The Supreme Court ruled 8-1 that federal bankruptcy law supersedes Indian tribes’ sovereign immunity.
An Indian tribe in Wisconsin had argued it could not be sued and that bankruptcy protections, such as the law’s automatic stay of collection efforts when an individual files for bankruptcy, did not operate to block its efforts to seek repayment of a debt from a person who filed for bankruptcy.
The Supreme Court disagreed in its ruling on June 15 in Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin (court file 22-227).
In this case, Lendgreen, a payday lending operation owned by the tribe, tried to collect a $1,100 overdue account from the respondent, Brian Coughlin, one of its members who subsequently filed for bankruptcy….