PAUL D. BORMAN, District Judge.
This matter is before the Court on Appellants Sault St. Marie Tribe of Chippewa Indians and Kewadin Casinos Gaming Authority's (Appellants or collectively "the Tribe") appeal of United States Bankruptcy Judge Walter J. Shapero's August 13, 2014 Opinion and Order denying Appellants' motion to dismiss based on sovereign immunity. (ECF No. 1, Notice of Appeal; ECF No. 8, Brief of Appellant.) Appellee Buchwald Capital Advisors LLC, Litigation Trustee for the Greektown Litigation Trust (Appellee or "the Litigation Trustee") filed a Response (ECF No. 10) and the Tribe filed a Reply (ECF No. 12). The Court held a hearing on April 1, 2015.
For the reasons that follow, the Court REVERSES the decision of the Bankruptcy Court, finds that Congress did not clearly and unequivocally express an intent to abrogate the sovereign immunity of Indian tribes in section 106(a) of the Bankruptcy Code, and REMANDS the matter to the Bankruptcy Court for further proceedings on the issue of whether the Tribe waived its sovereign immunity from suit in the underlying bankruptcy proceedings.
In this bankruptcy appeal, the Tribe challenges the Bankruptcy Court's ruling in the underlying Adversary Proceeding that Congress intended to abrogate tribal sovereign immunity from suit in section 106(a) of the Bankruptcy Code when it abrogated the sovereign immunity of "governmental unit[s]," and further defined a "governmental unit" in section 101(27) of the Bankruptcy Code to include "other ... domestic government[s]." The Tribe appeals the Bankruptcy Court's Order denying its motion to dismiss based on sovereign immunity, arguing that the failure of the Legislature to clearly and unequivocally manifest an intent to abrogate tribal sovereign immunity when describing the entities whose sovereign immunity was abrogated under the Bankruptcy Code requires dismissal of the claims against it in the Bankruptcy Court Adversary Proceeding. The Litigation Trustee responds that the Legislature need not invoke the magic words "Indian tribes" when intending to remove the cloak of sovereign immunity that otherwise shields Indian tribes from suits against them and argues that the Legislature clearly and equivocally intended just that when it included the catchall phrase "or other ... domestic government" in section 101(27) of the Bankruptcy Code when defining the term "governmental unit."
On May 28, 2008, Greektown Holdings, LLC and certain affiliates (collectively the "Debtors"), commenced proceedings under Chapter 11 of the United States Bankruptcy Code, In re: Greektown Holdings, LLC, et al., Debtors (E.D.Mich.Bankr.No. 08-53104). On or about May 28, 2010, this Adversary Proceeding was commenced, The Official Committee of Unsecured Creditors on Behalf of the Estate of Greektown Holdings, LLC
Shortly after the Adversary Proceeding was commenced, on June 25, 2010, the Tribe filed a motion to dismiss the MUFTA claims against it on the grounds of sovereign immunity. (Adv. Pro. ECF No. 8.) The Litigation Trustee opposed the motion (Adv. Pro. ECF No. 56) and the Tribe replied (Adv. Pro. ECF No. 69). Subsequently the parties stipulated to bifurcate the hearing on the motion to dismiss to first decide the purely legal question of whether Congress, in Section 106(a) of the Bankruptcy Code, abrogated the Tribe's sovereign immunity and thereafter, if necessary, to decide whether the Tribe waived its sovereign immunity by participating in the Bankruptcy proceedings. The Bankruptcy Court heard oral argument on December 29, 2010, and took the matter under advisement.
While the issue of sovereign immunity was still under advisement in the Bankruptcy Court, in 2012 the Tribe and the Litigation Trustee reached a settlement, filed a motion to have the settlement approved and requested that the Bankruptcy Court hold off ruling on the Tribe's motion to dismiss pending a decision on the Settlement Motion. This Court approved the Settlement Agreement, which contained a claims bar order that was an important aspect of the Settlement Agreement. (In re Greektown Holdings, LLC, Case No. 12-12340, ECF No. 10, Opinion and Order Granting Corrected Motion for Order Approving Settlement Agreement.) The non-settling Defendants in the Adversary Proceeding, Maria Gatzaros, Ted Gatzaros, Dimitrios Papas and Viola Papas ("the Papas and Gatzaros Defendants"), appealed the Court's Order approving the Settlement Agreement, objecting to the inclusion of the claims bar order. (In re Greektown, No. 12-12340, ECF No. 33, Notice of Appeal.) The Sixth Circuit reversed and remanded with instructions to this Court to reconsider the propriety and scope of the claims bar order. With the claims bar order under fire, the parties stipulated in this Court to withdraw the motion for an order approving the settlement and the case was dismissed. (In re Greektown, No. 12-12340, ECF Nos. 48, 49, Stipulation and Dismissal.) The parties thereafter
On June 9, 2015, with settlement negotiations at a standstill, the Tribe renewed its 2010 motion to dismiss on the grounds of sovereign immunity. (Adv. Pro. ECF No. 453, Renewed and Supplemented Motion to Dismiss Adversary Proceeding Re: Sovereign Immunity.) On June 27, 2015, the Litigation Trustee responded and opposed the motion. (Adv. Pro. ECF No. 463.)
On August 13, 2014, the Bankruptcy Court issued its Opinion and Order Denying the Tribe's Renewed and Supplemented Motion, concluding that "Congress sufficiently, clearly, and unequivocally intended to abrogate [the Tribe's] sovereign immunity in [section 106 of the Bankruptcy Code]." (August 12, 2014 Opinion and Order, Adv. Pro. ECF No. 474 at 36.) The Tribe now appeals that ruling to this Court. The question to be answered is purely one of statutory construction: Does Section 106 of the Bankruptcy Code, by reference to section 101(27)'s definition of "governmental unit" to include "other ... domestic government[s]," clearly and unequivocally express Congress's intent to abrogate the sovereign immunity of Indian tribes? As discussed infra, the Court concludes that it cannot say "with perfect confidence" that Congress intended, by using the generic phrase "other domestic governments" in § 101(27), to clearly, unequivocally, unmistakably and without ambiguity abrogate tribal sovereign immunity in § 106(a) of the Bankruptcy Code.
Accordingly, the Court REVERSES the August 13, 2014 Order of the Bankruptcy Court, finds that Congress did not clearly and unequivocally express an intent to abrogate the sovereign immunity of Indian tribes in section 106(a) of the Bankruptcy Code, and REMANDS this matter to the Bankruptcy Court for further proceedings to address the limited factual issue of whether the Tribe, while enjoying sovereign immunity from suit under the relevant provisions of the Bankruptcy Code, nonetheless waived that immunity in this proceeding.
The parties do not dispute this Court's jurisdiction to entertain the Tribe's appeal. Under 28 U.S.C. § 158(a)(1), this Court has jurisdiction to hear appeals "from final judgments, orders, and decrees" issued by the Bankruptcy Court. The denial of a motion to dismiss on the grounds of sovereign immunity is an immediately appealable "collateral order." Sault Ste. Marie Tribe of Chippewa Indians v. State of Michigan, 5 F.3d 147, 149-50 (6th Cir. 1993). A ruling on a motion to dismiss a bankruptcy court adversary proceeding is reviewed de novo. In re Grenier, 430 B.R. 446, 449 (E.D.Mich.2010) (citing Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir.2005)).
A motion to dismiss on the basis of sovereign immunity tests the Court's subject matter jurisdiction to entertain the action. Memphis Biofuels, LLC v. Chickasaw Nation Industries, Inc., 585 F.3d 917, 919-20 (6th Cir.2009). The Tribe moves under Fed. R. Civ. P. 12(b)(1) to dismiss the Complaint in the Adversary Proceeding for lack of subject matter jurisdiction. "In determining whether the Court has subject matter jurisdiction of a claim under Fed. R. Civ. P. 12(b)(1), the Court must assume that plaintiffs' allegations are true and must construe the allegations in a light most favorable to them." 3D Systems, Inc. v. Envisiontec, Inc., 575 F.Supp.2d 799, 802 (E.D.Mich.2008) (citing Little Traverse Bay Bands of Odawa Indians v. Great Spring Waters of America, Inc., 203 F.Supp.2d 853, 855 (W.D.Mich. 2002)). "Relief is appropriate only if, after such construction, it is apparent to the district court that there is an absence of subject matter jurisdiction." Id. at 803. "Where jurisdiction is challenged under Fed. R. Civ. P. 12(b)(1), a plaintiff bears the burden of proving jurisdiction in order to survive the motion." Id. (citing Rogers v. Stratton Indus., Inc., 798 F.2d 913, 915 (6th Cir.1986)).
The parties are in agreement that "[a]s a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity." Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998). Tribal sovereign immunity is a matter of common law, a judicially created doctrine, not deriving from the Eleventh Amendment or an act of Congress. Id. at 756, 118 S.Ct. 1700 (noting that the doctrine of tribal immunity developed "almost by accident" and is said to rest in the Supreme Court's decision in Turner v. United States, 248 U.S. 354, 39 S.Ct. 109, 63 L.Ed. 291 (1919)). "Turner's passing reference to immunity, however, did become an explicit holding that tribes had immunity from suit." Id. at 757, 118 S.Ct. 1700
"To abrogate tribal immunity, Congress must "unequivocally" express that purpose." C & L Enterprises, Inc. v. Citizen Band Potawatomi Tribe of Okla., 532 U.S. 411, 418, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001) ("Potawatomi") (citing Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978)). As Judge Shapero noted in his Opinion and Order, the Tribe throughout retains "a thumb on the interpretive scale tending to tip the balance in their favor in the event of an ambiguity or lack of clarity." (8/12/2014 Opinion and Order 36.) See Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985) ("statutes are to be construed liberally in favor of the Indians, with ambiguous provisions interpreted to their benefit"); Federal Aviation Administration v. Cooper, ___ U.S. ___, 132 S.Ct. 1441, 1448, 182 L.Ed.2d 497 (2012) ("Legislative history cannot supply a waiver that is not clearly evident from the language of the statute. Any ambiguities in the statutory language are to be construed in favor of immunity, so that the [Tribe's] consent to be sued is never enlarged beyond what a fair reading of the text requires. Ambiguity exists if there is a plausible interpretation of the statute that would not authorize" suit against the Tribe.) (internal quotation marks and citations omitted) (alteration added).
Kiowa, 523 U.S. at 755, 118 S.Ct. 1700.
Whether Congress has unequivocally expressed the intent, in section 106 of the Bankruptcy Code, to abrogate tribal sovereign immunity is the question presented in this bankruptcy appeal. The issue has
11 U.S.C. § 106(a) provides as follows:
The claims in this MUFTA Adversary Proceeding are brought under Sections 544 and 550 of the Bankruptcy Code and thus would be claims as to which the sovereign immunity of "governmental units" has been abrogated. 11 U.S.C. § 101(27) in turn defines "governmental unit" as follows:
It is not disputed that these statutory sections do not specifically mention "Indian tribes," nor does any other provision of the Bankruptcy Code expressly mention "Indian tribes." In re Nat'l Cattle Cong., 247 B.R. 259, 267 (Bankr.N.D.Iowa 2000) (concluding that Congress has not unequivocally abrogated the Tribe's sovereign immunity to suit under the Bankruptcy Code and noting that the "Code makes no specific mention of Indian tribes"). The issue is whether the Tribe can be considered a "governmental unit" whose sovereign immunity is abrogated under section 106(a) because Congress defined "governmental unit" to include, in addition to those sovereign entities specifically listed, "other domestic government[s]."
To summarize the opposing arguments, the Litigation Trustee asserts that the Tribe is undeniably both "domestic," i.e. not foreign, and a "government," i.e. possessing sovereign status. The Litigation Trustee notes that the Supreme Court has historically used both terms (although admittedly never together apart from a very recent reference discussed infra) when referring to Indian tribes, describing them, for example, as "tribal governments" and "domestic dependent nations." The Tribe argues that the Supreme Court has never referred to Indian tribes with the phrase "domestic governments" and insists that in order to abrogate tribal immunity, Congress must invoke the phrase Indian tribes, tribal governments, or some verbiage that uniquely and historically has been used to describe the Indian tribes. The Tribe submits that the phrase "domestic government" is not sufficiently unequivocal, without specific reference to Indian tribes, to state an intent to include Indian tribes among the entities whose sovereign immunity has been waived in section 106(a) of the Bankruptcy Code.
The Supreme Court recently addressed the issue of tribal sovereign immunity in Michigan v. Bay Mills Indian Community, ___ U.S. ___, 134 S.Ct. 2024, 188 L.Ed.2d 1071 (2014). In Bay Mills, the Supreme Court held that tribal sovereign immunity protected Bay Mills from suit against it for opening a casino outside Indian lands. At issue was the interpretation of the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq., which creates the framework for regulating gaming activity on Indian lands. 134 S.Ct. at 2028. The opinion is important for our purposes not for its ultimate interpretation of the IGRA but rather for its restatement of the historical underpinnings of the doctrine of tribal sovereign immunity and its refusal to revisit and reverse course on prior decisions holding that tribal immunity cannot be abrogated absent an express Congressional statement or waiver.
By way of background, the Court in Bay Mills provided the following historical synopsis of the Court's own rulings on the judicially created, common law doctrine of tribal sovereign immunity:
134 S.Ct. at 2030-31.
Applying these precedents, Justice Kagan, writing for the majority and joined by Justices Roberts, Kennedy, Breyer and Sotomayor, relied on the doctrine of stare decisis and concluded that tribal sovereign immunity remained a strong shield for Indian tribes and deferred to Congress to alter the course set by these precedents if it so chose. The dissent urged that it was time for the Court to reverse course, admit that previous cases were wrongly decided "[r]ather than insist that Congress clean up a mess" that the Court created and significantly scale back the broad doctrine of tribal sovereign immunity. Id. at 2045 (Scalia, J. dissenting). Justice Thomas, writing the principal dissent and joined by Justices Scalia, Ginsburg and Alito, criticized the majority for failing to appreciate the changing economic reality in which "the commercial activities of tribes have increased dramatically ... [with] tribes engage[d] in domestic and international business ventures including manufacturing, retail, banking, construction, energy, telecommunications, and more," id. at 2050 (internal quotation marks and citation omitted) (alterations added), yet remaining "largely litigation-proof" in the majority of these commercial enterprises. Id. at 2051. "As long as tribal immunity remains out of sync with this reality," Justice Thomas wrote, "it will continue to invite problems." Id. at 2052.
Although the majority in Bay Mills appeared to appreciate that a change in the doctrine of tribal sovereign immunity may be called for, it held fast to precedent, and in particular to the Court's decision in Kiowa, supra, which fully embraced the doctrine in its broadest sense. The majority observed that the Court in Kiowa
It is against the backdrop of this recent Supreme Court decision, reaffirming the sanctity of the "special brand of sovereignty" that Indian tribes have historically enjoyed, that we analyze whether, in section 106 of the Bankruptcy Code, Congress unequivocally, unmistakably and without ambiguity, by invoking the phrase "or other domestic governments," intended to abrogate the "special brand of sovereignty" that Indian tribes enjoy.
Arguing that section 106 of the Bankruptcy Code unequivocally abrogates tribal sovereign immunity, the Litigation Trustee relies on the Ninth Circuit's decision in Krystal Energy, which explicitly so holds. In Krystal Energy, the Ninth Circuit found that the definition of "governmental unit" in § 101(27) broadly captured all foreign and domestic governments:
357 F.3d at 1058. The court observed that "Indian tribes are certainly governments," and further found that "[t]he Supreme Court has recognized that Indian tribes are "domestic dependent nations," and concluded that therefore "the category "Indian tribes" is simply a specific member of the group of the domestic governments, the immunity of which Congress intended to abrogate." Id. at 1057-58. Having reached the conclusion that Indian tribes are "domestic governments," the Ninth Circuit concluded that therefore Congressional intent to abrogate their sovereign immunity was clearly expressed in section 106, citing several bankruptcy court decisions so holding:
357 F.3d at 1058 (alteration in original).
The Krystal court noted that this "syllogistic reasoning" had been followed by the Supreme Court in the context of Congressional abrogation of state sovereign immunity in Kimel v. Florida Bd. of Regents, 528 U.S. 62, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000), where the Supreme Court held that Congress had clearly expressed its intent to abrogate the sovereign immunity of the states when passing certain amendments to the Age Discrimination Enforcement Act (ADEA) that permitted suits against "any employer (including a public agency)" to be brought in any Federal or State court. Kimel, 528 U.S. at 73, 120 S.Ct. 631. Although "states" were not expressly listed in the provision authorizing such suits, the Supreme Court in Kimel looked to a different section of the ADEA which expressly defined "public agency" to include "the government of a State or political subdivision thereof," to conclude that "[r]ead as whole the plain language of these provisions clearly demonstrates Congress' intent to subject the States to suit for money damages at the hands of individual employees." Kimel, 528 U.S. at 74, 120 S.Ct. 631. In relying on Kimel, the Ninth Circuit found it "evident but, in the end, unimportant," that unlike the definition of "public agency" in the ADEA that specifically lists "States," no definition in the Bankruptcy Code mentions "Indian tribes." Krystal Energy, 357 F.3d at 1058-59.
The Ninth Circuit found sufficient support for its conclusion in the fact that "in enacting the Bankruptcy code, Congress was legislating against the back-drop of prior Supreme Court decisions, which do define Indian tribes as domestic nations, i.e. governments, as well as against the ordinary, all-encompassing meaning of the term `other foreign or domestic governments.'" Id. at 1059. Just as Congress need not "expressly mention Alabama and Wyoming" when abrogating the Eleventh Amendment immunity of "all states," the Ninth Circuit reasoned, it need not mention "Indian tribes" when abrogating the sovereign immunity of all "domestic governments." Id. Finding Indian tribes to be members of the "generic class" of "domestic governments" did not, the Ninth Circuit concluded, run afoul of the Supreme Court's "admonitions to `tread lightly' in the area of abrogation of tribal sovereign immunity." Id. at 1060. "[T]he Supreme Court's decisions do not require Congress to utter the magic words "Indian tribes" when abrogating tribal sovereign immunity." Id. at 1061. According to Krystal, no prohibited implication is necessary to conclude that in section 106(a) Congress unmistakably intended to abrogate tribal sovereign immunity:
357 F.3d at 1060. See also In re Russell, 293 B.R. 34, 39 (Bankr.D.Ariz.2003) (finding a distinction between inference (prohibited) and deduction (permitted) and concluding that deduction from what is expressly said in sections 101(27) and 106(a) yielded the conclusion that Congress expressly intended to abrogate tribal sovereign immunity and thus finding "no violation of the Court's proscription against abrogation by implication in concluding that § 106 includes Indian tribes"). More recently, in In re Platinum Oil Props., LLC, 465 B.R. 621, 643 (Bankr. D.New Mexico 2011) the bankruptcy court relied on the Krystal Energy and In re Russell line of authority, to similarly conclude that "[t]he language "or other foreign or domestic government" found in 11 U.S.C. § 101(27) includes Indian tribes, such that 11 U.S.C. § 106 together with 11 U.S.C. § 101(27) embodies Congress' clear and unequivocal abrogation of tribal sovereign immunity." The court in Platinum Oil recognized that this was not "the universal view," but apparently found it to be the better reasoned one. Id. at 644 n. 19.
In addition to this line of authority, the Litigation Trustee urges the Court to consider also that Justice Sotomayor, in her concurring opinion in Bay Mills, used the very phrase at issue here, i.e. "domestic governments," when comparing the sovereign status of States and Indian tribes. Justice Sotomayor observed that it would not foster comity among sovereigns to permit States to sue Indian tribes for commercial activity on State lands while at the same time precluding tribes from suing States for commercial activity on Indian lands. Following this observation, she noted that "[b]oth States and Tribes are domestic governments who come to this Court with sovereignty that they have not entirely ceded to the Federal Government." 134 S.Ct. at 2042 (Sotomayor, J. Concurring). While interesting to note that Justice Sotomayor used the very phrase at issue here, to wit "domestic governments," to characterize both States and Indian tribes, Justice Sotomayor was neither called upon to, nor did she imply that she was attempting to, create a generic description that could be used as a substitute for the phrase "Indian tribes" in the context of a Congressional abrogation of tribal sovereign immunity. Apart from this one instance in this concurring opinion, uttered years after section 106(a) of the Bankruptcy Code was adopted by Congress, it is undisputed that Indian tribes have never been referred to by the Supreme Court as "domestic governments." The bankruptcy court placed little weight on this statement in Justice Sotomayor's concurring opinion in Bay Mills and so does this Court.
There cannot be reasonable debate that Indian tribes are both "domestic" (in fact the Tribe concedes this attribute) and also that Indian tribes are fairly characterized as possessing attributes of a "government." See Bay Mills, 134 S.Ct. at 2030 (observing that immunity is a "necessary corollary to Indian sovereignty and self-governance" and that a tribe's immunity, "like its other governmental powers" are in Congress's hands); Id. at 2032 (noting that courts will not "lightly assume that Congress intends to undermine Indian self-government"); Turner v. United States, 248 U.S. 354, 357-58, 39 S.Ct. 109, 63 L.Ed. 291 (1919) ("Like other governments, municipal as well as state, the
For the Litigation Trustee, it is enough to have established that Indian tribes are both "domestic" and "governments" to reach the inevitable and unassailable conclusion that Congress expressly and unequivocally meant to include Indian tribes when it employed the phrase "domestic governments" in § 101(27). Krystal Energy, In re Platinum Oil, and In re Russell expressly so hold and Judge McFeeley's dissent in In re Mayes concurs in this result. These courts agree with the Litigation Trustee that Congress need not invoke the "magic words Indian tribes" when intending to abrogate tribal sovereign immunity. But, these decisions do not recognize that there is not one example in all of history where the Supreme Court has found that Congress intended to abrogate tribal sovereign immunity without expressly mentioning Indian tribes somewhere in the statute. Nor do these decisions place any significance on the fact that in many instances, when Congress did mean to abrogate tribal immunity, it did use the "magic words" "Indian tribes" in doing so. As discussed infra, Krystal and In re Russell do not give sufficient consideration to the "special brand" of sovereign immunity that Indian tribes enjoy. Bay Mills, 134 S.Ct. at 2037.
In In re Whittaker, 474 B.R. 687 (8th Cir. BAP 2012), the Eighth Circuit Bankruptcy Appellate Panel expressly rejected the Ninth Circuit's reasoning in Krystal, and held that absent a specific mention of "Indian tribes" in the Bankruptcy code, any finding of abrogation under § 106(a) necessarily must rely on inference or implication, both of which are prohibited by Supreme Court precedent. Quoting from In re National Cattle Congress, supra, the panel noted cases in which specific statutory reference to Indian tribes had been found sufficiently unequivocal to abrogate tribal sovereign immunity:
474 B.R. at 691 (quoting In re Nat'l Cattle Congress, 247 B.R. at 267) (alterations added). Finding Krystal unpersuasive given its failure to cite one case where tribal immunity was found to have been abrogated in the absence of a specific mention of the words "Indian tribes," and deriding the Ninth Circuit's failure to adhere to the clear proscription against inference and implication in finding such abrogation, the panel refused to follow Krystal:
474 B.R. at 695 (footnotes omitted).
The Tenth Circuit Bankruptcy Appellate Panel suggested the same conclusion in In re Mayes, 294 B.R. 145 (10th Cir. [BAP] 2003). Although not a basis for the holding in In re Mayes, the panel noted that § 106(a) "probably" could not be interpreted as an unequivocal expression of Congressional intent to abrogate tribal sovereign immunity:
294 B.R. at 148 n. 10.
The Tribe also convincingly relies on Supreme Court precedent analyzing issues of state sovereign immunity suggesting that inference from generic descriptions of a group of entities is impermissible to support a finding of abrogation. In Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985), the Court found that a provision in the Rehabilitation Act of 1973 that permitted suit to be filed against "any recipient of federal assistance," was insufficient to express clearly and unequivocally Congress's intent to abrogate the sovereign immunity of the states:
473 U.S. at 245-46, 105 S.Ct. 3142 (citations omitted).
Similarly, in Dellmuth v. Muth, 491 U.S. 223, 109 S.Ct. 2397, 105 L.Ed.2d 181 (1989), reiterating its reasoning in Atascadero, the Supreme Court found insufficient Congressional intent to abrogate states' immunity in the Education of Children With Handicaps Act ("EHA"). First, the Court completely rejected efforts to rely on any nontextual source as support for a finding of such intent:
491 U.S. at 230, 109 S.Ct. 2397 (alteration added).
Turning to the textual arguments in support of abrogation, the Court noted first that "the EHA makes no reference whatsoever to either the Eleventh Amendment or the States' sovereign immunity." 491 U.S. at 231, 109 S.Ct. 2397.
491 U.S. at 232, 109 S.Ct. 2397. Thus, Dellmuth forbids consideration of nontextual evidence and rejects logical inference as a method of divining Congressional intent to abrogate sovereign immunity, at least in the absence of other concrete textual support permitting one to draw "with perfect confidence" the conclusion that abrogation was intended. Id. at 231, 109 S.Ct. 2397.
Judge Shapero largely adopts the reasoning of the Ninth Circuit in Krystal Energy and embraces the "deductive reasoning" rationale of In re Russell. Judge Shapero was persuaded by the distinction he perceived between interpreting a statute that is silent on the topic of abrogation of sovereign immunity and interpreting a statute that mentions the subject but imperfectly defines its scope. The former instance, in Judge Shapero's opinion, requires implication (prohibited) but the latter requires only deduction (permitted):
In re Greektown Holdings, LLC, 516 B.R. 462, 474-75 (Bankr.E.D.Mich.2014) (initial citations and footnote omitted). According to Judge Shapero, because in this case the statute undeniably directly addresses abrogation of sovereign immunity in § 106(a), and the Tribe only objects that it does not do so clearly enough as to the special sovereign immunity possessed by Indian tribes, Judge Shapero concludes that this is a case of "deductive" reasoning, to be distinguished from those cases where the statute does not touch upon the issue of sovereign immunity at all, which then require the prohibited "implication and inference." And because Judge Shapero also concludes that "domestic government" clearly encompasses "Indian tribes," he "deduces" that therefore § 106(a) unequivocally expresses an intent to abrogate tribal immunity.
The faulty premise in this reasoning is that it presumes the very issue in contention, i.e. that "domestic government" is a phrase clearly understood beyond all rational debate to encompass an Indian tribe, just as the word "state" is clearly understood beyond all rational debate to encompass Arizona and the other 49 "states." But the two "deductions" are quite obviously qualitatively different. While this Court accepts the conclusions that Indian tribes are both "domestic" and bear the hallmarks of "governments," it does not necessarily follow that combining these admitted attributes together in a single generic phrase in § 101(27) "unequivocally and unmistakably," and "without ambiguity" leads one to conclude with "perfect confidence" that Congress intended thereby to include Indian tribes and to abrogate the "special brand" of sovereign immunity enjoyed by Indian tribes without so much as a reference to Indian tribes in the Bankruptcy Code.
While perhaps it may be said with "perfect confidence" that Indian tribes are both "domestic" in character and function as a "government," this Court cannot say with "perfect confidence" that Congress combined those terms in a single phrase in § 101(27) to clearly, unequivocally and unmistakably express its intent to include Indian tribes among those sovereign entities specifically mentioned whose immunity was thereby abrogated. While logical inference may support such a conclusion, Supreme Court precedent teaches that logical inference is insufficient to divine Congressional intent to abrogate tribal sovereign immunity. And if indeed the only sovereign entity not specifically listed in section 101(27) is Indian tribes, and if Congress clearly intended that they be included, why not just mention them by their specific name, as Congress has always done in the past?
The argument in favor of abrogation relies heavily on the fact that § 106(a) contains a broad, sweeping abrogation of the immunity of every type of sovereign entity and reasons from this that excluding Indian tribes from that list would be anomalous, or "sophistry" to quote the
Cherokee Nation v. State of Georgia, 30 U.S. 1, 18, 5 Pet. 1, 8 L.Ed. 25 (1831).
Recently, in Bay Mills, Justice Sotomayor in her concurrence draws on this description of the Indian tribes in Cherokee Nation in characterizing the tribes today:
134 S.Ct. at 2040-41 (Sotomayor, J. Concurring) (alterations in original).
Given the historical treatment of Indian tribes as special and distinct from either states or foreign governments, one cannot presume that Congress intended to include them, without mentioning them but solely by force of deduction, as among a group of sovereign entities with whom they share very little other than their sovereign status. There is not a single example of a Supreme Court decision finding that Congress intended to abrogate the sovereign immunity of the Indian tribes without specifically using the words "Indians" or "Indian
By contrast, there are many examples where lower courts have found such abrogation where Indian tribes are mentioned by name. See Osage Tribal Council v. United States Dept. of Labor, 187 F.3d 1174, 1182 (10th Cir.1999) (concluding that Congress intended the Safe Drinking Water Act to abrogate tribal sovereign immunity where jurisdiction was granted over "persons" and "persons" was defined to include "municipalities" which in turn was defined to include "Indian tribes"); United States v. Weddell, 12 F.Supp.2d 999, 1000 (D.S.D.1998) (concluding that Indian tribe was subject to garnishment under the FDCPA where "garnishee" defined to include "person" and person defined to include an Indian tribe); Blue Legs v. United States Bureau of Indian Affairs, 867 F.2d 1094, 1097 (8th Cir.1989) (concluding that Congress intended the Resource Conservation and Recovery Act to abrogate tribal immunity where "person" is defined to include a municipality and municipality is defined to include an Indian tribe).
In contrast to these cases, we have examples of lower courts refusing to find abrogation of tribal immunity where Indian tribes are not referenced by name. Florida Paraplegic, 166 F.3d 1126, 1132-33 (11th Cir.1999), is particularly instructive. In Florida Paraplegic, the Eleventh Circuit concluded that Congress did not clearly express an intent in the Americans With Disabilities Act ("ADA") to abrogate tribal sovereign immunity, although it explicitly provided that "states" were not immune from suit under the ADA, because it failed to specifically mention Indian tribes. The Eleventh Circuit first noted that abrogation of tribal immunity must be "unequivocally expressed," heeding "the Supreme Court's repeated instruction that, because of the `unique trust relationship between the United States and the Indians,' where Indian rights are at issue, ambiguities in federal laws must be resolved in the Indians' advantage." Id. at 1131 (quoting Blackfeet, supra). The court then concluded that the absence of any
166 F.3d at 1131. Finding no mention of Indian tribes in the provision of the ADA expressly providing that States were not immune from suit under the Eleventh Amendment, the Eleventh Circuit ruled that no such abrogation could be implied:
166 F.3d at 1133.
Importantly, as discussed supra, the Supreme Court has refused to permit an inference of abrogation in the context of state immunity from suit where such intent must be implied based on a generic definition that logically encompasses the sovereign entity. See Atascadero, supra, 473 U.S. at 245, 105 S.Ct. 3142.
Finally, in a number of statutes, Congress has clearly considered Indian tribes to be different from other forms of "government," and needing separate and distinct appellation. See 7 U.S.C. § 8310 (listing "States or political subdivisions of States, national governments of foreign countries, domestic or international organizations, Indian Tribes and other persons"); 42 U.S.C. § 9601(16) ("CERCLA") (listing "any State or local government, any foreign government, any Indian Tribe"); 16 U.S.C. § 698v-4 (listing "Federal, State, and local governmental units, and [] Indian Tribes and Pueblos"); 49 U.S.C. § 5121 (listing "a unit of State or local government, an Indian Tribe, a foreign government").
While one may question the historical legitimacy of the doctrine, and one may be uncomfortable with the notion that Indian tribes are subject to many laws yet in many cases we are powerless to enforce them against the tribes, and while one may find it tempting to deduce that Congress actually meant to include Indian tribes when it employed the catchall phrase "other domestic governments," notwithstanding the fact that Indian tribes are not mentioned by name in any provision of the Bankruptcy Code, this Court has recent, explicit direction from the Supreme Court rejecting this interpretation. This Court is instructed in Bay Mills that Indian tribes retain every bit of sovereign immunity they have historically possessed and that, absent clear, unequivocal and unmistakable language abrogating that immunity, it is not our place to lightly depart from centuries of unwavering judicial deference to Congress's role in defining with exactitude the instances in which it is appropriate to abrogate the sovereign immunity of Indian tribes. The Litigation Trustee concedes that if this Court finds any ambiguity in § 106(a), it cannot conclude that the language is clear, unequivocal and unmistakable and must favor the Indian tribes and uphold their immunity from suit.
This Court cannot say with "perfect confidence" that the phrase "other domestic government" unambiguously, clearly, unequivocally and unmistakably
For the foregoing reasons, the Court REVERSES the ruling of the Bankruptcy Court, holds that the Tribe is entitled to sovereign immunity from suit in this MUFTA proceeding and REMANDS the matter to the Bankruptcy Court for further proceedings on the issue of waiver of sovereign immunity, as outlined in the Bankruptcy Court's December 23, 2010 Stipulated Order.
IT IS SO ORDERED.
