Comment by Salomé A. Rivera
Native American tribes in the United States are recognized as “domestic dependent nations,” yet they are still autonomous in their sovereignty. Compared to other nations, the United States stands out for recognizing the inherent sovereignty of the indigenous populations within its borders by affirming their authority to regulate and govern designated lands. Indigenous peoples in other nations suffer due to their federal governments' inability to provide them with political autonomy. But the United States federal government is not exempt from criticism. Since the beginning of the colonization period, the United States has enforced its legal framework upon Native Americans and limited the autonomy they have over their governance through coercion and force.
The legislative history and evolving jurisprudence of tribal sovereignty make the relationship between the federal government and Native American tribes challenging to identify, and thus to navigate. Native American tribes possess tribal sovereign immunity. Like states in the American federal system, this immunity provides tribes with some degree of protection from legal suits. But tribal sovereign immunity is not absolute: Congress can abrogate this immunity if it “unequivocally” expresses its intent to do so. For centuries, Native American tribes have faced an uncertainty in sovereignty due to their unique legal status in the United States. The bankruptcy system is not immune from this uncertainty. Trapped in poverty due to federal policies, Native American tribes have attempted to overcome these economic adversities through entrepreneurial initiatives in different business sectors. Among its many benefits, the United States Bankruptcy Code (Code) provides various forms of relief and protections to debtors faced with economic turmoil. Native-owned businesses, like any business, are susceptible to financial distress and deserve the opportunity to seek relief and access to the Code's protections, yet their uncertain treatment under the Code prevents them from doing so equitably.
Notwithstanding recent case law development, the uncertain treatment of Native American tribes in bankruptcy proceedings has remained unaddressed. In Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, the United States Supreme Court resolved a decades-long circuit split. The Court correctly interpreted that §§ 106(a) and 101(27) of the Code abrogate tribal sovereign immunity by classifying Native American tribes as “governmental units.” Like states, Native American tribes can no longer use sovereign immunity as a defense from claims in bankruptcy proceedings. Despite the Supreme Court's correct interpretation of the Code, there is still no viable alternative for Native American tribes and their businesses to pursue relief and access safeguards similar to those available to their non-Native counterparts.
Considering the significant participation of Native American tribal businesses in commerce, it is imperative to address implications of the Supreme Court's decision and analyze potential solutions to deal with debt and restructuring for Native American tribes. This poses a crucial consideration for how we should comprehend the relationship between bankruptcy and other forms of governmental power. Legal scholarship has generally discussed the role the federal government should play in bankruptcy, but assessing the extent and significance of this authority, along with its implications, has gained a newfound importance following Lac du Flambeau.
This Comment discusses the historical context of tribal sovereign immunity and the policy implications of Congress's abrogation of this immunity. It contends that the continued uncertain treatment of Native American tribes in bankruptcy proceedings highlights Congress's need to adopt a novel framework to provide Native American tribes with a direct avenue to pursue debt relief. Part II explores tribal sovereign immunity in bankruptcy by discussing Congress's legislation on federal-tribal relations, the immunity's origins, and demands state intervention, which has historically addressed similar issues. Part III offers a historical background, examining prior decisions that have applied abrogation and non-abrogation approaches of tribal sovereign immunity in the Code. Part IV discusses the Supreme Court's decision in Lac du Flambeau resolving the circuit split on the Code's abrogation of tribal sovereign immunity. Part V identifies the implications of the Supreme Court's well-reasoned decision on Native American tribes' treatment under the Code and discusses the State's role in helping create unique frameworks to provide Native American tribes equitable access to financial relief. Part VI briefly concludes.
About the Author
Salomé A. Rivera. J.D. Candidate 2025, Tulane University Law School; B.A. 2022, University of Florida.
Citation
99 Tul. L. Rev. 397