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Bucher v. Dakota Fin. Corp. (In re Whitaker)

Bucher v. Dakota Fin. Corp. (In re Whitaker)

United States Bankruptcy Appellate Panel for the Eighth Circuit

June 20, 2012, Submitted; July 19, 2012, Filed

No. 12-6004, No. 12-6005, No. 12-6006, No. 12-6007

Opinion

 [*689]  FEDERMAN, Bankruptcy Judge

These four adversary proceedings involve suits by Chapter 7 bankruptcy trustees against defendants The Lower Sioux Indian Community (the "Tribe") and its "subsidiary," Dakota Finance Corporation. In three of the adversaries, the trustees are pursuing the Tribe and the debtors for turnover of ongoing tribal revenue payments owed to the debtors under the Tribe's ordinances and the Indian Gaming Regulatory Act. In one of the adversaries, the trustee is seeking to avoid a lien asserted  [*690]  by Dakota Finance Corporation on the ongoing revenue payments owed to Debtor Linda Rose Whitaker as being unperfected. Absent the filing of a bankruptcy case, the creditors of these debtors would be prohibited by the Tribe's sovereign immunity from, for example, garnishing those revenues. The issue here is whether the filing of bankruptcy by Tribe members serves to make the debtors' ongoing revenues from the Tribe available to the respective trustees for the benefit of their creditors. The Bankruptcy Court1 held that both the Tribe and Dakota Finance Corporation are protected by sovereign immunity  [**3] and dismissed the adversaries as to those parties. The trustees appeal. For the reasons that follow, we affirm.

Standard of Review

] We review findings of fact for clear error, and conclusions of law de novo.2 The trustees do not dispute that the Tribe is a federally recognized Indian tribe organized according to Section 16 of the Indian Reorganization Act.3 As a federally recognized Indian tribe, it enjoys sovereign immunity. The question here is whether Congress abrogated that immunity in the Bankruptcy Code, which is a legal conclusion we review de novo.4 The question of whether Dakota Finance Corporation is the type of subsidiary which shares the Tribe's immunity is a question of fact which we review for clear error.

The Tribe's Sovereign Immunity

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474 B.R. 687 *; 2012 Bankr. LEXIS 3298 **; 56 Bankr. Ct. Dec. 213; 79 A.L.R. Fed. 2d 613; 2012 WL 2924252

In re: Linda Rose Whitaker, Debtor;Paul W. Bucher, Trustee, Plaintiff - Appellant v. Dakota Finance Corporation, Defendant - Appellee;In re: Cecil Ray Barth, formerly doing business as Ray Barth Construction; Deanna Joan Barth, Debtors;Michael Scott Dietz, Trustee, Plaintiff - Appellant v. Deanna Joan Barth, Defendant, The Lower Sioux Indian Community, in the State of Minnesota, Defendant - Appellee;In re: Morris Jerome Pendleton, Sr.; Constance Louise Pendleton, also known as Connie Pendleton, Debtors;Paul W. Bucher, Trustee, Plaintiff - Appellant v. The Lower Sioux Indian Community, in the State of Minnesota, Defendant - Appellee, Morris Jerome Pendleton, Sr., Defendant;In re: Linda Rose Whitaker, Debtor;Paul W. Bucher, Trustee, Plaintiff - Appellant v. Linda Rose Whitaker, Defendant, The Lower Sioux Indian Community, in the State of Minnesota, Defendant - Appellee

Prior History:  [**1] Appeal from the United States Bankruptcy Court for the District of Minnesota. Appeal from the United States Bankruptcy Court for the District of Minnesota. Appeal from the United States Bankruptcy Court for the District of Minnesota. Appeal from the United States Bankruptcy Court for the District of Minnesota.

CORE TERMS

tribes, sovereign immunity, abrogate, tribal, immunity, domestic, sovereign, cases, unequivocally, entities, foreign state, courts, suits, governmental unit, waived

Bankruptcy Law, Judicial Review, Standards of Review, Clear Error Review, De Novo Standard of Review, Governments, Native Americans, Tribal Sovereign Immunity, Procedural Matters, Jurisdiction, Sovereign Immunity, General Overview, Authority & Jurisdiction, Legislation, Interpretation