Judge Allows Same Sex Bankruptcy to Move Forward

This story is from the Hudson Valley Times Herald Record.  Judge Celia Morris makes a ruling regarding that allows a married couple of the same sex to obtain a bankruptcy discharge.

By Victor Whitman
Times Herald-Record
Published: 2:00 AM – 05/12/11

A lesbian couple from the Town of Fallsburg recently won a legal battle in U.S. Bankruptcy Court that could have national implications on the issue of gay marriage.

The couple were married during a civil ceremony in Vermont in October, and soon afterward filed jointly as a married couple for bankruptcy in the New York Southern District. Their case is among 10 federal cases that people on opposing sides of the same-sex marriage debate have been watching.

The 1996 Defense of Marriage Act, or “DOMA,” signed by President Bill Clinton, prevented the federal government from recognizing the validity of same-sex marriage.

The Office of the United States Trustee sought to have the couple’s case dismissed on the grounds that it was an “improper joint petition” under DOMA and require the couple to file separate petitions.

On May 4, Judge Cecelia Morris sided with the couple and their Liberty lawyer, Kirk Orseck.

“Dismissal is not in the best interest of the debtors, who would lose the benefit of their fresh start and would incur greater administrative costs if they sever their petition and file a second case,” Morris wrote. “The record is absent of allegations of bad faith, hidden assets, or attempts to stall collection of the debtors, factors normally considered by the courts in deciding whether or not to dismiss.”

Morris also noted that none of the creditors sought to dismiss the case.

The Times Herald-Record withheld the couple’s names at their request. “While they are very proud to be taking this stance for their basic civil rights, they do not want their friends, relatives and employers to know that they had to file bankruptcy,” Orseck said.

The significance of this ruling is an open question. DOMA is a political football. President Barack Obama, who had pledged to overturn the law during his campaign, in February ordered the Attorney General’s Office not to defend constitutional challenges to DOMA. The Republican-led House of Representatives has committed to defending it. Morris writes she did not analyze the constitutionality of DOMA. Her ruling in the Fallsburg couple’s case is, however, on the radar of the House’s Bipartisan Legal Advisory Group, which has been assigned to defend DOMA.

Kerry Kircher, general counsel of the U.S. House of Representatives, referred to Morris’ ruling in a brief seeking more time to seek dismissal of another DOMA challenge out of California. “We are still reviewing that ruling, but it appears on the first read, that it is based, at least in part on the court’s determination that Section III of DOMA, is unconstitutional,” Kircher wrote.

A representative of the U.S. Trustee’s Office said the decision is being reviewed and no determination has been made regarding the possibility of an appeal.

Kircher noted that if the U.S. Trustee doesn’t appeal Morris’ decision, then the Bipartisan Legal Advisory Group must do so by May 28 to “preserve its ability to defend the statute’s constitutionality.”

The Gay and Lesbian Civil Rights group Lambda Legal is watching the case. Susan Sommer, Lambda Legal’s director of constitutional litigation, said Morris’ ruling, at a minimum, is a symbolic victory.

If nothing else, she said, the case illustrates that the lives of gay and lesbian married couples are as intertwined as those of heterosexual couples, and sometimes run into the same problems.

“The judge recognized the sheer idiocy of the federal policy that refuses to recognize the reality,” Sommer said.