Buchwald Capital Advisors, LLC v. Sault Ste. Marie Tribe of Chippewa Indians (In Re Greektown Holdings, LLC)
917 F.3d 451
6th Cir.2019Background
- Greektown Casino and related entities (the Debtors) filed Chapter 11 in May 2008 after a 2005 restructuring that shifted large transfers and debt among Tribe-owned entities; Trustee alleges a fraudulent transfer of ~$177 million on Dec. 2, 2005.
- The Greektown plan created a Litigation Trust; Buchwald (the Trustee) sued the Sault Ste. Marie Tribe and Kewadin Gaming Authority to avoid/recover transfers under 11 U.S.C. §§ 544, 550.
- Tribe moved to dismiss asserting tribal sovereign immunity; courts bifurcated the issues of (1) congressional abrogation and (2) waiver by the Tribe's conduct/filing.
- Bankruptcy court first found Congress abrogated immunity in §§ 106 and 101(27); district court reversed on abrogation and remanded to decide waiver.
- On remand both bankruptcy and district courts held Tribe did not waive immunity: (a) waiver requires clear board resolution under tribal law, (b) tribe’s immunity cannot be imputed from alter-ego/agent litigation conduct, and (c) filing bankruptcy does not waive immunity to subsequent adversary fraudulent-transfer claims.
- Sixth Circuit affirmed dismissal: Congress did not unequivocally abrogate tribal immunity in §§ 106/101(27); waiver by imputation or by filing bankruptcy was rejected, though the court held tribes can waive immunity by clear litigation conduct they themselves undertake.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Congress unequivocally abrogated tribal sovereign immunity in 11 U.S.C. §§ 106 and 101(27) | Sections 106 and 101(27) together abrogate immunity for any "governmental unit," which includes tribes | The Code does not clearly and unambiguously mention Indian tribes; ambiguity resolves in favor of tribal immunity | No abrogation: statute lacks requisite unequivocal expression to abrogate tribal immunity |
| Whether a tribe can waive sovereign immunity by its own litigation conduct | Filing or litigating in federal court can constitute a clear waiver | Tribe argued its charter/tribal code requires an express board resolution to waive immunity | Tribe CAN waive by clear litigation conduct, including by filing suit, but waiver must be clear and adhere to tribal law constraints |
| Whether litigation conduct of an alter ego or agent can be imputed to the tribe to effect waiver | The Debtors were tribal alter egos; their bankruptcy filings should waive the Tribe’s immunity | Waiver cannot be implied via equitable doctrines or imputation; Memphis Biofuels forecloses attributing such conduct for waiver | No imputation: alter-ego or agent litigation conduct cannot be attributed to tribe to waive immunity |
| Whether filing a bankruptcy petition waives tribal immunity to later adversary fraudulent-transfer claims | Filing bankruptcy (as the Debtors) waives sovereign immunity to avoid/recovery actions (analogy to Katz for states) | Katz applies to states based on constitutional history, not to tribes; bankruptcy filing does not waive tribal immunity for separate adversary claims | Filing bankruptcy does not waive tribal sovereign immunity as to separate adversary fraudulent-transfer claims |
Key Cases Cited
- Michigan v. Bay Mills Indian Cmty., 572 U.S. 782 (2014) (tribal sovereign immunity baseline; Congress must unequivocally abrogate)
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) (waiver of tribal immunity cannot be implied; requirement of clear legislative intent)
- Krystal Energy Co. v. Navajo Nation, 357 F.3d 1055 (9th Cir. 2004) (concluding Bankruptcy Code abrogated tribal immunity under §§ 106/101(27))
- Meyers v. Oneida Tribe of Indians of Wis., 836 F.3d 818 (7th Cir. 2016) (holding similar statutory language ambiguous and not an unequivocal abrogation)
- Memphis Biofuels, LLC v. Chickasaw Nation Indus., 585 F.3d 917 (6th Cir. 2009) (tribal charter requirements can prevent contractual waiver; equitable doctrines not to be used to find waiver)
- Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356 (2006) (state bankruptcy filing can limit state sovereign immunity; Court declined to extend Katz to tribes)
- Kiowa Tribe of Okla. v. Manufacturing Techs., 523 U.S. 751 (1998) (affirming tribe immunity from suit despite commercial conduct)