In Massachusetts, marriage between gay men or women is legal. But it’s a state law. There is a contradictory federal law. The Defense of Marriage Act was enacted into law in 1966 and signed into law by President Bill Clinton. It says that the federal government does not acknowledge same sex marriage, notwithstanding what the various state laws say.
The usual effect of this law is to have an adverse effect on 1,138 federal laws that relate to marriage, including benefits and taxes, especially estate taxes. President Obama’s administration has decided that the Defense of Marriage Act is unconstitutional and stopped enforcing it in February. Thus the Defense of Marriage Act also has an effect on bankruptcies, and in particular Boston bankruptcy, because a 2003 law allows gay marriage in Massachusetts.
How does this relate to filing for bankruptcy in Boston? Because it’s a federal law, in federal bankruptcy courts, gay couples cannot file for personal bankruptcy together. However, this may be changing. In a landmark case handed down by a federal bankruptcy judge in California, the federal Defense of Marriage Act was declared unconstitutional by Bankruptcy Judge Thomas Donovan. Apparently, a legally married (under state marriage laws) gay couple in Los Angeles, Gene Balas and Carlos Morales, filed for personal bankruptcy (using federal laws). The United States Trustee filed a motion to dismiss the case, saying that the Defense of Marriage Act prohibited the “benefit” of joint bankruptcy filing, because the couple was not a “man and a woman.” Judge Donovan rejected the U.S. Trustee’s position declaring that the Defense of Marriage Act was unconstitutional by finding that it violated the equal protection clause of the United States Constitution. This could have ramifications all over federal cases involving Massachusetts, especially in the bankruptcy court.
In the case, Mr. Bolas lost his job, and when he and his husband filed for bankruptcy protection, the US Trustee’s office filed their objection. Their lawyer, Attorney Robert Pfister, of Los Angeles, represented the couple pro bono.
In an unusual show of support, 19 other judges signed Judge Donovan’s decision, showing a strong sign of consensus among the judges, at least in California. In the decision, Judge Donovan found that the Defense of Marriage Act was an “apparent belief that the moral views of the majority may properly be enacted … in disregard of the personal status and living conditions of a significant segment of our pluralistic society.”
While judges in New York and Sacramento have also allowed gay couples to proceed with a bankruptcy, this seems to be the first time that a federal bankruptcy judge has declared the Defense of Marriage Act unconstitutional. Will this be followed in Massachusetts?
Marriage between a gay or lesbian couple was declared constitutional by the Supreme Judicial Court in 2003 in Massachusetts. This decision, a 4-3 opinion, was considered the first of its kind in this country by a top state court. The case Goodridge v. Dep’t. of Public Health defined the end of excluding same sex marriages, and was in response to the Massachusetts Senate’s request for an opinion regarding the legitimacy of civil unions. In Goodridge, the Supreme Judicial Court found that civil unions were separate and unequal. The next step may be a test in the federal bankruptcy court in Massachsuetts.