WPCf  efA Z,l moCóZE{>yQklFw_[\ɗO+ Mv>+&Rx1JQ;ԣreNgT-5v/(ëӥJa(~S75!.=Lz䶒sⅢ7bC+C.'w pXoVN+d"an#<%KP.(8K06"+ ueE3  Ğ¥:+LyxV:eH-I_){D,ޝwIWث<zWʊbT\If8y(Իͱ&T^j/)7*5 %I 0(O U:w b   N^ Yw@e4 0Db  0DKXEt m2ES; E!N##n+-..m1m122S3LV4}5+8lJ; <??tZGZGJJ {L{LLNN}OO+ORORzUzUU>YlEYEY\ZZZ{ _ _ _ _bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb B NcNc 0Dkc D3cccccccc 0ccccccccccccccccccccccccc 0Dododod AQde 0DeHP LaserJet 4,,,,,,0<\( 9Z+&Courier RegularX($,`  "CG Times Bold- -   _$XAXXX    13    _Thisisnottosaythatanentityfilingaclaimwiththe  bankruptcycourtmustforfeittheentirepanoplyofconstitutionalrights.Yet,evenifthiswereacaseofwaiverbyastate'sparticipationinafederalprogram(asinthesecondcategoryofwaivernotedabove),itwouldnotbeimpermissibleundertheEleventhAmendment."XAXXXACf.Dole,483U.S.at211(notingthat"in  somecircumstancesthe...inducementofferedbyCongressmightbesocoerciveastopassthepointatwhichpressureturnsintocompulsion")(citationandquotationsomitted).#XAXX"XA#ԀThestate,which  @ mightotherwiserecovernothingfromaninsolventdebtor,receivesasubstantialbenefitinexchangeforitspartialwaiverofsovereignimmunity.Thus,wethinkthequidproquofortheState'swaiverofimmunityisnotsocoerciveastoraiseconstitutional_concerns.___   _$XAXXX    7    _Thatprovision,formersection106(a)oftheBankruptcyCode,  stated:"Agovernmentalunitisdeemedtohavewaivedsovereignimmunitywithrespecttoanyclaimagainstsuchgovernmentalunitthatispropertyoftheestateandthataroseoutofthesametransactionoroccurrenceoutofwhichsuchgovernmentalunit'sclaimarose."11U.S.C.A.106(a)(1982)(superseded).]+ LQDRSTEUVEWXEYT%+ Ba3|xY(3$ !  - -($  *   A_  _XAXXX    11    Indeed,thecourtinCollegeSavingscouldhavelimitedthe  importofGardnerbycharacterizingitasadecisionthatdoesnot x implicatetheEleventhAmendmentatall.Thatis,itcouldhavestatedthatthedefensiveobjectiontothestate'sproofofclaimatissueinGardnerwassimplynota"suit...commencedor   prosecutedagainst...[a]State"withinthemeaningoftheEleventhAmendment.Cf.Gardner,329U.S.at57374("Ifthe `  claimantisaState,theprocedureofproofandallowanceisnottransmutedintoasuitagainsttheStatebecausethecourtentertainsobjectionstotheclaim."). j  _$XAXXX    5    _Thepartiestothisappealdonotchallengethelowercourt's  conclusionthatCongresslackstheauthoritytoabrogatePuertoRico'sEleventhAmendmentimmunitypursuantto106(a).SeeInre @ SacredHeartHosp.,133F.3d237,243(3dCir.1998)(holdingthat X 106(a)isnotavalidabrogationprovision).ButseeInreHood,   262B.R.412,414(6thCir.BAP2001)(holdingthat106(a)does   notoffendtheEleventhAmendmentbecauseCongressmayvalidlyabrogateastate'sEleventhAmendmentimmunitybylegislatingpursuanttothepowertoestablishuniformbankruptcylaws,U.S.Const.art.I,8,cl.4).U  $XMXXX    2    _TheEleventhAmendmentprovides:"TheJudicialpowerofthe  UnitedStatesshallnotbeconstruedtoextendtoanysuitinlaworequity,commencedorprosecutedagainstoneoftheUnitedStatesbyCitizensofanotherState,orbyCitizensorSubjectsofanyForeignState."U.S.Const.amend.XI.Ithaslongbeenestablishedthat,notwithstandingitsliterallanguage,theEleventhAmendmentextendstobarsuitsinstitutedinfederalcourtsagainstastatebyitsowncitizens.SeeHansv.Louisiana, ( x 134U.S.1(1890). ;  _$XAXXX    1    _Section106(b)oftheBankruptcyCodeprovidesthatthefiling  ofaproofofclaiminfederalbankruptcycourtby"[a]governmentalunit...isdeemed[tobea]waiverofsovereignimmunitywithrespecttoaclaimagainstsuchgovernmentalunitthatispropertyoftheestateandthataroseoutofthesametransactionoroccurrenceoutofwhichtheclaimofsuchgovernmentalunitarose."11U.S.C.A.106(b)(WestSupp.2001). I  _$XAXXX    4    _Section106(a)statesinpart:"Notwithstandinganassertionof  sovereignimmunity,sovereignimmunityisabrogatedastoagovernmentalunit..."11U.S.C.A.106(a)(WestSupp.2001). ; $XMXXX    1    _Section106(b)oftheBankruptcyCodeprovidesthatthefiling  ofaproofofclaiminfederalbankruptcycourtby"[a]governmentalunit...isdeemed[tobea]waiverofsovereignimmunitywithrespecttoaclaimagainstsuchgovernmentalunitthatispropertyoftheestateandthataroseoutofthesametransactionoroccurrenceoutofwhichtheclaimofsuchgovernmentalunitarose."11U.S.C.A.106(b)(WestSupp.2001).   _$DXAXXX    15    _ConsistentwithGardner,severalcircuitshaverecognizedthat  astate'sdecisiontoinvokethebankruptcycourt'sjurisdictionwilleffectsomewaiverofEleventhAmendmentimmunity.WiththeexceptionoftheSeventhCircuit,however,thosecourtshaveyettodecidewhetherthescopeofwaiverextendstocounterclaimsthatwouldpermitaffirmativerecoveryagainstthestate.Butcf.Inre   FriendshipMedicalCenter,Ltd.,710F.2d1297,1301(7thCir.  1983)(holdingthatscopeofwaiverextendsonlytocounterclaimsinthenatureofoffsetorrecoupment).WefindnothinginthelanguageofthedecisionsoftheNinth,Eighth,orEleventhCircuitsthatwouldbeincompatiblewithourdecisionhereorourpriorholdinginWJM.See,e.g.,InreLazar,237F.3dat  978("[_W]hen_Ԁastateoran'armofthestate'filesaproofofclaiminabankruptcyproceeding,thestatewaivesitsEleventhAmendmentimmunitywithregardtothebankruptcyestate'sclaimsthatarisefromthesametransactionoroccurrenceasthestate'sclaim.");In    reRose,187F.3d926,930(8thCir.1999)("[TheMissouristate    agency's]submissionofproofsofclaimsin[thedebtor's]bankruptcycasewaiveditsimmunityinrelatedproceedingsrequiredtoadjudicatethe_dischargeability_Ԁofthoseclaims.");InreBurke, (  146F.3d1313,1319(11thCir.1998)("[_B]y_Ԁfilingaproofofclaiminthedebtors'respectivebankruptcyproceedings,theStatewaiveditssovereignimmunityforthepurposesoftheadjudicationofthoseclaims.").   _$XAXXX    6    _"[_P]retrial_ԀordersgrantingordenyingEleventhAmendment  immunity[are]immediatelyappealable."_Metcalf_Ԁ&Eddyv.Puerto x RicoAqueduct&SewerAuth.,991F.2d935,937(1stCir.1993). _  _XAXXX    3    ItiswellsettledinthiscircuitthattheCommonwealthof  PuertoRico"isprotectedbytheEleventhAmendmenttothesameextentasanystate...."Ortiz-Felicianov.Toledo-Dvila,175 @ F.3d37,39(1stCir.1999).   _$ XAXXX    2    _TheEleventhAmendmentprovides:"TheJudicialpowerofthe  UnitedStatesshallnotbeconstruedtoextendtoanysuitinlaworequity,commencedorprosecutedagainstoneoftheUnitedStatesbyCitizensofanotherState,orbyCitizensorSubjectsofanyForeignState."U.S.Const.amend.XI.Ithaslongbeenestablishedthat,notwithstandingitsliterallanguage,theEleventhAmendmentextendstobarsuitsinstitutedinfederalcourtsagainstastatebyitsowncitizens.SeeHansv.Louisiana, ( x 134U.S.1(1890). _  _$XAXXX    3    ItiswellsettledinthiscircuitthattheCommonwealthof  PuertoRico"isprotectedbytheEleventhAmendmenttothesameextentasanystate...."Ortiz-Felicianov.Toledo-Dvila,175 @ F.3d37,39(1stCir.1999).  I  _$,XAXXX    4    _Section106(a)statesinpart:"Notwithstandinganassertionof  sovereignimmunity,sovereignimmunityisabrogatedastoagovernmentalunit..."11U.S.C.A.106(a)(WestSupp.2001). B  _$XAXXX    8    _Indeed,thenChiefJudgeCampbellnotedinWJMthatPardenwas  likelyripeforapartialoverrulingbytheSupremeCourt.See840 x F.2dat1002n.6. s  _$XAXXX    9    _Astate'sEleventhAmendmentimmunitymayalsobeabrogatedby  congressionalenactment,providedhoweverthatCongressexpressesitsunequivocalintentiontodosoandactspursuanttoavalidgrantofconstitutionalauthority.SeeLarov.NewHampshire,259 X F.3d1,5(1stCir.2001)(quotingBoardofTrs.oftheUniv.of   Ala.v._Garrett_,531U.S.356,,121S.Ct.955,962(2001)). !  _$XAXXX    10    _Astateofficialmayonlywaivethestate'ssovereignimmunity  duringthecourseoflitigationwherespecificallyauthorizedtodosobythatstate'sconstitution,statutes,ordecisions.SeeFord @ MotorCo.v._Dep't_ԀofTreasury,323U.S.459,469(1945)(holding X thatstateofficiallackedauthorizationtovoluntarilywaivethestate'sEleventhAmendmentimmunity).Onappeal,theCommonwealthhasnotpressedtheargumentthatitsofficialslackedtheauthorityunderthelawsofPuertoRicotowaivetheprotectionsoftheEleventhAmendmentinabankruptcyproceeding. b  _$XAXXX    12    _Bycontrast,inCollegeSavingsthecourtnotedthatthe  constructivewaivermechanismrejectedinthatcaseis"simplyunheardofinthecontextofotherconstitutionallyprotectedprivileges."527U.S.at681.   _$XAXXX    14    _AlthoughtheFourthCircuitupheldthesubstanceof106(b),  itstatedindictumthat:"While11U.S.C.106(b)maycorrectlydescribethoseactionsthat,asamatterofconstitutionallaw,constituteastate'swaiveroftheEleventhAmendment,itisneverthelessnotwithinCongress'powertoabrogatesuchimmunityby'deeming'awaiver."SeeInreCreativeGoldsmiths,119F.3dat  1147.WhetherCongresslackstheauthoritytousecertainlanguageincodifyinganexistingprincipleofwaiverisnotaquestionthatwouldaltertheoutcomeofthiscase.Wethereforeneednotaddressit.   _$XAXXX    15    _ConsistentwithGardner,severalcircuitshaverecognizedthat  astate'sdecisiontoinvokethebankruptcycourt'sjurisdictionwilleffectsomewaiverofEleventhAmendmentimmunity.WiththeexceptionoftheSeventhCircuit,however,thosecourtshaveyettodecidewhetherthescopeofwaiverextendstocounterclaimsthatwouldpermitaffirmativerecoveryagainstthestate.Butcf.Inre   FriendshipMedicalCenter,Ltd.,710F.2d1297,1301(7thCir.  1983)(holdingthatscopeofwaiverextendsonlytocounterclaimsinthenatureofoffsetorrecoupment).WefindnothinginthelanguageofthedecisionsoftheNinth,Eighth,orEleventhCircuitsthatwouldbeincompatiblewithourdecisionhereorourpriorholdinginWJM.See,e.g.,InreLazar,237F.3dat  978("[_W]hen_Ԁastateoran'armofthestate'filesaproofofclaiminabankruptcyproceeding,thestatewaivesitsEleventhAmendmentimmunitywithregardtothebankruptcyestate'sclaimsthatarisefromthesametransactionoroccurrenceasthestate'sclaim.");In    reRose,187F.3d926,930(8thCir.1999)("[TheMissouristate    agency's]submissionofproofsofclaimsin[thedebtor's]bankruptcycasewaiveditsimmunityinrelatedproceedingsrequiredtoadjudicatethe_dischargeability_Ԁofthoseclaims.");InreBurke, (  146F.3d1313,1319(11thCir.1998)("[_B]y_Ԁfilingaproofofclaiminthedebtors'respectivebankruptcyproceedings,theStatewaiveditssovereignimmunityforthepurposesoftheadjudicationofthoseclaims."). j  _$.XAXXX    5    _Thepartiestothisappealdonotchallengethelowercourt's  conclusionthatCongresslackstheauthoritytoabrogatePuertoRico'sEleventhAmendmentimmunitypursuantto106(a).SeeInre @ SacredHeartHosp.,133F.3d237,243(3dCir.1998)(holdingthat X 106(a)isnotavalidabrogationprovision).ButseeInreHood,   262B.R.412,414(6thCir.BAP2001)(holdingthat106(a)does   notoffendtheEleventhAmendmentbecauseCongressmayvalidlyabrogateastate'sEleventhAmendmentimmunitybylegislatingpursuanttothepowertoestablishuniformbankruptcylaws,U.S.Const.art.I,8,cl.4).   _$0XAXXX    6    _"[_P]retrial_ԀordersgrantingordenyingEleventhAmendment  immunity[are]immediatelyappealable."_Metcalf_Ԁ&Eddyv.Puerto x RicoAqueduct&SewerAuth.,991F.2d935,937(1stCir.1993).   _$2XAXXX    7    _Thatprovision,formersection106(a)oftheBankruptcyCode,  stated:"Agovernmentalunitisdeemedtohavewaivedsovereignimmunitywithrespecttoanyclaimagainstsuchgovernmentalunitthatispropertyoftheestateandthataroseoutofthesametransactionoroccurrenceoutofwhichsuchgovernmentalunit'sclaimarose."11U.S.C.A.106(a)(1982)(superseded). B  _$4XAXXX    8    _Indeed,thenChiefJudgeCampbellnotedinWJMthatPardenwas  likelyripeforapartialoverrulingbytheSupremeCourt.See840 x F.2dat1002n.6. s  _$6XAXXX    9    _Astate'sEleventhAmendmentimmunitymayalsobeabrogatedby  congressionalenactment,providedhoweverthatCongressexpressesitsunequivocalintentiontodosoandactspursuanttoavalidgrantofconstitutionalauthority.SeeLarov.NewHampshire,259 X F.3d1,5(1stCir.2001)(quotingBoardofTrs.oftheUniv.of   Ala.v._Garrett_,531U.S.356,,121S.Ct.955,962(2001)). !  _$8XAXXX    10    _Astateofficialmayonlywaivethestate'ssovereignimmunity  duringthecourseoflitigationwherespecificallyauthorizedtodosobythatstate'sconstitution,statutes,ordecisions.SeeFord @ MotorCo.v._Dep't_ԀofTreasury,323U.S.459,469(1945)(holding X thatstateofficiallackedauthorizationtovoluntarilywaivethestate'sEleventhAmendmentimmunity).Onappeal,theCommonwealthhasnotpressedtheargumentthatitsofficialslackedtheauthorityunderthelawsofPuertoRicotowaivetheprotectionsoftheEleventhAmendmentinabankruptcyproceeding. _  _:XAXXX    11    ;XAXXXAIndeed,thecourtinCollegeSavingscouldhavelimitedthe  importofGardnerbycharacterizingitasadecisionthatdoesnot x implicatetheEleventhAmendmentatall.Thatis,itcouldhavestatedthatthedefensiveobjectiontothestate'sproofofclaimatissueinGardnerwassimplynota"suit...commencedor   prosecutedagainst...[a]State"withinthemeaningoftheEleventhAmendment.Cf.Gardner,329U.S.at57374("Ifthe `  claimantisaState,theprocedureofproofandallowanceisnottransmutedintoasuitagainsttheStatebecausethecourtentertainsobjectionstotheclaim.").#:XAXXXAu#<\( 9Z+&Courier Regular b  _$=XAXXX    12    _Bycontrast,inCollegeSavingsthecourtnotedthatthe  constructivewaivermechanismrejectedinthatcaseis"simplyunheardofinthecontextofotherconstitutionallyprotectedprivileges."527U.S.at681. R  _$?XAXXX    13    _Thisisnottosaythatanentityfilingaclaimwiththe  bankruptcycourtmustforfeittheentirepanoplyofconstitutionalrights.Yet,evenifthiswereacaseofwaiverbyastate'sparticipationinafederalprogram(asinthesecondcategoryofwaivernotedabove),itwouldnotbeimpermissibleundertheEleventhAmendment.@XAXXXACf.Dole,483U.S.at211(notingthat"in  somecircumstancesthe...inducementofferedbyCongressmightbesocoerciveastopassthepointatwhichpressureturnsintocompulsion")(citationandquotationsomitted).#?XAXX"XA#ԀThestate,which  @ mightotherwiserecovernothingfromaninsolventdebtor,receivesasubstantialbenefitinexchangeforitspartialwaiverofsovereignimmunity.Thus,wethinkthequidproquofortheState'swaiverofimmunityisnotsocoerciveastoraiseconstitutionalconcerns. q  _$BXAXXX    14    _AlthoughtheFourthCircuitupheldthesubstanceof106(b),  itstatedindictumthat:"While11U.S.C.106(b)maycorrectly x describethoseactionsthat,asamatterofconstitutionallaw,constituteastate'swaiveroftheEleventhAmendment,itisneverthelessnotwithinCongress'powertoabrogatesuchimmunityby'deeming'awaiver."CXAXXXASeeInreCreativeGoldsmiths,119F.3dat  1147#BXAXXXA#.WhetherCongresslackstheauthoritytousecertainlanguage `  incodifyinganexistingprincipleofwaiverisnotaquestionthatwouldaltertheoutcomeofthiscase.Wethereforeneednotaddressit.Level 1Level 2Level 3Level 4Level 5 d(3$ !  yyyy'dxd(J2$ !  XͤXXX    0  (3$ !  {|C<<CLevel 1Level 2Level 3Level 4Level 5($$   1  !  _XAXXXXXA8ͤXXdd8  *!@p p UnitedStatesCourtofAppeals  #@ FortheFirstCircuit  h#XͤXhAy) ` dE<` A H No.001774@| | _ARECIBO_ԀCOMMUNITYHEALTHCARE,INC.,@<< Plaintiff,Appellee,@tt)v.@COMMONWEALTHOFPUERTORICO,DEPARTMENTOFHEALTHAND@  THEADMINISTRATIONOFHEALTHSERVICES,@Defendants,Appellants,@\ \ CARLOSE._RODR0GUEZ_-_QUESADA_,@!Trustee,Appellee.Ay) ` dE<` A g @ APPEALFROMTHEUNITEDSTATESDISTRICTCOURT@l l FORTHEDISTRICTOFPUERTORICO@[Hon.SalvadorE._Casellas_,U.S.DistrictJudge] ~ Ay) ` dE< ` A ^ @'Before@Torruella,CircuitJudge, u @ Coffin,SeniorCircuitJudge, =  @ andCampbell,SeniorCircuitJudge. U! Ay) ` dE<` A #     _Leticia_Ԁ_Casalduc_Ԅ_Rabell_,AssistantSolicitorGeneral,with l % whomRobertoJ._Snchez_ԄRamos,SolicitorGeneral,andVanessaLugo 4!& Flores,DeputySolicitorGeneral,wereonbrief,forappellants. !L'   Craig_Goldblatt_,withwhomAnne_Harkavy_,_Wilmer_,Cutler& "( Pickering,JohnnyRivera_Gonzles_,IgorJ._Domnguez_,andCarlosE. #) _Rodrguez_Ԅ_Quesada_,wereonbrief,forappellee. T$*   MarkB.Stern,Attorney,CivilDivision,Departmentof %l + Justice,withwhomStuartE._Schiffer_,ActingAssistantAttorney %4!, General,GuillermoGil,UnitedStatesAttorney,andH.ThomasByron &!- III,Attorney,CivilDivision,DepartmentofJustice,wereon t'". brief,fortheUnitedStatesofAmerica,amicuscuriae.Ay) ` dE<)` A )%1 R@,,"RSOcSTSotSTUtoUSber2SVS5SVXW6WXY9YS,2001SAy) ` d E<2,` A 3,'5 @<<  OPINIONONREHEARING   -Z(7 _  *!Q=AXdd=Q'X` P X' ` TORRUELLA,CircuitJudge. Thisappealrequiresusto  determinethevalidityof106(b)oftheBankruptcyCode,11U.S.C.106(b),LLLL   1      ׀inlightoftheSupremeCourt'smostrecent  p EleventhAmendmentjurisprudence.LLLL   2      ׀Uponinitialreview,we   concludedthat106(b)wasconstitutionallyinfirm.Afterrehearingandhelpfulsupplementalbriefing,however,wereachadifferentdeterminationandconcludethatourearlierdecisionmisinterpretedrecentSupremeCourtprecedentand,indoingso,failedtoaccordpropercontrollingvaluetoanextantdecisionofthiscircuit. ` Wethereforevacateourearlierdecisionandaffirmthedistrictcourt'sholdingthatuponappellants'filingaproofofclaiminthebankruptcycourt,theyarenotshieldedbytheEleventhAmendmentfromcompulsorycounterclaimsarisingfromthesametransactionoroccurrenceaswasthesubjectoftheproofofclaim.  p _@# I.Background    ` InMarch1984,thePuertoRicoDepartmentofHealth(the"Department")andtheAdministrationofHealthFacilities("_AFASS_")τbothofwhichareinstrumentalitiesoftheCommonwealthofPuertoRicoexecutedaseriesofcontractswithaprivateentity,_Arecibo_ԀCommunityHealthCare,Inc.("_ACHI_"),fortheadministrationofthe_Arecibo_ԀRegionalHospital,agovernment-ownedhospitalin_Arecibo_,PuertoRico.Thelastofthesecontractswasterminatedin1991. ` OnJune30,1991,theDepartmentfiledsuitagainst_ACHI_intheSuperiorCourtofPuertoRico.Thecomplaintallegedthat_ACHI_ԀhadfailedtorenderservicespursuanttotheadministrationcontractwiththeDepartment.Thereafter,onJuly2,1991,_ACHI_filedavoluntarypetitionforbankruptcyunderChapter11oftheBankruptcyCode.Thebankruptcycourtdeterminedthatthecontractindisputehadbeenterminatedpriortothefilingofthepetition,whereupontheDepartmentand_AFASS_Ԁproceededtofileaproofofanunsecuredclaimfor_ACHI_'sbreachoftheadministrationcontract.Theclaimwasfortheamountof$1,650,449.16. ` ThebankruptcyproceedingwassubsequentlyconvertedtooneunderChapter7,andatrusteewasappointed.ThetrusteecommencedanadversaryactionagainsttheDepartmentand_AFASS_assertingvariousclaimsunderstatelaw.TheclaimsallegedlyarisefromthesamecontractandoperativefactsasboththeactionfiledbytheDepartmentinthePuertoRicocourtsandtheproofofclaimfiledinfederalbankruptcycourt.Thetrusteesoughtto ,`'2 recoverthesumof$8,204,494.48,interestaccruedsince1991,attorneys'fees,andlitigationcosts. ` IntheirAnswertotheComplaint,theDepartmentand_AFASS_Ԁ("appellants")assertedthatthetrustee'sclaimswerebarredbytheEleventhAmendment.LLL!L   3      ׀Thereaftertheymovedtodismissthe  @ actiononthisground.ThebankruptcycourtconcludedthattheholdinginSeminoleTribeofFloridav.Florida,517U.S.44,54 `  (1996)(holdingthatCongressmaynotabrogatethestate'sEleventhAmendmentimmunitypursuanttoitsArticleIpowers),requiredsuchanoutcomeandconcludedthatbothsections106(a)LLL%L   4      ׀and(b)were  invalidasappliedtoappellants.ThebankruptcycourtreasonedthatifCongresscouldnotabrogatethestates'EleventhAmendmentsovereignimmunityunderSeminoleTribe,itcouldnotdosobywhat p amountstoaconditionalwaiver.ItthusruledthatappellantscouldnotbedeemedtohavewaivedtheirEleventhAmendmentimmunitybytheirfilingofaproofofclaiminthiscase. ` Thedistrictcourtagreedwiththebankruptcycourtastotheinvalidityof106(a),LLL-L   5      ׀butconcludedthatthewaiverof @" immunityunder106(b)waspermissiblebecauseitwas"_premise[d_]...uponanaffirmativeactionbythestatetotakeadvantageof,andparticipatein,thebankruptcyprocess."Inre_Arecibo_Ԁ_Cmty_.   HealthCare,Inc.,233_B.R._Ԁ625,630(D.P.R.1999).Appellants `  requestedthatthedistrictcourtreconsideritsruling.Whilethisrequestwaspending,theSupremeCourtdecidedCollegeSavings    Bankv.FloridaPrepaid_Postsecondary_ԀEducationExpenseBoard,527 `  U.S.666(1999)(CollegeSavings).Thedistrictcourt,without   comment,declinedtoreconsideritsrulingthat106(b)wasvalid. ` Appellantsthenbroughttheircausetothiscourtbywayofaninterlocutoryappeal._LLL/L   6      _ԀInourinitialdecisionweheldthat P 106(b)violatestheEleventhAmendment.See_Arecibo_Ԁ_Cmty_.Health 0 Care,Inc.v.CommonwealthofP.R.,244F.3d241,245(1stCir. p 2001).Weconstrued106(b)tocreatea"constructivewaiver"ofastate'ssovereignimmunity.Id.NotingthattheSupremeCourt  hasrecentlyfoundconstructivewaiverinsufficienttodefeatsovereignimmunity,seeCollegeSavings,527U.S.at680,we   concludedthatCongresscouldnotconditionastate'swaiverofitsEleventhAmendmentprotectiononitsdecisiontoengageinthelawfulactoffilingaclaimwiththebankruptcycourt.See `"& _Arecibo_Ԁ_Cmty_.HealthCare,244F.3dat245. #@(  ` Afterwerenderedourdecision,_ACHI_Ԁ("appellee")andtheUnitedStatesmovedforrehearingandrehearingenbanc.Thepanelagreedtorehearthecase.@$ II.Analysis  `   A.Standardofreview  @   ` Whetherthedistrictcourtcorrectlyupheldtheconstitutionalityof106(b)andfoundthatappellantshadwaivedtheirEleventhAmendmentimmunityisanissueoflaw.Wethereforereviewthelowercourt'srulingdenovo.See_Metcalf_Ԁ&Eddy,Inc.   v.PuertoRicoAqueduct&SewerAuth.,991F.2d935,938(1stCir. ` 1993). B.Stare_decisis_    ` In_WJM_,Inc.v.MassachusettsDepartmentofPublic ` Welfare,840F.2d996(1stCir.1985),weheldthataformer @ BankruptcyCodeprovisionidenticalinallrelevantrespectstocurrent106(b)wasapermissiblemeansofobtainingastate'swaiverofsovereignimmunitywithrespecttocompulsorycounterclaimsarisingfromaproofofclaimfiledwiththebankruptcycourt.LLL1L   7      ׀Id.at1005.TheUnitedStatesandappellee !$ botharguethatweareboundbythisdecisionasamatterofstare_decisis_. $0 (  ` Theprinciplethatarulingoflawbyapanelofthiscourtisbindinguponsubsequentpanelsis"anintegralcomponentofourjurisprudence."Stewartv.DuraConstr.Co.,230F.3d461,   467(1stCir.2000).Adherenceto"ourprecedentbasedsystemofjusticeplacesapremiumonfinality,stability,andcertaintyinthelaw...."Id.(citing_Hubbard_v.UnitedStates,514U.S.    695,711(1995)).Adeparturefromstare_decisis_Ԁmustthereforebesupportedbysome"specialjustification."_Dickerson_v.United   States,530U.S.428,443(2000)(quotingUnitedStatesv.I.B.M. 0  Corp.,517U.S.843,856(1996)).   ` Wehaveidentifiedtwocircumstancesinwhichadeparturefromstare_decisis_Ԁmaybewarranted.Thefirstariseswhen"[_a]n_existingpaneldecisionmaybeunderminedbycontrollingauthority,subsequentlyannounced,suchasanopinionoftheSupremeCourt,anenbancopinion,orastatutoryoverruling."Williamsv.Ashland  _Eng'g_ԀCo.,45F.3d588,592(1stCir.1995).Inthesecond  p circumstance,"[_w]hen_ԀemergentSupremeCourtcaselawcallsintoquestionaprioropinionofanothercourt,thatcourtshouldpausetoconsideritslikelysignificancebeforegivingeffecttoanearlierdecision."CarpentersLocalUnionNo.26v.U.S.Fidelity `"& &Guar.Co.,215F.3d136,141(1stCir.2000). #@(  ` Inthiscase,appellantsdonotarguethattheearlierdecisionin_WJM_hasbeendirectlyoverruledbysubsequent '`", controllingauthority;rather,theycontendthattheSupreme Court'sdecisioninCollegeSavingsprovidesinterveningauthority 0*%0 that,attheveryleast,requiresthisCourttorevisitthesoundnessof_WJM_inlightofrecentjurisprudentialdevelopments. @   ` InCollegeSavings,thecourtaddressedaprivatesuit   againstanarmoftheStateofFloridaforallegedlyengaginginfalseandmisleadingadvertisingofitstuitionprepaymentplaninviolationof43(a)ofthe_Lanham_ԀAct,15U.S.C.A.1125(a)(1995).TheTrademarkRemedyClarificationAct("_TRCA_")amendedthe_Lanham_ԀActtoprovidethatstateentities"shallnotbeimmune,undertheeleventhamendment...fromsuitinFederalcourt...foranyviolationunderthisAct,"andthatremediesshallbeavailableagainststateentities"tothesameextentassuchremediesareavailable...inasuitagainst"nonstateentities.Pub.L.102280,3(b),106Stat.3567(1992)(codifiedin15U.S.C.A.1122(1995)). ` Relyingonthetheoryof"constructivewaiver"announcedin_Parden_v.TerminalRailwayoftheAlabamaStateDocks  p Department,377U.S.184(1964),thepetitionersinCollegeSavings   arguedthatthe_TRCA_ԀplacedthestateonadequatenoticethatitsunlawfulconductininterstatecommercewouldlegitimatelywaiveitsEleventhAmendmentimmunityfromprivatesuitsformonetarydamagesunderthe_Lanham_ԀAct.Thecourt,however,rejectedthepetitioners'constructivewaivertheoryandoverruled_Parden_.See % * CollegeSavings,527U.S.at680.Thecourtreasonedthata '`", constructivewaiverapproachisfundamentallyincompatiblewithits"casesrequiringthataState'sexpresswaiverofsovereignimmunitybeunequivocal."Id.(citingGreatN.LifeIns.Co.v. +'2 Read,322U.S.47(1944)).Thecourtalsorecognizedthatallowing  constructivewaiverswould,"asapracticalmatter,permitCongresstocircumventthe_antiabrogation_ԀholdingofSeminoleTribe."Id.   at683. ` Appellantsinthepresentcasecontendthat106(b)andtheholdingin_WJM_violatethecentralteachingofCollegeSavings    Єnamely,thatCongressmaynotsmuggleanabrogationprovisionpastthecourtsmerelybydressingituptonotifyastatethatitwillwaiveitsEleventhAmendmentimmunitybyengaginginacertainactivity.Cf.CollegeSavings,527U.S.at683(notingthat  "[_f]orced_Ԁwaiverandabrogationarenotevendifferentsidesofthesamecointheyarethesamesideofthesamecoin")._WJM_did 0 not,however,relyexplicitlyon_Parden_inaffirmingthevalidity p oftheBankruptcyCode'swaiverprovision.L&LL3L   8      ׀Nonetheless,certain P languageintheopinionparticularlythenumerousreferencestothe"notice"providedbythestatutemayrevealasoup onofrelianceonaconstructivewaiverapproach.Compare_WJM_,840F.2d   at1003("Thestatuteputsthestateonnoticethatifitchoosestoenterthefederalgovernment'sexclusivebankruptcypreservebyfilingaclaim,itmustpayaprice:apartialwaiverofitssovereignimmunity.")(footnoteomitted)withCollegeSavings,527 #@( U.S.at681("In[theconstructive-waiversituation],themostthatcanbesaidwithcertaintyisthattheStatehasbeenputonnoticethatCongressintendstosubjectittosuitsbroughtby (#. individuals.ThatisveryfarfromconcludingthattheStatemadeanaltogethervoluntarydecisiontowaiveitsimmunity.")(citationsandquotationsomitted).Wemustthereforeundertakeamoresearchinganalysisthantheordinaryoperationofstare_decisis_Ԁwouldpermit,inquiringwhetherthetheoryofwaiverembodiedby106(b)remainssoundinthewakeofCollegeSavings.     C.WaiverofEleventhAmendmentimmunity  `   ` Ithaslongbeenrecognizedthatastate'ssovereignimmunityis"apersonalprivilegewhichitmaywaiveatpleasure."_L'LL5L   9      _   Clarkv.Barnard,108U.S.436,447(1883)."Thedecisiontowaive ` thatimmunity,however,'isaltogethervoluntaryonthepartofthesovereignty.'"CollegeSavings,527U.S.at675(quotingBeersv. 0 Arkansas,61U.S.(20How.)527,529(1858)).Thus,the"testfor  determiningwhetheraStatehaswaiveditsimmunityfromfederal-courtjurisdictionisastringentone."_Atascadero_ԀState 0 Hosp.v._Scanlon_,473U.S.234,241(1985). p  ` AstatemaywaiveitsEleventhAmendmentimmunitybymakinga"'cleardeclaration'thatitintendstosubmititselftothejurisdictionofthefederalcourts."CollegeSavings,527U.S.  !p$ at676(quotingRead,322U.S.at54).Suchadeclarationmaybe "& expressed,forexample,inastatestatuteorconstitutionalprovision.However,inkeepingwiththeSupremeCourt'sadmonition % !* thatastate'sconsenttosuitinfederalcourtmustbe"statedbythemostexpresslanguageorbysuchoverwhelmingimplicationsfromthetextas[will]leavenoroomforanyotherreasonableconstruction,"Edelmanv.Jordan,415U.S.651,673(1974) `  (quotationsomitted),wehaveheldthat"'inorderforastatestatuteorconstitutionalprovisiontoconstituteawaiverofEleventhAmendmentimmunity,itmustspecifythestate'sintentiontosubjectitselftosuitinfederalcourt.'"_Acevedo_ԀL;pezv.   Police_Dep't_ԀofP.R.,247F.3d26,28(1stCir.2001)(quoting 0  _Atascadero_ԀStateHosp.,473U.S.at241).   ` Similarly,astatemayalsoexplicitlywaivetheprotectionsoftheEleventhAmendmentbychoosingtoparticipateinafederalprogramforwhichwaiverofimmunityisastatedcondition.SeeMillsv.Maine,118F.3d37,50(1stCir.1997) P (citing_Atascadero_ԀStateHosp.,474U.S.at241);Aldenv.Maine,  527U.S.706,755(1999)("Nor,subjecttoconstitutionallimitations,doestheFederalGovernmentlacktheauthorityormeanstoseektheStates'voluntaryconsenttoprivatesuits.")(citingSouthDakotav.Dole,483U.S.203(1987)).Mere  $ participationbyastateinafederalprogramdoesnot,however,establishthestate'sconsenttobesuedinfederalcourt;thestate'sdecisiontowaiveitsimmunityasaconditionofparticipatinginthefederalprogramalsorequires"'expresslanguageor...suchoverwhelmingimplicationsfromthetextas[will]leavenoroomforanyotherreasonableconstruction.D...DFFGDDGE...E'"Fla._Dep't_ԀofHealth&Rehabilitative_Servs_.v.Fla. +'2 NursingHomeAss'n,450U.S.147,150(1981)(per_curiam_)(quoting  Edelman,415U.S.at673). @  ` Lastly,astatemaywaiveitsimmunitythroughitsaffirmativeconductinlitigation._L(LL7L   10      _ԀSeePaulN.HowardCo.v. `  PuertoRicoAqueduct&SewerAuth.,744F.2d880,886(1stCir.  @ 1984).Mostpertinenttotheissuefacedhereisthemaximthatafederalcourt"willfindawaiver...iftheStatevoluntarilyinvokes[its]jurisdiction...."CollegeSavings,527U.S.at   67576(citingGunterv.AtlanticCoastLineRy.Co.,200U.S.273, 0  284(1906)).SeealsoClark,108U.S.at44748(holdingthat  statewaiveditsEleventhAmendmentimmunitybyinterveninginafederalcaseasaclaimantofafund). ` InGardnerv.NewJersey,329U.S.565(1947),the p SupremeCourtheldthatastate'ssovereignimmunitydidnotbaradebtorfromassertingdefensiveobjectionstoaproofofclaimfiledbythestateinabankruptcyproceeding.Thecourtreasoned:8 ` hewhoinvokestheaidofthebankruptcycourtbyofferingaproofofclaimanddemandingitsallowancemustabidetheconsequencesofthatprocedure....WhentheStatebecomestheactorandfilesaclaimagainstthefund,itwaivesanyimmunitywhichitotherwisemighthavehadrespectingtheadjudicationoftheclaim. ` x` x  #@( ]Id.at573-74.InCollegeSavings,theSupremeCourtaffirmedthe  vitalityoftheGardnerrule,stating:"[Gardner],whichheldthat @ abankruptcycourtcanentertainatrustee'sobjectionstoaclaimfiledbyaState,standsfortheunremarkablepropositionthataStatewaivesitssovereignimmunitybyvoluntarilyinvokingthejurisdictionofthefederalcourts."527U.S.at681n.3.Thisisabroadproposition,goingbeyondthepreciseholdingofGardner.L_LL9L   11      _Ԁ `  Wewouldnotlightlyconfineitsmeaningtotheexamplecited. ` DespiteitsexpressapprovalofGardner'swaiver 0  principle,appellantsreadCollegeSavingstorequireustohold  that_WJM_hasbecomeconstitutionallyuntenableandthat106(b) P mustbeinvalidated.Appellantsnotethecourt'sremarkthat:"[_W]e_ԀthinkwheretheconstitutionallyguaranteedprotectionoftheStates'sovereignimmunityisinvolved,thepointofcoercionisautomaticallypassed--andthevoluntarinessofwaiverdestroyed--whenwhatisattachedtotherefusaltowaiveistheexclusionoftheStatefromotherwiselawfulactivity."CollegeSavings,527   U.S.at687.Usingthisstatementastheirspringboard,appellantsurgeuponusthepremisethatthefilingofaproofofclaimwiththefederalbankruptcycourtis"otherwiselawfulactivity"thatis `"& nodifferentfromtheactivitythecourtinCollegeSavingsheldto  beinsufficientforwaiver,namely,"thevoluntaryandnonessentialactivityofsellingandadvertisingafor-profiteducationalinvestmentvehicleininterstatecommerce...."Id.at680.If `  thispremiseholdstrue,appellantsargue,106(b)mustberuledunconstitutional. ` Wedonotacceptappellants'contentionthatnorelevantdifferenceexistsbetweenengagingincommercialactivityandfilingaproofofclaiminafederalbankruptcycourt.Althoughitiscertainly"lawful"forastatetofileaproofofclaim,webelievethatcallinguponafederalcourt'sjurisdictionisfundamentallydifferent,forpurposesoftheEleventhAmendment,frommerelyconductingcommercialactivity.TheSupremeCourtitselfrecognizedinCollegeSavingsthatastaterelinquishesits P immunityundertheEleventhAmendment"if[it]voluntarilyinvokes[the]jurisdiction[ofthefederalcourts]...."Id.at67576.  p Indeed,thecourtfoundthispropositiontobesowellestablishedastobe"unremarkable."Id.at681n.3(citingGardnerv.New @" Jersey,329U.S.565(1947)).Cf.NewYorkv.IrvingTrustCo.,  $ 288U.S.329,333(1933)("Ifastatedesirestoparticipateintheassetsofabankrupt,shemustsubmittoappropriaterequirementsbythecontrollingpower...."). ` Theconclusionthatastate'sfilingofaproofofclaimmayvalidlyeffectapartialwaiverofitssovereignimmunityisfurtherbuttressedbythosecaseswhichholdthatotherconstitutionalrightsareconsideredtobewaivedbythesame +'2 mechanism.L)LL<L   12      ׀Forexample,anindividualwhofilesaproofofclaim  withthebankruptcycourtwaiveshisSeventhAmendmentrighttoajurytrialforarelatedpreferenceactionbroughtbythedebtor.See_Langenkamp_v._Culp_,498U.S.42,44(1990);seealso_Katchen_v. `  _Landy_,382U.S.323,33637(1966)(holdingthatalthoughcreditor  @ mightbeentitledtoajurytrialonthepreferenceissueifhepresentednoclaiminthebankruptcyproceedingandawaitedplenarysuitbythetrustee,heisnotsoentitledwhentheissuearisesaspartoftheprocessingofhisclaimsinthebankruptcyproceedings).Similarly,thefilingofaproofofclaimwaivesanindividual'sdueprocessrighttoinsistonminimumcontactswithintheforumstatebeforebeingsubjecttothecourt'sjurisdiction.L_LL>L   13      _Ԁ 0 SeeInre_PNP_ԀHoldingsCorp.,99F.3d910,911(9thCir.1996)(per p _curiam_).HH ` Insum,wedonotread106(b)torelyonthenowdiscreditedtheoryofconstructivewaiver.Instead,thatprovision  p drawsonthewellestablishedprincipleofequitythatastatewaivesitsEleventhAmendmentimmunitybyavailingitselfofthejurisdictionofthefederalcourts. D.Scopeofwaiver  `   ` Appellantsalsoarguethat,evenifthewaiverprincipleofGardnerremainssound,thescopeofwaiverpermittedinGardner    representstheveryouterlimitsofconstitutionality.See `  Gardner,329U.S.57374("IftheclaimantisaState,the @  procedureofproofandallowanceisnottransmutedintoasuitagainsttheStatebecausethecourtentertainsobjectionstotheclaim....NojudgmentissoughtagainsttheState.").Inotherwords,appellantstheorizethatanywaiverthatwouldpermitanaffirmativerecoveryfromthestate'scofferswouldexceedtheboundariesoftheEleventhAmendment. ` Yet,totheextentweareaskedtodeterminewhether106(b)permissiblywaivesastate'simmunityonlywithregardtodefensivecounterclaimsforrecoupment,orwhetherthatprovisionmaybeapplied,aswritten,toallowforabroaderaffirmativerecoveryfromthestate,webelieveboththattheprecedentialeffectof_WJM_isdecisiveonthisissueandthat,inanyevent, "& allowanceofabroaderaffirmativerecoveryisthelegallyandconstitutionallyappropriatewaytoconstruethescopeofthiswaiver.II ` NothinginCollegeSavingspurportstorestrictthe (@$. constitutionallypermissiblescopeofwaivertriggeredbythestate'sinvocationofthejurisdictionofafederalcourt.Cf.527 ,`'2 U.S.at676("NoristhisacaseinwhichtheStatehasaffirmativelyinvokedourjurisdiction.").Ifanything,College @ Savingsaffirmsandreinforcesthenotionthatabroadwaiverof   immunitymaybepremisedonastate'sunequivocalconductdemonstratingitswillingnesstosubmittothejurisdictionofafederalcourt.Seeid.at67576,681n.3(waivingimmunityby    affirmativelyinvokingthejurisdictionofthefederalcourts);id. `  at687-88(voluntarilywaivingimmunityasaconditionofparticipatinginfederalprograms).AlthoughthescopeofwaiverfoundconstitutionalinGardnerandaffirmedinCollegeSavingswas  limitedtorecoupmentandthusnarrowerinscopethan106(b)τnothingineitherdecisionexplicitlyprecludesabroaderruleofwaiver.SeeInreLazar,237F.3d967,979(9thCir.2001), p petitionforcert.filed,70_U.S.L.W._Ԁ3090(U.S.July,19,2001) P (No.01-128);seealsoRichardH._Fallon_Ԁetal.,Hartand  Wechsler'sTheFederalCourtsandtheFederalSystem12324(4th  p ed.Supp.2000)(suggestingthatwhenastatevoluntarilyinvokesfederaljurisdiction,thepermissibleextentofthestate'sEleventhAmendmentwaivermaygobeyondtheboundsofGardner);  $ TeresaK._Goebel_,Comment,ObtainingJurisdictionoverStatesin `"& BankruptcyProceedingsafterSeminoleTribe,65U.Chi.L.Rev. #@( 911,925(1998)("TheGardnerCourtheldthatthedefensive % * counterclaimrulewasconstitutional,butdidnotforeclosethepossibilitythatabroadertestmaybeconstitutional.")(footnotes omitted). 0*%0  ` Thelanguageof106(b)itselfprovidesforawaiverof allclaimsarisingoutofthesametransactionoroccurrenceasthestate'sclaim.Thislanguagecreatesawaiver,thescopeofwhichisessentiallysimilartocompulsorycounterclaimsundertheFederalRules.SeeFed.R.Civ.P.13(a);cf.Fed.R.Civ.P.  @ 13(c)(statingthatacounterclaim"mayclaimreliefexceedinginamountordifferentinkindfromthatsoughtnthepleadingoftheopposingparty").Whereastateavailsitselfofthefederalcourtstoprotectaclaim,wethinkitreasonabletoconsiderthatactiontowaivethestate'simmunitywithrespecttothatclaimin  totoand,therefore,toconstruethatwaivertoencompass P compulsorycounterclaims,eventhoughtheycouldrequireaffirmativerecoveryfromthestate.Thealternativeapproachwouldhavetheunfortunateeffectofpreventingthecompleteadjudicationoftheclaiminasingleforum,underminingtheprinciplesthatledtheframersoftheFederalRulestocompelthelitigationofcertaincounterclaimsasapartofasinglelawsuit. ` Recentcasesfromoursistercircuitslendfurthersupportto_WJM_andourconclusionherethat106(b)validlywaives  $ astate'sEleventhAmendmentimmunitywithrespecttothefullamountofanycompulsorycounterclaims.In_In_ԀreStraight,143 #@( F.3d1387(10thCir.1998),theTenthCircuitheldthat106(b)permissiblywaivedthestate'sEleventhAmendmentimmunitywithrespecttocompulsorycounterclaimsarisingfromthestate'sproofofclaim.Asthecourtstated,106(b)"doesnotpretendtoabrogateastate'simmunity,itmerelycodifiesanexisting +'2 equitablecircumstanceunderwhichastatecanchoosetopreserveitsimmunitybynotparticipatinginabankruptcyproceedingortopartiallywaivethatimmunitybyfilingaclaim."Id.at1392.   Similarly,theFourthCircuithasheldthat"totheextenta[debtor]'sassertionsinastate-institutedfederalaction,includingthosemadewithregardtoastate-filedproofofclaiminabankruptcyaction,amounttoacompulsorycounterclaim,astatehaswaivedanyEleventhAmendmentimmunityagainstthatcounterclaiminordertoavailitselfofthefederalforum."Inre 0  CreativeGoldsmiths,Inc.,119F.3d1140,1148(4thCir.1997).L_*LLAL   14      _Ԁ  Andinadecisionthatisonlysomewhatmorevintage,theSecondCircuitheldthatformer106(a)oftheBankruptcyCode(thesamewaiverprovisionweaddressedin_WJM_)validlywaivedastate's p sovereignimmunitywithrespecttocompulsorycounterclaimsarisingfromthesametransactionoroccurrenceaswasthesubjectofthestate'sproofofclaim.SeeInre995FifthAve.Assoc.,L.P.,963  p F.2d503,509(2dCir.1992).L_+` LL` L   15      _    ` WerecognizethatourconclusionherepresentsastatewithsomethingofaHobson'schoice:"eithersubjectyourselftofederalcourtjurisdictionortakenothing."Texasexrel.Bd.of   RegentsofUniv.ofTex.v.Walker,142F.3d813,822(5thCir. `  1998).Ifthestatechoosestofileaproofofclaimwiththecourt,itexposesitselftoliabilityarisingfromacompulsorycounterclaim;ifitdeclinestofileaproofofclaim,itwillbepermanentlybarredfromcollectingitsdebtor,forthatmatter,collectingaproratashareofthebankruptcyestate.EventheEleventhAmendment,however,doesnotensureastatethechoiceofadesirablealternative.See_WJM_,840F.2dat100405("[_A]n_ P effectivewaiver[ofEleventhAmendmentimmunity]...mayoccurevenwhenthewaivingpartyisbetweenarockandahardplace.")(citationsomitted).Aswithanycaseofaknowingandintelligentwaiverofrights,thestatehastheoption(howeverunattractivethatoptionmaybe)ofdeterminingwhetherthepotentialbenefit  p fromwaivingitsimmunitywillexceedthepotentialliability.Ifthestateexpectsparticipationinthebankruptcytoyieldanetgain,itmayfileaclaimandwaiveitsimmunitywithrespecttocertaincounterclaims.Conversely,ifthestateexpectsitsparticipationtoyieldanetloss,itmayforegothebankruptcyproceedingsandretainitsimmunityfromsuit.Theunfairnessthestatemayfaceinbeingforcedintomakingthiselectioniscertainlynogreaterthanthatfacedbyanycreditorwhomustdecidewhethertoforegocertainconstitutionalprotectionsbysubmittingtothebankruptcyproceedings. ` Moreover,webelieveanypotentialunfairnessresultingfromastatehavingtowaiveitsimmunityasaprerequisiteforparticipationinthebankruptcyproceedingsisplacedinperspectivebyrecognizingtheconcreteunfairnessthatacontraryrulewouldimposeontheotherbankruptcycreditors,whoseproratashareofthebankruptcyestatewouldbediminishedbecausetheestatecannotobtainthefullamountofdebtowedtoitbythestate."[T]helawofbankruptcyisfoundeduponprinciplesofequity.Thatfoundationrequiresallpersonsorentitiesinthesameclassmustbetreatedalike.Thus,creditorscomingtothebankruptcycourtforreliefexpecttheywillfarenobetterornoworsethanothersoftheirstature."InreStraight,143F.3dat % * 1389.@,," III.Conclusion  (#.  ` Forthereasonsstatedabove,we JJVACATE JJourpriorpanel *%0 decisionand KKAFFIRM KKtherulingofthedistrictcourt.Thismatter `,'2 isremandedtothedistrictcourtforfurtherproceedingsconsistentwiththisopinion.