Goodbye Marrama! Yesterday’s Supreme Court decision in Law v. Siegel, 571 U.S. ___ (Mar. 4, 2014), spells an end to the brief resurgence of the bankruptcy court’s equitable powers that followed the Supreme Court’s 2007 decision in Marrama v. Citizens Bank, 549 U.S. 365 (2007).

Marrama was a confusing opinion that seemed at odds with a steady stream of decisions limiting the section 105 equitable powers. Marrama was surprising in two respects. First, the Supreme Court opined that the bankruptcy court had inherent equitable powers that did not depend on the section 105 grant. Further, the Court rejected the previously dominant view that the bankruptcy court’s equitable powers were confined by the specific provisions of the statute. As you may recall, Marrama used equity to override a Chapter 7 debtor’s express section 706(a) statutory right to convert to Chapter 13. Since the case involved an abuse of bankruptcy, a fair reading of Marrama was that this robust equitable power was limited to situations involving the integrity of the bankruptcy process. However, it reopened the possibility that the equitable powers might extend to other issues. Justice Alito, joined by Chief Justice Roberts and Justices Scalia and Thomas, dissented in Marrama.

Dissenter no more, Justice Scalia authored today’s Law decision and got all nine justices to sign on. While he does not outright overrule Marrama, he goes to great lengths to recharacterize Marrama’s equity analysis as “dictum”; using that term not once, but thrice in the space of a mere five sentences!

What of the bankruptcy court’s inherent non-105 equitable power? Justice Scalia revises Marrama’s affirmative recognition of such a power to a mere acknowledgement that the courts “may also possess” such powers (emphasis supplied). Presumably, he had to leave that possibly open in order to corral all nine votes needed for a unanimous decision. If such a power does exist, it is now firmly brought back into the general rule that neither inherent nor statutory equitable powers can contravene specific statutory provisions. The Marrama power to protect the integrity of the bankruptcy process is now nothing more than an uninteresting power “to dispense with futile procedural niceties.”

Well, as the famous maxim of equity states, “Equity follows the Law” (v. Siegel).