Supreme Court weighs whether bankruptcy waiver lets trustees sue government over old transfers

The Supreme Court heard argument in United States v. Miller on whether a bankruptcy trustee may use 11 U.S.C. §544(b) to recover transfers to the United States when sovereign immunity would have blocked a state‑law avoidance suit outside bankruptcy.

Miss Dubin, counsel (first argument), told the court that "this trustee's claim is time barred," and that the trustee's reliance on §544(b) fails because that provision permits the trustee to "step into the creditor's shoes" only when a real‑world creditor could have avoided the transfer under state law. She said §106(a) is a waiver of sovereign immunity for listed code sections but "plainly does not waive immunity for a state law claim outside bankruptcy," and it does not alter the substantive prerequisites of the incorporated provisions.

The government's argument focused on the interaction between §548, which generally carries a two‑year federal lookback, and §544(b), which incorporates state law avoidability and in many…