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SUPREME COURT OF THE UNITED STATES
_________________
No. 23–824
_________________
UNITED STATES, PETITIONER
v. DAVID L.
MILLER
on writ of certiorari to the united states
court of appeals for the tenth circuit
[March 26, 2025]
Justice Jackson delivered the opinion of the
Court.
The Bankruptcy Code empowers a bankruptcy
trustee to set aside, or “avoid,” certain transfers of a debtor’s
assets in order to recover those assets for the benefit of the
bankruptcy estate. This case concerns the trustee’s avoidance
powers under §544(b) of the Code. Under that provision, a trustee
may avoid certain transfers that would be “voidable under
applicable law”—that is, voidable outside of bankruptcy
proceedings. 11 U. S. C. §544(b)(1). Trustees typically
rely on state statutes to supply the “applicable law” when suing
under §544(b) to avoid a debtor’s transfer of assets.
In this dispute, a trustee invoked Utah law as
the basis for a §544(b) suit seeking to claw back a debtor’s
federal tax payment. Ordinarily, the Federal Government’s sovereign
immunity would bar any suit against it under Utah law. But the
Bankruptcy Code contains a sovereign-immunity waiver, §106(a), that
abrogates the Government’s sovereign immunity “with respect to”
§544. §106(a)(1). This case requires us to determine the scope of
that waiver.
Specifically, we must decide whether §106(a)
abrogates sovereign immunity
only with respect to the
federal cause of action created by §544(b) or whether it
also abrogates sovereign immunity with respect to the
underlying state-law claims that supply the “applicable law” for
that federal cause of action. We hold that §106(a)’s
sovereign-immunity waiver applies only to the §544(b) claim itself
and not to any state-law claims nested within that federal claim.
Section 106(a) is properly understood as a jurisdictional provision
that empowers courts to hear §544(b) claims against the Government
to the extent such claims are otherwise available under state law;
it does not alter the substantive meaning of §544(b)’s “applicable
law” clause. We therefore reverse the decision below.
I
A
Bankruptcy trustees have long had the power to
invalidate, or “avoid,” certain transfers of assets made by a
debtor. These “avoidance powers” serve multiple ends. Most
obviously, they help the trustee maximize the value of the
bankruptcy estate by enabling the trustee to recover assets that
otherwise would have been lost. The avoidance powers also help the
trustee equalize the distribution of the debtor’s assets among
creditors by preventing the debtor from offloading assets to
preferred creditors outside of the formal bankruptcy process.
Today, the avoidance powers are codified in
Chapter 5 of the Bankruptcy Code, which delineates the specific
types of transfers that trustees are empowered to set aside.
Section 545 of the Code, for instance, permits a trustee to avoid
the transfer of certain statutory liens. Meanwhile, §547(b) allows
a trustee to invalidate transfers that the debtor made immediately
before bankruptcy proceedings began. And §548 permits a trustee to
set aside certain fraudulent transfers, such as those made for the
purpose of delaying or impeding the repayment of creditors.
This case involves the trustee’s avoidance
powers under §544(b). That provision allows a trustee to “avoid any
transfer of an interest of the debtor . . . that is
voidable under applicable law by a creditor holding an unsecured
claim.” §544(b)(1). Although the term “applicable law” can
technically refer to any state or federal law outside of the
Bankruptcy Code, trustees typically rely on state statutes to
supply the “applicable law” for avoidance suits under §544(b).
The state statutes that trustees most often
invoke are known as “fraudulent transfer” laws. 5 Collier on
Bankruptcy ¶544.06[2], p. 544–27 (R. Levin & H. Sommer eds.,
16th ed. 2022). These laws—which generally employ the same language
from State to State—aim to prevent debtors from hiding or shielding
their assets from creditors. See
ibid. (explaining that 46
States have adopted either the Uniform Fraudulent Transfer Act or
its successor, the Uniform Voidable Transactions Act). To that end,
most fraudulent-transfer statutes provide creditors with a cause of
action to invalidate any transfer that a debtor made with the
intent to defraud creditors. Creditors may also typically invoke
these laws to void “constructive” fraudulent transfers—that is,
transfers made without an actual intent to defraud, such as an
insolvent debtor’s sale or transfer of assets for something less
than their equivalent value. 2 Bankruptcy Law Manual §9:29, pp.
779–780 (5th ed. 2024).[
1]
Notably, to show that a transfer is “voidable
under applicable law,” a bankruptcy trustee must “identify the
actual creditor or creditors who could have set aside the
transaction in question under applicable law.” 5 Collier,
Bankruptcy ¶544.06[1], at 544–25. “If there is no creditor against
whom the transfer is voidable under the applicable law, the trustee
is powerless to act.”
Ibid.
This “actual creditor” requirement serves as an
important check on the trustee’s §544(b) powers. Absent the
actual-creditor requirement, a trustee could use §544(b) to unwind
transactions that would never actually be at risk of invalidation
outside of bankruptcy proceedings. The actual-creditor requirement
thus mitigates the disruptive potential of a trustee’s avoidance
power by ensuring that the trustee has “no greater rights of
avoidance than the actual creditor would have if that creditor were
asserting invalidity on its own behalf.”
Id., ¶544.06[3], at
544–29.
B
This case arises from the collapse of a
Utah-based transportation business called All Resort Group. The
company fell into insolvency in 2013 as the result of poor
management and financial malfeasance. As the company struggled
financially, two of its shareholders began misappropriating company
funds for their own personal use, including to pay off personal
debts. In 2014, they transferred roughly $145,000 in company funds
to the Internal Revenue Service to satisfy their personal
income-tax obligations. The company received nothing in return for
paying off these shareholders’ debts.
Three years later, the company filed for
bankruptcy. Respondent was appointed as trustee of the bankruptcy
estate. He filed this suit against the United States under §544(b)
shortly after his appointment, seeking to avoid the 2014 tax
payments.
Respondent invoked Utah’s fraudulent-transfer
statute as the source of “applicable law” for his §544(b) claim.
Like most fraudulent-transfer laws, Utah’s statute allows a
creditor to void a debtor’s transfer of assets if the debtor was
insolvent at the time of the transfer and received less than equal
value in return. Utah Code §25–6–6
et seq.
(2014).[
2]
The parties cross-moved for summary judgment in
Bankruptcy Court. The Government did not contest respondent’s
allegation that All Resort Group was insolvent when it made the
2014 tax payments on behalf of its shareholders. Nor did it dispute
that the company received nothing of value in exchange for making
those payments. Instead, the Government asserted that respondent’s
claim failed because he could not satisfy §544(b)’s actual-creditor
requirement. Specifically, the Government argued, respondent could
not identify any creditor capable of prevailing in a
fraudulent-transfer suit against the Government under Utah law
because, outside of bankruptcy, any such suit would be barred by
sovereign immunity.
The Bankruptcy Court rejected that argument and
entered judgment for respondent.
In re All Resort Group,
Inc., 617 B.R. 375, 379 (Bkrtcy. Ct. Utah 2020). The court
based its decision on §106(a) of the Bankruptcy Code, which waives
the Government’s sovereign immunity for certain claims arising
under the Code.
Id., at 386. In particular, §106(a)(1)
provides that “sovereign immunity is abrogated as to a governmental
unit to the extent set forth in this section with respect to” 59
different provisions of the Code, including §544.
§106(a)(1).[
3]
The Bankruptcy Court construed §106(a) as
waiving the Government’s sovereign immunity not only as to the
trustee’s §544(b) claim but also “as to the underlying state law
cause of action” nested within the §544(b) claim. 617
B. R.
, at 386. Accordingly, the court held that
“sovereign immunity does not preclude [respondent] from satisfying
the actual creditor requirement.”
Id., at 391.
The District Court adopted the Bankruptcy
Court’s decision and the Tenth Circuit later affirmed. 71 F. 4th
1247 (2023). Like the Bankruptcy Court, the Tenth Circuit concluded
that §106(a) “expresses Congress’s intent to abolish the
Government’s sovereign immunity in an avoidance proceeding arising
under §544(b)(1), regardless of the context in which the defense
arises.”
Id., at 1253.
The Tenth Circuit’s decision reinforced a
conflict among the Courts of Appeals regarding whether §106(a)
abrogates sovereign immunity with respect to a state-law claim that
supplies the “applicable law” for a trustee’s §544(b) claim. We
granted certiorari to resolve that conflict. See 602 U. S. ___
(2024).
II
This dispute turns on the interplay between
§106(a) and §544(b) of the Bankruptcy Code. The parties here agree
that §106(a) waives the Government’s sovereign immunity with
respect to the federal cause of action created by §544(b). But
respondent contends that §106(a) goes further than that by also
waiving sovereign immunity with respect to whatever state-law cause
of action a trustee might invoke as the source of “applicable law”
for his or her §544(b) claim.
As explained below, we hold that §106(a) does
not sweep as broadly as respondent maintains. Waivers of sovereign
immunity are jurisdictional provisions that empower courts to hear
claims against the Government but do not themselves typically
create any new substantive rights against the Government. Here,
statutory text, context, and structure all demonstrate that §106(a)
fits squarely within that mold. For that reason, we conclude that
§106(a) does not alter the substantive meaning of §544(b)’s
“applicable law” clause by providing a waiver of immunity that
would not otherwise exist under that external source of law.
A
Before discussing §106(a) itself, it is
helpful to recall how waivers of sovereign immunity operate in
general. As our precedents explain, “[s]overeign immunity is
jurisdictional in nature” and deprives courts of the power to hear
suits against the United States absent Congress’s express consent.
FDIC v.
Meyer,
510 U.S.
471, 475 (1994). In providing that consent, waivers of
sovereign immunity function simply as “prerequisite[s] for
jurisdiction”—they do not create any new substantive rights or
alter any pre-existing ones.
United States v.
Mitchell,
463 U.S.
206, 212 (1983).
That is precisely the role that §106(a) plays
within the Bankruptcy Code. Section 106(a)(1) provides that the
Federal Government’s “sovereign immunity is abrogated
. . . with respect to” several dozen provisions of the
Code, thereby granting courts the power to hear claims against the
Government under those provisions. That includes the power to hear
claims under §544, which is among the listed provisions. At the
same time, §106(a)(5) expressly provides that “[n]othing 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.” In this way,
§106(a)’s text, read as a whole, makes clear that it operates like
any other waiver of sovereign immunity: It is “merely
jurisdictional” and does not establish any substantive rights
against the Government.
United States v.
Testan,
424 U.S.
392, 400 (1976).
Respondent’s reading of §106(a) departs from
that conventional understanding of sovereign-immunity waivers.
Under respondent’s view, §106(a) does not simply give courts
jurisdiction to hear §544(b) claims against the Government; it also
alters the substantive requirements of the claim itself. It is
undisputed that, outside of bankruptcy proceedings, the United
States could invoke the defense of sovereign immunity to bar any
lawsuit seeking to invalidate a federal tax payment under a State’s
fraudulent-transfer law. That barrier to state-law liability would
ordinarily doom a trustee’s §544(b) claim by making it impossible
for the trustee to show that the tax payment at issue is “voidable
under applicable law” by an actual creditor. But, respondent
contends, §106(a) vitiates that barrier by abrogating the
Government’s sovereign immunity with respect to
both the
§544(b) claim
and the state-law claim nested within it. As
respondent puts it, “Section 106(a)’s clear waiver ‘with respect
to’ section 544 applies equally to the trustee’s section 544(b)
cause of action and the applicable law that provides the elements
of that cause of action.” Brief for Respondent 2.
Respondent’s reading of §106(a) would thus
transform that statute from a jurisdiction-creating provision into
a liability-creating provision. But we have declined to read
sovereign-immunity waivers in that way. Rather, we have said that
the question “whether there has been a waiver of sovereign
immunity” is “ ‘analytically distinct’ ” from the
question “whether the source of substantive law upon which the
claimant relies provides an avenue for relief.”
Meyer, 510
U. S., at 484; see,
e.
g.,
United States
v.
Navajo Nation,
556 U.S.
287, 290 (2009) (“Neither the Tucker Act nor the Indian Tucker
Act creates substantive rights; they are simply jurisdictional
provisions that operate to waive sovereign immunity for claims
premised on other sources of law”). Respondent conflates these two
questions by seeking to leverage §106(a)’s waiver of
immunity—
i.
e., the statute’s grant of
jurisdiction—into an affirmative expansion of the trustee’s
avoidance powers under §544(b).
Construing §106(a) to modify the elements of a
§544(b) claim would thus reflect a highly unusual understanding of
sovereign-immunity waivers. That alone casts doubt on respondent’s
reading of §106(a). But even if that reading did not conflict with
our normal understanding of sovereign- immunity waivers, it would
remain untenable as a basic matter of text and structure.
B
The text and structure of §106 and §544 make
clear that §106(a)’s waiver of sovereign immunity does not operate
to modify §544(b)’s substantive requirements.
As noted above, §106(a) expressly states that it
does
not “create any substantive claim for relief or cause
of action not otherwise existing” under some other source of law.
§106(a)(5). That language plainly refutes the notion that §106(a)’s
sovereign-immunity waiver extends to “[b]oth the cause of action
[that §544(b) establishes] and its elements.” Brief for Respondent
18. Indeed, construing §106(a) to modify the “elements” of a
§544(b) claim would necessarily give the trustee a substantive
claim for relief against the Government that does not “otherwise
exis[t]” under §544(b) or Utah law.[
4] Section 106(a)’s text thus confirms that it does not
alter §544(b)’s substantive requirements.
So, too, does the list of Bankruptcy Code
provisions identified in §106(a) itself. Notably, §106(a) does not
meaningfully alter the substantive obligations of trustees under
any of the 58 other provisions that appear on the list alongside
§544. So far as we are aware, the other avoidance provisions on the
list retain the same substantive elements regardless of whether the
trustee is suing the Government or a private entity. Given that
§106(a) leaves the substantive elements of those avoidance
provisions untouched, it would be odd to read the provision as
modifying the elements of §544(b).
Section 544’s own text and structure reinforce
that conclusion. Recall that §544(b) requires a trustee to identify
an actual creditor capable of voiding the transfer at issue under
“applicable law.” That actual-creditor requirement—which restricts
the universe of transactions a trustee can invalidate—is unique to
§544(b). Section 544’s only other subprovision—subsection
(a)—conspicuously eschews any such requirement. Instead, subsection
(a) permits a trustee to invalidate certain transfers that “could
have” been voided by a lien creditor, “
whether or not such a
creditor exists.” §§544(a)(1), (2) (emphasis added). That contrast
in structure reflects a deliberate congressional choice to tie the
trustee’s rights under subsection (b) to the rights of an actual
creditor under “applicable law.” We doubt that Congress meant to
supplant that choice when it opted to include §544 on the lengthy
list of provisions it inserted into §106(a).
What is more, eliminating the actual-creditor
requirement would upend decades of practice and precedent. Section
544(b) was expressly “derived” from §70e of the Bankruptcy Act of
1898, which had long been understood to give trustees the same
rights as creditors under state law. S. Rep. No. 95–989, p. 85
(1978); H. R. Rep. No. 95–595, p. 370 (1977). As one widely
cited lower court decision put it, §70e “clothe[d] the trustee with
no new or additional right . . . over that possessed by a
creditor”; it merely placed the trustee “in the shoes of ” the
creditor, “subject to the same limitations and disabilities that
would have beset the creditor in the prosecution of the action on
his own behalf.”
Davis v.
Willey, 263 F. 588, 589 (ND
Cal. 1920).
Section 544(b) carried forward that same
understanding of the trustee’s role. That is why, for example,
defendants in §544(b) suits are entitled to raise the same defenses
against the trustee that they would have been able to raise against
the relevant creditor under applicable state law. Thus, “if the
creditor is deemed estopped to recover upon a claim, or is barred
from recovery because of the running of a statute of limitations
prior to the commencement of the case, the trustee is likewise
estopped or barred.” 5 Collier, Bankruptcy ¶544.06[3], at 544–29.
Similarly, if the “applicable” state law allows a prevailing party
to recover attorney’s fees, then a defendant who wins a §544(b)
suit can typically recover such fees from the bankruptcy estate.
Id., at 544–27. This long-settled understanding of the
trustee’s §544(b) powers—and their limits—underscores why it would
be so anomalous to treat §106(a) as expanding the trustee’s rights
beyond those of an actual creditor.[
5]
Even if the language and logic of §544 and
§106(a) permitted respondent’s broad reading of the
sovereign-immunity waiver, we note further that our precedents
would still foreclose that reading. “Under long-settled law,
Congress must use unmistakable language to abrogate sovereign
immunity.”
Financial Oversight and Management Bd. for
P. R. v.
Centro De Periodismo Investigativo, Inc.,
598 U.S. 339, 342 (2023). That means that we must “construe any
ambiguities in the scope of a waiver in favor of the sovereign.”
FAA v.
Cooper,
566 U.S.
284, 291 (2012). Here, §106(a)’s language unmistakably waives
sovereign immunity for the federal cause of action created by
§544(b). But, for all of the reasons just given, we cannot say that
it does the same for the state-law claims nested within §544(b)’s
“applicable law” clause.
III
A
Respondent interprets §106(a) differently. He
asserts that §106(a)(1)’s use of the phrase “with respect to”
requires a broad reading of the statute’s sovereign-immunity
waiver, citing dictionary definitions and cases that adopt
capacious readings of similar phrases. These sources, he says,
evince Congress’s intent to abrogate sovereign immunity for “all
subjects that concern or regard” the listed provisions, including
the meaning of “applicable law” in §544(b). Brief for Respondent
16.
The authorities respondent invokes, however,
cannot bear the weight he foists upon them. Even setting aside that
many of his authorities concern different statutory terms, they all
examine those terms in very different statutory contexts. For
instance, he cites our observation in
Lamar, Archer &
Cofrin, LLP v.
Appling, 584 U.S. 709, 717 (2018), that
the “[u]se of the word ‘respecting’ in a legal context generally
has a broadening effect.” But the statute at issue in
Lamar
used the term “respecting” in a quite dissimilar setting—as part of
the technical phrase “statement[s] respecting the debtor’s or an
insider’s financial condition.” §523(a)(2)(A). Giving breadth to a
discrete statutory term like “financial condition” is a far cry
from expanding a sovereign-immunity waiver, especially when our
“general rule” is “that waivers of sovereign immunity are to be
read
narrowly.”
Meyer, 510 U. S., at 480
(emphasis added).
Respondent’s textual argument thus flouts a
“fundamental canon of statutory construction”: that “the words of a
statute must be read in their context and with a view to their
place in the overall statutory scheme.”
Davis v.
Michigan
Dept. of Treasury,
489 U.S.
803, 809 (1989). That canon carries particular force when
construing phrases that govern conceptual relationships—like “with
respect to”—whose meanings inherently depend on their surrounding
context. Cf.
Dubin v.
United States, 599 U.S. 110,
119 (2023) (explaining that the phrase “ ‘[i]n relation
to’ ” is “context sensitive”).
Here, context cuts decidedly against the broad
reading respondent advances. As explained, construing §106(a) to
reach the elements of §544(b) would not only run counter to our
traditional understanding of sovereign-immunity waivers as purely
jurisdictional, but also contravene the text and structure of
§106(a) and §544(b), and defy our established rule that
sovereign-immunity waivers must be construed narrowly. Section
106(a)’s use of a malleable phrase like “with respect to” cannot
blunt the countervailing force of those contextual considerations
and interpretive principles. Cf.
Presley v.
Etowah County
Comm’n,
502 U.S.
491, 504 (1992) (rejecting a broad reading of the phrase
“ ‘with respect to voting’ ” in the Voting Rights Act
where doing so “would work an unconstrained expansion of its
coverage”).
Respondent resists the force of those contextual
considerations by appealing to §106(a)’s enactment history. He
emphasizes that Congress purposefully expanded the scope of
§106(a)’s immunity waiver in 1994 by adding the list of 59 specific
provisions, including §544, to the statute. But “no amount of
legislative history can ‘supply a waiver that is not clearly
evident from the language of the statute.’ ”
Department of
Agriculture Rural Development Rural Housing Service v.
Kirtz, 601 U.S. 42, 49 (2024) (quoting
FAA, 566
U. S., at 290). And, even if legislative history could serve
that function, respondent’s account of §106(a)’s history is
incomplete at best.
Since its adoption in 1978, §106 has always been
understood to provide only a “limited waiver of sovereign immunity
in bankruptcy cases.” S. Rep. No. 95–989, at 29; H. R. Rep.
No. 95–595, at 317. The House and Senate Reports accompanying the
1978 legislation both expressly stated: “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.” S. Rep. No. 95–989, at 29
(emphasis added); H. R. Rep. No. 95–595, at 317 (emphasis added).
This suggests that, at the time of enactment, Congress understood
the statute to preserve a basic symmetry between bankruptcy and
nonbankruptcy proceedings—not to expand transferee liability within
the bankruptcy system.
Nothing in the 1994 amendments to §106 dislodged
that original understanding. When Congress adopted §106(a)’s
current language in 1994, it did so with the narrow aim of
overturning two of this Court’s decisions:
United States v.
Nordic Village, Inc.,
503 U.S.
30 (1992), and
Hoffman v.
Connecticut Dept. of Income
Maintenance,
492 U.S.
96 (1989). Those decisions—neither of which involved §544(b)
itself—had held that §106’s immunity waiver did not reach monetary
judgments entered against the Government. The 1994 amendments
served to clarify that §106 does, in fact, “expressly provid[e] for
a waiver of sovereign immunity . . . with respect to
monetary recoveries.” H. R. Rep. No. 103–835, p. 42 (1994). But the
amendments did not expand §106’s scope beyond what Congress
envisioned in 1978. Rather, their goal was “to make section 106
conform to the Congressional intent of the Bankruptcy Reform
Act of 1978.”
Ibid. (emphasis added).
In sum, §106(a)’s enactment history—to the
extent it plays any role here—undercuts respondent’s broad reading
of §106(a) and reaffirms what the statute’s text makes evident:
that in waiving sovereign immunity “with respect to” §544, Congress
did not alter the substantive elements of §544 itself.
B
Respondent gains slightly more traction in
arguing that the Government’s reading of §106(a) would blunt the
impact of Congress’s decision to include §544 on the list of
provisions subject to §106(a)’s immunity waiver. After all,
respondent says, if sovereign immunity bars every state-law claim
capable of furnishing the “applicable law” for a §544(b) suit,
then—as a practical matter—no trustee could ever win such a suit
against the Government. Thus, respondent asserts, the Government’s
reading of §106(a) effectively robs the immunity waiver of any
meaningful purpose with respect to §544; it simply grants federal
courts jurisdiction over a set of inherently unwinnable claims.
We are not persuaded that the Government’s
reading extinguishes §106(a)’s effect with respect to §544. For one
thing, even if §106(a) does not enable trustees to prevail against
the Government under §544(b), they might still prevail against the
Government under §544’s other subprovision—subsection (a). As noted
above, subsection (a), unlike subsection (b), does not contain an
actual-creditor requirement. A trustee can therefore use subsection
(a) to set aside certain transfers—specifically, transfers of
certain liens—without identifying an actual creditor capable of
invalidating those transfers under state law. And federal tax law
separately provides that tax liens held by the Federal Government
may be invalidated under particular circumstances. See 26
U. S. C. §6323. As a result, a trustee can avoid
transfers of certain tax liens under §544(a) without identifying an
actual creditor and without needing to identify a waiver of
immunity to sustain a claim under the Internal Revenue Code. By
giving courts jurisdiction to hear those types of claims against
the Government, then, §106(a) serves a clear purpose “with respect
to” §544.
Respondent rejects that understanding of
§106(a), insisting that the waiver must be construed to give
substantive effect to
all of §544’s subsections—not just
subsection (a). He stresses that §106(a)(1)’s list of provisions
refers to §544 as a whole, without demarcating any specific
subsections. But the same is true of the 58 other Bankruptcy Code
provisions on the list, many of which include subsections that
plainly do not implicate sovereign immunity at all. Section 303,
for example, appears on the list even though subsection (a) of that
provision authorizes a kind of action—involuntary bankruptcy
petitions—that cannot be filed against the Government. The list
also includes §106 itself, despite the obvious incongruity of
applying §106(a) to its own waiver of sovereign immunity. The sheer
number of provisions on the list with subsections that cannot
plausibly be the subject of an immunity waiver rebuts respondent’s
strained reading of §106(a).
It is also noteworthy that, in addition to the
role that §106(a) plays with respect to §544(a), the waiver
provision serves an independent function with respect to §544(b):
It grants federal courts jurisdiction to hear §544(b) claims
brought against
state governments. As outlined earlier,
§106(a) abrogates sovereign immunity not just for the Federal
Government, but for any “governmental unit,” which includes any
“State.” §101(27). At the time Congress enacted §106(a), a handful
of States had chosen to subject themselves to potential liability
under their own fraudulent-transfer statutes.[
6] Section 106(a) thus granted federal courts
jurisdiction to hear §544(b) suits against those
states—jurisdiction that those courts would have otherwise
lacked.
C
Respondent’s argument also lacks support in
our precedent. Respondent cites our recent decision in
Kirtz, 601 U.S. 42, as evidence that Congress sometimes
waives sovereign immunity while simultaneously establishing a new
substantive right against the Government. But the statutory
provision at issue in
Kirtz bears little resemblance—in
text, structure, or operation—to §106(a).
In
Kirtz, we held that a provision of the
Fair Credit Reporting Act that “explicitly permitted consumer
claims for damages against the government” also functioned as a
waiver of sovereign immunity for those claims.
Id., at 51.
Our decision rested on the straightforward proposition that “a
cause of action authorizing suit against the government may waive
sovereign immunity even without a separate waiver provision.”
Id., at 53. That proposition is hardly controversial. If
Congress establishes a cause of action that—by its own explicit
terms—authorizes suits against the Government, then Congress need
not also enact an independent waiver of sovereign immunity.
That logic, however, has no bearing on the
question at issue here: namely, whether Congress waived sovereign
immunity for a
state cause of action that does
not
explicitly authorize suits against the Government. Nothing in
Kirtz suggests that courts should presume, in the absence of
explicit language to the contrary, that Congress has waived the
Federal Government’s sovereign immunity for such claims. If
anything,
Kirtz counsels in the opposite direction. Our
opinion there reaffirmed that “a waiver of sovereign immunity must
be ‘unmistakably clear in the language of the statute.’ ”
Id., at 49. And, once again, for all of the reasons
previously discussed, §106(a) does not contain an “unmistakably
clear” waiver of immunity for state-law claims nested within
§544(b)’s “applicable law” clause.
D
Finally, we decline respondent’s invitation to
affirm on other grounds. As an alternative basis for ruling in his
favor, respondent proposes a novel reading of §544(b) that would
purportedly allow a trustee to set aside a federal tax payment
without ever triggering the Federal Government’s sovereign
immunity. Per that reading, the trustee could satisfy the
actual-creditor requirement by showing that “applicable” state law
would permit a creditor to void the tax payment by suing someone
other than the United States. Respondent claims that he can
do that here because Utah law would (in theory) permit an All
Resort Group creditor to void the 2014 tax payments by suing the
two shareholders who orchestrated those payments, neither of whom
is protected by sovereign immunity.
We will not address this argument because it
turns on readings of both Utah law and §544(b) that no other court
has ever considered. Furthermore, respondent failed to raise this
argument below. See
Cameron v.
EMW Women’s Surgical
Center, P. S. C., 595 U.S. 267, 275 (2022) (“[I]f a
non-jurisdictional argument was not raised below, we generally will
not consider it as an alternative ground for affirmance”).
Additionally, “the question [this argument] poses has not been
adequately briefed and argued” here.
Granfinanciera, S. A.
v.
Nordberg,
492 U.S.
33, 38 (1989). We therefore leave it to the courts below to
decide whether respondent may pursue this argument on
remand.[
7]
* * *
Section 106(a) of the Bankruptcy Code
abrogates sovereign immunity for the federal cause of action
created by §544(b). It does not take the additional step of
abrogating sovereign immunity for whatever state-law claim supplies
the “applicable law” for a trustee’s §544(b) claim. Accordingly,
the decision of the Tenth Circuit is reversed.
It is so ordered.
