Same-Sex Marriage Recognized as Valid in Non-Recognition State for Purposes of Interpreting the Bankruptcy Code

by Pullman & Comley, LLC
Contact

As a result of two Federal trial court decisions issued May 19, 2014 and May 20, 2014, Oregon and Pennsylvania became the 18th and 19th states where gay and lesbian couples can legally marry.  In these decisions, U.S. District Court Judges held that because the prohibitions on same sex marriage in Oregon and Pennsylvania discriminate without a compelling state interest on the basis of sexual orientation, the laws violate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. 

These rulings are the 12th and 13th federal trial court rulings since last summer’s U.S. Supreme Court ruling in United States v. Windsor, in which the Court held the federal Defense of Marriage Act’s (“DOMA”) provision barring federal recognition of lawful same-sex marriages to be unconstitutional.  Despite the growing trend to permit same-sex marriage, there are still many states in which gay and lesbian couples are barred from marrying. Naturally, this split in the law poses legal issues when lawfully married same-sex couples cross state lines and are seek certain federal benefits in “non-recognition” states.

U.S. v. Windsor

The Supreme Court in the Windsor case invalidated Section 3 of DOMA which limited the definition of “marriage” for all purposes of federal law defined for all federal law purposes “marriage” as a legal union between a man and woman only, and “spouse” as a person of the opposite sex who was a husband or a wife.  These definitions apply to well over 1,000 federal statutes and regulations relating to spouses and marriages including, the federal, tax, immigration and bankruptcy statutes.  The Windsor decision is undoubtedly a groundbreaking and historic decision for our country and our society. But as a practical matter, it created a quandary because not all states recognize same-sex marriage and same-sex spouses.  Any lawfully married same-sex couple that relocates to a state that doesn’t recognize same-sex marriage faces uncertainty about which federal benefits they will be entitled to receive if the entitlement depends upon an individual occupying the status of “spouse.” As a result of the ambiguity created by the Windsor case, federal law practitioners are now speculating about what a court in a non-recognition state may do when called upon to  interpret what “spouse” and “marriage” mean for purposes of applying federal law in a non-recognition state.

In re Matson

Ten months following the Windsor decision, the U.S. Bankruptcy Court in the Eastern District of Wisconsin was confronted with the issue of whether debtors who were legally married in Iowa but resided in Wisconsin are “spouses” in Wisconsin for purposes of the requirement in the Bankruptcy Code that a joint case can only be filed by an individual and an individual’s “spouse.”  In re Matson, 2014 WL 1678989 (Bankr. E.D. Wis. 2014). 

The issue arose in Matson because Section 2 of DOMA, which provides that “no state shall be required to give effect to any public act, record, or judicial proceeding respecting a relationship between persons of the same sex,”  remains valid notwithstanding the holding in the Windsor case.  This section was not at issue in Windsor because the dispute arose in a state that recognized same-sex marriage in another jurisdiction.  Consequently, Section 2 of DOMA creates the uncertainty of interstate recognition of same-sex marriages in non-recognition states in various contexts, such as the bankruptcy filing by the debtors in Matson

Interestingly, the Bankruptcy Court’s analysis of what constitutes a “spouse” for bankruptcy purposes did not involve an equal protection or substantive due process analysis. Rather, the court found this issue to be more appropriately a routine matter of choice of law principles.  The court explained that because Wisconsin doesn’t recognize a valid same-sex marriage performed in another state, which is a legal position allowable under Section 2 of DOMA, Wisconsin wasn’t required to treat the debtor couple as married in any way. 

However, the court also concluded that although Section 2 of DOMA applies to states, it does not apply to federal courts.  As the Bankruptcy Code is silent as to which state law to apply when determining the validity of a party’s marriage, the court found that it is well-settled law that the validity of a marriage is governed by the law of the place where it was celebrated.  Citing  recent Internal Revenue Service and immigration rulings, the court noted that the federal government generally has relied on the “place of celebration” rule to determine who is married.

Following the “place of celebration” rule, the court held that when interpreting the Bankruptcy Code, the Iowa out-of-state marriage must be recognized as valid in Wisconsin even notwithstanding Wisconsin’s ban on same-sex marriage and notwithstanding Section 2 of DOMA.  The court explained that even if Wisconsin wasn’t required to recognize the debtors’ marriage because it conflicts with current Wisconsin state law, it is required under the Full Faith and Credit Clause of the U.S. Constitution to recognize and apply Iowa’s same-sex marriage law for purposes of federal law.  Since the debtor couple was lawfully married in Iowa, and because Windsor invalidated DOMA’s requirement that legal construction of the word “spouse” for purposes of defining federally conferred benefits refer only to opposite-sex couples, the court deemed the debtor couple “spouses” for purposes of the Bankruptcy Code.  Accordingly, the bankruptcy court held that the couple did satisfy the Bankruptcy Code’s requirement that a joint bankruptcy case may only be filed by an individual and the individual’s “spouse.”

Because Connecticut recognizes same-sex marriage, the issue in Matson will never arise in a Connecticut bankruptcy court.  Nevertheless, the decision is important because all federal law practitioners now have some insight into how a federal court in a non-recognition state might treat their same-sex clients who lawfully married in a recognition state, but are contemplating relocation to a non-recognition state.  

Matson is not binding on courts in non-recognition states. But, it reached the type of fair result that the LGBT community and its supporters hope courts will follow. As United States District Court Judge Michael McShane so eloquently stated in his May 19th decision invalidating Oregon’s ban on same-sex marriage:

“I believe that if we can look for a moment past gender and sexuality, we can see in these plaintiffs nothing more or less than our own families. Families who we would expect our Constitution to protect, if not exalt, in equal measure. With discernment we see not shadows lurking in closets or the stereotypes of what was once believed; rather, we see families committed to the common purpose of love, devotion, and service to the greater community.  …Where will this all lead? I know that many suggest we are going down a slippery slope that will have no moral boundaries. To those who truly harbor such fears, can only say this: Let us look less to the sky to see what might fall; rather, let us look to each other and rise.”

Reprinted with permission from the June 16th issue of Connecticut Law Tribune. ©2014 ALM Properties, Inc.  Further duplication without permission is prohibited.  All rights reserved

[View source.]

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pullman & Comley, LLC | Attorney Advertising

Written by:

Pullman & Comley, LLC
Contact
more
less

Pullman & Comley, LLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.