Wednesday, January 25

Andrew #2 on Sov Imm

Andrew #2; Common Sense?

I recognize the historical rooting of state sovereign immunity, and that the principle was an unspoken backdrop against which the Constitution was framed. So, despite it being a completely unenumerated principle, except for the immunity of a state against suits from citizens of other states (11th amend), I don't think it jurisprudentially erroneous to allow the principle of state sovereign immunity into the argument. Otherwise, anyway, there would be no argument, right? Without the super-precedent of state sovereign immunity, Katz is and open/shut bankruptcy law case, and the only question is what already-distributed funds the administrator can collect.

I've always thought that, when considering most legal questions, one can apply common sense to guess at what the outcome will be; and then the legal analysis eventually catches up and arrives at the same result. For instance, when people get hurt, blame and distribution of costs for treatment can be very difficult to determine. Common sense tells us, if you should have avoided the hole, then you can't blame someone else...and sure enough that is the basic legal principle.

In any event, here: this bankruptcy case simply doesn't seem an appropriate place to assert sovereign immunity.

The rationale for maintaining sovereign immunity, in my mind, is the need to allow government to govern. The overwhelmingly consequential decision-making that government officials must perform is simply in a different field from the day-to-day private actors for which the legal system is built. The Constitution and state constitutions provide the rules for governments, and finding violations of those rule-books is the legitimate way to legally challenge fed/state/local governments.

But with this bankruptcy case, none of the above principles apply. The state universities simply got a check from a failing bookstore company...and, so far as I can tell, none of this had anything to do with governing. So why in the world should the state universities be treated differently from any other entity to whom the bookstore company distributed money in its last throes?

The majority decided that, during the Constitutional convention, the states ceded their otherwise immune status in the specific field of bankruptcy suits. Forget for a moment the precedents between us and the convention. Doesn't it simply make sense, if the Constitution contemplates a system wherein federal officials take control of what happens when a person goes broke but still has debts, that the system would be entirely silly if certain actors (states) that are quite certainly often involved in bankruptcy issues/debts/credits/finances* are simply exempt from the game? I just don't understand allowing such a glaring loophole. Oops, I'm going bankrupt. Well, might as well shell what I have out to my favorite state official as opposed to letting some judge collect and distribute fairly.

Commentators seem most perplexed with the squaring of Katz to Seminole Tribe, a case that would seem to disallow the result in Katz--holding that the 11th Amendment prevents Congress, acting pursuant to its Article I powers, from abrogating a state's sovereign immunity by subjecting it to suit in federal court without its consent. I don't think this is really the case. Seminole dealt with one provision, the Indian Commerce Clause; the stretching of 11th amendment into ALL of article 1 seems to me 1) simply dicta; and 2) classic judicial activism (my definition: wanting a result and getting it in spite of wisdom and intellectual honesty...that, and ignoring Congress and legislatures).

It seems to me the 11th amendment does what the 11th amendment says: citizen in state X can't sue state Y. Any further sovereign immunity must come by way of it being a bedrock principle built into the Court's precedent. In that context, I see no reason why not to take the approach of contemplating the common sense implications of writing and signing off of the bankruptcy clause.

A footnote in the Seminole addresses bankruptcy:

[a]lthough the copyright and bankruptcy laws have existed practically since our nation's inception . . . , there is no established tradition in the lower federal courts of allowing enforcement of those federal statutes against the States.

This opens a whole new bag of discussion, so I will only iceberg tip it for now: I get occasionally mystified by what I will call the established tradition fixation. This seems like a weird form of Constitutional relativism. If there was a tradition of something, it's cool? How about: if it's right/wrong, it is right/wrong. Either the framers contemplated surrendering state sovereign immunity on favor of a fair bankruptcy policy or not. If established tradition is another name for super-precedent, I am further confused. The proponents of established tradition jurisprudence, then, need another name; like, something can be super-precedent if people 200 years ago did it?! More on that sometime later.


*States play a major role in the bankruptcy process, appearing in many bankruptcy cases in a myriad of roles -- as priority tax creditor, secured creditor, unsecured creditor, police and regulatory authority, environmental creditor, landlord, guarantor, bondholder, leaseholder, and equity interest holder. Similarly, a debtor may have a number of potential actions against a state, including a stay violation, preferences, turnover of property, and lien avoidance.