IN RE: Larry Lee PARKER and Shanna Sue Parker (2026)

ORDER DENYING OBJECTIONS TO CLAIM OF EXEMPTION

I. INTRODUCTION

This matter came before the Court on three objections by the chapter 7 trustee, Kevin O'Rourke (“trustee”) to an exemption filed by Larry Lee Parker and Shanna Sue Parker (“Debtors”). (ECF Nos. 20, 23, and 27) During the first hearing on the objections, the Court determined that the trustee was looking for guidance on whether a state exemption statute, RCW 6.15.010(1)(d)(viii), was constitutional. Specifically, the trustee was inquiring whether this bankruptcy-specific exemption for personal injury claims is unconstitutional because it violates the Supremacy Clause and/or the Bankruptcy Clause of the United States Constitution. Therefore, the Court certified the constitutional challenge of RCW 6.15.010(1)(d)(viii) to the Washington Attorney General on June 24, 2026. (ECF No. 37). See 28 U.S.C. § 2403(b). After reviewing the record, including the Attorney General's response, the Court concludes that RCW 6.15.010(1)(d)(viii) is constitutional because RCW 6.15.010(1)(d)(viii) applies uniformly to all debtors who petition for bankruptcy in Washington.¹

II. MEMORANDUM ORDER

Factual Background

The parties do not dispute the underlying facts of this case. Debtors Larry and Shanna Parker filed a chapter 7 petition and accompanying documents on December 18, 2025. Debtor's original Schedule C claimed as exempt a “[p]ending claim under Camp Lejeune Justice Act of 2022 [the “Camp Lejeune Claim”], separate property of [Shanna Parker]” (the “Camp Lejeune Claim Exemption”). (ECF No. 1, p. 19) Debtors listed the value of the claim as “[u]nknown,” and exempted “100% of fair market value, up to any applicable statutory limit” pursuant to RCW 6.15.010(1)(d)(vii).

The trustee objected to the Debtors’ Camp Lejeune Claim Exemption, asserting that “the provisions of RCW 6.15.010(1)(d)(vii) may not be valid or enforceable [given] the State of Washington's attempts to determine what is otherwise reserved by Federal Law and the Bankruptcy Courts.” (ECF No. 20) Debtors amended Schedules A/B and C to correct the statutory basis of the Camp Lejeune Claim Exemption, changing the cited provision from RCW 6.15.010(1)(d)(vii) to RCW 6.15.010(1)(d)(viii). (ECF No. 22)

The trustee filed a second objection on the same grounds as the prior objection and updated the statutory reference to RCW 6.15.010(1)(d)(viii). (ECF No. 23) Debtors amended their Schedules A/B and C for a second time, listing an estimated maximum value of $100,000 for the Camp Lejeune Claim. Debtors again indicated they were exempting “100% of fair market value, up to any applicable statutory limit” under RCW 6.15.010(1)(d)(viii). (ECF No. 25) Additionally, the Debtors responded to the trustee's objection, arguing the newly filed amended schedules made the trustee's first two objections moot, and asked this Court to overrule the trustee's objections. (ECF No. 26)

The trustee filed a third objection on the same grounds as the prior two objections and updated the value of the asset to $100,000. (ECF No. 27) Debtors responded, asserting they were entitled to the Camp Lejeune Claim Exemption under Washington law.

The Court held a hearing on the trustee's objection to the Camp Lejeune Claim Exemption on June 16, 2026. At the hearing, the Court heard argument from the trustee and from counsel for the Debtors. In essence, the trustee challenged the constitutionality of RCW 6.15.010(1)(d)(viii) because the statute authorizes a bankruptcy-specific exemption for personal injury claims. Debtors maintained that the statute is constitutional, valid, and enforceable in this case and should apply to similarly-situated debtors.

Recognizing that the constitutionality of RCW 6.15.010(1)(d)(viii) had been challenged, the Court requested supplemental briefing from the parties and certified the challenge to the Washington Attorney General. (ECF No. 37) The Debtors supplied the Court with supplemental briefing. (ECF No. 36) The Attorney General declined to intervene. (ECF No. 45)

Discussion

A. Preemption and Uniformity

The Supremacy Clause provides that the “Constitution, and the laws of the United States which shall be made in pursuance thereof ․ shall be the supreme Law of the land; and ․ any Thing in the Constitution or Laws of any State to the contrary notwithstanding.” U.S. Const. art. VI, cl. 2. The doctrine of preemption implements the Supremacy Clause and invalidates state laws that conflict with, or stand as an obstacle to, the purposes and objectives of federal law. Perez v. Campbell, 402 U.S. 637, 652 (1971).

A state law may be preempted where compliance with both state and federal law is impossible, where Congress has “occupied the field,” or where the state law frustrates the purposes and objectives of federal law. La. Pub. Serv. Comm'n v. F.C.C., 476 U.S. 355, 368–69 (1986). Nevertheless, states retain “the power to enact bankruptcy laws so long as they do not conflict with federal bankruptcy legislation.” Sticka v. Applebaum (In re Applebaum), 422 B.R. 684, 689 (9th Cir. BAP 2009) (citing Rhodes v. Stewart, 705 F.2d 159, 163 (6th Cir. 1983); In re Sullivan, 680 F.2d 1131, 1137 (7th Cir. 1982)).

Section 522(b)(3)(A) authorizes a debtor to exempt property that may be exempt under the debtor's state or local law. 11 U.S.C. § 522(b)(3)(A). Accordingly, Congress did not occupy the field of bankruptcy exemptions to the exclusion of state law. The remaining question is whether RCW 6.15.010(1)(d)(viii) conflicts with or frustrates the purpose of the Code.

Separate from the issue of preemption, the Bankruptcy Clause grants Congress the authority to establish “uniform Laws on the subject of Bankruptcies throughout the United States[.]” U.S. Const. art. I, § 8, cl. 4. The Bankruptcy Clause's uniformity requirement is a limitation on Congress's exercise of establishing bankruptcy laws, not on the states’ ability to enact exemption laws. In re Applebaum, 422 B.R. at 692 (citing Ry. Lab. Execs.’ Ass'n v. Gibbons, 455 U.S. 457, 468 (1982)). In Gibbons, the Supreme Court invalidated a federal bankruptcy statute because Congress enacted legislation directed at a single identified debtor, thereby treating that debtor differently from other debtors in bankruptcy. Gibbons, 455 U.S. at 470–71. Although the Bankruptcy Clause's uniformity requirement limits Congress's bankruptcy legislation, as held in Gibbons, uniformity “is not meant to act as a ‘straightjacket that forbids’ distinguishing among different classes of debtors.” Richardson v. Schafer (In re Schafer), 689 F.3d 601, 609 (6th Cir. 2012) (quoting Gibbons, 455 U.S. at 469).

B. Exemptions

When a debtor files for bankruptcy, all the debtor's property becomes property of the bankruptcy estate. 11 U.S.C. §§ 541, 522(b)(1). Debtors may exempt certain property from the estate, preventing that property from being distributed for the benefit of creditors. 11 U.S.C. § 522(b).

Section 522 of the Bankruptcy Code permits states to opt out of the federal exemption scheme and implement their own exemptions. 11 U.S.C. § 522(b). Debtors domiciled in Washington may elect either the federal exemptions or the Washington state exemptions.

In this case, the Debtors elected to use the Washington state exemptions for the Camp Lejeune Claim. The Washington exemption statutes provide two avenues for exempting personal injury claims. RCW 6.15.010(1)(d)(vii), (viii). Subsection (vii) provides that “any individual” may exempt up to $20,000 of certain personal bodily injury recoveries, as well as compensation for lost future earnings to the extent necessary for support. On the other hand, subsection (viii) imposes no dollar cap and provides that, “[i]n a bankruptcy case,” a debtor may exempt the proceeds of a personal injury claim and compensation for lost future earnings, subject to certain liens and subrogation claims.

C. Analysis

Several courts have upheld the constitutionality of bankruptcy-specific state exemption statutes.

In Sticka v. Applebaum, the Ninth Circuit Bankruptcy Appellate Panel held that a California exemption statute, Cal. Code Civ. Proc. § 703.140, was constitutional despite being available only to debtors “in a case under Title 11 of the United States Code.” Applebaum, 422 B.R. at 686 n.2. Importantly, the Panel concluded that a state exemption scheme did not conflict with federal bankruptcy law merely because the state scheme differed from the federal exemptions or nonbankruptcy law exemptions. Id. at 693.

Similarly, the Sixth Circuit held that bankruptcy-specific exemptions do not violate the Bankruptcy Clause's uniformity requirement. In Richardson v. Schafer, the Sixth Circuit upheld Michigan's bankruptcy-specific exemption statute, Mich. Comp. Laws § 600.5451(1)(n), and rejected an argument that the statute violated the Uniformity Clause of the Constitution. In re Schafer, 689 F.3d at 611–12. The Schafer court explained that the Constitution does not prohibit states from creating exemption schemes that distinguish between debtors who have filed for bankruptcy and those who have not. Id.

Persuasive authority supports finding RCW 6.15.010(1)(d)(viii) constitutional.² Simply put, “uniformity is geographical, and not personal.” Hanover National Bank v. Moyses, 186 U.S. 181, 188 (1902). If a debtor files for bankruptcy in the State of Washington, that debtor is eligible to exempt personal injury claims under RCW 6.15.010(1)(d)(viii), without any limitations or exceptions to distinguish the debtor from other debtors in bankruptcy.³

Accordingly, none of RCW 6.15.010(1)(d)(viii) appears to conflict with the Code or frustrate its purpose. Instead, the available authority persuades this Court that RCW 6.15.010(1)(d)(viii) is part of a state statutory scheme contemplated by Congress, and thus is constitutional.

III. CONCLUSION

Based on the foregoing, the Court concludes that the Debtors are entitled to the Camp Lejeune Exemption pursuant to RCW 6.15.010(1)(d)(viii). The trustee's objections are overruled.

So Ordered.

FOOTNOTES

1.   The State declined to intervene. (ECF No. 45) Nevertheless, the Court concludes that the Trustee presented a constitutional challenge to the statute that the Court must address.

2.   In addition to the cited cases discussed herein, see also In re Shumaker, 124 B.R. 820 (Bankr. D. Mont. 1991) (holding states have authority to enact exemption laws even if they produce varying effects on citizens, so long as the laws do not conflict with federal law); Sullivan, 680 F.2d (recognizing that state exemptions may create differing results without violating the Bankruptcy Clause); In re Westby, 473 B.R. 392 (Bankr. D. Kan. 2012), aff'd, 486 B.R. 509, 515–16 (10th Cir. BAP 2013); Owen v. Owen, 500 U.S. 305, 308 (1991) (“Nothing in [§ 522(b)] ․ limits a State's power to restrict the scope of its exemptions; indeed, it could theoretically accord no exemptions at all.”).

3.   There is insufficient precedent to support diverting from the holdings of the cited cases.Since the Supreme Court's decision in Gibbons, the Supreme Court has not held a state exemption statute unconstitutional. In fact, the only other application of Gibbons involved another federal statute. See Siegel v. Fitzgerald, 596 U.S. 464 (2022). Similarly, no Ninth Circuit court has applied the Gibbons holding to a state exemption statute.Notably, in the Applebaum dissent, Judge Markell opined that bankruptcy-specific state exemption statutes should be deemed preempted because the state exemptions remove assets from the estate and thus alter the Code's distribution scheme. Applebaum, 422 B.R. at 695–96. However, the Court is not persuaded that bankruptcy-specific exemptions impermissibly alter the federal bankruptcy scheme. As the majority in Applebaum and other persuasive authorities have recognized, in § 522(b) Congress expressly authorized states to define the exemptions available to debtors in bankruptcy. Because Congress expressly contemplated debtors could elect to use state exemptions, a state exemption statute does not conflict with federal law merely because it determines which property a debtor may remove from the bankruptcy estate.

Frederick P. Corbit, Bankruptcy Judge