U.S. Trustee Withdraws Appeal of Gay Couple's Bankruptcy Court DOMA Victory

Posted by Chris Geidner
July 7, 2011 11:10 AM |

Following consultation with the House Bipartisan Legal Advisory Group (BLAG), the U.S. Trustee asked to withdraw its appeal in its challenge to the attempted joint bankruptcy petition filed by Gene Douglas Balas and Carlos Morales, a married gay couple who live in California -- a move a Department of Justice spokeswoman says represents the DOJ's new policy on all such bankruptcy filings.

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DOJ spokeswoman Tracy Schmaler wrote to Metro Weekly that the July 6 filing in the Balas and Morales case represents a new policy, writing, "The Department of Justice has informed bankruptcy courts that it will no longer seek dismissal of bankruptcy petitions filed jointly by same-sex debtors who are married under state law."

Because of the federal definition of marriage contained within Section 3 of the Defense of Marriage Act, such joint filings have routinely been dismissed by courts at the urging of the U.S. Trustee, whose job as a "watchdog" over the bankruptcy process includes "[t]aking legal action to enforce the requirements of the Bankruptcy Code," according to the website for U.S. Trustee Program, which is a program under the Department of Justice.

In Balas and Morales's case, however, the bankruptcy court found on June 13 that Section 3 of DOMA was unconstitutional in its application to such couples attempting to file joint bankruptcy petitions. The U.S. Trustee, in consultation with the BLAG, had filed a notice that it was appealing the decision. The July 6 filing asks the court to withdraw that appeal.

In the filing, made in U.S. Bankruptcy Court in the Central District of California on July 6, Assistant U.S. Trustee Jill Sturtevant writes, "The [DOJ] has advised the [BLAG] of the pendency of this appeal, and the BLAG has responded that it does not intend to appear to present arguments in support of Section 3 of DOMA."

Sturtevant goes on to write, "The BLAG is actively participating in litigation in several other courts in which the constitutionality of Section 3 has been challenged. In light of the decision by the BLAG not to participate in this appeal and the availability of other judicial fora for the resolution of the constitutional question, the United States Trustee has determined that it is not a necessary or appropriate expenditure of the resources of this Court and the parties to continue to litigate this appeal."

About the department-wide policy, Schmaler wrote to Metro Weekly that the decision was made after consulting with the BLAG went on to note, "This decision is consistent with and follows the Administration's notification to Congress in February of this year that it would no longer defend the constitutionality of Section 3 of  DOMA as applied to legally married same-sex couples but would seek to provide Congress an opportunity to enter litigation to argue in favor of DOMA's constitutionality. This decision to stop filing motions to dismiss bankruptcy petitions avoids generating costly and time-consuming constitutional litigation that neither the BLAG nor the Department plans to defend."

The move comes just days after DOJ filed a brief in another case -- a challenge to DOMA from Karen Golinski, who is seeking equal health insurance coverage for her wife that would be available for a male federal court employee for his wife -- that strongly argued that Section 3 of DOMA is unconstitutional. Hours before the bankruptcy court filing, the U.S. Court of Appeals for the Ninth Circuit lifted the stay of U.S. District Court Virginia Phillips's injunction of the enforcement of "Don't Ask, Don't Tell" -- putting the Pentagon in the position of having to "tak[e] immediate steps" to comply with the order.

While the U.S. Trustee filed a notice that it was appealing the decision to the district court, attorneys for Balas and Morales this past week filed a request to have the case immediately appealed to the Ninth Circuit -- bypassing the district court. The U.S. Trustee's July 6 filing states that Balas and Morales did not agree to the withdrawal, so the U.S. Trustee "requests that the court enter an order approving withdrawal of the appeal."

Read the Balas/Morales filing: Balas-Dismiss Appeal.pdf


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