## Facts

- Equipment Services, Inc. filed for bankruptcy and retained attorney John M. Lamie, paying a prepetition retainer.
- After enactment of the Bankruptcy Reform Act of 1994, 11 U.S.C. § 330(a)(1) no longer expressly listed “the debtor’s attorney” among those eligible for compensation from estate funds.
- The case proceeded under Chapter 11 and was later converted to Chapter 7, with a Chapter 7 trustee appointed.
- Lamie continued performing legal services after conversion but was not employed by the Chapter 7 trustee under 11 U.S.C. § 327 and was not approved by the court as trustee’s counsel.
- Lamie sought payment from the bankruptcy estate under § 330(a)(1) for his post-conversion services as debtor’s counsel.
- The United States Trustee objected, asserting that § 330(a)(1) authorizes estate-funded compensation only for professionals employed under § 327 (or other listed categories), not for a Chapter 7 debtor’s attorney retained solely by the debtor.
- The bankruptcy court, district court, and Fourth Circuit denied estate compensation for Lamie’s Chapter 7 work absent § 327 employment, and the Supreme Court granted review.

## Issues

1. Whether 11 U.S.C. § 330(a)(1), as amended in 1994, permits a bankruptcy court to award compensation from estate funds to a Chapter 7 debtor’s attorney who was not employed by the trustee and approved under 11 U.S.C. § 327.

## Decision

- The Supreme Court affirmed the Fourth Circuit.
- Section 330(a)(1) does not authorize payment from estate funds to a Chapter 7 debtor’s attorney unless the attorney is employed by the trustee and approved by the court under § 327.
- Although the amended text is “awkward” and “even ungrammatical,” the Court treated it as unambiguous on the relevant point and applied it as written.
- Arguments that the 1994 amendment reflected a drafting mistake and should be corrected using legislative history were rejected because the enacted text controlled and the legislative history did not justify a judicial rewrite.
- The Court declined to depart from the statute’s text on policy grounds, finding the result not so extreme as to trigger an absurdity exception.

## Legal Principles

- When statutory language has a clear operative meaning, courts apply the statute as enacted even if the wording is grammatically defective or suggests a drafting error.
- Under the post-1994 version of § 330(a)(1), estate-funded compensation is limited to the categories listed in the statute, including “professional person[s] employed under section 327” (and other specified provisions).
- In Chapter 7, a debtor’s attorney retained only by the debtor is not entitled to compensation from the estate under § 330(a)(1) unless the attorney is employed by the trustee with court approval under § 327.
- Legislative history does not override statutory text absent genuine ambiguity or an absurd result that the text cannot reasonably bear.

## Conclusion

The Court held that § 330(a)(1) bars compensation from Chapter 7 estate funds to a debtor’s attorney who was not employed and approved under § 327, enforcing the amended statute’s text despite its awkward drafting and asserted policy concerns.


Lamie v. U.S. Tr., 540 U.S. 526 (2004)