States Rights and the Bankruptcy Code

Journal Issue

Nov 2003

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Whenever decisions of one court are reviewed by another, a percentage of them are reversed. That reflects a difference in outlook normally found between personnel comprising different courts. However, reversal by a higher court is not proof that justice is thereby better done. There is no doubt that if there were a super-Supreme Court, a substantial proportion of our reversals...would also be reversed. We are not final because we are infallible, but we are infallible only because we are final. 
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3… v. Allen, 344 U.S. 443, 540 (1953)</a> (Jackson, concurring).
</blockquote>

The fallibility of the U.S. Supreme Court, which was so candidly acknowledged by one of its most prominent
members half a century ago, is evident today in a line of its federalism cases. Beginning in 1996, the U.S. Supreme
Court's Eleventh Amendment jurisprudence has essentially closed the courthouse door to persons who may have a
cause of action against a state under a variety of federal laws, unless the state specifically consents to be sued. The
Court has held that Congress lacks the general power to make the states accountable in court for violating federal
laws under some of its Article I powers, even while recognizing that Congress may, in some cases, abrogate this
immunity under §5 of the Fourteenth Amendment. The Rehnquist Court is essentially breathing new life into "state
rights" doctrines that were rejected long ago.

Five U.S. Courts of Appeals first broadly applied Seminole Tribe and its progeny in a bankruptcy context
and held that Congress is powerless to eliminate state sovereign immunity in bankruptcy.<a href="#2" name="2a">2</a> The sixth court to do
so, the U.S. Court of Appeals for the Sixth Circuit applied a more detailed analysis and held that the founding
fathers fully intended to grant Congress the authority to create a uniform system of bankruptcy laws applicable to
the states. This article argues that the reasoning of the Sixth Circuit is legally and historically sound, and should be
adopted as the rule of law by other federal courts.

<h3>Seminole Tribe</h3>

The U.S. Supreme Court's 1996 decision in Seminole Tribe of Florida v. Florida held "for the first time since the
founding of the Republic that Congress has no authority to subject a state to the jurisdiction of a federal court at
the behest of an individual asserting a federal right." The Seminole Tribe case involved a controversy over the Indian
Gaming Regulatory Act, passed by Congress pursuant to the Indian Commerce Clause of Article I. The Gaming Act
allowed an Indian tribe to conduct specific gaming activities only if it had a valid compact with the state in which
the gaming activities were located. Under the Gaming Act, each state had a duty to engage in good-faith
negotiations with tribes residing within its borders to form a compact. If a state failed to do so, tribes were allowed
to sue the state in federal court to compel performance of the duty to negotiate.

The state of Florida was sued in federal court by the Seminole tribe for violating the good-faith negotiation
clause. Florida and its governor moved to dismiss the complaint on the ground that the suit violated Florida's
sovereign immunity from suit in federal courts. The district court denied the motion, but the appeals court reversed,
holding that Congress did not have the power under the Article I Indian Commerce Clause to abrogate the states'
Eleventh Amendment immunity. By a 5-4 vote, the U.S. Supreme Court affirmed.

In dissent, Justice Stevens warned that the "majority's opinion does not simply preclude Congress from
establishing the rather curious statutory scheme under which Indian tribes may seek the aid of a federal court to
secure a state's good-faith negotiations over gaming regulations. Rather, it prevents Congress from providing a federal forum for a broad range of
actions against states from those sounding in copyright and patent law to those concerning bankruptcy,
environmental law and the regulation of our vast national economy." The concerns raised by Justice Stevens were
well-founded, as noted above, as a lower court applied Seminole Tribe to prevent the state from being forced to
participate in the bankruptcy process against its will.

Chief Justice Rehnquist's response, set forth in footnote 16 to the majority decision, essentially agreed
with the conclusion that the decision would adversely affect the ability of debtors to bring a state into bankruptcy
court. Without discussing the language of §106 of the Bankruptcy Code and a number of decisions from the lower
courts, Chief Justice Rehnquist advised that "it has not been widely thought that the federal antitrust, bankruptcy or
copyright statutes abrogated the states' sovereign immunity." The Chief Justice was simply wrong, given the text of
§106 of the Bankruptcy Code, which specifically abrogates the very sovereign immunity he says was not abrogated
by the bankruptcy laws.

<h3>The Bankruptcy Clause and º106</h3>

Article I of the Constitution gives Congress the power to pass laws to "establish...uniform laws on the
subject of bankruptcies throughout the United States." Thus, the text of the bankruptcy clause contains a uniformity
requirement generally not found elsewhere in the litany of powers given to the legislative branch. Beginning in
1800, Congress has exercised its bankruptcy power to create five successive systems of bankruptcy laws—the
Bankruptcy Act of 1800,<a href="#3" name="3a">3</a> the Bankruptcy Act of 1841,<a href="#4" name="4a">4</a> the Bankruptcy Act of 1867,<a href="#5" name="5a">5</a> the Bankruptcy Act of
1898<a href="#6" name="6a">6</a> and the Bankruptcy Reform Act of 1978, which created the current Bankruptcy Code.

In the Bankruptcy Reform Act of 1978 and subsequent amendments, Congress promulgated §106 of
the Code, which unequivocally attempted to eliminate, in many contexts, the sovereign immunity to which
the federal and state governments might otherwise be entitled. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… U.S.C. §106</a>. In full, §106 reads as
follows:

<blockquote>
(a) Notwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a
governmental unit to the extent set forth in this section with respect to the following:
<blockquote>
(1) Sections 105, 106, 107, 108, 303, 346, 362, 363, 364, 365, 366, 502, 503, 505, 506, 510,
522, 523, 524, 525, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 722, 724, 726,
728, 744, 749, 764, 901, 922, 926, 928, 929, 944, 1107, 1141, 1142, 1143, 1146, 1201, 1203,
1205, 1206, 1227, 1231, 1301, 1303, 1305 and 1327 of this title. 
(2) The court may hear and determine any issue arising with respect to the application of such
sections to governmental units. 
(3) The court may issue against a governmental unit an order, process or judgment under such
sections or the Federal Rules of Bankruptcy Procedure, including an order or judgment awarding a
money recovery, but not including an award of punitive damages. Such an order or judgment for
costs or fees under this title or the Federal Rules of Bankruptcy procedure against any governmental
unit shall be consistent with the provisions and limitations of §2412(d)(2)(A) of Title 28. 
(4) The enforcement of any such order, process or judgment against any governmental unit shall be
consistent with appropriate non-bankruptcy law applicable to such governmental unit and, in the
case of a money judgment against the United States, shall be paid as if it is a judgment rendered by
a district court of the United States. 
(5) Nothing in this section shall create any substantive claim for relief or cause of action not otherwise
existing under this title, the Federal Rules of Bankruptcy Procedure or non-bankruptcy law.
</blockquote> 
(b) A governmental unit that has filed a proof of claim in the case is deemed to have waived sovereign
immunity with respect to a claim against such governmental unit that is property of the estate and that arose
out of the same transaction or occurrence out of which the claim of such governmental unit arose. 
(c) Notwithstanding any assertion of sovereign immunity by a governmental unit, there shall be offset against a
claim or interest of a governmental unit any claim against such governmental unit that is property of the estate.
</blockquote>

While the text of §106 leaves no doubt that Congress intended to abrogate the sovereign immunity of government
units in a variety of contexts, the Seminole Tribe line of authorities calls into question the legitimacy of Congress's
power to do so. However, a careful review of constitutional history, such as that recently employed by the Sixth
Circuit in In re Hood (Hood v. Tennessee Student Assistance Corp.),<a href="#7" name="7a">7</a> clearly establishes that Congress had full
authority under its bankruptcy power to eliminate state sovereign immunity in bankruptcy cases.

In In re Hood, the Tennessee Student Assistance Corporation (TSAC) appealed from a Bankruptcy
Appellate Panel's decision denying its motion to dismiss a debtor's petition for a hardship discharge of her student
loan for lack of jurisdiction. On appeal, TSAC argued that the Constitution's Bankruptcy Clause, Art. I, §8, did
not give Congress the power to abrogate states' sovereign immunity pursuant to <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… U.S.C. §106(a)</a>. Rather than
rejecting or distinguishing the Supreme Court's Seminole Tribe reasoning, the Sixth Circuit embraced it. Applying

Seminole Tribe, the Hood Court nevertheless concluded that the bankruptcy clause of the Constitution bestowed
upon Congress the power to abrogate states' sovereign immunity.

The Hood Court began its analysis by recounting the parameters of the Eleventh Amendment, which
provides:

<blockquote>
The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or
prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign
state.
</blockquote>

<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=U…. Const. Amend. XI</a>. The text of the Eleventh Amendment, and the manner in which it has been interpreted,
extend its scope to preclude not only suits against a state by a citizen of another, but also bars federal jurisdiction to
suits against a state by its own citizens.<a href="#8" name="8a">8</a> As a result, a private lawsuit against a state may be heard in federal court
"only if the state waives its sovereign immunity or if Congress, acting pursuant to a valid constitutional authority,
abrogates the state's sovereign immunity."

The Sixth Circuit noted that the question of whether Congress may validly abrogate state sovereign
immunity requires a two-step analysis, as set forth in a series of cases that began with Seminole Tribe and extended
to Alden v. Maine,<a href="#9" name="9a">9</a> wherein the Supreme Court extended Seminole Tribe to limit Congress's powers with respect
to suits in state court as well. The first step in the Seminole Tribe analysis is to examine whether Congress
adequately expressed its intent to abrogate the states' immunity from suit. Section 106 of the Bankruptcy Code
specifically abrogates the states' immunity. Thus, the Sixth Circuit focused largely on the second step in the
Seminole Tribe analysis, namely a historical inquiry into whether the framers of the Constitution intended to
bestow upon Congress the power to bring the states into federal court, by looking at The Federalist Papers and
other statements of the framers. Rather than simply basing its decision on Seminole Tribe's broad language
prohibiting Congress from abrogating state sovereign immunity pursuant to its Article I powers, the Hood Court
examined Congress's bankruptcy clause power as understood in the Constitutional Convention.

The Hood Court was careful to note that its analysis was not based in any way on the text of the Eleventh
Amendment, because "immunity from suit is a fundamental aspect of the sovereignty which the states enjoyed
before the ratification of the Constitution, and which they retain today...except as altered by the plan of the
Convention or certain constitutional amendments."<a href="#10" name="10a">10</a> The Eleventh Amendment "sought only to restore, not
change, the structure established at the Convention that was apparently distorted by the Supreme Court's decision in
Chisholm v. Georgia"<a href="#11" name="11a">11</a> in 1793.

Turning to the text of the Bankruptcy Clause, the Hood Court observed that the states' grant to the
federal government of power to make uniform laws on the subject of bankruptcy is, "at least to some extent,
inconsistent with states retaining the power to make laws over that issue." The difference between the
bankruptcy clause and other powers bestowed on the federal government is the uniformity language:

<blockquote>The peculiar terms of the grant certainly deserve notice. Congress is not authorized merely to pass laws, the
operation of which shall be uniform, but to establish uniform laws on the subject throughout the United States.
This establishment of uniformity is, perhaps, incompatible with state legislation, on that part of the subject to
which the acts of Congress may extend.<a href="#12" name="12a">12</a></blockquote>

While the Supreme Court has limited the ability of Congress to abrogate state sovereign immunity as part of a
legislative preference for uniformity,<a href="#13" name="13a">13</a> the Hood Court observed that the question before it was "whether a
constitutional uniformity requirement itself authorizes Congress to abrogate state sovereign immunity." The answer
to that inquiry could only be found by examining the views of the framers of the Constitution.

Alexander Hamilton, a delegate to the Constitutional Convention from New York and, with John Jay and
James Madison, one of the authors of the Federalist Papers, which advocated for the ratification of the proposed
constitution, stated that the federal government had "exclusive jurisdiction" where the Constitution granted
Congress the power to make uniform laws. "This must necessarily be exclusive, because if each state had power to
prescribe a DISTINCT RULE, there could be no UNIFORM RULE." The Federalist No. 32 at 155 (Alexander
Hamilton) (George W. Carey & James McClellan, eds., 2001). The earliest federal cases similarly interpreted the
grant of power as exclusive, noting that laws could be uniform only if a single agent were issuing them.<a href="#14" name="14a">14</a> The
authority had to be exclusive, because any lesser grant would have defeated the bankruptcy clause's original purpose.

Prior to 1789, debtor-creditor relations in the new nation were chaotic. Each state had different bankruptcy
laws, and no state had to give effect to the consequence of a bankruptcy in another jurisdiction. This systemic
failure did not allow debtors a fresh start that bankruptcy policies seek. The justification for the grant of exclusivity
was to create a system that "rose above individual states' interests."

The Hood Court next examined whether, "in ceding some sovereignty with the bankruptcy clause, the
states ceded their legislative powers, but not their immunity, from suit." Turning again to The Federalist, the Hood Court concluded that the states discarded their immunity from suit along with their power to legislate when they
consented to the bankruptcy clause's uniformity provision.

The Sixth Circuit based its conclusion in part on Federalist No. 81, in which Hamilton discussed
sovereign immunity as follows:

<blockquote>
It is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent. This is
the general sense, and the general practice of mankind, and the exemption, as one of the attributes of sovereignty, is
now enjoyed by the government of every state in the union. Unless, therefore, there is a surrender of this immunity
in the plan of the convention, it will remain with the states, and the danger intimated must be merely ideal. The
circumstances which are necessary to produce an alienation of state sovereignty were discussed in considering the
article of taxation, and need not be repeated here.

</blockquote>

The Federalist No. 81, at 422 (Alexander Hamilton).

The article on taxation, to which Hamilton refers as identifying the situations in which states can be
said to "alienat[e]" their sovereignty, is Federalist No. 32, which states:

<blockquote>
[A]s the plan of the convention aims only at a partial union or consolidation, the state governments would clearly
retain all the rights of sovereignty which they before had, and which were not, by that act, exclusively delegated to
the United States. This exclusive delegation, or rather this alienation of state sovereignty, would only exist in three
cases: where the constitution in express terms granted an exclusive authority to the union; where it granted, in one
instance, an authority to the union, and in another, prohibited the states from exercising the like authority; and
where it granted an authority to the union, to which a similar authority in the states would be absolutely and totally
contradictory and repugnant.<a href="#15" name="15a">15</a>

</blockquote>

The Hood Court determined that "Hamilton's identification of the uniform powers as examples of categories in
which states have ceded sovereignty includes the ceding of immunity from suit." When read together, Federalist
No. 81 and No. 32 suggest that the states ceded their immunity by granting Congress the power to make uniform
laws. The Hood Court could find no conclusive evidence in the ratification debates to contradict its conclusion.

As a consequence of its statutory, constitutional and historical analysis, the Hood Court concluded that
§106 is constitutional, and allowed the debtor to proceed with her hardship discharge action. Its impact, however, is
more far-reaching. Hood stands for the proposition that constitutional questions call for a careful historical analysis,
not simplistic application of prior precedent. Its analysis of the original intent of the bankruptcy clause is
illuminating and well-reasoned, and should be adopted as a method of analysis by other courts.

<h3>Other Historical Support for the Hood Decision</h3>

States' rights advocates may, however, critique the Hood decision as not delving deep enough into
constitutional history. Further analysis of this type does not contradict the conclusion reached by the Hood Court,
but rather strongly supports its holding.

The subject of bankruptcy law was only briefly discussed during the Constitutional Convention of 1787.
Neither the "Virginia Plan" for a new constitution offered by Edmund Randolph<a href="#16" name="16a">16</a> nor the "South Carolina Plan"
submitted by Charles Pinkney,<a href="#17" name="17a">17</a> which were both shared with the Convention on May 29, 1787, contain any
recommendations to the effect that the federal government should be given the power to legislate in the area of
bankruptcy. As the delegates discussed the various problems facing the American people in the aftermath of the costly War for Independence, it soon became clear that debt-relief laws
of a national character were needed to ensure that domestic and foreign creditors, whose funds were sorely needed to
bolster interstate commerce, would be able to obtain a fair repayment from insolvent debtors free from the
difficulties associated with having to attempt collection under the diverse laws of 13 different states.

On Aug. 29, 1787, Pinkney suggested that a proposition "to establish uniform laws upon the subject of
bankruptcies, and respecting the damages arising on the protest of foreign bills of exchange" be added to the new
Constitution.<a href="#18" name="18a">18</a> The suggestion was sent to a subcommittee,<a href="#19" name="19a">19</a> which issued a favorable report on the
recommendation just three days later.<a href="#20" name="20a">20</a> The proposed bankruptcy clause was briefly debated by the Convention on
Monday, Sept. 3, 1878.<a href="#21" name="21a">21</a>

Few delegates opposed the idea of granting Congress the power to enact bankruptcy laws. Those who were
critical of the idea were concerned with the nature of the power involved and not necessarily of making bankruptcy a
federal concern. For example, Roger Sherman of Connecticut "observed that bankruptcies were in some cases
punishable with death by the laws of England [and] he did not [choose] to grant a power by which that might be
done in the United States."<a href="#22" name="22a">22</a> In reply, Governor Morris of Pennsylvania agreed that bankruptcy "was an extensive
[and] delicate subject. [However, he said he would agree to the proposal] because he saw no danger of abuse of the
power by the Legislature of the [United States]."<a href="#23" name="23a">23</a> With no more debate, the Convention approved the bankruptcy
clause by an overwhelming majority.<a href="#24" name="24a">24</a>

No one at the Convention mentioned the idea that states holding claims against the estate of a bankrupt
would not be subject to any uniform system of bankruptcy created by Congress.

James Madison, the father of the U.S. Constitution and a great champion of states' rights, did not see the
need to discuss the subject of state sovereign immunity when defending the propriety of the bankruptcy clause
during the ratification debates. In Federalist No. 41, Madison argued that uniform laws on the subject of
bankruptcies was among those laws "which provide for the harmony and proper intercourse among the states." The
Federalist, No. 41 at 282 (Madison) (Wesleyan University Press, 1961) (Jacob E. Cooke, ed.). Madison added that
the "power of establishing uniform laws of bankruptcy is so intimately connected with the regulation of commerce,
and will prevent so many frauds where the parties of their property may lie or be removed into different states, that
the expedient of it seems not likely to be drawn into question."<a href="#25" name="25a">25</a>

Few voices were raised in opposition to the bankruptcy clause. The only widely read Anti-Federalist who
discussed the subject at length, "the Federal Farmer," could not seem to make up his mind as to whether he was for
or against allowing Congress to exercise the bankruptcy power.

In some letters, The Federal Farmer seemed to say that he saw no problem in letting the federal
government have the power to enact bankruptcy laws.<a href="#26" name="26a">26</a> The Federal Farmer explained:

<blockquote>
I am not sufficiently acquainted with the laws and internal police of all the states to discern fully how general
bankrupt laws, made by the union, would affect them, or promote the public good. I believe the property of
debtors, in the several states, is held responsible for their debts in modes and forms very different. If uniform
bankrupt laws can be made without producing real and substantial inconveniences, I wish them to be made by
Congress.<a href="#27" name="27a">27</a>
</blockquote>

In a letter written on Jan. 25, 1788, some three months later, the Farmer took direct aim at the bankruptcy
clause and let both barrels fly:

<blockquote>
[I]t does not appear to me, on further reflection, that the union ought to have the power, it does not appear to me to
be a power properly incidental to a federal head, and, I believe, no one ever possessed it; it is a power that will
immediately and extensively interfere with the internal police of the separate states, especially with their
administering justice among their citizens. By giving this power to the union, we greatly expend the jurisdiction of
the federal judiciary, as all questions arising on bankrupt laws, being laws of the union, even between citizens of the
same state, may be tried in the federal courts; and I think it may be shown that by the help of these laws, actions
between citizens of different states, and the laws of the federal city, aided by no overstrained judicial fictions,
almost all civil causes may be drawn into those courts.<a href="#28" name="28a">28</a>
</blockquote>

The arguments made by the Federal Farmer illustrate that even opponents of the proposed U.S. Constitution
realized that the bankruptcy clause would give the federal government the power to interfere with "internal police of
the separate states," such as by subjecting them to the bankruptcy laws.

<h3>Conclusion</h3>

While many (including the author) believe that Seminole Tribe and the precedent applying it were
wrongly-decided, they remain the law of the land. The Sixth Circuit's decision In re Hood, however, demonstrates
that Seminole Tribe is not the end of the inquiry into whether Congress has the power to abrogate a state's
sovereign immunity, but merely provides a framework to analyze such questions from a statutory and historical
perspective. The Hood Court's conclusion that §106 and the bankruptcy clause provide Congress with sufficient
power to abrogate state sovereign immunity stands as a landmark decision, built on a firm historical foundation,
and should, itself, be adopted as the law of the land.

<hr>
<h3>Footnotes</h3>

<a name="1">1</a> Assistant U.S. Attorney, Southern District of Iowa; J.D. (1989) Washington University; M.A. (1986 -
Sociology) and B.A. (1984 - Journalism) Eastern Illinois University; former law clerk (1989-91) to the late
Hon. Frank W. Koger, U.S. Bankruptcy Judge, W.D. Mo. The views expressed in this article are solely those
of the author and should not be attributed to the U.S. Department of Justice, the U.S. Attorney for the Southern
District of Iowa or any other person or entity associated with him. This article is written with thanks to SPO and
AHK for their help with my "attention" project. <a href="#1a">Return to article</a>

<a name="2">2</a> See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3… v. La Crosse County Dist. Attorney (In re Nelson), 301 F.3d 820, 832 (7th Cir. 2002)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2… v. Franchise Tax Bd. (In re Mitchell), 209 F.3d 1111, 1121 (9th Cir. 2000)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… Heart Hosp. of
Norristown v. Pennsylvania (In re Sacred Heart Hosp. of Norristown), 133 F.3d 237, 243 (3d Cir. 1998)</a>;

<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… v. PNL Asset Mgmt. Co. LLC (In re Fernandez), 123 F.3d 241, 243 (5th Cir.), amended by 130 F.3d
1138, 1139 (5th Cir. 1997)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… v. Maryland (In re Creative Goldsmiths of Washington, D.C.), 119 F.3d
1140, 1145-46 (4th Cir. 1997)</a>. <a href="#2a">Return to article</a>

<a name="3">3</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of Apr. 4, 1800, ch. 19, 2 Stat. 19</a>, repealed by <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of Dec. 19, 1803, ch. 6, 2 Stat. 248</a>. <a href="#3a">Return to article</a>

<a name="4">4</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of Aug. 19, 1841, ch. 9, 5 Stat. 440</a>, repealed by <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of Mar. 3, 1843, ch. 82, 5 Stat. 614</a>. <a href="#4a">Return to article</a>

<a name="5">5</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of Mar. 2, 1867, ch. 176, 14 Stat. 517</a>, amended by <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of June 22, 1874, ch. 390, 18 Stat. 178</a>,

repealed by <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… of June 7, 1878, ch. 170, 20 Stat. 99</a>. <a href="#5a">Return to article</a>

<a name="6">6</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… Act, ch. 541, 30 Stat. 544 (1898)</a>, amended by <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=c… Act, ch. 575, 52 Stat. 840 (1938)</a>,
repealed by <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=N… of Nov. 6, 1978, Pub. L. No. 95-598, 92 Stat. 2549</a>. <a href="#6a">Return to article</a>

<a name="7">7</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3… F.3d 755 (6th Cir. 2003)</a>. <a href="#7a">Return to article</a>

<a name="8">8</a> See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… v. Louisiana, 134 U.S. 1 (1890)</a>. <a href="#8a">Return to article</a>

<a name="9">9</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5… U.S. 706 (1999)</a>. <a href="#9a">Return to article</a>

<a name="10">10</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…; 527 U.S. at 713</a>. <a href="#10a">Return to article</a>

<a name="11">11</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…; 527 U.S. at 722-23</a>. <a href="#11a">Return to article</a>

<a name="12">12</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… v. Crowninshield, 17 U.S. (4 Wheat.) 122 (1819)</a>. <a href="#12a">Return to article</a>

<a name="13">13</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5… Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999)</a>. <a href="#13a">Return to article</a>

<a name="14">14</a> "That the exercise of the power to pass bankrupt and naturalization laws by the state governments is
incompatible with the grant of a power to congress to pass uniform laws on the same subjects, is obvious, from the
consideration that the former would be dissimilar and frequently contradictory; whereas the systems are directed to
be uniform, which can only be rendered so by the exclusive power in one body to form them." <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1… v. Prince, 10
F. Cas. 542, 545 (C. C.D. Pa. 1814)</a> (B. Washington, Circuit Justice). <a href="#14a">Return to article</a>

<a name="15">15</a> The Federalist No. 32 at 155 (Alexander Hamilton). <a href="#15a">Return to article</a>

<a name="16">16</a> I Madison, The Journal of the Debates in the Convention Which Framed the Constitution of the United
States, May-September 1787 at 13-19 ((Hunt, ed.) (1908). The Virginia Plan, which was primarily written by James
Madison, is often referred to as the "Large States' Plan." <a href="#16a">Return to article</a>

<a name="17">17</a> I Madison at 19-31. The South Carolina Plan is also known as the "Small States Plan." The proposal for a
new constitution offered by Alexander Hamilton would have implicitly given Congress the power to enact
bankruptcy laws if it deemed them necessary. Article VII of the Hamilton Plan suggested that "[t]he Legislature of
the United States shall have power to pass all laws which they shall judge necessary to the common defence and
general welfare of the Union." <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; at 172</a>. <a href="#17a">Return to article</a>

<a href="#18" name="18a">18</a> II James Madison, The Journal of the Debates in the Convention Which Framed the Constitution of the
United States, May - September, 1787 at 267 ((Hunt, ed.) (1908). <a href="#18a">Return to article</a>

<a name="19">19</a> Id. at 267. <a href="#19a">Return to article</a>

<a name="20">20</a> Id. at 292. <a href="#20a">Return to article</a>

<a name="21">21</a> Id. at 294. <a href="#21a">Return to article</a>

<a name="22">22</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; <a href="#22a">Return to article</a>

<a name="23">23</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…; <a href="#23a">Return to article</a>

<a name="24">24</a> Nine states voted for the clause (New Hampshire, Massachusetts, New Jersey, Pennsylvania, Maryland,
Virginia, North Carolina, South Carolina and Georgia). Only Connecticut voted against it. Id. at 294. <a href="#24a">Return to article</a>

<a name="25">25</a> Id. at 287. <a href="#25a">Return to article</a>

<a name="26">26</a> Herbert Storing, 2 The Anti-Federalist at 229-230 (Letters from the Federal Farmer, Oct. 8, 1787). <a href="#26a">Return to article</a>

<a name="27">27</a> Id. at 243. <a href="#27a">Return to article</a>

<a name="28">28</a> 2 The Anti-Federalist at 344. <a href="#28a">Return to article</a>

Journal Authors

Craig Peyton Gaumer

Journal Date

Saturday, November 1, 2003 - 12:00

Bankruptcy Rule

2003