The 5-to-4 decision made clear that the new Roberts court is just as divided on issues of federalism as the Rehnquist court was. Chief Justice John G. Roberts Jr., taking the place of his predecessor, Chief Justice William H. Rehnquist, on the side of states' rights, was in dissent.
Justice Sandra Day O'Connor was in the majority, in one of the most important votes in the closing months of a tenure that is likely to end before the court issues any more decisions. Judge Samuel A. Alito Jr. may be confirmed as her replacement before the end of a recess that the court began after the morning's decision announcements.
The opinion for the majority, by Justice John Paul Stevens, invoked the original intent of the Constitution's framers in concluding that the individual states had been committed to a federal solution to bankruptcy problems that emerged during the early years of the new nation, when states had widely varying bankruptcy systems. A debtor might be released from one state's prison only to be thrown into another's, Justice Stevens said.
Justice Stevens noted that the framers had given Congress the power to establish "uniform laws on the subject of bankruptcies throughout the United States," in the language of the Bankruptcy Clause of Article I. In so doing, he said, the framers "plainly intended to give Congress the power to redress the rampant injustice resulting from states' refusal to respect" one another's bankruptcy laws.
Consequently, he said, "the ineluctable conclusion" was that the states intended to yield their sovereign immunity when it came to bankruptcy.
The dissenters objected that this reading of constitutional history not only was not "ineluctable" but also was misinformed. The majority "greatly exaggerates the depth of the framers' fervor to enact a national bankruptcy regime," Justice Clarence Thomas said in the dissenting opinion. He said that "nothing in the text of the Bankruptcy Clause suggests an abrogation or limitation of the states' sovereign immunity."
The majority opinion, Central Virginia Community College v. Katz, No. 04-885, was joined by Justices David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer in addition to Justice O'Connor. In addition to Chief Justice Roberts, Justices Antonin Scalia and Anthony M. Kennedy joined Justice Thomas's dissent.
The outcome made clear that the court's unanimous ruling in a federalism case earlier this month, rejecting on narrow grounds a claim of state immunity from suit by disabled prison inmates, amounted to only a temporary compromise based on a collective decision not to tackle the more divisive issues that the case, United States v. Georgia, might have raised. And it made even more clear that Judge Alito, if he is confirmed, will be in a strong position to help write the next chapter of the court's continuing re-examination of the relationship between Washington and the states.
The case decided on Monday began with the bankruptcy of a company that operated a chain of college bookstores on the campuses of Virginia state colleges and universities. For constitutional purposes, the institutions are arms of the state.
Shortly before filing for bankruptcy, the company, Wallace's Bookstores Inc., based in Kentucky, had settled debts of several thousand dollars that it owed to four of the state colleges. The trustee appointed by the federal bankruptcy court to handle the case tried to recover that money, in order to redistribute the company's remaining assets equally to all its creditors, but the colleges resisted on the ground of sovereign immunity.
The state's motion to dismiss the proceedings was rejected by both the bankruptcy court and the Federal District Court in Lexington, Ky., and by the United States Court of Appeals for the Sixth Circuit, in Cincinnati. Virginia then appealed to the Supreme Court.
The Supreme Court's decision was particularly interesting for its use of original intent by a group of justices who are not known for turning to that tool of constitutional interpretation. Another interesting aspect of the decision was its treatment of one of the court's most important recent federalism precedents, a 1996 decision called Seminole Tribe v. Florida. In that 5-to-4 decision by Chief Justice Rehnquist, the court held that the power of Congress to regulate interstate commerce, granted by Article I of the Constitution, did not give it the authority to breach the states' constitutional immunity from suit.
Justice Stevens, dissenting in that case, had warned that the decision would also apply to limit another of Congress's powers under Article I, the power to enact bankruptcy laws. "Careful study and reflection have convinced us, however, that that assumption was erroneous," Justice Stevens said in his opinion on Monday.
In other action on Monday, the court, without comment, turned down an appeal filed by the State of Minnesota from a federal court decision invalidating provisions of its code of judicial conduct.
The provisions at issue prohibited judges and judicial candidates from personally soliciting campaign contributions, from identifying themselves as members of a political party, from speaking at partisan gatherings and from accepting political party endorsements.
Provisions of this sort are common among a majority of states in which judges of at least some courts must run for election. But the United States Court of Appeals for the Eighth Circuit, in St. Louis, held last year that the Minnesota provisions violated the First Amendment's guarantee of free speech. The Eighth Circuit's decision caused great consternation in state courts and within the organized bar.
The Conference of Chief Justices, representing the state courts, and the American Bar Association were among groups that filed briefs in support of Minnesota's appeal in the case, Dimick v. Republican Party of Minnesota, No. 05-566.
The case began in 1998 as a constitutional challenge to Minnesota's judicial code by Gregory Wersal, a previously unsuccessful candidate for the State Supreme Court. In 2002, one part of the case reached the Supreme Court, which ruled in Republican Party v. White that a ban on judicial candidates' stating their views on legal questions was unconstitutional. It had been widely expected that the justices would agree to continue their examination of the issue by accepting Minnesota's latest appeal.