Grogan v. Garner (1990)
- Docket
- 89-1149
- Decided
- 1990-01-01
Summary
Question: What standard of evidence should bankruptcy courts apply in considering whether a debt was the result of "actual fraud" under section 523(a) of the Bankruptcy Code? Conclusion: Courts should apply the "preponderance of the evidence" standard. Justice John Paul Stevens, for a unanimous Supreme Court, wrote that the lack of a specified standard of evidence in section 523(a) implied that Congress had intended the preponderance of the evidence standard to be used. That lower standard was generally used in civil actions between private parties (including bankruptcy filings) unless particularly important interests were at stake. Protecting a bankruptcy filer who had previously been convicted of fraud was not sufficiently important to demand a higher level of evidence. Stevens also wrote that the "fresh start" intention of the bankruptcy laws did not suggest a higher standard of evidence. "In the same breath that we have invoked this 'fresh start policy," he wrote, "we have been careful to explain that the Act limits the opportunity for a completely unencumbered new beginning to the 'honest but unfortunate debtor.'" A debtor previously convicted of fraud did not fit this description.