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Tribal Sovereign Immunity in Bankruptcy Gets Supreme Court Hearing

Submitted by jhartgen@abi.org on

The Supreme Court will examine whether the bankruptcy code stripped a Native American tribe and its subsidiary of its sovereign immunity not to be subject to a court’s authority, Bloomberg Law reported. The order issued Friday by the justices grants a request from the Lac Du Flambeau Band of Lake Superior Chippewa Indians to consider whether its subsidiary was allowed to go after money owed by an individual after he filed for chapter 13. The case “presents a question of utmost importance to Indian tribes,” the band said in its request to the court.

Virgin Islands’ $150 Million Propane Fight Clouds Solar Plans

Submitted by ckanon@abi.org on
The global surge in fuel costs has hit hard in the far-flung U.S. Virgin Islands, adding another financial pressure to a government-run utility already fighting to stay solvent, placate an unhappy supplier and find backing to develop renewable power, WSJ Pro reported. The Virgin Islands Water and Power Authority has hovered near bankruptcy for years, but its financial woes are intensifying. Its most important fuel supplier, Houston-based Vitol Inc., has threatened in recent weeks to cut off shipments of liquid propane if WAPA doesn’t pay back $150 million in contract arrears. Propane makes up the bulk of WAPA’s power generation, and it can’t afford to keep the lights on for long without continued shipments from Vitol. The problem is that WAPA lives hand-to-mouth, barely scraping together the cash every week to order fuel, pay wages and make interest payments to banks and bondholders. Vitol’s demands come at a bad time for WAPA, already pummeled by rising fuel costs and in the midst of negotiations to bring utility-scale solar and battery power to the U.S. territory’s largest island, St. Croix. The price of propane has gone up 22% for WAPA since the beginning of 2021, while diesel, its backup fuel, has increased 161%. WAPA hasn’t raised its customer rates as fuel costs increased, with help from a $28 million fuel subsidy it received from the Virgin Islands’ federal COVID-19 stimulus funds. Mr. Smith said he is trying to find roughly $35 million to upgrade WAPA’s power generators while replacing fossil-fuel generation with lower-cost solar.

Justices Debate State Law Opening Courts to Suits Against Corporations

Submitted by ckanon@abi.org on
The Supreme Court struggled to decide whether Pennsylvania can require corporations to consent to being sued in its courts — by anyone, for conduct anywhere — as a condition of doing business in the state, the New York Times reported. Only Pennsylvania has such a law, but if the court rules that it is constitutional, other states will most likely enact similar ones, giving injured consumers, workers and others more choices about where to sue and subjecting corporations to suits in courts they may view as hostile to business. The case, Mallory v. Norfolk Southern Railway, No. 21-1168, was brought by Robert Mallory, a Virginia man who says he developed cancer from exposure to toxic chemicals while working in Virginia and Ohio for the Norfolk Southern Railway Company, which was based and incorporated in Virginia. The question in the case is whether he can sue in a third state with no concrete connection to the suit — Pennsylvania. The Supreme Court has long said that corporations may be sued where they are incorporated or where their headquarters are. And they may be sued in particular cases if the plaintiff’s claims are related to the defendant’s contacts with the state. Mr. Mallory relied on none of those bases for jurisdiction. Rather, he pointed to a Pennsylvania law that requires companies that do business in the state to consent to being sued there. Carter G. Phillips, a lawyer for the railroad, said that putting his client to that choice was unconstitutional, but Justice Neil M. Gorsuch said Norfolk Southern had made a conscious decision. “There’s no doubt the railroad understood by filing that piece of paper that it was subject to this law,” he said. (Subscription required.)