Florida Dept. of Revenue v. Diaz
647 F.3d 1073
| 11th Cir. | 2011Background
- Diaz owed Virginia child-support arrearages; Virginia DSS pursued enforcement through Florida DOR after Diaz moved to Florida.
- Diaz filed Chapter 13 in 2002; Florida DOR filed a claim for past-due support, later reduced to $47,746.49 for purposes of the plan.
- Diaz’s Chapter 13 plan was confirmed in 2003 and discharged in 2005; the discharge statement noted that most but not all debts are discharged, and that child support is an exception.
- Post-discharge, Florida DOR and Virginia DSS engaged in collection actions (notices, income-d deduction order, license suspension, tax intercepts) between 2007 and 2009.
- Diaz sought contempt and sanctions in 2008 for automatic-stay and discharge-injunction violations; bankruptcy court held the agencies in contempt and awarded damages.
- Eleventh Circuit reversed, holding that Florida DOR and Virginia DSS enjoy sovereign immunity against stay-violation contempt and that child-support debts are nondischargeable in Chapter 13, thus not violating the discharge injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state sovereign immunity bars stay-contempt claims. | Diaz argues agencies violated stay during bankruptcy. | DOR/DSS relied on sovereignty; Katz framework governs jurisdiction. | Sovereign immunity shields from stay-contempt claims. |
| Whether sovereign immunity allows discharge-injunction contempt claims and if agencies violated the injunction. | Diaz alleges post-discharge collection violated 524(a)(2). | Child support nondischargeable; collection after discharge cannot violate injunction. | Discharge-injunction claims barred; agencies did not violate injunction because child-support debt is nondischargeable. |
| Whether post-petition interest on nondischargeable child support is still nondischargeable and controls preclusion arguments. | Discharge should prevent enforcement of any post-petition interest. | Nondischargeability statute controls; discharge does not discharge such debts. | Post-petition interest on nondischargeable child support is nondischargeable; preclusion theories do not override. |
| Whether res judicata/collateral estoppel bars relitigation of debt amount or dischargeability. | Diaz seeks to limit further collection based on prior adjudications. | Dischargeability of debt and amount not fully litigated; no preclusion. | Preclusion doctrines do not bar the post-bankruptcy collection efforts. |
Key Cases Cited
- Gardner v. New Jersey, 329 U.S. 565 (1947) (waiver of sovereign immunity by claiming against the state)
- Lapides v. Bd. of Regents, 535 U.S. 613 (2002) (state waives immunity by invoking federal jurisdiction)
- Katz, Central Virginia Community College v. Katz, 546 U.S. 356 (2006) (consent by ratification theory; in rem jurisdiction play)
- In re Crow, 394 F.3d 918 (11th Cir.2004) (unconstitutional 106(a) abrogation theory)
- Espinosa, U.S. 130 S. Ct. 1367 (2010) (child-support nondischargeable in Chapter 13)
- In re Burke, 146 F.3d 1319 (11th Cir.1998) (scope of litigation waiver in bankruptcy)
- In re Gurwitch, 794 F.2d 585 (11th Cir.1986) (nondischargeable taxes; preclusion limits)
- Tenn. Student Assistance Corp. v. Hood, 541 U.S. 440 (2004) (discharge and public policy)
- In re Globe Mfg. Corp., 567 F.3d 1291 (11th Cir.2009) (standard of review for contempt sanctions)