Supreme Court of the United States

Patterson v. Shumate

June 15, 1992504 U.S. 753

Summary

Justice Blackmun, writing for a unanimous Court, held that “applicable nonbankruptcy law” in 11 U.S.C. § 541(c)(2) includes federal law and that the enforceable antialienation provision in Shumate’s ERISA-qualified pension plan permitted exclusion of his interest from his bankruptcy estate. The Court rejected arguments based on legislative history, statutory surplusage, and bankruptcy policy, and did not reach Shumate’s alternative exemption claim under § 522(b)(2)(A). Justice Scalia concurred separately without any other Justice joining, emphasizing textual interpretation and criticizing the inconsistent interpretive methodology employed in Dewsnup v. Timm.

Holding

  • Whether § 541(c)(2)’s reference to “applicable nonbankruptcy law” includes federal law.. The phrase includes any relevant nonbankruptcy law, including federal law such as ERISA.
  • Whether the ERISA-required antialienation provision permits exclusion of Shumate’s pension interest under § 541(c)(2).. The plan’s antialienation provision is an enforceable restriction on transfer under § 541(c)(2), permitting exclusion of Shumate’s interest from his bankruptcy estate.

Docket 91-913

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