The U.S. Supreme Court on June 3 ruled unanimously (9-0) in the case of Taggart v. Lorenzen (No. 18-489) that a court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct.
Nicole A. Saharsky is co-head of Mayer Brown's Supreme Court & Appellate Practice and is the Counsel of Record for the Respondents, Shelley A. Lorenzen, et al. She focuses her practice on briefing and arguing cases in the U.S. Supreme Court and in the federal and state appellate courts and on developing legal strategies for the trial courts and agency proceedings.
Hon. Eugene R. Wedoff (ret.) is the chairman of ABI and a solo practitioner based in Oak Park, Ill., with his practice focused exclusively on pro bono representation in bankruptcy appeals. He served as a bankruptcy judge in the Northern District of Illinois (in Chicago) from 1987 to 2015 and was chief judge from 2002 to 2007. He joined former Bankruptcy Judge Leif Clark and a group of law professors to file an amicus brief in support of the petitioner, Bradley Taggart.
ABI Editor-at-Large Bill Rochelle provides his authoritative take on legal developments affecting bankruptcy practice in ABI's Rochelle’s Daily Wire. Rochelle published for Bloomberg every day from 2007-15, and prior to his second career in journalism, he practiced bankruptcy law for 35 years.
A creditor may be held in civil contempt for violating a bankruptcy court’s discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct, according to the Supreme Court’s ruling on June 3 in Taggart v. Lorenzen. The opinion for the Court by Justice Stephen G. Breyer also rejected the Ninth Circuit’s idea that a subjective, good faith belief about the inapplicability of the discharge injunction is a defense to contempt.
What are the potential implications of the Court's decision? Will the Court's standard for a discharge violation also apply to violations of the automatic stay under Section 362? ABI’s media webinar presents two experts involved in the case to discuss the potential effects of the Court’s ruling and to take questions.