Supreme Court Nixes State Immunity in Bankruptcy Case

Law360, New York (January 23, 2006, 12:00 AM EST) -- In a decision reached by a single-vote margin, the Supreme Court has ruled that states can be sued in certain bankruptcy cases.

By a 5-4 vote, the Court rejected the defense that states are protected by sovereign immunity in certain bankruptcy proceedings, arguing that Congress, in adopting the bankruptcy law, has retained the right to treat states the same way as it treats other creditors.

The ruling represented a deviation from the recent trend, spearheaded by the court's conservative majority, to embrace states’ immunity as a...
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