Bucher v. Dakota Finance Corp. (In re Whitaker)
474 B.R. 687
8th Cir. BAP2012Background
- Trustees seek turnover and lien-related relief from The Lower Sioux Indian Community (the Tribe) and Dakota Finance Corporation (DFC) in four adversaries; actions involve ongoing tribal revenue payments under Tribe ordinances and the Indian Gaming Regulatory Act and a lien-avoidance dispute by DFC; bankruptcy case posture is dismissal on immunity grounds; issue is whether Tribe members’ bankruptcy makes Tribe revenues available to creditors.
- The Tribe is a federally recognized Indian tribe under the Indian Reorganization Act, possessing sovereign immunity from suit absent Congressional abrogation; the dispute centers on whether § 106(a) of the Bankruptcy Code abrogates that immunity for Indian tribes.
- § 106(a) abrogation is found in terms of “governmental units” and does not expressly include Indian tribes; this definitional reach is central to whether Congress unequivocally abrogated tribal immunity in bankruptcy.
- Courts have treated practical abrogation to depend on explicit inclusion of tribes or clear language; Santa Clara Pueblo requires unequivocal expression; no explicit inclusion of Indian tribes in § 106(a) language.
- Dakota Finance Corporation is an arm/instrumentality of the Tribe; immunity can extend to subordinate economic entities if closely tied to the tribe; evidence shows DSE created and owned by the Tribe to generate government revenues and to share immunity.
- The Bankruptcy Court’s dismissal of the adversaries against both the Tribe and DFC is affirmed, as the Tribe and its subordinate entity are shielded by sovereign immunity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §106(a) abrogate tribal immunity for Indian tribes? | Krystal Energy-like view that tribes fall within °governmental units°; Congress intended broad abrogation. | Santa Clara Pueblo-based view requiring explicit, unequivocal language to abrogate immunity; no explicit tribal reference. | No; §106(a) does not unequivocally abrogate tribal immunity. |
| Is Dakota Finance Corporation protected by tribal immunity as a subordinate economic entity? | DFC operates as part of tribal economic framework and would share immunity. | DFC lacks sufficient close relationship to Tribe to share immunity. | DFC is an arm of the Tribe and entitled to the Tribe’s immunity. |
Key Cases Cited
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) (unambiguous abrogation required for tribal immunity)
- In re National Cattle Congress, 247 B.R. 259 (Bankr.N.D.Iowa 2000) (abrogation analysis in bankruptcy contexts)
- Krystal Energy Co. v. Navajo Nation, 357 F.3d 1055 (9th Cir.2004) (found abrogation under §106; debate on tribal status as government)
- Oklahoma Tax Comm. v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505 (1991) (tribal immunity not waived by certain disputes)
- Kiowa Tribe of Oklahoma v. Mfg. Techs., Inc., 523 U.S. 751 (1998) (tribal immunity and off-reservation conduct)
- Blatchford v. Native Village of Noatak, 501 U.S. 775 (1991) (discussion of domestic vs foreign sovereigns in tribal immunity)