Our nation won, and the office of the New Jersey Attorney General lost, in U.S. Bankruptcy Court recently. New Jersey had actually argued that the laws of the United States, including the federal bankruptcy law, did not apply to New Jersey, based on a skewed view of "sovereign immunity." Bankruptcy Judges Novalyn Winfield and Stephen Stripp flatly rejected that constitutional monstrosity. Judge Winfield held that "the Court is perplexed by this latter stance as there is no support for such a position in the Constitution or the case law construing its provisions." In re De Oliveira.
The cases arose because the DMV continues to collect "insurance surcharges" after their discharge in bankruptcy by the motorist. Judge Stripp held in Kish (Gail Chester was the attorney) that the surcharge was not in the "fine" exception. Now New Jersey is expected to claim that insurance surcharges are excise taxes. The Judge did not rule on that moot argument, since excise taxes older than 3 years are discharged.
These cases stand for the principle (called "Ex parte
Young") that even if a citizen may not sue a state agency
(because state agencies have sovereign immunity in federal court),
that a citizen may sue a state official for an injunction to
make the state official obey federal law: the Constitution and
laws of the United States. For the sake of the sovereignty of
the United States of America, as one nation, it could not be
CLNJ was an unsuccessful amicus in the Metlife case in the N.J. Supreme Court, where the Court upheld percentage late fees in a commercial mortgage case. The Court did say that a consumer case might be different.
The New York Times printed a Letter to the Editor from
CLNJ stating that pay day loans
( two week loans until pay day at 300% interest) are illegal
in New Jersey; they violate both the 30% criminal usury law and
the 16% civil usury limit. Lending above 16% requires a license.
Thus CLNJ opposes A.2355, a misguided
bill to repeal the civil usury law. Usury laws were the first
consumer protection laws. For 300 years, this law has protected
consumers. Where does Governor Whitman stand? Silence on rent
to own and similar usury issues is very disturbing.
No politician wants
to vote in favor of fraud and loansharking in an election year.
So their plan is to do the dirty work after the elections.
N.J. Bills S.1343/A.1097 are poised to be voted on by the full
Senate and Assembly. Citizens ought to let their legislators
know how they feel about fraud. Three Judges held rent to own
illegal in N.J., yet our Governor and Attorney General seem inclined
to let the rent to own lobbyists (including the Governor's fund
raiser) roll unimpeded through the halls of Trenton.
Another awful idea
is a so-called Federalism bill where Congress would have to specify
which state laws were preempted by the laws Congress passes.
The trouble with this bill is that the U.S. Constitution, in
the Supremacy Clause, already specifies that federal law is the
supreme law of the land. Congress can't constitutionally elevate
a state law so that it preempts federal law. Since it is impossible
to know in advance what state laws will be affected by a federal
law, the bill asks the impossible.
After revolting from
the sovereign King of England, under the Articles of Confederation,
pre-1789, the newly independent states acted like semi-sovereign
countries. Trouble was, they were ungovernable because there
was no effective national government. Statesmen with foresight,
Federalists Alexander Hamilton, James Madison and John Jay, wrote
The Federalist Papers to persuade the states to agree
on a strong federal government and ratify the Constitution of
the United States of America (1789). Our Constitution was sorely
tested in 1860, but the civil war proved that states may not
leave the Union, and must obey federal law. The Fourteenth Amendment
was passed to force southern states to obey federal civil rights
law. The "states' rights" crowd continued to oppress
African-Americans with unjust laws, until the federal courts,
starting with Brown v. Board of Education (1954) made
segregation illegal. Brave federal judges, such as Frank Johnson,
Jr. of Alabama (who died this summer), risked their lives for
the Constitutional principle of equal justice under law. That
civil rights struggle, combined with courts not afraid to promote
justice, not afraid to apply the U.S. Constitution, are examples
of what is right about the United States, a dedication to law
and justice, an attempt to right past wrongs, for which Americans
can be proud.
So then the employees sued the state in state court, arguing that state judges must obey the Supremacy Clause of the U.S. Constitution. To their everlasting shame, those five Justices held that Maine had "sovereign immunity" meaning no one, except the United States itself, can sue the state for money owed. They noted that this was the first time in over 200 years that the Supreme Court had so held.
The reason no prior Supreme Court had so held, is because
Alden v. Maine is dead wrong. Alden undermines
the Constitution of the United States. The Court said that Maine
must obey federal labor laws, voluntarily, making those federal
rights without a monetary remedy in any court. The Court stuck
a knife in the Supremacy Clause of the Constitution. Had a similar
decision been rendered in 1860, then perhaps the southern states
would have been freed to start their separate country. Had Alden
v. Maine been decided in 1954, then African-Americans would
still be segregated out of their legal rights. Jefferson Davis
would be mighty pleased.
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