Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin


Does the Bankruptcy Code abrogate tribal sovereign immunity and thus subject Indigenous tribes to the Bankruptcy Code’s automatic stays enjoining debt collection, or do Indigenous tribes retain sovereign immunity against the Bankruptcy Code’s automatic stays?

Note: The authors mirror the parties’ and courts’ use of the terms “Indian” and “Indian tribe” as legal terms in this Preview.

Oral argument: 
April 24, 2023

This case asks the Supreme Court to decide whether the Bankruptcy Code unequivocally expresses congressional intent to abrogate the sovereign immunity of Indigenous tribes. The Lac du Flambeau Band of Lake Superior Chippewa Indians argues that the Bankruptcy Code’s language is unclear, ambiguous, and subject to reasonable alternative interpretations, which fails to meet the high bar of an unequivocal expression of Congress’s intent. Brian W. Coughlin counters that there is no requirement for an explicit reference to Indigenous tribes, and that the ordinary meaning of the word “governmental unit” clearly shows Congress’s intent to abrogate the sovereign immunity of Indigenous tribes. This case touches on essential questions regarding tribal self-governance and abuse of the system of sovereign immunity.

Questions as Framed for the Court by the Parties 

Whether the Bankruptcy Code unequivocally expresses Congress’ intent to abrogate the sovereign immunity of Indigenous tribes.


Congress has authorized bankruptcy courts under 11 U.S.C. § 362(a) of the Bankruptcy Code (the “Code”) to enforce an automatic stay on debt collection efforts by creditors after the debtor has filed for bankruptcy. In re Coughlin at 605. Section 106(a) provides that a governmental unit’s assertion of sovereign immunity is set aside with respect to specific Code provisions, including the provision granting the automatic stay. Id.

Two federal circuit courts have split regarding whether the Code abrogates Indigenous tribes’ sovereign immunity. Id. at 603. In Krystal Energy Co. v. Navajo Nation, the United States Court of Appeals for the Ninth Circuit held that the Code does abrogate the sovereign immunity of Indigenous tribes. Id. By contrast, the United States Court of Appeals for the Sixth Circuit held in In re Greektown Holdings, LLC that the Code does not abrogate tribes’ sovereign immunity. Id.

In June 2019, Brian Coughlin took out a $1,100 payday loan from Lendgreen, a wholly owned subsidiary of the Lac du Flambeau Band of Lake Superior Chippewa Indians (the “Band”). Id. at 604. At the end of 2019, Coughlin filed for Chapter 13 bankruptcy in the United States Bankruptcy Court for the District of Massachusetts (“Bankruptcy Court”). Id. In his filing, Coughlin claimed his debt to the Band, which at this point totaled $1,600 with interest, as a nonpriority unsecured claim. Id.

The Code typically imposes an automatic stay preventing efforts by creditors to secure debts by debtors outside of a progressing bankruptcy proceeding once the debtor has filed for bankruptcy. Id. However, the Band continued to contact Coughlin regarding the repayment of his debt after Coughlin had filed for bankruptcy. Id. Coughlin continued to receive calls and emails even after he had given the Band oral and written notice that he had filed for bankruptcy and that an automatic stay existed. In re Coughlin at 492.

Coughlin then moved to enforce the automatic stay against the Band to prevent them from pursuing further debt collection efforts. In re Coughlin at 604. In response, the Band asserted tribal sovereign immunity and attempted to dismiss Coughlin’s proceeding seeking enforcement of the automatic stay. Id.

The Bankruptcy Court granted the Band’s motion to dismiss. Id. The Bankruptcy Court found that the automatic stay’s abrogation of sovereign immunity did not apply to Indigenous tribes because the plain language of the statute leaves the Band out of the statute’s enumerated list of governmental units to which the abrogation applies, even though other statutes have regularly included the term “Indian tribes” when intending to abrogate their sovereign immunity in other contexts. In re Coughlin at 493.

Coughlin appealed the Bankruptcy Court’s decision to the United States Court of Appeals for the First Circuit, which reversed the Bankruptcy Court’s decision. In re Coughlin, at 603. The First Circuit reasoned that the plain meaning of the phrase “any governmental unit” in Section 106(a) includes Indigenous tribes because a tribe is a government. Therefore, Indigenous tribes qualify as domestic rather than foreign governments. Id. at 605–06. The First Circuit also found that the historical context surrounding the passage of Section 106(a) reflects an understanding that Indigenous tribes were considered to be a “governmental unit,” indicating that Congress’s clear intent was to include them within the group of governmental units whose sovereign immunity is abrogated for the automatic stay. Id. at 606.

Coughlin appealed to the Supreme Court of the United States, which granted certiorari on January 13, 2023. Brief for Petitioners, Lac du Flambeau Band of Lake Superior Chippewa Indians et al. at 3.



The Band argues that the Bankruptcy Code fails to unequivocally express Congress’s intent to abrogate the sovereign immunity of Indigenous tribes. Brief for Petitioners, Lac du Flambeau Band of Lake Superior Chippewa Indians et al. (the “Band”) at 22. The Band asserts that Congress could have “easily” referred expressly to Indigenous tribes in the Code but did not. Id. at 22. Thus, the Band claims that the “most natural reading” of the Code excludes Indigenous tribes. Id. at 23. According to the Band, the Code’s definition of governmental units comprises three categories: specifically identified units, their departments, agencies, and instrumentalities, and “other foreign or domestic governments.” Id. The Band argues that tribal nations are “neither foreign nor domestic” and thus do not fall under any of the definition’s categories. Id. at 33.

The Band next posits that the intent to abrogate sovereign immunity cannot be implied, and that all ambiguities should be “construed in favor of immunity.” Id. at 20. The Band contends that a reasonable alternative interpretation is enough to show both that ambiguity exists and also a lack of clear Congressional intent to abrogate sovereign immunity. Id. at 27. Thus, the Band posits that a reasonable interpretation of the Code is that Congress failed to expressly mention Indigenous tribes because Congress intended to exclude them. Id. The Band also maintains that “other foreign and domestic governments” could alternatively reasonably refer to commissions created through interstate compacts and authorities, such as the Washington Metropolitan Area Transit Authority. Id. at 40.

Finally, the Band disagrees with the First Circuit’s reasoning that Indigenous tribes are 1) governments and 2) domestic, and thus would be included in “other…domestic governments.” Id. at 30. The Band criticizes the First Circuit’s use of syllogistic reasoning to interpret single words in a compound phrase, contending that dictionary definitions of single words may not capture the compound meaning of the words. Moreover, even if the definitions capture the correct meaning, the Band asserts that dictionary definitions are not an unequivocally clear expression of Congressional intent. Id. at 31. In sum, the Band argues that Congress’s “conspicuous omission” of Indigenous tribes in the language of the statute shows the lack of intent to include Indigenous tribes within the scope of the statute. Id. at 27.

In contrast, Brian W. Coughlin argues that the Code has clear language that supports abrogating the sovereign immunity of Indigenous tribes. Brief for Respondent, Brian W. Coughlin at 15. Coughlin asserts that the ordinary meaning of “other…domestic governments” includes Indigenous tribes. Brief for Respondent at 16. First, Coughlin argues that Indigenous tribes have the authority to carry out government functions, as shown by their powers to legislate, tax, execute and administer laws as well as punish offenders, and to create courts with binding authority. Id. at 17. Second, Coughlin contends that Indigenous tribes are domestic governments because, according to the ordinary meaning of “government,” they belong within the “sphere of authority, “control,” “fabric,” or “boundaries” of a nation or sovereign state and are “subject to the plenary power of Congress. Id. at 20–21. According to Coughlin, Indigenous tribes are a part of and within the jurisdictional limits of the United States and, thus are domestic governments. Id. at 21.

Moreover, Coughlin claims the language of Section 101(27) of the Code clearly shows Congress’s intent to include Indigenous tribes and depart from the “baseline of tribal immunity.” Id. at 14-15. Coughlin posits that the pairing of “foreign or domestic” in the phrase “other foreign or domestic governments” is meant to be read expansively and “broadens…the meaning of the phrase.” Id. at 23. Coughlin likens this to language such as “day or night” and “for richer or poorer,” which Coughlin argues is not meant to make exclusive categories. Id. Instead, Coughlin asserts this language reflects Congress’s intent for bankruptcy courts to treat all governments as governmental units, irrespective of whether they are subject to the authority of or within the U.S. Id.

Coughlin also claims that the Band failed to show the statutory language was unclear. Id. at 32. Coughlin maintains that there is no requirement for magic words nor explicit reference to “tribes” or tribal sovereign immunity. Id. at 32–33. According to Coughlin, broad language does not mean ambiguity; here, ordinary meaning supplies the necessary clarity. Id. at 39, 44.


The Band asserts that historical context does not support the abrogation of sovereign immunity for Indigenous tribes. Brief for Petitioners at 43. The Band argues that Indigenous tribes, in other statutes, are explicitly mentioned alongside the entities enumerated in Section 101(27) of the Code. Id. at 23. For example, the Band refers to the Resource Conservation and Recovery Act (“RCRA”), the Safe Drinking Water Act (“SDWA”), the Clean Water Act (“CWA), the Biomass Energy and Alcohol Fuels Act (“BEAFA”), and the Animal Health Protection Act (“AHPA”). Id. The Band argues that, although “magic words” are not required, Congress’s past practice shows a history of explicitly referencing Indigenous tribes in other codes. Id. at 27. Thus, the Band asserts it is “exceedingly odd” that Congress chose a “different and more convoluted method of achieving the same result in the Bankruptcy Code.” Id. at 28. Moreover, the Band argues that the Supreme Court has recognized four sovereigns: foreign nations, the federal government, state governments, and the Indigenous tribes, with the caveat of quasi-sovereign immunity for Indigenous tribes. Id. The Band also contends that appellate courts have “(nearly) unbroken acceptance” of finding no abrogation of sovereign immunity without explicit reference to Indigenous tribes. Id. at 26. According to the Band, Congress legislates against the “backdrop” of the clear statement rule, and thus, Congress’s failure to explicitly refer to Indigenous tribes shows a lack of clear intent. Id. The Band posits that Congress was aware of the “importance of clarity” in bankruptcy proceedings because it enacted the current version of the Code to clarify whether federal and state sovereign immunity was abrogated against specific monetary claims. Id. at 27.

The Band disagrees with the First Circuit’s reliance on the 1979 Bankruptcy Court decision In re Bohm’s, which the First Circuit found evinced a “clear” awareness that tribes were governmental units. Id. at 43. The Band maintains that, as a single decision, In re Bohm’s does not “represent judicial consensus.” Id. at 43. Moreover, the decision applies the pre-1978 Bankruptcy Code and “not any practice…that would have informed Congress’s understanding in 1994.” Id. In addition, the Band disagrees with the lower court’s use of congressional floor statements. Id. at 45. The Band calls floor statements the “least illuminating forms of legislative history” and contends that these floor statements were also not directed toward the Code. Id.

Coughlin counters that historical context supports the abrogation of sovereign immunity for Indigenous tribes. Brief for Respondent at 30. In response to the Band’s reference to other federal statutes, including the RCRA, SDWA, CWA, BEAFA, and AHPA, which explicitly mention “tribes,” Coughlin argues that those statutes either 1) dealt specifically with “tribal affairs'” or included them within the definition of “person” which usually carries an “interpretive presumption” against including sovereigns. Id. at 35. Thus, according to Coughlin, a reason existed to include explicit references to Indigenous tribes in those statutes, but not here, where the Code does not specifically deal with tribal affairs and uses the term “governmental unit,” which does not have an interpretive presumption against including sovereigns. Id. at 35–36.

Additionally, Coughlin asserts that the clear statement rule is just one of many “background principles” to consider. Id. at 30. Coughlin argues that the historical record reflects another background principle: the Framers’ goal for uniformity. Id. at 31. According to Coughlin, the Framers’ goal for harmonizing bankruptcy law supports finding an intent to abrogate sovereign immunity for Indigenous tribes instead of maintaining a “patchwork” of laws and the ability for sovereigns to interfere with bankruptcy proceedings. Id. at 30. Finally, Coughlin concludes that, like Congress’s eminent domain and war powers, courts have historically recognized its bankruptcy powers as one of few powers to uniformly abrogate state sovereign immunity. Id. at 31.



Seven Indigenous tribes, including the Navajo Nation (collectively, “Navajo Nation”), in support of the Band, argue that if their sovereignty is abrogated, this will negatively impact the ability of Indigenous tribes to self-govern. Brief of Amici Curiae Navajo Nation et al. (“Navajo Nation”), in Support of Petitioner at 8–9. The Navajo Nation notes that engaging in business operations, such as the payday loan in this case, is essential to funding tribal governments because of the limited economic prospects for Indigenous tribes. Id. at 11. The Navajo Nation highlight that abrogating Indigenous tribes’ sovereignty in the bankruptcy context would significantly interfere with business operations that are essential for the continuance of tribal self-governance. Id. at 13, 16.

The Native American Financial Services Association (“NAFSA”), also in support of the Band, echoes this concern and underscores that tribal businesses such as payday loans provide necessary revenue to support tribal self-governance and are inseparable from the tribes’ sovereign authority. Thus, NAFSA contends that stripping tribes of their sovereign immunity would jeopardize this independence. Brief of Amicus Curiae Native American Financial Services Organization, in Support of Petitioner at 8.

A collection of nine groups and individuals including the National Association of Consumer Bankruptcy Attorneys (collectively, “NACBA”), in support of Coughlin, counters that the other non-tribal investors in payday loan schemes, like the one in this case, take advantage of the Indigenous tribes’ limited economic resources in a manner that limits tribal self-governance. Brief of Amici Curiae National Association of Consumer Bankruptcy Attorneys et al. (“NACBA”), in Support of Respondent at 28–29. Three groups including Public Citizen (collectively, “Public Citizen”) further point out that predatory lenders take advantage of the tribes’ economic situations to create deals that disproportionately benefit private lenders more than tribes, resulting in business deals that do not produce as much profit as would be possible in support of self-governance. Brief of Amici Curiae Public Citizen et al. (“Public Citizen”), in Support of Respondent at 16.

The Antonin Scalia Law School Separation of Powers Clinic, also in support of Coughlin, contends that sovereign immunity from an automatic stay in a bankruptcy dispute is not required for efficient tribal self-governance such that abrogating tribes’ sovereign immunity in such cases does not threaten tribal self-governance. Brief of Amicus Curiae Separation of Powers Clinic, in Support of Respondent at 12.


The Navajo Nation, in support of the Band, expresses concern that debtors will abuse a decision that requires Indigenous tribes to abrogate their sovereignty in bankruptcy cases. Brief of Navajo Nation at 17. The Navajo Nation underscores that such a decision would be weaponized to allow debtors to engage in harassing litigation with tribal nations and to avoid Indigenous tribal law. Id. The Navajo Nation emphasizes that this concern of harassing litigation and avoidance of tribal law is not simply theoretical and has already happened to Indigenous tribes in the Ninth Circuit, such as the Navajo Nation itself, after the Krystal Energy decision. Id. The Navajo Nation elaborates that since Krystal Energy, the Nation has been sued under the Code and subsequently forced to defend suits in expensive litigation without the ability to assert sovereign immunity as a defense. Id. at 18. Therefore, the Navajo Nation asserts that expanding the abrogation of sovereign immunity to all jurisdictions would allow debtors everywhere to abuse the bankruptcy system at the expense of tribal nations. Id. at 17–18.

Public Citizen, in support of Coughlin, responds that allowing Indigenous tribes to retain sovereign immunity in bankruptcy cases results in private payday loan lenders abusing the system at the expense of debtors. Brief of Public Citizen at 15. Public Citizen notes that payday loan lenders are often predatory. Id. Public Citizen highlights that those predatory lenders frequently partner with Indigenous tribes simply to take advantage of the tribe’s sovereign immunity to use it as protection from liability and government regulation. Id. NACBA, in support of Coughlin, contends that continuing to allow private predatory payday lenders to escape liability simply by partnering with Indigenous tribes would perpetuate the already difficult situation of debtors who file for bankruptcy. Brief of NACBA at 28. NACBA also notes that allowing Indigenous tribes to retain sovereign immunity in bankruptcy cases would dramatically increase personal bankruptcy rates due to the improper protection from liability due to the tribes’ continued sovereign immunity. Id. at 28­–29.



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