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

33 F.4th 600
CourtCourt of Appeals for the First Circuit
DecidedMay 6, 2022
Docket21-1153P
StatusPublished
Cited by2 cases

This text of 33 F.4th 600 (Coughlin v. Lac du Flambeau Band of Lake Superior Chippewa Ind) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coughlin v. Lac du Flambeau Band of Lake Superior Chippewa Ind, 33 F.4th 600 (1st Cir. 2022).

Opinion

United States Court of Appeals For the First Circuit

No. 21-1153

IN RE: BRIAN W. COUGHLIN,

Debtor.

BRIAN W. COUGHLIN,

Appellant,

v.

LAC DU FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS; L.D.F. BUSINESS DEVELOPMENT CORP.; L.D.F. HOLDINGS, LLC; NIIWIN, LLC, d/b/a Lendgreen,

Appellees.

APPEAL FROM THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Frank J. Bailey, U.S. Bankruptcy Judge]

Before

Barron, Chief Judge, Lynch, Circuit Judge, and Burroughs,* District Judge.

Gregory G. Rapawy, with whom Terrie L. Harman, Richard N. Gottlieb, Michael D. Cameron, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Alfano Law Office, PLLC, and the Law Offices of Richard N. Gottlieb were on brief, for appellant. Andrew Adams, III, with whom Peter J. Rademacher, Zachary

* Of the District of Massachusetts, sitting by designation. R.G. Fairlie, Andrew W. Lester, Adrienne K. Walker, Hogen Adams PLLC, Spencer Fane LLP, and Locke Lord LLP were on brief, for appellees. Seth Davis, Kaighn Smith, Jr., Amy K. Olfene, and Drummond Woodsum on brief for amici curiae professors of federal Indian law in support of appellees. Patrick O. Daugherty, Laura E. Jones, and Van Ness Feldman LLP on brief for amicus curiae Native American Financial Services Ass'n in support of appellees.

May 6, 2022 LYNCH, Circuit Judge. This case presents an important

question of first impression in our circuit: whether the Bankruptcy

Code abrogates tribal sovereign immunity. Two of our sister

circuits have already considered the question and reached opposite

conclusions. Compare Krystal Energy Co. v. Navajo Nation, 357

F.3d 1055, 1061 (9th Cir. 2004) (holding that the Code abrogates

immunity), with In re Greektown Holdings, LLC 917 F.3d 451, 460-

61 (6th Cir. 2019) (holding that the Code does not abrogate

immunity), cert. dismissed sub nom. Buchwald Cap. Advisors LLC v.

Sault Ste. Marie Tribe, 140 S. Ct. 2638 (2020). Like the Ninth

Circuit, we hold that the Bankruptcy Code unequivocally strips

tribes of their immunity.

Our decision permits debtor Brian W. Coughlin to enforce

the Bankruptcy Code's automatic stay against one of his creditors,

a subsidiary of the Lac Du Flambeau Band of Lake Superior Chippewa

Indians ("Band"). As the bankruptcy court held otherwise, see In

re Coughlin, 622 B.R. 491, 494 (Bankr. D. Mass. 2020), we reverse.

I.

In July 2019, Coughlin took out a $1,100 payday loan

from Lendgreen, a wholly owned subsidiary of the Band.1 Later that

1 Lendgreen is a trade name of Niiwan, LLC. The Band is the sole owner of the L.D.F. Business Development Corporation. That entity is the sole member of LDF Holdings, LLC, which in turn is the sole member of Niiwan. All parties agree that Lendgreen is an arm of the Band, so it enjoys whatever immunity the Band does.

- 3 - year, he voluntarily filed a Chapter 13 bankruptcy petition in the

District of Massachusetts. On the petition, he listed his debt to

Lendgreen, which had grown to nearly $1,600, as a nonpriority

unsecured claim. He also listed Lendgreen on the petition's

creditor matrix, and his attorney mailed Lendgreen a copy of the

proposed Chapter 13 plan.

When Coughlin filed his petition, the Bankruptcy Code

imposed an automatic stay enjoining "debt-collection efforts

outside the umbrella of the bankruptcy case." Ritzen Grp., Inc.

v. Jackson Masonry, LLC, 140 S. Ct. 582, 586 (2020) (citing 11

U.S.C. § 362(a)). Despite the automatic stay, Lendgreen

repeatedly contacted Coughlin seeking repayment of his debt.

Though Coughlin told Lendgreen representatives that he had filed

for bankruptcy and provided his attorney's contact information,

Lendgreen continued to call and email him directly. Two months

after he filed the petition, Coughlin attempted suicide. He

attributes that attempt to his belief that his "mental and

financial agony would never end," and blamed his agony on

Lendgreen's "regular and incessant telephone calls, emails and

voicemails."

To stop Lendgreen's collection efforts, Coughlin moved

to enforce the automatic stay against Lendgreen and its corporate

See Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Hous. Auth., 207 F.3d 21, 29 (1st Cir. 2000).

- 4 - parents, including the Band. He sought an order prohibiting

further collection efforts as well as damages, attorney's fees,

and expenses. In response, the Band and its affiliates asserted

tribal sovereign immunity and moved to dismiss the enforcement

proceeding. The bankruptcy court agreed with the Band and granted

the motions to dismiss. See In re Coughlin, 622 B.R. at 494.

We permitted a direct appeal from that decision, see 28

U.S.C. § 158(d), and now reverse.2

II.

We review de novo the Bankruptcy Court's determination

of a pure question of law. In re IDC Clambakes, Inc., 727 F.3d

58, 63 (1st Cir. 2013).

A.

Congress may abrogate tribal sovereign immunity if it

"'unequivocally' express[es] that purpose."3 Michigan v. Bay Mills

2 We acknowledge and thank the following amici curiae for their submissions in support of the Band: the Native American Financial Services Association and Professors Seth Davis, Matthew L.M. Fletcher, Joseph William Singer, Angela R. Riley, Kristen A. Carpenter, Adam Crepelle, Gregory Ablavsky, Bethany Berger, Alexander T. Skibine, and Addie C. Rolnick. 3 The same standard applies to states. See, e.g., Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 55 (1996) ("In order to determine whether Congress has abrogated the States' sovereign immunity, we ask . . . whether Congress has 'unequivocally expresse[d] its intent to abrogate the immunity.'" (quoting Green v. Mansour, 474 U.S. 64, 68 (1985)) (alteration in original)).

- 5 - Indian Cmty. 572 U.S. 782, 790 (2014) (quoting C & L Enters.,

Inc. v. Citizen Band Potawatomi Tribe of Okla., 532 U.S. 411, 418

(2001)). "That rule of construction reflects an enduring principle

of Indian law: Although Congress has plenary authority over tribes,

courts will not lightly assume that Congress in fact intends to

undermine Indian self-government." Id.

To abrogate sovereign immunity "Congress need not state

its intent in any particular way." FAA v. Cooper, 566 U.S. 284,

291 (2012). The Supreme Court has "never required that Congress

use magic words" to make its intent to abrogate clear. Id. To

the contrary, it has explained that the requirement of unequivocal

abrogation "'is a tool for interpreting the law' and that it does

not 'displac[e] the other traditional tools of statutory

construction.'" Id. (quoting Richlin Sec. Serv. Co. v. Chertoff,

553 U.S. 571, 589 (2008)) (alteration in original); cf. Penobscot

Nation v. Frey, 3 F.4th 484, 493, 503 (1st Cir. 2021) (en banc)

(holding that the Indian canons play no role in interpreting an

unambiguous statute), cert. denied No. 21-838, 2022 WL 1131375

(U.S. Apr. 18, 2022).

In determining whether the Bankruptcy Code unequivocally

abrogates tribal sovereign immunity, we begin with the text.

Section 106(a) of the Code provides that "[n]otwithstanding an

assertion of sovereign immunity, sovereign immunity is abrogated

as to a governmental unit to the extent set forth in this section

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