Defiance of Bankruptcy
Kenneth N. Klee
University of California, Los Angeles (UCLA) - School of Law
James O. Johnston
Hennigan, Mercer & Bennett
Stutman, Treister & Glatt
Vanderbilt Law Review, November 1999
This article examines the new doctrine of constitutional sovereign immunity, as well as Eleventh Amendment immunity, with a particular emphasis on bankruptcy law. After giving some examples of State defiance of bankruptcy law, the article reviews traditional limitations to sovereign immunity and discusses their viability or lack of viability in the wake of Seminole Tribe and Alden. Among other things, the article analyzes the scope of State protection, waiver of immunity in the wake of the Supreme Court's decision in College Savings, issuance of Ex parte Young injunctions, the possible In rem exception to sovereign immunity, and the Takings Clause.
The article concludes by proposing federal legislative solutions to overcome Seminole Tribe and Alden in the bankruptcy context. Specifically, the article considers but generally rejects reenactment of the Bankruptcy Code under the Fourteenth Amendment. The article recommends amendments to the Bankruptcy Code authorizing the United States trustee to sue in the name of the United States, providing for an automatic Ex parte Young injunction, and disallowing a State's claim absent waiver of immunity. The Spending Clause is also examined. The article concludes by applying principles of federalism to evaluate the proposed legislative solutions.
Date posted: August 3, 1999