Whether the Eleventh Amendment prevents Congress from authorizing citizens to collect damages against states that force citizens into bankruptcy with meritless involuntary bankruptcy petitions.

In 11 U.S.C. § 303, Congress enabled creditors to force alleged debtors into bankruptcy involuntarily. Recognizing the reputational and financial harm this could inflict on alleged debtors, Congress further provided in section 303(i) that creditors who file meritless petitions are liable for any damages they cause. Congress knew that individual states might invoke the involuntary bankruptcy procedures. Indeed, states often appear as creditors in bankruptcy proceedings, defending their interests and benefiting from the uniform system Congress designed. Here, Congress decided it was only fair that states should bear responsibility for their own misconduct in involuntary bankruptcy actions, just like any other creditor. To that end, 11 U.S.C. § 106(a) prohibits states from asserting sovereign immunity to escape secti on 303(i) damages. In its opinion below, the Ninth Circuit broke that system. Despite Congress’s constitutional authority over bankruptcy in Article I, the Ninth Circuit joined the Fourth, Fifth, Seventh, and Tenth Circuits in holding that section 106(a) is unconstitutional in nearly all respects. Meanwhile, the First, Second, Third, and Sixth Circuits have indicated that section 106(a) is constitutional, at least in some scenarios. This Court has taken up the question of when section 106(a) is constitutional three times b efore but ended up resolving those cases on other grounds each time. The time is now ripe for this Court to address this circuit split and resolve the following question: ii Whether the Eleventh Amendment prevents Congress from authorizing citizens to collect damages against states that force citizens into bankruptcy with meritless involuntary bankruptcy petitions.