Working Together The Clerks Office and the U.S. Trustee
U.S. Trustee Program
The Executive Office of the U.S. Trustee (EOUST) of the Department of Justice was initially a pilot program for 18 districts under the Bankruptcy Reform Act of 1978. With the passage of the Bankruptcy Judges, U.S. Trustees and Family Farmer Act of 1986, it became a permanent program in all federal districts except for those in Alabama and North Carolina. Financial support for the program comes mainly from fees collected from parties in the bankruptcy process.2 In the initial 1978 act, the program's primary role was stated by Congress to be a "watchdog over the bankruptcy process."3 The program's stated mission is as follows:
The U.S. Trustee Program acts in the public interest to promote the efficiency and to protect and preserve the integrity of the bankruptcy system. It works to secure the just, speedy and economical resolution of bankruptcy cases; monitors the conduct of parties and takes action to ensure compliance with applicable laws and procedures; identifies and investigates bankruptcy fraud and abuse; and oversees administrative functions in bankruptcy cases.4The attorney general appoints the U.S Trustees and assistant U.S. Trustees in each of the current 21 regions. It is with the assistant U.S. Trustees and their staff in the 95 field offices that the clerk's office typically communicates and collaborates on a regular basis.
As an entity of the Judicial Branch, "the overriding duty common to all [court] clerks is to provide the support necessary to permit the court as an institution to fulfill its constitutional, statutory and societal responsibilities."5 This support goes to both the internal workings of the clerk's office as well as the external coordination required with organizations such as the U.S. Trustee Program. In comparing the duty of clerks with the stated mission for the U.S. Trustee, it can be easily seen that there "must be a great deal of cooperation between the U.S. Trustee and the clerk's office to ensure that cases are efficiently and effectively administered."6
This level of cooperation should continue to mature and become stronger as electronic filing changes the landscape for bankruptcy courts.
With the similarities of each office to support the bankruptcy system noted, it is also important to note that limitations and parameters based on the separation of powers are adhered to as well. The overall policy in this realm is that:
communication between the judicial and administrative systems is expressly not prohibited. The court may discuss general problems of administration and improvement of bankruptcy administration, including the operation of the U.S. Trustee system, with the U.S. Trustee... Only ex parte meetings and communications with the court concerning matters affecting a particular case or proceeding are prohibited. Fed. R. Bankr. P. 9003(b).7Please note that some gray areas will always exist in how those lines are seen and interpreted.
With the basic structural foundation discussion complete, several specific ways in which the unique relationship between the clerk's office and the U.S. Trustee is put into practice to further benefit the bankruptcy system and its players can now be noted.
Panel Trustee Information
Panel trustees, as appointed by the U.S. Trustee, are integral players in the overall bankruptcy process. Therefore, having current information on that trustee is essential for noticing and case-processing purposes. Typically, this information is communicated by the assistant U.S. Trustee in a timely manner to the clerk so that any upcoming changes are properly coordinated and accurate information is provided. This mainly occurs when a new panel trustee is selected or moves to a new office location. While that type of coordination can be relatively minor, it is with the more major structural types of changes where the close collaboration between offices becomes more critical. One example of this was with the chapter 13 trustee's office for the state of Arkansas when the U.S. Trustee decided to split it into not two offices, but three. As stated by Assistant U.S. Trustee for Arkansas Charles Tucker:
This [the benefit of coordinating efforts] was demonstrated in our relationship during the chapter 13 trustee split. While that was a matter initiated by the U.S. Trustee, [the clerk office's] cooperation was of invaluable assistance in resolving some of the most troubling issues arising from the split, such as the handling of claims, and flow of paper between the four offices and other details. Our ability to meet together with the three chapter 13 trustees at the early stages of the split was an important factor in the surprising[ly] smooth transition from a single chapter 13 trusteeship to three trusteeships.
Policies, Procedures and Rules
Often, office policies, procedures, rules and regulations require modification or changes by the U.S. Trustee, the court or both. As with changes to panel trustee information, the effective relationship between the two offices provides enormous benefits by promptly getting the word out and working together to properly implement the new policies. One recent example comes from the initiation of the National Debtor Identification Program by the EOUST early last year. Once notification was provided to us that our district was to be phased into the program by March, we worked with Charles Edwards, our assistant U.S. Trustee, to have applicable language incorporated into creditor meeting notices, post copies of memoranda explaining the program in public areas and inform staff of this change so they could relay needed information when questions arise from customers. An even more encompassing example for all who work in the bankruptcy arena is with the new case management/ electronic case filing system (CM/ECF) being initiated by the U.S. courts. For the last few years, clerk's offices have been closely coordinating with their assistant U.S. Trustees to create new and better efficiencies with CM/ECF in areas such as streamlined data transfers, ceasing duplicative keying and case-tracking functions, and developing training programs that work to ease the transition from dependence on paper to using the technology to its fullest. This overall transition team concept between the offices has worked very well for all involved. Charles Tucker states, "I advise all my fellow assistants that it is very important when moving to [CM/]ECF that they be part of the transition team, which is what I felt I was during our implementation." He felt that this was crucial in helping each office understand the differences in "trustee speak" and "clerk speak" when creating new processes.
The final benefit of the clerk/trustee relationship to be relayed is the appropriate assistance provided to the U.S. Trustee in their original watchdog role as set out by Congress in 1978. While the cooperation on the National Identification Program was mainly in the area of communication, clerk's offices have typically been asked, and have agreed when possible, to work with assistant U.S. Trustees to track the timely filing of required reports and fees and provide notification of questionable trends that sometimes occur with cases. From my experience and discussions with other courts, this happens most frequently with pro se filings when a petition-preparer type of service is involved. Support for this can be found in this statement from the EOUST: "Many of the most egregious abuses in the bankruptcy system are perpetrated by those who prey upon debtors who are in dire financial straits and are not well-equipped to scrutinize offers of assistance."8 The teamwork between offices worked to uncover such a scheme on pro se filers in the Central District of California, where a landlord illegally filed a number of petitions on behalf of his tenants in order to retain the ownership of a building. "[T]hrough the cooperative efforts of the U.S. Trustee for the Central District of California, the chapter 13 trustee and the bankruptcy clerk's office, which had flagged a group of bankruptcy petitions as unusual," this fraudulent scheme was discovered, and the landlord was prosecuted and fined.9
This level of cooperation should continue to mature and become stronger as electronic filing changes the landscape for bankruptcy courts. Its health could be tested in a big way, though, if bankruptcy legislation is ever passed, given the tough issues concerning credit counseling, income testing and retention of income tax returns. It is my belief that the offices would pass such a test given the solid foundation that has been discussed in this article.