Justice Scalia’s death is big news in the larger political world. His passing leaves a Supreme Court that may be evenly split on a wide range of politically and socially charged legal questions. Its impact on bankruptcy law will be more subtle. Although one can view many bankruptcy law questions through a political or social policy lens, the Justices rarely see the cases they take in that way. Instead, they treat most of their bankruptcy appeals as technical questions of statutory interpretation.

Justice Scalia undoubtedly had a major impact on the development of bankruptcy law. He is best known for his textualist approach to statutory construction, and bankruptcy law is one area where the literal or plain language approach has taken root. Although neither the Court nor Justice Scalia consistently applied that approach to bankruptcy questions, it has become the Court’s dominant approach to bankruptcy law questions.

His dissent in the lien-stripping case of Dewsnup v. Timm is Scalia the textualist at his best, blasting the majority’s position that the phrase “allowed secured claim” had different meanings in subsections (a) and (d) of section 506 of the Code. His worst? His majority opinion in BFP v. Resolution Trust Corp. where he did not trust his theory enough to apply plain language when it violated his view of the harmony between fraudulent transfer law and mortgage foreclosure law. Instead, he replaced the statutory language “reasonably equivalent” with a judge-made and very detailed statutory-sounding test that insulated regularly conducted judicial foreclosure sales from fraudulent transfer attack.

Predictions can be dangerous, especially when no one knows who will replace Justice Scalia. But, on the other hand, if I’m proven wrong in a few years, none of you will remember my prediction and, if I am right, I can remind you! So, here goes…

I predict that the most significant bankruptcy impact of Justice Scalia’s death will be a shift away from his ardent plain language approach to bankruptcy matters. Justice Breyer has very strong views on statutory construction and they conflict with Justice Scalia’s approach. Justice Breyer’s approach is more purposive and he views legislative history as a useful tool. Only Justice Thomas comes close to Justice Scalia’s absolutist stance, so without Justice Scalia to challenge Justice Breyer, expect to see purpose-based arguments fare better in bankruptcy appeals. As noted above, bankruptcy is an area where the interpretive approach seems to matter more than the Justice’s political leanings, so a change in approach will matter a lot in bankruptcy.

I don’t intend to catalogue all of the bankruptcy issues where Justice Scalia’s absence might make a difference, but one other deserves mention. Bankruptcy courts traditionally have been viewed as courts of equity and the Supreme Court has struggled to define the limits of the bankruptcy court’s equitable powers. Justice Scalia was very hostile to the idea of equitable powers and his opinion in Law v. Siegel threatened the very idea of bankruptcy courts as courts of equity. His departure leaves that side of the debate without a strong advocate and likely shifts the balance back towards more robust equitable powers in bankruptcy. I will be watching so I can remind you, but only if I was right.