Complete Preemption via Historical Evolution
Complete preemption is a jurisdictional doctrine that applies when a federal statute so wholly envelops certain state law claims that those claims effectively cease to exist. Aside from an explicit complete preemption hook, the Supreme Court has recognized just one way for a federal statute to completely preempt state law claims: it must provide an exclusive federal remedy and also have a special nature that makes it especially federal. Courts shirk this second prong to their own detriment. One example of complete preemption generating confusion is § 303(i) of the Bankruptcy Code, which provides remedies for involuntary debtors against bad faith creditors. A 2005 Ninth Circuit decision, In re Miles, held that § 303(i) completely preempts certain state tort law claims. This decision has generated a diverse set of criticisms. Yet no criticism of Miles has addressed the Ninth Circuit’s failure to articulate why involuntary bankruptcy has a special federal nature. This Comment makes this showing by tracking the historical evolution of bankruptcy as a whole. In doing so, this Comment observes two entwined trends in the history of U.S. bankruptcy: bankruptcy became more remedial—and thus more voluntary—as the federal government simultaneously asserted increased control over bankruptcy law. This historical evolution shows how the structural safeguards for involuntary debtors are nested within one another. The dual developments toward bankruptcy-as-remedy and bankruptcy-as-federal combine to provide involuntary debtors special protection and to give involuntary bankruptcy a special federal nature. Employing historical evolution as a heuristic for deciphering complete preemption is both legally and practically sound. This Comment expands on the § 303(i) case study to argue that historical evolution can form the basis for recognizing an area of law’s special federal nature and can support application of the complete preemption doctrine to novel contexts.