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Bankruptcy Jurisdiction and the Supreme Court: Can a State be Sued for Money When It Violates a Federal Statute?

By · October 14, 2006 · 2006 Ark. L. Notes 367
In categories: Bankruptcy, Business Law

I was waiting to get a haircut this past January and was reading THE UNITED STATES LAW WEEK, one of my favorite publications. Reading a synopsis of the  Central Virginia Community College v. Katz, I suddenly jumped up and exclaimed that the Court had just surprised me enormously. Needless to say, the folks at the hair salon thought that I had lost my mind. To understand the importance of the Katz case a little history must be discussed. It concerns the power of the federal government and the powers of the states. What is at issue is whether a state can ever be sued for some type of performance. Enjoining state behavior still remains a viable option at the moment. But any other type of relief was not available, at least before the Katz case. Whether the suit is for a state’s failure to pay overtime pay to policemen, or discriminating against a state employee because she was old or disabled, the suit cannot be maintained. This is the case despite the fact that Congress, in the particular statute made the state subject to the federal legislation. This is what makes the Katz case so extraordinary. In Katz,the debtor bookstore was suing the state to return money to the bankruptcy estate as a bankruptcy preference.

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