1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-8-1998

In Re: Sacred Heart

Precedential or Non-Precedential:

Docket 97-1126

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Recommended Citation

"In Re: Sacred Heart" (1998). 1998 Decisions. Paper 4.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/4
Filed January 8, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 97-1126 

IN RE: SACRED HEART HOSPITAL OF NORRISTOWN, dba 

SACRED HEART HOSPITAL & REHABILITATION CENTER, 

Debtor 

SACRED HEART HOSPITAL OF NORRISTOWN, dba 

SACRED HEART HOSPITAL & REHABILITATION CENTER 

v. 

COMMONWEALTH OF PENNSYLVANIA, 

DEPARTMENT OF PUBLIC WELFARE 

(D.C. Civil No. 96-cv-06172) 

IN RE: SACRED HEART HOSPITAL OF NORRISTOWN, 

d/b/a SACRED HEART HOSPITAL & 

REHABILITATION CENTER, 

Debtor 

SACRED HEART HOSPITAL OF NORRISTOWN 

v. 

COMMONWEALTH OF PENNSYLVANIA, 

DEPARTMENT OF PUBLIC WELFARE 

(D.C. Civil No. 96-cv-06286) 

Sacred Heart Hospital of Norristown, 

Appellant 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Nos. 96-cv-06172 and 96-cv-06286) 
Argued September 25, 1997 

BEFORE: COWEN, ROTH and LEWIS, Circuit Judges 

(Filed January 8, 1998) 

 William A. Slaughter, Esq. (Argued) 

 Matthew M. Strickler 

 Ballard, Spahr, Andrews & Ingersoll 

 1735 Market Street 

 51st Floor 

 Philadelphia, PA 19103 

 COUNSEL FOR APPELLANT 

 Sacred Heart Hospital of 

 Norristown 

 Sallie A. Rodgers, Esq. 

 Commonwealth of Pennsylvania, 

 Office of Legal Counsel 

 Department of Public Welfare 

 Health & Welfare Building 

 P.O. Box 2675 

 Harrisburg, PA 17105-2675 

 Thomas Blazusiak, Esq. (Argued) 

 Pennsylvania Department of 

 Public Welfare 

 1600 Hanover Avenue 

 Allentown, PA 18103 

 COUNSEL FOR APPELLEE 

 Commonwealth of PA, Department 

 of Public Welfare 

 Leonard H. Gerson, Esq. 

 Angel & Frankel 

 460 Park Avenue 

 New York, NY 10017 

 COUNSEL FOR AMICUS- 

 APPELLANT 

 Business Bankruptcy Law 

 Committee of the New York 

 County Lawyers' Association 

 2 
OPINION OF THE COURT 

COWEN, Circuit Judge. 

This appeal involves a challenge to the constitutionality 

of section 106(a) of the Bankruptcy Code, 11 U.S.C.

S 106(a). That section purports to abrogate state sovereign 

immunity in federal court. The defendant-appellee, 

Commonwealth of Pennsylvania Department of Public 

Welfare ("DPW"), argued before the bankruptcy court that 

section 106(a) was not enacted pursuant to a valid exercise 

of congressional power. Therefore, DPW asserted that the 

Eleventh Amendment to the United States Constitution 

bars Debtor-appellant Sacred Heart Hospital of 

Norristown's ("Sacred Heart") lawsuit against DPW. The 

bankruptcy court denied DPW's claim of Eleventh 

Amendment immunity. It also entered an order on the

merits granting declaratory judgment for Sacred Heart. The 

district court reversed the bankruptcy court's order dealing 

with Eleventh Amendment immunity and thereafter vacated 

the order of the bankruptcy court concerning the merits of 

the dispute. We will affirm the district court. 

I. 

Sacred Heart, an acute care community hospital in 

Norristown, Pennsylvania, began providing medical 

treatment to patients under Pennsylvania's Medical 

Assistance program ("the Program"), 55 Pa. Code S 1101.11 

et seq., in 1967. By May of 1994, however,financial

difficulties forced Sacred Heart to cease operations and lay 

off substantially all of its several hundred employees. 

Shortly thereafter, Sacred Heart filed a voluntary petition 

for relief under Chapter 11 of the United States Bankruptcy 

Code. 

During the course of Sacred Heart's Chapter 11 

proceedings, the Commonwealth asserted various claims 

against the Debtor. The Commonwealth's Department of 

Labor and Industry ("DLI") asserted claims against the 

Debtor for amounts claimed to be owed to the 

 3 
Commonwealth under the Commonwealth's Unemployment 

Compensation and Workers' Compensation statutes; the 

Commonwealth's Department of Revenue ("DOR") asserted 

claims against the Debtor for sales and use taxes; and DPW 

asserted a claim against the Debtor arising under a lease.1 

Earlier in the bankruptcy proceedings, the Debtor 

submitted invoices to DPW to obtain payment for some of 

the medical treatments it provided to patients under the 

Program. The Commonwealth's Office of Inspector General 

("OIG") returned the invoices to the Debtor, however, 

because they were incorrectly completed. The Debtor

resubmitted them to OIG in January of 1996, and 

submitted additional invoices to DPW in May of 1996. DPW 

denied all of the Debtor's claims because the Debtor failed 

to comply with 55 Pa. Code S 1101.68. This statute requires 

claims to be submitted to DPW within 180 days after the 

treatment is rendered. 

The Debtor subsequently filed in the bankruptcy court 

the instant adversary proceeding against DPW, demanding 

judgment against DPW "in the amount to which it is 

entitled under the Medical Assistance program." Adv. 

Compl. at 5. The Debtor did not request a declaratory 

judgment, nor did it request any prospective injunctive 

relief against any Commonwealth officials. 

DPW filed motions to dismiss based principally on the 

Eleventh Amendment to the United States Constitution. 

Sacred Heart responded by claiming that no 

Commonwealth agency was entitled to Eleventh 

Amendment immunity in these proceedings because the

DLI and DOR claims in the bankruptcy proceedings 

constituted a waiver of the Commonwealth's sovereign 

_________________________________________________________________ 

1. Although DPW filed a proof of claim against the Debtor in these 

proceedings, it is undisputed that this claim was misdocketed. The lease 

in question was between DPW and the Sacred Heart General Hospital 

("SHGH"), which also had a matter pending in the Bankruptcy Court for 

the Eastern District of Pennsylvania. Once DPW recognized that its claim 

against SHGH was unrelated to the Debtor, it agreed not to pursue any 

claim against the Debtor and not to oppose the Debtor's objection to the 

claim. Sacred Heart has never argued that DPW waived its Eleventh 

Amendment immunity because of this inadvertent filing. 

 4 
immunity.2 Sacred Heart did not argue that the Eleventh 

Amendment did not apply or that DPW had waived its 

immunity under 11 U.S.C. S 106(c). 

The bankruptcy court denied DPW's motions. It held that 

the Eleventh Amendment was not implicated because: (1) 

the adversary complaint sought not monetary relief but 

only a declaration that section 108(a) of the Bankruptcy 

Code affected state billing rules to require that otherwise 

untimely invoices be accepted as timely; and (2) the 

Commonwealth waived its sovereign immunity as to all 

claims relating to Sacred Heart's bankruptcy proceedings 

when DLI filed its proof of claim for unreimbursed 

unemployment benefits.3 The bankruptcy court 

subsequently issued a final order, stating that "[u]pon 

advice of the Debtor's counsel . . . the Debtor would 

presently be satisfied with an Order declaring 11 U.S.C. 

S 108(a) applies here." App. at A52.4 The bankruptcy court 

ordered that DPW accept as timely all billings that were not 

untimely under state rules as of the filing of Sacred Heart's 

bankruptcy. The Commonwealth appealed both orders to 

the district court. 

_________________________________________________________________ 

2. While it is unclear whether Sacred Heart's waiver argument before the 

bankruptcy court was based on 11 U.S.C. S 106(b) or some undefined 

general waiver principle, we need not be concerned with this ambiguity 

(or the constitutional issues concerning either theory) because Sacred 

Heart has failed to pursue these arguments in this appeal. 

3. DPW filed an immediate appeal of this order under the collateral order 

exception to the final judgment rule. Although the bankruptcy court 

refused to grant a stay pending appeal, the district court subsequently 

granted the stay. 

4. Section 108(a) provides as follows: 

 (a) If applicable nonbankruptcy law, an order entered in a non- 

 bankruptcy proceeding, or an agreement fixes a period within which 

 the debtor may commence an action, and such period has not 

 expired before the date of the filing of the petition, the trustee 

may 

 commence such action only before the later of-- 

 (1) the end of such period, including any suspension of such 

 period occurring on or after the commencement of the case; or 

 (2) two years after the order for relief. 

11 U.S.C. S 108(a) (1993). 

 5 
The district court by order entered on January 21, 1997, 

reversed the bankruptcy court. Specifically, the district 

court held that 11 U.S.C. S 106(a), which purports to 

abrogate state sovereign immunity, violates the Eleventh 

Amendment to the United States Constitution in light of the 

Supreme Court's decision in Seminole Tribe of Florida v. 

Florida, ___ U.S. ___, 116 S. Ct. 1114 (1996).5 The district 

court also determined that, because there was no 

contention that Sacred Heart's claims against DPW arose 

out of the same transaction or occurrence as either DLI's or 

DOR's claims against Sacred Heart, DPW did not waive its 

immunity pursuant to 11 U.S.C. S 106(b). In addition, 

because Sacred Heart never argued before the bankruptcy 

court that its claims were raised to offset DLI's or DOR's 

claims pursuant to 11 U.S.C. S 106(c), the district court 

found this issue waived. Finally, the district court held that 

the bankruptcy court lacked jurisdiction over the adversary 

proceeding after DPW appealed the August 7, 1996, order 

of the bankruptcy court, which was a collateral order 

dealing with the jurisdiction of the bankruptcy court. It also 

vacated the August 15, 1996, order of the bankruptcy court 

which dealt with the merits of the adversary proceedings. 

This appeal followed. 

_________________________________________________________________ 

5. Section 106 of the Bankruptcy Code, entitled "Waiver of sovereign 

immunity," provides, in pertinent part: 

 (a) Notwithstanding an assertion of sovereign immunity, sovereign 

 immunity is abrogated as to a governmental unit to the extent set 

 forth in this section with respect to the following: 

 (1) Sections . . . 106 [and] 108 . . . of this title. 

 . . . . 

 (b) A governmental unit that has filed a proof of claim in the 

case 

 is deemed to have waived sovereign immunity with respect to a 

 claim against such governmental unit that is property of the estate 

 and that arose out of the same transaction or occurrence out of 

 which the claim of such governmental unit arose. 

 (c) Notwithstanding any assertion of sovereign immunity by a 

 governmental unit, there shall be offset against a claim or 

interest 

 of a governmental unit any claim against such governmental unit 

 that is property of the estate. 

11 U.S.C. S 106 (1994). 

 6 
Sacred Heart essentially raises three arguments on 

appeal. First, it contends that the Eleventh Amendment 

does not limit bankruptcy court jurisdiction because 

bankruptcy courts do not exercise the judicial power of the 

United States under Article III. Second, it asserts that the 

Bankruptcy Clause, U.S. Const. art. I, S 8, cl. 4, vests 

Congress with the power to abrogate state sovereign

immunity from suit in federal court. Third, it maintains 

that even if the Bankruptcy Clause itself does not authorize 

Congress to abrogate state sovereign immunity, Congress' 

abrogation of sovereign immunity in section 106(a) should 

be sustained as a valid exercise of its enforcement power 

under the Fourteenth Amendment.6 

II. 

"Because in bankruptcy cases the district court sits as an 

appellate court, our review of the district court's decision is 

plenary." Brown v. Pennsylvania State Employees Credit 

Union, 851 F.2d 81, 84 (3d Cir. 1988) (citing Universal 

Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 101-02 

(3d Cir. 1981)). We review the findings of fact of the 

bankruptcy court only for clear error. Id. (citing In re 

Morrissey, 717 F.2d 100, 104 (3d Cir. 1983)). Findings of 

fact by a trial court are clearly erroneous when, after 

reviewing the evidence, the appellate court is "left with a 

definite and firm conviction that a mistake has been 

committed." Anderson v. City of Bessemer City, N.C., 470 

U.S. 564, 573, 105 S. Ct. 1504, 1511 (1985) (quotation 

marks omitted). We exercise plenary review over legal 

questions. In re Fegeley, 118 F.3d 979, 982 (3d Cir. 1997) 

(citing In re Siciliano, 13 F.3d 748, 750 (3d Cir. 1994)). It is 

error for a district court, when acting in the capacity of a 

court of appeals, to make its own factual findings. Universal 

Minerals, 669 F.2d at 104. 

_________________________________________________________________ 

6. DPW also contends that because DLI and DORfiled proofs of claim in 

these proceedings, Sacred Heart may bring a declaratory judgment 

action against DPW pursuant to section 106's "offset" provision, 11 

U.S.C. S 106(c). However, we need not address this argument and, thus, 

the constitutionality of 11 U.S.C. S 106(c), because Sacred Heart failed 

to 

raise this issue below and, therefore, for purposes of this appeal, has 

waived it. 

 7 
The bankruptcy court had jurisdiction pursuant to 28 

U.S.C. S 1334(a) and 28 U.S.C. S 157(a). The district court's 

appellate jurisdiction was based upon 28 U.S.C. S 158(a) 

and the collateral order exception to the final judgment 

rule. See Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & 

Eddy, Inc., 506 U.S. 139, 142-43, 113 S. Ct. 684, 687 

(1993). We have jurisdiction pursuant to 28 U.S.C.S 158(d). 

III. 

The Eleventh Amendment provides: 

 The Judicial power of the United States shall not be 

 construed to extend to any suit in law or equity, 

 commenced or prosecuted against one of the United 

 States by Citizens of another State, or by Citizens or 

 Subjects of any Foreign State. 

U.S. Const. amend. XI. Although the Amendment expressly 

prohibits only suits against States by citizens of other 

States, the Supreme Court has long held that the Eleventh 

Amendment also bars suits against the State by its own 

citizens, Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S. 

Ct. 1347, 1355 (1974) (collecting cases), and may bar suits 

invoking the federal question jurisdiction of Article III 

courts. See Idaho v. Coeur d'Alene Tribe of Idaho, ___ U.S. 

___, ___, 117 S. Ct. 2028, 2033 (1997) (citing Seminole 

Tribe, ___ U.S. at ___, 116 S. Ct. at 1114). This immunity 

is based on a two-part presupposition: (1) "each State is a 

sovereign entity in our federal system[,]" Seminole Tribe, ___ 

U.S. at ___, 116 S. Ct. at 1122; and (2) "[i]t is inherent in 

the nature of sovereignty not to be amenable to the suit of 

an individual without its consent." Id. at ___, 116 S. Ct. at 

1122 (quotation marks omitted). 

Eleventh Amendment immunity, however, is not 

absolute. When, as here, a plaintiff seeks recovery only 

from the state, and not from its officials, there are two ways 

to divest a state of its Eleventh Amendment sovereign 

immunity and hale the state into federal court. First, a 

state may waive its Eleventh Amendment immunity and

consent to suit in federal court. See Atascadero State Hosp. 

v. Scanlon, 473 U.S. 234, 238, 105 S. Ct. 3142, 3145 

(1985). Second, Congress can abrogate a state's Eleventh 

 8 
Amendment immunity, but only if two requirements are 

met: Congress must unequivocally express an intent to 

abrogate state immunity, and the legislative action must be 

"pursuant to a valid exercise of power . . . ." Green v. 

Mansour, 474 U.S. 64, 68, 106 S. Ct. 423, 425-26 (1985) 

(citing Pennhurst State Sch. & Hosp. v. Halderman, 465 

U.S. 89, 98, 104 S. Ct. 900, 906 (1984)). 

"Congress' intent to abrogate the States' immunity from 

suit must be obvious from `a clear legislative statement.' " 

Seminole Tribe, ___ U.S. at ___, 116 S. Ct. at 1123 (quoting 

Blatchford v. Native Village of Noatak, 501 U.S. 775, 786, 

111 S. Ct. 2578, 2584 (1991)). "A general authorization for 

suit in federal court is not the kind of unequivocal statutory 

language sufficient to abrogate the Eleventh Amendment." 

Atascadero, 473 U.S. at 246, 105 S. Ct. at 3149. Rather, 

abrogation will be effected only when the intent to abrogate 

is "stated by the most express language or by such 

overwhelming implication from the text as [will] leave no 

room for any other reasonable construction." Id. at 239-40, 

105 S. Ct. at 3146 (quotation marks omitted). 

If congressional intent to abrogate is found, a federal 

court must next determine whether Congress, in enacting 

the specific legislation, was acting pursuant to a valid 

exercise of power. Prior to Seminole Tribe, the Supreme 

Court had recognized two sources of authority through 

which Congress could validly abrogate state sovereign 

immunity: section 5 of the Fourteenth Amendment, 

Fitzpatrick v. Bitzer, 427 U.S. 445, 96 S. Ct. 2666 (1976), 

and the Interstate Commerce Clause. Pennsylvania v. Union 

Gas Co., 491 U.S. 1, 109 S. Ct. 2273 (1989). In Seminole 

Tribe, however, the Court overruled Union Gas and held 

that "[t]he Eleventh Amendment restricts the judicial power 

under Article III, and Article I cannot be used to circumvent 

the constitutional limitations placed upon federal 

jurisdiction." ___ U.S. at ___, 116 S. Ct. at 1131-32. "Thus, 

since Seminole Tribe section five of the Fourteenth

Amendment has been the sole basis for Congress to 

abrogate the states' immunity under the Eleventh 

Amendment."7 College Savings Bank v. Florida Prepaid 

_________________________________________________________________ 

7. As the Fitzpatrick Court explained, the Fourteenth Amendment, 

adopted well after the adoption of the Eleventh Amendment, expanded 

 9 
Postsecondary Education Expense Bd., ___ F.3d ___, ___, 

1997 WL 749514, at *4 (3d Cir. Dec. 5, 1997). 

In light of the foregoing, we must determine, first, 

whether Congress expressly abrogated the states' Eleventh 

Amendment immunity when enacting the current version of 

section 106(a),8 and, second, whether the Act in question 

was passed pursuant to a constitutional provision granting 

Congress the power to abrogate. 

There can be no doubt that Congress unequivocally 

expressed its intent to abrogate the states' Eleventh 

Amendment immunity under the Bankruptcy Code. See 

Matter of Fernandez, 123 F.3d 241, 243 (5th Cir. 1997); In 

re Creative Goldsmiths of Washington, D.C., Inc., 119 F.3d 

1140, 1145 (4th Cir. 1997). Section 106(a) explicitly states 

that, "[n]otwithstanding an assertion of sovereign immunity, 

sovereign immunity is abrogated as to a governmental unit 

to the extent set forth in this section . . . ." The only 

question before us, therefore, is whether Congress acted 

pursuant to a valid exercise of its power. 

_________________________________________________________________ 

federal power at the expense of state autonomy and thereby 

fundamentally altered the pre-existing balance between state and federal 

power achieved by Article III and the Eleventh Amendment. 427 U.S. at 

453-56, 96 S. Ct. at 2670-71. The Court reaffirmed this view of section 

5 in Seminole Tribe. ___ U.S. at #6D 6D6D#, 116 S. Ct. at 1128. 

8. Pursuant to section 113 of the Bankruptcy Reform Act of 1994, Pub. 

L. No. 103-394, 108 Stat. 4106 (1994), former section 106(c) was 

amended and recodified as current section 106(a). The Amendment was 

intended to overrule United States v. Nordic Village, Inc., 503 U.S. 30, 

112 S. Ct. 1011 (1992) and Hoffman v. Connecticut Dep't of Income 

Maintenance, 492 U.S. 96, 109 S. Ct. 2818 (1989), "two Supreme Court 

cases that have held the States and Federal Government are not deemed 

to have waived their sovereign immunity by virtue of enacting section 

106(c) of the Bankruptcy Code." 140 Cong. Rec. H10766 (daily ed. Oct. 

4, 1994) (Section-By-Section Description). The amendment was also 

intended "to clarify[ ] the original intent of Congress in enacting 

Section 

106 of the Bankruptcy Code with regard to sovereign immunity." See 

Matter of Merchants Grain, Inc., 59 F.3d 630, 634 (7th Cir. 1995) 

(quotation marks omitted), judgment vacated sub nom. Ohio Agr. 

Commodity Depositors Fund v. Mahern, ___ U.S. ___, 116 S. Ct. 1411 

(1996). 

 10 
Sacred Heart contends that Seminole Tribe merely held 

that Congress could not abrogate sovereign immunity

pursuant to the Indian and Interstate Commerce Clauses 

and did not address Congress' other Article I powers. 

Sacred Heart also argues that the Bankruptcy Clause is 

distinguishable from other Article I clauses because it 

contains an affirmative requirement of uniformity. In 

addition, Sacred Heart asserts that we should uphold 

section 106(a) as a valid exercise of Congress' power under 

section 5 of the Fourteenth Amendment.9 We find each of 

these arguments unpersuasive. 

The Seminole Tribe Court held that Congress may not

abrogate state sovereign immunity by legislation passed 

pursuant to its Article I powers. ___ U.S. at ___, 116 S. Ct. 

at 1131-32. The Court stated: 

 Even when the Constitution vests in Congress complete 

 law-making authority over a particular area, the 

 Eleventh Amendment prevents congressional 

 authorization of suits by private parties against 

 unconsenting States. The Eleventh Amendment 

 restricts the judicial power under Article III, and Article 

 I cannot be used to circumvent the constitutional 

 limitations placed upon federal jurisdiction. 

Id. (footnote omitted). The Court thereby overruled Union 

Gas, its only prior case finding congressional authority to 

abrogate state sovereign immunity pursuant to an Article I 

power, and "restored the balance of power between 

Congress and the Judiciary anticipated by the Framers in 

Article I and Article III of the Constitution . . . ." Close v. 

New York, 125 F.3d 31, 38 (2d Cir. 1997). 

_________________________________________________________________ 

9. While Sacred Heart also contends that the Eleventh Amendment is not 

even implicated in this matter because bankruptcy courts do not 

exercise the judicial power of the United States under Article III, this 

argument cannot withstand the Supreme Court's recent pronouncement 

in Seminole Tribe that "[t]he Eleventh Amendment restricts the judicial 

power under Article III, and Article I cannot be used to circumvent the 

constitutional limitations placed upon federal jurisdiction." ___ U.S. at 

___, 116 S. Ct. at 1131-32. See also In re Grewe, 4 F.3d 299, 304 (4th 

Cir. 1993) ("[W]hile functionally there may appear to be a separate 

bankruptcy court, for jurisdictional purposes there is only one court, 

i.e., 

the district court." (quotation marks and citation omitted)). 

 11 
Moreover, there is simply no principled basis to 

distinguish the Bankruptcy Clause from other Article I 

clauses. See Matter of Fernandez, 123 F.3d at 244; In re 

Creative Goldsmiths, 119 F.3d at 1145-46; see also 

Hoffman, 492 U.S. at 111, 109 S. Ct. at 2828 (Marshall, J., 

dissenting) ("I see no reason to treat Congress' power under 

the Bankruptcy Clause any differently [than the Commerce 

Clause], for both constitutional provisions give Congress 

plenary power over national economic activity." (citation 

omitted)). Nor does the uniformity requirement in the 

Bankruptcy Clause change this analysis. "The 

Constitutional requirement of uniformity is a requirement 

of geographic uniformity" and nothing more. Vanston

Bondholders Protective Comm. v. Green, 329 U.S. 156, 172, 

67 S. Ct. 237, 244 (1946) (Frankfurter, J., concurring). 

Because Eleventh Amendment immunity applies uniformly 

to all states and to all parties in a bankruptcy proceeding, 

the uniformity requirement is not frustrated, and Sacred 

Heart's argument must fail. As such, we hold that the 

Bankruptcy Clause is not a valid source of abrogation 

power. 

Equally unavailing is Sacred Heart's assertion that

Congress enacted section 106(a) pursuant to section 5 of 

the Fourteenth Amendment. Section 5 of the Fourteenth 

Amendment provides that "Congress shall have the power 

to enforce, by appropriate legislation, the provisions of this 

article." U.S. Const. amend. XIV, S 5. "Correctly viewed, S 5 

is a positive grant of legislative power authorizing Congress 

to exercise its discretion in determining whether and what 

legislation is needed to secure the guarantees of the 

Fourteenth Amendment." Katzenback v. Morgan, 384 U.S. 

641, 651, 86 S. Ct. 1717, 1723-24 (1966). Congress' power, 

however, "extends only to enforc[ing] the provisions of the 

Fourteenth Amendment." City of Boerne v. Flores, ___ U.S. 

___, ___, 117 S. Ct. 2157, 2164 (1997) (quotation marks 

omitted). "Any suggestion that Congress has a substantive, 

non-remedial power under the Fourteenth Amendment is 

not supported by our case law." Id. at ___, 117 S. Ct. at 

2167-68. 

While Congress need not "recite the words `section 5' or 

`Fourteenth Amendment' or `equal protection' " when

 12 
enacting laws pursuant to this power, E.E.O.C. v. Wyoming, 

460 U.S. 226, 243 n.18, 103 S. Ct. 1054, 1064 n.18 (1983) 

(citation omitted), "if Congress does not explicitly identify 

the source of its power as the Fourteenth Amendment, 

there must be something about the act connecting it to 

recognized Fourteenth Amendment aims." Wilson-Jones v. 

Caviness, 99 F.3d 203, 210 (6th Cir. 1996), modified on 

other grounds, 107 F.3d 358 (6th Cir. 1997) (per curiam);10 

see also Pennhurst State Sch. & Hosp. v. Halderman, 451 

U.S. 1, 16, 101 S. Ct. 1531, 1539 (1981) (respect for state 

sovereignty requires that courts "should not quickly 

attribute to Congress an unstated intent to act under its 

authority to enforce the Fourteenth Amendment"). Here, 

there is simply no evidence suggesting that section 106(a) 

was enacted pursuant to any constitutional provision other 

than Congress' Bankruptcy Clause power. See Matter of 

Fernandez, 123 F.3d at 245; In re Creative Goldsmiths, 119 

F.3d at 1146; In re Kish, 212 B.R. 808, 815 (D.N.J. 1997); 

In re C.J. Rogers, Inc., 212 B.R. 265, 272-73 (E.D. Mich. 

1997). On the contrary, 

 the conclusion seems logically inescapable that in 

 passing the 1994 Act Congress exercised the same 

 specifically enumerated Article I bankruptcy power that 

 it has traditionally relied on in enacting prior 

 incarnations of the bankruptcy law dating back to 

 1860--68 years before the passage of the Fourteenth 

 Amendment. We will not presume that Congress

 intended to enact a law under a general Fourteenth 

 Amendment power to remedy an unspecified violation 

 of rights when a specific, substantive Article I power 

 clearly enabled the law. 

In re Creative Goldsmiths, 119 F.3d at 1146 (citation 

omitted). Sacred Heart's argument must fail. 

_________________________________________________________________ 

10. Although the Wilson-Jones court indicated that the only cases it 

"could locate where legislation was upheld under the Fourteenth 

Amendment's enforcement clause concerned discrimination by state 

actors on the basis of race or gender[,]" 99 F.3d at 210, this court 

recently considered whether the Trademark Remedy Clarification Act of 

1992, Pub. L. No. 102-542, 106 Stat. 3567 (1992), was a valid 

mechanism to enforce the Due Process Clause. See College Savings 

Bank, ___ F.3d at ___-___, 1997 WL 749514, at *5-9.

 13 
Finally, we also reject Sacred Heart's contention that 

bankruptcy constitutes a "privilege or immunity" under 

section 1 of the Fourteenth Amendment, thereby enabling 

Congress to utilize section 5 of the Fourteenth Amendment 

to abrogate Eleventh Amendment immunity. As we 

observed in Lutz v. City of York, 899 F.2d 255, 264 (3d 

Cir. 1990), the Privileges and Immunities Clause of

the Fourteenth Amendment "has remained essentially 

moribund" since the Supreme Court's decision in The

Slaughter-House Cases, 83 U.S. (16 Wall.) 36 (1873), and 

the Supreme Court has subsequently relied almost 

exclusively on the Due Process Clause as the source of 

unenumerated rights.11 Moreover, the Supreme Court has 

expressly held that there is no constitutional right to a 

bankruptcy discharge, see United States v. Kras, 409 U.S. 

434, 446-47, 93 S. Ct. 631, 638-39 (1973), and we can 

conceive of no reason to resuscitate this section of the 

Fourteenth Amendment by finding that bankruptcy is a 

privilege of national citizenship. See Matter of Fernandez, 

123 F.3d at 245 ("[T]here is no indication that Congress 

passed the 1994 Act to remedy any incipient breaches or 

even some unarticulated, general violation of the rights 

specified in S 1 of the Fourteenth Amendment." (citation 

omitted)); see also In re Kish, 212 B.R. at 817; In re NVR, 

L.P., 206 B.R. 831, 842 (Bankr. E.D. Va. 1997). 

Having concluded that Congress may not abrogate state 

sovereign immunity pursuant to any of its Article I powers, 

_________________________________________________________________ 

11. "The Fourteenth Amendment forbids states from abridging the 

privileges and immunities that flow from national citizenship." In re 

Storer, 58 F.3d 1125, 1128 (6th Cir. 1995) (citing U.S. Const. amend. 

XIV, S 1). The most prominent rights of national citizenship were 

catalogued in Twining v. New Jersey, 211 U.S. 78, 29 S. Ct. 14 (1908), 

and include the right to inform federal officials of violations of federal 

law, In re Quarles, 158 U.S. 532, 15 S. Ct. 959 (1895), the right to be 

free from violence while in the lawful custody of a United States marshal, 

Logan v. United States, 144 U.S. 263, 12 S. Ct. 617 (1892), the right to 

enter the public lands, United States v. Waddell, 112 U.S. 76, 5 S. Ct. 

35 (1884), the right to vote in national elections, The Ku-Klux Cases, 110 

U.S. 651, 4 S. Ct. 152 (1884), the right to petition Congress for redress 

of grievances, United States v. Cruikshank, 92 U.S. (2 Otto) 542 (1875), 

and the right to pass freely from state to state, Crandall v. Nevada, 73 

U.S. (6 Wall.) 35 (1867). 

 14 
and that there is no evidence that Congress enacted section 

106(a) of the Bankruptcy Code pursuant to section 5 of the 

Fourteenth Amendment, we hold that section 106(a) is 

unconstitutional to the extent that it purports to abrogate 

state sovereign immunity in federal court. The January 21, 

1997, order of the district court will be affirmed in all 

respects. 

 15 
ROTH, Circuit Judge, concurring. 

I agree with the majority holding rejecting the 

Bankruptcy Clause as a source of abrogation power postSeminole Tribe of Florida v. Florida, ___ U.S. ___, 116 S.Ct. 

1114 (1996), and consequently declaring 11 U.S.C. S 106(a) 

unconstitutional. I write separately, however, to express my 

concern about the breadth of the language used by the 

majority in reaching this holding. 

The Supreme Court in Seminole Tribe, rejected both the 

Indian Commerce Clause and, by overruling Pennsylvania 

v. Union Gas Co., 491 U.S. 1, 109 S.Ct. 2273 (1989), the 

Interstate Commerce Clause as sources of abrogation

power. ___ U.S. at __, 116 S.Ct. at 1127, 1131. The majority 

in the instant case, concludes that "there is simply no 

principled basis to distinguish the Bankruptcy Clause from 

other Article I clauses." Majority Op. at 12. I would not go 

so far as to discuss the merits of Article I powers other than 

the ones at issue in Seminole Tribe and the instant case: 

the Interstate Commerce Clauses, and the Bankruptcy

Clause, respectively. I would hold that there is simply no 

principled basis to distinguish the Bankruptcy Clause from 

the Interstate Commerce Clause. In both words and scope, 

the Bankruptcy Clause is identical to the Indian Commerce 

Clause. Both clauses read as follows: "The Congress shall 

have Power [t]o . . . ." Furthermore, nothing in the history 

or text of the Bankruptcy Clause indicates any more an 

"alter[ation of the] pre-existing balance between state and 

federal power," Seminole Tribe, #6D6D 6D# U.S. at ___, 116 S.Ct. at 

1128, than the Indian Commerce Clause. 

In short, I would not foreclose the possibility that in the 

post-Seminole Tribe era, there exist any Article I powers 

sufficiently [powerful/unique/similar to the Fourteenth 

Amendment in effect as] to abrogate state sovereign

immunity. See, e.g., Diaz-Gandia v. Dapena-Thompson, 90 

F.3d 609, 616 (1st Cir. 1996) (reaffirming that Congress, 

acting pursuant to its War Powers, see U.S. Const. art. I, 

S 8, abrogated state sovereign immunity to damages actions 

brought under the Veterans' Reemployment Rights Act, 38 

U.S.C. S 2021 et seq.). As the First Circuit reasoned, it is 

not clear that the Court's holding in Seminole Tribe was so 

broad as to strike down all sources of abrogation power in 

 16 
Article I. 90 F.3d at 616. I would deal with potential 

sources of abrogation power in Article I, as they arise on a 

case-by-case basis. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

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