When Does Some Federal Interest Require a Different Result?: An Essay on the Use and Misuse of Butner v. United States

18 Pages Posted: 3 Jun 2014 Last revised: 22 Jul 2015

See all articles by Juliet M. Moringiello

Juliet M. Moringiello

Widener University - Commonwealth Law School

Date Written: June 3, 2014

Abstract

Thousands of judges and scholars have relied on the statement in the 1979 Supreme Court opinion in Butner v. United States that “property interests are created and defined by state law...unless some federal interest requires a different result.” Often, they cite to the statement as a policy constraint that elevates state property law over federal bankruptcy law. This Essay, written for the American Bankruptcy Institute – University of Illinois Symposium on Chapter 11 Reform, posits that the Butner rule is not as broadly applicable as commonly believed. To do so, the Essay surveys some notable uses and misuses of the Butner rule in the 35 years since the case was decided and concludes that so long as Congress clearly states a federal purpose for modifying a party’s state law property rights at the moment a bankruptcy case is filed, such a modification is permissible.

Keywords: Butner, property, property law, property rights, federal bankruptcy law, land use, real estate law, contracts, commercial law, reorganization, creditors

JEL Classification: K11, K12

Suggested Citation

Moringiello, Juliet M., When Does Some Federal Interest Require a Different Result?: An Essay on the Use and Misuse of Butner v. United States (June 3, 2014). 2015 U. Ill. L. Rev. 657; Widener Law School Legal Studies Research Paper No. 14-16. Available at SSRN: https://ssrn.com/abstract=2445584

Juliet M. Moringiello (Contact Author)

Widener University - Commonwealth Law School ( email )

3800 Vartan Way
Harrisburg, PA 17110-9380
United States
717-541-3917 (Phone)

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