Court Opinion

ID: 8899314
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:45:55.453122+00
Date Added: 2024-06-11T17:07:43.253081
License: Public Domain

SMITH, Circuit Judge
(dissenting):
I respectfully dissent. The result seems to me inconsistent with the thrust of Perez v. Campbell, 402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233 (1971), since priority in distribution of the proceeds of the sale of the asset is here determined under state law in a manner inconsistent with the federal bankruptcy law priorities. Undoubtedly Meyer v. Bass, 281 F.2d 728 (9th Cir. 1960) and United States v. California, 281 F.2d 726 (9th Cir. 1960), support the result reached here. Their foundation, however, *341has been weakened by Perez, for that case also involved a conflict between a state licensing scheme — conditioning licensing on financial arrangements — and bankruptcy law provisions. See also In Re Kanter, 505 F.2d 228 (9th Cir. 1974). The state might refuse transfer of a delinquent license, State Board of Equalization v. Stodd, 500 F.2d 1208 (9th Cir. 1974), which would destroy its value, and grant licenses to others in its regular course, but when it permits sale of the license it preserves the value of an existing asset of the estate. I think it must look to the bankruptcy law for determination of the priorities of claimants against the assets of the estate.
The trustee characterizes the state’s claim under § 24049 as the levy of a tax lien against the assets of the bankrupt estate, the state characterizes it as mere regulation of a property interest, the liquor license, subject to the requirements of the section as an inherent part of the property interest itself. Of the two, the trustee’s interpretation seems more in accord with the position of the Court in Perez that state laws must yield to the bankruptcy statutes if the state laws frustrate the full effectiveness of the federal provisions. Perez, supra, 402 U.S. at 652, 91 S.Ct. at 1712, 29 L.Ed.2d at 244. Section 64 orders wage earners be paid first, § 24049 that the state come first, regardless of § 64.
The liquor license is no more a state created property which the state may regulate and control without regard to the bankruptcy laws than was the driver’s license in Perez. I would reverse.