Court Opinion

ID: 73027
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:52:51+00
Date Added: 2024-06-11T08:50:55.436133
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[PUBLISH]
                                                                     FILED
                 IN THE UNITED STATES COURT OF APPEALS
                                                             U.S. COURT OF APPEALS
                                                               ELEVENTH CIRCUIT
                          FOR THE ELEVENTH CIRCUIT
                            ________________________                  2/19/03
                                                                THOMAS K. KAHN
                                   No. 97-8917                      CLERK
                          ________________________
           D. C. Docket Nos. 92-11482JSD (97-42), 94-12007JSD (97-43)

IN RE: GARY BURKE, PAMELA BURKE,
                                                                    Debors.

STATE OF GEORGIA DEPARTMENT OF REVENUE,
                                                                    Plaintiff-Appellant,
                                        versus

GARY BURKE;
PAMELA BURKE,
                                               Defendants-Appellees.
IN RE; RAYMOND D. HEADRICK, CYNTHIA J. HEADRICK,

                                                                    Debtors.
THE STATE OF GEORGIA,
Department of Revenue,
                                                                    Plaintiff-Appellant,
                                        versus

RAYMOND D. HEADRICK;
CYNTHIA J. HEADRICK,
                                                                Defendants-Appellees.
                            ________________________

                     Appeal from the United States District Court
                        for the Southern District of Georgia
                          _________________________
                                   (July 22, 1998)

Before ANDERSON and BIRCH, Circuit Judges, and COHILL*, Senior District
      Judge.

___________________
* Honorable Maurice B. Cohill, Senior U.S. District Judge for the Western District of
Pennsylvania, sitting by designation.
ANDERSON, Circuit Judge:
      In this consolidated appeal of two separate bankruptcy proceedings, the State of

Georgia Department of Revenue (“the State”) appeals the district court’s affirmance of

two bankruptcy court orders denying the State’s motion to dismiss and motion for

summary judgment based on Eleventh Amendment immunity. Because we conclude

that the State waived its Eleventh Amendment immunity by filing a proof of claim in

each of the bankruptcy proceedings, we affirm.

                     I. FACTS AND PROCEDURAL HISTORY

      The first bankruptcy case involves Gary and Pamela B. Burke (“the Burkes”).

In August 1992, the Burkes sought relief under Chapter 13 of the Bankruptcy Code.

The Georgia Department of Revenue filed a proof of claim that included an unsecured

priority claim of $12,437.40 for unpaid state income taxes covering the tax years 1980-

84. This claim was later adjudged to be a general unsecured claim. After the case was

converted to Chapter 7, the bankruptcy court entered a general discharge order

releasing the Burkes from liability for all dischargeable debts. Before the case was

closed, however, neither party requested that the bankruptcy court determine whether

the taxes accrued in 1980-84 were discharged. In May 1994, three months after the

entry of the discharge, the Department of Revenue wrote a letter to the Burkes

demanding payment of these taxes and warning that nonpayment could result in

collection by garnishment, attachment, or levy. The Burkes then reopened their

Chapter 7 case and filed an adversary action against the State of Georgia, alleging that

the Department of Revenue violated the discharge injunction of 11 U.S.C. § 524(a) by

                                            2
sending the demand letter for unpaid state income taxes.1 After its motion for

summary judgment was denied,2 the State moved to dismiss the Burkes’ action, relying

on Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S. Ct. 1114 (1996), and

arguing that the relief sought by the Burkes was barred by the Eleventh Amendment.

The bankruptcy court initially declined to address this issue, relying instead on its

finding that the State of Georgia had waived its sovereign immunity by filing a proof

of claim against the Burkes’ bankruptcy estate. See In re Burke, 200 B.R. 282, 287-88

(Bankr. S.D. Ga. 1996). In denying the State’s motion to alter or amend the previous

order, the bankruptcy court concluded that § 106(a)3 of the Bankruptcy Code

       1
          Section 524(a) provides in relevant part that “[a] discharge in a case under this title . .
. (2) operates as an injunction against the commencement or continuation of an action, the
employment of process, or an act, to collect, recover or offset any such debt as a personal
liability of the debtor, whether or not discharge of such debt is waived.” 11 U.S.C. § 524(a)
(1993).
       2
         In its motion for summary judgment, the State argued that it could not have violated
the discharge injunction since the taxes in question were nondischargeable. In an August 9,
1995, order, the bankruptcy court denied this motion, finding that the 1980-84 taxes including
accrued interest and penalties were discharged by the discharge order of February 1, 1994. See
In re Burke, 200 B.R. 282, 284 (Bankr. S.D. Ga. 1996). This ruling is not challenged on
appeal.
       3
         Section 106(a), entitled “Waiver of Sovereign Immunity,” provides:
       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 . . . 362, . . . 524 . . . .
               (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 . . . including an order or judgment awarding a
       money recovery, but not including an award of punitive damages.
11 U.S.C. § 106(a) (Supp. 1998).

                                                  3
unequivocally expressed congressional intent to abrogate states’ sovereign immunity

for violations of the discharge injunction of § 524 and that § 106(a) was enacted by a

valid exercise of power under the Fourteenth Amendment. See In re Burke, 203 B.R.

493, 497 (Bankr. S.D. Ga. 1996) (reasoning that in light of Seminole Tribe, the

Bankruptcy Clause of Article I did not empower Congress to abrogate the Eleventh

Amendment, but that abrogation could be accomplished under the Fourteenth

Amendment). In an alternative holding, the bankruptcy court concluded that even if

the State of Georgia was immune from suit for its alleged violations of the discharge

injunction, it had waived that immunity by filing a proof of claim against the Burkes.

In re Burke, 203 B.R. at 497-98.

      In the second bankruptcy proceeding, Raymond D. and Cynthia J. Headrick

(“the Headricks”) filed a petition for relief under Chapter 13 of the Bankruptcy Code in

December 1994. The Georgia Department of Revenue filed a proof of claim for state

income taxes. Thereafter, in October 1995, the Department of Revenue issued an

“Official Assessment and Demand for Payment” against the Headricks, and then issued

a “Collection Notice” demanding immediate payment of the taxes and warning that

nonpayment would result in collection by levy, garnishment, or attachment.

Subsequently, the Headricks filed an adversary action against the State of Georgia,

alleging that the State’s collection attempts violated the automatic stay prescribed by

                                            4
11 U.S.C. § 362.4 The State moved for summary judgment, arguing that it was entitled

to sovereign immunity and, alternatively, that as a matter of law it had not violated the

automatic stay. The bankruptcy court found both grounds to be without merit and

denied the motion. See In re Headrick, 200 B.R. 963, 965-69 (Bankr. S.D. Ga. 1996)

(adopting the same reasoning as in In re Burke, and thus finding that the State’s

immunity was abrogated because § 106(a) was enacted by Congress pursuant to a valid

exercise of authority under the Fourteenth Amendment, or alternatively, that the State

waived its immunity by filing a proof of claim against the debtors). The State’s motion

to alter or amend the previous order denying summary judgment was denied. See In re

Headrick, 203 B.R. 805 (Bankr. S.D. Ga. 1996). The State of Georgia then appealed

the bankruptcy court’s orders in In re Burke and In re Headrick to the District Court for

the Southern District of Georgia. In affirming the bankruptcy court’s orders, the

district court concluded that “the case law now uniformly acknowledges that Congress

       4
         Section 362(a) provides in relevant part that
       [e]xcept as provided in subsection (b) of this section, a petition filed under
       section 301, 302, or 303 of this title, . . . operates as a stay, applicable to all
       entities, of (1) the commencement or continuation . . . of a judicial,
       administrative, or other action or proceeding against the debtor that was or
       could have been commenced before the commencement of the case under this
       title, or to recover a claim against the debtor that arose before the
       commencement of the case under this title; . . . (6) any act to collect, assess, or
       recover a claim against the debtor that arose before the commencement of the
       case under this title.
11U.S.C. § 362(a) (1993).
       Section 362(h) provides that “[a]n individual injured by any willful violation of a stay
provided by this section shall recover actual damages, including costs and attorneys’ fees.” 11
U.S.C. § 362(h) (1993).

                                               5
did not have the power to enact § 106(a) pursuant to those powers granted it under the

Bankruptcy Clause of Article I,” but that § 106(a) validly abrogates Georgia’s

sovereign immunity because “the bankruptcy code creates privileges and immunities

enforceable by Congress under § 5 of the Fourteenth Amendment.” District Court

Order, at 6-8 (July 23, 1997).5 The State of Georgia appeals this order.

                                     II. DISCUSSION

       Our jurisdiction in this case arises from the district court’s denial of the State of

Georgia’s claim to Eleventh Amendment immunity; such a denial grants the State the

right of an immediate, interlocutory appeal. See Puerto Rico Aqueduct and Sewer

Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147, 113 S. Ct. 684, 689 (1993) (applying

collateral order doctrine of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.

Ct. 1221 (1949)); see also Seminole Tribe of Florida v. Florida, 11 F.3d 1016, 1021

(11th Cir. 1994); aff’d, 517 U.S. 44, 116 S. Ct. 1114 (1996). The grant or denial of a

state’s sovereign immunity defense is an issue of law subject to de novo review by this

court. See Seminole Tribe, 11 F.3d at 1021.

       The Eleventh Amendment states:

       The Judicial power of the United States shall not be construed to extend
       to any suit in law or equity, commenced or prosecuted against one of the

       5
        The district court acknowledged that the issue of waiver was raised by the debtors, but
declined to address the issue because the court concluded that the State’s Eleventh Amendment
immunity was validly abrogated by 11 U.S.C. § 106(a). District Court Order, at 2 (July 23,
1997).

                                              6
       United States by Citizens of another State, or by Citizens or Subjects of
       any Foreign State.

U.S. Const. amend. XI. Although the Eleventh Amendment only expressly prohibits

suits against states by citizens of other states, the Supreme Court has long held that the

Eleventh Amendment also bars suits brought against a state by its own citizens. Hans

v. Louisiana, 134 U.S. 1, 15, 10 S. Ct. 504, 507 (1890). However, there are certain

well-established exceptions to Eleventh Amendment immunity. First, a state may

waive its Eleventh Amendment immunity and consent to suit in federal court. See

Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238, 105 S. Ct. 3142, 3145 (1985).

Second, Congress can abrogate states’ Eleventh Amendment immunity if Congress

unequivocally expresses an intent to abrogate state immunity and acts pursuant to a

valid exercise of power. See Green v. Mansour, 474 U.S. 64, 68, 106 S. Ct. 423, 425-

26 (1985) (citing Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 99, 104

S. Ct. 900, 907 (1984)).

       Relying on Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S. Ct. 1114

(1996), the State of Georgia contends that Congress’ power to abrogate states’

Eleventh Amendment immunity only exists under § 5 of the Fourteenth Amendment

and that § 106(a) of the Bankruptcy Code was not enacted pursuant to the Fourteenth

Amendment. The debtors6 respond that § 106(a) validly abrogates states’ sovereign

immunity because § 106(a) was enacted pursuant to § 5 of the Fourteenth Amendment

       6
           We refer to the Burkes and the Headricks collectively as “the debtors.”

                                                 7
in order to enforce a protected due process property interest or the privileges and

immunities of federal citizenship as recognized in § 1 of the Fourteenth Amendment.7

However, we need not resolve this abrogation issue because assuming arguendo that

the State of Georgia has Eleventh Amendment immunity and it has not been validly

abrogated by § 106(a), we conclude that in this case the State waived its sovereign

immunity by filing a proof of claim in the debtors’ bankruptcy proceedings.

       Waiver of Eleventh Amendment Immunity8

       7
         The amicus curiae, the Business Bankruptcy Law Committee of the New York
County Lawyers’ Association, contends that Congress has the right to abrogate states’
Eleventh Amendment immunity pursuant to the power granted in the Bankruptcy Clause of
Article I of the U.S. Constitution. As noted in the text, we need not address the abrogation
issue.
       8
          We note at the outset of this section that our waiver analysis is not based on 11 U.S.C.
§ 106(b). Section 106(b) provides that
        [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 same
        transaction or occurrence out of which the claim of such governmental unit
        arose.
11 U.S.C. § 106(b) (Supp. 1998). We decline to rely on § 106(b) because, in deciding the
instant case, we have assumed arguendo that the State of Georgia’s Eleventh Amendment
immunity has not been validly abrogated by § 106(a) and because we acknowledge that “the
power to define waiver can become the functional equivalent of the power to abrogate.” Aer-
Aerotron v. Texas Dep’t of Transp., 104 F.3d 677, 681 (4th Cir. 1997); see also Schlossberg
v. Maryland Comptroller of the Treasury (In re Creative Goldsmiths of Washington,
D.C., Inc.), 119 F.3d 1140, 1147 (4th Cir. 1997) (concluding that the language of §
106(b) “amounts to language of abrogation” and that it is “not within Congress’ power to
abrogate such immunity by ‘deeming’ a waiver”), cert. denied, 118 S. Ct. 1517 (1998).
However, we note that, although we do not rely on § 106(b) and it does not control our
analysis, the language of § 106(b) may well be a correct restatement of the jurisprudence
regarding waiver of Eleventh Amendment immunity. See Wyoming Dep’t of Transp.
v. Straight (In re Straight), 143 F.3d 1387 (10th Cir. 1998) (concluding that §
106(b) “follows the lead already established by the Supreme Court in Gardner v.
                                                8
       The State of Georgia contends that, under its constitution, only the Georgia

General Assembly may waive the State’s sovereign immunity, and that waiver is limited

to the extent provided in the Georgia Constitution.9 Subsection (f) of article I, section 2,

paragraph 9 of the Georgia Constitution clearly provides that the constitution’s limited

waiver of sovereign immunity does not include the State’s Eleventh Amendment

immunity, and the debtors have identified no legislation providing that the State has

waived its Eleventh Amendment immunity for violations of a bankruptcy court’s

discharge injunction or automatic stay. However, in the absence of explicit consent by

state statute or constitutional provision, a state may consent to a federal court’s

jurisdiction through its affirmative conduct. See Gardner v. New Jersey, 329 U.S. 565,

New Jersey” and “merely codifies an existing equitable circumstance under
which a state can choose to preserve its immunity by not participating in a
bankruptcy proceeding or to partially waive that immunity by filing a claim”); In
re Creative Goldsmiths, 119 F.3d at 1147 (acknowledging that § 106(b) “may
correctly describe those actions that, as a matter of constitutional law, constitute
a state’s waiver of the Eleventh Amendment”); Aer-Aerotron, 104 F.3d at 683
(Niemeyer, J., concurring) (concluding that although § 106 “may restate the law
of Eleventh Amendment waiver, it does not establish the law on the subject”).
       9
       The Georgia Constitution provides in relevant part that:
              (e) Except as specifically provided in this Paragraph, sovereign
      immunity extends to the state and all of its departments and agencies. The
      sovereign immunity of the state and its departments can only be waived by an
      Act of the General Assembly which specifically provides that sovereign
      immunity is thereby waived and the extent of such waiver.
              (f) No waiver of sovereign immunity under this Paragraph shall be
      construed as a waiver of any immunity provided to the state or its departments,
      agencies, officers, or employees by the United States Constitution.
Ga. Const. Art. I., § II, Para. IX (Supp. 1997).

                                              9
573-74, 67 S. Ct. 467, 472 (1947); Schlossberg v. Maryland Comptroller of the Treasury

(In re Creative Goldsmiths of Washington, D.C., Inc.), 119 F.3d 1140, 1148-49 (4th Cir.

1997), cert. denied, 118 S. Ct. 1517 (1998).10

       10
          In In re Creative Goldsmiths, 119 F.3d at 1148-49, the court analyzed Maryland
constitutional and statutory law and concluded that Maryland law did not indicate a
waiver of the state’s Eleventh Amendment immunity nor grant the Maryland Attorney
General the power to waive that immunity by defending a case on the merits. However,
after undertaking this analysis, the court separately considered whether the state’s filing
of a proof of claim in the debtor’s bankruptcy proceeding constituted consent to the
trustee in bankruptcy’s suit in federal court seeking to recover income taxes paid to the
state. Id. at 1149. The court reasoned that if the state official has authority under state
law to file a proof of claim in the debtor’s bankruptcy proceeding and thus initiate a
federal action, then the court would “look to federal law to determine the scope of waiver
attending the state’s federal suit.” Id. at 1148. The court explained that
       The Eleventh Amendment . . . presents no bar to a state affirmatively
       entering a federal forum voluntarily to pursue its own interest. But it would
       violate the fundamental fairness of judicial process to allow a state to
       proceed in federal court and at the same time strip the defendant of valid
       defenses because they might be construed to be affirmative claims against
       the state. . . . For this reason, we hold that to the extent a defendant’s
       assertions in a state-instituted federal action, including those made with
       regard to a state-filed proof of claim in a bankruptcy action, amount to a
       compulsory counterclaim, a state has waived any Eleventh Amendment
       immunity against that counterclaim in order to avail itself of the federal
       forum.
Id. Applying these principles, the court concluded that the trustee’s adversary action
against the State of Maryland to avoid the payment of the debtor’s corporate income
taxes did not “arise out of the same transaction or occurrence supporting Maryland’s
proof of claim for unrelated [sales and withholding] taxes” and thus the trustee’s action
could not be “construed under federal law as a claim in the nature of a compulsory
counterclaim to the state’s proof of claim.” Id. at 1149 (emphasis added). Therefore, the
court held that it did not have authority to entertain the action by the trustee. Id. at 1150.
      Unlike in In re Creative Goldsmiths, the debtors’ adversary action in the
instant case involves the same state income taxes that the State of Georgia
sought to recover by filing proofs of claim in the debtors’ respective bankruptcy
proceedings. Therefore, we conclude that the debtors’ actions for violation of the
automatic stay and discharge injunction “arise out of the same transaction or
                                              10
       In Gardner v. New Jersey, 329 U.S. 565, 67 S. Ct. 467 (1947), the Supreme

Court addressed the effect of filing a proof of claim in a bankruptcy proceeding on a

state’s assertion of Eleventh Amendment immunity. In that case, the State of New

Jersey filed a proof of claim for unpaid taxes against the debtor. Id. at 570, 67 S. Ct. at

470. After the debtor and various creditors filed objections to the state’s claim, the

trustee in bankruptcy filed a petition for adjudication of the conflicting claims with the

bankruptcy court. Id. at 571, 67 S. Ct. at 470. The Attorney General of New Jersey

thereupon entered a special appearance in the proceedings, contending that the petition

“would constitute a prohibited suit against the State.” Id. In rejecting New Jersey’s

sovereign immunity argument, the Court concluded that

       It is traditional bankruptcy law that he who invokes the aid of the
       bankruptcy court by offering a proof of claim and demanding its allowance
       must abide the consequences of that procedure. If the claimant is a State,
       the procedure of proof and allowance is not transmitted into a suit against
       the State because the court entertains objections to the claim. The State is
       seeking something from the debtor. No judgment is sought against the
       State. . . . When the State becomes the actor and files a claim against the
       fund it waives any immunity which it otherwise might have had respecting
       the adjudication of the claim.

Id. at 573-74, 67 S. Ct. at 472 (citation omitted). See New York v. Irving Trust Co., 288

U.S. 329, 332, 53 S. Ct. 389, 391 (1933) (concluding that “[i]f a state desires to

participate in the assets of a bankrupt, she must submit to appropriate requirements by the

controlling power; otherwise, orderly and expeditious proceedings would be

occurrence” as the State’s proofs of claim. See, e.g., In re Price, 42 F.3d 1068,
1073-74 (7th Cir. 1994); In re Pinkstaff, 974 F.2d 113, 115 (9th Cir. 1992).
                                             11
impossible”); see also Clark v. Barnard, 108 U.S. 436, 447-48, 2 S. Ct. 878, 883 (1883)

(holding that the State of Rhode Island had waived its sovereign immunity by voluntarily

intervening as a claimant to a bankruptcy fund paid into federal court).11

       We conclude that the Court’s reasoning in Gardner applies to the instant cases.

See Dekalb County Div. of Family and Child Servs. v. Platter (In re Platter), 140 F.3d

676 (7th Cir. 1998) (applying Gardner and rejecting the State of Indiana’s Eleventh

Amendment immunity defense because a state agency had initiated an adversary

proceeding in bankruptcy court against the debtor seeking a ruling that the debt owed

to the agency was nondischargeable). In In re Headrick, the State of Georgia invoked

the aid of the bankruptcy court by filing a proof of claim for unpaid state income taxes

in the Headricks’ bankruptcy proceeding. However, after the bankruptcy court entered

an automatic stay order in the case to prevent creditors from attempting to collect on

the Headricks’ debts, the State sent a collection notice and official assessment to the

Headricks. We conclude that the substance of the Headricks’ action is a motion to

enforce the bankruptcy court’s automatic stay order. Enforcement of this order is

merely the bankruptcy court’s exercise of its jurisdiction over the State in the course of

adjudicating the proof of claim filed by the State in the Headricks’ bankruptcy

       11
         In a recent decision, the Fifth Circuit Court of Appeals concluded that Seminole
Tribe “does not and should not impair [the] force” of Gardner and Irving Trust. Texas v.
Walker, 142 F.3d 813 (5th Cir. 1998) (relying on Gardner and Irving Trust in holding that,
although the state did not file a proof of claim in the debtor’s bankruptcy proceeding, the
debtor could raise discharge as an affirmative defense against the state’s suit on the debt)

                                               12
proceeding. Similarly, in In re Burke, the Burkes’ action is in substance one to enforce

the discharge injunction entered by the bankruptcy court. We note that in In re Burke,

the State of Georgia sent a demand letter to the Burkes after the Burkes’ bankruptcy

proceeding was closed. Therefore, the Burkes reopened their bankruptcy case in order

to file an adversary action against the State. We conclude that the bankruptcy court

retained jurisdiction over the State in order to enforce the judgment it had entered as

part of adjudicating the State’s claim in the Burkes’ bankruptcy case.

       The Supreme Court’s decision in Gardner establishes that, by filing a proof of

claim in the debtors’ respective bankruptcy proceedings, the State waived its sovereign

immunity for purposes of the adjudication of those claims. We hold that this waiver

includes the bankruptcy court’s enforcement of the discharge injunction and the

automatic stay in the instant cases. We believe that the enforcement of the bankruptcy

court’s orders in both of the instant cases falls easily within the waiver of immunity

“respecting the adjudication of the claim” found by the Supreme Court in Gardner, 329

U.S. at 574, 67 S. Ct. at 472. We emphasize that our holding regarding the State’s

waiver of Eleventh Amendment immunity is quite narrow because the debtors

seriously seek to recover only the costs and attorneys’ fees incurred in enforcing the

bankruptcy court’s automatic stay and discharge injunction.12 Therefore, addressing

       12
          The district court noted that “the Burkes and the Headricks will have difficulty
proving that they suffered any real damage from the Revenue Department’s actions, which
amounted to nothing more than sending a few collection letters. Perhaps only nominal
damages will flow from the Revenue Department’s actions.” District Court Order, at 8 n.3
(July 23, 1997). At oral argument, the debtors’ attorney conceded that there was no indication

                                              13
only the live issues in this case, we hold that the State of Georgia has waived its

Eleventh Amendment immunity to the extent of the attorneys’ fees and costs incurred

by the debtors in enforcing the bankruptcy court’s automatic stay and discharge

injunction.13

                                     III. CONCLUSION

       For the foregoing reasons, we affirm the district court’s affirmance of the

bankruptcy court’s orders denying the State of Georgia’s motion to dismiss in In re

Burke and its motion for summary judgment in In re Headrick.

       AFFIRMED.

that damages in the two cases would go beyond the costs and attorneys’ fees incurred in
enforcing the bankruptcy court’s automatic stay and discharge injunction.
       13
          In dicta, the court in In re Creative Goldsmiths, 119 F.3d at 1148, indicated that “to
the extent a defendant’s assertions in a state-instituted federal action, including those made
with regard to a state-filed proof of claim in a bankruptcy action, amount to a compulsory
counterclaim, a state has waived any Eleventh Amendment immunity against the counterclaim
in order to avail itself of the federal forum.” In the instant case, we need not address whether
the scope of the State’s waiver of Eleventh Amendment immunity extends to the full scope
indicated by the Fourth Circuit in In re Creative Goldsmiths.

                                               14