Thanks to reader DS, following up on this morning's post on the Philadelphia Newspapers' bankruptcy case ("The indubitable equivalent of such claims"), I now know which commas were at stake, and why. The critical commas were these, in
(ii) for the sale, subject to section 363 (k) of this title, of any property that is subject to the liens securing such claims, …
As to why and how the commas allegedly matter, DS drew my attention to dueling footnotes in the briefs.
This starts with footnote 16 on p. 33 of the
Philadelphia Newspapers' brief of one of the appellants, Citizens Bank of Pennsylvania:
Debtors’ construction of the statute also results in grammatical error. If, as Debtors contend, subdivision (ii) applies only to some sales of property subject to liens, why is the clause “subject to section 363(k) of this title” set off by commas? Under Debtors’ (and the District Court’s) reading, that clause would be what grammarians call a “defining” or “restrictive” relative clause: which is to say, the clause would serve to define a “sale subject to section 363(k)” and to distinguish such a sale from some other hypothetical sale (such as the sale they propose to conduct) that would not be subject to Section 363(k). But it would be a grammatical mistake to set off such a restrictive relative clause with commas and, if Debtors are right, the commas that appear in subdivision (ii) should not be there. On the other hand, if – as Lenders contend – all sales of property subject to the liens of secured creditors are also “subject to section 363(k),” then the clause “subject to section 363(k) of this title” is not a restrictive relative clause but is, instead, a “non-restrictive” relative clause merely descriptive of a “sale.” As such, it could have been put in parentheses or – as is the case in section 1129 – set off by commas.
The punctuation used in section 1129, in other words, unambiguously supports the Bankruptcy Court’s construction of the clause and is not in accord with the District Court’s construction of the clause. See, e.g., H.W. Fowler, MODERN ENGLISH USAGE 587 (2d ed. Oxford Univ. Press 1968); W. Strunk & E. B. White, THE ELEMENTS OF STYLE 4 (3d ed. MacMillan Publ’g Co. 1979). Whether the drafters of section 1129 were familiar with Fowler’s and Strunk & White’s instructions on this subject may, in fairness, be subject to some doubt. On the other hand, our civilization has yet to reach the point where it should be assumed that Congress does not know how to punctuate – and it is only by making such an assumption that one could find the meaning of Section 1129(b)(2)(A) “unambiguous” even though the punctuation used therein points to an entirely different meaning. Evidently thinking better of Congress, our courts continue to say that the punctuation of a statute, though “not controlling … can provide useful confirmation of conclusions drawn from the words ….” United States v. Ron Pair Enters., 489 U.S. 235, 251 (1989).
The Lenders The appellees, Philadelphia Newspapers, LLC (and others) responded with footnote 12 on p. 40 of their brief:
This Court need not entertain Citizens’ grammar lesson in footnote 16 of its Brief. It simply does not matter whether the commas set forth in “the sale, subject to section 363(k) of this title” in subsection (ii) are correct or incorrect. No amount of commas or deletion of commas transforms “sale” into “all sales” as Citizens urges. And, no amount of punctuation changes the facts: (1) that the plain language of Section 1129(b)(2)(A) sets forth three alternatives to be chosen by the proponent of the plan; and (2) subsections (i) and (iii) do not contain the words “subject to Section 363(k).” It does not dictate which particular subsection a debtor must use.
In any event, there is no basis to Citizens’ claim that the Debtors’ argument or the District Court’s analysis depends upon a grammatically incorrect meaning of subsection (ii). The language of subsection (ii) says “sale, subject to section 363(k) of this title, ….” The Debtors believe the plain meaning of this phrase is that “subject to section 363(k)” is intended to mean that, if a debtor determines to proceed under subsection (ii) and thereby avoid the requirement of establishing indubitable equivalence under subsection (iii), it must provide for a credit bid as described in Section 363(k). Thus, consistent with its punctuation, the phrase is a non-restrictive clause that merely provides clarifying information regarding the “sale.” If the commas were removed, the result would be a non sequitur. The only “sale” referred to under Section 363(k) is a sale under Section 363(b), which applies to sales outside the plan context. It would therefore make no sense for Congress to refer to Section 363(b) sales in a provision dealing with plan confirmation. Importantly, the grammatically correct interpretation of subsection (ii) does not require that all sales under a plan be subject to Section 363(k) just sales where the debtor determines to seek confirmation under subsection (ii).
I guess we can all now see why the news stories were less than completely specific on this point.
And I continue to think that there's a job for some applied semanticists here…
[Update -- my informant writes:]
I should have sent you the covers of the briefs and indicated which pages went with which cover. The footnote 16 I sent you is actually from the brief of one of the appellants, Citizens Bank of Pennsylvania, which appears to be one of the creditors. The answering footnote is from the brief of the appellees, Philadelphia Newspapers, LLC (and others whose identity I do not know) — as I understand it, the debtor is Philadelphia Newspapers. Not that it really matters to the point you made.
Now fixed in the body of the post …]
[Update #2 -- Anne Sherry wrote to point out that (an excellent-quality recording of) the oral argument in the court of appeals is available here.
For more on legal commas, see here.]