RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 08a0206p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

BERNARD F. SCHULTZ; ELIZABETH M. SABATINE,

Plaintiffs-Appellants,

v.

UNITED STATES OF AMERICA,

Defendant-Appellee.

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No. 07-5618

Appeal from the United States District Court

for the Eastern District of Tennessee at Chattanooga.

No. 07-00012—R. Allan Edgar, District Judge.

Argued: March 17, 2008

Decided and Filed: June 2, 2008 

Before: RYAN, SILER, and COLE, Circuit Judges. 

_________________

COUNSEL

ARGUED: Thomas E. Ray, SAMPLES, JENNINGS, RAY & CLEM, Chattanooga, Tennessee, for

Appellants. Lewis Yelin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for

Appellee. ON BRIEF: Thomas E. Ray, SAMPLES, JENNINGS, RAY & CLEM, Chattanooga,

Tennessee, for Appellants. Lewis Yelin, William Kanter, UNITED STATES DEPARTMENT OF

JUSTICE, Washington, D.C., for Appellee. George W. Kuney, UNIVERSITY OF TENNESSEE

COLLEGE OF LAW, Knoxville, Tennessee, for Amicus Curiae.

_________________

OPINION _________________

R. GUY COLE, JR., Circuit Judge. Plaintiffs-Appellants Bernard Francis Schultz and

Elizabeth Mary Sabatine (hereinafter “the Schultzes”), husband and wife and residents of Hamilton

County, Tennessee, filed for bankruptcy under Chapter 13 in the United States Bankruptcy Court

for the Eastern District of Tennessee. Independently, the Schultzes filed a complaint for declaratory

judgment in the United States District Court for the Eastern District of Tennessee, alleging that the

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA” or “the Act”)

violates Article I, Section 8, Clause 4 of the Constitution (the “Bankruptcy Clause”), which gives

Congress the power to establish “uniform Laws on the subject of Bankruptcies throughout the

United States.” U.S. CONST. art. 1, § 8, cl. 4 (emphasis added). The district court granted the

Government’s motion for summary judgment and dismissed the Schultzes’ complaint. For the

following reasons, we AFFIRM the judgment of the district court.

1
No. 07-5618 Schultz, et al. v. United States Page 2

1

While individual consumer debtors also may file under Chapter 11 of the Bankruptcy Code, see Toibb v.

Radloff, 501 U.S. 157, 160-64 (1991), as a practical matter, the cost and complexity of this remedy preclude most

individual debtors from doing so.

2

The BAPCPA also permits a debtor to deduct additional expenses for food, clothing, housing, utilities, health

insurance, disability insurance, health savings accounts, and certain educational expenses, so as long as the debtor

demonstrates that those additional allowances are reasonable and necessary. 11 U.S.C. § 707(b)(2)(A)(ii).

I. BACKGROUND

A.

Individual consumer debtors generally choose between two forms of relief afforded by the

Bankruptcy Code: Chapter 7 and Chapter 13.1 In a Chapter 7 proceeding, an individual debtor

receives an immediate unconditional discharge of personal liabilities for debts in exchange for the

liquidation of all non-exempt assets. See 11 U.S.C. §§ 701-784. By contrast, in a Chapter 13

proceeding, a debtor commits to repayment of a portion of his or her financial obligations over a

specified period of time (generally three to five years) in exchange for retaining non-exempt assets

and receiving a broader discharge of debt than is available under Chapter 7. See 11 U.S.C. §§ 1301-

1330. Under the bankruptcy system prior to the BAPCPA, Pub. L. No. 109-8, 119 Stat. 23 (codified

as amended in scattered sections of Title 11 of the United States Code), debtors had a presumption

of eligibility to file under Chapter 7, with the final determination made by the Bankruptcy Court on

an individualized basis. 11 U.S.C. § 727. 

In 2005, the landscape for bankruptcy filings dramatically changed. Responding to a

growing belief that “bankruptcy relief may be too readily available and is sometimes used as a first

resort, rather than a last resort,” H.R. REP. NO. 109-31(I), at 4 (2005), and the prevalence of

“opportunistic personal filings and abuse,” id. at 5, Congress enacted the BAPCPA in order to

require above-median income debtors to make more funds available for the payment of unsecured

creditors. As a result, higher-income debtors with the ability to repay a substantial portion of their

debts without significant hardship are now required to do so by filing under Chapter 13 rather than

Chapter 7.

The centerpiece of the Act is the imposition of a “means test” for Chapter 7 filers, which

requires would-be debtors to demonstrate financial eligibility to avoid the presumption that their

bankruptcy filing is an abuse of the bankruptcy proceedings. By its terms, the BAPCPA authorizes

a bankruptcy court to dismiss a debtor’s petition filed under Chapter 7 or, with the debtor’s consent,

to convert such a petition to Chapter 13 “if it finds that the granting of relief would be an abuse of

the provisions of [Chapter 7].” 11 U.S.C. § 707(b)(1). Under this test, the first step instructs the

bankruptcy court to compare the debtor’s annualized current monthly income to the median family

income of a similarly sized family in the debtor’s state of residence. If the debtor’s current monthly

income is equal to or below the median, then the presumption of abuse does not arise. 11 U.S.C.

§ 707(b)(7). If, however, it exceeds the median, the Act directs the court to recalculate the debtor’s

income by deducting certain necessary expenses specified by the statute. Id. § 707(b)(2)(A)(ii).

These reductions are derived from the national and local standards contained in the Internal Revenue

Service’s Financial Analysis Handbook. Id.; see INTERNAL REVENUE SERV., INTERNAL

REVENUE MANUAL, FINANCIAL ANALYSIS HANDBOOK (“IRS Handbook”), available at

http://www.irs.gov/irm/part5/ch15s01.html.

Because of these deductions, eligibility under the new regime is calculated at least in part

based on the state and county where the debtor resides. The housing expense deduction, for

example, is governed by the county where the debtor resides. Id. § 5.15.1.7(4)(A).2

 Although the

national standards, which identify amounts for “food, housekeeping supplies, apparel and services,
No. 07-5618 Schultz, et al. v. United States Page 3

and personal care products and services,” and a fixed “miscellaneous” amount, id. § 5.15.1.7(3), are

mostly uniform throughout the United States, the local standards, which define amounts for housing

and transportation, vary greatly. 

If after deducting these necessary expenses and specified amounts, the debtor’s current

monthly income exceeds certain mathematical benchmarks, then the presumption of abuse arises.

11 U.S.C. § 707(b)(2)(A)(i). This presumption may be rebutted only if the debtor demonstrates

special circumstances justifying any additional expenses or adjustments to the debtor’s income for

which there is no reasonable alternative, and that those special circumstances reduce the debtor’s

income below the specified benchmarks. Id. § 707(b)(2)(B). And even if the presumption of abuse

does not apply, or has been rebutted by the debtor, the BAPCPA empowers a bankruptcy court to

consider whether it believes “the debtor filed the petition in bad faith,” or whether “the totality of

the circumstances . . . of the debtor’s financial situation demonstrates abuse.” Id. § 707(b)(3). 

To implement and enforce these reforms, the United States trustee or the bankruptcy

administrator reviews a Chapter 7 debtor’s petition and files with the court a statement explaining

whether a presumption of abuse arises. Id. § 704(b)(1). If the trustee determines that it does, then

the trustee is directed either to file a motion to dismiss, a motion to convert the petition, or to

provide a statement explaining why such a motion is inappropriate. Id. § 704(b)(2). 

The BAPCPA also amended two aspects of Chapter 13. First, “disposable income” is now

defined as “currently monthly income received by the debtor . . . less amounts reasonably needed

to be expended.” 11 U.S.C. § 1325(b)(2). If a debtor’s annualized monthly income exceeds the

median family income for a similarly sized family in the applicable state, the Act requires the

bankruptcy court to calculate “amounts reasonably necessary to be expended” in accordance with

the same IRS Handbook’s national and local standards used in Chapter 7. Id. § 1325(b)(3). If a

debtor is below the median income, the “amounts reasonably necessary to be expended” are instead

determined as they were pre-BAPCPA—by the bankruptcy court assessing whether the expenses

listed by the debtor in Schedule J (which must be filed along with the bankruptcy petition) are

reasonably necessary for the debtor’s maintenance and support. Id. § 1325(b)(2). Second, if the

debtor’s income still exceeds the median after recalculation, the Act imposes an “applicable

commitment period” of “not less than 5 years.” Id. § 1325(b)(4)(A)(ii). However, if the debtor’s

annualized income is less than the median, then the applicable commitment period is three years.

Id. § 1325(b)(4)(A)(i). 

B.

On November 21, 2006, the Schultzes filed for bankruptcy under Chapter 13 in the United

States Bankruptcy Court for the Eastern District of Tennessee. On January 13, 2007, the bankruptcy

court confirmed their plan, which required payment for sixty months and resulted in a pro-rata

distribution to unsecured creditors of less than 100% of their allowed claims. 

Concurrently, the Schultzes brought a separate suit against the United States, which

challenges the five sections of the BAPCPA that employ the “means test”—Sections 707(b)(7),

707(b)(2), 704(b), 1325(b)(3), and 1325(b)(4)—under one central theory: because median-income

calculations are based, at least in part, on the state and county in which the debtor resides, the

BAPCPA is not a “uniform Law[] on the subject of Bankruptcies throughout the United States.”

U.S. CONST. art. 1, § 8, cl. 4 (emphasis added). 

At the time of their Chapter 13 filing, the Schultzes had an annualized current monthly

income of $84,975.84, an amount that is above the median family income for a family of five for

Tennessee residents (which is $63,174), but below the median family income of Connecticut,
No. 07-5618 Schultz, et al. v. United States Page 4

3

Across the United States, the median family income for a family of five ranges from $52,036 in Mississippi

to $98,505 in Connecticut. (Joint Appendix (“JA”) 73-74.) 

4

The Government did not raise the standing issue at the district court, Schultz, 369 B.R. at 351 n.1, but

“[s]tanding is not an affirmative defense that must be raised at risk of forfeiture.” Cmty. First Bank v. Nat’l Credit Union

Admin., 41 F.3d 1050, 1053 (6th Cir. 1994).

Hawaii, Massachusetts, Maryland, New Hampshire, and New Jersey.3 As a result of this benchmark

in Tennessee, the Schultzes’ applicable commitment period was five, rather than three, years, and

in calculating their disposable income they were limited to the expense deductions set forth in

Sections 707(b)(2)(A) and (B). 11 U.S.C. § 1325(b)(3)-(4). 

After the parties filed cross-motions for summary judgment, the district court granted the

Government’s motion and dismissed the Schultzes’ complaint. Canvassing relevant Supreme Court

precedent, the district court concluded that the “uniformity requirement does not proscribe different

results in different states because of state law variations.” Schultz v. United States, 369 B.R. 349,

352 (E.D. Tenn. 2007). In response to the Schultzes’ argument that the BAPCPA amendments are

unconstitutional because they create variations in different states based on federal instead of state

law, the district court explained that there is “no principled reason for concluding that variations

resulting from federal statistics create unconstitutional non-uniformity, whereas variations resulting

from state law do not.” Id. The court concluded that “[d]isposable income might vary from place

to place, but it is based on uniformly calculated national statistics. The variations in the results

produced by these statistics are of no constitutional consequence.” Id. at 353. 

The Schultzes timely appealed. We review de novo a district court’s grant of summary

judgment. Miller v. Admin. Office of the Courts, 448 F.3d 887, 893 (6th Cir. 2006).

II. ANALYSIS

A.

As a threshold matter, we address briefly the Government’s contention that the Schultzes

lack standing to challenge two BAPCPA provisions affecting Chapter 7 bankruptcy filings: Sections

707(b)(2) and 704(b). We review de novo the question of standing, Sandusky County Democratic

Party v. Blackwell, 387 F.3d 565, 573 (6th Cir. 2004), even “where standing has erroneously been

assumed below,” Adarand Constructors, Inc. v. Mineta, 534 U.S. 103, 110 (2001).4

 A plaintiff has

Article III standing when he or she can show: (1) an injury-in-fact that (2) was “fairly traceable to

the defendant’s allegedly unlawful conduct” and (3) is “likely to be redressed” via a favorable

decision. Prime Media, Inc. v. City of Brentwood, 485 F.3d 343, 349 (6th Cir. 2007) (quoting Lujan

v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). The only question in dispute is whether the

Schultzes have shown an “injury-in-fact,” or “an invasion of a legally protected interest which is

(a) concrete and particularized, and (b) actual or imminent,” Lujan, 504 U.S. at 560 (citations

omitted), by the two presumption-of-abuse sections intended for Chapter 7 debtors. In applying the

first requirement of a concrete injury, the Supreme Court made clear that a plaintiff is not entitled

to injunctive or declaratory relief “[a]bsent a sufficient likelihood that he will again be wronged in

a similar way,” City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983), unless the plaintiff is subject

to “continuing, present adverse effects,” O’Shea v. Littleton, 414 U.S. 488, 496 (1974). 

The problem, as the Government sees it, is that the Schultzes never filed a Chapter 7

bankruptcy petition, nor do they intend to do so in the future. Although the Schultzes have shown

that their income is above the applicable median family income for Tennessee, potentially subjecting

them to the challenged Chapter 7 provisions, they have not established that they would be exposed

to the presumption of abuse after their monthly income is reduced by allowable expenses specified
No. 07-5618 Schultz, et al. v. United States Page 5

by the statute. See 11 U.S.C. § 707(b)(2). The Schultzes, in turn, argue that the potential for being

subject to the presumption of abuse under Chapter 7 forced them into filing under Chapter 13. And

requiring a debtor to file a Chapter 7 petition with full knowledge that it would be dismissed subjects

the debtor to years of litigation while his bankruptcy case, and financial situation, remain in limbo.

The questions of whether the Schultzes were deterred from filing a Chapter 7 petition, and

whether the presumption of abuse would have applied after the appropriate reductions and

calculations, are irrelevant for one simple reason: the parties concede that the Schultzes have

standing to challenge the Chapter 13 provisions—Sections 1325(b)(3) and (4)—which use the same

state-specific median income levels and varying local standards as the Chapter 7 amendments.

Based on their median family income calculation in Tennessee, the Schultzes are currently repaying

debt under a sixty-month Chapter 13 plan, and receive less favorable treatment in their plan than

individuals in other states. Moreover, their housing and transportation expenses were determined

by reference to the IRS Handbook, which varies by locality.

 Because our resolution of the Schultzes’ Chapter 13 challenges effectively addresses the

identical claims for the Chapter 7 provisions, without regard to whether they have standing to

challenge those provisions, we find no need to resolve this issue. To put it simply, we could not

invalidate some of the “means test” provisions without invalidating the others.

B.

1.

We turn to the central issue in this case: Is the BAPCPA a uniform law on the subject of

bankruptcy? The Bankruptcy Clause of the Constitution grants Congress the power to “establish

. . . uniform Laws on the subject of Bankruptcies throughout the United States.” U.S. CONST. art.

I, § 8, cl. 4. What distinguishes these “peculiar terms” from the other Article I powers is the concept

of uniformity, which, as Chief Justice Marshall noted nearly two centuries ago, “deserve[s] notice.

Congress is not authorized merely to pass laws, the operation of which shall be uniform, but instead

to establish uniform laws on the subject throughout the United States.” Sturges v. Crowinshield, 17

U.S. (4 Wheat.) 122, 193-94 (1819). 

Echoing Justice Marshall’s concern that the concept of “uniformity is, perhaps, incompatible

with state legislation,” id., the Schultzes contend that “the classification scheme adopted by

Congress based upon whether a debtor is above or below the median income of his particular state

of residence violates the Bankruptcy Clause because it results in some debtors receiving different

bankruptcy relief under federal law based solely upon [the] state or county [in which] they happen

to reside.” (Appellants’ Br. 8-9.) Implicit in their argument is what the Supreme Court has referred

to as personal uniformity, or the notion that the bankruptcy laws should apply identically to

individual debtors, regardless of the state or locality in which the debtor resides. The Court,

however, has consistently described the Bankruptcy Clause’s uniformity requirement as

“geographical, and not personal,” Hanover Nat’l Bank v. Moyses, 186 U.S. 181, 188 (1902), which

is “wholly satisfied when existing obligations of a debtor are treated alike by the bankruptcy

administration throughout the country regardless of the State in which the bankruptcy court sits,”

Vanston Bondholders Protective Comm. v. Green, 329 U.S. 156, 172 (1946) (Frankfurter, J.,

concurring). 

Over the last century, the Supreme Court has wrestled with the notion of geographic

uniformity, ultimately concluding that it allows different effects in various states due to

dissimilarities in state law, so long as the federal law applies uniformly among classes of debtors.

In Moyses, one of the first cases dealing with the validity of a bankruptcy statute, the Court upheld

the incorporation of varying state exemptions into the 1898 Bankruptcy Act. 186 U.S. at 189-90.
No. 07-5618 Schultz, et al. v. United States Page 6

Geographic uniformity in this context, the Court observed, was satisfied “when the trustee takes in

each state whatever would have been available if the bankrupt law had not been passed. The general

operation of the law is uniform although it may result in certain particulars differently in different

states.” Id. at 190. In 1918, the Court reaffirmed the Moyses principle in a case involving the

Bankruptcy Act’s incorporation of varying state fraudulent conveyance statutes, despite the fact that

the laws “may lead to different results in different states.” Stellwagen v. Clum, 245 U.S. 605, 613

(1918). See also Vanston, 329 U.S. at 172 (explaining that the Bankruptcy Clause “does not mean

wiping out the differences among the forty-eight States” and holding that state tort and contract law

may determine the validity of creditors’ claims). 

Nearly sixty years later, the Supreme Court, applying Moyses, held that Congress may enact

non-uniform laws to deal with geographically isolated problems as long as the law operates

uniformly upon a given class of creditors and debtors. Blanchette v. Connecticut General Ins.

Corps., 419 U.S. 102 (1974). In Blanchette, the Court considered the constitutionality of the

Regional Rail Reorganization Act (“Rail Act”), which operated only in a single statutorily defined

region: the northeast United States. In explaining why such a specific statute did not exceed

Congress’s power under Article I, the Court noted that at the time Congress passed the Rail Act, all

of the railroads then operating under the bankruptcy laws were contained within the northeast

region, and thus, even had the statute been drafted to be of general applicability, its operation and

effect would have been unchanged. Id. at 159-60. The Court ultimately concluded that the

“uniformity provision does not deny Congress power to take into account differences that exist

between different parts of the country, and to fashion legislation to resolve geographically isolated

problems,” id. at 159, so long as the law “appl[ied] equally to all creditors and debtors,” id. at 160.

See also Leidigh Carriage Co. v. Stengel, 95 F. 637, 646 (6th Cir. 1899) (holding that the

Bankruptcy Clause “imposes no limitation upon congress as to the classification of persons who are

to be affected by such laws, provided only the laws shall have uniform operation”). 

Only once has the Court struck down a statute as non-uniform. In Railway Labor

Executives’ Ass’n v. Gibbons, 455 U.S. 457, 470-71 (1982), the Court determined that Congress

overstepped its authority in passing a private bankruptcy law that affected only the employees of a

single company, the Rock Island & Pacific Railroad Company. While acknowledging that “the

uniformity requirement is not a straightjacket that forbids Congress to distinguish among classes of

debtors,” id. at 469, the Court found that the Act “[was] a response to the problems caused by the

bankruptcy of one railroad” and was therefore “nothing more than a private bill,” id. at 470-71. The

Court documented the chaos created by discriminatory state legislation during the Articles of

Confederation, and concluded that the “uniformity requirement was drafted in order to prohibit

Congress from enacting private bankruptcy laws.” Id. at 472. The lesson, in short, is that “[t]o

survive scrutiny under the Bankruptcy Clause, a law must at least apply uniformly to a defined class

of debtors.” Id. at 473. 

Applying these principles to the instant case, we conclude that the BAPCPA is a

constitutionally uniform law. Congress is allowed to distinguish among classes of debtors, and to

treat categories of debtors differently, whether it be through the incorporation of varying state laws

“affecting dower, exemptions, the validity of mortgages, priorities of payment and the like.”

Stellwagen, 245 U.S. at 613. And this is precisely what the BAPCPA does: Sections 707(b)(7),

1325(b)(3), and 1325(b)(4) distinguish between two classes of debtors, those whose annualized

current monthly income is above the family median income for the applicable state and those whose

income is below. All Chapter 13 below-median-income debtors have only a three-year instead of

a five-year applicable commitment period, and are subject to more favorable treatment in calculating

their disposable income than all debtors above the median; all above-median-income debtors are

subject to an applicable commitment period of “not less than 5 years,” and have their income

recalculated in accordance with the IRS Handbook’s national and local standards. Yes, the

Schultzes may receive less favorable treatment simply because they are residents of Tennessee, a
No. 07-5618 Schultz, et al. v. United States Page 7

state whose median monthly income is lower than a host of others, but the same could be said of

debtors living in states with less favorable state property exemption laws. See Moyses, 186 U.S. at

190. Accordingly, “[t]he general operation of the law is uniform although it may result in certain

particulars differently in different states.” Moyses, 186 U.S. at 190. 

Had Congress described the “means test” in explicit geographic terms, by enacting

legislation exempting residents of certain states without justification, we would be faced with a

significantly different case. In St. Angelo v. Victoria Farms, Inc., 38 F.3d 1525 (9th Cir. 1994), for

instance, the Ninth Circuit considered whether a statutory amendment extending the deadline for two

states to implement an administrative program violated the uniformity provision of the Bankruptcy

Clause. The Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of

1986, Pub. L. No. 99-554, 100 Stat. 3088 (1986), permanently established the United States Trustee

Program, an administrative agency responsible for overseeing the administration of bankruptcy cases

and private trustees. Congress curiously chose to phase the program in over a two-year period for

every state except North Carolina and Alabama, who instead had the option of voting into the

Trustee program over an extended period of time. Several years later, in Section 317 of the Judicial

Improvements Act of 1990, Pub. L. No. 101-650, 104 Stat. 5089 (1990), Congress extended the

deadline for North Carolina and Alabama to implement the program to October 1, 2002, without any

corresponding explanation for the special treatment. St. Angelo, 38 F.3d at 1529.

Finding that the exemption was “not a provision which has different effects . . . due to

differences in the laws of these two states,” id. at 1531, and that “Congress [did not] provide[] [any]

indication that the exemption in question was intended to deal with a problem specific to North

Carolina and Alabama,” id., the Ninth Circuit concluded that the law did “not apply uniformly to

a defined class of debtors,” id. at 1532.

But there are key differences between the BAPCPA and the statute in St. Angelo. For one,

as we have already noted, the BAPCPA is uniform in form: all debtors whose income is above the

median family income are treated alike, as are all debtors whose income falls below. The resulting

differences based on the state in which the debtor resides are analytically indistinguishable from the

differences resulting from the incorporation of various state laws. For another, whereas in St.

Angelo there was no indication that Congress intended for the exemption to deal with a problem

specific to North Carolina and Alabama, the BAPCPA directly addresses regionally isolated

problems. Because debtors in certain parts of the country are likely to pay more for housing than

debtors in other parts, Congress believed that the means test—or “needs-based bankruptcy

relief”—could gauge varying costs of living, and thus “ensure that debtors repay creditors the

maximum they can afford.” H.R.REP. NO. 109-31(I), at 2. The Bankruptcy Clause “does not deny

Congress power to take into account differences that exist between different parts of the country,

and to fashion legislation to resolve geographically isolated problems,” Blanchette, 419 U.S. at 159,

and it is not for us as an appellate court to pass judgment on the wisdom of congressional legislation.

2.

The Schultzes next argue that the uniformity requirement was enacted in response to the fear

that the national government would use its power over commerce to the disadvantage of particular

states. (Appellants’ Br. 12-21; Amicus Br. 4-5.) Accordingly, even if a federal bankruptcy law may

vary in application from state to state, employing federal income standards enables the preferential

treatment of debtors in some states over debtors in other states, a form of discriminatory treatment

the Framers explicitly prohibited. We do not find their argument or their view of history

compelling.
No. 07-5618 Schultz, et al. v. United States Page 8

First, Supreme Court precedent lends no support to the federal versus state distinction.

Moyses, Stellwagen, and Blanchette cannot be read as standing for anything more than their precise

holding: that Congress does not exceed its constitutional powers in enacting a bankruptcy law that

permits variations based on state law or to solve geographically isolated problems. Although the

Supreme Court has not specifically addressed classifications based on federal law such as those in

the BAPCPA, we find no reasoning within the relevant case law explaining why employing federal

variations somehow makes a bankruptcy law non-uniform. The lesson of Moyses and its

progeny—that Congress may permissibly address regional variations—would apply equally to

variations based on either state laws or federal statistics. 

And Gibbons does not counsel a different result. There, the Court struck down a federal

bankruptcy law as violative of the uniformity provision on the ground that the Act was a law

designed for and applied to only one bankrupt railroad. 455 U.S. at 470-71. The BAPCPA, in

contrast, is uniformly applicable across the nation and does not target any isolated entity. 

True, the Court has recognized that “the Bankruptcy Clause itself contains an affirmative

limitation or restriction upon Congress’ power.” Gibbons, 455 U.S. at 468. But a strict reading of

this statement “overlooks the flexibility inherent in the constitutional provision,” Blanchette, 419

U.S. at 158, and improperly cabins the reach of Congress’s authority. It is worth noting that in every

case considering the scope of the Clause, the Court merely assumed that the term “uniform” implied

an affirmative restriction, and ultimately concluded that such a restriction could be satisfied by a law

that is uniform only in form. 

Nor does the original understanding of the Bankruptcy Clause support the federal versus state

distinction that the Schultzes urge us to adopt. We need not belabor the point, as a historical account

of the Bankruptcy Clause has been recounted numerous times, including once recently by this

circuit. See In re Hood, 319 F.3d 755, 764-65 (6th Cir. 2003), aff’d on other grounds, Tennessee

Student Assistance Corp. v. Hood, 541 U.S. 440 (2004). It suffices to say the following: the

Bankruptcy Clause emerged amidst a depressed economy, collapsing business ventures, and the

prospect of commercial warfare between the various states. To combat mounting debt crises in the

newly confederated America, states enacted “an ignoble array of legislative schemes” discharging

the debt obligations of their citizens, primarily at the expense of out-of-state creditors. Home Bldg.

& Loan Ass’n v. Blaisdell, 290 U.S. 398, 427 (1934). 

Faced with multiple obstacles for collecting debt, and the resulting economic harm, the

Framers believed that a federal—and “uniform”—bankruptcy system would be necessary to reduce

the problem inherent in applying varying state insolvency and bankruptcy rules, and to rein in the

pro-debtor excesses of state legislatures. See Cent. Virginia Cmty. Coll. v. Katz, 546 U.S. 356, 362-

63 (2006) (“The history of the Bankruptcy Clause . . . demonstrate[s] that it was intended not just

as a grant of legislative authority to Congress, but also to authorize limited subordination of state

sovereign immunity in the bankruptcy arena. Foremost on the minds of those who adopted the

Clause were the intractable problems, not to mention the injustice, created by one State’s

imprisoning of debtors who had been discharged . . . in and by another State.”); Hood, 319 F.3d at

764-65 (“Indeed, setting bankruptcy policies on the state level would enable states to favor in-state

creditors over similarly-situated out-of-state creditors. By granting the power to Congress

exclusively, the Constitution prevented runaway states from defeating bankruptcy’s goals.”); In re

Dehon, Inc., 327 B.R. 38, 56 (Bankr. D. Mass. 2005) (“[T]he use of the word ‘uniform’ in the

Bankruptcy Clause was not primarily intended as a restriction on congressional power, but as a grant

of power to Congress. The very structure of the clause and its placement in the Constitution clarify

this point.”). See also BRUCE H. MANN, REPUBLIC OF DEBTORS: BANKRUPTCY IN THE AGE OF
No. 07-5618 Schultz, et al. v. United States Page 9

5

Indeed, the only direct reference to the Bankruptcy Clause in the Federalist Papers conveys the idea that

uniform bankruptcy laws were necessary to protect creditors in a national economy. James Madison recognized in No.

42 that “[t]he power of establishing uniform laws of bankruptcy, is so intimately connected with the regulation of

commerce, and will prevent so many frauds where the parties or their property may lie or be removed into different

States, that the expediency of it seems not likely to be drawn into question.” THE FEDERALIST No. 42, at 239 (James

Madison) (Clinton Rossiter ed., 1961). So did Alexander Hamilton in No. 32, when he explained that the word

“uniform” in the Naturalization Clause—a provision that closely mirrors that of the Bankruptcy Clause—confers on

Congress the “exclusive jurisdiction” to regulate within that area, “because if each State had power to prescribe a distinct

rule, there could not be a uniform rule.” THE FEDERALIST No. 32, at 199 (Alexander Hamilton) (Clinton Rossiter ed.,

1961). 

AMERICAN INDEPENDENCE 183-85 (2002); Kurt H. Nadelmann, On the Origin of the Bankruptcy

Clause, 1 AM. J. LEGAL HIST. 215, 225-27 (1957).5

In light of this account, we find no merit in the Schultzes’ argument that Congress can

incorporate state laws, but cannot incorporate federal standards. At the time of the Constitutional

Convention, the fear was not, at least in the bankruptcy context, of Congress discriminating in favor

of or against a particular locality. Quite to the contrary, uniformity in the Bankruptcy Clause was

viewed as a way to safeguard the nation’s interest in establishing and maintaining a single system

of debt and credit without interference from the parochial or otherwise obstreperous action on the

part of the fifty states. See Dehon, 327 B.R. at 56 n.34. 

3. 

One final point needs to be addressed: We are not persuaded that the heightened scrutiny

applied in United States v. Ptasynski, 462 U.S. 74, 84 (1983), is relevant to the interpretation of the

Bankruptcy Clause. In Ptasynski, the Court considered whether a section of the Crude Oil Windfall

Profit Tax Act granting an exemption for oil produced in certain regions near Alaska violated the

uniformity provision in the Taxing Power. Although the Court ultimately upheld the exemption, it

began its analysis with the presumption that the “the Uniformity Clause was proposed as one of

several measures designed to limit the exercise of [Congress’s] power,” id. at 81, and applied a form

of heightened scrutiny: “[W]here Congress does choose to frame a tax in geographic terms, we will

examine the classification closely to see if there is actual geographic discrimination.” Id. at 84-85.

However, the text and the background of the Taxing Power is wholly inapposite to that of

the Bankruptcy Clause. We need not look any further than the plain language of the Bankruptcy

Clause, which states: “[The Congress shall have Power] to establish . . . uniform Laws on the subject

of Bankruptcies throughout the United States.” U.S. CONST. art. I, § 8, cl. 4. Reading these words

in conjunction with the Taxing Power, another clause in Congress’s enumerated powers, reveals a

striking contrast. The Taxing Power states: “The Congress shall have Power to lay and collect

Taxes, Duties, Imposts and Excises, . . . but all Duties, Imposts and Excises shall be uniform

throughout the United States.” U.S. CONST. art. I, § 8, cl. 1 (emphasis added). If the Framers had

intended both of these uniformity provisions to be read as an absolute limitation, requiring Congress

to enact perfectly uniform laws, they presumably would have employed similar language in the

Bankruptcy Clause by stating that “Congress shall have Power to establish Laws on the subject of

Bankruptcies, but all such Laws shall be uniform throughout the United States.” See Randolph J.

Haines, The Uniformity Power: Why Bankruptcy is Different, 77 AM. BANKR. L.J. 129, 166-67

(2003) [hereinafter The Uniformity Power]. 

McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819), provides ample support for this

reading of constitutional text. In his foundational analysis in McCulloch, Justice Marshall concluded

that “necessary” as used in the Necessary and Proper Clause should be interpreted as conferring an

additional grant of power, rather than a limitation on Congress’s authority to choose only those

means that were absolutely necessary: “1st. The clause is placed among the powers of congress, not
No. 07-5618 Schultz, et al. v. United States Page 10

along the limitations on those powers. 2d. Its terms purport to enlarge, not diminish the powers

vested in the government.” Id. at 419-20. Much like the Bankruptcy Clause, if Congress intended

“necessary” to imply a restraint on the sphere of congressional authority, it “would have been

expressed in terms resembling these. ‘In carrying into execution the foregoing powers, and all

others,’ &c. ‘no laws shall be passed but such as are necessary and proper.’” Id. at 420. See also

Haines, The Uniformity Power, at 167. As it was in McCulloch, so it is here: the term “uniform”

was intended to grant an additional power at the expense of the fifty states, rather than to limit the

scope of Congress’s delegated powers. 

While it is true that the Supreme Court has “looked to the interpretation of [the Bankruptcy

Clause] in determining the meaning of the [Taxation Power],” Ptasynski, 462 U.S. at 83 n.13 (citing

Blanchette, 419 U.S. at 160-61), the Court has never found prior precedent in one area to be

dispositive in the other, nor has it required appellate courts to apply the heightened scrutiny in

Ptasynski to cases interpreting the Bankruptcy Clause. In fact, the Court in Ptasynski acknowledged

in the very same footnote that “the purposes giving rise to the Bankruptcy Clause are not identical

to those underlying the [Taxing Power’s] Uniformity Clause . . . .” Id. The lengthy historical

discussion in Ptasynski shows that the Taxing Power emerged from the “concern that the national

government would use its power over commerce to the disadvantage of particular States,” id. at 81,

a history that stands in stark contrast to the problems inherent in applying varying state bankruptcy

rules to debtors and creditors living in different states. In sum, uniformity of taxes and duties served

to assure the states that Congress would not discriminate in favor of or against a particular locality,

whereas uniformity in the bankruptcy context was viewed as a grant of power to standardize creditor

relief across the nation, notwithstanding varying obtrusive state laws. We therefore find it

inappropriate to employ the heightened scrutiny in Ptasynski and to determine whether the BAPCPA

results in “actual geographic discrimination.” Id. at 85.

III. CONCLUSION

For those reasons, we AFFIRM the judgment of the district court.