UNITED STATES OF AMERICA, PETITIONER V. NORDIC VILLAGE, INC., DAVID O. SIMON, TRUSTEE No. 90-1629 In The Supreme Court Of The United States October Term, 1990 The Solicitor General, on behalf of the United States of America, /1/ petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Sixth Circuit in this case. Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Sixth Circuit PARTIES TO THE PROCEEDINGS In addition to the parties named in the caption, Robert E. Martin, Lake County Treasurer, was a defendant in the district court and the bankruptcy court. John Howard and the State of Ohio, Department of Taxation, were defendants in the bankruptcy court. TABLE OF CONTENTS Question Presented Parties To The Proceedings Opinions below Jurisdiction Statutory provisions involved Statement Reasons for granting the petition Conclusion OPINIONS BELOW The opinion of the court of appeals (App., infra, 1a-36a) is reported at 915 F.2d 1049. The decisions and orders of the district court (App., infra, 37a-45a) and the decision and orders of the bankruptcy court (App., infra, 46a-52a) are not yet reported. JURISDICTION The judgment of the court of appeals was entered on October 4, 1990 (App., infra, 55a-56a). A petition for rehearing was denied on January 23, 1991 (App., infra, 53a-54a). The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY PROVISIONS INVOLVED Sections 106, 549, and 550 of the Bankruptcy Code (11 U.S.C.) are set forth in the petition appendix (App., infra, 57a-60a). QUESTION PRESENTED Whether Section 106(c) of the Bankruptcy Code (11 U.S.C.) waives the sovereign immunity of the United States from an action seeking a monetary recovery in bankruptcy. STATEMENT 1. On March 27, 1984, Nordic Village, Inc., doing business as Swiss Haus, filed a petition for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. 1101-1174 (App., infra, 2a). In June 1984, the Internal Revenue Service (IRS) was notified of the bankruptcy, and later filed a proof of claim against the estate seeking payment of delinquent employment taxes, penalties, and interest totaling about $80,000. On July 18, 1984, Josef Lah, an officer and shareholder of Nordic Village, wrote a counter check to AmeriTrust Company for $26,000, which was drawn on Nordic Village's corporate account. Lah had the bank issue him several cashier's checks, including a check for $20,000 payable to the IRS. The $20,000 check to the IRS bore the notation "REMITTER: SWISS HAUS, INC." Although the notation was later crossed out (the facts do not establish when or by whom), it remained legible. Lah delivered the check to the IRS and directed the IRS to apply it against the outstanding tax liability he had incurred as sole proprietor of Josef's Hair Design. The IRS credited his account accordingly. (App., infra, 2a, 38a). /2/ 2. Respondent David O. Simon was appointed trustee for the debtor in August 1984 and subsequently commenced these adversary proceedings in the bankruptcy court for the Northern District of Ohio. /3/ Respondent sought to recover several post-petition transfers, including the $20,000 transfer made by Lah to the IRS, alleging that they were voidable under Section 549 of the Code. /4/ The government argued that it was protected from recovery under Section 550(b)(1) of the Code, because the IRS was a subsequent transferee who had received the transfer from the initial transferee, Lah, in good faith and without knowledge that the transfer was voidable. /5/ The bankruptcy court rejected this argument, holding that the IRS was the initial transferee, and entered judgment for $20,000 against the United States. /6/ The government appealed to the district court pursuant to Rule 8001 of the Bankruptcy Rules, 11 U.S.C. App., at 275. 3. The district court affirmed and subsequently denied the government's motion to alter or amend the judgment. The court found that the IRS was either an initial transferee who, at the time of receipt, knew or should have known that the transfer was voidable. /7/ The government appealed from this judgment to the court of appeals pursuant to 28 U.S.C. 158(d). 4. In the Sixth Circuit, the government renewed its contention that it was protected from recovery as a subsequent transferee without knowledge of the transfer's voidability. The government also contended for the first time that the present action is barred by sovereign immunity. The court of appeals rejected both contentions over a dissent by Judge Kennedy. a. Bankruptcy Code Section 106 waives the sovereign immunity of "governmental units" in bankruptcy cases under certain circumstances. The Code defines "governmental unit" to include the United States and agencies like the IRS, the States and their instrumentalities, and local and foreign governments. /8/ The portion of Section 106 pertinent here is Section 106(c): (c) Except as provided in subsections (a) and (b) of this section and notwithstanding any assertion of sovereign immunity -- (1) a provision of this title that contains "creditor", "entity", or "governmental unit" applies to governmental units; and (2) a determination by the court of an issue arising under such a provision binds governmental units. 11 U.S.C. 106(c). /9/ In Hoffman v. Connecticut Dep't of Income Maintenance, 109 S. Ct. 2818 (1989), this Court held that Section 106(c) does not abrogate the immunity of States under the Eleventh Amendment from claims for retroactive monetary relief. Writing for a plurality, Justice White construed Section 106(c) "as not authorizing monetary recovery." Hoffman, 109 S. Ct. at 2823. He found that its language was, instead, "more indicative of declaratory and injunctive relief." Ibid. /10/ Hoffman involved a claim by a trustee in each of two, unrelated Chapter 7 proceedings. 109 S. Ct. at 2821. One of the claims was similar to respondent's claim in the present case; Hoffman sought to avoid a preferential payment to the taxing authority (there, the State), and to recover the payment pursuant to Section 550. Ibid. /11/ The other claim was for the "turnover" (see 11 U.S.C. 542(b)) to the estate of money owed to the debtor by the State's Medicaid agency. Ibid. After the bankruptcy court in Hoffman upheld both claims, the United States intervened. In a brief filed with this Court in Hoffman, the United States urged the interpretation of Section 106(c) ultimately adopted by the plurality. U.S. Br. in Hoffman, No. 88-412, at 10-26. The United States also made clear its position that "Congress treated federal and state agencies identically in Section 106(c)" (id. at 17-18), and that Section 106(c) therefore "must be construed to have the same meaning with respect to both state and federal agencies" (id. at 23 n.16). Although the Court had no occasion in Hoffman to address that position directly, the plurality noted that "(S)ection (106) applies to the Federal Government as well" as the States (109 S. Ct. at 2823), and Justice Stevens observed in his dissent that "(t)he statute * * * applies to the Federal Government as well" as to the States (109 alike" (id. at 2829). In the wake of Hoffman and prior to the present case, only one court of appeals had addressed the scope of Section 106(c) in the context of a claim against the federal government. In SBA v. Rinehart, 887 F.2d 165, 170 (1989), the Eighth Circuit relied on the plurality opinion in Hoffman to conclude that Section 106(c) does not waive the federal government's sovereign immunity from claims for retroactive monetary relief. b. The Sixth Circuit reached the opposite conclusion here in affirming the district court's judgment. The Sixth Circuit dismissed Rinehart as "suspect * * * authority" because the Rinehart court "assume(d) that Hoffman applies to the United States." App., infra, 7a n.2. The Sixth Circuit observed that "there (was) no controlling analysis of (Section 106(c)) in Hoffman" (id. at 3a), and the court believed that, in any event, "Hoffman is not precedent for this case" (id. at 10a) because the plurality "did not examine the intent of Congress as to federal agencies like the IRS" (ibid.). This state of affairs left "the lower courts (to) make independent judgments as to whether Congress intended, by the Bankruptcy Act, to waive the immunity of federal agencies, in this case, the IRS." Id. at 11a-12a. In the Sixth Circuit's judgment, Section 106(c) waives the immunity of federal agencies from monetary recovery "in clear and explicit terms" (App., infra, 13a): Section 106 abolishes the defense of sovereign immunity in cases where the claim is made by the trustee pursuant to a provision of the Code that contains any of the words "creditor," "entity," or "governmental unit." Section 550 is one of these sections. It specifically authorizes the Trustee to avoid the transfer and to recover the property or its value from the "entity" for whose benefit the transfer is made. * * * The IRS is a "governmental unit" and an "entity," thus the language of the statute in this case clearly waives the governmental immunity. App., infra, 6a. In contrast to the plurality in Hoffman, the court of appeals here found "nothing in the provision suggesting that it is limited to injunctive or declaratory relief." Id. at 6a-7a. Likewise eschewing the Hoffman plurality's exclusive reliance on statutory language, the court found support for its reading of Section 106 in the legislative history of the Bankruptcy Code. /12/ The court acknowledged, but dismissed as irrelevant, the fact that its reading of Section 106 "w(ould) result in different meanings depending upon whether it is being applied to a state or federal governmental unit." App., infra, 12a. This was no anomaly, the court stated; rather, it was "the inevitable result of applying two different methods of construction." Ibid. c. Judge Kennedy in dissent concluded that the analysis in Hoffman does apply to the United States. "(F)or essentially the same reasons relied upon by the plurality in * * * Hoffman" (App., infra, at 22a) she determined that "when reading the language narrowly in favor of the government, as (courts) are required to do, * * * the language of subsection 106(c) only waives sovereign immunity for the purpose of allowing a bankruptcy court to issue declaratory and injunctive relief." Ibid. Judge Kennedy expressed doubt about relying on legislative history as an aid to interpretation in this context. Id. at 22a n.4. /13/ She nonetheless reviewed those portions of the legislative history on which the majority had relied, and concluded that they did not "produce an outcome different from that reached by a plurality of the Supreme Court (in Hoffman)." Id. at 22a. REASONS FOR GRANTING THE PETITION In Hoffman, this Court granted review "to resolve the conflict" among the circuits over the extent to which Bankruptcy Code Section 106(c) abrogates the sovereign immunity of the States under the Eleventh Amendment. 109 S. Ct. at 2822. The present case raises an issue of equal importance -- namely, the extent to which Section 106(c) waives the sovereign immunity of the federal government -- as to which the courts of appeals are divided. The Sixth Circuit's holding in the present case -- that Section 106(c) waives the United States' immunity from retroactive monetary relief -- directly conflicts with the Eighth Circuit's decision in SBA v. Rinehart, 887 F.2d 165 (1989), and with the interpretation of Section 106(c) adopted by a plurality of this Court in Hoffman. The Sixth Circuit's decision is incorrect in our view. Moreover, the decision exposes the United States to significant monetary liability under a wide variety of Bankruptcy Code provisions. For these reasons we urge the Court to grant review. 1. The Sixth Circuit correctly observed that no interpretation of Section 106(c) commanded majority support in Hoffman. Moreover, the Court had no occasion in Hoffman directly to address the scope of federal sovereign immunity under Section 106(c). The question left open in Hoffman has produced a conflict between the Sixth and the Eighth Circuits that warrants resolution by this Court. In SBA v. Rinehart, supra, the Eighth Circuit reversed a district court's award of punitive damages against the Small Business Administration for a violation of the Code's automatic stay provision, 11 U.S.C. 362(a). The Eighth Circuit held that the award was barred by sovereign immunity. 887 F.2d at 166-167. In so holding, the court relied on the plurality opinion in Hoffman to determine that "section 106(c) * * * d(id) not authorize the award." Id. at 166. The Rinehart court recognized that the "precise question" before it was not decided in Hoffman. Nonetheless, the Rinehart court observed, "the Court's opinion (in Hoffman) refers to the federal government as well," and accordingly concluded that "(Hoffman's) analysis is equally applicable to a waiver of sovereign immunity by the federal government." Id. at 170 (citing Hoffman, 109 S. Ct. at 2823). /14/ The Sixth Circuit here took the opposite approach. The Sixth Circuit determined that "(t)he more pertinent argument to the present case is that of the (dissenting) opinion (in Hoffman)." App., infra, 13a. Relying on the dissent in Hoffman, the court here concluded that the language of Section 106(c) "could not be clearer" and, in particular, contained "nothing * * * suggesting that it is limited to injunctive or declaratory relief." Id. at 6a-7a. The court below likewise embraced the analysis of legislative history set forth in the dissenting opinion in Hoffman, finding that the legislative history confirmed the court's reading of Section 106(c). Id. at 13a. The conflicting interpretations of the Sixth and the Eighth Circuits subject the federal government to drastically different degrees and forms of liability. Under the Sixth Circuit's reading, the United States confronts claims for monetary recovery pursuant to a wide variety of Code provisions: "(T)he only limit is the number of provisions of the Bankruptcy Code containing one of the trigger words. With this 'limit,' Section 106(c) would apply in a scattershot fashion to over 100 Code provisions." Hoffman, 109 S. Ct. at 2822. /15/ In contrast, under the Eighth Circuit's interpretation in Rinehart, Section 106(c) would, in general, authorize only declaratory or injunctive relief regarding the validity and dischargeability of debts owed to the government. See U.S. Br. in Hoffman at 14, 20-21. Because of the broad legal consequences of the Sixth Circuit's decision and the United States' frequent position as a creditor in bankruptcy proceedings, the present conflict creates uncertainty in a significant portion of bankruptcy cases. Resolution of the conflict is therefore necessary to the effective administration of the Bankruptcy Code. 2. a. The Sixth Circuit eschewed the narrower interpretation of Section 106(c) adopted by a plurality of the Court of Hoffman in favor of the broader interpretation set forth in Justice Marshall's dissent. The court of appeals considered this choice to be compelled by the Hoffman plurality's invocation of Atascadero State Hospital v. Scanlon, 473 U.S. 234 (1985). In Atascadero, the Court stated that, in abrogating the States' sovereign immunity under the Eleventh Amendment, Congress must make its intention "unmistakably clear in the language of the statute." 473 U.S. at 242. Since the Atascadero standard does not apply to waivers of federal sovereign immunity, the court of appeals reasoned, it was free to treat the scope of the United States' immunity under Section 106(c) as a "simple" question of statutory interpretation. That conclusion conflicts both with this Court's decisions regarding the proper framework for analyzing questions of federal sovereign immunity and with Congress's intent as to Section 106(c). Questions of federal sovereign immunity do not, as the Sixth Circuit believed, entail a "very different" (App., infra, 12a) analysis from the analysis that governs questions of Eleventh Amendment immunity. Like an intent to abrogate Eleventh Amendment immunity, Congress's intent to waive federal sovereign immunity "cannot be implied but must be unequivocally expressed." Irwin v. Veterans Administration, 111 S. Ct. 453, 457 (1990). Accord Block v. North Dakota, 461 U.S. 273, 280 (1983); United States v. Mitchell, 445 U.S. 535, 538 (1980); United States v. Testan, 424 U.S. 392, 399 (1976); United States v. King, 395 U.S. 1, 4 (1969). /16/ Statutes waiving federal sovereign immunity must be construed "strictly in favor of the sovereign" (Testan, 424 U.S. at 399), especially in matters affecting the federal fisc, see Lehman v. Nakshian, 453 U.S. 156, 161 & n.8 (1981). The Sixth Circuit ignored these settled principles when it treated the question presented here like any other question of congressional intent. Congress intended in Section 106(c) to treat the States and the United States the same. Congress made this intention clear in Section 106(c) by using a single term, "governmental unit," to refer to both the States and the United States. Since Congress intended to accord identical tratment, courts should also accord identical treatment in construing Section 106(c). Thus, the Sixth Circuit should have applied the same analysis to the United States' claim of immunity as this Court did to the State's claim in Hoffman. The court should have determined whether an intent to waive federal sovereign immunity from monetary recovery was "unmistakably clear in the language of the statute." Hoffman, 109 S. Ct. at 2822. The court of appeals erred not only in its approach to the language of Section 106(c) but also in its reliance on legislative history. "Legislative history generally will be irrelevant to a judicial inquiry into whether Congress intended to abrogate the Eleventh Amendment." Dellmuth v. Muth, 491 U.S. 223, 230 (1989) (quoted in Hoffman, 109 S. Ct. at 2822). "If congressional intent is unmistakably clear in the language of the statute, reliance on (legislative history) will be unnecessary, and if it is not, Atascadero will not be satisfied." Hoffman, 109 S. Ct. at 2823. Relying on Dellmuth and Atascadero, the plurality in Hoffman refused to review the legislative history of Section 106(c) to determine the scope of the States' immunity. Because Congress intended the States and the United States to be treated the same, the Sixth Circuit here should not have relied on legislative history to determine the scope of federal sovereign immunity. b. The Sixth Circuit's analysis is flawed even if the scope of federal sovereign immunity under Section 106(c) presented a "simple" question of statutory interpretation. The court ignored established principles of statutory construction in holding that Section 106(c) authorizes retroactive monetary relief. That is so, as Judge Kennedy stated, "for essentially the same reasons relied upon by the plurality * * * in Hoffman." App. 22a. The Sixth Circuit's reading focuses solely on Section 106(c)(1) and ignores Section 106(c)(2). Under Section 106(c)(1), any Code provision that contains one of three trigger words applies to a governmental unit. The Sixth Circuit's analysis stopped after the court found one of the magic words in Section 550(a), the provision governing recovery of the transfer avoided here. On this basis, the court concluded that Section 106(c) waived sovereign immunity from monetary recovery. The court found "nothing in (Section 106(c)) suggesting that it is limited to injunctive or declaratory relief." App., infra, 6a-7a. That is because the court ignored Section 106(c)(2). Under this approach, as the plurality observed in Hoffman, Section 106(c) "would have exactly the same effect if subsection (c)(2) had been totally omitted." 109 S. Ct. at 2823. The Sixth Circuit's reading thus contravenes the duty of courts "to give effect, if possible, to every word and clause of a statute." Ibid. Subsection (c)(2) contains "limiting language" that "is more indicative of declaratory and injunctive relief than of monetary recovery." Hoffman, 109 S. Ct. at 2823. The language restricts the relief available under Section 106(c) to a "determination by the court of (the) issue arising under" the Code provision that applies by operation of subsection (c)(1). Congress's use of the term "determination" stands in stark contrast to its use of the broader term "claim" used in Sections 106(a) and 106(b). The latter term, defined for purposes of the Code as a "right to payment" (11 U.S.C. 101(4)(A)) -- clearly authorizes monetary recovery in cases to which Section 106(a) or 106(b) applies. Congress's use of a different, plainly narrower term in Section 106(c) strongly suggests that Congress intended in that provision to restrict the form of relief available. See INS v. Cardoza-Fonseca, 480 U.S. 421, 432 (1987). Another aspect of Sections 106(a) and 106(b) reinforces this understanding of Congress's intent. Sections 106(a) and 106(b) are narrow waivers of sovereign immunity. Most significantly, they apply only when the government has made a claim against the estate. /17/ Thus, the government can avoid liability under Sections 106(a) and 106(b) by refraining from making a claim against the estate. The government does not have this option under Section 106(c); it applies whether or not the government has made a claim. Given the comparative breadth of Section 106(c) in this respect, the structure of Section 106 suggests that Section 106(c) should be comparatively narrow in terms of the form of relief it authorizes courts to grant. As the plurality recognized in Hoffman, construing Section 106(c) to authorize only declaratory or injunctive relief does not deny all effect to that provision. So construed, Section 106(c) "waives the sovereign immunity of the Federal Government so that the Federal Government is bound by determinations of issues by the bankruptcy courts even when it did not appear and subject itself to the jurisdiction of such courts." Hoffman, 109 S. Ct. at 2823. Thus, the United States "would be bound, like other creditors, by discharge of debts in bankruptcy, including unpaid taxes." Ibid. /18/ 3. In Hoffman, the Court resolved the scope of the States' Eleventh Amendment immunity under Section 106(c). But the Court in Hoffman did not resolve the scope of immunity enjoyed by other "governmental unit(s)," because no interpretation of Section 106(c) commanded majority support. As noted, note 8, supra, "governmental units" in Section 106 include not only the States and the United States but also local and foreign governments. Thus, the current conflict between the Sixth and Eighth Circuits as to the scope of the United States' sovereign immunity under Section 106(c) also creates uncertainty for local and foreign governments. If the Court grants review of the question of federal sovereign immunity presented here, its decision is very likely to resolve the current uncertainty with regard to these other sovereign entities. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. KENNETH W. STARR Solicitor General SHIRLEY D. PETERSON Assistant Attorney General JOHN G. ROBERTS, JR. Deputy Solicitor General RICHARD H. SEAMON Assistant to the Solicitor General GARY D. GRAY JOHN A. DUDECK, JR. Attorneys APRIL 1991 /1/ The Internal Revenue Service was erroneously named as the governmental party in the proceedings below. Accordingly, we have substituted the United States as the proper party in the caption of this petition. We took the same approach under similar circumstances in a case decided by this Court last Term, United States v. Energy Resources Co., 110 S. Ct. 2139 (1990). See U.S. Br. in Energy Resources, No. 89-255, at 1 n.1. /2/ The record indicates that two of the other checks Lah obtained from AmeriTrust were used to pay his state and local taxes. App., infra, 41a-42a. /3/ The proceedings are governed by the Bankruptcy Code as amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, 98 Stat. 333. The Bankruptcy Court for the Northern District of Ohio had jurisdiction over the proceedings pursuant to 28 U.S.C. 157, and Local General Order No. 84, entered by the District Court for the Northern District of Ohio on July 16, 1984. /4/ With exceptions not pertinent here, under Section 549 a trustee may avoid any unauthorized transfer of property of the estate "that occurs after the commencement of the case." 11 U.S.C. 549(a)(1). /5/ 11 U.S.C. 550 provides in relevant part: (a) Except as otherwise provided in this section, to the extent that a transfer is avoided under section * * * 549 * * *, the trustee may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from -- (1) the initial transferee of such transfer or the entity for whose benefit such transfer was made; or (2) any immediate or mediate transferee of such initial transferee. (b) The trustee may not recover under section (a)(2) of this section from -- (1) a transferee that takes for value, including satisfaction or securing of a present or antecedent debt, in good faith, and without knowledge of the voidability of the transfer avoided * * *. /6/ The court found that Lah had been acting for the debtor in obtaining the check, and that the bank had functioned solely as a conduit of the funds. App., infra, 48a-50a. /7/ In the district court's view, the "Swiss Haus" notation on the check put the IRS on "inquiry notice" that the transfer was voidable, since, at the time of receipt, the IRS had been notified of Nordic Village's bankruptcy filing. App., infra, 39a-40a, 43a-44a. /8/ 11 U.S.C. 101(26) provides: "governmental unit" means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government. /9/ Sections 106(a) and 106(b) contain separate waivers of sovereign immunity, neither of which applies here. Section 106(a) waives the sovereign immunity of a "governmental unit" with respect to "any claim against such * * * unit that is property of the estate and that arose out of the same transaction or occurrence out of which such governmental unit's claim arose." Under Section 106(a), when the government makes a claim against the estate, it waives its immunity from compulsory counterclaims by the estate. See S. Rep. No. 989, 95th Cong., 2d Sess. 29 (1978); cf. Fed. R. Civ. P. 13(a). Here, the IRS's claim against the estate was based on the debtor's tax delinquency; the trustee's claim against the IRS in contrast, was based on the conversion of corporate funds by the debtor's officer to pay the officer's personal tax liability. Ther is no factual or legal connection between these two claims of the sort that triggers Section 106(a). See App., infra, 19a. Section 106(b) provides that, when the government makes a claim against the estate, the estate may seek to setoff against the government's claim any claim that the estate has against the government. Section 106(b) is inapplicable here because the trustee did not seek a setoff. /10/ Justice White was joined in Hoffman by the Chief Justice and Justices Kennedy and O'Connor. Justice Scalia concurred in a separate opinion in which Justice O'Connor also joined. 109 S. Ct. at 2824. Justice Scalia found it unnecessary to address the language of Section 106(c), because he determined that Congress lacks power under the Bankruptcy Clause of Article I to abrogate the States' Eleventh Amendment immunity. Ibid. Justice O'Connor also wrote separately, expressing her agreement with Justice Scalia and with the plurality's conclusion that in Section 106(c) Congress did not express "a clear intention to abrogate the States' Eleventh Amendment immunity." Ibid. Justice Marshall filed a dissenting opinion in which Justices Brennan, Blackmun and Stevens joined stating that Congress did intend in Section 106(c) to abrogate the States' Eleventh Amendment immunity and that Congress had the authority to do so under the Bankruptcy Clause. Id. at 2824-2827. Finally, Justice Stevens, joined by Justice Blackmun, filed a dissent stating that he joined Justice Marshall's dissenting opinion and that, in his view, the legislative history of Section 106(c) "lends added support to (Justice Marshall's) reading of the statute." Id. at 2827-2829. /11/ As explained, in the present case the transfer was voidable under 549 of the Code. In Hoffman, the basis for avoiding the transfer was Section 547(b) of the Code. 109 S. Ct. at 2821. However, the statutory basis for recovery is the same in each case: both transfer avoided under 547(b) and transfers avoided under Section 549 are recoverable pursuant to Section 550(a) of the Code. /12/ The court of appeals considered the case before it to present "a simple case involving the construction of language enacted by Congress." App., infra, 12a. Based on this view, the court examined the legislative history of Section 106(c) at some length. Id. at 7a-10a. The court noted that the Hoffman plurality refused to examine legislative history, insisting instead (109 S. Ct. at 2822) that the abrogation of immunity be expressed on the face of the statute. App., infra, 12a. Hoffman's approach was "inapplicable" in the present case, the court explained, because cases involving the federal government's sovereign immunity "are very different" from those involving the sovereign immunity of the States. Ibid. /13/ Judge Kennedy reasoned that, "(s)ince Congress intended the language we are interpreting to be applied in the same fashion to both state and federal governmental units, a resort to legislative history may well be inappropriate." App., infra, 22a n.4. /14/ The Ninth Circuit likewise concluded in a recent decision that "the plurality's reasoning (in Hoffman) is equally applicable to the immunity of the United States." Pearson v. United States, 917 F.2d 1215, 1216 (1990) (holding that Section 106(c) does not waive federal sovereign immunity from claims for money damages based on violations of the automatic stay provision of the Code, 11 U.S.C. 362), petition for cert. pending, No. 90-1208. /15/ The Sixth Circuit's interpretation would authorize monetary awards not only for claims to recover post-petition transfers avoided under Section 549, as involved here, but also -- as involved in Hoffman, for example (see 109 S. Ct. at 2821) -- claims to recover pre-petition preferential transfers avoided under Section 547 and claims for the "turnover" of funds. /16/ See also Library of Congress v. Shaw, 478 U.S. 310, 318 (1986) (interest on attorneys' fees cannot be recovered in Title VII action against the United States); cf. Missouri v. Jenkins, 491 U.S. 274, 281 n.3 (1989) (interest on attorneys' fees available in Title VII action against a State). /17/ As explained, Section 106(a) authorizes claims against the government that arise out of the same transaction or occurrence as the government's claims against the estate. Section 106(b) allows claims of the estate to be setoff against the government's claims against the estate. /18/ See also Neavear v. Schweiker, 674 F.2d 1201, 1203-1204 (7th Cir. 1982) (holding that, under Section 106(c), bankruptcy court could discharge debt owed to Social Security Administration), cited with approval in Hoffman, 109 S. Ct. at 2823. APPENDIX