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06-11890 In re: Fess

By: dmc-admin//August 3, 2009//

06-11890 In re: Fess

By: dmc-admin//August 3, 2009//

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Bankruptcy
Per capita payments

An Indian tribe cannot be compelled to turn over a bankrupt tribe member's per capita payments to the bankruptcy trustee.

"Precedent in the 7th Circuit and this district indicate that tribal law rather than state law should be consulted on this particular point. Airadigm notes that state law does not govern the determination of a property interest when the property 'falls outside of state commercial codes by virtue of the federal interest or the nature of the property.' 519 F.3d at 650. Here, the per capita payments fall within both exceptions. First, as noted by Judge Crabb in DeCora, 'the Nation's interest in controlling the distribution of its revenue far outweighs Wisconsin's interest in enforcing its commercial code. The right of the Nation to distribute its own assets as it sees fit is central to self-governance. 396 B.R. at 225. This suggests that a federal interest, namely the Ho-Chunk Nation's interest in creating and defining property interests in per cpatia distributions, outweighs Wicnsin's interest in uniformity of definition of property interests. In addition, federal law authorizes tribes to create these particular property rights. Although federal law does not itself create the property right (as it did in Airadigm), it specifically authorizes tribes to create a certain type of property: per capita distributions. The per capita payments thus fit squarely within the exception discussed in Airadigm."

06-11890 In re: Fess

W.D.Wis., Martin, Bankr. J.

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