E. Determination as to Whether Indian Tribes Can File

The above analysis shows that there is no clear place where Indian tribes fit into the Bankruptcy Code. Absent technical statutory definitions, one might see a tribe as most similar to a municipality--an entity that both governs and provides for a particular group of people within a given area. However, sovereignty prevents tribes from meeting the necessary requirements to be a Chapter 9 debtor. The most likely recourse for tribes is to argue they are sufficiently similar to corporations, thus allowing them to file under Chapters 7 or 11. However, numerous distinguishing factors and a lack of precedent would force a tribe hoping to file for bankruptcy as a corporation to make a novel, tenuously supported argument, unlikely to impress a court absent indication from Congress that it meant to include Indian tribes within the Bankruptcy Code.

The strongest factor weighing against a tribe's ability to file is the Code's more expansive definition of a governmental unit. As stated above, the strongest argument a tribe can make in favor of filing is to analogize itself to a corporation. A corporation has the power to file because it falls within the Code's definition of a person, who may file under Chapter 7 or Chapter 11. However, 101(41) of the Code explicitly states that a person cannot be a governmental unit. Therefore, if the Code deems the tribe a governmental unit, the tribe cannot be a person, and the analogy to a corporation fails.

Section 101(27) of the Code broadly defines a governmental unit as including the following: United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States ..., a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government. Courts have addressed the issue of whether, under the Code, Indian tribes are considered governmental units with regard to the sovereign immunity provision in 106, which states, Notwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a governmental unit to the extent set forth in this section ...,

The most significant opinion on the issue is the Ninth Circuit Court of Appeals' holding in Krystal Energy Co. v. Navajo Nation. In Krystal, the Navajo Nation had issued tax assessments to a debtor, who appealed the assessments and filed an adversary proceeding against the Navajo Nation in bankruptcy court. The court had to determine whether the Navajo Nation was immune from suit. The bankruptcy court granted the Navajo Nation's motion to dismiss, and the federal district court affirmed. However, the court of appeals held that 106 abrogated tribal sovereign immunity and found that the phrase other foreign or domestic governments encompassed Indian tribes, citing Chief Justice Marshall's characterization in Cherokee Nation. Therefore, the debtor could bring the Navajo Nation into court. If this characterization of an Indian tribe as a governmental unit is indeed the majority standard adopted by the courts going forward, then, as stated above, a tribe cannot be both a person and a governmental unit under the Code.

There are, however, strong arguments that the Ninth Circuit was wrong. Traditionally, courts have required an explicit reference to Indian tribes as evidence of Congress' intent to abrogate tribal sovereign immunity. The federal district court in Krystal held that the Bankruptcy Code did not abrogate the tribe's sovereign immunity because such an abrogation cannot be implied but must be unequivocally expressed by Congress. Courts may not find an unequivocal expression of abrogation where the language of a federal statute does not include Indian tribes in definitions of parties subject to suit or does not specifically assert jurisdiction over Indian tribes. Because the Bankruptcy Code makes no explicit reference to Indian tribes, under canons of construction of Indian law, the courts should not find an equivocal expression sufficient to have abrogated the tribe's immunity. Although the phrase other foreign or domestic governments could logically include Indian tribes, a court could not say with perfect confidence that this was Congress' intent, as required by the Supreme Court when determining whether state sovereign immunity has been abrogated.

Even if the Ninth Circuit's decision in Krystal was wrong, the question whether Indian tribes are governmental units under the Bankruptcy Code remains. Though it is possible that the Code has not abrogated immunity because 106 lacks an explicit reference to Indian tribes, the heightened standard requiring explicit reference to tribes only applies when determining whether Congress has abrogated tribal immunity. It is possible that even though tribes may not be governmental units for the purposes of 106, they could be considered governmental units under other parts of the Code not dealing with immunity where the heightened standard does not apply. For example, 101(41) of the Code explicitly states that a person is not a governmental unit. Because immunity is not involved in 101(41), there is no requirement that there be an explicit reference to Indian tribes for tribes to fall within the definition of a governmental unit. Thus, the definition of governmental unit would appear to encompass Indian tribes, which would prevent tribes from claiming they are persons under the Code, because a governmental unit cannot be a person. Tribes, therefore, could not file for bankruptcy as corporations.

It is unlikely that Indian tribes can file for bankruptcy under the Code. A tribe's most likely avenue is to rely on the similarities between a tribe and a corporation and file as a corporation. This option, however, is foreclosed if courts deem a tribe to be a governmental unit, as the Ninth Circuit did in Krystal. Although commentators have criticized this holding, their criticisms specifically address whether a tribe constitutes a governmental unit for purposes of abrogating tribal sovereign immunity. Therefore, even if Krystalis eventually overturned, it is still possible that an Indian tribe could fall within the Code's definition of governmental unit for purposes other than abrogation of sovereign immunity. All of these obstacles, taken together, make it unlikely that tribes can file under the Bankruptcy Code.