United States v. Miller
- Docket Number
- 23-824
- Citation
- 604/2
- Term
- October Term 2024
- Argued
- December 2, 2024
- Decided
- March 26, 2025
- Lower Court
- United States Court of Appeals for the Tenth Circuit
- Author
- Associate Justice Ketanji Brown Jackson
- Concurring
- Ketanji Brown Jackson, John G. Roberts, Jr., Clarence Thomas, Samuel A. Alito, Jr., Sonia Sotomayor, Elena Kagan, Brett M. Kavanaugh, Amy Coney Barrett
- Dissenting
- Neil M. Gorsuch
Read the official slip opinion (PDF)
AI-Generated Summary
Summary of United States v. Miller (2025)
1. Case Information:
- Case Name: United States v. David L. Miller
- Docket Number: 23-824
- Dates: Argued December 2, 2024; Decided March 26, 2025
- Lower Court: United States Court of Appeals for the Tenth Circuit
2. Facts of the Case:
- The case stems from the insolvency of All Resort Group, a Utah-based transportation business, which collapsed in 2013 due to poor management and financial malfeasance. In 2014, two shareholders misappropriated approximately $145,000 of company funds to pay personal federal income tax obligations, with the company receiving no value in return.
- In 2017, All Resort Group filed for bankruptcy, and David L. Miller was appointed as the trustee of the bankruptcy estate. Miller filed an avoidance suit under 11 U.S.C. §544(b) against the United States to recover the misappropriated funds, relying on Utah’s fraudulent-transfer statute as the “applicable law.” The Bankruptcy Court ruled in favor of Miller, a decision adopted by the District Court and affirmed by the Tenth Circuit, prompting the Supreme Court to grant certiorari to resolve a circuit split on the scope of sovereign immunity waivers under the Bankruptcy Code.
3. Legal Issues Presented:
- The central question was whether 11 U.S.C. §106(a), which waives sovereign immunity “with respect to” certain Bankruptcy Code provisions including §544, extends to state-law claims (here, Utah’s fraudulent-transfer statute) nested within a §544(b) avoidance action, or applies only to the federal cause of action under §544(b) itself.
- This case involves the interpretation of statutory provisions in the Bankruptcy Code, specifically the interplay between §106(a) (sovereign immunity waiver) and §544(b) (trustee’s avoidance powers), and principles of sovereign immunity.
- Arguments: The trustee (Miller) argued that §106(a) waives immunity for both the federal §544(b) claim and the underlying state-law claim, allowing him to bypass the actual-creditor requirement’s limitation due to sovereign immunity. The United States contended that §106(a) waives immunity only for the federal claim under §544(b), not for state-law claims, thus requiring an actual creditor who could void the transfer outside bankruptcy, a condition barred by sovereign immunity.
4. The Court's Decision (Main Opinion):
- Author & Type: Justice Jackson delivered the opinion of the Court, representing a Majority opinion joined by Chief Justice Roberts and Justices Thomas, Alito, Sotomayor, Kagan, Kavanaugh, and Barrett.
- Holding: Section 106(a)’s sovereign immunity waiver applies only to the federal cause of action under §544(b) and does not extend to state-law claims nested within that federal claim.
- Legal Reasoning:
- The Court emphasized that sovereign immunity waivers are jurisdictional, not liability-creating, citing precedents like FDIC v. Meyer (510 U.S. 471) and United States v. Mitchell (463 U.S. 206). Section 106(a) grants courts jurisdiction to hear §544(b) claims but does not alter substantive rights.
- Section 106(a)(5) explicitly states it does not create new substantive claims, contradicting the trustee’s broader interpretation. Section 544(b)’s actual-creditor requirement remains intact, tying the trustee’s rights to those of an actual creditor under applicable law.
- The Court contrasted §544(b) with §544(a), which lacks an actual-creditor requirement, indicating Congress’s deliberate intent to limit §544(b) claims. Waiving immunity for nested state-law claims would disrupt long-standing practice and precedent.
- Sovereign immunity waivers must be construed narrowly, with ambiguities resolved in favor of the sovereign, as per FAA v. Cooper (566 U.S. 284), and §106(a) lacks clear language to extend the waiver to state-law claims.
- Disposition: The decision of the Tenth Circuit was reversed.
5. Concurring Opinion(s) (if any):
- There were no concurring opinions mentioned in the provided text.
6. Dissenting Opinion(s) (if any):
- Justice Gorsuch: Justice Gorsuch dissented, arguing that the majority conflates sovereign immunity with the substantive merits of a claim.
- Reasons for Dissent:
- Gorsuch contended that a valid fraudulent-transfer claim exists under Utah law, undisputed by the parties, and §106(a)(1) waives the government’s sovereign immunity defense in a bankruptcy context under §544(b)(1).
- He distinguished between modifying claim elements and waiving an affirmative defense, asserting that §106(a) merely prevents the government from raising sovereign immunity as a defense in bankruptcy proceedings, without altering the substantive claim.
- Gorsuch aligned with other circuits (e.g., Ninth and Fourth) that allow trustees to avoid fraudulent transfers to the United States under §544(b), disagreeing with the majority’s narrow interpretation.
7. Potential Significance:
- This ruling clarifies the scope of sovereign immunity waivers under the Bankruptcy Code, establishing that §106(a) does not extend to state-law claims within §544(b) actions, potentially limiting bankruptcy trustees’ ability to recover assets transferred to the federal government in avoidance suits.
- The decision reinforces the principle of narrow construction of sovereign immunity waivers, preserving the government’s immunity in state-law contexts even within bankruptcy proceedings, which may impact how trustees structure avoidance actions against governmental entities.
- It resolves a circuit split, providing uniform guidance on the interplay between federal bankruptcy law and state fraudulent-transfer laws when the United States is a defendant.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Key terms: Bankruptcy Trustee Powers, Sovereign Immunity Waiver, Fraudulent Transfers