TRAVELERS CASUALTY & SURETY CO. OF AMERICA v. PACIFIC GAS & ELECTRIC CO.

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Syllabus
TRAVELERS CASUALTY & SURETY CO. OF AMERICA
v. PACIFIC GAS & ELECTRIC CO.
certiorari to the united states court of appeals for
the ninth circuit
No. 05–1429. Argued January 16, 2007—Decided March 20, 2007
After respondent (PG&E) filed for Chapter 11 bankruptcy, petitioner
(Travelers), which had previously issued a surety bond to guarantee
PG&E’s payment of state workers’ compensation benefits, asserted a
claim in the bankruptcy action to protect itself should PG&E default on
the benefits. With the Bankruptcy Court’s approval, PG&E agreed to
insert language into its reorganization plan and disclosure statement to
protect Travelers in case of such a default. Additional litigation over
the negotiated language nevertheless ensued and was ultimately re
solved by a court-approved stipulation stating, inter alia, that Travelers
could assert a general unsecured claim for attorney’s fees, which were
authorized in the parties’ original indemnity agreements. When Trav
elers filed an amended claim for such fees, PG&E objected based on the
rule the Ninth Circuit adopted in its prior Fobian decision that where
the litigated issues involve not basic contract enforcement questions,
but issues peculiar to federal bankruptcy law, attorney’s fees generally
will not be awarded. The Bankruptcy Court rejected Travelers’ claim
on that basis, and the District Court and the Ninth Circuit affirmed.
Held:
1. Federal bankruptcy law does not disallow contract-based claims for
attorney’s fees based solely on the fact that the fees were incurred liti
gating bankruptcy law issues. Because the Fobian rule finds no sup
port in federal bankruptcy law, the Ninth Circuit erred in disallowing
Travelers’ claim. Pp. 448–454.
(a) The American rule that “the prevailing litigant is ordinarily not
entitled to collect a reasonable attorneys’ fee from the loser,” Alyeska
Pipeline Service Co. v. Wilderness Society, 421 U. S. 240, 247, may be
overcome by, inter alia, an “enforceable contract” allocating such fees,
Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U. S. 714, 717.
A contract allocating attorney’s fees that is enforceable under substan
tive, nonbankruptcy law is allowable in bankruptcy except where the
Bankruptcy Code provides otherwise. Cf. Security Mortgage Co. v.
Powers, 278 U. S. 149, 154. The Code does not do so here. Pp. 448–449.
(b) Under the Bankruptcy Code, the bankruptcy court “shall allow”
a creditor’s claim “except to the extent that” the claim implicates any of

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nine enumerated exceptions. 11 U. S. C. § 502(b). Because Travelers’
attorney’s fees claim has nothing to do with the exceptions set forth
in §§ 502(b)(2)–(9), it must be allowed unless it is unenforceable under
§ 502(b)(1), which disallows any claim that is “unenforceable against the
debtor and property of the debtor, under any agreement or applicable
law for a reason other than because such claim is contingent or unma
tured.” Pp. 449–450.
(c) Section 502(b)(1) is most naturally understood to provide that,
with limited exceptions, any defense to a claim that is available outside
of the bankruptcy context is also available in bankruptcy. This reading
is consistent not only with the plain statutory text, but also with the
settled principle that “[c]reditors’ entitlements in bankruptcy arise in
the first instance from the underlying substantive law creating the debt
or’s obligation, subject to any qualifying or contrary provisions of the
Bankruptcy Code.” Raleigh v. Illinois Dept. of Revenue, 530 U. S. 15,
20. That principle requires bankruptcy courts to consult state law in
determining the validity of most claims. See ibid. Thus, when the
Code uses the word “claim”—i. e., a “right to payment,” § 101(5)(A)—it
is usually referring to a right to payment recognized under state law,
“[u]nless some federal interest requires a different result,” Butner v.
United States, 440 U. S. 48, 55. Pp. 450–451.
(d) The Fobian rule finds no support in § 502 or elsewhere in fed
eral bankruptcy law. The Fobian court did not identify any Code pro
vision as presenting such support, but instead cited three of its own
prior decisions, none of which identified any basis for disallowing a
contractual claim for attorney’s fees. Nor did the court have occasion
to do so; in each of those cases, the attorney’s fees claim failed as a
matter of state law. The absence of such textual support is fatal for
the Fobian rule. See FCC v. NextWave Personal Communications
Inc., 537 U. S. 293, 302. In light of § 502(b)(1)’s broad, permissive scope,
and the Court’s prior recognition that “the character of [a contractual]
obligation to pay attorney’s fees presents no obstacle to enforcing it in
bankruptcy,” it necessarily follows that the Fobian rule cannot stand.
Security Mortgage, supra, at 154. Pp. 451–454.
2. The Court expresses no opinion as to PG&E’s arguments that unse
cured claims for contractual attorney’s fees, such as Travelers’, are cate
gorically disallowed by § 506(b), which expressly authorizes such fees
“[t]o the extent that an allowed secured claim is secured by property
[whose] value [exceeds] the amount of such claim,” and that such disal
lowance is confirmed by the Bankruptcy Code’s structure and purpose,
as examined against the backdrop of pre-Code bankruptcy law. The
Court ordinarily does not consider arguments, such as these, that were

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neither raised nor addressed below, Cooper Industries, Inc. v. Aviall
Services, Inc., 543 U. S. 157, 168–169, and PG&E has not identified any
circumstances warranting an exception to that rule here. PG&E’s in
sistence that its arguments are “fairly included” within the question
presented in the certiorari petition is not persuasive. Pp. 454–456.
167 Fed. Appx. 593, vacated and remanded.
Alito, J., delivered the opinion for a unanimous Court.
G. Eric Brunstad, Jr., argued the cause for petitioner.
With him on the briefs were Rheba Rutkowski, Robert A.
Brundage, and William C. Heuer.
E. Joshua Rosenkranz argued the cause for resondent.
With him on the brief were David B. Goodwin, Carren Shul
man, Timothy S. Mehok, Gary M. Kaplan, and Thomas C.
Goldstein.*
Justice Alito delivered the opinion of the Court.
We are asked to consider whether federal bankruptcy
law precludes an unsecured creditor from recovering attor
ney’s fees authorized by a prepetition contract and incurred
in postpetition litigation. The Court of Appeals for the
Ninth Circuit held, based on a rule previously adopted by
that court, that such fees are categorically prohibited—even
where the contractual allocation of attorney’s fees would be
enforceable under applicable nonbankruptcy law—to the ex
tent the litigation involves issues of federal bankruptcy law.
Because that rule finds no support in the Bankruptcy Code,
we vacate and remand.
I
Respondent Pacific Gas and Electric Company (PG&E)
filed a voluntary Chapter 11 bankruptcy petition in April
*Briefs of amici curiae urging reversal were filed for the Surety &
Fidelity Association of America by Edward G. Gallagher; and for the
American Insurance Association by Craig Goldblatt and Caroline Rogus.
Robert M. Zinman filed a brief for Richard Aaron et al. as amici curiae
urging affirmance.

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2001, 11 U. S. C. § 1101 et seq., and continued thereafter to
operate its business as a “debtor in possession,” §§ 1107(a),
1108. The bankruptcy filing caught the attention of peti
tioner Travelers Casualty & Surety Company (Travelers),
which had previously issued a $100 million surety bond on
PG&E’s behalf to the California Department of Industrial
Relations, guaranteeing PG&E’s payment of state workers’
compensation benefits to injured employees.1 In connection
with the bond, PG&E executed a series of indemnity agree
ments in favor of Travelers. The indemnity agreements
provide that PG&E will be responsible for any loss Travelers
might incur in connection with the bonds, including any at
torney’s fees incurred in pursuing, protecting, or litigating
Travelers’ rights in connection with those bonds.
Although no default occurred, Travelers asserted a claim
in the bankruptcy action to protect itself in case PG&E de
faulted on its workers’ compensation benefits at some point
in the future, requiring Travelers to make payments under
its bond. In response to Travelers’ claim, and with the
knowledge and approval of the Bankruptcy Court, PG&E
agreed to insert language into its reorganization plan and
disclosure statement to protect Travelers’ right to indemnity
and subrogation in the event of a default by PG&E.
Travelers claimed, however, that PG&E then unilaterally
altered the negotiated language in a way that substantially
diminished the protection it had been seeking. According
to Travelers, that development resulted in additional litiga
1 California law required PG&E to provide workers’ compensation bene
fits for its employees by either (1) purchasing workers’ compensation in
surance from a licensed provider of such insurance or (2) adopting a plan,
with the State’s approval, to self-insure. PG&E chose the latter option,
and was therefore required to post security with the State to ensure ongo
ing payment of mandatory workers’ compensation benefits. See Cal. Lab.
Code Ann. §§ 3700, 3701 (West 2003). Travelers posted the required secu
rity by issuing a bond on PG&E’s behalf. The bond makes Travelers lia
ble, up to $100 million, for workers’ compensation benefits in the event of
a default by PG&E.

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tion, but Travelers and PG&E ultimately resolved the dis
pute by entering into a stipulation that was later approved
by the Bankruptcy Court. In addition to accommodating
Travelers’ substantive concerns, the stipulation stated that
Travelers “ ‘may assert its claim for attorneys’ fees under
the [i]ndemnity [a]greements’ ” (subject to PG&E’s right to
object) as a general unsecured claim against PG&E. Brief
for Petitioner 17.
Travelers subsequently filed an amended proof of claim
seeking to recover the attorney’s fees it incurred in con
nection with PG&E’s bankruptcy proceedings. PG&E ob
jected, arguing that Travelers could not recover attorney’s
fees incurred while litigating issues of bankruptcy law.
The Bankruptcy Court agreed and rejected Travelers’
claim on that basis. App. to Pet. for Cert. 23a–25a. Travel
ers appealed that ruling to the District Court. The District
Court affirmed, relying on In re Fobian, 951 F. 2d 1149 (CA9
1991), which held that “where the litigated issues involve not
basic contract enforcement questions, but issues peculiar to
federal bankruptcy law, attorney’s fees will not be awarded
absent bad faith or harassment by the losing party,” id., at
1153. See App. to Pet. for Cert. 10a, 17a.
Travelers appealed again, and the United States Court of
Appeals for the Ninth Circuit affirmed. 167 Fed. Appx. 593
(2006). The panel acknowledged that, in at least some cir
cumstances, a “ ‘prevailing party in a bankruptcy proceeding
may be entitled to an award of attorney fees in accordance
with applicable state law . . . .’ ” Id., at 594 (quoting In re
Baroff, 105 F. 3d 439, 441 (CA9 1997)). The panel neverthe
less rejected Travelers’ claim based on the Fobian rule,
which it cited for the proposition that “attorney fees are not
recoverable in bankruptcy for litigating issues ‘peculiar to
federal bankruptcy law.’ ” 167 Fed. Appx., at 594 (quoting
Fobian, supra, at 1153). The panel explained that, because
the fees claimed by Travelers were incurred litigating issues

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that were “governed entirely by federal bankruptcy law,”
Travelers’ claim necessarily failed. 167 Fed. Appx., at 594.2
Travelers sought review in this Court, noting a conflict
among the Courts of Appeals regarding the validity of the
Fobian rule. Compare Fobian, supra, at 1153, with In re
Shangra-La, Inc., 167 F. 3d 843, 848–849 (CA4 1999). We
granted certiorari to resolve that conflict, post, p. 948.
II
Under the American Rule, “the prevailing litigant is ordi
narily not entitled to collect a reasonable attorneys’ fee from
the loser.” Alyeska Pipeline Service Co. v. Wilderness So
ciety, 421 U. S. 240, 247 (1975); see Hauenstein v. Lynham,
100 U. S. 483, 490–491 (1880); Arcambel v. Wiseman, 3 Dall.
306 (1796). This default rule can, of course, be overcome by
statute. Fleischmann Distilling Corp. v. Maier Brewing
Co., 386 U. S. 714, 717 (1967). It can also be overcome by an
“enforceable contract” allocating attorney’s fees. Ibid.
In a case governed by the Bankruptcy Act of 1898, we
observed that “[t]he character of [a contractual] obligation
to pay attorney’s fees presents no obstacle to enforcing it in
bankruptcy, either as a provable claim or by way of a lien
upon specific property.” Security Mortgage Co. v. Powers,
278 U. S. 149, 154 (1928). Similarly, under the terms of the
current Bankruptcy Code, it remains true that an otherwise
enforceable contract allocating attorney’s fees (i. e., one
that is enforceable under substantive, nonbankruptcy law)
is allowable in bankruptcy except where the Bankruptcy
Code provides otherwise. See 4 Collier on Bankruptcy
2 The Court of Appeals incorporated by reference the reasoning em
ployed in In re DeRoche, 434 F. 3d 1188 (CA9 2006), which was decided by
the same panel that decided this case. 167 Fed. Appx., at 593. Although
the DeRoche opinion is longer than its counterpart in this case, it adds
very little to the panel’s explanation of the Fobian rule. See 434 F. 3d,
at 1190–1192.

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¶ 506.04[3][a], p. 506–118 (rev. 15th ed. 2006) (hereinafter
Collier).
This case requires us to consider whether the Bankruptcy
Code disallows contract-based claims for attorney’s fees
based solely on the fact that the fees at issue were incurred
litigating issues of bankruptcy law. We conclude that it
does not.
A
When a debtor declares bankruptcy, each of its creditors
is entitled to file a proof of claim—i. e., a document providing
proof of a “right to payment,” 11 U. S. C. § 101(5)(A)—against
the debtor’s estate. Once a proof of claim has been filed, the
court must determine whether the claim is “allowed” under
§ 502(a) of the Bankruptcy Code: “A claim or interest, proof
of which is filed under section 501 . . . is deemed allowed,
unless a party in interest . . . objects.”
But even where a party in interest objects, the court “shall
allow” the claim “except to the extent that” the claim impli
cates any of the nine exceptions enumerated in § 502(b).
Those exceptions apply where the claim at issue is “unen
forceable against the debtor . . . under any agreement or
applicable law,” § 502(b)(1); “is for unmatured interest,”
§ 502(b)(2); “is for [property tax that] exceeds the value of
the [estate’s] interest” in the property, § 502(b)(3); “is for
services of an insider or attorney of the debtor” and “exceeds
the reasonable value of such services,” § 502(b)(4); is for un
matured debt on certain alimony and child support obliga
tions, § 502(b)(5); is for certain “damages resulting from the
termination” of a lease or employment contract, §§ 502(b)(6)
and (7); “results from a reduction, due to late payment, in
the amount of . . . credit available to the debtor in connec
tion with an employment tax on wages, salaries, or commis
sions earned from the debtor,” § 502(b)(8); or was brought to
the court’s attention through an untimely proof of claim,
§ 502(b)(9).

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Travelers’ claim for attorney’s fees has nothing to do with
property tax, child support or alimony, services provided by
an attorney of the debtor, damages resulting from the termi
nation of a lease or employment contract, or the late payment
of any employment tax. See §§ 502(b)(2)–(8). Nor does it
appear that the proof of claim was untimely. See § 502(b)(9).
Thus, Travelers’ claim must be allowed under § 502(b) unless
it is unenforceable within the meaning of § 502(b)(1).
B
Section 502(b)(1) disallows any claim that is “unenforceable
against the debtor and property of the debtor, under any
agreement or applicable law for a reason other than because
such claim is contingent or unmatured.” This provision is
most naturally understood to provide that, with limited ex
ceptions, any defense to a claim that is available outside of
the bankruptcy context is also available in bankruptcy. See
4 Collier ¶ 502.03[2][b], at 502–22 (explaining that § 502(b)(1)
is generally understood to “make available to the trustee any
defense” available to the debtor “under applicable nonbank
ruptcy law”—i. e., any defense that the debtor “could have
interposed, absent bankruptcy, in a suit on the [same sub
stantive] claim by the creditor”).
This reading of § 502(b)(1) is consistent not only with the
plain statutory text, but also with the settled principle that
“[c]reditors’ entitlements in bankruptcy arise in the first in
stance from the underlying substantive law creating the
debtor’s obligation, subject to any qualifying or contrary pro
visions of the Bankruptcy Code.” Raleigh v. Illinois Dept.
of Revenue, 530 U. S. 15, 20 (2000). That principle requires
bankruptcy courts to consult state law in determining the
validity of most claims. See ibid.
Indeed, we have long recognized that the “ ‘basic federal
rule’ in bankruptcy is that state law governs the substance
of claims, Congress having ‘generally left the determina
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to state law.’ ” Ibid. (quoting Butner v. United States,
440 U. S. 48, 57, 54 (1979); citation omitted). Accordingly,
when the Bankruptcy Code uses the word “claim”—which
the Code itself defines as a “right to payment,” 11 U. S. C.
§ 101(5)(A)—it is usually referring to a right to payment rec
ognized under state law. As we stated in Butner, “[p]rop
erty interests are created and defined by state law,” and
“[u]nless some federal interest requires a different result,
there is no reason why such interests should be analyzed
differently simply because an interested party is involved in
a bankruptcy proceeding.” 440 U. S., at 55; accord, Vanston
Bondholders Protective Comm. v. Green, 329 U. S. 156, 161
(1946) (“What claims of creditors are valid and subsisting
obligations against the bankrupt at the time a petition in
bankruptcy is filed is a question which, in the absence of
overruling federal law, is to be determined by reference to
state law”).
C
In rejecting Travelers’ claim for contractual attorney’s
fees, the Court of Appeals did not conclude that the claim
was “unenforceable” under § 502(b)(1) as a matter of applica
ble nonbankruptcy law. Nor did it conclude that Travelers’
claim was rendered unenforceable by any provision of the
Bankruptcy Code. To the contrary, the court acknowledged
that, in at least some circumstances, a “ ‘prevailing party in
a bankruptcy proceeding may be entitled to an award of at
torney fees in accordance with applicable state law . . . .’ ”
167 Fed. Appx., at 594 (quoting Baroff, 105 F. 3d, at 441).
The court nevertheless rejected Travelers’ claim based
solely on a rule of that court’s own creation—the so-called
Fobian rule—which dictates that “attorney fees are not re
coverable in bankruptcy for litigating issues ‘peculiar to fed
eral bankruptcy law.’ ” 167 Fed. Appx., at 594 (quoting Fob
ian, 951 F. 2d, at 1153). The court explained that, because
the fees claimed by Travelers were incurred litigating issues

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that were “governed entirely by federal bankruptcy law,”
167 Fed. Appx., at 594, Travelers’ claim necessarily failed.
The Fobian rule finds no support in the Bankruptcy Code,
either in § 502 or elsewhere. In Fobian, the court did not
identify any provision of the Bankruptcy Code as providing
support for the new rule. See 951 F. 2d, at 1153. Instead,
the court cited three of its own prior decisions, In re John
son, 756 F. 2d 738 (1985); In re Coast Trading Co., 744 F. 2d
686 (1984); and In re Fulwiler, 624 F. 2d 908 (1980) (per cu
rium). Significantly, in none of those cases did the court
identify any basis for disallowing a contractual claim for at
torney’s fees incurred litigating issues of federal bankruptcy
law. Nor did the court have occasion to do so; in each of
those cases, the claim for attorney’s fees failed as a matter of
state law. See Johnson, supra, at 741–742; Coast Trading,
supra, at 693; Fulwiler, supra, at 910.3
The absence of textual support is fatal for the Fobian rule.
Consistent with our prior statements regarding creditors’
entitlements in bankruptcy, see, e. g., Raleigh, supra, at 20,
we generally presume that claims enforceable under appli
cable state law will be allowed in bankruptcy unless they
are expressly disallowed. See 11 U. S. C. § 502(b). Neither
the court below nor PG&E has offered any reason why the
fact that the attorney’s fees in this case were incurred lit
3 In Johnson, the debtor sought attorney’s fees after the creditor unsuc
cessfully requested relief from the automatic stay under 11 U. S. C.
§ 362(d)(1). The debtor acknowledged that the contract between the par
ties entitled only the creditor to attorney’s fees, but the debtor claimed
that a California statute extended that entitlement to both parties. The
court rejected that argument, noting that the statute applied only in the
context of an “ ‘action on a contract,’ ” and concluding that a request for
relief from an automatic stay could not be considered an action on a con
tract. 756 F. 2d, at 741–742. Both Coast Trading and Fulwiler involved
claims for attorney’s fees based on an Oregon statute similar to the statute
at issue in Johnson; the court found the statute inapplicable in both cases.
Coast Trading, 744 F. 2d, at 693; Fulwiler, 624 F. 2d, at 909–910.

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igating issues of federal bankruptcy law overcomes that
presumption.
Section 502(b)(4) is instructive on this point. That provi
sion expressly disallows claims for a particular category of
attorney’s fees—those “for services of an . . . attorney of the
debtor,” to the extent the claimed fees “excee[d] the reason
able value of such services.” The existence of that provision
suggests that, in its absence, a claim for such fees would be
allowed in bankruptcy to the extent enforceable under state
law. The absence of an analogous provision excluding the
category of fees covered by the Fobian rule likewise sug
gests that the Code does not categorically disallow them.
See 4 Collier ¶ 506.04[3][a], at 506–118 (concluding that Fob
ian “inverts the proper analysis” by allowing attorney’s fees
only where they are expressly authorized by the Bankruptcy
Code, and explaining that “a claim for attorney’s fees arising
in the context of litigating bankruptcy issues must be al
lowed if valid under applicable state law”).
Congress, of course, has the power to amend the Bank
ruptcy Code by adding a provision expressly disallowing
claims for attorney’s fees incurred by creditors in the litiga
tion of bankruptcy issues. But because no such provision
exists, the Bankruptcy Code provides no basis for disallow
ing Travelers’ claim on the grounds stated by the Ninth
Circuit.
As we explained in FCC v. NextWave Personal Commu
nications Inc., 537 U. S. 293 (2003), “where Congress has
intended to provide . . . exceptions to provisions of the
Bankruptcy Code, it has done so clearly and expressly.” Id.,
at 302. Here, the Bankruptcy Code does not “clearly and
expressly” compel courts to follow the Fobian rule; on the
contrary, the Code says nothing about unsecured claims for
contractual attorney’s fees incurred while litigating issues of
bankruptcy law. In light of the broad, permissive scope of
§ 502(b)(1), and our prior recognition that “[t]he character of
[a contractual] obligation to pay attorney’s fees presents no

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obstacle to enforcing it in bankruptcy,” it necessarily follows
that the Fobian rule cannot stand. Security Mortgage, 278
U. S., at 154; see Cohen v. de la Cruz, 523 U. S. 213, 221 (1998)
(“We . . . ‘will not read the Bankruptcy Code to erode past
bankruptcy practice absent a clear indication that Congress
intended such a departure’ ” (quoting Pennsylvania Dept. of
Public Welfare v. Davenport, 495 U. S. 552, 563 (1990))).
III
PG&E makes no effort to defend the Fobian rule. See
Tr. of Oral Arg. 28 (conceding that PG&E does not defend
the Fobian rule, and acknowledging that “[t]he Fobian rule
is wrong . . . as to the distinction that it draws between State
law and Federal litigation”). Instead, PG&E argues that
§ 506(b) categorically disallows unsecured claims for contrac
tual attorney’s fees and—noting that Travelers’ claim is un
secured—asks us to affirm on that basis. Section 506(b) pro
vides as follows:
“To the extent that an allowed secured claim is secured
by property the value of which . . . is greater than the
amount of such claim, there shall be allowed to the
holder of such claim, interest on such claim, and any rea
sonable fees, costs, or charges provided for under the
agreement or State statute under which such claim
arose.” 11 U. S. C. § 506(b) (2000 ed., Supp. V).
According to PG&E, this provision authorizes claims for con
tractual attorney’s fees to the extent the creditor is over
secured, but disallows such claims to the extent the creditor
is either not oversecured or (like Travelers) completely unse
cured. This reading of the Code, PG&E argues, “is not a
matter of negative implication, but of explicit negation.”
Brief for Respondent 18. PG&E also argues that the struc
ture and purpose of the Bankruptcy Code, examined against
the backdrop of pre-Code bankruptcy law, confirm that Con

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gress did not intend to allow unsecured creditors to recover
attorney’s fees. See id., at 25–38.
PG&E did not raise these arguments below. Conse
quently, none of the lower courts had occasion to address
them. Nor were these arguments presented in PG&E’s
brief in opposition to certiorari. PG&E nevertheless insists
that we should address these arguments as though they were
“fairly included” within the question presented in Travelers’
petition for certiorari. See id., at 41. That contention ap
pears to be premised on the theory that “the Fobian rule
reaches the correct conclusion in this case,” but “doesn’t
go far enough in . . . preventing creditors from requiring
other creditors to pay for their attorneys’ fees.” Tr. of
Oral Arg. 25.
We are not persuaded. We granted certiorari to resolve
a conflict among the lower courts regarding the Fobian rule,
which is analytically distinct from, and fundamentally at
odds with, PG&E’s reading of § 506(b).4
In any event, we ordinarily do not consider claims that
were neither raised nor addressed below, Cooper Industries,
Inc. v. Aviall Services, Inc., 543 U. S. 157, 168–169 (2004),
and PG&E has failed to identify any circumstances that
would warrant an exception to that rule in this case. We
therefore will not consider these arguments.5
4 PG&E’s new reading of the Code would prohibit all unsecured credi
tors from recovering contractual, postpetition attorney’s fees in bank
ruptcy proceedings—even if those fees were incurred while litigating is
sues of state law. See Brief for Respondent 17–19. The Fobian rule, by
contrast, would allow such a recovery—even by unsecured creditors—so
long as the litigation resulting in the claimed fees did not involve “issues
peculiar to federal bankruptcy law.” See In re Fobian, 951 F. 2d 1149,
1153 (CA9 1991).
5 For similar reasons, we will not address PG&E’s argument that Travel
ers’ claim should be denied based on the theory that the fees at issue were
incurred in connection with activities that were not reasonably necessary
to preserve Travelers’ rights and, alternatively, were not authorized by

549US2 Unit: $U23 [03-28-10 12:38:21] PAGES PGT: OPIN
456 TRAVELERS CASUALTY & SURETY CO. OF
AMERICA v. PACIFIC GAS & ELEC. CO.
Opinion of the Court
Accordingly, we express no opinion with regard to
whether, following the demise of the Fobian rule, other prin
ciples of bankruptcy law might provide an independent basis
for disallowing Travelers’ claim for attorney’s fees. We con
clude only that the Court of Appeals erred in disallowing
that claim based on the fact that the fees at issue were in
curred litigating issues of bankruptcy law.
* * *
The judgment of the United States Court of Appeals for
the Ninth Circuit is therefore vacated, and the case is re
manded for further proceedings consistent with this opinion.
It is so ordered.
Travelers’ contract with PG&E. See Brief for Respondent 42–49. This
argument was not addressed below, was not raised in PG&E’s brief in
opposition to certiorari, and bears no relation to the question presented.
See this Court’s Rule 14.1(a) (“Only the questions set out in the petition,
or fairly included therein, will be considered by the Court”).