It's not often that I recommend an article as unhesitatingly as I do The Bankruptcy Clause by Stephen J. Lubben of Seton Hall School of Law (abstract here). (Of course, it's not likely that many of my readers will share my fascination with the intersection of bankruptcy and constitutional law.)
I won't summarize Lubben's work except to report that it's consistent with (although in much more depth) than what I found in the research for my article, The Missing Piece of the Puzzle: Perspectives on the Wage Priority in Bankruptcy (abstract here). I will, however, draw attention to two of Lubben's conclusions. First, and consistent with what I report in Third Time's the Charm (abstract here), when modern courts write of the English roots of bankruptcy in equity, they should not be understood to be referring to the historical scope of equitable remedies administered by the Courts of Chancery. Instead, as Lubben writes:
Indeed, but for the protections afforded by the Fifth Amendment to the interests of secured creditors in property and one holding that insolvency legislation for a single railroad violated the "uniformity" required of bankruptcy legislation, there seems to be little limit to judicial approval for Congressional action under the Bankruptcy Clause. What this suggests for the constitutionality of Title II of Dodd-Frank is obvious.
In short, The Bankruptcy Clause is an excellent work parts of which my future bankruptcy students might expect to read.
I won't summarize Lubben's work except to report that it's consistent with (although in much more depth) than what I found in the research for my article, The Missing Piece of the Puzzle: Perspectives on the Wage Priority in Bankruptcy (abstract here). I will, however, draw attention to two of Lubben's conclusions. First, and consistent with what I report in Third Time's the Charm (abstract here), when modern courts write of the English roots of bankruptcy in equity, they should not be understood to be referring to the historical scope of equitable remedies administered by the Courts of Chancery. Instead, as Lubben writes:
While it is often said that modern bankruptcy courts are "courts of equity," this reflects a misunderstanding of the process that has from inception statutory and bureaucratic. Bankruptcy commissions happened to be overseen by the same office that oversaw English chancery courts, but that did not create any equitable jurisdiction in the commissions.Second, and here's where my knowledge was substantially supplemented, there was no clear understanding of the borders of the Contracts Clause and the Bankruptcy Clause among the drafters of the Constitution, the ratifiers, and the courts (state and federal) during or after the Founding period. Notwithstanding the strong federalist views of Chief Justice John Marshall, even he was not able to command a majority of the Supreme Court clearly to conclude that the Bankruptcy Clause precluded the states from enacting any bankruptcy legislation nor that the Contracts Clause precluded all such state action. Not until the fourth decade of the 20th century did the judicial consensus on federal supremacy in bankruptcy fully mature
Indeed, but for the protections afforded by the Fifth Amendment to the interests of secured creditors in property and one holding that insolvency legislation for a single railroad violated the "uniformity" required of bankruptcy legislation, there seems to be little limit to judicial approval for Congressional action under the Bankruptcy Clause. What this suggests for the constitutionality of Title II of Dodd-Frank is obvious.
In short, The Bankruptcy Clause is an excellent work parts of which my future bankruptcy students might expect to read.
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