Clark v. Rameker (13-299)

argument 13-299

Clark v. Rameker

Supreme Court of the United States 57 min 6 speakers 8 chapters transcribed 4 days ago official recording ↗

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What is the case Clark v. Rameker about and why is it before the Supreme Court?

John G. Roberts 0:00

We'll hear argument this morning in case thirteen two nine nine, Clark versus Ramaker. Mr. Sham again?

Mr. Shamberg 0:07

Thank you, Mr. Chief Justice, and may it please the court. This case concerns the bankruptcy codes, retirement funds, exemption. By its plain terms, that provision categorically exempts funds that have been set aside for retirement in certain tax exempt retirement accounts. Funds in an inherited individual retirement account qualify for the exemption, first because they were set aside for retirement when they were deposited in the account. And second, because an IRA remains tax exempt after it passes to a beneficiary upon the death of its initial owner. Respondents ask this court to exclude inherited IRAs by engrafting an additional limitation onto the statute. Under their interpretation, the funds must be in an account that not only is tax exempt

Mr. Shamberg 0:53

But also possesses certain quote objective features, end quote.

Anthony M. Kennedy 0:57

It it's true. I I think that the respondents have to explain why their position doesn't commit us to a difficult case by case adjudication down the line, and yours is a more simple approach. On the other hand, it seems to me uh that Uh you really render the words retirement funds superfluous.

Mr. Shamberg 1:16

Well I don't think that that is true, Justice Kennedy. Yes. And let let me explain why we think that retirement funds are not superfluous here. First of all, we think that retirement funds serves a clarifying function, with the result that, in the event that if Congress were to add something to one of the many tax provisions that are incorporated into the provision that is not a retirement account, that would be excluded. In other words, the phrase retirement funds makes clear that only funds that have been set aside in a retirement account are exempted. But I want to say something more broadly about this argument concerning superfluity, which I think is really at the core of respondents' textual argument here.

Mr. Shamberg 1:58

I think that argument really misapprehends with respect the structure of the statute. It may very well be true that, at least as matters currently stand, the phrase retirement funds does not independently exclude anything from the scope of the statute. But this statute, of course, includes a to the extent that clause. And our interpretation gives the phrase retirement funds meaning. It gives it a broader meaning. Retirement funds. But Mr Shanligan

Ruth Bader Ginsburg 2:24

it could have a Meaning if it were read to refer to the debtors. retirement fund. Not anyone's retirement fund. And let me ask you one disturbing feature of this. Congress was very careful when it crafted exemptions. From the bankrupt estate. Like the homestead exemption is in what? Forty two. Something over twenty two thousand dollars, the car. Thirty seven something. Is it likely that Congress would have created An exemption so large this one is claimed to be three hundred thousand dollars. For funds that are immediately usable by The bankruptcy. I mean this Big part of money. It's a exempt from From the creditors claim. It just seems incongruous, considering how narrow Congress has made The other exemptions

How do the parties define “retirement funds” under the bankruptcy exemption statute?

Mr. Shamberg 3:25

Two points in response to that. First, Justice Ginsburg, with regard to the admittedly very high cap on retirement funds. It is true that a beneficiary of an inherited IRA has the ability to withdraw the funds immediately, though Congress has created considerable tax incentives for such an individual not to do so. But the same could be said of, for example, an individual who holds a four hundred fifty seven B account that's a retirement account for employees of certain governmental entities and nonprofits, who has left employment and then goes into bankruptcy. So too, with regard to an individual who holds a Roth IRA, at least with regard to the contributions that the individual made to that IRA. And in fact, while the CAP limits the amount of money that can be exempted at $1.25 million, it actually also contains exceptions for rollover IRAs such that an individual can exempted amount, all of which is to say that Congress did intend this exemption to be quite expansive.