further collection efforts by creditors, including Lendgreen. See §362(a). Yet, according to Coughlin, Lendgreen continued its efforts to collect on his debt, even after it was reminded of the pending bankruptcy petition. Coughlin alleges that Lendgreen was so aggressive in its efforts to contact him and collect the money that he suffered substantial emotional distress, and at one point, even attempted to take his own life.
Coughlin eventually filed a motion in Bankruptcy Court, seeking to have the stay enforced against Lendgreen, its parent corporations, and the Band (collectively, petitioners). Coughlin also sought damages for emotional distress, along with costs and attorney’s fees. See §362(k) (providing a damages award to individuals injured by willful violations of the automatic stay).
Petitioners moved to dismiss. They argued that the Bankruptcy Court lacked subject-matter jurisdiction over Coughlin’s enforcement proceeding, as the Band and its subsidiaries enjoyed tribal sovereign immunity from suit.[1] The Bankruptcy Court agreed; it held that the suit had to be dismissed because the Bankruptcy Code did not clearly express Congress’s intent to abrogate tribal sovereign immunity.
In a divided opinion, the Court of Appeals for the First Circuit reversed, concluding that the Bankruptcy Code “unequivocally strips tribes of their immunity.” In re Coughlin, 33 F. 4th 600, 603–604 (2022). In so holding, the First Circuit deepened a split among the Courts of Appeals on this question. Compare Krystal Energy Co. v. Navajo Nation, 357 F. 3d 1055, 1061 (CA9 2004) (holding that the Bankruptcy Code abrogates tribal sovereign immunity), with In re Greektown Holdings, LLC, 917 F. 3d 451, 460–461 (CA6
- ↑ It is undisputed in this case, and we assume herein, that the Band’s subsidiaries are arms of the Tribe and enjoy the Band’s sovereign immunity. In re Coughlin, 33 F. 4th 600, 604, n. 1 (CA1 2022); In re Coughlin, 622 B. R. 491, 493 (Bkrtcy. Ct. Mass. 2020).
