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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 32 April 2025 F E A T U R E S T O R Y SOVEREIGN IMMUNITY: FROM POLICY TO PRACTICE Attorney Reneau J. Longoria delves into several cases involving tribal sovereign immunity as it pertains to the United States Bankruptcy Code. B y R E N E A U J . L O N G O R I A F rom Haaland v. Brackeen, 599 U.S. 255 (2023) to Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, 599 U.S. 382 (2023) (Lac) and a path forward in the lessons of Eagle Bear, Inc. v. Independence Bank, No. CV-22-93-GF- BMM, 2023 WL 8529145, 705 F. Supp. 3d 1141 (D. Mont. Dec. 8, 2023) 1 . The U.S. Supreme Court decision in Haaland v. Brackeen 2 upheld the constitu- tionality of the Indian Child Welfare Act and the sovereignty of Tribes; however, that same year, the U.S. Supreme Court diminished tribal sovereign immunity as it pertains to the U.S. Bankruptcy Code. 3 The practical impact of this struggle, as well as imbedded obstacles to actual sovereignty, is clearly illustrated in the recent decision in Eagle Bear, Inc. v. Independence Bank. 4 The U.S. Supreme Court decision in Brackeen upheld and protected tribal sovereignty, while specifically address- ing the protection of Native children. At first glance, the June 15, 2023, decision in Lac—affirming the First Circuit's decision refusing to apply the principles of sovereign immunity over the U.S. Bankruptcy Code and resolving a split in the circuits—appears to be straight- forward statement that the Bankruptcy Code applies to Tribal creditors. Peeling back the history of the case, as well as the path carved through the heart of the sacred principles of sovereign immunity, reveals the significance of the decision. Eagle Bear highlights how this decision is impacting Indian country, which illustrates deeper, more systemic barriers to true sovereign immunity. The analysis takes us from the courtrooms of Massachusetts, which look out onto the Atlantic Ocean, to the Eagle Bear KOA campground, which sits in the shadow of the Rocky Mountains on the boarder of Glacier Park on lands leased from the Black Feet Indian Nation. In 2019, in the underlying bankrupt- cy case in Lac, Coughlin, a Massachu- setts debtor, obtained and defaulted on an online payday loan from an entity affiliated with, but not directly owned by, Ladu Flambeau Band of Lake Superior Chippewa Indians, a federally recognized Tribe. 5 The debtor filed a motion in the U.S. Bankruptcy Court of Massachusetts alleging "catastrophic" damages from emails and calls attempt- ing to collect on his payday loan follow- ing his declaration of bankruptcy. 6 In Coughlin's surreply in response to a motion to dismiss for lack of jurisdic- tion, he argued for the first time that "the long line of Supreme Court cases finding that Indian tribes are entitled to sovereign immunity subject only to precise congressional limitations should be overruled." 7 That argument would become the tail that wagged the dog of this case as it evolved, even though, as Judge Bailey pointed out, "Coughlin has not stated [overruling precedent that Indian tribes are entitled to sovereign immunity] [as] a basis for that relief." 8 Citing the sovereignty of the Tribe, Judge Bailey declined to exercise jurisdic- tion over the dispute, recognizing that "[t] he Tribe is a federally recognized Indian R E N E A U J . L O N G O R I A E S Q . is an enrolled member of The Little Shell Tribe of Montana, was born and raised in Montana and has practiced civil and criminal law in Montana, Texas, and New York. For 27 years, Reneau has practiced bankrupt- cy and default litigation in the Northeast, including Massachusetts, Maine, and New Hampshire. Reneau is the sole owner and Managing Member of Doonan, Graves & Longoria LLC and may be reached by email at rjl@dgandl.com. ©2025. Published in The Urban Lawyer Vol. 53, No. 1, Winter 2025, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder."