Chicago v. Fulton, 592 U.S. 154

Chicago impounded individual vehicles for unpaid motor-vehicle fines; several vehicle owners (respondents) filed Chapter 13 petitions and demanded return of their cars.
The City refused to release the vehicles unless debtors paid upfront or plan confirmation occurred.
Bankruptcy courts held the City violated the automatic stay; the Seventh Circuit affirmed, reasoning that retention of the vehicles constituted an act “to exercise control” under 11 U.S.C. §362(a)(3).
The Supreme Court granted certiorari to resolve a circuit split about whether mere post-petition retention of estate property violates §362(a)(3).
The Court held that §362(a)(3) bars affirmative acts that disturb the prepetition status quo, but does not prohibit mere passive retention of estate property; turnover is chiefly governed by §542.
Justice Sotomayor concurred, agreeing with the statutory interpretation but stressing practical harms to debtors, the availability of §542 turnover relief, and the need for procedural or statutory fixes to expedite turnover of vehicles.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether mere post-petition retention of estate property violates §362(a)(3)	Retention is an “act” that “exercises control” and thus violates the automatic stay (Fulton)	Mere retention is passive and does not constitute an affirmative act to exercise control (City)	Mere retention alone does not violate §362(a)(3); the provision targets affirmative acts that alter the status quo
Whether §362(a)(3) supplies an immediate turnover remedy and how it interacts with §542(a)	§362(a)(3) should operate as a blanket turnover rule on filing	Turnover is governed by §542(a); reading §362(a)(3) to require turnover would render §542 surplus and create conflicts with §542 exceptions	§542 is the proper turnover provision; construing §362(a)(3) as a turnover command would produce surplusage and inconsistency, and the statutory history supports the Court’s reading

United States v. Whiting Pools, Inc., 462 U.S. 198 (1983) (§541 includes property made available by other Code provisions)
Nken v. Holder, 556 U.S. 418 (2009) (stay suspends judicial alteration of the status quo)
Yates v. United States, 574 U.S. 528 (2015) (canon against surplusage)
Citizens Bank of Maryland v. Strumpf, 516 U.S. 16 (1995) (avoid constructions that conflict with another statutory provision)
Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007) (Chapter 13 purpose: fresh start; debtors retain possession)
Bullard v. Blue Hills Bank, 575 U.S. 496 (2015) (procedural character of adversary proceedings)
In re Fulton, 926 F.3d 916 (7th Cir. 2019) (court below: retention violated §362(a)(3); judgment vacated)