Creating a Split, Sixth Circuit Holds: No Waiver of Immunity for Indian Tribes

In a 2/1 decision, the Sixth Circuit created a split of circuits by holding that Sections 106 and 101(27) do not waive sovereign immunity with respect to Indian tribes. The majority on the appeals court also held that the tribe’s filing of a bankruptcy petition for one of its businesses did not waive sovereign immunity when creditors later filed a fraudulent transfer suit against the tribe. The opinion appears to mean that a tribe can loot a business it owns, put the business in bankruptcy, then escape liability for its pre-bankruptcy conduct, unless the tribe has waived immunity under the tribe’s internal governing rules.

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