Th e Ho no ra ble JohnR. G ibs on , Unit e d St ate s Co ur t of Ap pe a ls f

or the Ei g hth

Cir c uit , 1 sitti ngby desig nation. 1 07- 4369- bk I n r e: CFCU Commun i t y Cr edi t U n i on 1 U N IT E D S T A T E S C O U R T O F A P P E A LS 2 3 F OR THE S EC OND C IR C U IT 4 5 6 7 August Term, 2008 8 9 (Argued: September 24, 2008 Dec ided: J anuar y 9, 2009) 10 11 12 Docke t No. 07-4369-bk 13 14 15 16 CF CU C OMMUNI TY C R E DI T U NI ON , 17 18 Ap pe lla nt, 19 20 –v.– 21 22 J ER AL D J OHN H A Y WA RD , II, L O I S E VE L YN H A Y WA RD , 23 24 Ap pe lle es, 25 26 S T A T E O F N EW Y O RK , O F F I CE OF THE A TTORN EY G EN ER AL , 27 28 In te rv e no r, 29 30 P ET ER S CR I BNER , 31 32 Trustee. 33 34 35 Be fore : 36 W ES L EY , H A LL , and G I B S ON , Circuit Judges

. 12 1 Appea l from a judg ment of the United States District Court for the Western District of 2 New Y ork (Siragusa, J .), ente red on Septe mber 19, 2007, a ffirmingan orde r of the B ankruptc y 3 Court (Ninfo, J. ), e nte re d o n M ay 25 , 2 00 6, ho ldi ngthat th e 20 05 ame ndme nt t o N .Y . C. P.L .R. 4 52 06 , in c re a sin gNe w Y or k’ s h ome ste a d e xemp tio n f ro m $1 0, 00 0 to $5 0, 00 0, a pp lie d to de bts 5 c ontr a c te d p ri or

to t he e ff e c tiv e date of

the ame ndme nt. 6 7 8 9 10 E DW AR D Y. C ROSSMO RE , The Crossmore L aw Of fice , I thaca , NY for

Ap pe lla nt. 11 12 J EFF C OL EMAN , I thaca , NY for Ap pe lle es. 13 14 O WE N D E MUT H , Assistant Sol icitor Gene ral, (B arba ra D . Under

wood, Solicitor 15 Gene ral, Andr ew D. B ing, D eputy Solicitor Genera l), for

Andre w M. Cuomo, 16 Attorney Gene ral of the State of Ne w York. 17 18 19 20 21 W ES L EY , Circuit Judge : 22 In Augus t 20 05 , th e Ne w Y or k St ate L e g isl atur e ame nd e d N .Y . C. P.L .R. 52 06 to i nc re a se 23 the state’s home stead e x emption from $10,000 to $50,000. See2 0 0 5 N

. Y

. Law s C h

. 6 2 3

. In 24 addition to ex empting a judgme nt debtor’s home “ from application to the satisfaction of a mone y 25 jud g me nt, ” N. Y. C.P. L .R. 52 06 (a ), Ne w Y or k d e bto rs are e nti tle d to c la im this e xemp tio n in 26 ba

nk ru ptc y pr oc e e din g s. See N. Y. De bt. & Cr e d. L aw § 28 2; see also 11 U.S.C. § 522(b)(3)( A). 27 This appea l require s us to determine whe ther the 2005 A mendment’s incr ease d homestead 28 exemption amount applies retroac tively to debts incurre d prior to the Amendme nt’s eff ective 29 date. We hold that it does. Neither the statutory

languag e nor its leg islative history require s 30 limit ing the scope of the Amendment to debts incur red a fter the Amendment’s e ffe ctive date

. 31 The Contrac t Clause of the Constituti on is likewise not offende d by a re troac tive application of 32 the Amendment to pre -existi ngdebts. Acc ording ly , New Y ork debtors who file a ba nkruptcy3 1 petition after the Amendment’s e ffe ctive date are entitled to invoke the g reater homestea d 2 exemption amount of $50,000. 3 F AC TS 4 O nO c t o b e r 1 4 , 2 0 0 5 , J e r a l d

J o h nH ayw ar d , IIan d

L o i s E v e l ynH ayw ar d

( c o l l e c t i v e l y, 5 “De btors”) f

iled a Chapter

7 bankruptc y

petition. Debtors alleg ed that (1) J era ld owned re al 6 pr op e rt

y wi th a mark e t va lue of

$9 5, 29 4 e nc umb e re d b y

a $4 9, 77 5. 98 mor

tg a g e ; ( 2) the pr op e rt

y 7 was e x empt under N .Y. C.P.L .R. 5206; and (3) Appe llant CFCU Communi ty Credit Union 8 (“CF CU”) he ld a claim for $11,291.63 (a Ma

y 2003 car loan), sec ured by

an automobile value d 9 at $7,185, leavingCFCU a g ener al unsec ured c reditor f or the ba lance ($4,106.63). 10 CFCU objecte d to the homestead e x emption to the ext ent it exceeded the pre- 2005 11 Amendment amount. CFCU a rgued that (1) the 2005 Amendment doe s not specifica lly provide 12 that it applies to obligations or de bts incurre d prior to August 30, 2005 – the eff ective date of the 13 Am e ndme nt; (2 ) i n th e a bs e nc e of su c h a pr ov isi on , th e 20 05 Am e ndme nt d oe s n ot a pp ly 14 retroa ctively

to any obligation or debt incurr ed prior to that date; and (3) even if the 2005 15 Amendment applied to pr e-August 30, 2005 debts, that construction would impair the c ontrac t 16 betwee n Debtors a nd CFCU, thus violating the Contra ct Clause of the United States Constit ution. 17 SeeU.S. Const. art. I , § 10, cl. 1. In opposition, Debtors contende d that the State L eg islature 18 clea

rly intended the $50,000 homeste ad exemption to apply beca use the lawspecific ally

provided 19 that it

“ sh a ll t ake e ff

e c t imme diate ly .” 20 05 N. Y. L aws Ch. 62 3, § 2 . D e bto rs a lso argue d th at, 20 under 11 U .S.C. § 522(b)(3)(A ), they may exempt “any

proper ty that is ex empt under . . . State or 21 loc a l la

w that is a

pp lic a ble on the date of

the fi lin gof

the pe tit ion

. . . . ” Thus , b e c a

us e the ir 22 petition was filed on Oc tober 14, 2005, a fter the eff ective da te of the A mendment, the incr ease d4 1 e xemp tio n amou

nt a pp lie s. 2 The ba

nkruptcy court (N info, J. ) denie d CFCU’s motion, holding that De btors wer e 3 entitled to the $50,000 exemption even though the y incurre d their CFCU de bt prior to the 2005 4 Amendment. Se e In reHa y war d , 343 B.R. 41, 47 (B ankr. W.D.N.Y. 2006) . The c ourt 5 principally

relied on, a

nd adopted the r easoningof, In reLitt le , N o . 0 5

- 6 8 2 8 1 , 2 0 0 6 WL 6 1524594, at *12-13 (B ankr. N .D.N.Y. Apr . 24, 2006), which he ld that the Amendment wa s 7 reme dial and ther efor e should be a pplied retroa ctively , and that re troac tive application did not 8 violate the Contrac t Clause. Discussing the re medial nature of the Ame ndment, J udg e Ninfo 9 c on c lud e d th at th e “ mis c hie f” and “ imp e rf e c tio n” the L e g isl atur e so ught t o r e me dy wa s a 10 homestead e x emption not index ed for inflation that had bec ome “tantamount to having no 11 exemption at all.” Ha y war d , 343 B.R. at 45 ( quoting N.Y . Spons. Memo., 2005 S.B. S4582). 12 The re medy

was to adjust the exemption to “make it rea listi c in today ’s ec onomy .” Id. at 46 13 (quotingN.Y. Spons. Memo., 2005 S.B. S4582). 14 Th e c ourt c on c lud e d th at li mit ingthe re a c h o f t he law t o p ro sp e c tiv e a

pp lic atio n o nly 15 would “def

eat the c lear ly

evident intention of the Ne w York State L eg islature.” Id. The c ourt 16 also noted that CFCU ha d not reduc ed the Ha y war ds’ debt to judg ment befor e August 30, 2005. 17 The c ourt conc luded that such “ cre ditors do not have the kind of ve sted rig hts that require a 18 detailed c onstitut ional analy sis bey ond that set forth in Litt le .” Id. The c ourt conc luded that 19 “the Tr

ustee-in- bankruptc y , who re prese nts all the g ener al unsec ured c reditors a nd is the ‘per fec t 20 lien cre ditor’ under Section 544,” would only be veste d with rig hts that “came into exi stence 21 when the de btors filed their ba nkruptcy petitions after August 30, 2005, the date whe n the 22 [Amendment] beca me immediately

and re troac tively

eff ective.” Id. at 46-47. The district courtOn Fe bruar y 4, 2008, we grante d the State Attorney Gene ral’s motion to submit a brief 2 as an inter

venor. “An or der of

a district cour

t functioningin its capac ity as an a ppellate c ourt in a 3 bankruptc y

case is subject to plenary revie w.” Mazzeo v . Lenhart ( In re M azzeo) , 167 F.3d 139, 142 (2d Cir. 1999). This Court “indepe ndently revie w[s] the fa ctual dete rminations and leg al conclusions of the ba

nkruptcy court.” Mome ntum Mfg. Corp. v. Employe e Creditors Comm. ( In re Mome ntum Manufacturing Corp.) , 25 F.3d 1132, 1136 ( 2d Cir. 1994) (interna l citation and 5 1 (Siragusa, J. ) af

firmed upon “ the opinion of the cour t below.” CFCU Cmty. Credit Union v. 2 Ha

y war d , No. 06-CV-6290, 2007 WL4232721, at *3 (W.D.N.Y. Sept. 11, 2007). 3 On appe al to this Court, C FCU re iterate s its challeng e to the re troac tive application of the 4 2005 Amendment as it re lates to pre- exis ting de bts, arguing that (1) neither the languag e of the 5 Am e ndme nt n or

its le g isl ativ e his tor

y manif e st a c le ar i nte nt t

hat th e statut e a

pp ly re tr oa c tiv e ly

to 6 pre- Amendment debts, a nd (2) r etroa ctive application violates the Contract Clause. De btors 7 counter

that we should employ

the exemption in effec t at the time of the filingof their pe tition 8 beca

use 11 U.S.C. § 522(b)(3) (A) pr ovides that the “State or local law that is applicable on the 9 date of

the filingof the pe tition” gove rns the ava ilable state ba nkruptcy exemptions . New Y ork’s 10 Attorney

Gene ral ha s intervene d pursuant to 28 U.S.C. § 2403(b) in support of the statute. 2 11 Whil e agree ing w ith Debtors that they should have the be nefit of the inc rea sed exemption, the 12 Attorney

Gene ral re

jects their r easoningand instead ur g es us to adopt the rationale ar ticulated by 13 the cour

ts below – the 2005 Amendme nt is remedial and the ref ore a pplies to debts incurre d prior 14 to its effec tive date. F or the re asons set for th below, we a ffirm the or der of the district court. 15 DI SCU SSIO N 16 I. The St at e Law Que st ion : I nt e r pr e ti ng t he Sc ope of t he 20 05 Am e ndm e nt 17 A. Gove rning B ankrup tcy C ode P rovisions an d New York’s Hom este ad 18 Exem ption 3quotations marks omitted). “The bankruptc y court’s le g al conc lusions are e valuated de novo ; it s finding s of fa ct ar e subjec t to a clea rly err oneous standar d.” Id. (interna l citation omitt ed). The issues raised by

CFCU in this appeal a

re pur e leg al questions subject to de novo re vie w b y thi s Court

. Th is p ro vis ion

wa s p re vio us ly

c od if ie d at 11 U. S.C. § 5 22 (b )( 2) , b ut c ha ng e d a s a re su lt 4 of the B ankruptc y

Abuse Preve ntion & Consumer Protec tion Act of 2005, Pub. L . No. 109-8, 119 Stat. 23. 6 1 Pursuant to 11 U.S.C. § 522(b), debtors may exempt certain prope rty

from the ba

nkruptcy 2 estate c reated by

the petition, “allowingthem to retain those a ssets rather than divide them 3 amongtheir cr editors.” Rousey v . Jacoway , 544 U.S. 320, 322 (2005); se e als o B e ll v . B e ll ( In re 4 Be ll) , 225 F.3d 203, 208 ( 2d Cir. 2000). NewYork ha s “opted out” of the fe dera l exempti on 5 sc he me se t f

or th i n § 52 2( d) , c ho os ingins te a d to pr ov ide its own e xclu siv e se t of pe rm iss ibl e 6 exemptions for de btors domiciled in the state. See 11 U. S.C. § 5 22 (b )( 1) ; D u b r o ff v . F ir s t N a t' l 7 Ba nk

of G le ns Fa lls (

In reDu br off

) , 1 19 F .3 d 7 5, 76 -7 7 ( 2d Cir . 1 99 7) ; In re Nudo , 147 B.R. 68, 8 70 (B ankr. N .D.N.Y. 1992) . Debtors may exempt “any

proper ty that is ex empt under . . . State or 9 local law that is applicable on the date of the f iling of the petition ...” 11 U.S.C. § 522(b)(3)( A). 4 10 Thus, while fe dera l law g overns the date on which the e x emption comes into play , New Y ork 11 law g overns the nature a nd scope of

the exemption. 12 New Y ork’s e x emptions are se t forth in Debtor & Creditor L aw § 282. See I n re Ony an, 13 16 3 B .R. 21 , 2 4- 25 (B ank r. N. D. N. Y. 19 93 ). Th at st atut e e xplic itl y inc or po rate s N .Y . C. P.L .R. 14 5206, New Y ork’s homestea d exemption. SeeN. Y. De bt & Cr e d. L aw § 28 2. N. Y. C.P. L .R. 15 5206 exempts several c ateg ories of pr operty as longas the prope rty

in question is “owned and 16 occupie d as a pr incipal re sidence .” The statute protec ts the residenc e fr om the satisfac tion of 17 mon e y

jud g me nts up to “ fi ft

y tho us and do lla rs in v a lue a

bo ve lie ns and

e nc umb ra

nc e s . . . un le ssOthe r b ank ru ptc y c ourt s h ave sim ila

rl y a do pte d th e vie w that th e e xemp tio n amou nt i n 5 eff ect on the da

te the petition was filed a pplies reg ardle ss of whethe r the state intende d the statute to apply

to pre-e x isting debts. See, e .g., In re Ev ans , 3 62 B .R. 27 5, 28 0 ( B ank r. D. S.C. 20 06 ); Ma tte r o

f Sk je nte , 2 13 B .R. 27 4, 27 5 ( B ank r. D. Vt . 1 99 7) ; Ba rtle tt v . G igu e re( In re Ba rtle tt) , 168 B.R. 488, 494 (B ankr. D . N.H. 1994). 7 1 the jud g me nt w a s r e c ov e re d who lly fo r t he purc ha se pr ic e ” of

the re sid e nc e . N .Y . C. P.L .R. 2 5206(a)

. 3 Debtors c ontend that 11 U.S.C. § 522(b)(3) (A) r equire s that all bankruptcy petitions filed 4 in New Yor

k afte r the Ame ndment’s ena ctment date e mploy the incre ased home stead e x emption. 5 One Ne w York ba nkruptcy court ha s adopted this view. Se e Ru pp v . E lm as ri (

In reEl ma sri ), 6 369 B.R. 96, 104 (B ankr. E.D .N.Y. 2007). I t is true, as Judge Ninf o noted, that the 5 7 trustee- in-bankruptc y is the “per fec t lien cre ditor” under Section 544 of the B ankruptc y Code on 8 the date D ebtors filed the ir bankruptc y petition. Ha

y war d , 343 B.R. at 46. Thus, one might 9 conclude from Section 544 that the f iling date of the pe tition defines the rig hts of unsecur ed 10 c re dit or s; i nd e e d it do e s. B ut t

he inq uir y he re is n ot m e re ly

the ri g hts of

the un se c ur e d c re dit or s, 11 but also the brea dth of the exemption’s protection of a debtors’ pr operty

in New Yor

k. Section 12 522(b)( 3)(A) specific ally notes that exemptions under the statute ar e limited to “any proper ty that 13 is e xemp t un de r . . . State or loc a l la w t hat is ap pli c ab leon the date of

the filingof the pe tition 14

. . .” (e mph a sis a dd e d) . I f, un de r N e w Y or k la w, the inc re a se d e xemp tio n d oe s n ot a pp ly to 15 contra ct debts incurr ed bef ore the eff

ective date of the inc rea se, then pre -ena ctment contra ct 16 cre ditors have the be nefit of the lowe r exemption level while post-ena ctment contra ct cr editors 17 fac e the hig her e x emption. In both case s, their claims ag ainst the estate a re g overne d by

the 18 trustee’ s “per fec t lien,” but are limit ed by the scope of the e x emption as define d by New Y ork 19 law.8 1 De bto rs a lso argue that Owen v. O wen , 500 U.S. 305 (1991) applies he re a nd require s that 2 fede ral, not Ne w York, la w g overns the a

pplicability

of the incr ease d homestead e x emption 3 amount. In Owen , the Supreme Court interpr eted a differ ent B ankruptc y

Code provision – 11 4 U. S.C. § 5 22 (f

), the lie n avo ida

nc e pr ov isi on

– whic h, at th at ti me , p ro vid e d th at 5 “[n] otwithstanding a ny waiver of exemptions, the debtor may avoid the fixing of a

lien on an 6 interest of the debtor in prope rty to the extent that such lien impairs an exemption t o which the 7 debtor would have bee n entitled under [§ 522(b)], if such lien is – (1) a judicial lien; or (2) a 8 nonpossessory , nonpurcha se-money secur ity interest . . . .” Owen , 500 U.S. at 309 (quoting11 9 U.S.C. § 522(f) (1990) (interna l quotation marks omitted)). Althoug h Florida law excluded 10 cer

tain proper

ty from the sc ope of its homestea d act ( i.e., prope rty subject to a pre -existi ng 11 judgme nt lien), the Supreme Court he ld that the debtor wa s never theless per

mitted to avoid the 12 pre- exis ting lien that impaire d his homestead exemption under § 522(f ). See Owen , 500 U.S. at 13 312-14. Owen , howeve r, does not re qu irea pp lic atio n o f t

he inc re a se d h ome ste a d e xemp tio n in 14 this case, whe re D ebtors see k to exempt property from the r eac h of cr editors pursuant to a state15 c re ate d e xemp tio n w ith out r e g ard to whe the r N e w Y or

k inte nd e d th e Am e ndme nt t o a pp ly to 1 6 d e b ts c o n tr a c te d

b e f o r e it s e n a c tm e n t. “ I f

a St ate o p ts o u t [ o f

th e f e d e r a l e xe mp ti o ns c h e me ], 17 then its debtors are limit ed to the exemptions provided by state law. N othing in subsec tion (b) 18 (o r e lse wh e re in t he Cod e ) l imi ts a

State ’s po we r t o r e str ic t th e sc op e of its e xemp tio ns ; in de e d, it 19 could theore tically acc ord no exemptions at all.” Id. at 308. Owen ho lds no sw ay he re . T his 20 c a se re qu ir e s th at w e de c ide the sc op e of the ho me ste a d e xemp tio n – the se t of de bts su bje c t to 21 the re ach of

the Amendment. Clea

rly , this is a matter of Ne w York la w. 22Ne w Y o rk ’s fi rs tHo m es t ea d Ac t“p ro v i d edth ata l o to f l an d wi tho n e o r m o re b u i l d i n gs 6 there on not exceeding$1000 in value owne d and occ upied as a residenc e by

a ‘house holder havinga fa

mily ’ could be exempted from an e x ecution by rec ordinga designation so specify ing in the appropr iate County Clerk’s off

ice.” In reFe iss , 15 B.R. at 826 ( internal c itation omit ted); se e ge ne ra lly Robinson v. W iley , 15 N.Y. 489 (1857)

.

9 1 B. Ne w Yo r k Ho m e st e ad Ex e m pt ion Bac kgr ound 2 New Y ork law ha s provided a home stead e x emption since 1850. SeeHomestea d Act of 3 1850, ch. 260 (1850) N.Y. L aws 499 (r eplac ed by the Code of Civil Procedure 1876); J oh n T. 4 Ma the r M

e m’ l H os p. , I nc . v . P e ar l , 7 23 F .2 d 1 93 , 1 94 (2 d Ci r. 19 83 ); In reFe iss , 15 B.R. 825, 5 82 6 ( B ank

r. E. D. N. Y. 19 81 ). No t surp ri sin g ly , th e purp os e of the ho me ste a d e xemp tio n is “ to 6 6 protec t a homeowne r ag ainst seizure of his or her dwellingto satisfy

a money judgme nt.” GE 7 Capital

Bus. Asset Funding Corp. v. Hakak ian , 3 00 A. D. 2d

48 6, 48 7 ( 2d

De p’ t 20 02 ). Court s 8 have lon gre c og nize d th e str on gpo lic y c on sid e ratio ns un de rl yingNe w Y or k’ s e xemp tio n s tatut e : 9 The statute is founde d upon considerations of public policy , and has introduc ed a 10 new r

ule in reg ard to the e x tent of prope rty which shall be liable for a man’s 11 debts. The leg islature we re of opinion, looking to the adva ntag es belong ing to the 12 fa

mil y state in t he pr e se rv atio n o f m or a ls, the e du c atio n o f c hil dr e n, and po ssi bly 13 even, in the e ncoura g ement of hope in unfortunate de btors, that this deg ree of 14 exemption would promot e the public we lfare , and per haps in the end, be nefit the 15 cre ditor. 16 17 Robinson v. W

iley , 15 N.Y. 489, 494 (1857) (Opn. of Johnson, J. ). The home stead e x emption 18 “ re fl e c t[s] a

le g isl ativ e po lic y , b oth

state and fe de ra l, t o p ro vid e an h on e st d e bto r w itha fr e sh 19 start,” a

nd was “ draf

ted with the under standingthat justice is not served by leavingthe debtor 20 and his family

homeless and on the br ink of financ ial ruin.” W estinghouse Credit Corp. v. 21 Central Tr ust Co. (I n re Leonardo) , 1 1 B .R. 45 3, 45 5 ( B ank r. W.D .N .Y . 1 98 1) ; se e als o I n r e 22 Miller , 1 03 B .R. 65 , 6 7 ( B ank r. N. D. N. Y. 19 89 ); In re Pe arlman , 54 B.R. 455, 457 (B ankr. 23 S.D.N.Y. 1985).The amendment took eff ect on January

1, 1970. See1969 N.Y. L aws Ch. 961, § 2. 7

10 1 Since the homestea d statute was incor porate d into the N.Y. C.P.L .R. in 1962 ithas bee n 2 amende d sever al times to increa se the e x emption. See1962 N.Y. L aws Ch. 308. In 1969, the 3 L eg islature incr ease d the exemption from $1,000 to $2,000. See19 69 N. Y. L aws Ch. 96 1; see 4 als o Rooseve lt Hardware v. Gree n , 7 2 A .D .2 d 2 61 , 2 67 (2 d D e p’ t 19 80 ). Th at ame ndme nt d id 5 not indicate if the statute a pplied to debts contrac ted prior to its eff ective date. 7 6 Prior to the enac tment of the 2005 Amendme nt, the last time the State L eg islature 7 incre ased the homestead e x emption was in 1977. In addition to raising the homestead e x emption 8 amount from $2,000 to $10,000, the 1977 ame ndments “modernized” the statute “by specify ing 9 three distinct and enumerated ty pes of pr operty

which qualify

for the e x emption . . . and by 10 de le tin gthe pr ov isi on s r e qu ir inga jud g me nt d e bto r t o f

ile a no tic e or c onve y anc e wi th t

he c ounty 11 cler

k in order to c laim the exemption.” W yoming County Bank &

Trust Co. v. Kiley , 75 A.D.2d 12 477, 479 (4th Dep’ t 1980). The 1977 leg islation also ex plicitly direc ted that the “a ct shall take 13 e ff

e c t ni ne ty da y s a ft e r i t sh a ll h ave be c ome a law, but sh a ll n ot a ff

e c t th e a pp lic atio n o f p ro pe rt

y 14 to the satisfac tion of a money judgme nt for

a d e bt c on tra c te d b e

fore it t ak es e ffe c t. ” 1977 N.Y. 15 L aws Ch. 181, § 2 (e mphasis added) . Thus, under the plain languag e of the amendment, the 16 incre ased home stead e x emption did not im pact judg ment cre ditors who soug ht to enforc e a mone y 17 judgme nt for debts c ontrac ted prior to the amendment’s ef fec tive date r eg ardle ss of when the y 18 conver

ted the debt to a judg ment. A number of bankruptc y

court de cisions have noted that the 19 exemption under the 1977 Amendment wa s not available f or contra ct debts incurr ed prior to the 20 Amendment’s e ffe ctive date

. See I n re Buchardt , 1 14 B .R. 36 2, 36 5 ( B ank r. N. D. N. Y. 19 90 ); InThe district cour t in Litt le , u

po n whic h th e c ourt s b e low he avil y re lie d, int e rp re te d th is 8 as a c lear indication that the L eg islature intended the 2005 Amendment to be r emedial a nd thus applied re troac tively

. Litt le , 2007 WL2791122, at *3. That viewis inconsistent with Majewski

. 11 1 reVe ntu ra , 6 5 B .R. 29 , 3 0 ( B ank r. N. D. N. Y. 19 86 ); In re He nninger , 53 B.R. 60, 61 (B ankr. 2 W.D.N.Y. 1985). 3 C. The 2005 Am endm ent to t he Hom este ad Exem ption 4 The 2005 Ame ndment does not contain languag e addr essingwhether the new e x emption 5 amount should be applied to debts contr acte d prior to the Amendme nt’s enac tment date. Instead, 6 the Amendment mer ely direc ts that “[t] his act shall take e ffe ct immediately .” 2005 N.Y. L aws 7 Ch. 623, § 2. A statute’s command that it take e ffe ct “immediately” does not re solve the question 8 of whe ther, unde r Ne w York la w, the ame ndment should be applied re troac tively to pre-e x isting 9 debts. Se e Ma

je wsk i v . B ro ad alb in-Pe rth Ce nt. Sc h. Di st. , 9 1 N

. Y

. 2 d

5 7 7 , 5 8 3 ( 1 9 9 8 )

. In 10 Majewski , the New York Court of Appe als observe d that “the date that leg islation is t o take e ffe ct 11 is a

se pa rate qu e sti on

fr om whe the r t

he statut e sh ou ld a

pp ly to c la ims and

ri g hts the n in 12 exis tence .” Id . The Majewskic ourt fu rt he r c on c lud e d th at “ [w]hi le the fa c t th at a statut e is t o 13 take e ffe ct immediately evince s a sense of urg ency , the meaningof the phra se is equivoca l in an 14 analy sis of retroa ctivity .” Id. (interna l citations and quotation marks omitted). Thus, the cour t 1 5 c o n c l u d e d

th at“ th e p r o v i s o th atth e s u b j e c tp r o v i s i o n s w e r e t o ‘ t ak e e f f e c ti m m e d i at e l y’ 16 contribut[ed] littl e to our unde rstandingof whe ther re troac tive application wa s intended on the 17 issue prese nted.” Id. at 583-584. Thus, the languag e of the 2005 Amendment is inconclusive on 8 18 the re troac tivity

question prese nted her e. 19 D. Ret roact ive or P rospect ive? 20 I t should come as no surpr ise that “re troac tive operation is notfavor ed by [New York]I t is im portant to note that CFCU doe s not claim that it obtained a vested inter est – a 9 pr op e rt y int e re st – in D e bto rs ’ h ome pr ior

to t he Am e ndme nt’ s e na c tme nt. Whil e CF CUha s a secur ity interest in Debtor s’ ca

r it has not reduc ed the amount due on the loan to a judg ment and filed the judg ment in the county in which debtors r eside. SeeN. Y. C.P. L .R. 52 03 (a ). Thus , CF CU ’s on ly

c la im h e re is that th e Am e ndme nt d oe s n ot a pp ly to t he ir c ontr a c t ba se d c la im solely beca use the c ontrac t was executed pr ior to the Amendment’s e ffe ctive date

. 12 1 courts and statutes will not be give n such construc tion unless the languag e expressly or by 2 nece ssary

implication requires it.” Majewski , 91 N.Y.2d at 584. As Judge Cardozo once opined, 3 “[i] t takes a c lear

expression of the leg islative purpose to justify a re troac tive application.” 4 J ac ob us v Col ga te , 217 N.Y. 235, 240 (1916) . “Ge nera lly , an ame ndment will have prospe ctive 5 a pp lic atio n o nly , a

nd wi ll h ave no re tr oa c tiv e e ff e c t un le ss t

he langua g e of

the statut e c le arl y 6 indicates that it shall rec eive a contra ry interpre tation.” N.Y. Stat. L aw § 5 2. Ind e e d, the Sup re me 7 Court has rec og nized that “the pre sumption aga inst retroac tive leg islation is deeply rooted in our 8 jurisprudenc e, and e mbodies a leg al doctrine centur ies older than our Republic.” Landgraf v. USI 9 Fi lm Prod

s. , 511 U.S. 244, 265 (1994). 10 Remedial leg islation, however, “ should be applied re troac tively .” Majewski , 91 N.Y.2d at 11 584. “Remedia l statutes constitute an exception to the g ener al rule that statutes are not to be 12 g iven a r etroa ctive oper ation, but only to the extent that they

do not impair vested rights.” N.Y. 13 Stat. L aw § 54. Howeve r, the mer e cla ssification of “a statute as ‘r emedial’ does not 9 1 4 a u t o m at i c a l l y o v e r c o m e th e s tr o n gp r e s ump t i o n ” th ats t atu t e s s h o u l d b e a p p l i e d p r o s p e c t i v e l y, 15 “ sin c e the te rm

may br oa dly e nc omp a ss a

ny atte mpt to ‘ su pp ly so me de fe c t or

a br idg e so me 16 superf

luity in the former

law.’” Majewski , 91 N.Y.2d at 584 ( quoting N.Y . Stat. L aw § 321). To 17 deter

mine whether

a statute should be a

pplied retroa ctively , courts must look at leg islative history 18 to see if it “r evea ls that the purpose of ne w leg islation is t o clar ify what the law

was a lway s meant13 1 to say

and do.” Id. at 58 5. Simp ly put, t he re mus t be a

“ c le ar” e xpre ssi on

of le g isl ativ e int e nt t o 2 apply

a statute re troac tively

. Id. at 589. 3 New Y ork’s Court of Appe als has ca utioned, howeve r, that while the “ maxi ms of statutory 4 c on str

uc tio n” de sc ri be d a

bo ve “ pr ov ide he lpf

ul guid e po sts , th e re a c h o f t he statut e ult imate ly 5 become s a matter of judgme nt made upon re view of the leg islative g oal.” Duell v. Condon , 84 6 N.Y.2d 773, 783 (1995) . “Other fac tors in the retroa ctivity analy sis include whether the 7 L eg islature has ma de a spe cific pr onounceme nt about retroa ctive ef fec t or conve y ed a se nse of 8 urg ency ; whether

the statute wa s desig ned to re write a n unintended judicial interpr etation; and 9 whether

the ena ctment itself re aff irms a leg islative judgme nt about what the law in question 10 should be.” In re Gle ason ( Michae l Vee, Ltd.) , 96 N.Y.2d 117, 122 (2001)

. 11 E. Le gis lat ive Int e nt 12 There are sever al key leg islative documents which she d light on the statute’ s purpose. The 13 me mor and a

su bmi tte d b y

the Am e ndme nt’ s sp on so rs in t he Se nate and

As se mbl y

are he lpf ul i n 14 that reg ard. In New Y ork, while not dete rminative, a le g islator’s sponsor memo submitted 15 contempora

neously with the leg islation “is entitled to considerable w eig ht in discerningleg islative 16 intent.” Va tore v . Co mm ’r of C on su me r A

ffa irs , 8 3 N. Y. 2 d

6 4 5 , 6 5 1 (1 9 9 4 ) ( qu o t i n g Matter of 17 Kni

gh t-Ri dd e r B ro ad . v . G re e nb e rg , 70 N.Y.2d 151, 158 (1987) ). Eac h memo contains the 18 fo llo wi ngjus tif

ic atio n f or the 20 05 Am e ndme nt: 19 The idea

of the homestea d exemption t o civil judgments see ms to have bee n that 20 no civil judgment a g ainst any person should re sult in t hat per son forfe iting his or 21 her ha

ving a rig ht to a place to live. To that end, Chapter 181 of the L aws of 1977 22 ma de the va lue of a pe rs on ’s ho me ste a d u

p to $1 0, 00 0 e xemp t f

ro m c ivi l 23 judgme nts ag ainst that person. 24 25 L ate r o n, Se c tio n 2 82 of the De bto r a

nd Cr e dit or L aw e xten de d th is e xemp tio n to14 1 assessments of the va lue of a person’ s estate whe n Ba

nkruptcy is declar ed. When 2 laws mention specif ic dollar amounts, itis prudent to periodica lly revie w and 3 up date tho se amou nts

. 4 5 Current lawsets the homestea d exemptions at $10,000. That amount was set when 6 the exemption was first enac ted in 1977, and has not be en update d since. In 1998, 7 the va lue of that amou

nt o f m on e y

ha d d e c lin e d to a

bo ut $ 35 70 in 1 97 7 d oll ars . 8 9 This bill proposes to increase the homestea d exemption t o $50,000, a much more 10 re a lis tic fi gur e . T he c ur re nt a mou nt, wh ic h is 22 y e ars old , is no t at a ll r e a lis tic in 11 today ’s ec onomy . To have the figure so low is tantamount to havingno exemption 12 at a ll. 13 14 N. Y. Spo ns . M e mo. , 2 00 5 S. B . S4 58 2; N .Y . Sp on s. Me mo. , 2 00 5 A .B . A 84 79 . T he As se mbl y 15 memo additionally noted, “[t] his bill will help to provide some re lief fr om the stringe nt 16 bankruptc y

laws re cently

passed by

Congr ess.” N.Y . Spons. Memo., 2005 A.B. A8479. 17 This leg islative history clea rly ref lects an intent on the pa

rt of the L eg islature to adjust the 18 ho me ste a d e xemp tio n to a c c ount f or inf latio n a nd to b ri ngit i n li ne wi th c ur re nt e c on omi c 19 conditions. The law’ s sponsors specific ally noted that the $10,000 amount had not be en update d 20 si nce 1 97 7 an d wa s “n otat a ll real is ti c in to day ’s e con om y .” N .Y. S po ns . M emo ., 20 05 S .B. 21 S4582; N.Y. Spons. Memo., 2005 A.B. A8479. The sponsors further explained that “[t] o have the 22 figure so low is tantamount to havingno exemption at all.” Id. Viewingthe $10,000 exemption 23 as insufficie nt, the L eg islature incr ease d the dollar va lue to a leve l that further s the policy of 24 re du c ingthe numbe r o f d e bto rs wh o lo se the ir ho me s a s a

re su lt o f b ank

ru ptc y or a c ivi l 25 judgme nt, a long standingg oal of the home stead e x emption in New Yor k. See, e .g., Leonardo , 11 26 B.R. at 455. 27 Ba sed on the a bsence of languag e bar

ringthe application of the Amendment to pre

28 enac tment debts, and the leg islative intent to provide for a n immediate incre ased e x emption, weAlthough the cre ditor in Pe rry obtained a judg ment prior to the 1977 Amendme nt’s 10 eff ective da te, see77 A.D.2d at 882, that f act wa s not determinative. The pre- 1977 exemption applied bec ause the debt

upon which the judg ment was e ntere d was incur red prior to the Amendment’s e ffe ctive date

. Se e id . at 881. The Ne w York Court of A ppeals noted in Majewski , h o we v er , th at“[ a] l th o u gh 11 postenac tment statements of the Gove rnor may be examined in an ana ly sis of leg islative intent and statutory

purpose,” they

must be viewed w ith caution. See91 N.Y.2d at 586.

15 1 c ann ot i nf

e r t hat th e L e g isl atur e int e nd e d th e Am e ndme nt t o a pp ly on ly pr os pe c tiv e ly . CF CU 2 points to not hing in the statute or leg islative history that would require limit ing the scope of the 3 Amendment in such a fashion. Unlike the la

nguag e of the 1977 Amendment, see Perry v

. 4 Zarcone , 77 A.D.2d 881 (2d D ep’t 1980), appeal dismissed 52 N.Y.2d 701, the 2005 Ame ndment 5 does not addre ss the issue of whe ther the statute a pplies to pre-A mendment debts. In discussing 6 the 1977 Amendment, the Pe rry court c oncluded that a

judgme nt debtor wa s not entitled to the 7 incre ased home stead e x emption beca use the State L eg islature “intende d that the incre ase be 8 prospec tive only , i.e., to apply only when the de bt upon which execution is sought ar ose af ter the 9 eff ective da te of the a mendment.” Id. at 881. The c ourt ref err ed to two executive memora nda 10 10 c on c e rn ingthe 19 77 Am e ndme nt. Th e c ourt no te d th at th e fi rs t me mor and um w a s a state me nt i n 11 support of the bill from the State Executive De partment, whic h indicated that: “T he [proposed] 12 law would not apply to debts that exi st before it takes eff ect. The ref

ore, e x isting cr editors will not 13 have the ir secur ity diminis hed by

the amendme nt.” Id. at 881 (a lterations in orig inal) (inter nal 14 quotation marks omitted). The c ourt additionally noted that a “ statement of the G overnor on 15 approvingthe bill” stated “e x isting cr editors will not have their se curity diminis hed by

the 16 amendment.” Id. at 882 (interna l quotation marks omitted). 11 17 No su c h le g isl ativ e his tor y e xists he re . In th is c a se , th e L e g isl atur e ’s de c isi on no t toWe reiterate that we a re only asked to de termine if c ontrac t-based de bts that have not 12 been r educe d to judgment pr ior to the eff ective date of the A mendment ar e subjec t to the incre ased e x emption amount. 16 1 include somethingakin to the anti-re troac tivity provision of the 1977 Amendme nt in the 2005 2 Amendment sug g ests an intent to apply the law to pre -ena ctment contra ct debts. L eg islative 3 conce rn with pre- exis ting de bts ex presse d in the 1977 Amendment is simply not present in the 4 2005 leg islation. Rather, the L eg islature explicitly commanded that it was to take ef fec t 5 “ imm e diate ly .” 20 05 N. Y. L aws Ch. 62 3, § 2 . A lth ou g h s uc h a dir e c tiv e a lon e do e s n ot m and ate 6 retroa ctive application, se e Ma je wsk i, 9 1 N

. Y

. 2 d

at5 8 3 , i tc e rt a i n l y e v i n c e s “ a s e n s e o f ur g e n c y” 7 that the statute’s intende d benef iciarie s – including de btors subject to contra ct-ba sed debts who 8 file a ba

nkruptcy petition after August 30, 2005 – be g iven the bene fit of an incr ease d homestead 9 exemption. See G leason , 96 N.Y.2d at 122 ( noting that the L eg islature conve y ed “a sense of 10 immediacy ,” by , amongother thing s, “direc t[ ing] that the ame ndment was to take eff ect 11 immediately”). 12 We also ag ree with New Yor k’s Attorney

Gene ral that the 2005 A mendment is remedia l in 13 nature

. See, e .g. , Macum ber v. Shafe r , 637 P.2d 645, 646 (Wash. 1981) (re troac tively applying a

n 14 ame ndme nt t o th e Was hin g ton state ho me ste a d e xemp tio n in c re a sin gthe e xemp tio n amou nt t o 15 unsecur ed debts incur red pr ior to the amendme nt “[i] n order to further the purpose of

the 16 homestead le g islation in gene ral, a nd to give eff

ect to the amendment incre asingthe dollar amount 17 of the e x emption in particular.” ). The 2005 Amendment’s cle ar obje ctive wa s to update the 18 statut e to r e fl e c t c ur re nt e c on omi c c on dit ion s a nd to o nc e a g a in p ro te c t de bto rs fr om l os ingthe ir 19 homes – a g oal more likely to be adva

nced w ith a $50,000 exemption amount. Moreove r, 12 20 sever al bankr

uptcy courts, includingthe cour t below her e, have observe d that applying a n17 1 inc re a se d h ome ste a d e xemp tio n o nly to d e bts inc ur

re d p os t- e na c tme nt w ou ld n ot a de qu ate ly 2 advanc e the a

meliorative purpose of the e x emption. Se e Ha y war d , 3 43 B .R. at 46 ; Evans , 362 3 B.R. at 281. I f we adopted CF CU’s interpre tation, the policy g oal under lying the incre ased 4 homestead e x emption would not be fully rea liz ed for

bankruptc y

debtors, like De btors here , who 5 filed shortly

afte r August 2005 but are bur dened by pre- August 2005 debts. Indeed, unde r such a 6 re a din g , th e re lie f t he L e g isl atur e so ught t o p ro vid e “ imm e diate ly” wo uld be a lon gtim e in 7 coming

. 8 In a dd iti on , th e State L e g isl atur e ’s a c tio n o n th e ho me ste a d e xemp tio n in c re a se a pp e ars to 9 have be en par

tly prec ipitated by

Congr ess’s passa g e of the Ba nkruptcy Abuse Preve ntion and 10 Consumer Protection Act of 2005. The Asse mbly

sponsor memo expli citly provided that the 11 Amendment “w ill help to provide some relief from the string ent bankr

uptcy laws re cently

passed 12 by

Con g re ss. ” N. Y. Spo ns . M e mo. , 2 00 5 A .B . A 84 79 . I f, ho we ve r, we c on c lud e d th at th e old 13 e xemp tio n amou

nt a pp lie d – the le g isl ativ e sp on so rs be lie ve d th at amou nt w a s “ tanta

mou nt t o 14 havingno exemption at all,” id. ; N.Y. Spons. Memo., 2005 S.B. S4582 – no additional relief 15 would be ac corde d to New Yor k debtors, thus contraveningthe Amendment’ s purpose. 16 In light of the leg islative finding that the incre ased e x emption amount was longoverdue 17 and that the old amount wa s unrea listi c in today ’s ec onomy , it would defeat the intent of the 18 L eg islature to judicially eng raf t an anti-re troac tivity

provision (similar to that found in the 1977 19 Am e ndme nt) onto t he statut e wh e re no ne e xists

. I t is we ll s e ttl e d th at “ [t]he L e g isl atur e is 20 presumed to be awa re of the law in existence at the time of an e nactment.” Matter of Amorosi v. 21 S. Colon ieIn d. Ce nt. Sc h. Di st. , 9 N. Y. 3 d

3 6 7 , 3 7 3 (2 0 0 7 ) ( qu o t i n g B &F B ldg. Co rp . v . Li e big , 22 76 N. Y. 2d

68 9, 69 3 ( 19 90 )) . I f t

he L e g isl atur e int e nd e d th e Am e ndme nt t o b e pr os pe c tiv e on ly18 1 (i.e., not to apply

to pre-e x isting debts) it could e asily have c arr ied over

the languag e fr om the 2 1977 Amendment. It chose not to do so. Thus, a Ne w York de btor’s ability to invoke the 3 incre ased home stead e x emption is determined not by the date the debtor’s unse cure d contra ct debt 4 was incur

red, but ra

ther, by the date upon which the debtor files his or her

bankruptc y

petition. 5 F . Cer tification 6 Be fore we de part fr om our state law a naly sis, we take a

moment to ex plain why

we de cline 7 to exercise our discr etionary authority to cer tify the state lawissue to the New Y ork Court of 8 Appea ls. Although ne ither the pa rties nor the A ttorney

Gene ral a s an interve nor advoc ated 9 cer

tification, we ma

y cer tify a question whe re “ an unsettled a nd signific ant question of state la w . 10

. . wi ll c ontr ol t

he outc ome of

a c a se pe nd ingbe fo re thi s Co ur t.” Se c on d Ci r. L oc a l R. § 0 .2 7; see 11 22 N.Y.C.R.R. § 500.27. Certification may be appr opriate “ if with respe ct to the question asked . 12 . . there is a statute implicated [and] it s plain languag e does not a nswer the question.” Ci t

yo f N

. Y. 13 v. Smok

es-Spirits.Com, Inc ., 541 F.3d 425, 456 ( 2d Cir. 2008) (interna l quotations and citations 14 omi tte d) (a lte ratio n in or ig ina l) . I f, ho we ve r, an o pe n is su e of state law i s n ot n e c e ssa

ri ly 15 deter

minative of the outcome , cer tification is unwarr anted. See G aldamez v. Keane , 394 F.3d 68, 16 76 n.5 (2d Cir. 2005). As we have pr eviously noted, ce rtification is not nece ssarily require d 17 “whe never

(a) a plaintiff r aises a f

eder al constitutional challeng e to state lawin fede ral c ourt, (b) 18 the state ’s highe st c ourt ha s n ot i nte rp re te d th e statut e , a nd (c ) t he c on sti tut ion a l qu e sti on c ou ld 19 conce ivably

be avoide d by

some savinginterpre tation.” Tun ic k v . S afi r , 209 F.3d 67, 73- 74 (2d 20 Cir. 2000). 21 We would note that the larg e majority of ca ses dea ling with the homeste ad exemption 22 have be en litigated in bankruptc y court. Perha

ps the issue does not pre sent itself often outside of19 1 the context of a bankr uptcy proce eding . In any

event, the que stion of whether the 2005 2 Amendment applies to pre -existi ngdebts is easily resolved usingwell-e stablished principles of 3 New Y ork law that counsel cour ts in the task of deter

mining the r eac h of a statute. H oweve r, the 4 rea ch of the statute is but half the task. Onc e we have c oncluded that the statute aff ects pre

5 e xistin gde bts , w e mus t th e n d e te rm ine if it r un s a fo ul o f t

he Contr a c t Cla

us e of the U. S. 6 Constit ution. Thus, resolution of the state law que stion alone would not resolve the problem 7 prese nted. 8 I f w e c e rt if ie d th e iss ue of

the sc op e of

the 20 05 Am e ndme nt t o th e Ne w Y or k h ig h c ourt , 9 and

that c ourt

a g re e d w ithour a

na ly sis , th e Ne w Y or

k c ourt wo uld have no c ho ic e but to 10 deter

mine if retr oactive a

pplication violated the Contrac t Clause. Under New Y ork law, “ [a] 11 statut e is p re sumpt ive ly c on sti tut ion a l and

sh ou ld b e c on str

ue d in su c h a mann e r a s to up ho ld i ts 12 constitutionalit y .” Eaton v. N. Y . City Conciliat ion &Appeals Bd. , 56 N.Y.2d 340, 346 (1982)

. 13 Notwithstanding our g reat esteem for

the New York Court of Appe als, this Court is not bound by 14 its views with reg ard to the Constitution of the United States. The Ne w York c ourt could dec ide 15 that retroa ctivity

makes sense in light of the statute’ s purpose but that the Contrac t Clause require s 16 a prospe ctive view, only to have this Court rejec t that aspec t of the Ne w York c ourt’s ana ly sis. 17 Nothing w ould be g ained f rom the exercise . Be cause the rules of statutory interpre tation in New 18 York a

re c lear and ea sily

applied, and the constitutional question acts eff ectively to veto one view 19 of the statute, we think judicial economy merits resolution of this issue in feder al cour t. 20 II. The Constitution al Challenge 21 The Contrac t Clause of the United States Constitution provides that “[n] o State shall . . . 22 pass any

. . . L aw . . . impairingthe Oblig ation of Contrac ts.” U.S. Const. art. 1, § 10, cl. 1.20 1 “Althoug h the languag e of the Contract Clause is fa cially absolute, its prohibition m ust be 2 a c c omm od ate d to the inh e re nt p oli c e po we r o f t he State ‘t o s a fe gua

rd the vit a l inte re sts of

its 3 people.’ ” Energy R eserv es Group, Inc . v. Kan. Power and Light Co. , 459 U.S. 400, 410 (1983) 4 (qu o t i n g Ho meBl dg. &Loa n A ss’n v . B lai

sd e ll , 290 U.S. 398, 434 (1934)). The state’s police 5 power

has bee n descr ibed as “ an exerc ise of the sove reign rig ht of the Gove rnment to protec t the 6 lives, health, morals, c omfort and g ener al welf are of the pe ople, [which] i s paramount to any 7 rig hts under contr acts be tween individuals.” Allied Structural Steel Co. v. Spannaus , 4 38 U. S. 8 23 4, 24 1 ( 19 78 ). Un le ss t he state is a

pa rt y to t he c ontr a c t, c ourt s g e ne ra lly sh ou ld d e fe r t o 9 “leg islative judgme nt as to the nec essity and re asonable ness of a

particula r mea sure.” Energy 10 Reserv es , 4 5 9 U. S

. at4 1 2 -4 1 3 (qu o t i n g United States Trust Co. v. New Je rsey , 431 U.S. 1, 22-23 11 (1977))

. 12 The fir st step in Cont rac t Clause analy sis asks “whethe r the state la w has, in fa ct, oper ated 13 as a substantial impairment of a contr actua l relationship.” Energy R eserv es , 459 U.S. at 411 1 4 (qu o t i n g Allied Structural Steel , 438 U.S. at 244). “This inquiry has three components: whethe r 15 there is a contra ctual re lationship, whether a chang e in law impairs that c ontrac tual relationship, 16 and whe ther the impairme nt is subst antial.” Ge ne ra l M oto rs C or p. v . R om e in , 503 U.S. 181, 186 17 (1992). Eve n if a state la w substantially

impairs a contr act, it will not be deeme d unconstitutional 18 so long a s it is j ustified by “a significant a

nd leg itimate public purpose . . . such a s the reme dying 19 of a br oad and g ener al social or e conomic proble m.” Energy R eserv es , 4 59 U. S. at 41 1- 41 2. Th is 2 0 re qu i re m en t“gu ar an t ee s th atth e S t at e i s ex er ci s i n g i t s p o l i ce p o we r, ra th er th an p ro v i d i n g a 21 benef

it to special interests.” Id. at 412. I f such a public purpose is demonstra ted, the mea

ns 22 chosen to a ccomplish that g oal must be “re asonable and nec essar y .” Sal Tinnerello & Sons, Inc.In W eber , CF CUmov e d f

or le ave to t ake a

dir e c t a pp e a l to thi s Co ur

t f ro m a 13 bankruptc y

court orde r re troac tively

applying the 2005 Amendment to the debtor ’s prope rty

. See 484 F.3d at 157 (citing28 U.S.C. § 158(d)(2)) . We denied the motion, decliningto exercise our jurisdiction to hear the a

ppeal. Id. This Court concluded that it did “not per ceive a conf lict of su c h a natur e that c re ate s unc e rt a int y in t he ba nk ru ptc y c ourt s, a s a ll thr e e of

the c ourt s w ith in this circuit to have c onsidered the question have he ld that New Yor k’s homestea d exemption applies re troac tively .” Id. at 161. We further noted that CFCU did not show “that e valuation of the ba nk ru ptc y c ourt ’s de c isi on

at th is t ime wo uld

le a d to a mor e ra pid re so lut ion

of the c a se , in part be cause the dec ision does not appear to be either

manifestly

corr ect or

manifestly

incorre ct.” Id. In r e a c hin gthi s c on c lus ion , w e no te d th at th e 20 05 Am e ndme nt w a s “ pla us ibl y re me dia l” and that a Contra ct Clause violation was “ unlikely .” Id. CFCU does have a lien on D ebtors’ a utomobile securingthe loan, but the bala nce due 14 on the loan excee ds the value of the vehicle . Thus, CFCU is a g ener al unsec ured c reditor.

21 1 v. Town of Stoni ngton , 1 4 1 F. 3 d 4 6 , 5 4 (2 d

C i r. 1 9 9 8 ) ( ci t i n g Energy R eserv es , 459 U.S. at 412- 2 41 3) ; s e e a l

s o S a n i ta t i o n &R e c

y c l i n g I n d u s . , I n c . v . Ci t yo f N

. Y. , 107 F.3d 985, 993 ( 2d Cir. 3 1997). 4 We b e g in o ur ana ly sis by

ob se rv ingthat th is C ourt pr e vio us ly

vie we d w ithsk e pti c ism

a 5 Contract Clause a

rgument, such as the one CFCU makes he re, notingthat it was “unlikely that the 6 retroa ctive application of New Y ork’s homestea d exemption would vi olate the Contrac ts Clause.” 7 W eber v . United States , 4 84 F .3 d 1 54 , 1 61 (2 d Ci r. 20 07 ). Ho we ve r, that is su e wa s n ot d ir e c tly 8 befor e the Court in W eber ; it s r e so lut ion

wa s n ot n e c e ssa

ry to d isp os e of

the a pp e a l. Th e tim e

13 9 ha s c ome to a dd

re ss C F CU ’s c on sti tut ion a l c la im. 10 Her e, CFCU pr ovided Debtor s with an automobile loan; the par ties undisputedly

had a 11 contra ctual re lationship. For our pur poses, CFCU is a g ener al unsec ured c reditor who ha s not 12 reduc ed the de bt to judgment. There can be littl e doubt that the incr ease d exemption i mpairs 14 13 CFCU’s rig hts as a cr editor; the hig her e x emption, if applicable , reduc es the a ssets available for 14 satisfac tion of the debt. Thus, our a naly sis turns on whether that impairment is substantial.22 1 Deter

mining if a

statute substantially

impairs a contr act r equire s an examination of “the 2 extent to which reasona ble expectations under the contra ct have been disrupte d.” Bu ffa lo 3 Teachers Fe d’n v. Tobe , 4 6 4 F. 3 d 3 6 2 , 3 6 8 (2 d

C i r. 2 0 0 6 ) ( qu o t i n g Sa nit ati on &Re c

y c ling I nd us . , 4 107 F.3d at 993). Althoug h, as the ba nkruptcy court in Litt leexplained, the Amendment may 5 have “ modified the expectations of the pa rties,” 2006 WL1524594, at *12, in our view, it did not 6 substantially

disrupt the parties’ rea sonable e x pectations under the contr act. Ne w York’ s 7 homestead e x emption has limit ed Ne w York c reditors since 1850. The e x emption amount has 8 be e n in c re a se d s e ve ra l ti me s si nc e the e xemp tio n’ s in c e pti on . CF CUc e rt a inl y kn e w that D e bto rs ’ 9 home would be shielde d to some ext ent from the satisfaction of a money judgme nt or exempted 10 from the ba

nkruptcy estate. 11 In any

event, e ven if we char acte rized the impairment of the c ontrac tual relationship as 12 substantial, we would still conclude that a pplication of the 2005 Ame ndment to pre-e nactment 13 debts serve s the “sig nificant a nd leg itimate public purpose,” Energy R eserv es , 459 U.S. at 411, of 14 expanding the c lass of debtors who will be able to kee p their homes despite de clar ing ba nkruptcy

. 15 The leg islative determination to incre ase the exemption i s a re asonable means of pr otectingNew 16 York c itiz ens fr om home forf eiture. 17 CFCU’s re liance on se vera l of our older Contract Clause de cisions is mi splace d. See, e .g. , 18 W

ils on v . R e lin , 135 F.2d 99 ( 2d Cir. 1943) (L . Hand, J. ); Sa mu e ls v . Q ua rti n , 108 F.2d 789 ( 2d 19 Cir . 1 94 0) ; In re Gordon , 9 0 F .2 d 5 83 (2 d Ci r. 19 37 ); In re M essinger , 29 F.2d 158 ( 2d Cir. 20 1928). In those ca ses, this Court held that New Yor k statutes allowingdebtors to exempt the 21 pr oc e e ds of

dis a bil ity ins ur anc e or

the c a shva lue of

lif e ins ur anc e po lic ie s f

ro m c re dit or

c la ims 22 could not be applied a g ainst the claims of pre -existi ngcre ditors. See W ilson , 135 F.2d at 100In Ad dis s v . S e lig , 264 N.Y. 274 (1934) , the New York Court of Appe als rea ched the 15 same c onclusion as this Circuit. In Seltzer , th e Ni nth

Cir c uit de te rm ine d th at r e tr oa c tiv e a pp lic atio n o f a

Ne va da statut e 16 permitting de btors to exempt I ndividual Retirement Acc ounts from the bankr uptcy estate did not violate the Contrac t Clause. 104 F.3d at 235. The question of whe ther the impairme nt was su bs tanti a l w a s n ot at is su e on a pp e a l. T he c ourt

he ld t hat a pp lic atio n o f t

he statut e to d e bts incurre d prior to its effe ctive date did not violate the Contract Clause be cause the law se rved a valid public purpose a

nd was a rea sonable e x erc ise of the state ’s power

. Id. at 236-237.

23 1 (d isa

bil ity ); Sa mu e ls , 1 08 F .2 d at 79 1 ( dis a bil ity ); Gordon , 90 F.2d at 584-586 (life insura nce) ; 2 Messinger , 29 F.2d at 161 (life insuranc e). In Gordon , the Court rec og nized the ge nera l rule that 15 3 “an impair

ment of a c reditor’ s rig hts must be substantial in order to come within the constitutional 4 prohibition.” Id. at5 8 6 (c i t i n g Bron so n v . Ki nz ie , 42 U.S. (1 How.) 311 ( 1843)). In deter mining 5 if the statute constituted a substantial impairment of cre ditors’ rig hts, the Gordon court 6 commented that “ a wor kman’s tools or a f

arme r’s ne cessa

ry implements may

be within the 7 protec tion of an exemption statute even as a g ainst prior cr editors,” but the c ircumstance s 8 surr ound inglif

e ins ur a nc e , h ow e ve r, we re “ too do ub tf ul t o e na ble us to s ay

that c re dit or s w ou ld 9 lose no substantial rig ht if such exemption st atutes we re he ld applicable.” Id. 10 The “ impairment” pre sented he re is fa r less substantial. The 2005 Ame ndment does not 11 exempt an entire c lass of prope rty previously

available to cre ditors. New Yor k’s homestea d 12 exemption has been par t of that state’s leg al and lendingenvironment for more than a

centur y and 13 a half

. I ts latest incarnation increa sed the e x emption in order to ac count for inf lation. Moreover , 14 our older c ases may not apply with the same for ce toda y as they do not appea

r to fully employ 15 c ur

re nt C ontr a c t Cla

us e jur isp ru de nc e to t

he e xtent th at th e y

fa il t o a c c or d s uf

fi c ie nt d e fe re nc e to 16 state le g isl ativ e jud g me nts c on c e rn ingwh e the r a statut e a dv anc e s a

signif ic ant a nd le g iti mate 17 pu

bli c purp os e . See I

n re Seltzer , 104 F.3d 234, 236 ( 9th Cir. 1996); Nev. Employ ees Ass’n, Inc. 16Although a n ear lier dec ision from that court, se e In reBa ssi n , 637 F.2d 668, 670 ( 9th Cir. 1980), held that re troac tive application of the California homestea d exemption “would be an unconstitutional im pairment of pr e-e x isting contra ct obliga tions,” id. , the Seltzer

court obser

ved that th is c a se (a

nd oth e r c a se s inva lid atin gre tr oa c tiv e a pp lic atio n o f s tate e xemp tio n s tatut e s) was “ decide d befor e” the Supreme Court’s de cision in “Energy R eserv es , and thus did not give appropr iate def

ere nce to leg islative judgme nts.” 104 F.3d at 236. The Seltzer court noted that the Sup re me Court

ha s “ re tr e ate d f

ro m it s [pr ior

c a se law], and

ha s in dic ate d a

re ne we d w ill ingne ss to defe r to the dec isions of state leg islatures re g ardingthe impairment of pr ivate contr acts.” Id. (interna l quotation marks and citation omitted) (a lteration in orig inal). The c ourt conc luded that the state le g isl atur e wa s c on c e rn e d w iththe po ssi bil ity that, a bs e nt t he e xemp tio n, the state would be for ced to c are for individuals “lef t destitute by

attachme nt to their retire ment plans.” Id. (interna l quotation marks omitted). 24 1 v. Keating , 903 F.2d 1223, 1226 ( 9th Cir. 1990) (citingG. Gunther , Constit utional L aw 498 2 (1 98 5) ). Thus , w e fi nd that a pp lic atio n o f t

he 20 05 Am e ndme nt t o p re -e xistin gc ontr a c t de bts 3 does not violate the Contrac t Clause. Cf

. Seltzer , 1 04 F .3 d at 23 5- 37 ; see W eber , 484 F.3d at 161. 4 CO NC LU SION 5 In s um, the 20 05 Am e ndme nt a pp lie s r e tr oa c tiv e ly

in p os t- e na c tme nt f

ili ng s to c ontr a c t6 based de bts that prece ded its enac tment. Furthe rmore, r etroa ctive application of the exemption 7 does not violate the c onstitut ional rig hts of pre- enac tment, contrac t-based c reditors who ha ve not 8 re du c e d th e de bt o we d to the m to jud g me nt. Ac c or din g ly , th e jud g me nt o f t he dis tr ic t c ourt

is 9 AFF I RMED.