Page 25 - John Hundley 2011

Sharp Thinking

No. 53 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. October 2011

Bankruptcy Courts Prove Surprisingly

Hostile to “Defense of Marriage” Act

By John T. Hundley, Jhundley@lotsharp.com, 618-242-0246

The federal “Defense of Marriage” Act, Pub. L. 104-199, 110 Stat. 2419, codified in pertinent part at 1
U.S.C. § 7 (“DOMA”), has received an unpleasant welcome from an unexpected quarter – the nation’s
bankruptcy courts.

That act defines the term “spouse” for purposes of federal law as “a person of the opposite sex who is
a husband or a wife.” It also defines “marriage” as “only a legal union between one man and one woman
as husband and wife.”

DOMA has raised its head in bankruptcy proceedings by virtue of 11 U.S.C. § 302(a), which permits
filing of a joint bankruptcy petition “by an individual that may be a debtor under such chapter and such
individual’s spouse.” Although President Obama has ordered the Executive Branch to stop
enforcing DOMA, in at least two recent cases personnel from the office of the United States
Trustee (“UST”) have moved to dismiss joint bankruptcy petitions filed
by gay and lesbian married couples. In re Somers, 448 B.R. 677 (Bankr.
S.D.N.Y. 2011), and In re Balas, 449 B.R. 567 (Bankr. C.D. Cal. 2011).

In Somers, the debtors were legally married in a Vermont ceremony and
shortly thereafter filed a joint petition under Chapter 7 of the Bankruptcy Code
(11 U.S.C. §§ 701 et seq.). The UST moved to dismiss “for cause” under 11
U.S.C. § 707(a). Although DOMA bears little resemblance to the express
“cause” grounds stated in § 707(a), the court noted those grounds are
“illustrative, not exhaustive,” and declined to reject the motion on that ground.
It also said that In re Favre, also known as In re Allen, 186 B.R. 769 (Bankr.
N.D. Ga. 1995), had appeared to say that if a legally-married, same-sex couple
were involved, a joint petition would be proper, but Favre was a pre-DOMA
case and such comments were dicta, so Favre was not controlling. Hundley

While the bankruptcy court thus had to move to the merits, it declined to undertake the full-fledged
review of the validity of DOMA which the Balas court subsequently issued. Instead, Somers viewed the
motion before it as involving a degree of discretion. Citing a leading bankruptcy treatise, it said a
court exercising discretion under § 707(a) “must consider any extenuating circumstances as well as the
interests of various parties.” It found that the interests of neither debtors nor creditors would be served by
dismissal or severance (in part because the bankruptcy case had proceeded a significant way on its
course through Chapter 7), and it said that the facts that the Executive Branch was no longer defending
DOMA and that the UST provided no significant supporting rationale in the instant case were important
“extenuating circumstances” supporting denial of the UST’s motion.

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