Dear USET/USET SPF Family,
Today, the Supreme Court of the United States (SCOTUS) issued its opinion
in Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin.
The question before the Court was whether the U.S. Bankruptcy Code expresses unequivocally Congress' intent to abrogate the sovereign immunity of Tribal Nations. In the majority opinion, SCOTUS held that the Bankruptcy Code “unambiguously abrogates the sovereign immunity of all governments, including federally recognized Indian Tribes.” The vote on the case was 8-1, with Justice Neil Gorsuch dissenting.
The case concerned a wholly owned subsidiary of the Lac du Flambeau Band of Lake Superior Chippewa Indians, Lendgreen, which sought repayment of a $1,100 debt. The debtor sued, and the Tribal Nation invoked its sovereign immunity. The case largely hinged on the inclusion of Tribal Nations as “governmental units” under the Bankruptcy Code, which expressly abrogates the sovereign immunity of “governmental units” for enumerated reasons. The Bankruptcy Code defines a “governmental unit” as “United States; State; Commonwealth; District; Territory; municipality; foreign state; department; agency; or instrumentality of the United States…. a State; a Commonwealth; a Territory; a municipality, or a foreign state; or other foreign or domestic government.” In the opinion, SCOTUS stated that “because federally recognized Tribes unquestionably fit that description,” largely due to the catch-all of “foreign and domestic government” at the end and the repeated affirmation in statute and case law of Tribal Nations as governments, the Code’s abrogation applies to Tribal Nations, as well as “any and every government that possesses the power to assert such immunity.” Further, the opinion asserts that Congress need not specifically reference Tribal Nations or use any specific terms or words in order to abrogate sovereign immunity. This creates the potential for attacks upon Tribal sovereignty in other instances where Tribal Nation sovereignty is not specifically referenced.
USET SPF, along with Tribal Nations and organizations, joined an amicus brief to SCOTUS arguing that the definition of "governmental unit” in the code does not specifically include Tribal Nations and thus does not apply. The brief further argues that Tribal Nations are engaged in extensive governmental and regulatory activities. In this role, we interact regularly with individuals and businesses that may become debtors under the United States Bankruptcy Code. In these instances, preserving the sovereign immunity of Tribal Nations is essential to preserving our rights to self-determination and self-governance.
The Court’s opinion in this case has the potential to expose Tribal Nations to costly, involuntary lawsuits under the Bankruptcy Code. Regrettably, it is difficult to know the potential wider damages that this decision will cause, as there are many general references to governments throughout federal law. However, it could directly threaten Tribal Nations’ rights to economic self-sufficiency, self-determination, and self-governance.
While this decision is unfavorable for Indian Country, USET SPF remains committed to protecting Tribal sovereignty, including Tribal sovereign immunity. We must continue to stay vigilant and will provide further information on this and other cases as it becomes available.
For more information, please contact Ms. Liz Malerba, USET SPF Director of Policy and Legislative Affairs, at firstname.lastname@example.org or at 615-838-5906.