[Update: Does this case suggest cries of stare decisis by various Democrats was cynical in nature? A bit -- the law does develop, and certain cases are not so well loved by liberals. But, it is about more than abortion -- many Warren/Burger Court opinions are at stake. So, be careful critics.]
The question in this case is whether the trustee may sue a State (or, in this case, a state university's bookstore, which is treated the same as the State for sovereign immunity purposes), to get back a preferential transfer. ... A bankruptcy trustee's proceeding to set aside the debtor's preferential transfers to state agencies is not barred by sovereign immunity. Pursuant to the Bankruptcy Clause, Congress may, at its option, either treat states in the same way as other creditors insofar as concerns "Laws on the subject of Bankruptcies" or exempt them from operation of such laws.
-- summary of Cent. Virginia Cmty. Coll. v. Katz
I referenced a case that was decided yesterday. It is interesting for various reasons, especially given Justice O'Connor was the swing vote -- there was another 5-4 decision so far this term, but it is dubious if Alito would decide it the other way. Thus, with the additional fact that Alito was voted out of the Senate Judiciary Committee today (10-8, party line ... shocker), perhaps further commentary is warranted.
The case was rather obscure -- during a bankruptcy proceeding, a bankruptcy trustee wished to sue a state university's (Central Virginia Community College) bookstore to get back what is known as a "preferential transfer." A bankruptcy proceeding attempts to treat all creditors in an equitable matter, thus when a debtor in some fashion treats one in a "preferential" matter by playing favorites in some fashion, the trustee is under obligation to deal with the problem. This includes ordering the preferred person or institution to surrender the portion given illegally. On the face of it, one doubts this one involved too much money. But, individual facts often are not the issue when the Supreme Court decides. The basic principle at stake is.
The issue here is state immunity from monetary lawsuits pursuant not only to the 11th Amendment (for as the Supremes notes in their more lucid moments, that amendment only deals with specific matters) but the "plan of the convention," namely original meaning as well as the inherent nature of state sovereignty never surrendered even after the Constitution was ratified. As with some petty suits involving free speech (surely not all NYT v. Sullivan in scope), surely some of the facts securing said principle would be -- and do seem -- trivial. And, the principle is not made up out of the thin air -- The Federalist itself references that states might be appalled to be subject to monetary lawsuits.
The question is the breadth of the principle, the corresponding national interests at stake. Though I personally do not find it horrible -- or in no way "essential" to state sovereignty per current doctrine -- requiring states to be subject to run of the mill monetary judgments is reasonably seen as something our Constitution seriously frowns upon as an original matter. [As I wrote elsewhere, fairness demands mention be made that the likes of Kennedy and O'Connor evenhandedly protects other unwritten rules such as the "right to privacy."] This is clearly the case when out of state litigants use the federal courts, though it seems to me that Chisholm v. Georgia followed the original concern that litigants -- including states -- would not follow through on their debt requirements. But, how far do we take this theme? Surely, once you go beyond mere personal jurisdiction questions of this nature, problems arise.
Jurisdiction -- court authority to say what the law is -- kicks in various ways. One important matter for federal courts is "federal questions" -- based not on who is involved, but the federal issue with constitutional significance. Thus, even after the Eleventh Amendment, the Marshall Court allowed suits against states when the national bank was involved. Justice Stevens and others note that this was a sound reading of the original meaning of said amendment, the wording of which was chosen over a broader proposed amendment which would be more universal in scope.
Therefore, for instance, to protect its commerce powers, Congress could make states subject to litigation. It would be "necessary and proper" in certain cases to do so, just as it is now deemed so when amendments ratified after the Eleventh ... as long as the Congress expressly notes that is what it is doing.
I find this proviso and general principle a bit strange. If "state dignity" is so threatened by monetary lawsuits that even in civil rights cases federal legislation has to expressly supply the intention to do so, why is the mere fact the Fourteenth Amendment (etc.) was ratified after the Eleventh a saving factor? By implication, the amendment was ratified with the understanding basic constitutional values would not be overridden unless "appropriate." Sure, the Civil War brought with it the assumption national power would now be more acceptable, but state immunity is fundamental to state sovereignty!
If monetary damages was required to uphold let us say the war power, would it not be allowed, but since the poll tax provision came later in the game, even a relatively mild violation could be dealt with in such a fashion? Justice Stevens, in fact, raised a somewhat similar question among the various state immunity dissents that graced the U.S. Reports since the mid-1990s. Among his parade of horribles was the issue of bankruptcy -- if Congress cannot, as the Supremes suggested, use monetary suits against states to uphold its commerce power, what is the stopping point? After all, bankruptcy is interlocked with commerce.
Justice O'Connor, as is her wont, saw a way to split the baby. [In fact, she announced the opinion, since Stevens was not available to do so. Appropriately, I also am about to read her new bio ... these things fall neatly in place.] Bankruptcy, especially the power to make it "uniform" -- to prevent one state from threatening debtors relieved of their obligations in another, etc. -- is somewhat special. As does the in rem (focusing on the debts) nature of the procedures, and so forth. And, history could be trumped out to suggest as much.
Thus, this case is one of many where the liberal justices (or less conservative) can on their own or via opinions written by others, use original understanding to their benefit. This suggests the flexibility of the process and why liberals should be a bit more open to it (other than references to Madison and such) when it furthers their interests. And, it often does. The dissenting four -- again, it is silly to decide this issue like this, especially a Court that thus far this year if anything went out of its way to decide things narrowly -- read the history another way. Well, nothing new there. And, I think to the degree they argued that bankruptcy is not so unique, they probably have a good case. But, the Stevens Four are willing to take half (or a piece) of the loaf, if that is what they can get.
Anyway, I am not so sure how much can be taken from this little case, though it does offer what I see as an appealing way to establish a somewhat middle course on federalism questions. Some might argue that said "course" is really a makeweight approach, arbitrary O'Connorism, allowing one to have their cake and eat it too. Well, sure, it can be ... if not done appropriately. But, and again the libertarian moves of the likes of Kennedy (dissenting here) suggests it is credible, this need not be an either/or matter. Sometimes, there should be limits on national power and more attention given to the states. But, federalism is a messy matter -- sometimes national interests do trump state power.
And, especially when forced to carefully spell it out (for some reason, the decision noted bankruptcy -- given its unique character -- is not such a case ... this case has the makings of a short lifespan) and kept from overreaching overall, yes, this sometimes includes monetary lawsuits. In practice, any number of other things costs states' money and prestige, so why is this so special? The ability -- with two centrist conservatives on board -- to hope for such reasonable decisions suggests a reason why the Alito nomination matters. The fact -- ridicule of some of his opinions by the usual suspects aside -- Justice Kennedy was among the dissenters here suggests his vote is one we should remain wary about.
The new bankruptcy legislation can even be raised here, especially since the opinion itself referenced the fairness that the Bankruptcy Clause was intended to bring. Likewise, it suggests how little cases like these results in real world consequences, consequences that require the right amount of balanced justice. Ah, but Alito is not balanced in that fashion ... his leanings are well known. They will be ignored or downplayed though as the Republicans vote along party lines (will one dissent? likely a few Dems will in effect as well, so no biggie) as a few key leaders in their party voice their "concern" for the overreaching of the President in the national security warrant tap matter and so forth.
Give me $1 instead -- it will get me a cup of coffee at least, instead of nothing as all. The "concern" of Bill Clinton was ridiculed, but we are supposed to respect said concern here while they do nothing really worth mentioning (anti-torture? well, that is only provisional, don't you know?) to actually DO ANYTHING to limit executive power. One interesting number: over a thousand subpoenas by Congress to investigate Clinton in five years from 1997-2002, three so far for Dubya. Instead, the Republicans provide a rubber stamp, Judge Alito but the most recent. I am sure he will respect the "dignity" of the states ... the dignity of the Constitution overall?
Well, as President Bush etc. noted, that is not important in a post-9/11 world. To say otherwise is in effect to give "aid and comfort" to the enemy. A bankruptcy decision might be the little obscure thing Justice Alito will spend much of his time being concerned about, but his confirmation will be one more slap against the principles of justice the decision handed down yesterday reminded us the Bankruptcy Clause secures, even against the dignity of the powers that be.