In re Harris
492 B.R. 225
Bankr. S.D. Tex.2013Background
- Creditors historically required to attach supporting documents to proofs of claim; Rule 3001 amended Dec 1, 2011 to allow fee shifting for missing documents.
- Question presented: whether the Dec 1, 2011 amendments apply retroactively to pre- vs post-Dec 1, 2011 filings.
- Cases before Dec 1, 2011 filed with missing documents could be subject to prior remedies (e.g., Rule 9011 sanctions) but the fee-shifting mechanism was new for those filings primarily.
- Debtors sought fee shifting against creditors in claim objections, but often without independent justification for the fees incurred.
- Court analyzes retroactivity and whether fee shifting is justified where documents were necessary to evaluate the claim’s validity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dec 1, 2011 fee-shifting provisions apply retroactively | Claimants filed before Dec 1, 2011. | Retroactivity should apply under just and practicable standards. | No retroactive fee shifting for pre-Dec 1, 2011 claims. |
| Whether fee shifting applies to post-Dec 1, 2011 claims in old cases | Provisions cover post-Dec 1, 2011 claims regardless of case filing date. | Applicability limited by case posture. | Applies to post-Dec 1, 2011 filings in cases commenced before that date. |
| What remedies may be imposed under Rule 3001(c)(iii)(D) | Remedies including fee shifting are available when omitted information increases costs. | Remedies depend on proportionality to harm and necessity of information. | Remedies may include expenses and attorney’s fees caused by the failure; must be tied to noncompliance. |
| Whether fee shifting is justified where omission did not affect claim validity | Ommission may necessitate additional research and fees. | If omission does not affect understanding of claim, fee shifting unlikely. | Fee shifting not justified when omission does not drive evaluation of claim. |
Key Cases Cited
- MortgageAmerica Corp. v. Bache Halsey Stuart Shields, Inc., 789 F.2d 1146 (5th Cir.1986) (retroactive application of Rule 8010 remedy under prior rule)
- In re Brunson, 486 B.R. 759 (Bankr.N.D.Tex.2013) (court considered retroactivity just and practicable for pre-Dec 2011 claims)
- In re Wingerter, 594 F.3d 931 (6th Cir.2010) (Rule 9011 sanctions may apply when documents are missing)
- In re Pratt, 524 F.3d 580 (5th Cir.2008) (mandatory notice before Rule 9011 fee shifting)
- In re Yorkshire, LLC, 540 F.3d 328 (5th Cir.2008) (inherent power sanctions require bad faith; not automatic)
- Landgraf v. USI Film Products, 511 U.S. 244 (1994) (retrospective analysis for procedural rules; posture-dependent)
- FDIC v. Deglau, 207 F.3d 153 (3d Cir.2000) (principles for retroactive amendments to procedures)