The Anti-DOMA Heresy Spreads – Another Bankruptcy Judge Heard From

Another U.S. Bankruptcy Court judge has rejected a DOMA-based motion by the U.S. Trustee to dismiss a joint bankruptcy filing by a married same-sex couple.  In In re Ziviello-Howell, Case No. 11-22706-A-7 (May 31, 2011), Judge Michael S. McManus of the U.S. Bankruptcy Court for the Eastern District of California, finding that the case before him was "substantially similar" to In re Somers, 2011 WL 1709839 (Bankr. S.D.N.Y. 2011), and followed the persuasive precedent of finding no basis to grant the motion.  The U.S. Trustee argued that because of DOMA, the bankruptcy court was precluded from treating a same-sex couple as married, even if they were married under state law, and thus they could not file a joint petition.

"Without reaching DOMA's constitutionality," wrote Judge McManus, "this court is not convinced that dismissal is in the best interest of all parties or that Section 707(a) requires dismissal even if DOMA is applicable and constitutional."  Judge McManus noted that the case before him, involving a same-sex lesbian couple who married in California during 2008 and whose marriage remains valid in that state, had proceeded nearly to conclusion before the U.S. Trustee's motion was brought before the court for decision.  He pointed out that the "deadline for moving for dismissal pursuant to 11 U.S.C. sec. 707(b) has expired," that just about everything of substance to be determined in the case had already been determined, and thus the "motion has been brought before the court for decision much too late."

More to the point, he found that "dismissing the case at this juncture would duplicate the work and costs for the debtors, the creditors, the trustee, and the court," and that "there has been no showing of prejudice to any creditor or unfair advantage to the debtors if this case is permitted to continue."  He also noted that because the bankruptcy case was dealing with joint assets and joint debts, "even if the cases were filed separately, it would make sense to consolidate them," so that "the only effective difference between a joint petition and two consolidated petitions is that the former requires one filing fee and the latter requires two filing fees."

Thus, the court found no cause for dismissal, rejecting the U.S. Trustee's petition as not being in the best interest of the parties.  The debtors are represented by Joseph Feist. 

One suspects that the U.S. Trustee is just going through the motions by seeking dismissal in cases such as this.  Attorney General Eric Holder indicated in February that the Justice Department will no longer defend DOMA in court, but will continue to apply it until such time as it is definitively declared unconstitutional or repealed.  In the meantime, one suspects that DOJ (of which the U.S. Trustee is a part) will feel duty-bound to file such motions, but without any enthusiasm, because granting the motions to dismiss would make no sense in terms of efficient administration of a bankruptcy case.

Thanks to NYC bankruptcy practitioner Ethan Ganc for bringing this new decision promptly to our attention.  He informs me that it is the lead story on the American Bankruptcy Institute's headlines digest today.  So the news is spreading among practitioners and bankruptcy judges that this is one application of DOMA that will not fly.

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