The Pitfalls of Style

Occasionally, statutes or codes go through a process of "stylistic revision." The intent is a noble one. Laws are often confusingly or archaically drafted, or both, leaving them sometimes incomprehensible even to trained lawyers. Since the lay public is presumed to know what the law is, laws should be drafted in a way that even the average person can understand them. Stylistic revisions further that goal.

But sometimes laws are hard to understand because they are just complicated, and stylistic revisions can, in an effort to simplify the prose, unintentionally change their meaning—and thus the law!

Here's an interesting example. Wisconsin has a voluntary alternative to federal bankruptcy generally known as "receivership." Like the bankruptcy code, the receivership statute has a provision allowing the receiver to claw back "preference payments" made to a preferred creditor shortly before the petition for receivership. The idea is that an insolvent debtor's assets should be distributed equitably among the creditors, and preference payments give some creditors an unfair edge. 

But in addition to being very different from the relevant provision of the bankruptcy code, the Wisconsin provision on preferences is quite difficult to parse—and in at least one place seems absurd. Here's the relevant text:

If the debtor has given a preference within 4 months before the filing of a petition, or an assignment, after the filing of the petition and before the appointment of a receiver, or after the filing of an assignment and before the qualification of the assignee, and the recipient has reasonable cause to believe that the enforcement of the judgment or transfer would effect a preference, the judgment shall be voidable by the receiver or assignee, and the receiver or assignee may recover the property or its value from the recipient.

Note in particular the highlighted excerpt: "If the debtor has given a preference ... and the recipient has reasonable cause to believe that the enforcement of the judgment or transfer would effect a preference, the judgment shall be voidable by the receiver..."

This makes clear that the receiver may void a preferential judgment. But what about a preferential transfer? (A much more common occurrence, obviously.) All along the statute talks in terms of "judgment or transfer"—and elsewhere the term "preference" is defined to include certain judgments and transfers—but  the operative language specifies that the receiver can void only "the judgment." 

This is not a purely academic flaw. In a reported case, the bankruptcy court in the Eastern District of Wisconsin had to finesse aside the argument that the Wisconsin preference statute applies only to judgments, and not to transfers. Ignoring the plain text, the court held that the Wisconsin legislature "certainly would have been clearer" if that were really its intent. But the statute is actually crystal clear when you study it. And if it weren't clear, the maxim of "expressio unius est exclusio alterius" would seem to resolve any ambiguity in favor of the conclusion that only judgments are voidable. No, the problem is not that the statute is unclear—the problem is that, as drafted, it is ridiculous. 

Some research reveals that this problem was caused by a stylistic revision gone awry. Here's the text of the statute with the most recent revision* noted by strikethrough and underline:

If the debtor shall have has given a preference within four 4 months before the filing of a petition, or an assignment, or after the filing of the petition and before the appointment of a receiver, or after the filing of an assignment and before the qualification of the assignee, and the person receiving it, or to be benefited thereby, or his or her agent acting therein, shall have had recipient has reasonable cause to believe that the enforcement of such the judgment or transfer would effect a preference, it the judgment shall be voidable by the receiver or assignee, and the receiver or assignee may recover the property or its value from such person the recipient.

The bill authorizing this revision says it simply "replaces word form of number with digits and other language for greater readability and conformity with current style." But it also made one terrible, ill-advised change: it deleted the word "it" and replaced it with "the judgment." This was an obvious error. The pronoun "it" in the old statute did not refer to "the judgment"; it referred to "a preference" all the way back at the beginning of the sentence. So this change had the effect of narrowing the receiver's powers from being able to void "a preference" (defined as including judgments and transfers) to being able to void only "the judgment." Oops.

Symbolically, a stylistic revision committee takes an oath similar to the Hippocratic oath taken by doctors, except that instead of "Do no harm" it is "Amend no laws." In this case, that oath was broken. Luckily, the error was so terrible and changed the plain meaning to make it so ridiculous that no court will likely ever enforce it as it is now actually drafted.

For another example of a stylistic revision gone apparently awry, see The Federal Rule of Civil Procedure that Was Changed by Accident: A Lesson in the Perils of Stylistic Revision, 62 South Carolina Law Review 41 (2010).

*Note: As originally published this post linked to the wrong revision of the statute. That's fixed now.