Taggart v. Lorenzen
U.S. Supreme Court · decided June 3, 2019 · Supreme Court Database (Spaeth)
- Decided
- June 3, 2019
- Term
- October Term 2018
- Vote
- 9–0
- Majority author
- Justice Breyer
- Issue area
- Economic Activity
- Disposition
- Vacated and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice BREYER delivered the opinion of the Court. At the conclusion of a bankruptcy proceeding, a bankruptcy court typically enters an order releasing the debtor from liability for most prebankruptcy debts. This order, known as a discharge order, bars creditors from attempting to collect any debt covered by the order. See 11 U.S.C. § 524(a)(2). The question presented here concerns the criteria for determining when a court may hold a creditor in civil contempt for attempting to collect a debt that a discharge order has immunized from collection. The Bankruptcy Court, in holding the creditors here in civil contempt, applied a standard that it described as akin to "strict liability" based on the standard's expansive scope. In re Taggart , 522 B. R. 627, 632 (Bkrtcy. D.Ct. Ore. 2014). It held that civil contempt sanctions are permissible, irrespective of the creditor's beliefs, so long as the creditor was " 'aware of the discharge' " order and " 'intended the actions which violate[d]' " it. Ibid. (quoting In re Hardy , 97 F. 3d 1384, 1390 (CA11 1996) ). The Court of Appeals for the Ninth Circuit, however, disagreed with that standard. Applying a subjective standard instead, it concluded that a court cannot hold a creditor in civil contempt if the creditor has a "good faith belief" that the discharge order "does not apply to the creditor's claim." In re Taggart , 888 F. 3d 438,…
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