The Bankruptcy Court for the District of New Mexico held this week that tribal sovereign immunity does not protect the Jicarilla Apache Nation from the impact of a Chapter 11 plan. In Re Platinum oil Properties, LLC, Case No. 09-10832 (D.NM. Bankr. Aug. 12, 2011). Because the Bankruptcy Code abrogates tribal sovereign immunity, according to the court, tribes have to abide by a reorganization plan. But weirdly, the Jicarilla Tribe does not appear to have made any argument based on its sovereign immunity. Instead, in its motion for summary judgment, the Tribe argued that the debtor’s claims interfered with the tribe’s sovereign ability to control and regulate its jurisdiction. Somebody took the word “sovereign” and ran with it, sticking his or her neck out far more than necessary and reaching the Bankruptcy Code’s definition of governmental unit, on which sovereign immunity abrogation hinges. In other words, the decision is a mess.
What can we learn from this case? Beware when using the term “sovereign.” Ensure, as the Jicarilla Tribe admirably attempted to do, that the court understands even the most elemental facets of tribal sovereignty. Here, that means distinguishing between a tribe’s broad power to regulate and control its jurisdiction, Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 140 (1982), as opposed to a tribe’s narrow ability to avoid being sued. Kiowa Tribe of Oklahoma v. Mfg. Tech., Inc., 523 U.S. 751, 754 (1998).
Tribes to should explore how and when they can govern their own affairs in the bankruptcy context. Clearly when the matter is left to federal courts, tribes will often lose.
Anthony Broadman is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm. His practice focuses on company-critical business litigation and representing tribal governments. He can be reached at 206.691.3631 or firstname.lastname@example.org, or or via galandabroadman.com.