In Re CW Mining Co.
625 F.3d 1240
10th Cir.2010Background
- C.W. Mining Company (CWM) owed royalties to COP and hired by Standard as exclusive coal broker; Aquila held a nearly $25 million judgment against CWM.
- CWM filed an involuntary bankruptcy petition under 11 U.S.C. § 303(b) in January 2008.
- Aquila alleged COP violated the automatic stay by actions to terminate CWM's coal agreement, collect pre-petition royalties, and threaten eviction.
- Aquila alleged Standard violated the stay by pursuing garnished funds from UEI and other actions related to post-petition activity.
- A bankruptcy court scheduled an August 1, 2008 contempt hearing; Standard and COP failed to timely respond by July 18, 2008.
- The bankruptcy court entered a contempt order on July 23, 2008, voiding post-petition actions and ordering sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did due process require an actual hearing? | Due process was satisfied by notice and opportunity to be heard. | No hearing was required if proper notice was given and non-response allowed relief. | No automatic right to a live hearing; notice and opportunity to be heard suffice. |
| Is Local Rule 9013-1(c) unconstitutional for civil contempt motions without a hearing? | Not raised below; review should be limited. | Rule allows granting relief without a hearing, potentially unconstitutional. | Court declines to address constitutionality; not raised below. |
| Did the bankruptcy court exceed authority by using a motion instead of an adversary proceeding? | Contempt relief requires adversary proceeding in some views. | Rules permit contempt by motion; not required to proceed via Rule 7001. | Contempt motions may be used; did not exceed authority; relief proper via motion. |
Key Cases Cited
- In re Gledhill, 76 F.3d 1070 (10th Cir. 1996) (due process in civil contempt requires notice and opportunity to be heard)
- Mathews v. Eldridge, 424 U.S. 319 (U.S. 1976) (substantive due process balancing in hearing adequacy)
- Boddie v. Connecticut, 401 U.S. 371 (U.S. 1971) (due process allows non-merit hearings under adequate notice)
- Kuykendall, 371 F.3d 745 (10th Cir. 2004) (due process in civil actions; opportunity to be heard)
- In re Skinner, 917 F.2d 444 (10th Cir. 1990) (bankruptcy court authority to issue civil contempt sanctions)
- In re Gledhill, 76 F.3d 1076 (10th Cir. 1996) (plain-language rules permit motion practice for certain relief)