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Editor: Rod Sullivan
Profession: Maritime Attorney

Category: Supreme Court Rulings

While Central Virginia Community College v. Katz, No. 04-885 (2006) appears on its face to be a minor bankruptcy decision, it may turn out to be the first slide down a "slippery slope," or if you prefer, it may be the federal "camel getting its nose under the tent" of 11th Amendment. The fact is that the majority in this hotly contested 5-4 decision said that the 11th Amendment doesn't really mean what it says it means. A little history may help to understand why the majority got it wrong.

Remember the American Revolution, Lexington and Concord, 1775-1783 and all that? Well, there were lots of Americans who stayed loyal to Great Britain, and these guys were called "Loyalists." One of them was a South Carolina Scotsman and ship's captain named Captain Robert Farquhar.

On October 31, 1777, while Georgia was in rebellion and in the hands of the rebels (i.e. the Patriots, the "good guys", the "Americans", "us"), Farquhar, who apparently was also a war profiteer who didn't mind selling to the rebels/Patriots, sold $169,613.33 of clothing on credit to Thomas Stone, who is referred to as working for a "Rebel Counsellor" and who may have been a lawyer, and Edward Davis, a member of the Georgia Assembly. Both the buyers lived in Savannah, Georgia. Speculation is that the clothing may have been uniforms for the Georgia military.

About a year later, in December 1778, the British recaptured Savannah and created a list of traitors (Patriots to us), who were charged with High Treason, who lost all their land and possessions, and had to flee from Georgia. If they had been caught, they would have been hung. Who was on the list? Thomas Stone and Edward Davis, of course. Since they lost everything, they could not longer pay Farquhar. They may have fled to Quebec Province, Canada.

Well, the Patriots won the Revolution, with the help of the French, and Georgia enacted a statute which "sequestered" or "extinguished" claims of the Loyalists. Farquhar, realizing that he probably wouldn't get paid, apparently gave the debt up for lost, and moved back to Port Gordon, Scotland. But politically, things got better for Loyalists in the years after the Revolution.

At the time, there were two political parties in the United States, the Federalists, which included Washington, Adams, and Hamilton (who were like modern Republicans in many ways) and the Republicans, which included Jefferson and Madison (who were like modern Democrats in many ways). The Federalists wanted closer ties with Great Britain after the Revolution and realized that paying the claims of Loyalists would help make that happen. The Republicans wanted closer ties to France and felt that the Loyalists were traitors who chose the wrong side, so "screw them."

The Supreme Court was made up of Federalists because Washington was a Federalist. Since the Supreme Court was made up of people who wanted closer ties with Great Britain, when Farquhar died, the executor of his estate, a guy named Chisolm, decided that the Georgia was responsible for the debts of Stone and Davis so he sued Georgia in the U.S. Supreme Court.

So now you have the basic facts. The estate of a British Loyalist war profiteer was trying to get the taxpayers of the Georgia, who had just defeated Great Britain in the Revolution, and who were already broke from paying for the Revolution, to pay Fahquhar for the uniforms he had sold them.

Even though the feelings of most Americans at the time was "screw the Loyalists," the U.S. Supreme Court decided to side with them and defaulted Georgia for not showing up and defending themselves against the claim. Georgia actually did hire two Philadelphia lawyers ( Washington D.C. was nothing but lines on a map, overlaying a swamp at the time) who said that the Supreme Court didn't have jurisdiction.

In the famous case of Chisholm v. Georgia, 2 U.S. 419, 1 L. Ed. 440, 2 Dall. 419 (1793) (which also, for you separation of church and state buffs says "MAN, fearfully and wonderfully made, is the workmanship of his all perfect CREATOR") decided that Georgia could be sued for the debt.

The country went beserk, and not just in Georgia. In Boston they complained that the claims of Loyalists would now flood the courts, and that the Chisolm decision would "give the key to our treasury to the agents of . . . men who were inimical to our Revolution." Southern plantation owners, whose economy had revolved about a continual indebtedness to British merchants, also opposed the ruling.

In just a few years, the whole nation amended the Constitution by adding the 11th Amendment which says:

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

For two hundred and thirteen years was rule was the States could not be sued in federal courts. It says "any suit, in law or equity." What is so tough to understand about that?

Fast forward to 2006. January 23, 2006 to be precise.

What the Supreme Court said is that States could be sued in bankruptcy court by individuals to collect debts. What did we amend the Constitution for? What does the 11th Amendment mean? How much more specific can you get than "ANY SUIT." Maybe our forefathers should have added "AND WE REALLY MEAN IT!!"

Now, not only can States be sued in bankruptcy courts, but they can be forced to appear before judges who aren't even appointed by the President or approved by the Senate. You think U.S. district court judges are independent? If you want to see independence, step into bankruptcy court someday.

No, the Supremes got this one wrong. Gutting an entire Constitutional Amendment takes time, but watch out. Over the next twenty or thirty years, the 11th Amendment may be just as useless and ignored as the 10th was before it.

Do you have a different point of view? Write me about it. If you write it well, I may just publish it here.