Central Virginia Comm College v. Katz
This case involves a dispute between four state-supported institutions of higher education in Virginia and the now-bankrupt Wallace's Bookstores, Inc., which operated college bookstores in a number of states. Each of the four Virginia Institutions did business with the company prior to its declaration of bankruptcy. Katz, who is the liquidating supervisor of Wallace's, filed suit in Kentucky to collect debts allegedly owed to Wallace's by the Virginia colleges and to prevent them from filing claims against the bankrupt estate.
The colleges moved to dismiss the suit on the basis of state sovereign immunity. The bankruptcy court denied the motion, following the decision of the Sixth Circuit Court of Appeals in Hood v. Tennessee Student Assistance Corporation, which held that Article I of the Bankruptcy Clause of the U.S. Constitution gives Congress the authority to repeal state sovereign immunity. The district court affirmed the ruling of the bankruptcy court, and the Sixth Circuit issued an unpublished per curiam opinion affirming the district court.
Question Presented:
May Congress use the Article I Bankruptcy Clause, U.S. Const. art. I, ยง 8, cl. 4, to abrogate the States'
sovereign immunity?
Decision under Review (unpublished)
