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 Contributing Editor: Nauni Manty, Manty & Associates, P.A.
BAP___Rucker_v__Belew.pdf

            In Rucker v. Belew (In re Belew), 588 B.R. 875 (8th Cir. BAP 2018), the BAP held that bankruptcy courts lack authority to deny an exemption on a ground that is not specified in the Bankruptcy Code. The trustee objected to the debtor’s claim of exemptions based upon bad faith.  Specifically, the debtor failed to schedule various assets in his initial filing.  The debtor failed to list a debit account, a possible equitable interest in his spouse’s checking account, two unpublished, unedited fiction manuscripts, and a possible interest in cash held in a safe in the debtor’s residence.  The debtor amended his schedules and exempted all of those items.  The trustee objected to the amended exemptions based upon the argument that the amended exemptions were in bad faith and prejudicial to the debtor’s schedules.  The bankruptcy court overruled the objection, relying on Law v. Siegel, 571 U.S. 415, 134 S.Ct. 1188, 188 L.Ed.2d 146 (2014), for the proposition that federal law provides no authority for bankruptcy courts to deny an exemption on a ground that is not specified in the bankruptcy code. In Law, Justice Scalia, in dicta, observed that federal law provides no authority for the bankruptcy courts to deny an exemption on the grounds not specified in the Code, e.g., based on debtor’s fraudulent concealment of the asset claimed as exempt or the debtor’s bad faith.  On appeal, the BAP held that it and other courts have held that federal courts are bound by the Supreme Court’s “considered dicta almost as firmly as by the Court’s outright holdings.”  It observed that appellate courts should afford deference and respect to Supreme Court dicta.  Because the dicta abrogated the Eighth Circuit precedent, the BAP affirmed the bankruptcy court.