33 F.4th 600
1st Cir.2022Background
- Debtor Brian W. Coughlin took a payday loan from Lendgreen, a wholly owned subsidiary of the Lac Du Flambeau Band, and later filed a Chapter 13 petition listing Lendgreen as an unsecured creditor.
- The Bankruptcy Code automatic stay (11 U.S.C. § 362) barred collection outside the bankruptcy, but Lendgreen continued direct collection contacts.
- Coughlin moved in bankruptcy court to enforce the automatic stay and to recover damages under § 362(k); the Band asserted tribal sovereign immunity and the bankruptcy court dismissed the enforcement action.
- First Circuit granted direct appeal and considered whether the Bankruptcy Code abrogates tribal sovereign immunity.
- The panel concluded § 106(a) (enacted 1994) unequivocally abrogates sovereign immunity for "governmental unit[s]," and that § 101(27) (1978) defines "governmental unit" to include tribes as "domestic" governments; it reversed the bankruptcy court and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Bankruptcy Code abrogates tribal sovereign immunity | Coughlin: §106(a) "notwithstanding" language abrogates immunity as to listed Code provisions, and "governmental unit" includes tribes | Band: Congress must clearly name tribes; §101(27) does not expressly mention tribes so abrogation is not unequivocal | Court: §106(a) plus §101(27) definition yields unequivocal abrogation; tribes are "domestic government[s]" and §106 abrogates immunity |
| Whether the term "other foreign or domestic government" in §101(27) includes tribes | Coughlin: tribes are governments and "domestic dependent nations"—thus domestic governments under ordinary meaning and historical context | Band: residual phrase plausibly excludes tribes; Congress omitted "tribe" intentionally; interpretive canons favor tribes where ambiguous | Court: ordinary meaning, historical usage, statutory structure, and benefits conferred on governmental units support inclusion of tribes |
| Role of interpretive canons and legislative history | Coughlin: no magic-words rule required; Cooper forbids requiring explicit "tribe" word; legislative silence cannot create ambiguity where text is clear | Band: Indian canons and expressio unius support exclusion; legislative silence significant; Congress has explicitly named tribes elsewhere | Court: Indian canons apply only if statute ambiguous; text is unambiguous (per court) and Cooper prohibits a magic-words requirement |
| Practical effect / remedies (automatic stay enforcement) | Coughlin: entitlement to enforce stay and recover damages under §362(k) against creditor arm of tribe | Band: immunity bars in-personam relief and damages claims | Court: abrogation permits enforcement of automatic stay and damages remedy; remanded for further proceedings |
Key Cases Cited
- Michigan v. Bay Mills Indian Cmty., 572 U.S. 782 (2014) (describing tribal sovereign immunity and clear-statement abrogation rule)
- FAA v. Cooper, 566 U.S. 284 (2012) (rejecting a "magic words" requirement and explaining clear-statement is interpretive tool)
- C & L Enters., Inc. v. Citizen Band Potawatomi Tribe of Okla., 532 U.S. 411 (2001) (abrogation requires unequivocal congressional intent)
- Hoffman v. Conn. Dep't of Income Maint., 492 U.S. 96 (1989) (refusing to infer abrogation from legislative purpose where statutory text is not clear)
- United States v. Nordic Village, Inc., 503 U.S. 30 (1992) (similar principle limiting abrogation absent clear statutory text)
- Krystal Energy Co. v. Navajo Nation, 357 F.3d 1055 (9th Cir. 2004) (Ninth Circuit held Bankruptcy Code abrogates tribal immunity)
- In re Greektown Holdings, LLC, 917 F.3d 451 (6th Cir. 2019) (Sixth Circuit held Bankruptcy Code does not abrogate tribal immunity)
- Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996) (articulating the clear-and-unequivocal abrogation standard)
- Cir. City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (useful for construing general words that follow a specific statutory list)