Perez v. Campbell
Citation and Court
402 U.S. 637 (1971), Supreme Court of the United States
Facts
Campbell filed for bankruptcy and received a discharge of a judgment debt arising from an automobile accident. Arizona’s financial responsibility law required suspension of the driver’s license of any person who failed to satisfy a judgment arising from an automobile accident, and it provided that a bankruptcy discharge did not satisfy this requirement. Perez (the Arizona official) suspended Campbell’s license; Campbell argued the state law was preempted by federal bankruptcy law.
Issue
Whether Arizona’s financial responsibility statute, which required license suspension for unsatisfied judgments even after a federal bankruptcy discharge, was preempted by the federal Bankruptcy Act under the Supremacy Clause.
Holding
The Supreme Court held that Arizona’s law was unconstitutional because it stood as an obstacle to the accomplishment of Congress’s purpose in providing a fresh start to bankrupt debtors, and was therefore preempted under the Supremacy Clause.
Rule / Doctrine
Under the Supremacy Clause, state law is preempted (conflict preemption) when it stands as an obstacle to the full accomplishment of the purposes and objectives of a federal statute. A state law that strips the discharged debtor of the fresh start Congress intended to provide directly conflicts with federal bankruptcy law and cannot stand, regardless of the state’s independent interest in highway safety or financial responsibility.
Significance
Perez v. Campbell is a foundational conflict preemption case illustrating obstacle preemption — where a state law does not directly contradict federal law but undermines its purposes. It is a key case in courses on federal-state relations and statutory preemption.