Travelers Casualty & Surety Company of America v. Pacific Gas and Electric Company (549 U.S. 443)
U.S. Supreme Court · decided March 20, 2007 · Supreme Court Database (Spaeth)
- Citation
- 549 U.S. 443 · 127 S. Ct. 1199
- Decided
- March 20, 2007
- Term
- October Term 2006
- Vote
- 9–0
- Majority author
- Justice Alito
- Issue area
- Attorneys
- Disposition
- Vacated and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Alito delivered the opinion of the Court. We are asked to consider whether federal bankruptcy law precludes an unsecured creditor from recovering attorney’s fees authorized by a prepetition contract and incurred in postpetition litigation. The Court of Appeals for the Ninth Circuit held, based on a rule previously adopted by that court, that such fees are categorically prohibited — even where the contractual allocation of attorney’s fees would be enforceable under applicable nonbankruptey law — to the extent the litigation involves issues of federal bankruptcy law. Because that rule finds no support in the Bankruptcy Code, we vacate and remand. I Respondent Pacific Gas and Electric Company (PG&E) filed a voluntary Chapter 11 bankruptcy petition in April 2001, 11 U. S. C. §1101 et seq., and continued thereafter to operate its business as a “debtor in possession,” §§ 1107(a), 1108. The bankruptcy filing caught the attention of petitioner Travelers Casualty & Surety Company (Travelers), which had previously issued a $100 million surety bond on PG&E’s behalf to the California Department of Industrial Relations, guaranteeing PG&E’s payment of state workers’ compensation benefits to injured employees. In connection with the bond, PG&E executed a series of indemnity agreements in favor of Travelers. The indemnity agreements provide that PG&E will be responsible for any loss…
Excerpt of a 21,917-character opinion. The full text and citation network load in the interactive viewer above.