622 B.R. 491
Bankr. D. Mass.2020Background
- Debtor Brian W. Coughlin filed a Chapter 13 petition on December 4, 2019 and alleges postpetition collection calls/emails seeking payment of a prepetition payday loan (amount < $1,600).
- Debtor filed a motion under 11 U.S.C. § 362(k) claiming the Tribe and three related entities (Niiwin, LLC d/b/a Lendgreen; L.D.F. Business Development Corp.; L.D.F. Holdings, LLC) violated the automatic stay and caused severe emotional harm.
- The Alleged Violators moved to dismiss under Fed. R. Civ. P. 12(b)(1) and (6) (applied via Fed. R. Bankr. P. 7012), asserting tribal sovereign immunity and lack of subject-matter jurisdiction.
- The Tribe is federally recognized; Debtor conceded that Lendgreen, BDC, and Holdings are arms of the Tribe. Under First Circuit precedent, arms of a tribe share the tribe’s immunity.
- Bankruptcy Code § 106(a) abrogates sovereign immunity as to § 362, but § 101(27)’s definition of "governmental unit" does not expressly mention Indian tribes, producing a circuit split on whether § 106(a) unequivocally abrogates tribal immunity.
- The court concluded § 106/§ 101(27) do not unequivocally abrogate tribal sovereign immunity, granted the motions to dismiss, and dismissed the Stay Motion for lack of subject-matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 11 U.S.C. § 106(a) unequivocally abrogates Indian tribal sovereign immunity for § 362 claims | §106(a) together with §101(27) abrogates immunity; wording like "other...domestic government[s]" includes tribes (relying on Krystal Energy) | §101(27) does not expressly mention tribes; Supreme Court requires a clear, unequivocal statement by Congress to abrogate tribal immunity | Court held §106/§101(27) are not sufficiently clear to abrogate tribal immunity and dismissed for lack of subject-matter jurisdiction |
| Whether the non-tribal corporate defendants (Lendgreen, BDC, Holdings) are protected by tribal immunity | Debtor argued abrogation applies to these entities (and conceded they are tribal arms) | Defendants: as arms of the Tribe they share the Tribe’s sovereign immunity | Court treated the entities as arms of the Tribe and attributed tribal immunity to them |
| Whether the court should revisit or overrule Supreme Court precedents on tribal immunity | Debtor urged overruling the Supreme Court’s tribal-immunity doctrine | Defendants: existing Supreme Court precedent controls; only Congress or the Supreme Court can change it | Court declined to overrule Supreme Court precedent and noted such change is beyond this court’s authority |
Key Cases Cited
- Michigan v. Bay Mills Indian Cmty., 572 U.S. 782 (2014) (reaffirms tribal sovereign immunity and requires unequivocal congressional abrogation)
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) (recognition of tribal sovereign immunity)
- Krystal Energy Co. v. Navajo Nation, 357 F.3d 1055 (9th Cir. 2004) (held §106 abrogated tribal immunity)
- Buchwald Capital Advisors v. Sault Ste. Marie Tribe (In re Greektown Holdings, LLC), 917 F.3d 451 (6th Cir. 2019) (concluded §106 does not unequivocally abrogate tribal immunity)
- Meyers v. Oneida Tribe of Indians of Wis., 836 F.3d 818 (7th Cir. 2016) (rejected §106 abrogation of tribal immunity)
- Ninegret Dev. Corp. v. Narragansett Indian Wetuomuck Housing Auth., 207 F.3d 21 (1st Cir. 2000) (arms of a tribe enjoy the tribe’s sovereign immunity)
- Narragansett Indian Tribe v. Rhode Island, 449 F.3d 16 (1st Cir. 2006) (abrogation of tribal immunity requires a clear statement by Congress)