The First Circuit Court of Appeals concluded that the Defense of Marriage Act, otherwise known as "DOMA", is unconstitutional on May 31, 2012, in the case of Commonwealth of Massachusetts v. US Department of Health and Human Services. DOMA was enacted by Congress in 1996, in reaction to several state court decisions upholding same-sex marraiges. DOMA provided, for purposes of federal law, that marriage was defined as a legal union between one man and one woman. The impact of that law was far reaching. It prohibited same-sex married couples (in those states permitting same-sex marriage) from filing joint tax returns, from enjoying tax advantages in inheriting property, from receiving Social Security Survivor benefits,and from filing joint bankruptcy petitions, among many other legal benefits. States that permitted same-sex marriage were threatened with a loss of federal aid for certain social programs that affects same-sex married couples.
The First Circuit, in reaching its decision, reviewed the purported purposes of the DOMA statute, as described in the committee report that preceded the legisation, and found that they did not provide sufficient rationale for the law. In fact, the First Circuit concluded that the reasons set forth in the committee report were demonstrated to be incorrect, ill conceived, or simply hostile to homosexuality generally. As a result, the First Circuit concluded that the statute violated the Equal Protection Clause of the U.S. Constitution and was unconstitutional. The First Circuit stayed its decision to permitt the U.S. Supreme Court to review the issue.
The bankruptcy implications of the First Circuit decision, if it is upheld by the U.S. Supreme Court, is that same-sex married couples will be able to file joint bankruptcy petitions, saving time and money in addressing joint and household debts in a more cost effective and comprehensive way. The burden on both debtors and creditors will be lessened by consolidating the reorganization and elimination of overwhelming debt in single bankrutpcy cases.
Molleur Law Office is pleased to note that Jen Hayden will speak on a panel at the American Bankrutpcy Institute's Northeast Bankruptcy Conference in Bretton Woods , New Hampshire in July 2012 on the impact of DOMA and same-sex marriage in bankruptcy cases - a timely topic in bankruptcy law.