Defense of Marriage Act Declared Unconstitutional

The big legal news of the day is that Judge Tauro of the United States District Court for the District of Massachusetts (Boston) declared the federal Defense of Marriage Act ("DOMA"), 1 USC sec. 7, unconstitutional. The case is styled Gill v. Office of Personnel Management, et al. (link opens .pdf opinion). The case was brought by same-sex spouses married under Massachusetts law. The Court held that "DOMA as applied to Plaintiffs violates the equal protection principles embodied in the Fifth Amendment to the United States Constitution."

On the federal level, DOMA limits the recognition of marital rights to heterosexual spouses. The Court held that Congress' reasons for enacting the law bore no rational relationship to the goals it set. The Court also expressed a strong sentiment that the federal government should stay out of the business of defining marriage because that is the traditional and exclusive purview of the States.

I recently wrote about same-sex spouses and some of the special issues they face in bankruptcy, such as that DOMA has been interpreted to bar such spouses from filing joint bankruptcy petitions which, among other things, increases the overall cost of bankruptcy. That may change now, and I would like to bring a test case if presented with the right clients. Judge Tauro's opinion is not binding on the bankruptcy court and it may yet be appealed. However, it broke new ground and will carry considerable weight when used to support a challenge to a joint bankruptcy petition on behalf of same-sex spouses.

Bankruptcy Issues for Same-Sex Spouses

We have represented many same-sex couples in bankruptcy throughout the years, before and after the landmark decision in Goodridge v. Department of Public Health which provided legal recognition to same-sex marriage in Massachusetts. Despite this decision, there continues to be several special issues in same-sex bankruptcy cases.

Bankruptcy is a federal proceeding and same-sex marriage is not recognized on a federal level. See Defense of Marriage Act. This means that same-sex spouses cannot file joint bankruptcy petitions. The impact of this is primarily technical: One can get the same relief with two petitions as with one. Also, here in Massachusetts, if two bankruptcy cases are filed simultaneously, the creditor meeting for each will be assigned the same date, time and trustee. This allows same-sex spouses to experience the creditor meeting together, though--unlike in the case of heterosexual couples--they will still be examined under oath individually.

One significant drawback to the treatment of same-sex spouses in bankruptcy is that the cost of two bankruptcy cases is always higher than for one case. However, it has been my experience that same-sex spouses tend to have less joint debt than heterosexual couples (although this may change with time). Consequently, if only one spouse has debt problems, it may be advisable for just that spouse to file bankruptcy. This is a right that all married people have, which may be more often advantageous for same-sex spouses.

Means testing for same-sex couples:
There isn't any real difference in how a means test is formulated for roommates, same-sex couples, straight couples, or anyone else. There are differences with how the forms are filled out, but those are just details. The crux of it is that both spouses are counted in household size for the means test and then any contribution to the debtor's household expenses from the other spouse is also included. This is essentially what happens in a traditional joint case. The mechanics are different, but in a way that benefits gay spouses: the non-filing spouse's total income does not need to be included and then diminished by the so-called "marital adjustment." For a same-sex spouse the non-filing spouse's actual net household contribution need only be listed on the means test.

P.S. I wrote a post a few days after this one reporting on how one Massachusetts (federal) judge declared the Defense of Marriage Act unconstitutional. It can be viewed here.