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Civil Resource Manual 196. Seminole Tribe And State Sovereign Immunity


Sovereign Immunity -- Seminole Tribe and State Sovereign Immunity

 1.    In Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996), the        Supreme Court held that Congress does not have the power under Article         I Indian Commerce clause to abrogate the States' Eleventh Amendment        immunity to permit suits to enforce rights under the Federal Indian        Gaming Regulatory Act.  (The Act allows an Indian Tribe to conduct        gaming activities only pursuant to a valid compact with the State        where activities are located.  The Act required the State to negotiate         in good faith and gave Tribes the right to sue in Federal court to        compel performance of this duty.) In dissent, Justice Stevens warned        that the "majority's opinion does not simply preclude Congress from        establishing the rather curious statutory scheme under which Indian        tribes may seek the aid of a federal court. . ..  Rather, it prevents        congress from providing a federal forum for a broad range of actions        against States, from those sounding in copyright and patent law, to         those concerning bankruptcy, environmental law, and the regulation         of our vast national economy."  116 S. Ct. at 1134 (emphasis added).  2.    Impact of Seminole on § 106(a): see, e.g., Hood        v. Tenn. Student Assistance Corp. (In re Hood), 262 B.R. 412        (B.A.P. 6th Cir. 2001); Lankford v. Comptroller of Pub. Accounts        (In re Lankford), 261 B.R. 410 (Bankr. N.D. Tex. 2001); Pitts        v. Ohio Dep't of Taxation (In re Pitts), 241 B.R. 862 (Bankr. N.D.         Ohio 1999).  Compare Headrick v. Ga. Dep't of Revenue (In re         Headrick), 203 B.R. 805 (S.D. Ga. 1996) (14th Amendment grants        Congress authority to subject State to complaints to enforce automatic         stay), aff'd sub nom., Ga. Dep't of Revenue v. Burke (In re        Burke), 146 F.3d 1313 (11th Cir. 1998), cert. denied, 527        U.S. 1043 (1999), with Schlossberg v. Md. Comptroller of the         Treasury (In re Creative Goldsmiths of Wash., D.C.), 119 F.3d 1140         (4th Cir. 1997) (§ 106(a) as applied to States violates Eleventh        Amendment), cert. denied, 523 U.S. 1075 (1998), United        States Dep't of Treasury v. Gosselin, 252 B.R. 854 (D. Mass. 2000)         (no waiver for proceeding to discharge debt to State), Kish v.        Verniero (In re Kish), 212 B.R. 808 (D.N.J. 1997) (same),        Womack v. Mays (In re Womack), 253 B.R. 247 (Bankr. E.D. Ark.        2000) (no waiver to permit suit against state agency for stay        violation), Koehler v. Iowa College Student Aid Comm'n (In re        Koehler), 204 B.R. 210 (Bankr. D. Minn. 1997) (proceeding to        discharge debt).  3.    Impact on § 106(b): see Arecibo Cmty. Health Care, Inc.         v. Puerto  Rico, 244 F.3d 241 (1st Cir. 2001).  "The validity of        Section 106(b), already under serious doubt after Seminole        Tribe, see [Creative Goldsmiths], is clearly        undermined by the holding in [College Sav. Bank v. Fla. Prepaid        Postsecondary Educ. Expense Board, 527 U.S. 666 (1999)]."  244        F.3d at 245.  Held: 106(b) is unconstitutional. Id.; see        also Grabscheid v. Mich. Employment Sec. Comm'n (In re C.J.        Rogers, Inc.), 212 B.R. 265 (E.D. Mich. 1997) (holding §        106(b) "deemed waiver" for compulsory counterclaims violates Eleventh        Amendment).  But see Wyo. Dep't of Transp. v. Straight (In        re Straight), 143 F.3d 1387, 1390 (10th Cir.), cert.        denied, 525 U.S. 982 (1998); In re Barrett Ref. Corp., 221        B.R. 795 (Bankr. W.D. Okla. 1998).  4.    Eleventh Amendment and Seminole do not apply to every        proceeding and order which may affect state interests.              a.  The Ex Parte Young doctrine, whereby a suit seeking        prospective equitable relief against a state official who has engaged        in a continuing violation of Federal law is not deemed to be a suit        against the State for purposes of state sovereign immunity, permits        enforcement of a discharge order against a state tax official in an        action for prospective injunctive and declaratory relief.  Goldberg         v. Ellett (In re Ellett), 254 F.3d 1135 (9th Cir. 2001); see        also Guiding Light Corp. v. La. Dep't of Health & Hosps. (In re         Guiding Light Corp.), 213 B.R. 489 (E.D. La. 1997) (Ex Parte        Young permits debtor Medicaid provider to sue to enjoin state        official from withholding Medicaid payments); Pac. Gas & Elec. Co.        v. Cal. Pub. Utils. Comm'n (In re Pac. Gas & Elec. Co.), 263 B.R.        306, 314-15 (Bankr. N.D. Cal. 2001) (Ex Parte Young permits        suit against PUC commissioners alleging automatic stay violations);        Horwitz v. Zywiczynski (In re Zywiczynski), 210 B.R. 924        (Bankr. W.D.N.Y. 1997) (Ex Parte Young permits turnover order;        Eleventh Amendment does not preclude threshold inquiry into whether        State's claim of adverse interest is more than colorable).        b.  "[A] bankruptcy discharge is binding on non-consenting States        notwithstanding the [Supreme] Court's more recent sovereign immunity        jurisprudence."  Goldberg v. Ellett (In re Ellett), 254 F.3d        1135, ____ (9th Cir. 2001) (citing In re Collins, 173 F.3d 924,         928-31 (4th Cir. 1999) and Texas v. Walker, 142 F.3d 813,        822-23 (5th Cir. 1998)); see also Maryland v. Antonelli        Creditors' Liquidating Trust, 123 F.3d 777, 786-87 (4th Cir. 1997)         (order confirming plan which provided for waiver of state transfer tax         not a "suit"); Smith v. Psychiatric Hosps. of Fla., Inc. (In re        Psychiatric Hosps. of Fla., Inc.), 216 B.R. 660, 661 (M.D. Fla.        1998) (same; motion to determine dischargeability under § 505);        In re Sun Healthcare Group, Inc., 245 B.R. 779, 784-87 (Bankr.        D. Del. 2000) (same; DIP financing order); Harden v. Gilbert (In re         Int'l Heritage, Inc.), 239 B.R. 306, 309-10 (Bankr. E.D.N.C. 1999)         (same; proceeding to determine scope of automatic stay, even if a        contested matter).  5.    See also Innes v. Kan. State Univ. (In re Innes), 184        F.3d 1275, 1284 (10th Cir. 1999) (KSU waived Eleventh Amendment        immunity in adversary proceeding by entering into contract with DOE        requiring it to perform certain actions in the event of bankruptcy of        student loan borrower), cert. denied, 529 U.S. 1037 (2000);        In re Barrett Ref. Corp., 221 B.R. 795, 814 (Bankr. W.D. Okla.        1998) (State's waiver of sovereign immunity cannot be undone by        withdrawing proof of claim). 
Updated February 19, 2015