One of the activities that the CLR co-sponsored last year was the conference by our excellent bankruptcy colleagues Ray Warner and Keith Sharfman (who together run the Center for Bankruptcy Studies at St. John’s) on Religion and Bankruptcy. You can see some discussion of the conference here, here, here, and here.
As often happens to me, I came upon a neat topic of discussion months after the conference was over. Sturges v. Crowninshield (1819), authored by Chief Justice Marshall, dealt in part with New York’s power to create a “bankrupt” law (a bankruptcy law) or instead “whether the power is exclusively vested in the congress of the United States” pursuant to Article I section 8 which gives Congress authority to enact “uniform Laws on the subject of Bankruptcies throughout the United States.” It’s not my area, and so I am likely missing lots of important details (please fill them in), but I’m apprised by some bankruptcy folks that the old rule was that states could have bankruptcy rules so long as Congress did not pass a federal one, which meant that for much of the period before 1898, states did have, and could have, their own bankruptcy laws.
Crowninshield is a long and extremely complicated case, involving the Contracts Clause as well. But I thought to highlight one interesting piece of dicta in a later portion of the decision involving the relationship of bankruptcy and the religious ideas of the discharging of debt, expiation, and the alleviation of public misery and poverty. Note also the natural law language used by Marshall in discussing the states’ “inherent” power to achieve these aims, as well as the way in which the Court wrestles with the problems of prison, debt, and freedom in the cultivation of good citizenship.
