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Sherlock’s Admonition: Vindicatory Contempts as Criminal Actions for Purposes of Bankruptcy Code § 362
DePaul Bus. & Com. L.J. (2014)
  • Amir Shachmurove
For more than two decades, a debate has raged over what to make of vindicatory contempts, a class of ostensibly civil contempt orders  intended to punish a debtor for his or her defiance of prior judicial orders issued pre-petition by a state court. Because § 362(a)(1) applies to all judicial actions and proceedings and § 362(b)(1) excepts only criminal matters, many courts have held that contempts not issued during the course of a proceeding to enforce a penal law must be stayed. The plain language, they contend, allows no other construction, Congress’ plenary authority over “the subject of Bankruptcies”  dating to June 21, 1788,  and its objective manifest in the capacious language of § 362(a). Others disagree, offering two justifications for recognizing an exception to § 362(a) for vindicatory contempts. First, Congress could not have actually intended to strip state courts of their ability to exercise such an ancient and inherent power on a debtor post-petition. Second, the Code was not designed to protect debtors from the consequences of the kind of obdurate conduct punished by these contempts. Even within this majority, no consensus has emerged. Some courts seem to define vindicatory contempts as criminal, thereby bringing them within the ambit of § 362(b)(1), but they do so inconsistently and often apologetically. Far more simply evade the distinction between “criminal” and “civil.” After more than thirty years, with the Code giving no definition to the critical term “criminal” in § 362(b)(1), the case law regarding the applicability of § 362(a)(1) and (b)(1) to vindicatory contempts is still confused, the courts still in persistent discord. Relying on the widely accepted principles of interpretation rarely applied with any thoroughness in these cases, this article pinpoints where these courts have erred and how this debate must finally be settled. In so doing, it lays out how the Code must be construed, regardless of section.
  • Automatic stay,
  • contempt,
  • criminal contempt,
  • civil contempt,
  • statutory interpretation,
  • plain meaning,
  • ambiguous,
  • ambiguity,
  • context,
  • holistic,
  • textualism,
  • due process,
  • purpose,
  • pro rata distribution,
  • pre-Code,
  • fraud,
  • fresh start,
  • canons of interpretation,
  • holistic interpretation,
  • post-petition suits,
  • prepetition conduct,
  • legislative history,
  • legislative intent,
  • legislative purpose,
  • contumacious behavior,
  • state interest,
  • traditional state regulation,
  • unfortunate and honest debtor,
  • defiance of court’s authority,
  • coercive tool,
  • punitive,
  • criminally contumacious conduct,
  • authority of the court
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Citation Information
Amir Shachmurove, Sherlock’s Admonition: Vindicatory Contempts as Criminal Actions for Purposes of Bankruptcy Code § 362(b)(1), 13 DePaul Bus. & Com. L.J. 67 (2014)