Tribal Sovereign Immunity Waived

Posted by NCBRC - November 28, 2022

In a succinct opinion, the Ninth Circuit reaffirmed its 2004 decision that Congress abrogated tribal sovereign immunity with respect to the automatic stay. Numa Corp. v. Diven, No. 22-15298 (9th Cir. Nov. 14, 2022) (unpublished).

NCBRC and NACBA filed an amici brief in support of the debtor in this case.

After the bankruptcy court sanctioned NUMA Corporation and the Cedarville Rancheria of Northern Paiute Indians (the Tribe), for violating the automatic stay in the debtor’s bankruptcy case, the Tribe sought and obtained leave to appeal to the Ninth Circuit arguing that the bankruptcy court incorrectly found that Congress had clearly waived tribal sovereign immunity.

The court began its short discussion with section 106(a) which abrogates the sovereign immunity of a “governmental unit” with respect to a number of specified Bankruptcy Code provisions including the automatic stay. In Krystal Energy Co. v. Navajo Nation, 357 F.3d 1055 (9th Cir. 2004), the court held that the definition of “governmental unit” includes tribes, and that section 106(a) of the Bankruptcy Code unequivocally abrogates tribal sovereign immunity. Finding that Krystal Energy remains good law, the court affirmed the bankruptcy court’s imposition of sanctions.

The court found it unnecessary to determine whether the tribe waived its sovereign immunity by filing a proof of claim in the debtor’s bankruptcy case.

Diven 9th Cir Nov 2022

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