Lead Opinion
delivered the opinion of the Court.
Article I, § 8, cl. 4, of the Constitution provides that Congress shall have the power to establish “uniform Laws on the subject of Bankruptcies throughout the United States.” In Tennessee Student Assistance Corporation v. Hood,
Petitioners are Virginia institutions of higher education that are considered “arm[s] of the State” entitled to sovereign immunity. See, e. g., Alden v. Maine,
Bankruptcy jurisdiction, at its core, is in rem. See Gardner v. New Jersey,
It is appropriate to presume that the Framers of the Constitution were familiar with the contemporary legal context when they adopted the Bankruptcy Clause
We acknowledge that statements in both the majority and the dissenting opinions in Seminole Tribe of Fla. v. Florida,
II
Critical features of every bankruptcy proceeding are the exercise of exclusive jurisdiction over all of the debtor’s
The history of discharges in bankruptcy proceedings demonstrates that the state agencies’ concessions, and Hood’s holding, are correct. The term “discharge” historically had a dual meaning; it referred to both release of debts and release of the debtor\from prison. Indeed, the earliest English statutes governing bankruptcy and insolvency authorized discharges of persons, not debts. One statute enacted in 1649 was entitled “An Act for discharging Poor Prisoners unable to satisfie their Creditors.” 2 Acts and Ordinances of the Interregnum, 1642-1660, pp. 240-241 (C. Firth & R. Rait eds. 1911). The stated purpose of the Act was to “Discharge . . . the person of [the] Debtor” “of and from his or her Imprisonment.” Ibid. Not until 1705 did the English Parliament extend the discharge (and then only for traders and merchants) to include release of debts. See 4 Ann., ch. 17, §7,11 Statutes at Large 165 (D. Pickering ed. 1764) (providing that upon compliance with the statute, “all and every person and persons so becoming bankrupt... shall be discharged from all debts by him, her, or them due and owing at the time that he, she, or they did become bankrupt”); see also McCoid, Discharge: The Most Important Development in Bankruptcy History, 70 Am. Bankr. L. J. 163, 167 (1996).
Common as imprisonment itself was, the American Colonies, and later the several States, had wildly divergent schemes for discharging debtors and their debts. Id., at 79 (“The only consistency among debt laws in the eighteenth century was that every colony, and later every state, permitted imprisonment for debt — most on mesne process, and all on execution of a judgment”). At least four jurisdictions offered relief through private Acts of their legislatures. See Railway Labor Executives’ Assn. v. Gibbons,
The difficulties posed by this patchwork of insolvency and bankruptcy laws were peculiar to the American experience. In England, where there was only one sovereign, a single discharge could protect the debtor from his jailer and his creditors. As two cases — one litigated before the Constitutional Convention in Philadelphia and one litigated after it— demonstrate, however, the uncoordinated actions of multiple sovereigns, each laying claim to the debtor’s body and effects according to different rules, rendered impossible so neat a solution on this side of the Atlantic.
In the first case, James v. Allen,
In the second case, Millar v. Hall,
Responding to Millar’s counsel’s argument that the holding of James controlled, Ingersoll urged adoption of a rule that “the discharge of the Defendant in one state ought to be sufficient to discharge [a debtor] in every state.”
These two cases illustrate the backdrop against which the Bankruptcy Clause was adopted. In both James and Millar, the debtors argued that the earlier discharge should be given preclusive effect pursuant to the Full Faith and Credit Clause of the Articles of Confederation. See James,
The Convention adopted the Committee’s recommendation with very little debate two days later. Roger Sherman of Connecticut alone voted against it, apparently because he was concerned that it would authorize Congress to impose upon American citizens the ultimate penalty for debt then in effect in England: death. See J. Madison, Notes of Debates in the Federal Convention of 1787, p. 571 (Ohio Univ. Press ed. 1966). The absence of extensive debate over the text of the Bankruptcy Clause or its insertion indicates that there was general agreement on the importance of authorizing a uniform federal response to the problems presented in cases like James and Millar.
Ill
Bankruptcy jurisdiction, as understood today and at the time of the framing, is principally in rem jurisdiction. See Hood,
The text of Article I, § 8, cl. 4, of the Constitution, however, provides that Congress shall have the power to establish “uniform Laws on the subject of Bankruptcies throughout the United States.” Although the interest in avoiding unjust imprisonment for debt and making federal discharges in bankruptcy enforceable in every State was a primary motivation for the adoption of that provision, its coverage encompasses the entire “subject of Bankruptcies.” The power granted to Congress by that Clause is a unitary concept rather than an amalgam of discrete segments.
The Framers would have understood that laws “on the subject of Bankruptcies” included laws providing, in certain limited respects, for more than simple adjudications of rights in the res. The first bankruptcy statute, for example, gave bankruptcy commissioners appointed by the district court the power, inter alia, to imprison recalcitrant third parties in possession of the estate’s assets. See Bankruptcy Act of 1800, § 14,2 Stat. 25 (repealed 1803). More generally, courts adjudicating disputes concerning bankrupts’ estates historically have had the power to issue ancillary orders enforcing their in rem adjudications. See, e. g., 2 W. Blackstone, Commentaries on the Laws of England 486 (1766) (noting that the assignees of the bankrupt’s property — the 18th-century counterparts to today’s bankruptcy trustees — could “pursue any legal method of recovering [the debtor’s] property so vested in them,” and could pursue methods in equity with the consent of the creditors); Plank,
Our decision in Hood illustrates the point. As the dissenters in that case pointed out, it was at least arguable that the particular procedure that the debtor pursued to establish dischargeability of her student loan could have been characterized as a suit against the State rather than a purely in rem proceeding. See
The interplay between in rem adjudications and orders ancillary thereto is evident in the ease before us. Respondent first seeks a determination under 11 U. S. C. §547 that the various transfers made by the debtor to petitioners qualify as voidable preferences. The § 547 determination, standing alone, operates as a mere declaration of avoidance. That declaration may be all that the trustee wants; for example, if the State has a claim against the bankrupt estate, the avoidance determination operates to bar that claim until the preference is turned over. See § 502(d). In some cases, though, the trustee, in order to marshal the entirety of the
As we explain in Part IV, infra, it is not necessary to decide whether actions to recover preferential transfers pursuant to § 550(a) are themselves properly characterized as in rem.
IV
Insofar as orders ancillary to the bankruptcy courts in rem jurisdiction, like orders directing turnover of preferential transfers, implicate States’ sovereign immunity from suit, the States agreed in the plan of the Convention not to assert that immunity. So much is evidenced not only by the history of the Bankruptcy Clause, which shows that the Framers’ primary goal was to prevent competing sovereigns’ interference with the debtor’s discharge, see Part II, supra, but also by legislation considered and enacted in the immediate wake of the Constitution’s ratification.
Congress considered proposed legislation establishing uniform federal bankruptcy laws in the first and each succeeding Congress until 1800, when the first Bankruptcy Act was passed. See C. Warren, Bankruptcy in United States History 10 (1935) (“[I]n the very first session of the 1st Congress, during which only the most necessary subjects of legislation were considered, bankruptcy was one of those subjects; and as early as June 1, 1789, a Committee of the House was named to prepare a bankruptcy bill”). The Bankruptcy Act of 1800 was in many respects a copy of the English bankruptcy statute then in force. It was, like the English law, chiefly a measure designed to benefit creditors. Like the English statute, its principal provisions permitted
The American legislation differed slightly from the English, however. That difference reflects both the uniqueness of a system involving multiple sovereigns and the concerns that lay at the core of the Bankruptcy Clause itself. The English statute gave a judge sitting on a court where the debtor had obtained his discharge the power to order a sheriff, “Bailiff or Officer, Gaoler or Keeper of any Prison” to release the “Bankrupt out of Custody” if he were arrested subsequent to the discharge. 5 Geo. 2, ch. 30, ¶ 13 (1732). The American version of this provision was worded differently; it specifically granted federal courts the authority to issue writs of habeas corpus effective to release debtors from state prisons. See § 38, 2 Stat. 32; see also In re Comstock,
This grant of habeas power is remarkable not least because it would be another 67 years, after Congress passed the Fourteenth Amendment, before the writ would be made generally available to state prisoners. See Ex parte Royall,
This history strongly supports the view that the Bankruptcy Clause of Article I, the source of Congress’ authority to effect this intrusion upon state sovereignty, simply did not contravene the norms this Court has understood the Eleventh Amendment to exemplify. Cf. Blatchford v. Native Village of Noatak,
The ineluctable conclusion, then, is that States agreed in the plan of the Convention not to assert any sovereign immunity defense they might have had in proceedings brought pursuant to “Laws on the subject of Bankruptcies.” See Blatchford,
Y
Neither our decision in Hood, which held that States could not assert sovereign immunity as a defense in adversary proceedings brought to adjudicate the dischargeability of student loans, nor the cases upon which it relied, see
Congress may, at its option, either treat States in the same way as other creditors insofar as concerns “Laws on the subject of Bankruptcies” or exempt them from operation of such laws. Its power to do so arises from the Bankruptcy Clause itself; the relevant “abrogation” is the one effected in the plan of the Convention, not by statute.
The judgment of the Court of Appeals for the Sixth Circuit is affirmed.
It is so ordered.
Notes
A preferential transfer is defined as “any transfer of an interest of the debtor in property— '
“(1) to or for the benefit of a creditor;
“(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
“(3) made while the debtor was insolvent;
“(4) made—
“(A) on or within 90 days before the date of the filing of the petition; ór
“(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
“(5) that enables such creditor to receive more than such creditor would receive if—
“(A) the case were a case under chapter 7 of this title;
“(B) the transfer had not been made; and
“(C) such creditor received payment of such debt to the extent provided by the provisions of this title.” 11 U. S. C. § 547(b).
Respondent also instituted adversary proceedings against some of the petitioners to collect accounts receivable. He has, however, filed a letter with this Court indicating his intent not to pursue those claims further.
Section 106(a), as amended in 1994, provides in part as follows:
“Notwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a governmental unit . . . with respect to the following:
“(1) Sections 105,106,107,108, 303,346,362,363,364, 365,366,502, 503, 505, 506, 510, 522, 523, 524, 525, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 722, 724, 726, 728, 744, 749, 764, 901, 922, 926, 928, 929, 944, 1107, 1141, 1142, 1143,1146,1201, 1203, 1205,1206, 1227, 1231, 1301, 1303, 1305, and 1327 of this title.
“(2) The court may hear and determine any issue arising with respect to the application of such sections to governmental units.
“(3) The court may issue against a governmental unit an order, process, or judgment under such sections of the Federal Rules of Bankruptcy Procedure, including an order or judgment awarding a money recovery, but not including an award of punitive damages....”
The term “governmental unit” is defined to include a “State,” a “municipality,” and a “department, agency, or instrumentality of ... a State.” §101(27).
The above-quoted version of § 106(a) is the product of revisions made in the wake of some of our precedents. The Bankruptcy Reform Act of 1978, 92 Stat. 2549, contained a provision indicating only that “governmental unit[s],” defined to include States, were deemed to have “waived sovereign immunity” with respect to certain proceedings in bankruptcy and to be bound by a court’s determinations under certain provisions of the Act “notwithstanding any assertion of sovereign immunity.” Id., at 2555-2556. This Court’s decisions in Hoffman v. Connecticut Dept, of Income Maintenance,
In Cannon v. University of Chicago,
Imprisonment for debt was not abolished in England until 1869, and then only subject to certain exceptions. See Debtors Act, 1869, 32 & 33 Vict., ch. 62, §4; see also Cohen, The History of Imprisonment for Debt and its Relation to the Development of Discharge in Bankruptcy, 3 J. Legal Hist. 153,164 (1982).
The legislation widely acknowledged to be the first English bankruptcy statute, 34 &
“At the time of the Revolution, only three of the thirteen colonies ... had laws discharging insolvents of their debts. No two of these relief systems were alike in anything but spirit. In four of the other ten colonies, insolvency legislation was either never enacted or, if enacted, never went into effect, and in the remaining six colonies, full relief was available only for scattered, brief periods, usually on an ad hoc basis to named insolvents.” Coleman, Debtors and Creditors in America, at 14.
Ingersoll was admitted to the Philadelphia bar in. 1773 and elected a member of the Continental Congress in 1780. After serving as a delegate to the Constitutional Convention, he became a member of the Philadelphia Common Council. He served, as attorney general of Pennsylvania from 1790 to 1799 and again from 1811 to 1817. From March 1821 until his death in 1822 he served as a judge in the District Court for the City and County of Philadelphia. Among the cases he litigated before this Court was Chisholm v. Georgia,
The Committee of Detail was created by the Convention on July 25, 1787, to prepare a draft text of the Constitution based on delegates’ proposals.
Of course, the Bankruptcy Clause, located as it is in Article I, is “ ‘intimately connected’ ” not just with the Full Faith and Credit Clause, which appears in Article IV of the Constitution, but also with the Commerce Clause. See Railway Labor Executives’ Assn. v. Gibbons,
The proper characterization of such actions is not as clear as petitioners suggest. The Court in Nordic Village, Inc.,
The Judiciary Act of 1789 authorized issuance of the writ, but only to release those held in federal custody. See Haines, The Uniformity Power: Why Bankruptcy is Different, 77 Am. Bankr. L. J. 129, 179-181 (2003) (hereinafter Haines). Also, in the interim between 1800 and 1867, Congress authorized limited issuance of the writ in response to two crises it
Further evidence of the Framers’ intent to exempt laws “on the subject of Bankruptcies” from the operation of state sovereign immunity principles can be gleaned from §62 of the Bankruptcy Act of 1800. That section provided that “nothing contained in this law shall, in any manner, effect the right of preference to prior satisfaction of debts due to the United States as secured or provided by any law heretofore passed, nor shall be construed to lessen or impair any right to, or security for, money due to the United States or to any of them.” 2 Stat. 36. That Congress
Petitioners make much of precedents suggesting that the word “uniform” represents a limitation, rather than an expansion, of Congress’ legislative power in the bankruptcy sphere. See, e. g., Gibbons,
Petitioners’ logic is not persuasive. Although our analysis does not rest on the peculiar text of the Bankruptcy Clause as compared to other Clauses of Article I, we observe that, if anything, the mandate to enact “uniform” laws supports the historical evidence showing that the States agreed not to assert their sovereign immunity in proceedings brought pur
One might object that the writ of habeas corpus was no infringement on state sovereignty, and would not have been understood as such, because that writ, being in the nature of an injunction against a state official, does not commence or constitute a suit against the State. See Ex parte Young,
We do not mean to suggest that every law labeled a “bankruptcy” law could, consistent with the Bankruptcy Clause, properly impinge upon state sovereign immunity.
Cf. Hoffman,
Dissenting Opinion
dissenting.
Under our Constitution, the States are not subject to suit by private parties for monetary relief absent their consent or a valid congressional abrogation, and it is “settled doctrine” that nothing in Article I of the Constitution establishes those preconditions. Alden v. Maine,
The majority maintains that the States’ consent to suit can be ascertained from the history of the Bankruptcy Clause. But history confirms that the adoption of the Constitution merely established federal power to legislate in the area of bankruptcy law, and did not manifest an additional intention to waive the States’ sovereign immunity against suit. Accordingly, I respectfully dissent.
I
The majority does not appear to question the established framework for examining the question of state sovereign immunity under our Constitution. The Framers understood, and this Court reiterated over a century ago in Hans v. Louisiana,
“‘It is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent. This is the general sense and the general practice of mankind; and the exemption, as one of the attributes of sovereignty, is now enjoyed by the government of every State in the Union. Unless, therefore, there is a surrender of this immunity in the plan of the convention, it will remain with the States_’” Id., at 13 (quoting The Federalist No. 81, pp. 548-549 (J. Cooke ed. 1961) (hereinafter The Federalist No. 81); emphasis added and deleted).
See also Ex parte New York,
These principles were further reinforced early in our Nation’s history, when the people swiftly rejected this Court’s decision in Chisholm v. Georgia,
The majority finds a surrender of the States’ immunity from suit in Article I of the Constitution, which authorizes Congress “[t]o establish . . . uniform Laws on the subject of Bankruptcies throughout the United States.” §8, cl. 4. But nothing in the text of the Bankruptcy Clause suggests an abrogation or limitation of the States’ sovereign immunity. Indeed, as this Court has noted on numerous occasions, “[t]he Eleventh Amendment restricts the judicial power under Article III, and Article I cannot be used to circumvent the constitutional limitations placed upon federal jurisdiction.” Seminole Tribe, supra, at 72-73. “[I]t is settled doctrine that neither substantive federal law nor attempted congressional abrogation under Article I bars a State from raising a constitutional defense of sovereign immunity in federal court.” Alden, supra, at 748. See also Kimel v. Florida Bd. of Regents,
It is difficult to discern an intention to abrogate state sovereign immunity through the Bankruptcy Clause when no such intention has been found in any of the other clauses in Article I. Indeed, our cases are replete with acknowledgments that there is nothing special about the Bankruptcy Clause in this regard. See Seminole Tribe,
The majority’s departure from this Court’s precedents is not limited to this general framework, however; the majority also overrules sub silentio this Court’s holding in Hoffman, supra. The petitioner in Hoffman, id., at 99 — like respondent Katz here — sought to pursue a preference avoidance action against a state agency pursuant to 11 U. S. C. § 547(b). The plurality opinion, joined by four Members of this Court, held that Eleventh Amendment immunity barred suit because Congress had failed to enact legislation sufficient to abrogate that immunity, and expressed no view on whether Congress possessed the constitutional power to do so. Hoffman, supra, at 104. Justice Scalia concurred in the judgment, arguing that there was no need to examine the statute
After today’s decision, however, Hoffman can no longer stand. For today’s decision makes clear that no action of Congress is needed because the Bankruptcy Clause itself manifests the consent of the States to be sued. Ante, at 378.
II
The majority supports its break from precedent by relying on historical evidence that purportedly reveals the Framers’ intent to eliminate state sovereign immunity in bankruptcy proceedings. Ante, at 362-363, 373. The Framers undoubtedly wanted to give Congress the authority to enact a national law of bankruptcy, as the text of the Bankruptcy Clause confirms. But the majority goes further, contending that the Framers found it intolerable that bankruptcy laws could vary from State to State, and demanded the enactment of a single, uniform national body of bankruptcy law. Ante, at 365-368. The majority then concludes that, to achieve a uniform national bankruptcy law, the Framers must have intended to waive the States’ sovereign immunity against suit. Ante, at 362. Both claims are unwarranted.
In contending that the States waived their immunity from suit by adopting the Bankruptcy Clause, the majority conflates two distinct attributes of sovereignty: the authority of a sovereign to enact legislation regulating its own citizens, and sovereign immunity against suit by private citizens.
For example, Article I also empowers Congress to regulate interstate commerce and to protect copyrights and patents. These provisions, no less than the Bankruptcy Clause, were motivated by the Framers’ desire for nationally uniform legislation. See James Madison, Preface to Debates in the Convention of 1787, reprinted in 3 M. Farrand, Records of the Federal Convention of 1787, pp. 539, 547-548 (1911) (hereinafter Farrand’s Debates) (noting lack of national regulation of commerce and uniform bankruptcy law as defects under the Articles of Confederation); M. Farrand, The Framing of the Constitution of the United States 48 (1913) (noting that the Articles of Confederation failed to provide for uniform national regulation of naturalization, bankruptcy, copyrights, and patents). Thus, we have recognized that “[t]he need for uniformity in the construction of patent law is undoubtedly important.” Florida Prepaid,
Nor is the abrogation of state sovereign immunity from suit necessary to the enactment of nationally uniform bankruptcy laws. The sovereign immunity of the States against suit does not undermine the objective of a uniform national law of bankruptcy, any more than does any differential treatment between different categories of creditors. Cf. Railway Labor Executives’ Assn. v. Gibbons,
B
The majority also greatly exaggerates the depth of the Framers’ fervor to enact a national bankruptcy regime. The idea of authorizing Congress to enact a nationally uniform bankruptcy law did not arise until late in the Constitutional Convention, which began in earnest on May 25, 1787. 1 Farrand’s Debates xi. The Convention charged the Committee of Detail with putting forth a comprehensive draft Constitution, which it did on August 6. Ibid.; 2 id., at 177. Yet the Convention did hot consider the language that eventually became the Bankruptcy Clause until September 1, id., at 483-485, and it adopted the pro vision, with little debate two days later, id., at 489. Under the majority’s analysis, which emphasizes the Framers’ zeal to enact a national law of bankruptcy, this timing is difficult to explain.
The majority’s premise fares even worse in explaining the postratification period. The majority correctly notes that the practice of the early Congresses can provide valuable
The historical record thus refutes, rather than supports, the majority’s premise that the Framers placed paramount importance on the enactment of a nationally uniform bank
Moreover, the majority identifies no historical evidence suggesting that the Framers or the early Legislatures, even if they were anxious to establish a national bankruptcy law, contemplated that the States would subject themselves to private suit as creditors under that law. In fact, the historical record establishes that the Framers held the opposite view. To the Framers, it was a particularly grave offense to a State’s sovereignty to be hauled into court by a private citizen and forced to make payments on debts. Alexander Hamilton, the author of Federalist No. 81, followed his general discussion of state sovereign immunity by emphasizing that the Constitution would be especially solicitous of state sovereignty within the specific context of payment of state debts:
“‘[Tjhere is no color to pretend that the state governments would, by the adoption of that plan, be divested of the privilege of paying their own debts in their own way, free from every constraint but that which flows from the obligations of good faith. The contracts between a nation and individuals are only binding on the conscience of the sovereign, and have no pretension to a compulsive force. They confer no right of action independent of the sovereign will. To what purpose would it be to authorize suits against States for the debts they owe? How could recoveries be enforced? It is evident that it could not be done without waging war against the contracting State; and to ascribe to the federal courts by mere implication, and in destruction of a pre-existing right of the state governments, a power which would involve such a consequence, would be altogether forced and unwarrantable.’” Hans,134 U. S., at 13 (quoting The Federalist No. 81, at 549).
The majority attempts to bolster its historical argument by making three additional observations about the bankruptcy power: (1) Congress’ early provision of habeas corpus relief in bankruptcy to forbid the imprisonment of a debtor by one State, in violation of a discharge order issued by the courts of another State, ante, at 365-366, 374-375; (2) the inability of debtors, first in the American Colonies and then under the Articles of Confederation, to enforce in one state court a discharge order issued by another state court, ante, at 366-368; and (3) the historical understanding that bankruptcy jurisdiction is principally in rem, ante, at 369-373. The implication is that, if these specific observations about bankruptcy are correct, then States must necessarily be subject to suit in transfer recovery proceedings, if not also in other bankruptcy settings. Ante, at 370; ante, at 377-378. But none of these observations comes close to demonstrating that, under the Bankruptcy Clause, the States may be sued by private parties for monetary relief.
1
The availability of habeas relief in bankruptcy between 1800 and 1803 does not support respondent’s effort to obtain monetary relief in bankruptcy against state agencies today.
“The right to so discharge has not been doubted by this court, and it has never been supposed there was any suit against the State by reason of serving the writ upon one of the officers of the State in whose custody the person was found. In some of the cases the writ has been refused as matter of discretion; but in others it has been granted, while the power has been fully recognized in all.” Id., at 168 (collecting cases).
This Court has reaffirmed Young repeatedly — including in Seminole Tribe,
The majority’s second observation — that the Framers were concerned that, under the Articles of Confederation, debtors were unable to obtain discharge orders issued by the court of one State that would be binding in the court of another State, ante, at 366-368 — implicates nothing more than the application of full faith and credit, as is apparent from the majority opinion itself. Accordingly, it has nothing to do with state sovereign immunity from suit.
To support its observation, the majority describes at length two Pennsylvania court rulings issued under the Articles of Confederation. See James v. Allen,
Accordingly, it is unsurprising that, when the issue of bankruptcy arose at the Constitutional Convention, it was also within the context of full faith and credit. See ante, at 368-369.
3
Finally, the majority observes that the bankruptcy power is principally exercised through in rem jurisdiction. Ante, at 369-373. The fact that certain aspects of the bankruptcy power may be characterized as in rem, however, does not determine whether or not the States enjoy sovereign immunity against such in rem suits. And it certainly does not answer the question presented in. this case: whether the Bankruptcy Clause subjects the States to transfer recovery proceedings — proceedings the majority describes as “ancillary to and in furtherance of the court’s in rem jurisdiction,” though not necessarily themselves in rem, ante, at 372.
Two years ago, this Court held that a State is bound by a bankruptcy court’s discharge order, notwithstanding the State’s invocation of sovereign immunity, because such actions arise out of in rem jurisdiction. See Tennessee Student Assistance Corporation v. Hood,
The fact that transfer recovery proceedings fall outside any possible in rem exception to sovereign immunity is confirmed by United States v. Nordic Village, Inc.,
The majority attempts to evade Nordic Village by claiming that “the trustee in this case, unlike the one in Nordic Village, seeks, in the alternative, both return of the ‘value’ of the preference, . . . and return of the actual ‘property transferred.’ ” Ante, at 372, n. 10 (quoting 11 U. S. C. § 550(a)). But where, as here, the property in question is
In light of the weakness of its historical evidence that the States consented to be sued in bankruptcy proceedings, the majority’s effort to recast respondent’s action as in rem is understandable, but unconvincing.
* * *
It would be one thing if the majority simply wanted to overrule Seminole Tribe altogether. That would be wrong, but at least the terms of our disagreement would be transparent. The majority’s action today, by contrast, is difficult to comprehend. Nothing in the text, structure, or history of the Constitution indicates that the Bankruptcy Clause, in contrast to all of the other provisions of Article I, manifests the States’ consent to be sued by private citizens.
I respectfully dissent.
The parties in Hoffman likewise agreed that the suit was barred by Eleventh Amendment immunity absent some further action by Congress.
Immunity against suit is just “one of the attributes of sovereignty,... enjoyed by the government of every state in the union.” The Federalist No. 81, at 549. The sovereign power to legislate is a distinct attribute of sovereignty; it is discussed, for example, in a completely separate portion of the Federalist than immunity from suit. See, e. g., id., No. 32.
For over a dozen years after the ratification of the Constitution, Congress failed to adopt a single bankruptcy law. See, e. g., 9 Annals of Congress 2671 (1799) (noting that Congress had “not.. . passed [bankruptcy legislation] for these ten years past, and the States [have] legislated upon it in their own way” (statement of Rep. Baldwin)); 3 Farrand’s Debates 380 (same). It was not until April 4,1800, that the Sixth Congress finally adopted our Nation’s first bankruptcy law, ch. 19,2 Stat. 19, and even that law left an ample role for state law, §61, id., at 36. (By contrast, the very first Congress enacted, inter alia, patent and copyright legislation. 1 Stat. 109,124.)
Moreover, that first Act was short lived; Congress repealed it just three years later. 2 Stat. 248. And over a decade later, this Court confirmed what Congress’ inattention had already communicated — that the Bankruptcy Clause does not vest exclusive power in Congress, but instead leaves an ample role for the States. See Sturges v. Crowninshield,
To be sure, the majority opinion adds, in a footnote, that “[w]e do not mean to suggest that every law labeled a ‘bankruptcy’ law could, consistent with the Bankruptcy Clause, properly impinge upon state sovereign immunity.” Ante, at 378, n. 15. But the majority offers no explanation of this statement; certainly it offers no principled basis on which to draw distinctions in future cases.
This is particularly so given the absence of any known application of that law (let alone any test of its validity) during that time. The provision was enacted into law on April 4,1800, ch. 19,2 Stat. 19, and repealed on December 19, 1803, ch. 6, id., at 248. The sole reference cited by the majority is In re Comstock,
The majority also contends that the provision for habeas relief in the 1800 bankruptcy law is “remarkable not least because it would be another 67 years, after Congress passed the Fourteenth Amendment, before the writ would be made generally available to state prisoners.” Ante, at 374. The implication is that the Bankruptcy Clause shares a similar pedigree with the Fourteenth Amendment, which (unlike Article I of the Constitution) authorizes Congress to abrogate state sovereign immunity against suit. See, e. g., Fitzpatrick v. Bitzer,
The same point was made in Railway Labor Executives’ Assn. v. Gibbons,
Begier involved funds held by the debtor in statutory trust for the United States — so its analysis of those “particular dollars” does not help the respondent in this case.