U.S. Code » Title 11 » Chapter CHAPTER 1— GENERAL PROVISIONS

11 U.S.C. § 106

Waiver of sovereign immunity

Read at: OLRCuscode.house.gov CornellLII GovInfogovinfo.gov JustiaTitle 11 CasesGoogle Scholar
(a) Notwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a governmental unit to the extent set forth in this section with respect to the following:(1) Sections 105, 106, 107, 108, 303, 346, 362, 363, 364, 365, 366, 502, 503, 505, 506, 510, 522, 523, 524, 525, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 722, 724, 726, 744, 749, 764, 901, 922, 926, 928, 929, 944, 1107, 1141, 1142, 1143, 1146, 1201, 1203, 1205, 1206, 1227, 1231, 1301, 1303, 1305, and 1327 of this title.(2) The court may hear and determine any issue arising with respect to the application of such sections to governmental units.(3) The court may issue against a governmental unit an order, process, or judgment under such sections or the Federal Rules of Bankruptcy Procedure, including an order or judgment awarding a money recovery, but not including an award of punitive damages. Such order or judgment for costs or fees under this title or the Federal Rules of Bankruptcy Procedure against any governmental unit shall be consistent with the provisions and limitations of section 2412(d)(2)(A) of title 28.(4) The enforcement of any such order, process, or judgment against any governmental unit shall be consistent with appropriate nonbankruptcy law applicable to such governmental unit and, in the case of a money judgment against the United States, shall be paid as if it is a judgment rendered by a district court of the United States.(5) Nothing in this section shall create any substantive claim for relief or cause of action not otherwise existing under this title, the Federal Rules of Bankruptcy Procedure, or nonbankruptcy law.(b) A governmental unit that has filed a proof of claim in the case is deemed to have waived sovereign immunity with respect to a claim against such governmental unit that is property of the estate and that arose out of the same transaction or occurrence out of which the claim of such governmental unit arose.(c) Notwithstanding any assertion of sovereign immunity by a governmental unit, there shall be offset against a claim or interest of a governmental unit any claim against such governmental unit that is property of the estate.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2555; Pub. L. 103–394, title I, § 113, Oct. 22, 1994, 108 Stat. 4117; Pub. L. 111–327, § 2(a)(4), Dec. 22, 2010, 124 Stat. 3557.)Historical and Revision Noteslegislative statements

Section 106(c) relating to sovereign immunity is new. The provision indicates that the use of the term “creditor,” “entity,” or “governmental unit” in title 11 applies to governmental units notwithstanding any assertion of sovereign immunity and that an order of the court binds governmental units. The provision is included to comply with the requirement in case law that an express waiver of sovereign immunity is required in order to be effective. Section 106(c) codifies In re Gwilliam, 519 F.2d 407 (9th Cir., 1975), and In re Dolard, 519 F.2d 282 (9th Cir., 1975), permitting the bankruptcy court to determine the amount and dischargeability of tax liabilities owing by the debtor or the estate prior to or during a bankruptcy case whether or not the governmental unit to which such taxes are owed files a proof of claim. Except as provided in sections 106(a) and (b), subsection (c) is not limited to those issues, but permits the bankruptcy court to bind governmental units on other matters as well. For example, section 106(c) permits a trustee or debtor in possession to assert avoiding powers under title 11 against a governmental unit; contrary language in the House report to H.R. 8200 is thereby overruled.

senate report no. 95–989

Section 106 provides for a limited waiver of sovereign immunity in bankruptcy cases. Though Congress has the power to waive sovereign immunity for the Federal government completely in bankruptcy cases, the policy followed here is designed to achieve approximately the same result that would prevail outside of bankruptcy. Congress does not, however, have the power to waive sovereign immunity completely with respect to claims of a bankrupt estate against a State, though it may exercise its bankruptcy power through the supremacy clause to prevent or prohibit State action that is contrary to bankruptcy policy.

There is, however, a limited change from the result that would prevail in the absence of bankruptcy; the change is two-fold and is within Congress’ power vis-a-vis both the Federal Government and the States. First, the filing of a proof of claim against the estate by a governmental unit is a waiver by that governmental unit of sovereign immunity with respect to compulsory counterclaims, as defined in the Federal Rules of Civil Procedure [title 28, appendix], that is, counterclaims arising out of the same transaction or occurrence. The governmental unit cannot receive a distribution from the estate without subjecting itself to any liability it has to the estate within the confines of a compulsory counterclaim rule. Any other result would be one-sided. The counterclaim by the estate against the governmental unit is without limit.

Second, the estate may offset against the allowed claim of a governmental unit, up to the amount of the governmental unit’s claim, any claim that the debtor, and thus the estate, has against the governmental unit, without regard to whether the estate’s claim arose out of the same transaction or occurrence as the government’s claim. Under this provision, the setoff permitted is only to the extent of the governmental unit’s claim. No affirmative recovery is permitted. Subsection (a) governs affirmative recovery.

Though this subsection creates a partial waiver of immunity when the governmental unit files a proof of claim, it does not waive immunity if the debtor or trustee, and not the governmental unit, files proof of a governmental unit’s claim under proposed 11 U.S.C. 501(c).

This section does not confer sovereign immunity on any governmental unit that does not already have immunity. It simply recognizes any immunity that exists and prescribes the proper treatment of claims by and against that sovereign.

Editorial NotesReferences in Text

The Federal Rules of Bankruptcy Procedure, referred to in subsec. (a)(3), (5), are set out in the Appendix to this title.

Amendments

2010—Subsec. (a)(1). Pub. L. 111–327 struck out “728,” after “726,”.

1994—Pub. L. 103–394 amended section generally. Prior to amendment, section read as follows:

“(a) A governmental unit is deemed to have waived sovereign immunity with respect to any claim against such governmental unit that is property of the estate and that arose out of the same transaction or occurrence out of which such governmental unit’s claim arose.

“(b) There shall be offset against an allowed claim or interest of a governmental unit any claim against such governmental unit that is property of the estate.

“(c) Except as provided in subsections (a) and (b) of this section and notwithstanding any assertion of sovereign immunity—

“(1) a provision of this title that contains ‘creditor’, ‘entity’, or ‘governmental unit’ applies to governmental units; and

“(2) a determination by the court of an issue arising under such a provision binds governmental units.”

Statutory Notes and Related SubsidiariesEffective Date of 1994 Amendment

Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and applicable with respect to cases commenced under this title before, on, and after Oct. 22, 1994, see section 702(a), (b)(2)(B) of Pub. L. 103–394, set out as a note under section 101 of this title.

Notes of Decisions
Cited in 798 cases (47 in the last 5 years), 1930–2026 · leading case: Buchwald Capital Advisors, LLC v. Sault Ste. Marie Tribe of Chippewa Indians (In Re Greektown Holdings, LLC), 917 F.3d 451 (6th Cir. 2019).
Sort: Relevance Newest Treatment
Buchwald Capital Advisors, LLC v. Sault Ste. Marie Tribe of Chippewa Indians (In Re Greektown Holdings, LLC), 917 F.3d 451 (6th Cir. 2019). · cites it 34× “The Trustee responded that that the Tribe did not possess tribal sovereignty (1) because Congress abrogated tribal sovereign immunity in the Bankruptcy Code of 1978, 11 U.S.C. §§ 106 , 101(27), and (2) because the Tribe waived tribal sovereign immunity by actually or effectively…”
In Re Lile, 96 B.R. 81 (Bankr. S.D. Tex. 1989). · cites it 39× “DISCUSSION OF ISSUES AND LAW The determinative question presented in this matter before me is whether or not the doctrine of sovereign immunity bars the imposition of damages against the IRS for violation of the stay pursuant to 11 U.”
Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440 (2004). · cites it 8× “See Rule 7004. In response, TSAC filed a motion to dismiss the complaint for lack of jurisdiction, asserting Eleventh Amendment sovereign immunity.”
Jove Eng'g, Inc. v. Internal Revenue Serv., 92 F.3d 1539 (11th Cir. 1996). · cites it 11× “We further conclude that, as amended in 1994, 11 U.S.C. § 106 unequivocally waives sovereign immunity for monetary damages under 11 U.”
Duby v. United States (In Re Duby), 451 B.R. 664 (1st Cir. BAP 2011). · cites it 14× “al distress damages for violations of the automatic stay and discharge injunction from the USDA; (2) whether the bankruptcy court erred when it concluded that the Debtor was entitled to recover attorney’s fees despite not having incurred any other recoverable damages; and (3)…”
Cent. Virginia Cmty. Coll. v. Katz, 546 U.S. 356 (2006). · cites it 6× “960 (2005), to consider the question left open by our opinion in Hood: whether Congress' attempt to abrogate state sovereign immunity in 11 U.S.C. § 106 (a) [2] is valid. As *362 we shall explain, however, we are persuaded that the enactment of that provision was not necessary…”
In Re: Charter Oak Assocs., Debtor. Neal Ossen, Tr. v. Dep't of Soc. Servs., State of Connecticut, 361 F.3d 760 (2d Cir. 2004). · cites it 10× “Section 106 of the Bankruptcy Code purports to abrogate state sovereign immunity under certain circumstances in the bankruptcy context, see 11 U.S.C. § 106 (a), and, in the absence of abrogation, to define circumstances under which a state will be deemed to have waived its…”
Hoffman v. Connecticut Dep't of Income Maint., 492 U.S. 96 (1989). · cites it 8× “The issue presented by this case is whether § 106(c) of the Bankruptcy Code, 11 U. S. C. § 106 (c), authorizes a bankruptcy court to issue a money judgment against a State that has not filed a proof of claim in the bankruptcy proceeding.”
Posey v. United States Dep't of the Treasury-Internal Revenue Serv., 156 B.R. 910 (W.D.N.Y. 1993). · cites it 20× “relevant issues on this,appeal are: (I)whether the United States has a valid right to setoff appellant’s 1988 tax overpayment, claimed as exempt property, against a discharged 1984 tax liability; (II) whether the United States Department of the Treasury, or the Internal Revenue…”
In Re Pamela L. Hood, Debtor. Pamela L. Hood v. Tennessee Student Assistance Corp., 319 F.3d 755 (6th Cir. 2003). · cites it 7× “8, does not give Congress the power to abrogate states’ sovereign immunity in 11 U.S.C. § 106 (a). Applying the analysis that the Supreme Court set forth in Seminole Tribe, we conclude that Article I, section 8 of the Constitution gives Congress the power to abrogate states’…”
In Re Barrett Refining Corp., 221 B.R. 795 (Bankr. W.D. Okla. 1998). · cites it 22× “Barrett then proposed a plan which included references to 11 U.S.C. § 106 . 2 This section abrogates sovereign immunity on the part of governmental units as to certain sections of the Bankruptcy Code and provides further that governmental units waive sovereign immunity by filing…”
In Re: Kaiser Grp. Int'l Inc., Debtor Int'l Fin. Corp. v. Kaiser Grp. Int'l Inc., Frank J. Perch, Iii, Tr., 399 F.3d 558 (3rd Cir. 2005). · cites it 7× “In doing so, the District Court reversed the Bankruptcy Court to the extent that the bankruptcy decision concluded that International’s claims were within the scope of the waiver of sovereign immunity by IFC pursuant to 11 U.S.C. § 106 (b). On appeal, International argues that…”
Show all 798 citing cases →
— 11 U.S.C. § 106(a) — 13 cases
Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, 599 U.S. 382 (2023).
Florida Agency for Health Care Admin. v. Bayou Shores SNF, LLC (In Re Bayou Shores SNF, LLC), 828 F.3d 1297 (11th Cir. 2016).
In Re: Custom Contractors, LLC, Deborah C. Menotte v. United States, 745 F.3d 1342 (11th Cir. 2014).
Sparkman v. State of Florida Dep't of Revenue (In Re York-Hannover Developments, Inc.), 201 B.R. 137 (Bankr. E.D.N.C. 1996).
Aer-Aerotron, Inc., Holmes P. Harden, Tr.-Appellee v. The Texas Dep't of Transp., 104 F.3d 677 (4th Cir. 1997).
— 11 U.S.C. § 106(a)(1) — 1 case
Aer-Aerotron, Inc., Holmes P. Harden, Tr.-Appellee v. The Texas Dep't of Transp., 104 F.3d 677 (4th Cir. 1997).
— 11 U.S.C. § 106(b) — 5 cases
Schulman v. California State Water Resources Control Bd. (In Re Lazar), 200 B.R. 358 (Bankr. C.D. Cal. 1996).
Arecibo Cmty. Health Care, Inc. v. Puerto Rico, 244 F.3d 241 (1st Cir. 2001).
Casino Caribean LLC v. Money Centers of Am., Inc. (In re Money Ctr. of Am., Inc.), 565 B.R. 87 (Bankr. D. Del. 2017).
In Re Layton, 220 B.R. 508 (Bankr. N.D.N.Y. 1998).
Arecibo Cmty. Health Care, Inc. v. Commonwealth, 260 F.3d 241 (1st Cir. 2001).
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.