669 B.R. 341
Bankr. D. Nev.2025Background
- Steven M. Hayden, Sr. repeatedly litigated to assert control over Western Steel, Inc. and assets of William Cashion despite an August 20, 2013 Alabama state-court judgment voiding his actions and imposing a broad permanent injunction. The Alabama courts have imposed fines, attorney fees, incarceration for contempt, and pre-filing limits.
- Over ~2012–2024 Hayden filed multiple suits in Alabama and Nevada and four bankruptcy matters in Nevada (including involuntary petitions against entities/trusts tied to Cashion/Western Steel), often conflating a Nevada "Western Steel" with the Alabama corporation. Many filings were dismissed or converted; Hayden frequently failed to effect service or abandoned filings.
- The bankruptcy court issued orders to show cause (OSCs) and Cashion/Western Steel moved to declare Hayden a vexatious litigant and seek pre-filing restrictions in the District of Nevada bankruptcy cases. Evidentiary hearings were held July 11 and July 29, 2024.
- Hayden advanced procedural objections (judicial notice improper, Rules 1011/7007.1 violations by opponents, lack of standing, lack of jurisdiction, and recusal motions), and repeatedly refused or failed to appear for in-person testimony required by the court.
- The court found Hayden’s bankruptcy filings and related pleadings objectively unreasonable and filed for improper purpose—to continue collateral attacks and attempts to seize Cashion’s assets in violation of Alabama injunctions—and concluded monetary sanctions had proven ineffective.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial notice of other courts' records | Judicial notice of prior state/federal orders and bankruptcy filings is appropriate to show Hayden’s pattern. | Hayden argued judicial notice equated to re-litigating facts and impermissible post-dismissal discovery. | Court may judicially notice court records and prior orders (not their truth); took notice of cited documents to show pattern of conduct. |
| Applicability of Fed. R. Bankr. P. 1011 and 7007.1 | Movants said rules not material to vexatious-litigant inquiry; compliance issues irrelevant here. | Hayden argued opposing parties failed to file corporate-ownership statements, so filings are defective. | Rules inapplicable: 1011(f) not triggered and 7007.1 applies only in adversary proceedings; claims about noncompliance were frivolous. |
| Standing of Cashion/Western Steel to seek vexatious determination and sanctions | Movants asserted direct pecuniary injury and status as parties-in-interest; thus they have constitutional and prudential standing. | Hayden contended movants lacked standing in the dismissed involuntary case. | Court held movants have standing—they are directly and adversely affected and may seek relief (including pre-filing restrictions). |
| Whether Hayden is a vexatious litigant and pre-filing restrictions warranted | Movants argued Hayden’s long pattern of repetitive, frivolous filings, violative of Alabama injunctions, warrants a narrowly tailored pre-filing order in the bankruptcy court. | Hayden denied jurisdiction, claimed filings were legitimate and that prior vexatious findings were inapposite. | Court declared Hayden a vexatious litigant for bankruptcy filings, finding bad faith, frivolousness, and harassment; imposed narrowly tailored pre-filing judicial-review requirement for future bankruptcy filings/pleadings. |
Key Cases Cited
- Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir.) (standards for judicial notice and limits on taking notice of facts subject to reasonable dispute)
- Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (courts’ inherent power to sanction for abuse of judicial process)
- De Long v. Hennessey, 912 F.2d 1144 (9th Cir.) (procedural prerequisites and record required before imposing pre-filing restrictions)
- Weissman v. Quail Lodge, Inc., 179 F.3d 1194 (9th Cir.) (federal courts’ authority to impose restrictive pre-filing orders on vexatious litigants)
- Miller v. Cardinale (In re DeVille), 361 F.3d 539 (9th Cir.) (Rule 9011 standards in bankruptcy context; obligations of pro se litigants)