Miller v. United States

• Court: Court of Appeals for the Tenth Circuit
• Decided: May 1, 2025
• Docket: 21-4135
• Status: Unpublished

Opinion

Appellate Case: 21-4135 Document: 109-1 Date Filed: 05/01/2025 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT May 1, 2025 _________________________________ Christopher M. Wolpert Clerk of Court DAVID L. MILLER,

Plaintiff - Appellee,

v. No. 21-4135 (D.C. No. 2:20-CV-00248-BSJ) UNITED STATES OF AMERICA, (D. Utah)

Defendant - Appellant.

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NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES,

Amicus Curiae. _________________________________

ORDER AND JUDGMENT* _________________________________

Before CARSON, BALDOCK, and EBEL, Circuit Judges. _________________________________

This appeal arises out of a converted Chapter 7 bankruptcy filed in 2017. In 2014,

the debtor, All Resorts Group, Inc., paid personal tax debts of two of its principals totaling

$145,138.78 to the Internal Revenue Service. Plaintiff, the United States Trustee, brought

* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 21-4135 Document: 109-1 Date Filed: 05/01/2025 Page: 2

an adversary proceeding in the bankruptcy court against the United States pursuant to Code

§ 544(b)(1) to avoid these transfers. The “applicable law” on which the Trustee relied was

now-former § 25-6-6(1) of Utah’s Uniform Fraudulent Transfer Act (amended 2017),

presently codified at Utah Code Ann. § 25-6-203(1) as part of Utah’s Uniform Voidable

Transactions Act.

The United States (Government) did not contest the substantive elements required

for the actual creditor (in this case, an individual with an employment discrimination claim

against the debtor) to establish a voidable transfer under § 25-6-6(1). The Government

also acknowledged that the sovereign immunity waiver contained in Code § 106(a) made

it amenable to the Trustee’s § 544(b)(1) action. The Government did, however, contest §

544(b)(1)’s “actual creditor requirement,” i.e., that an actual creditor could succeed against

the Government in a suit brought under § 25-6-6(1) outside of bankruptcy.

Specifically, the Government argued that an actual creditor could not avoid the

debtor’s tax payments made on behalf of its principals to the IRS because sovereign

immunity would bar such creditor’s action against the Government outside of bankruptcy.

Therefore, the Trustee could not satisfy § 544(b)(1)’s actual creditor requirement and avoid

the debtor’s tax payments. The Trustee did not disagree that outside of bankruptcy and

apart from Code § 544(b)(1), sovereign immunity would bar the actual creditor’s suit

against the Government. But, according to the Trustee, the waiver contained in Code §

106(a) abrogated sovereign immunity not only as to his § 544(b)(1) adversary proceeding

against the Government, but also as to the underlying Utah state law cause of action he

invoked under subsection (b)(1) to avoid the transfers.

2 Appellate Case: 21-4135 Document: 109-1 Date Filed: 05/01/2025 Page: 3

On cross-motions for summary judgment, the bankruptcy court, in a thorough

opinion, ruled in favor of the Trustee and avoided the transfers. The court held the Trustee

had satisfied § 544(b)(1)’s actual creditor requirement because “§ 106(a)(1) unequivocally

waives the federal government’s sovereign immunity with respect to the underlying

state law cause of action incorporated through § 544(b)[.]” In re All Resorts Group, Inc.,

617 B.R. 375, 394 (Bankr. D. Utah 2020). Accordingly, the bankruptcy court awarded the

Trustee a judgment against the Government pursuant to 11 U.S.C. §§ 106(a)(3) and 550(a)

in the amount of $145,138.78. On appeal to the district court, the court adopted the

bankruptcy court’s decision and affirmed its judgment. United States v. Miller, No. 20-

CV-248-BSJ, Order (D. Utah Sept. 8, 2021). The Government subsequently appealed to

this court to address an issue—the scope of Code § 106(a)’s waiver of sovereign immunity

as it bears on Code § 544(b)(1)—that has split our sister circuits.

On June 27, 2023, we issued a published opinion affirming the judgment of the

district court. On January 29, 2024, the Government filed a Petition for a Writ of Certiorari

in the United States Supreme Court. Subsequently, the Supreme Court granted certiorari

and reversed our judgment. In doing so, the Court held that, although Section 106(a) of the

Bankruptcy Code abrogates sovereign immunity for the federal cause of action created by

§544(b), it does not take the additional step of abrogating sovereign immunity for whatever

state-law claim supplies the “applicable law” for a trustee’s §544(b) claim. United States

3 Appellate Case: 21-4135 Document: 109-1 Date Filed: 05/01/2025 Page: 4

v. Miller, 145 S. Ct. 839 (2025). Accordingly, we reverse the judgment of the district court,

and remand for further proceedings consistent with the Supreme Court’s opinion.

Entered for the Court,

Per Curiam