The Obama Administration has abandoned DOMA, will same sex joint bankruptcy petitions follow?

The Obama Administration appears to have lost the will to fight for the Defense of Marriage Act (DOMA), the federal law that defines marriage as between a man and a woman. President Obama has ordered Attorney General, Eric Holder, not to defend the statute against two lawsuits filed in New York and Connecticut. The administration’s change in policy paves the way for gay couples to file joint bankruptcy petitions in states that allow same sex marriage.

Although only five states currently recognize gay marriage, same sex debtors in those jurisdictions are not permitted to file joint bankruptcy petitions. Section 302 of the Bankruptcy Code authorizes ”spouses” to file joint petitions, but the Code does not define the term “spouse.” Instead,  the Bankruptcy Code borrows its definition of the term “spouse” from DOMA which defines the term “marriage” and “spouse” as including only couples of the opposite sex for federal purposes. As a result, section 302 of the Bankruptcy Code must be read to allow joint petitions only on behalf of heterosexual couples. In In Re Kunda, the Court rejected a 10th amendment challenge to DOMA and prohibited a same sex joint bankruptcy petition on the grounds that DOMA’s federal definition of marriage did not preclude states from simutaneously formulating their own definition. Federal law (bankruptcy) would use the federal definition of “spouse” and state law the state definition.

A finding that DOMA is either unconstitutional or unenforceable by the Department of Justice, would leave federal law without a clear definition of marriage. Absent DOMA ,and consistent with the spirit of the 10th Amendment, the states would once again fully occupy the marriage arena. Regulation and definition of marriage would be left to the states as it traditionally has been. Rather than a uniform definition of marriage imposed by DOMA, federal law would borrow it’s definition from state legislation based on choice of law analysis. The issue would become which state’s marriage laws apply, not whether state law applies.

Absent an amendment to the contrary, section 302 of the Bankruptcy Code would define “spouse” based on state law, opening the door for same sex joint bankruptcy filings in states that have legalized gay marriage. The Obama Administration’s decision to abandon DOMA signals an ironic, yet important victory for federalism and gay rights advocates. Stay tuned.

John O’Connor