Supreme Court: states can be sued under bankruptcy law

[Judi Lynn]

Supreme Court: states can be sued under bankruptcy law
Mon Jan 23, 2006 10:48 AM ET

WASHINGTON (Reuters) - States can be sued in certain bankruptcy proceedings, a divided U.S. Supreme Court ruled on Monday in a case that pitted state powers against those of the federal government.

By a 5-4 vote, the high court rejected arguments that states could not be sued because of state sovereign immunity. The court said Congress, in adopting the bankruptcy law, has the power to treat states the same way as other creditors.

The decision departed from the series of rulings in recent years by the court's conservative majority that generally have expanded the immunity of states from lawsuits while cutting back on the power of Congress.

The case involved four state-run colleges in Virginia -- Central Virginia Community College, Virginia Military Institute, New River Community College and Blue Ridge Community College.

Wallace Bookstores, which operated a chain of college bookstores, filed for bankruptcy in 2001. The liquidating supervisor of the bankruptcy estate sued the four colleges in an attempt to recover money owed to Wallace.
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http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2006-01-23T154747Z_01_N04259058_RTRUKOC_0_US-COURT-BANKRUPTCY.xml

[wicket]

1. Interesting.

Thanks for the link, this should get interesting to say the least!

[shance]

2. More reason to fight Alito and any other extremist nominee

n/t