[00:00:00] Speaker 01: and this debate. [00:00:55] Speaker 03: Good morning. [00:00:56] Speaker 03: Is it Mr. Larberdane? [00:00:58] Speaker 02: Larberdane, yes, ma'am. [00:01:01] Speaker 02: Good morning. [00:01:01] Speaker 02: My name is Malcolm X. Larberdane. [00:01:03] Speaker 02: I'm counsel for Pellet Tammy B. Bell, and we're here to deal with the issue, I feel, that was brought about by the Bankruptcy Act of 1978. [00:01:12] Speaker 02: Prior to this act, the field of bankruptcy was pretty much the Wild Wild West. [00:01:16] Speaker 02: A lot of inconsistencies, creditors, debtors, and third parties were treated unfairly. [00:01:20] Speaker 02: As a result, Congress acted and enacted the Bankership Act of 1978. [00:01:25] Speaker 02: It pretty much created the Bankership Court system that we have today. [00:01:29] Speaker 02: It brought a bunch of unity and cohesion to an otherwise disorganized system. [00:01:37] Speaker 01: But isn't it a question whether Ms. [00:01:40] Speaker 01: Bell was a federal employee? [00:01:42] Speaker 02: Yes, it is, Your Honor. [00:01:43] Speaker 02: That is in fact the question. [00:01:45] Speaker 02: And with the act, it also created the trustee. [00:01:49] Speaker 02: And this trustee represents the estate of the debtor. [00:01:52] Speaker 02: And it's tasked with handling the administrative tasks associated with bankruptcy. [00:01:58] Speaker 02: We're now moving towards the issue of is the trustee an independent contractor or an employee? [00:02:06] Speaker 02: Now this issue really has not been dealt with head on. [00:02:10] Speaker 02: It's been tangently discussed in various cases. [00:02:13] Speaker 01: What's the evidence that she was a federal employee? [00:02:16] Speaker 02: Well, the evidence I have in this situation is titles for the U.S., Title 28, Title 11, and the handbook for the U.S. [00:02:25] Speaker 02: Trustee's Office. [00:02:26] Speaker 02: Those three bodies of law [00:02:29] Speaker 02: pretty much mandate how the U.S. [00:02:31] Speaker 02: Trustee's office is to be conducted. [00:02:34] Speaker 01: As a matter of fact, the handbook... Aren't there definitions of a federal employee and the requirement that a SF-50 be utilized? [00:02:43] Speaker 02: I understand that, Your Honor, but I feel that we can get there by first defining what is a trustee. [00:02:53] Speaker 02: The legislation creates this position [00:02:56] Speaker 02: it was birthed out of the Department of Justice. [00:02:59] Speaker 02: This position is controlled by the Department of Justice. [00:03:02] Speaker 02: I mean, when I say controlled, every facet of it is controlled by the Department of Justice. [00:03:07] Speaker 02: So at some point, I think we need to examine the relationship between the trustee and the Department of Justice. [00:03:13] Speaker 01: Does she get a paycheck from the U.S. [00:03:16] Speaker 01: Treasury? [00:03:17] Speaker 02: No, Your Honor, she got a check from the U.S. [00:03:21] Speaker 02: trustee. [00:03:21] Speaker 02: However, [00:03:23] Speaker 02: Those funds allocated stem from a budget that were approved by the U.S. [00:03:28] Speaker 02: Trustee's office. [00:03:30] Speaker 02: So, the U.S. [00:03:32] Speaker 02: Trustee's is the office that allocated the money to the Trustee to pay my client. [00:03:39] Speaker 02: So, I mean, when I say every facet of the office is controlled by the U.S. [00:03:43] Speaker 02: Trustee's office, I mean that. [00:03:47] Speaker 03: But how does that necessarily get you to the point you need to be in this case, as Judge Berry pointed out, which is, is she a federal employee? [00:03:55] Speaker 02: Well, I get there by examining the relationship between the US trustee and the standing trustee. [00:04:05] Speaker 02: When you look at tests that determine whether or not an independent contractor is maybe an employee, [00:04:14] Speaker 02: when you examine it, all four tests, let me back up a bit. [00:04:19] Speaker 02: When you look at the tests, it overwhelmingly shows that a trustee is an employee of the United States government. [00:04:26] Speaker 02: I mean, every facet of his office is controlled by the Department of Justice. [00:04:33] Speaker 02: And that's how we get there. [00:04:34] Speaker 02: I think there's a gap. [00:04:35] Speaker 02: And I think it's time that this relationship between the US trustee and the Spanish trustee [00:04:41] Speaker 02: is adequately vetted. [00:04:43] Speaker 01: Don't you have to go to Congress for that? [00:04:45] Speaker 02: Well, not necessarily. [00:04:47] Speaker 02: I feel that the Bankruptcy Act created the position, but when you look at the handbook that was promulgated in titles 28 and 11, it's clear that a tremendous amount of control is exerted over a standing trustee by the Department of Justice. [00:05:07] Speaker 02: I mean, yes, it would be clear to say that, but [00:05:11] Speaker 02: that Kyle has to mean something. [00:05:14] Speaker 02: If you're going to say that a trustee is private, well there needs to be some similarities or I guess something that shows that he is in fact a private. [00:05:25] Speaker 02: That's not the case in this matter. [00:05:27] Speaker 03: But is that really the inquiry? [00:05:30] Speaker 03: I mean, does the MSPB have to show that somebody is private, or do you have to show she's an employee? [00:05:38] Speaker 03: And just because this distinction between private and non-private, how does that necessarily get you to where you need to be, which is she's a federal employee under the statutory regime? [00:05:51] Speaker 02: Well, I get there when I'm looking at the relationship of the standing trustee and the Department of Justice. [00:06:00] Speaker 02: There's a gap there. [00:06:01] Speaker 02: I understand that there's been some intent to put the standing trustee on an island all by himself, but he's not by himself. [00:06:12] Speaker 02: I mean, every facet of his office is controlled by the Department of Justice. [00:06:18] Speaker 02: And case law, really for the most part, really does not know how to define a standing trustee. [00:06:25] Speaker 02: There's been a lot of inconsistency throughout. [00:06:28] Speaker 01: In any event, what you're doing is talking about the trustee, not your client. [00:06:34] Speaker 02: I understand that. [00:06:35] Speaker 02: I understand that. [00:06:36] Speaker 02: And I get there by looking at the relationship that my client has with the standing trustee who has a relationship with the Department of Justice. [00:06:46] Speaker 02: I understand it's a long shot, but I think that this issue really needs to be addressed because without it, it's really difficult to pigeonhole and define what a standing trustee is. [00:07:00] Speaker 00: We're trying to define whether your client's an employee or not. [00:07:05] Speaker 00: I understand that. [00:07:06] Speaker 02: I understand that. [00:07:08] Speaker 00: What cases or what legal authority do you have to support your theory about, your control theory? [00:07:14] Speaker 02: Okay, well, really, the cases I have, I have statutes, titles 11 and 28 in the handbook at the U.S. [00:07:24] Speaker 02: Trustee's office. [00:07:26] Speaker 02: mandates that standing trustees operate by. [00:07:29] Speaker 02: I mean the handbook has everything from reporting requirements, income requirements, budget requirements, the duties of the trustee. [00:07:36] Speaker 02: I mean the equipment of the trustee doesn't even belong to him. [00:07:40] Speaker 02: It belongs to the US trustee. [00:07:42] Speaker 02: So I mean [00:07:44] Speaker 02: I understand that I'm kind of back doing this argument, but to get there, you need to at least, I guess, we get there by defining what is the exact nature of my client's employer to the federal government here. [00:07:58] Speaker 02: And I agree with Judge Laurie. [00:08:01] Speaker 02: Yes, it would have been a lot easier if Congress would have clearly spelled this out, but there is, in fact, a gap here. [00:08:07] Speaker 01: Congress did spell out the definition of an employee, 7511A1. [00:08:13] Speaker 02: Yes. [00:08:14] Speaker 01: And your client doesn't fit within that? [00:08:16] Speaker 02: Well, I feel like she does fit within that because she works for an office that is controlled by the Department of Justice. [00:08:22] Speaker 02: I think that's how we get there. [00:08:25] Speaker 02: And, in essence, you just can't put a standing trustee's office by itself and be the end of it. [00:08:35] Speaker 02: His life is, he was birthed by the bankruptcy act of 1978. [00:08:41] Speaker 02: He comes out of the Department of Justice. [00:08:42] Speaker 02: That office, that framework, that supervision, all comes from the Department of Justice. [00:08:49] Speaker 02: And you just can't ignore it and be like, okay, employee, prove to us how you are a federal employee. [00:08:57] Speaker 02: I'll prove to you that I'm a federal employee because I work for somebody who is controlled by the federal government. [00:09:02] Speaker 02: That's how I'm a federal employee. [00:09:04] Speaker 02: When you think about this, this is perhaps the most unique independent contractor-employee relationship to ever exist. [00:09:11] Speaker 02: When you look at the control that the Department of Justice exerts over a standing trustee, it's pretty much unprecedented. [00:09:18] Speaker 02: So we get there by looking at the relationship between the relationship my client has with the standing trustee. [00:09:31] Speaker 01: In other words, you're trying to substitute logic for statute. [00:09:38] Speaker 03: Pretty much. [00:09:40] Speaker 03: Why don't we hear from, why don't you want to reserve the rest of your time? [00:09:42] Speaker 03: Yes. [00:09:43] Speaker 03: Do we have a divided argument here? [00:09:50] Speaker 05: Good morning. [00:09:54] Speaker 03: You're dividing your time? [00:09:56] Speaker 03: Yes. [00:09:58] Speaker 05: MSPB properly found that Miss Bell was not a federal government employee who was entitled to appeal her discharge to the Merit Systems Protection Board. [00:10:07] Speaker 05: Pursuant to 5 U.S.C. [00:10:09] Speaker 05: 7701, the Merit Systems Protection Board can only adjudicate appeals only where it was granted that authority by statute or regulations. [00:10:20] Speaker 05: 5 U.S.C. [00:10:22] Speaker 05: 7705 says that the Maryland System Dissection Board can only adjudicate appeals that come from an employee, and 7511 defines an employee as one being in the competitive service or in the accepted service. [00:10:37] Speaker 05: Petitioner has put forth no evidence, absolutely no evidence that shows that she was in the accepted service or she was a competitive employee. [00:10:48] Speaker 05: They have submitted several cases, all of the cases that they submitted. [00:10:53] Speaker 05: says just the opposite of what they're trying to show. [00:10:57] Speaker 05: The petitioner concedes that she does not fall within any of the categories of an accepted employee or a competitive employee. [00:11:06] Speaker 05: In fact, the personnel office where the standing trustee worked searched their records and could find no documentation, no Form 50 or any other form that shows that Miss Bell was a federal employee. [00:11:21] Speaker 00: What about your opponent's argument [00:11:22] Speaker 00: related to control, that if you have a federal agency that exerts some sort of control that flows down to a worker, that that should be sufficient for us to find that there's been an establishment or an employee. [00:11:40] Speaker 05: No, it isn't, Your Honor, because Ms. [00:11:42] Speaker 05: Bell has to be appointed as a federal employee, and she has put forth no evidence, no documentation that she has been appointed as a federal employee. [00:11:52] Speaker 05: In fact, the standard form 50 that she would fall under, which most government agencies use, there may be a couple other forms I'm not familiar with from them, but those are the general standard forms the government agencies use. [00:12:06] Speaker 05: shows that the person is appointed and they use accepted service or competitive service. [00:12:11] Speaker 05: Ms. [00:12:11] Speaker 05: Bell has put forth no evidence in that. [00:12:14] Speaker 05: She is a private employee. [00:12:15] Speaker 05: In fact, when she filed an appeal with the state court, Mr. Thornburg, who is Ms. [00:12:22] Speaker 05: Bell's employee, had it removed to the district court. [00:12:25] Speaker 05: When Ms. [00:12:26] Speaker 05: Bell tried to get it removed back to the state court, Ms. [00:12:30] Speaker 05: Bell said, I'm not a federal employee. [00:12:32] Speaker 03: Yeah, but she was forced to stay in federal court. [00:12:35] Speaker 03: She lost that battle. [00:12:36] Speaker 03: Yes, she did. [00:12:37] Speaker 03: And she lost that battle. [00:12:38] Speaker 03: I can understand and appreciate why she felt like, well, given the ruling, I have to change my tune. [00:12:44] Speaker 03: Maybe I am a federal boy. [00:12:45] Speaker 05: Well, actually, the removal statute, she was removed. [00:12:49] Speaker 05: The Fifth Circuit said the removal statute because she was acting under. [00:12:54] Speaker 05: No court, no court said that Ms. [00:12:58] Speaker 05: Bell was a federal employee and they certainly did not say that Ms. [00:13:01] Speaker 05: Bell was a federal employee entitled to appeal for removal to the Merit Systems Protection Board. [00:13:07] Speaker 01: In other words, it was removed because it raised a federal issue? [00:13:12] Speaker 05: It was removed because she was acting under, and the Fifth Circuit said that Mr. Thornburg was entitled to come under the removal statutes. [00:13:22] Speaker 05: Of course, summer judgment was granted because it was not 20 employees, which is a standard that you have to have in order to confer yourself with that. [00:13:34] Speaker 05: because she was acting under. [00:13:36] Speaker 05: But the Fifth Circuit did not say that Miss Bell was a federal employee. [00:13:42] Speaker 05: The removal statute was moved because of the status of Mr. Thornburg, not Miss Bell. [00:13:47] Speaker 05: Miss Bell has to show that she is a federal employee entitled to appeal her removal to the Merit System Protection Board, for which she has not. [00:13:57] Speaker 05: In all of her, the appellant cited several cases. [00:14:03] Speaker 05: She cited Myers under Myers. [00:14:06] Speaker 05: Myers never said that she was a federal employee. [00:14:09] Speaker 05: Ms. [00:14:09] Speaker 05: Bell cited another case where the Supreme Court never said that Ms. [00:14:21] Speaker 05: Bell wanted a federal employee in Tyler to appeal to the American System Protection Board. [00:14:26] Speaker 05: In short, Ms. [00:14:28] Speaker 05: Bell has presented no statute. [00:14:30] Speaker 05: no regulations or case law that she meets her burden to show that she was an employee entitled to appeal her removal to the board. [00:14:38] Speaker 05: Petitioner missed several sections of the statute, five USC, 11 USC, 28, and several sections of 28 USC. [00:14:49] Speaker 05: None of those sections. [00:14:51] Speaker 05: None of those sections say that Ms. [00:14:54] Speaker 05: Bell is a federal employee entitled to appeal of removal to the board. [00:14:58] Speaker 05: It does not matter whether or not Ms. [00:15:02] Speaker 05: Thornburg is a private standing trustee. [00:15:06] Speaker 05: If Ms. [00:15:06] Speaker 05: Bell has to go somewhere in terms of asserting her appeal, I'm not familiar with the Louisiana state law. [00:15:13] Speaker 05: They talk about the difference between a trustee and the difference between a private citizen and [00:15:22] Speaker 05: She incited no law, no law whatsoever that says that the board, and the board can only adjudicate those appeals that have specifically given it authority to do so by statute of regulations. [00:15:36] Speaker 05: And there is nothing in Ms. [00:15:38] Speaker 05: Bell's submissions to the board while doing the administrative stage. [00:15:43] Speaker 05: There is nothing in Ms. [00:15:44] Speaker 05: Bell's [00:15:45] Speaker 05: brief. [00:15:46] Speaker 05: There's nothing in the cases that she cited that would show that the board has jurisdiction to adjudicate her appeal. [00:15:53] Speaker 05: And we submit that the board correctly dismiss Ms. [00:15:57] Speaker 05: Bell's appeal as not being within the board's jurisdiction. [00:16:01] Speaker 03: Thank you. [00:16:12] Speaker 04: My colleague has really, I think, effectively presented the information. [00:16:17] Speaker 03: Can I ask you, since you're representing DOJ here, what is this office? [00:16:22] Speaker 03: I mean, this office is under your control of supervision and budget, no? [00:16:27] Speaker 04: Budget, not exactly. [00:16:28] Speaker 04: It is under the U.S. [00:16:30] Speaker 04: Trustee's program, is under the Department of Justice. [00:16:32] Speaker 04: The U.S. [00:16:33] Speaker 04: trustee appoints rosters of private standing trustees across the country to be able to step in and handle the administration of bankruptcy of states. [00:16:43] Speaker 04: The way the fees work is there's a budget, the funds that pay [00:16:49] Speaker 04: the private standing trustee come out of the estate. [00:16:53] Speaker 04: And there's a schedule that's set out. [00:16:55] Speaker 03: So there are all these private trustees. [00:16:57] Speaker 03: All these private trustees out across the country. [00:16:59] Speaker 03: Including of this employee's employer, this person's employer, right? [00:17:03] Speaker 03: Yes. [00:17:04] Speaker 04: And they are, in your view, independent contractors? [00:17:08] Speaker 04: In the nature of independent contractors, that's right. [00:17:10] Speaker 04: They don't get any funding from the federal government. [00:17:14] Speaker 03: How are they selected? [00:17:15] Speaker 03: Is it a competitive selection? [00:17:16] Speaker 03: Is there something, or are they just [00:17:19] Speaker 03: How do they select it? [00:17:20] Speaker 04: Well, the US trustee is the one that selects the private standing trustees. [00:17:24] Speaker 04: I don't actually know. [00:17:25] Speaker 04: I'm not really familiar with the process by which they apply. [00:17:29] Speaker 04: Is it a permanent position or is it just a standing case? [00:17:32] Speaker 04: They may join the roster of private trustees. [00:17:35] Speaker 04: They may be dropped from the roster of private trustees. [00:17:37] Speaker 04: I'm not sure what the selection process is or how they get selected in the first place, but they're not hired. [00:17:44] Speaker 04: included on roster private trustees to handle cases in a certain region or part of the country. [00:17:50] Speaker 03: And then they have independent authority. [00:17:52] Speaker 03: Whoever they want to hire, they hire. [00:17:53] Speaker 03: Absolutely. [00:17:56] Speaker 04: They hire the employees in their office. [00:17:57] Speaker 04: They fire the employees in the office. [00:17:59] Speaker 04: They pay them out of their own proceeds, and their own salaries come out of the estate, not from the federal government. [00:18:05] Speaker 04: So it's just that the US trustee's office selects the private trustees, and that the statute controls how they operate and how they administer the estate. [00:18:13] Speaker 04: But otherwise, they operate in the nature of a private contractor. [00:18:17] Speaker 04: As I guess both parties can see, there's no case that's ever found that the private trustee is an employee of the government, much less one of the private trustees' employees. [00:18:27] Speaker 04: And as Ms. [00:18:28] Speaker 04: Reardon pointed out, there's been absolutely no evidence from Ms. [00:18:31] Speaker 04: Bell that she was ever appointed to a competitive or accepted service position with the federal government. [00:18:37] Speaker 04: And it is, of course, her burden to demonstrate that since she has to establish jurisdiction. [00:18:41] Speaker 04: I think the only thing I can probably... Happy to answer any questions. [00:18:45] Speaker 04: The only thing I can really add, I think, to what Ms. [00:18:47] Speaker 04: Reardon said was in response to the question that Judge Rain asked about control and the argument that petitioner is making about control. [00:18:54] Speaker 04: I think that argument is effectively rebutted by a case we cited in our brief, Costner versus United States, and that was a court of claim case where the petitioner was arguing that control and supervision was enough to establish the employment relationship, and the court varied [00:19:11] Speaker 04: very definitively said, no, control comes out of this sort of common law master-servant relationship which is irrelevant to federal law because federal employment is not defined under common law but pursues a statute. [00:19:24] Speaker 04: The statute requires that the employee be an accepted or competitive service [00:19:29] Speaker 04: Appointment, it requires an appointment and here there is not being so much as an allegation of appointment, never mind any evidence furnished of appointments and Ms. [00:19:38] Speaker 04: Val simply has failed to establish and the board correctly found that she failed to establish that she was a federal employee with appeal rights to the board. [00:19:47] Speaker 04: Thank you very much. [00:19:53] Speaker 03: Tom Perry-Buttle. [00:19:56] Speaker 02: I submit to you that the Department of Justice has more control over the private trustees than is previously discussed by counsel officers. [00:20:06] Speaker 03: Well that may or may not be true, but why don't you tell us how it's sufficient to establish to make Ms. [00:20:13] Speaker 03: Bell an employee. [00:20:14] Speaker 02: Well, if you look at the Bell case that was decided by the Fifth Circuit, it clearly put [00:20:20] Speaker 02: a standing trustee under the Department of Justice. [00:20:23] Speaker 02: In the past, people wanted to put the trustee on the judiciary side. [00:20:27] Speaker 02: That now has been clarified. [00:20:29] Speaker 02: A standing trustee now comes out of the Department of Justice. [00:20:33] Speaker 02: To get to where I'm trying to be, you have to then look at the relationship that the trustee has with the Department of Justice. [00:20:42] Speaker 02: I find it hard pressed to stand here and say that [00:20:47] Speaker 02: The Senate trustee is independent or private when he has a tremendous amount of regulation that's put upon him by the US trustee's office. [00:20:57] Speaker 02: So I submit to you that with that type of control, it has to flow that my client works for a federal agency, which means that the Senate trustee is a federal employee. [00:21:16] Speaker 03: We thank all counsel and the case is submitted. [00:21:23] Speaker 03: Thank you.