Professor Bibas makes argument for Supreme Court Clinic to help homeowners trying to save their homes
On March 24, Penn Law professor Stephanos Bibas argued in front of the U.S. Supreme Court in the bankruptcy case Bank of America v. Caulkett, a case represented by the Law School’s Supreme Court Clinic.
Bibas, Professor of Law and Criminology, has been working on the case alongside his clinic students, who gain first-hand experience by researching, writing briefs, and participating in moot court rehearsals for Supreme Court cases.
Lately, the clinic been particularly interested in taking on bankruptcy cases, like Bank of America v. Caulkett. Banks, such as Bank of America, issued mortgages up to the full value of the home — instead of the usual 80 percent — to people during the housing bubble.
But following the collapse of the housing market, many homeowners found themselves “under water,” meaning the debt on their home was greater than the home’s value. The bankruptcy code states that if there’s no value to support a mortgage, then the mortgage can be voided in bankruptcy, Bibas explained.
Bibas and the Supreme Court Clinic are arguing for these second mortgages to be voided, as per the bankruptcy code, so homeowners can renegotiate their first mortgages and find a way to stay in their homes. The banks have convinced the lower courts not to read the bankruptcy code in such a way, and the Supreme Court’s ruling in Bank of American v. Caulkett will determine how bankruptcy law is interpreted.
“The outcome of this case could allow the Bankruptcy Code to help many homeowners saddled with excessive second mortgages born of banks’ overzealous lending during the subprime mortgage crisis to get out from their extremely underwater homes,” said Lindsay Fritchman L’15, one of Bibas’s students in the Supreme Court Clinic.
For the students involved in the Supreme Court Clinic, the work they do is a valuable part of their legal education, giving them both practical lawyering experience and the opportunity to be a part of decisions that influence the legal landscape of the United States.
The clinic has won several landmark decisions, including Padilla v. Kentucky, which established that criminal defense attorneys must advise non-citizen clients about the deportation risks of guilty pleas, and Petrella v. Metro-Goldwyn-Mayer, which involved the copyright of the 1980 Oscar-winning film Raging Bull.
“The opportunity to participate in the process of taking a case from the certiorari stage through the merits stage at the U.S. Supreme Court is a rare experience for any lawyer,” said Supreme Court Clinic student William Cole L’15, “so having the chance to work on multiple cases at the Supreme Court level as a law student is quite an amazing opportunity.”
And the experience of working on Supreme Court cases isn’t the only benefit, added Cole. It’s also first-rate training for the students, whether they’re going on to law firms, clerkships, or academia.
“This collaborative, goal-oriented atmosphere is different from the classroom atmosphere,” said Cole, “and it was a valuable capstone experience to immerse myself in these issues and work together with the professors and my fellow clinic members in service to our clients.”
And for Bibas, making an argument in front of the Supreme Court remains a unique experience, even with his years of experience.
“It’s exhilarating but a bit like intellectual jousting,” he said. “You’re always responding to one question and trying to turn it into making an affirmative point before the next thrust comes.”