(Updates with reason for bankruptcy in ninth paragraph.)
June 14 (Bloomberg) -- The ban on federal recognition of same-sex marriage can’t prevent a gay couple from filing a joint bankruptcy, a panel of judges ruled, declaring the U.S. Defense of Marriage Act unconstitutional.
Gene Douglas Balas and Carlos A. Morales were married legally in California before voters in 2008 passed Proposition 8, which banned same-sex marriages. That makes them, and about 18,000 other gay couples who wed in the state before the ban, eligible to file bankruptcy together, according to yesterday’s ruling in U.S. Bankruptcy Court in Los Angeles.
“This case is about equality, regardless of gender or sexual orientation,” according to the decision signed by 20 bankruptcy judges. “In this court’s judgment, no legally married couple should be entitled to fewer bankruptcy rights than any other legally married couple.”
The U.S. Defense of Marriage Act bans federal agencies from recognizing marriages between same-sex couples. The judges, in their decision yesterday, ruled that the 1996 law violates the Fifth Amendment of the Constitution by treating married gay couples differently from married opposite-sex couples.
While two other courts previously allowed same-sex couples to file joint bankruptcies, this ruling went further, Robert J. Pfister, an attorney for Balas and Morales, said in a telephone interview.
U.S. District Judge Vaughn Walker in San Francisco ruled in August that there was “overwhelming” evidence that Proposition 8, the 2008 amendment to California’s constitution that states marriage is only between a man and a woman, violates equal protection rights.
The judge who took over the Proposition 8 case after Walker retired refused to throw out Walker’s ruling today, rejecting a request from gay-marriage opponents. Proposition 8 advocates argued that Walker shouldn’t have been allowed to oversee the case because he is gay and therefore had a stake in the outcome.
In the bankruptcy case, the judges ruled that it would not be “fair or rational” to conclude that a gay married couple that filed a joint bankruptcy had somehow harmed married heterosexuals.
Balas supplied most of the couple’s income from his $200,000-a-year job in the financial industry before he was laid off in March 2009, he said in court records. The couple filed for bankruptcy in February after exhausting their savings and retirement accounts.
The Office of the U.S. Trustee, which oversees bankruptcy cases, asked a judge to throw out the bankruptcy, arguing that because Balas and Morales are men, the Defense of Marriage Act prohibits the court from recognizing them as a married couple.
President Barack Obama’s administration stopped defending the law in courts, saying it unconstitutionally discriminates against gays and lesbians. That decision prompted House Speaker John Boehner, an Ohio Republican, to authorize the House’s top lawyer to take over that task.
The House Bipartisan Legal Advisory Group, working with the U.S. Trustee, didn’t intervene in the case though it said it was considering doing so, according to the opinion issued today.
Michael Steel, a spokesman for Boehner, didn’t immediately return a call for comment.
The bankruptcy case is In re Gene Douglas Balas, 11-17831, U.S Bankruptcy Court, Central District of California (Los Angeles). The Proposition 8 case is Perry v. Schwarzenegger, 3:09-cv-02292, U.S. District Court, Northern District of California (San Francisco).
--With assistance from Karen Gullo in San Francisco. Editors: Charles Carter, Michael Hytha
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