CENTRAL VA COMM. COLLEGE v. KATZ

Print this Page
Case Basics
Docket No. 
04-885
Petitioner 
Central Virginia Community College, et al.
Respondent 
Bernard Katz, Liquidating Supervisor for Wallace's Bookstores, Inc.
Advocates
(argued the cause for Petitioners)
(argued the cause for Respondent)
Tags
Term:
Facts of the Case 

Katz, the supervisor of a bookstore that declared bankruptcy, filed a suit to collect debts owed to the bookstore by Central Virginia Community College and several other schools operated by the state of Virginia. Katz also petitioned to prevent the schools from filing claims to collect money from the bookstore because of its bankruptcy status. The colleges argued that they could not be sued by Katz because of state sovereign immunity (which holds that a state must consent in order to be sued). The bankruptcy court disagreed, however, finding that Congress's authority under the Bankruptcy Clause of the Constitution (Article I Section 8) was sufficient to allow them to waive states' sovereign immunity in bankruptcy cases.

Question 

Does the Bankruptcy Clause of the U.S. Constitution (Article I Section 8), waive the states' sovereign immunity?

Conclusion 
Decision: 5 votes for Katz, 4 vote(s) against
Legal provision: Article 1, Section 8, Paragraph 4: Bankruptcy Clause

Yes. In a 5-4 decision written by Justice John Paul Stevens, the Court ruled that states cannot invoke sovereign immunity as a defense in bankruptcy proceedings. Rather than ruling on the power of Congress under the Bankruptcy Clause to waive states' immunity, as the bankruptcy court did, the Court held that ratification of the Clause itself involved a subordination of state sovereign immunity. The Court relied on the history and intent of the Bankruptcy Clause, which indicated that "the power to enact bankruptcy legislation was understood to carry with it the power to subordinate state sovereignty, albeit within a limited sphere." Justice Clarence Thomas wrote a dissent, which was joined by Justices Antonin Scalia and Anthony Kennedy and Chief Justice John Roberts.

Cite this Page
CENTRAL VA COMM. COLLEGE v. KATZ. The Oyez Project at IIT Chicago-Kent College of Law. 20 October 2014. <http://www.oyez.org/cases/2000-2009/2005/2005_04_885>.
CENTRAL VA COMM. COLLEGE v. KATZ, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2000-2009/2005/2005_04_885 (last visited October 20, 2014).
"CENTRAL VA COMM. COLLEGE v. KATZ," The Oyez Project at IIT Chicago-Kent College of Law, accessed October 20, 2014, http://www.oyez.org/cases/2000-2009/2005/2005_04_885.