Why the Bankruptcy Court Ruling Matters

In a recent ruling by the Central District of California’s Bankruptcy Court division, a nearly-unanimous block of 20 judges signed on to an opinion holding that the federal Defense of Marriage Act is unconstitutional. The issue arose when a married same-sex couple in California elected to file a joint bankruptcy petition – which can be beneficial and result in some cost-savings for some couples in debt. Predictably the bankruptcy trustee rejected the filing on the grounds that DOMA precluded any recognition of their same-sex marriage, and the couple filed an appeal. Typically only one judge signs an appeal decision, but in this case 20 out of the court’s 23 judges joined in the opinion.

In simple terms the judges ruled that DOMA violates the constitutional equal protection clause. They said that there is no rational basis for the law, focusing on the obvious truth that allowing a couple to file a joint bankruptcy petition could not have any effect on anyone else’s marriage. They focused on the structure of the bankruptcy process, and concluded that none of the reasons cited by Congress in passing DOMA made any sense in the context of the debtor protection laws.

While the practical impact of this ruling may be slight – and the financial implications are rather minor – the symbolic importance is enormous. Bankruptcy judges are not considered flaming radicals or “activist” judges, and the mundane world of creditor-debtor relations is not usually seen as a hotbed of political controversy. But this ruling reveals the many practical consequences of a law that has no legal merit – and hopefully will help pave the way to its demise, either judicially or legislatively.

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