941 F.3d 625
2d Cir.2019Background
- In Sept. 2013, attorney Kenneth Rosellini filed a Chapter 7 petition for client Alba Sanchez in the E.D.N.Y. and then failed to prosecute the case.
- The bankruptcy court issued multiple orders to show cause for Rosellini’s failures; he did not comply.
- The bankruptcy court imposed a $1,000 monetary sanction against Rosellini, citing its inherent power to manage its docket and courtroom.
- Rosellini moved to vacate and for reconsideration; the bankruptcy court denied relief.
- The district court (Block, J.) affirmed; Rosellini appealed to the Second Circuit.
- The Second Circuit (per curiam) addressed, as a matter of first impression in the Circuit, whether bankruptcy courts possess inherent sanctioning power and affirmed the $1,000 sanction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bankruptcy courts possess inherent sanctioning power | Rosellini did not contest existence but challenged exercise; implicitly argued sanction improper | Bankruptcy court/district relied on precedent supporting inherent powers | Bankruptcy courts do possess inherent sanctioning powers, like Article III courts |
| Whether inherent power extends to non‑compensatory sanctions on attorneys | Rosellini argued the sanction was unwarranted here | Court: inherent power permits relatively minor non‑compensatory attorney sanctions to manage docket | Court affirmed that such minor sanctions are within bankruptcy courts’ inherent authority |
| Whether the bankruptcy court properly exercised its inherent power in this case (sanction amount $1,000) | Rosellini sought vacatur and reconsideration of the sanction | Bankruptcy court justified sanction for failure to prosecute and comply with show‑cause orders | Second Circuit affirmed the $1,000 sanction as appropriate |
| Standard of review and scope of appellate review | Rosellini sought reversal; argued lower courts erred on merits | Appellee/district court treated bankruptcy order under plenary review limited to the authority invoked | Court applied plenary review limited to the inherent‑power question and affirmed |
Key Cases Cited
- Law v. Siegel, 571 U.S. 415 (recognizes that bankruptcy courts may possess inherent sanctioning authority)
- Chambers v. NASCO, Inc., 501 U.S. 32 (establishes federal courts’ inherent powers to manage their affairs and sanction misconduct)
- In re Kalikow, 602 F.3d 82 (2d Cir.) (discusses limits on sanction awards and the need to identify invoked authority)
- Casse v. Key Bank Nat’l Ass’n (In re Casse), 198 F.3d 327 (2d Cir.) (notes bankruptcy courts can police dockets via inherent powers)
- Charbono v. Sumski (In re Charbono), 790 F.3d 80 (1st Cir.) (collects appellate recognition that bankruptcy courts may impose inherent‑power sanctions)
- United States v. Seltzer, 227 F.3d 36 (2d Cir.) (recognizes imposition of sanctions on attorneys)
- Wilder v. GL Bus Lines, 258 F.3d 126 (2d Cir.) (per curiam) (acknowledges courts’ ability to impose non‑compensatory sanctions on attorneys)
