Truesdale of Barron & Newburger for their exceptional work in preparing this brief and NCBA Amicus Committee Chairs Ron Miller, Crystal Duplay, and all of the committee members for their engagement and feedback. 

Case Background: The bankruptcy trustee filed an adversary proceeding seeking to avoid the debtor’s tax payment as a fraudulent transfer under the Utah Uniform Fraudulent Transfer Act. The U.S. opposed the proceeding, but the bankruptcy court ruled that the tax payment could be avoided. Both the District Court of Utah and the Tenth Circuit Court of Appeals affirmed. The United States asserted the defenses of sovereign immunity, preemption, or the Appropriations Clause. Our brief, filed in support of the trustee’s position, advocates for affirming the Tenth Circuit’s decision, which held that the United States cannot use these defenses and must be treated like any other recipient of a fraudulent transfer under the Code.

Why This Matters: The government’s position in this case undermines the fair and consistent application of the Bankruptcy Code by effectively granting itself a special exemption from fraudulent transfer actions. This exemption depletes the bankruptcy estate, reducing the funds available for other creditors.

NCBA’s Commitment: As the voice of the creditors’ rights legal community, advocating for our creditor-clients and ensuring the uniform applicable of the Bankruptcy Code, as highlighted in PHH Mortgage Corp. v. Guthrie, is crucial. Our amicus brief emphasizes the importance of maintaining a level playing field in bankruptcy proceedings, ensuring that no party, including the government, receives undue advantages.

We look forward to the Supreme Court’s decision and will keep you informed of any updates.