AZ ICA Dischargeable in Bankruptcy

The Federal Court of Appeals for the 9th Circuit has ruled the Industrial Commission of Arizona (ICA) can be discharged as a debtor where an employer has filed bankruptcy and the ICA sought reimbursement through the bankruptcy proceedings thereby waiving its sovereign immunity. In State of Arizona v. Bliemeister, No. 01-16058 (07/19/02), the employer did not have workers' compensation insurance. An employee was injured and the State picked up benefits, later seeking reimbursement from the employer. The employer sought to discharge the obligation under Chapter 7 of the US Bankruptcy Code. The...