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Ping: Episode 3
- Posted: Mar 09, 2009 at 12:58PM
- 20,315 views
- 20 comments
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This week , as always, Max and Laura observed and listened to what people here at Microsoft were buzzing about, what was on their minds and what they talked about at the water cooler. Here is a recap of what was on the minds of Microsofties this past
week. Topics include:
No Ipods at the Gates house!
Sobees it!
Is 2019 real?
Make a wish
...and more, enjoy!
Oops, something didn't work.
He probably means shorter as the height is required to be shorter in order for the triangle to fall through itself. So obviously I was wrong and the triangle can fall through itself.
i wonder what mr jobs would do to a member of his family if they showed up at door with a zune (or even a last-year ipod)
silly thing still
personally i strongly dislike both the ipod and the zune and dedicated mp3players in general (i do dislike the ipod the most though) i want my phone to handle that stuff
You're right that round manhole covers can't fall through, and that's a big reason. Another primary reason that I've heard is - the dang things are heavy! One person can roll a round manhole cover, but of course that wouldn't work with any other shape.
And of course, the "creative" answer: Manhole covers are round because maholes are round.
Comments have been closed since this content was published more than 30 days ago, but if you'd like to continue the conversation, please create a new thread in our Forums, or Contact Us and let us know.


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5 Sidekicks Who Got Screwed By History
#2. John Wayne's Sidekick, Yakima Canutt
Yakima Canutt was a real-deal cowboy, the kind who grew up on a ranch and busted broncos for fun. He was also a major hit on the rodeo circuit, a war veteran and an expert horse rider. But it wasn't until he began wintering in Hollywood between rodeo seasons that he found his true calling: as a best boy. Just kidding -- Yakima was a really good stunt man. By the time talkies rolled around, Yakima had logged onscreen time in 48 movies and was staging scenes as much as he was acting in them.
His butt-chin was the stuff of legends.
In 1932, he met a little-known actor named John Wayne. A cowboy bromance was formed. Canutt not only doubled for Wayne on his trickiest stunts but he also taught him how to fall off a horse without dying and how to twirl a gun real fancy-like, and together they developed realistic punching techniques for the camera. But more importantly, John Wayne pretty much tailored his on-screen persona after Yakima. Everything that we remember about John Wayne -- his walk, his slow, long drawl and stilted speech, even the way he stood -- were all ripped right off of Yak Canutt.
Yak Canutt, seen here diving into horses.
This isn't some kind of conspiracy theory. The Duke was the first to admit it:
"I spent weeks studying the way Yakima Canutt walked and talked. He was a real cowhand. I noticed that the angrier he got, the lower his voice, the slower his tempo. I try to say my lines low and strong and slow, the way Yak did."
So Canutt not only taught Wayne the skills he needed to be a believable cowboy, but he was the real-life John Wayne. He invented all of the mannerisms that John Wayne would use in every freaking role he played. Wayne became one of the most famous actors of all time; Canutt was forgotten.
Seriously, spend more than 10 minutes on your book cover, guy.
#1. George Washington's Sidekick, Baron von Steuben
The hilariously long-named Friedrich Wilhelm August Heinrich Ferdinand von Steuben was a Prussian-born soldier who actually could have doubled for his future boss, George Washington:
Seriously, those two could have pulled off some Parent Trap-level shenanigans:
Except that von Steuben didn't speak a word of English, so that would have been pretty hard to do. And it's also probably why you've never heard of him.
In 1777, after over 30 years in military service and eight years of fooling people into thinking he was a baron, von Steuben was introduced to American legend Benjamin Franklin, who in turn recommended him to Gen. Washington. And when Franklin made that introduction, he made sure to let Washington know that the fake baron was also a lieutenant general (which he was not). The record is unclear, but we're pretty sure von Steuben also bragged about his score of 2400 on the SATs and how MIT was totally offering him a full ride. Washington was duly impressed.
At this point, you'd think that this non-English-speaking George Washington look-a-like fraud was probably knee-deep in shit he was ill-prepared to handle, but you'd be wrong. Within months of arriving in America, he rose from drillmaster to inspector general of the Continental Army, wrote the army's drill manual and taught soldiers how to not defecate all over their own campsites, how to actually use a bayonet for something other than a shish kebab skewer and how to march, stand, use their muskets correctly and pretty much how to be an army that could defeat the most powerful military force in the world. Two more things: 1) He did all this for free, and 2) He was probably gay.
... and now the Steuben Monument makes sense.
So what happens to a foreigner who saves America? Untold riches? The adoration of millions? All the Cristal you could shake a stick at?
Not quite. Congress gave him land (there was plenty to go around after stealing so much from Indians and former royalists) but refused to pay the money he had been promised when first volunteering. It took the intervention of Washington and Franklin to persuade Congress to provide the Baron with a bankruptcy-saving pension. And even then, the guy still died in debt and pretty much forgotten.
It wasn't until America's involvement in World War I, when everyone got in a tizzy over the German Hun, that some German-Americans resurrected Steuben's memory as proof of their American patriotism. And also to set up some sweet future parades for truant egomaniacs:
"It was all worth it!"
And see what other important individuals we're bring into the public eye in our new book.
For more figures time forgot, check out 5 Famous Inventors (Who Stole Their Big Idea) and The 6 Greatest War Heroes Who Got Screwed Out of History.
And stop by Linkstorm because the Internet is ready to preach you the gospel.
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subset: commoncrawl


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TORONTO City Council on Monday moved one step close to raising city sewage and water rates.
The rates for the first 3,000 gallons will increase from $20 to $24 per month, while the sewage rates will increase to $18 monthly, according to Mayor John Geddis.
"If we don't meet the state minimum (for average water rates), we won't be eligible to apply for (state grant funds)," said the mayor, adding the city's sewage plant and infrastructure need improvements.
Geddis previously said the city intends on pursuing as many grants as possible for the upgrades. Sewage and water costs will be an additional $6 per gallon for each additional 1,000 gallons of water used per city water customer per month, said the mayor. He added that cost would apply for both the water and sewage rates.
"The only place (in the county) that has cheaper water rates than Toronto is Stratton," said Geddis, adding even with the increases, water rates still will be less expensive for city customers than Steubenville, Wintersville and county water customers.
The mayor also said the rate hikes were recommended by City Service Director John Hannan.
"Council will probably hold the third (and final ordinance) reading (on the increases) during its next meeting," said Geddis.
In other matters, City Council approved $500 bonuses for full-time city employees and $200 bonuses for part-time employees, according to Geddis.
"(City employees) haven't had a raise in three years, so we went ahead and approved the bonuses) for employees this year," Geddis said.
The mayor said bonuses for employees were the same as last year, and the finance committee had studied the matter.
The mayor also said street paving was "supposed to be done by Nov. 15," but inclement weather so far this fall will prevent Lash Paving Co. from finishing the work. "(The company) asked if they could wait until next spring (to finish). The company will hold its price until next year," Geddis noted.
He added it makes sense to wait until weather conditions improve to finish the project.
(Miller can be contacted at firstname.lastname@example.com.)


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Pastry Shop Christians
During his historic trip to Assisi, Pope Francis visited the hall in the Bishop's residence in which Saint Francis stripped himself of his clothes and renounced his earthly birthright. Seemingly no previous Pope had ever visited the place.
Pope Francis remarked that there had been rumors in the Italian press that bishops, cardinals, perhaps the pope himself would in a dramatic gesture engage in a communal stripping off of robes. Reminding that the Church is all the baptized, he said all must imitate Christ who stripped himself to become a servant of all, even to accepting the Cross. And, if we would be Christians, we must follow Jesus on his Way, there is no other Way.
Then the Pope said: "But some will object: can't we have a Christianity that is a little more human – without the cross, without Jesus, without stripping away of self?" And the Pope replies; "In this way we would become pastry shop Christians, luscious cakes, sweet dainties. Delectable, but not real Christians. We need to strip away that worldliness which leads to vanity, arrogance, pride."
And he made it clear he was not speaking only of the Curia.
The Italian is here.
About the Author
Rev. Robert P. Imbelli, a priest of the Archdiocese of New York, is Associate Professor of Theology Emeritus at Boston College.
14 comments
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- Editor Featured
I think it's fantastic to hear a pope saying all of these simply Christian things. As a friend asked me recently, "Doesn't it make you feel very old? To have lived so long to see this?" It keeps bringin my mind back to this, which Hannah Arendt wrote about Pope John many years ago.
But all that said--Can't we have that Church he describes, and have zeppole? Please, take my vanity, my arrogance, my pride. But leave the cannoli!
methinks (Shakespeare on PBS tonight!), you are confounding Francesco with Giuseppe. It's the latter who is fond of zeppole. At least that's the Bronx tradition.
The English version of the homily is also now available:
you may be relieved to hear that in his talk with the cloistered Sisters today, the Pope made reference to Saint Teresa of Avila. It seems a nun was bombarding Teresa with complaints. The Saint's solution was to tell the cook to fix her a steak: "Quando a lei veniva una suora, oh, con queste cose… diceva alla cuoca: "dalle una bistecca!".
I guess it's butchers "si," pastry chefs "no."
I recall a story about the Jesuits finding relief in a photo of Pope John with a cigarette after a reproval about smoking from Pius. I find some similar relief in this pope's gustatory Gospel, carnivore that I am.
Still, we're going to need a ruling on the Eastertime pizza rustica. Does a meat pie pass muster???
The seemingly impromptu comments and teachings are going to be more effective than many people think. I think, primarily, because they address people's lifestyle and are less concerned with intellectual kinds of didactic presentations of the life of faith. Not that more didactic presentations (e.g. encyclicals, etc.) are not important but I don't think they are what is called for in this age of instant communication. Plus adddressing lifestyle is the most direct, immediate and tangible thing that people actually see and it is the most immediate area that they can actually address is a concrete way.
As Simone Weil said:
"We are living in times which have no precedent, and in our present situation universality, which could formerly be implicit, has to be fully explicit. It has to permeate our language and the whole of our way of life...Today it is not nearly enough merely to be a saint, but we must have the saintliness demanded by the present moment, a new saintliness, itself also without precedent.A new type of sanctity is indeed a fresh spring, an invention. If all is kept in proportion and if the order of each thing is preserved, it is almost equivalent to a new revelation of the universe and of human destiny. It is the exposure of a large portion of truth and beauty hitherto concealed under a thick layer of dust. More genius is needed than was needed by Archimedes to invent mechanics and physics. A new saintliness is a still more marvellous invention."
Five more years of Francisisms will thoroughly change the Church.and at a healthy 81, I might live to see it.
"At a healthy 81, I might live to see it."
Speriamo bene!
Is there an overlap between pastry shop Christians and cafeteria Catholics?
Mark ... only prudentially so.
The mental image of stripped-down old-man hierarchs is little bit too much to take ... I think I just threw-up in my mouth.
I lived for a couple years in the Arthur Avenue section of the Bronx. The neighborhood's working class Italians would have loved Papa Francesco. He speaks their language.
I guess that Francesco is really taking this Franciscan thing seriously. That has got to make us all uncomfortable with our prejudices and life styles.
Reminds me of what my sainted sixth-grade teacher, Sister Mary Adelaide, always would warn us: "Christianity is not for sissies."
I trust your untimely spasm did not spoil "il buon gusto di Arthur Avenue!"
Darn, I was so much more relaxed when his words, filtered through my needs, allowed me to believe, if only briefly, he had the reins now and all was moving in the best of directions. Come to think on it, I suspect that's what I still believe from time to time.
@ Yah know, Roberto: If I close my eyes, I can still smell the comforting aroma of bread-baking at Agostino's early in morning as I walked to work through the neighborhood.
Does the saintly Nancy Liguori, the chain-smoking grandma with the truck-driver mouth, still feed the homeless everyday from her own kitchen? Does Frankie DeLuca still hang-out on the side-walk, constantly combing and adjusting his greased-up coif, surrounded by drooling little girls? Do they still have the Arthur Avenue market with its fresh produce, butchers and live poultry market?
Yah know, you can take da boy outta da Bronx, but you can't take da Bronx outta da boy!


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11-11131 Lea (Doc. # 102)
- Details
- Category: Judge Nugent
- Published: 16 August 2012
- Written by Judge Nugent
- Hits: 2987
In Re Lea, 11-11131 (Bankr. D. Kan. Aug. 2, 2012) Doc. # 102
Click here for the pdf document.
SIGNED this 2nd day of August, 2012.
EXEMPTION CONSTITUTIONAL ) Jointly Administered
ANTHONY TAYLOR LEA, ) Case No. 11-11131
MEREDITH RENEE LEA, ) Chapter 7
Debtors. )
LAURIE LOUISE HUDSON, ) Case No. 11-12855
) Chapter 7
Debtor. )
RICKY WAYNE FOGLE, ) Case No. 11-13302
JERRI LYN FOGLE, ) Chapter 7
Case 11-11131 Doc# 102 Filed 08/02/12 Page 1 of 25
Debtors. )
Congress and the Kansas Legislature have each enacted an earned income tax credit (EIC)
to afford lower-income families with children not only a refund of over-withheld wages, but also
an additional refundable tax credit.1 Until last year, the right to receive the credit, along with the
debtor's income tax refund, was subject to turnover to a chapter 7 debtor's trustee for administration
and distribution to the creditors. Recognizing that the proceeds of the credit were intended by
Congress and the state legislature to provide some relief for working lower-income families, the
Kansas Legislature enacted KAN.STAT.ANN. § 60-2315 (2011 Supp.) which exempts the right to
receive the credit for those Kansans who file for bankruptcy relief (the "Act").2 The debtors in these
three cases claimed this exemption and their Trustees objected, claiming that Kansas's bankruptcy
specific exemption of the EIC runs afoul of the Bankruptcy Clause and the Supremacy Clause of the
United States Constitution. They also assert that the Act's language making it applicable to
individual debtors under the Federal Bankruptcy Reform Act of 1978 renders it inapplicable to
bankruptcy cases filed after the enactment of the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 (BAPCPA).
Because the Bankruptcy Code expressly accommodates the several states' exemption
schemes by allowing states to "opt out" of the federal exemptions in 11 U.S.C. § 522(b) and because
this exemption will apply uniformly to all Kansas debtors in bankruptcy, the Act does not violate
1 See 26 U.S.C. § 32; KAN.STAT.ANN. § 79-32,205 (2011 Supp.).
2 The Act took effect on April 14, 2011. See 2011 KAN.SESS.LAWS, ch. 25, sec 2.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 2 of 25
either the Bankruptcy or Supremacy Clauses. It plainly applies to the 1978 Bankruptcy Reform Act
because that act was amended, not superseded, by BAPCPA. The Trustees' objections must be
overruled and that part of these and similarly situated debtors' tax refunds that have been retained
in trust pending resolution of these objections should be released to the debtors.3
This Court may hear and determine objections to the validity of a debtor's exemptions as a
core proceeding.4
Factual Summary
In the three captioned cases, the parties submitted stipulations to the Court which are
summarized below.5 Edward J. Nazar is the Trustee of the Lea case; Linda S. Parks is the Trustee
of the Hudson case; and Steven L. Speth is the Trustee of the Fogle case. Nazar and Parks submitted
briefing on the issues before me; Speth did not. The State of Kansas was allowed to intervene to
defend the constitutionality of the EIC exemption statute and submitted briefs in response to the
Trustees' submissions.6 The debtors Lea and Fogle also submitted briefs defending their right to
3 The Court entered a series of case management and procedural orders that aggregated
and provided for the joint administration of more than 100 EIC cases like these. The Court
intends the reasoning and decree in this Memorandum Opinion to apply in all of those cases.
4 See 28 U.S.C. § 157(b)(1) and (b)(2)(B) and § 1334.
5 Originally, a fourth lead case administered by chapter 7 trustee J. Michael Morris was
part of these jointly administered cases, In re Arellano, Case No. 11-11091. The Court approved
an agreed order resolving the Trustee's Second Motion for Turnover and Debtor's Amended and
Second Amended Exemption, see dkt. 80, mooting the EIC exemption issue in that case. Trustee
Morris does not participate in these proceedings.
6 See Fed. R. Civ. P. 5.1. Lea, Dkt. 69; Hudson, Dkt. 24; Fogle, Dkt. 38. The State
appears by Assistant Attorney General Derenda J. Mitchell.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 3 of 25
claim the exemption.7
Anthony and Meredith Lea filed their chapter 7 case on April 25, 2011 and on June 23,
amended their Schedule C to claim the EIC exemption. They received a federal and state income tax
refund of $7,989 from which their counsel withheld $574 pursuant to an attorney's fee assignment,
leaving a net refund amount of $7,415. Part of their federal refund was the EIC which amounted to
$2,149. Because April 25 was the 115th day of 2011, 115/365 of the Leas' refund, after deducting
the attorneys fee, is property of their bankruptcy estate. If their attempt to exempt the EIC fails, that
amount will be $2,336.23; if they prevail, it will be $1,659.15 and they will be permitted to retain
the $677.08 that represents 115/365 of the EIC.
Laurie Hudson filed her chapter 7 case on September 15, 2011 and claimed the EIC
exemption. She received a federal income tax refund of $2,744, $2,335 of which represented the
EIC. She received a state income tax refund of $297, but was entitled to a state EIC of $420. Her
estate owns 258/365 of her federal and state refunds. If the EIC exemption is upheld, the estate's
share of the federal refund will be $289.10.8 Because the state EIC exceeds the amount of her refund,
she will be entitled to retain all of it. If, however, the EIC exemption falls, Ms. Hudson's estate will
receive 258/365 of $3,041, the sum of the federal and state refunds, or $2,149.52.
7 Debtors Lea appear by their counsel Martin J. Peck. Debtors Fogle appear by their
attorney Douglas D. Depew. Debtor Hudson, represented by Donald Astle, did not submit a
brief on the constitutional questions.
8 ($2,744-$2,335) x 258/365 = $289.10.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 4 of 25
Ricky and Jerry Fogle filed their case on October 26, 2011 and exempted their EIC benefit.
According to the very brief stipulation filed in that case, they received $6,052 in federal and state
refunds including an EIC of $2,957.13. I calculate that the estate's share of their non-exempt tax
refund is equal to 299/365 of the total amount. If the EIC exemption survives, the estate will receive
$2,535.24;9 if it doesn't, the estate will get $4,957.66.10
The only legal controversy in these cases is whether the Act and the exemption it offers to
bankrupt Kansans is a constitutional enactment of the State. There are no other factual controversies
in these three matters.
Constitutionality and Exemption Standards
The determination of whether a state statute is constitutional is a question of law subject to
unlimited review.11 State statutes are presumed to be constitutional and courts resolve all doubts in
favor of a statute's validity.12 Courts are required to interpret a statute in a way that makes it
constitutional if a reasonable construction would maintain the legislature's apparent intent.13
9 ($6,052- $2,957.13) x 299/365.
10 $6,052 x 299/365.
11 Kansas One-Call Sys., Inc. v. State, 294 Kan. 220, 225, 274 P.3d 625 (2012).
12 Id. See also, Ry. Express Agency, Inc. v. Virginia, 282 U.S. 440, 444, 51 S.Ct. 201, 75
L.Ed 450 (1931); Eaton v. Jarvis Products Corp., 965 F.2d 922 (10th Cir. 1992); Phelps v.
Hamilton, 59 F.3d 1058, 1071 (10th Cir. 1995) (federal courts apply state rules of statutory
construction in interpreting state statute, including the rule that the state statute is to be
interpreted to uphold its constitutionality whenever possible); Rural Water Dist. #2 v. City of
Louisburg, 288 Kan. 811, 817, 207 P.3d 1055 (2009), quoting Martin v. Kansas Dept. Of
Revenue, 285 Kan. 625, 629-30, 176 P.3d 938 (2008).
13 Frisby v. Schultz, 487 U.S. 474, 483, 108 S.Ct. 2495, 101 L.Ed. 2d 420 (1988) (statutes
will be interpreted to avoid constitutional difficulties); Kansas One-Call Sys., Inc., supra; State
ex rel. Tomasic v. Unified Government of Wyandotte County/Kansas City, Kan., 264 Kan. 293,
300, 955 P. 2d 1136 (1998) (state statutes are not struck down unless infringement of the
Case 11-11131 Doc# 102 Filed 08/02/12 Page 5 of 25
Exemption statutes such as the EIC statute at issue here are to be liberally construed in favor
of the exemption and to give effect to the statute's beneficent purpose.14 Exemptions claimed by
debtors in bankruptcy are presumed valid.15 As the parties objecting to the claimed EIC exemption
and attacking the constitutionality of the EIC exemption statute, the Trustees have the burden of
rebutting the presumption of validity.16
Bankruptcy Judge Janice Miller Karlin has already addressed most of the constitutional
challenges to the Kansas EIC exemption that are advanced in these three cases in In re Westby.17 She
issued a well-reasoned and articulate decision that handily disposed of many of the objections raised
by the Trustees in these cases. And, on a related, but not identical exemption issue, this judge has
recently addressed the interplay between the Kansas exemptions and the federal domiciliary
requirement set out in § 522(b) in rejecting the chapter 13 trustee's objection to a debtor's use of the
constitution is clear beyond substantial doubt.).
14 In re Carbaugh, 278 B.R. 512, 522 (10th Cir. B.A.P. 2002). See also Schwab v. Reilly,
__ U.S. __, 130 S.Ct. 2652, 2667, 177 L.Ed. 2d 234 (2010) (Bankruptcy exemptions are part and
parcel of the fundamental bankruptcy concept of a "fresh start."); In re Mueller, 71 B.R. 165,
167 (Bankr. D. Kan. 1987), aff'd 867 F.2d 568 (10th Cir. 1989) (To achieve fresh start,
bankruptcy laws provide for debtor to exempt property so he will have "the basic necessities of
life and a means to achieve economic rehabilitation" and therefore exemption laws are construed
liberally in favor of exemption.)
15 Fed. R. Bankr. P. 4003(c); Jenkins v. Hodes (In re Hodes), 402 F.3d 1005, 1009-10
(10th Cir. 2005); In re Robinson, 295 B.R. 147, 152 (10th Cir. B.A.P. 2003).
16 See Barrett v. Unified School District 259, 272 Kan. 250, 255, 32 P.3d 1156 (2001)
(describing the burden of the party asserting a statute's unconstitutionality as a "weighty one.").
17 In re Westby, __ B.R.__, 2012 WL 1144412 (Bankr. D. Kan. Apr. 4, 2012). None of
the trustee objectors in her case raised the § 549 post-petition transfer argument.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 6 of 25
federal exemptions that was based on preemption.18 Both Judge Karlin and I agree that when
Congress allowed the states to opt out of the usage of the federal exemptions in § 522(b), it
implicitly recognized that different states would place varying limitations on their citizens' rights
to exempt property from execution.
A. The Earned Income Credit
The EIC is a refundable tax credit.19 As the Tenth Circuit noted in In re Montgomery, an
individual's tax credits are applied to tax owed for a taxable year and if they exceed the amount of
tax owed, they are considered an overpayment that is refunded.20 So, whether an individual has
actually paid in withholdings or not, she is entitled to receive the excess credit as if she had. The EIC
"was enacted to reduce the disincentive to work caused by the imposition of Social Security taxes
on earned income (welfare payments are not similarly taxed), to stimulate the economy by funneling
funds to persons likely to spend the money immediately, and to provide relief for low-income
families hurt by rising food and energy prices."21 As the Tenth Circuit Bankruptcy Appellate Panel
has noted, "the EIC benefits low-income married couples and heads of households with qualifying
18 In re Long, 470 B.R. 186 (Bankr. D. Kan. May 7, 2012).
19 See 26 U.S.C. § 32; Sorenson v. Sec'y of Treasury of U.S., 475 U.S. 851, 854-55, 106
S.Ct. 1600, 89 L.Ed. 2d 855 (1986) (distinguishing and explaining EIC's refundable feature
from certain other tax credits); In re Dickerson, 227 B.R. 742, 745 (10th Cir. BAP 1998) (noting
EIC treated as an overpayment of tax); In re Westby, 2012 WL 1144412 at *1 for Judge Karlin's
excellent and concise description of the EIC.
20 In re Montgomery, 224 F.3d 1193, 1194 (10th Cir. 2000).
21 Sorenson v. Sec'y of the Treasury, 475 U.S. at 864. See In re James, 406 F.3d 1340
(11th Cir. 2005) (holding that EIC qualified as "public assistance" that could be claimed exempt
under Alabama's exemption law for public assistance).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 7 of 25
dependent children."22 The state's EIC is computed as a percentage of the federal EIC, currently set
at 18 per cent.23
B. The Kansas EIC Exemption
KAN.STAT.ANN. § 60-2315 (2011 Supp.) provides:
An individual debtor under the federal bankruptcy reform act of 1978 (11 U.S.C. §
101 et seq.), may exempt the debtor's right to receive tax credits allowed pursuant
to section 32 of the federal internal revenue code of 1986, as amended, and K.S.A.
79-32,205, and amendments thereto [the Earned Income Credit or EIC]. An
exemption pursuant to this section shall not exceed the maximum credit allowed to
the debtor under section 32 of the federal internal revenue code of 1986, as amended,
for one tax year. Nothing in this section shall be construed to limit the right of offset,
attachment or other process with respect to the earned income tax credit for the
payment of child support or spousal maintenance.24
Thus, a Kansas debtor may exempt the right to receive the EIC portion of his or her tax refunds for
one tax year, presumably a year preceding or in which the debtor files his case. A Kansas resident
not filing a bankruptcy case may not claim this exemption and that is the seed of the Trustees'
discontent. The Trustees believe that "bankruptcy-specific" exemptions improperly invade the
province of Congress to establish uniform bankruptcy laws and violate the Supremacy Clause by
venturing into an area that congressional action has preempted. They also complain that four
different bankruptcy code sections are in direct conflict with the Act and finally argue that because
the Act by its terms applies to debtors "under the federal bankruptcy reform act of 1978 (11 U.S.C.
§ 101 et seq.)," it does not apply to the Bankruptcy Code as amended by the BAPCPA in 2005. None
of these arguments prevails.
22 In re Crowson, 431 B.R. 484, 492 (10th Cir. BAP 2010).
23 KAN.STAT.ANN. § 79-32,205 (2011 Supp.).
24 KAN.STAT.ANN. § 60-2315, emphasis added.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 8 of 25
C. The Bankruptcy (Uniformity) Clause
Article I of the United States Constitution reserves to Congress the duty to make uniform
laws on the subjects of bankruptcy and naturalization.25 Until Congress began to enact bankruptcy
statutes, the states were free to provide their own insolvency systems, but once Congress exercised
this reserved power, the states' separate bankruptcy provisions were swept aside. The Bankruptcy
Clause requires Congress to provide federal procedural uniformity, but does not necessarily require
that the effect of bankruptcy exemptions will be uniform from state to state so long as those
exemptions are uniform within a state. The Supreme Court has held that bankruptcy always
recognizes differential state law outcomes because it relies heavily on the states' property laws.26
Indeed, state law exemptions have long been recognized as necessarily and permissibly varying from
state to state.27 The Bankruptcy Code expressly recognizes different states' exemptions by allowing
debtors to choose between the federal exemptions in § 522(d) and state law exemptions or
25 U.S. CONST. art. I, § 8, cl. 4.
26 Butner v. United States, 440 U.S. 48, 54-55, 99 S.Ct. 914, 59 L.Ed. 2d 136 (1979) (In
bankruptcy, the creation and determination of property rights in assets of a bankrupt's estate are
generally determined by state law.). See also, Stellwagen v. Clum, 245 U.S. 605, 613, 38 S.Ct.
215, 62 L.Ed. 507 (1918) ("Notwithstanding this requirement as to uniformity the bankruptcy
acts of Congress may recognize the laws of the state in certain particulars, although such
recognition may lead to different results in different states."); Hanover Nat'l Bank v. Moyses,
186 U.S. 181, 22 S.Ct. 857, 46 L.Ed. 1113 (1902) (concluding that the Bankruptcy Act of 1898,
permitting debtors to choose state law exemptions in force at the time of their bankruptcy
petition, did not violate the uniformity requirement under the Bankruptcy Clause; the general
operation of the law is uniform although it may result in certain particulars differently in
different states).
27 Stellwagen, 245 U.S. at 234: "For example, the Bankruptcy Act recognizes and
enforces the laws of the states affecting dower, exemptions, the validity of mortgages, . . . and
the like. Such recognition in the application of state laws does not affect the constitutionality of
the Bankruptcy Act, although in these particulars the operation of the Act is not alike in all the
Case 11-11131 Doc# 102 Filed 08/02/12 Page 9 of 25
permitting states to opt out of the federal law's exemption scheme, forcing their residents to rely
solely on their state's exemptions.28 Thus, exemptions taken by debtors in different states may vary
substantially. Kansas has opted out of the federal exemption scheme.29
Courts across the country have addressed whether state law bankruptcy-specific exemptions
violate the Bankruptcy Clause. Some have held such bankruptcy-specific exemptions
unconstitutional.30 Others have upheld state law bankruptcy-specific exemptions.31 The leading case
finding bankruptcy-specific exemptions to be unconstitutional as a violation of the Bankruptcy
Clause is In re Schafer, where the Sixth Circuit Bankruptcy Appellate Panel held a Michigan statute
that allowed bankruptcy debtors to take a $35,000 homestead exemption instead of the state's $3,500
28 § 522(b)(2).
29 KAN.STAT.ANN. § 60-2312(a) (2005).
30 See In re Schafer, 455 B.R. 590 (6th Cir. B.A.P. 2011) (Michigan homestead exemption
that is more favorable for bankruptcy debtors than nonbankruptcy debtors held unconstitutional
under Bankruptcy Clause; uniformity requirement of Bankruptcy Clause mandates geographic
uniformity, thus requiring all residents of state, whether in bankruptcy or not, be treated the
same); In re Reynolds, 24 B.R. 344 (Bankr. S.D. Ohio 1982) (Ohio's bankruptcy-specific
exemption statute violated the Bankruptcy Clause); In re Mata, 115 B.R. 288 (Bankr. D. Colo.
1990) (Colorado bankruptcy-only exemption violated uniformity requirement).
31 See In re Kulp, 949 F.2d 1106, 1109 n. 3 (10th Cir. 1991) (Colorado's bankruptcy-
specific exemption of 75 per cent of IRAs did not violate the Uniformity Clause); In re
Applebaum, 422 B.R. 684 (9th Cir. B.A.P. 2009) (California's bankruptcy-specific exemptions
did not violate the Uniformity Clause); In re Cross, 255 B.R. 25 (Bankr. N.D. Ind. 2000)
(Indiana's bankruptcy-specific exemption of real property held as tenants by the entireties does
not violate the Uniformity Clause; Uniformity Clause is not a restriction upon the states); In re
Shumaker, 124 B.R. 820 (Bankr. D. Mont. 1991) (Montana's bankruptcy-specific exemption of
IRAs for bankruptcy debtors did not violate the doctrine of geographic uniformity). See also
Sheehan v. Peveich, 574 F.3d 248, 252 (4th Cir. 2009), cert. denied 130 S.Ct. 1066 (2010)
(noting that Congress did not restrict its authority delegated to the states by requiring state law
exemptions apply equally to bankrupt debtors and non-bankruptcy debtors)
Case 11-11131 Doc# 102 Filed 08/02/12 Page 10 of 25
exemption for general debtors to have invaded the province of Congress.32 Unlike Kansans,
Michigan debtors may opt for the federal or state exemptions. Following Sixth Circuit authority
holding that when the states adopted the Constitution they ceded the right to legislate in the area of
bankruptcy,33 the Schafer court concluded that the states may preclude the use of the federal
exemptions as provided by § 522(b)(2), but that the states may not create bankruptcy-only
exemptions. It suggested that those states who attempt to do so "conflate" the debtor's right to claim
an exemption with the state's right to legislate in an area preserved to the federal government –
specifically to legislate concerning bankruptcy.34 In other words, when a state enacts a bankruptcy-
only statute, it is actually making bankruptcy law, invading Congress's bankruptcy power. But by
that logic, any opt-out state amending an exemption provision that is carried into bankruptcy by dint
of § 522(b)(2) is engaging in the same proscribed conduct. Where do we draw the line?
The Schafer court also concluded that Michigan's bankruptcy homestead exemption was
geographically non-uniform despite long-standing Supreme Court precedent that allows Congress
to "give effect to the allowance of exemptions prescribed by state law without violating the
uniformity requirement."35 As the Supreme Court held in Hanover Nat'l Bank v. Moyses, the
Constitution requires geographic uniformity rather than personal uniformity. Geographic uniformity
32 455 B.R. 590, 605-06 (6th Cir. B.A.P. 2011).
33 Hood v. Tenn. Student Assist. Corp. (In re Hood), 319 F.3d 755 (6th Cir.2003), aff'd,
541 U.S. 440, 124 S.Ct. 1905, 158 L.Ed.2d 764 (2004).
34 455 B.R. at 604.
35 Id. at 605, citing Ry. Labor Execs. Ass'n v. Gibbons, 455 U.S. 457, 469, 102 S.Ct. 1169,
1176, 71 L.Ed.2d 335 (1982) (citing Hanover Nat'l Bank v. Moyses, 186 U.S. at 189-90). See
also Stellwagen v. Clum, 245 U.S. 605, 613 (1918) (holding that a bankruptcy law may be
uniform and yet "recognize the laws of the state in certain particulars, although such recognition
may lead to different results in different states.").
Case 11-11131 Doc# 102 Filed 08/02/12 Page 11 of 25
is satisfied when "the trustee takes in each state whatever would have been available to the creditor
if the bankrupt law had not passed."36 The Schafer court concluded that, in Michigan, a trustee
would not "take . . . whatever would have been available" without bankruptcy.
While that passage from Hanover may have force in the context of the Michigan statue, we
cannot blindly apply it here for several reasons. First, Hanover arose as a challenge to the
constitutionality of a federal statute, the Bankruptcy Act of 1898. Section 6 of the Bankruptcy Act
provided that bankrupts were entitled to the allowance of "exemptions which are prescribed
by the state laws in force at the time of the filing of the petition . . . ."37 The 1898 Act contained no
opt-out provision; in the absence of section 6, Act bankrupts would have had no exemptions at all.
By contrast, the Bankruptcy Reform Act of 1978 included not only a comprehensive federal
exemption scheme, but also a way for states to opt for their own scheme, suggesting that Congress
intended to balance debtors' freedom to choose a potentially more liberal federal exemption scheme
with deference to the several states' discrete preferences concerning what their resident debtors
could keep and what creditors could get.
Second, it is by no means clear that a Kansas creditor of a non-bankrupt debtor would receive
any more of the EIC benefit than would a trustee. All that KAN.STAT.ANN. § 60-2315 exempts is
the "right to receive tax credits." A creditor of a non-bankrupt Kansas debtor could only attach the
proceeds of the EIC in the hands of the debtor once she had received them. That creditor could not,
for instance, garnish the funds in the hands of the Internal Revenue Service or the Kansas
Department of Revenue because those entities are authorized by statute to only pay refunds to the
36 Hanover, 186 U.S. at 190.
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taxpayer, not to creditors.38 Thus, unlike the Michigan trustee in Schafer, these Trustees will receive
exactly what a creditor outside bankruptcy in Kansas would receive from the debtor's "right to
receive" the EIC: nothing. Geographical uniformity as articulated in Hanover is thus served.
Third and perhaps most important, the uniformity requirement is a limitation on
congressional power, not that of the states. In In re Applebaum, the Ninth Circuit Bankruptcy
Appellate Panel concluded that the uniformity provision in the Bankruptcy Clause is not a limitation
on the states, but on Congress. "It is an affirmative limitation or restriction upon Congress's power,
not a limitation on the states."39 Thus, when Congress enacts bankruptcy laws, they must be uniform
in effect. As noted above, Hanover concluded that geographical uniformity was achieved even
where the Bankruptcy Act's recognition of different states' exemption schemes might result in
different outcomes from state to state. That a state's law results in varying effects on a state's
citizens is not enough to invalidate it as long as the law in question does not conflict with Federal
None of the circuit courts of appeal has found a bankruptcy-specific exemption to be nonuniform
and therefore unconstitutional, but the one circuit court to have considered the issue, the
Tenth Circuit, upheld a bankruptcy-specific law.41 In In re Kulp, the Tenth Circuit concluded that
38 See Brockelman v. Brockelman, 478 F.Supp. 141 (D. Kan. 1979) (creditor's
garnishment of tax refund in hands of IRS was barred by sovereign immunity, citing Buchanan
v. Alexander, 45 U.S. (4 How.) 20, 11 L.Ed 857 (1846)); 26 U.S.C. § 6402; KAN.STAT.ANN.§§
75-6204, -6203, -6216 and 79-3233j (2011 Supp.).
39 422 B.R. 684 (9th Cir. B.A.P. 2009), quoting Ry. Labor Executives' Ass'n v. Gibbons,
455 U.S. 457, 459 (1982). See also Cross, 255 B.R. at 31.
40 In re Shumaker, 124 B.R. 820, 826 (Bankr.D. Mont. 1991).
41 In re Kulp, 949 F.2d at 1109 n. 3 (10th Cir. 1991).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 13 of 25
a Colorado statute that exempted the avails of individual retirement accounts for debtors in
bankruptcy was enforceable.42 In a footnote disposing of the trustee's uniformity argument, that
court stated that the trustee's uniformity objection "confuse[d] the geographical uniformity doctrine
with the well-established principle that states may pass laws which do not conflict with the federal
scheme" and concluded that there was no conflict in this case "because 11 U.S.C. § 522 expressly
delegates to states the power to create bankruptcy exemptions."43 That this expression of the Tenth
Circuit's view only appears in a footnote is no reason to discount it as persuasive, if not binding,
authority on how to apply the Bankruptcy Clause in these cases.
In short, I agree that Schafer is correct to recognize the difference between 522(b)'s
permitting a state to opt out and inviting it to draft laws that conflict with federal law, but disagree
that this means that a state may never enact a statute that only takes effect in bankruptcy, provided
it does not otherwise conflict with the federal scheme. The Tenth Circuit drew this distinction in
Kulp. The Kansas EIC exemption does not offend the Bankruptcy Clause.
D. The Supremacy Clause
Article VI of our Constitution provides that the "Laws of the United States" that are made
"in Pursuance of the Constitution . . . shall be the supreme Law of the Land" notwithstanding any
law enacted by a state.44 The Trustees claim that the enactment by the Kansas legislature of an
exemption that is only effective in a bankruptcy case is pre-empted by the Congress having already
enacted a comprehensive bankruptcy scheme in the Code. There are three types of preemption: that
42 949 F.2d 1106 (10th Cir. 1991).
43 Id. at 1109 n 3.
44 U.S. CONST. art. VI, cl. 2.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 14 of 25
which is express in federal law; that which is implied from Congress having occupied the field in
which the challenged legislation works; and that which results from a state's enactment conflicting
with federal law.45
1. Express Preemption
Nothing in the Bankruptcy Code expressly preempts the enactment of state-specific
exemption provisions. In fact, the existence of Bankruptcy Code § 522(b) which operates to allow
states to not only enact their own exemptions, but also forces their residents to use them, strongly
compels the conclusion against express preemption of statutes like the Act.46
2. Implied Preemption - Occupying the Field
Nor can we say that Congress has preempted the field of exemptions. Again, Congress's
express invitation to the states to mandate the use of their own exemption provisions in bankruptcy
makes it hard to conclude that Congress intended to occupy the field in this area. Rather, Congress
acted to incorporate state property and exemption law into the bankruptcy process, as the Supreme
Court has repeatedly held for over 100 years.
Congress clearly knows how to limit or restrict state law exemptions in bankruptcy cases.
As an example, when it enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, Congress imposed restrictions on the value of homestead exemptions in § 522(o) and (p) that
specifically apply to debtors claiming state law exemptions.47 If their conditions are met,
45 See Westby, 2012 WL 1144412 at *11-12 for Judge Karlin's discussion of preemption
46 See Kulp, 949 F.2d at 1109 n. 3 (noting that Colorado's bankruptcy-only exemption at
issue in In re Mata, does not conflict with federal bankruptcy law because § 522 "expressly
delegates to states the power to create bankruptcy exemptions.")
47 See § 522(b)(3)(A).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 15 of 25
subsections (o) and (p) cap the amount of the homestead exemption a Kansas bankruptcy debtor may
claim; a non-bankrupt Kansas debtor enjoys an unlimited homestead exemption. The 2005 law also
imposed domiciliary requirements on debtors seeking to exempt property under state law.48 The
effect of the domicile criteria in § 522(b)(3)(A) is not different from that of the bankruptcy-only EIC
exemption. If a Kansas bankruptcy debtor has not resided in the state for the 740 days preceding
the petition date he is ineligible to claim the Kansas exemptions, but a non-bankrupt Kansas debtor
of shorter duration will qualify for those exemptions as will a Kansas debtor in bankruptcy who has
lived in the state his entire life. The operation of the domiciliary requirements thus results in two
Kansas bankruptcy debtors being treated differently, based upon the length of time they have resided
in the state. It also may result in a Kansas nonbankruptcy debtor being able to claim Kansas
exemptions while a Kansas bankruptcy debtor may not. Other than subsections (o) and (p), and the
domicile requirements, Congress has not limited state law exemptions.49 The Kansas EIC exemption
does not conflict with these federal restrictions.
3. Conflict Preemption - The Act's Alleged Conflicts with the Bankruptcy Code
The Trustees also argue that the state EIC exemption statute actually conflicts with federal
law and, in particular, with certain provisions of the Bankruptcy Code. None of these arguments
is persuasive. Conflict preemption exists when it is impossible to comply with both the state law
48 Id.
49 See also Sheehan v. Peveich, 574 F.3d 248, 252 (4th Cir. 2009), cert. denied 130 S. Ct.
1066 (2010) (West Virginia's bankruptcy only exemption scheme did not conflict with federal
law where section 522(b)(1) expressly and concurrently authorizes state law exemptions in
bankruptcy; Congress did not restrict this authority delegated to the states by requiring state
exemptions apply equally to bankruptcy and non-bankruptcy cases).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 16 of 25
and the federal law.50 Absent that, the state law must frustrate or present an obstacle, rather than
impose a "modest impediment," to the objectives of the federal law.51
a. Section 541(c)(1)(B) - Property of the Estate
First, the Trustees argue that § 541(c)(1)(B) invalidates the Act. That subsection provides
that an interest of the debtor becomes property of the estate at filing notwithstanding any
nonbankruptcy law provision that is conditioned on the filing of a case under title 11. The fallacy
of this position is that all property that debtors claim exempt is, until the exemption is claimed and
allowed, a part of the property of the estate.52 In the case of EIC property, the "condition" that causes
it to leave the estate is the claim and allowance of the exemption, not the filing of the case. This is
no different from any other exemption. The Act does not conflict with § 541(c)(1)(B) nor frustrate
bankruptcy debtors' ability to obtain a fresh start under the Bankruptcy Code.
b. Section 549 - Post-petition Transfer
Likewise, the claim of this and any other bankruptcy exemption does not operate as an
50 PLIVA, Inc. v. Mensing, __ U.S. __, 131 S. Ct. 2567, 2577, 180 L.Ed. 2d 580 (2011).
51 Pharm. Research & Mfrs. Of Am. v. Walsh, 538 U.S. 644, 667, 123 S.Ct. 1855 (2003)
(modest impediment to federal law did not provide a sufficient basis for preemption of state
52 See 11 U.S.C. § 522(l); Schwab v. Reilly, 560 U.S.__, 130 S. Ct. 2652, 2657, 2663-64
(upon the filing of a chapter 7 petition, most all of the debtor's assets become property of the
estate, subject to the debtor's right to reclaim certain property as exempt); In re Mwangi, 432
B.R. 812, 820 (9th Cir. B.A.P. 2010) (same); In re Trudeau, 237 B.R. 803, 805-06 (10th Cir.
B.A.P. 1999) (EIC is property of the estate, citing In re Montgomery, 219 B.R. 913, 916 (10th
Cir. B.A.P. 1998)); In re Carbaugh, 278 B.R. 512, 520 (10th Cir. B.A.P. 2002) (exemptions may
only be claimed on property that is property of the bankruptcy estate); Owen v. Owen, 500 U.S.
305, 308, 111 S.Ct. 1833, 114 L.Ed. 2d 350 (1991) (property cannot be exempted unless it first
falls within the bankruptcy estate); In re O'Brien, 443 B.R. 117 (Bankr. W.D. Mich. 2011)
(property remains property of the estate, even if it is exemptible, until such time the exemption is
actually claimed and the objection deadline expires).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 17 of 25
invalid postpetition transfer under § 549. Under that section, postpetition transfers are avoidable
when a debtor transfers property of the estate, after commencement of the case, and the transfer is
not authorized by the bankruptcy court or the Bankruptcy Code. 53 The term "transfer" means "each
mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting
with – (i) property; or (ii) an interest in property."54 The Court first observes that the claiming of
an exemption on Schedule C does not constitute a transfer.55 This is no different than a debtor listing
any other property on a bankruptcy schedule. Any alleged "transfer" of the property occurs, if at
all, when the claimed exemption is allowed.56 That has yet to occur in these cases because the
trustees have objected to the claim of exemption.57 Moreover, upon allowance of the exemption,
the property transferred is no longer "property of the estate;" it is exempt property.58 Thus, mere
claiming exempt the right to receive the EIC is not a transfer of property of the estate. Even if the
53 Section 549(a). In re Blair, 330 B.R. 206, 213 (Bankr. N.D. Ill. 2005); In re Potter, 386
B.R. 306, 308 (Bankr. D. Colo. 2008); In re Patton, 314 B.R. 826, 833 (Bankr. D. Kan. 2004).
55 In re Duffin, 457 B.R. 820, 827 (10th Cir. B.A.P. 2011) (debtor's claim of exemptions
does not constitute a transfer of property for purposes of strong-arm statute, § 544(a)).
56 See In re Mills, 176 B.R. 924, 927 (D. Kan. 1994) (writing and delivery of check does
not constitute postpetition transfer; rather, the transfer occurs when the check is honored); Wells
Fargo Bank, N.A. v. Jimenez, 406 B.R. 935, 942 (D. N.M. 2008) (property is not summarily
removed from bankruptcy estate immediately upon debtor's claim of exemption).
57 See In re Bucchino, 439 B.R. 761, 770 (Bankr. D. N.M. 2010) (property of the estate is
not exempt unless and until time to object to claim of exemption expires or a timely objection is
58 Bucchino, supra (upon allowance of a debtor's claim of exemption, the exempt
property revests in the debtor, is excluded from the bankruptcy estate and the trustee may not
administer it); In re Gibson, 433 B.R. 868, 870 (Bankr. N.D. Okla. 2010) (in order for debtor to
remove property from bankruptcy estate by exempting it, property must first be property of the
Case 11-11131 Doc# 102 Filed 08/02/12 Page 18 of 25
claim of exemption is deemed a post-petition transfer under § 549, only unauthorized transfers fall
within the prohibition of this code section. Claiming an exemption is expressly authorized by § 522.
Specifically, § 522(b)(1) and (b)(2) authorize an individual debtor to exempt property that is exempt
under state law, if the state has opted out of the federal exemption scheme.59 Because § 522 clearly
provides for state law exemptions to be claimed by Kansas debtors, claiming the right to receive the
EIC as exempt is authorized and does not violate the condition of § 549(a)(2)(B), that the transfer
is unauthorized under title 11. As Judge Karlin observed in Westby, under the Trustees' theory, all
claims of exemption would create a postpetition transfer of property; that proposition is untenable
given the express authorization in § 522(b) for Kansas debtors to exempt property under state law.60
c. Section 544(a)(2) – Hypothetical Creditor Rights
Nor does claiming this exemption conflict with the trustee's powers and rights as a
hypothetical executing creditor under § 544(a)(2). That Code section states:
(a) The trustee shall have, as of the commencement of the case, and without regard
to any knowledge of the trustee or of any creditor, the rights and powers of, or may
avoid any transfer of property of the debtor or any obligation incurred by the debtor
that is voidable by – (2) a creditor that extends credit to the debtor at the time of the
commencement of the case, and obtains, at such time and with respect to such credit,
an execution against the debtor that is returned unsatisfied at such time, whether or
not such a creditor exists;
Thus, in bankruptcy, the trustee claims the right to proceed just as a creditor that extended credit to
the debtor and who obtained an execution against the debtor that was returned unsatisfied. The
Trustees suggest that because a debtor outside of bankruptcy cannot take this exemption, a judgment
creditor outside bankruptcy could attach the EIC in the debtor's hands, limiting the powers of a
59 See also § 522(b)(3)(A).
60 Westby, 2012 WL 1144412 at *16.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 19 of 25
hypothetical Kansas execution creditor. But § 544 grants these hypothetical powers to a trustee "as
of the commencement of the case," meaning that the trustee may stand in the shoes of a creditor to
claim that creditor's hypothetical priority in property of the estate. The exercise of the exemption
removes that property from the estate, depriving the trustee of the right to administer it.61 The same
is true for all property claimed exempt in bankruptcy.
The Tenth Circuit Bankruptcy Appellate Panel's decision in Rupp v. Duffin, a case discussing
the interplay of § 544(a)(2) and a state exemption statute, does not aid the Trustees' cause in this
case.62 That case makes clear that a trustee exercising § 544(a)(2) rights stands in the shoes of a
hypothetical executing creditor and can obtain no greater rights than the executing creditor could
outside bankruptcy. An executing creditor can only attach non-exempt property.63 Duffin dealt with
a Utah exemption statute that was not a bankruptcy-specific exemption. Utah's life insurance
exemption statute excepted from its protection payments made on a life insurance contract in the
year prior to levy or execution. Because such payments were not exempt, the BAP held that a
chapter 7 trustee exercising the powers of a hypothetical creditor could reach these non-exempt
payments, just as an executing creditor could.
As already discussed in the analysis of the Trustees' uniformity argument,64 the EIC
exemption statute protects a bankrupt debtor's "right to receive" the tax credits. Outside bankruptcy,
an executing creditor could not attach the debtor's EIC in the hands of the IRS or the Kansas
61 Bucchino, 439 B.R. at 770.
62 Rupp v. Duffin (In re Duffin), 457 B.R. 820 (10th Cir. B.A.P. 2011).
63 Id. at 829.
64 Supra at pp. 12-13.
Case 11-11131 Doc# 102 Filed 08/02/12 Page 20 of 25
Department of Revenue. The result is the same in bankruptcy when the debtor exempts her right to
receive the EIC – the trustee exercising the rights of a hypothetical executing creditor also cannot
attach the EIC because it is exempt property. There is thus no conflict between the KAN.STAT.
ANN. § 60-2315 and § 544(a)(2).
d. Section 507 - Distribution Priorities
Finally, the trustees argue that this exemption operates to reconfigure the distribution
priorities under § 507 because KAN.STAT.ANN. § 60-2315 says that nothing in it "shall be construed
to limit the right of offset, attachment, or other process with respect to the earned income tax credit
for the payment of child support or spousal maintenance." First, this language merely subjects the
debtor's right to receive the EIC to setoff or attachment by governmental entities collecting and
enforcing domestic support obligations under existing federal and state law. Second, even if this
language somehow charges a trustee with collecting child support from the proceeds of the credit,
it does nothing to affect priority of domestic support obligations which already occupy the highest
priority, subject only to the trustee's administrative expenses.65 The Trustees apparently contend
that the EIC exemption effectively elevates priority of domestic support obligations over the
trustee's administrative expenses in contravention of § 507(a)(1)(C). However, this argument fails
to recognize and differentiate between estate property and exempt property. Exempt property is
never distributed under § 507 – because it is no longer available for administration by the trustee.
Once an exemption of property is allowed, it is no longer property of the estate nor subject to the
65 Section 507(a)(1). A chapter 7 trustee's administrative expenses jump ahead of
domestic support obligations "to the extent that the trustee administers assets that are otherwise
available for the payment of such claims." § 507(a)(1)(C) [emphasis added].
Case 11-11131 Doc# 102 Filed 08/02/12 Page 21 of 25
trustee's administration.66 Thus, if a debtor's exemption of the right to receive the EIC is allowed,
this property would be unavailable in any event to the trustee for payment of claims, including the
trustee's administrative expenses. This last statutory conflict argument must also fail.
e. Conflict with Federal Tax Policy
Congress established the EIC to allow lower-income families and household heads to retain
not only what they have paid in towards income taxes, but also to receive as a "refund" the balance
of the credit whether they paid it in withholdings or not. The credit is a means of assisting lower
income families in their struggle to subsist. Exemptions serve precisely the same purpose and, as
the Kansas legislative history suggests, the legislature exempted this particular benefit in bankruptcy
because it knew that debtors who clearly needed the EIC's assistance were losing it in bankruptcy
cases. The EIC exemption does not conflict with federal law and congressional intent, it furthers it.
As discussed above, only creditors of bankrupt debtors, acting through the instrumentality of the
trustees, could reach the debtors' EIC when the debtors received it as part of a pre-petition year's
tax refund. Diverting that money from low-income households to pay trustees' fees and unsecured
creditors' claims instead of family sustenance directly conflicts with Congress's and the legislature's
intent in establishing the earned income credit. KAN.STAT.ANN. § 60-2315 cures that conflict.
In sum, KAN.STAT.ANN. § 60-2315 does not conflict with, interfere with, or frustrate any
of the Bankruptcy Code sections relied upon by the Trustees. Nor does it conflict in any way with
the enactment and enforcement of any other part of Title 11 or overarching federal law. The EIC
66 See note 58, supra; Taylor v. Freeland & Kronz, 503 U.S. 638, 642, 112 S.Ct. 1644,
118 L.Ed. 2d 280 (1992) (by claiming certain property exempt, debtor prevents distribution of
such property to his creditors); Owen v. Owen, 500 U.S. 305, 308 (1991) ("An exemption is an
interest withdrawn from the estate (and hence from the creditors) for the benefit of the debtor.").
Case 11-11131 Doc# 102 Filed 08/02/12 Page 22 of 25
exemption neatly dove-tails into the Code's exemption scheme which offers the states the
opportunity to choose their debtor's exemptions for them. And, it insures that a bankrupt Kansan's
earned income credit goes to pay the rent or buy her family food, not a prepetition creditor's claim.
All of this is consistent with the federal law and does not infringe upon the Constitution's
Supremacy Clause.
E. Application of the Act to post-BAPCPA Bankruptcy Cases
The Trustees assert that the EIC exemption is inapplicable to these cases because they were
filed after enactment of BAPCPA and the exemption statute refers to cases filed "under the federal
bankruptcy reform act of 1978 (11 U.S.C. § 101 et seq.)." This argument has been made
unsuccessfully in at least one previous exemption case.67 In In re Foth, I held that-
The Federal Bankruptcy Reform Act of 1978 became effective on October 1, 1979
and expressly repealed the Bankruptcy Act of 1898, as it had been amended over its
80–year history. Former § 522(b) allowed debtors to elect between the uniform
federal scheme of exemptions afforded them by § 522(d) and the exemptions of their
state of domicile. Former § 522(b)(1) also provided that a state could opt-out of
allowing its residents to elect the federal exemptions and Kansas opted out in 1980
by its passage of § 60–2312. Other than changing the subsection letter and number
references in former § 522(b), BAPCPA did not change the opt-out provision in any
material way in 2005.
While BAPCPA significantly modified the provisions of the "federal bankruptcy
reform act of 1978," Congress did not repeal the Federal Bankruptcy Reform Act of
1978 as it did the 1898 Act in 1978. The Court notes that the Kansas statute
expressly refers to "11 U.S.C. § 101, et seq.," which now embodies [the Federal
67 See In re Foth, No. 06-10696, 2007 WL 4563434 (Bankr. D. Kan. Dec. 21, 2007) (in
objecting to debtor's claim of exemption in life insurance proceeds under state statute, trustee
contended Kansas's "opt-out" from federal bankruptcy exemption scheme under K.S.A. § 602312(
a) was no longer applicable because the opt out language in § 60-2312(a) referred to
individual debtors "under the federal bankruptcy reform act of 1978 (11 U.S.C. § 101 et seq.),"
thus making the exemption of life insurance unavailable in cases filed after BAPCPA).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 23 of 25
Bankruptcy Reform Act of 1978 as amended and modified by] BAPCPA.68
In addition, the BAPCPA legislation itself describes BAPCPA as "An Act To amend title 11 of the
United States Code . . ."69 Just as in Foth, this objection must also fail. The Kansas EIC exemption
statute is applicable and available to debtors in cases filed after the enactment of BAPCPA.
F. The Abandoned Equal Protection Objection
In the initial objections to the claimed EIC exemption, Ms. Parks asserted that the exemption
statute "denies to trustees in Bankruptcy and creditors of bankrupts the equal protection of the laws,
and is in contravention of the Fourteenth Amendment to the Constitution of the United States."70
However, she did not brief this argument and it is therefore deemed abandoned.71 None of the other
Trustees in these three cases raised an equal protection argument in their objections nor briefed the
same in their submissions to the Court. Having failed to raise the issue or address it in their briefs,
I consider that the all of the objecting Trustees have waived or abandoned it.
The Trustees have not overcome the presumption of constitutionality that attaches to
Kansas's bankruptcy-only EIC exemption statute. As the statute does not contravene either the
Uniformity or Supremacy Clauses, the Trustees's objections to the debtors' exemptions of the right
68 Id. at *4.
69 See Pub. L. No. 109-8, pt. 1; 119 Stat. 23 (April 20, 2005).
70 Case No. 11-12855, Dkt. 17, p. 4, ¶ 14.
71 Id., Dkt. 50. (At page 2 of her brief, the equal protection argument is omitted from the
stated grounds for Trustee Parks' objection). See In re Francis, 385 B.R. 800 (B.A.P. 10th Cir.
2008)(quoting Tran v. Trustees of State Colleges in Colorado, 355 F.3d 1263, 1266 (10th Cir.
2004)(further quotations omitted)); Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 679 (10th Cir.
1998); In re Chavez, 305 B.R. 381 (10th Cir. B.A.P. 2003).
Case 11-11131 Doc# 102 Filed 08/02/12 Page 24 of 25
to receive the earned income credit portions of their income tax refunds are OVERRULED. The
Trustees are therefore directed to immediately release any interest they have claimed in any part of
these or any similarly-situated debtors' earned income tax credits.
# # #
Case 11-11131 Doc# 102 Filed 08/02/12 Page 25 of 25


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JX said it will keep oil tanks in the site and transport refined products from elsewhere to Muroran to ensure adequate supply. JX will also maintain some secondary units to produce petrochemical products - mainly toluene and xylene - to be used as feedstock for a paraxylene joint venture in South Korea.
By MARI IWATA
TOKYO -- JX Nippon Oil & Energy Corp., Japan's largest
oil refiner by capacity, said Friday that it will permanently
stop processing crude oil at its 180,000-bpd Muroran refinery by March 2014 as part of
efforts to reduce excess oil refining capacity.
Japan's oil demand has been edging lower since the mid-2000s
due to widespread adoption of energy-efficient vehicles. The
country imported 3.6 million bpd of crude in 2011, down 16%
compared with 2005, according to government data.
JX Nippon, a unit of JX Holdings, will have crude processing
capacity of 1.21 million bpdafter it stops processing crude at
Muroran. "Our refinery operating rate will rise to
near full capacity," executive vice president Yukio Uchida told
Idemitsu Kosan Co.'s 140,000-bpd Hokkaido refinery will be
the only refinery on Japan's northernmost
island after the move. But JX will keep oil tanks in the site
and transport refined products from its other refineries to
Muroran to ensure adequate supply, Mr. Uchida said.
JX will maintain some secondary units there as well, to
produce petrochemical products - mainly
toluene and xylene - to be used as feedstock for a paraxylene
joint venture in South Korea with SK Global Chemical.
That venture is scheduled to start commercial operations
in August 2014, Mr. Uchida said.
Dow Jones Newswires
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Engineers and designers are highly skilled individuals. Forcing them to enter design changes using tables, forms and spreadsheets is unproductive and uneconomical, and it increases the likelihood of human error—this is the way that most instrumentation software systems currently work. For too long, software vendors have denied engineers and designers the simple practicality of a graphical visual engineering interface with "drag and drop" capability and inbuilt intelligence, ensuring changes are automatically replicated into all the associated data and databases.
Is 2016 the peak for US gasoline demand?
Too soon to tell
July 2016


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All other
appointments were made in the
regular manner, that is upon
recommendation of the faculty
of the department and Dean
of the College concerned.
For the future
nothing is so
important as the maintenance
of the scholastic standards
of the institution. At present
the University of Arkansas
ranks very high indeed
among the universities of this
nation, and I believe
unsurpassed by any in
the South. This standing
is primarily dependent
upon the excellence
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