Court case

Lac du Flambeau Band v. Coughlin

The Bankruptcy Code abrogates tribal sovereign immunity, so a tribe's payday-loan business could be held to the automatic stay.

Citation
599 U.S. ___ (2023), No. 22-227 [reporter page 599 U.S. 382 from-memory; matches Wikipedia infobox, secondary only; check bound volume]
Court
U.S. Supreme Court
Year
2023
Nations
Lac du Flambeau Band of Lake Superior Chippewa (Anishinaabe)
Treaty at issue
none
Effect on land rights
procedural

What happened

This case is about sovereign immunity and bankruptcy, not land. The Lac du Flambeau Band of Lake Superior Chippewa Indians is a federally recognized tribe that wholly owns several business entities. In 2019, one of them, Lendgreen, let Brian Coughlin borrow $1,100 in a high-interest, short-term payday loan. Before he repaid it, Coughlin filed for Chapter 13 bankruptcy, which triggers an automatic stay against further collection efforts by his creditors.

Lendgreen allegedly kept trying to collect. Coughlin asked the Bankruptcy Court to enforce the stay and award damages against Lendgreen, its parent corporations and the Band. The Bankruptcy Court dismissed the suit on tribal sovereign immunity grounds. The First Circuit reversed, concluding that the Code "unequivocally strips tribes of their immunity."

The Supreme Court affirmed in an opinion by Justice Jackson. It held that the Bankruptcy Code expressly abrogates the sovereign immunity of "governmental unit[s]" for specified purposes, and that the Code unambiguously does so for all governments, including federally recognized Indian tribes. The Code's definition of a governmental unit ends with the catchall "other foreign or domestic government." The Court said Congress must make its intent to abrogate "unmistakably clear," and found it did.

Justice Thomas concurred in the judgment, and Justice Gorsuch dissented.

Summarized with AI assistance from 3 sources and checked against their words; not yet reviewed by historians or by the nations. Report an error

What the sources say, and how this was checked

Well supported by the sources below.

  1. The Bankruptcy Code expressly abrogates the sovereign immunity of “governmental unit[s]” for specified purposes.Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, No. 22-227 (U.S. June 15, 2023) (supremecourt.gov slip opinion)
  2. The First Circuit reversed, concluding that the Code “unequivocally strips tribes of their immunity.”Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, No. 22-227 (U.S. June 15, 2023) (supremecourt.gov slip opinion)
  3. allowed respondent Brian Coughlin to borrow $1,100 in the form of a high-interest, short-term loanLac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, No. 22-227 (U.S. June 15, 2023) (supremecourt.gov slip opinion)

Research notes. The slip opinion is marked 599 U.S. ____; reporter page 382 in our data was not shown and I did not open the bound volume. The syllabus line-breaks the holding ('sovereign im- munity'), so it is described rather than quoted. The old closing sentence about off-reservation commercial activity was removed as unsourced.

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Nations named 3

Doctrine applied 2

Policy era 1

Sources

  1. supreme.justia.com/cases/federal/us/599/22-227/legal text copy
The record’s fields
Holding
The Bankruptcy Code unequivocally abrogates sovereign immunity for all governmental units, including tribes. Jackson wrote for the Court; Thomas concurred in the judgment and Gorsuch dissented (8-1).
Kind
Court case
Confidence
High

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