Central Virginia Community College v. Katz

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Central Virginia Community College v. Katz
6th Cir. 2004); cert. granted, 544 U.S.
960 (2005).
Holding
A bankruptcy trustee's proceeding to set aside the debtor's preferential transfers to state agencies is not barred by sovereign immunity.
Court membership
Chief Justice
John Roberts
Associate Justices
John P. Stevens · Sandra Day O'Connor
Antonin Scalia · Anthony Kennedy
David Souter · Clarence Thomas
Ruth Bader Ginsburg · Stephen Breyer
Case opinions
MajorityStevens, joined by O'Connor, Souter, Ginsburg, Breyer
DissentThomas, joined by Roberts, Scalia, Kennedy
Laws applied
U.S. Const. Art. I § 8

Central Virginia Community College v. Katz, 546 U.S. 356 (2006), is a

Article I power to authorize individuals to sue states, the others being PennEast Pipeline Co. v. New Jersey and Torres v. Texas Department of Public Safety
.

Background

In England, sovereign immunity referred to the concept that the king could not be sued without his consent. Beginning with

Seminole Tribe v. Florida
.

Wallace's Bookstores did business with Central Virginia Community College, an arm of the state. While it was insolvent, Wallace's Bookstores made certain preferential transfers of property to the state to satisfy debts. After Wallace's Bookstores filed for bankruptcy, Katz, the bankruptcy trustee, sued the state under 11 U.S.C. § 547
to recover those transfers. The state raised sovereign immunity as a defense.

Oral arguments

Oral argument was held on October 31, 2005, with William E. Thro arguing for the petitioners and Kim Martin Lewis for the respondents.[1] During oral arguments, a light bulb exploded 44 feet (13 m) above the bench, showering the front of the court with small shards of glass. Chief Justice John Roberts, who had been on the court for less than a month, quipped that "it's a trick they play on new chief justices all the time," prompting laughter, "we're even more in the dark now than before."[2]

Opinion of the Court

In an opinion by

Justice Stevens, the Court rejected the state's claim of sovereign immunity.[3] The Court first noted that during the time the Articles of Confederation
were in effect, states often did not recognize another state's discharge of a person's debt. This patchwork of bankruptcy laws made it difficult for people in debt to get out of debtors' prison. In light of this history, the Court interpreted Congress' power under the Bankruptcy Clause to make "uniform laws on the subject of bankruptcies" to include the power to abrogate state sovereign immunity.

The Court stated early bankruptcy legislation also supported its interpretation of the Bankruptcy Clause. It noted that in 1800, when concerns for state sovereign immunity ran fervent, Congress, with no recorded objection, gave federal courts power to release debtors from state prison through the writ of habeas corpus.

In coming to its conclusion, the Court declined to follow

Seminole Tribe v. Florida
suggesting a contrary result.

Dissent

Justice Thomas, writing for himself and three other justices, argued the historical record indicated states did not give up their sovereign immunity under the Bankruptcy Clause. The dissenters would have followed the view that nothing in Article I abrogates state sovereign immunity.

References

  1. ^ "Supreme Court Docket No. 04-885". Supreme Court of the United States. Retrieved October 16, 2018.
  2. ^ Mears, Bill (December 28, 2005). "Chief Justice Roberts wins early praise". CNN. Retrieved October 16, 2018.
  3. ^ The Supreme Court, 2005 Term — Leading Cases, 120 Harv. L. Rev. 125 (2006).

External links

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