Reitz v. Mealey

Background

A man who caused a car accident had a final judgment against him for damages and had his New York driver’s license suspended under a state law that acts when such judgments go unpaid. He later entered bankruptcy and received a discharge of the debt. He sued to stop the motor vehicles commissioner from enforcing the suspension, arguing the law violated the Constitution’s due process protection and was inconsistent with the federal bankruptcy law.

Reasoning

The Court held that the original form of the state law — which allows suspension of a license after a final unpaid judgment and ties restoration to payment or proof of ability to pay — is a legitimate way for the State to protect the public on the roads. The majority said this kind of rule is not barred by the federal bankruptcy provision because the State’s goal is public safety, not merely collection for the creditor. The Court did not decide whether two later amendments, which let creditors trigger certification or control temporary license returns, are valid; it concluded the original statute would still have applied in this case and thus declined to rule on the amendments.

Real world impact

Drivers who have final unpaid judgments from car accidents can have their licenses suspended under this New York law, and a federal bankruptcy discharge does not automatically remove that state consequence as applied under the original statute. Because the Court avoided ruling on the later amendments, some practical questions about creditor control and temporary license restoration may be decided later.

Dissents or concurrances

A dissent warned that giving creditors the power to trigger certification or to restore licenses creates coercive leverage over discharged debtors and argued those parts conflict with the bankruptcy law.