402 U.S. 637 (1971), 5175, Perez v. Campbell

Docket Nº:No. 5175
Citation:402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233
Party Name:Perez v. Campbell
Case Date:June 01, 1971
Court:United States Supreme Court

Page 637

402 U.S. 637 (1971)

91 S.Ct. 1704, 29 L.Ed.2d 233




No. 5175

United States Supreme Court

June 1, 1971

Argued January 19, 1971




The provision that

discharge in bankruptcy following the rendering of any such judgment [as a result of an automobile accident] shall not relieve the judgment debtor from any of the requirements of this article,

contained in Ariz.Rev.Stat. § 28-1163(b), part of the Motor Vehicle Safety Responsibility Act, which the Arizona courts have construed as having as

its principal purpose the protection of the public using the highways from financial hardship which may result from the use of automobiles by financially irresponsible persons,

directly conflicts with § 17 of the Bankruptcy Act, which states that a discharge in bankruptcy fully discharges all but certain specified judgments, and is thus unconstitutional as violative of the Supremacy Clause. Kesler v. Department of Public Safety, 369 U.S. 153, and Reitz v. Mealey, 314 U.S. 33, have no authoritative effect to the extent they are inconsistent with the controlling principle that state legislation that frustrates the full effectiveness of federal law is invalidated by the Supremacy Clause. Pp. 644-656.

421 F.2d 619, reversed and remanded.

WHITE, J., delivered the opinion of the Court, in which BLACK, DOUGLAS, BRENNAN, and MARSHALL JJ., joined. BLACKMUN, J., filed an opinion concurring in the result as to petitioner Emma Perez and dissenting as to petitioner Adolfo Perez, in which BURGER, C.J., and HARLAN and STEWART, JJ., joined, post, p. 657.

Page 638

WHITE, J., lead opinion

MR. JUSTICE WHITE delivered the opinion of the Court.

This case raises an important issue concerning the construction of the Supremacy Clause of the Constitution -- whether Ariz.Rev.Stat.Ann. § 28-1163(b) (1956) which is part of Arizona's Motor Vehicle Safety Responsibility Act, is invalid under that clause as being in conflict with the mandate of § 17 of the Bankruptcy Act, 11 U.S. c. § 35 providing that receipt of a discharge in bankruptcy fully discharges all but certain specified judgments. The courts below, concluding that this case was controlled by Kesler v. Department of Public Safety, 369 U.S. 153 (1962), and Reitz v. Mealey, 314 U.S. 33 (1941), two earlier opinions of this Court dealing with alleged conflicts between the Bankruptcy Act and state financial responsibility laws, ruled against the claim of conflict and upheld the Arizona statute.

On July 8, 1965 petitioner Adolfo Perez, driving a car registered in his name, was involved in an automobile accident in Tucson, Arizona. The Perez automobile was not covered by liability insurance at the time of the collision. The driver of the second car was the minor daughter of Leonard Pinkerton, and in September, 1966, the Pinkertons sued Mr. and Mrs. Perez in state court [91 S.Ct. 1706] for personal injuries and property damage sustained in the accident. On October 31, 1967, the petitioners confessed judgment in this suit, and a judgment order was entered against them on November 8, 1967 for $2,425.98 plus court costs.

Mr. and Mrs. Perez each filed a voluntary petition in bankruptcy in Federal District Court on November 6, 1967. Each of them duly scheduled the judgment debt

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to the Pinkertons. The District Court entered orders on July 8, 1968, discharging both Mr. and Mrs. Perez from all debts and claims provable against their estates, including the Pinkerton judgment. 11 U.S.C. § 35; Lewis v. Roberts, 267 U.S. 467 (1925).

During the pendency of the bankruptcy proceedings, the provisions of the Arizona Motor Vehicle Safety Responsibility Act came into play. Although only one provision of the Arizona Act is relevant to the issue presented by this case, it is appropriate to describe the statutory scheme in some detail. The Arizona statute is based on the Uniform Motor Vehicle Safety Responsibility Act promulgated by the National Conference on Street and Highway Safety.1 Articles 1 and 2 of the Act deal, respectively, with definitional matters and administration.

The substantive provisions begin in Art. 3, which requires the posting of financial security by those involved in accidents. Section 28-1141 of that article requires suspension of licenses for unlawful failure to report accidents, and § 28-1142 (Supp. 1970-1971) provides that, within 60 days of the receipt of an accident report, the Superintendent of the Motor Vehicle Division of the Highway Department shall suspend the driver's license of the operator and the registration of the owner of a car involved in an accident

unless such operator or owner or both shall deposit security in a sum which is sufficient in the judgment of the superintendent to satisfy any judgment or judgments for damages resulting from the accident as may be recovered against the operator or owner.

Under the same section, notice of such suspension and the amount of security required must be sent to the owner and operator not less than 10 days prior to the effective date of the suspension. This section does not apply if the owner or the operator carried liability

Page 640

insurance or some other covering bond at the time of the accident, or if such individual had previously qualified as a self-insurer under § 28-1222. Other exceptions to the requirement that security be posted are stated in § 28-1143.2 If none of these exceptions applies, the suspension continues until: (1) the person whose privileges were suspended deposits the security required under § 28-1142 (Supp. 1970-1971); (2) one year elapses from the date of the accident and the person whose privileges were suspended files proof with the Superintendent that no one has initiated an action for damages arising from the [91 S.Ct. 1707] accident; (3) evidence is filed with the superintendent that a release from liability, an adjudication of nonliability, a confession of judgment, or some other written settlement agreement has been entered.3 As far as the record in the instant case shows,

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the provisions of Art. 3 were not invoked against petitioners, and the constitutional validity of these provisions is, of course, not before us for decision.

Article 4 of the Arizona Act, which includes the only provision at issue here, deals with suspension of licenses and registrations for nonpayment of judgments. Interestingly, it is only when the judgment debtor in an automobile accident lawsuit -- usually an owner-operator like Mr. Perez -- fails to respond to a judgment entered against him that he must overcome two hurdles in order to regain his driving privileges. Section 28-1161, the first section of Art. 4, requires the state court clerk or judge, when a judgment4 has remained unsatisfied for 60 days after entry, to forward a certified copy of the judgment to the superintendent.5 This was done in the present case, and on March 13, 1968, Mr. and Mrs. Perez were served with notice that their drivers' licenses and registration were suspended pursuant to § 28-1162(A).6 Under other provisions of Art. 4, such suspension is to

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continue until the judgment is paid,7 and § 28-1163(b) specifically provides that

[a] discharge in bankruptcy following the rendering of any such judgment shall not relieve the judgment debtor from any of the requirements of this article.

In addition to requiring satisfaction of the judgment debt, § 28-1163(A) provides that the license and registration

shall remain suspended and shall not be renewed, nor shall any license or registration be thereafter issued in the name of the person . . . until the person gives proof of financial responsibility

for a future period.8 Again, the validity of this limited requirement that some [91 S.Ct. 1708] drivers post evidence of financial responsibility for the future in order to regain driving privileges is not questioned here. Nor is the broader issue of whether a

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State may require proof of financial responsibility as a precondition for granting driving privileges to anyone before us for decision. What is at issue here is the power of a State to include as part of this comprehensive enactment designed to secure compensation for automobile accident victims a section providing that a discharge in bankruptcy of the automobile accident tort judgment shall have no effect on the judgment debtor's obligation to repay the judgment creditor, at least insofar as such repayment may be enforced by the withholding of driving privileges by the State. It was that question, among others, which petitioners raised after suspension of their licenses and registration by filing a complaint in Federal District Court seeking declaratory and injunctive relief and requesting a three-judge court. They asserted several constitutional violations, and also alleged that § 28-1163(b) was in direct conflict with the Bankruptcy Act, and was thus violative of the Supremacy Clause of the Constitution.9 In support of their complaint, Mr. and Mrs. Perez filed affidavits stating that the suspension of their licenses and registration worked both physical and financial hardship upon them and their children. The District Judge granted the petitioners leave to proceed in forma pauperis, but thereafter granted the respondents' motion to dismiss the complaint for failure to state a claim upon which relief could be granted, citing Kesler and Reitz.10 The Court of Appeals affirmed, relying on

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the same two decisions. 421 F.2d 619 (CA9 1970). We granted certiorari. 400 U.S. 818 (1970).


Deciding whether a state statute is in conflict with a federal statute, and hence invalid under the Supremacy Clause, is essentially a two-step process of...

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