Mark Dingley v. Yellow Logistics, LLC, 852 F.3d 1143

Debtor Mark Dingley, former towing-company owner, was sanctioned (~$4,000) by a Nevada state court for failing to appear for a deposition and ordered to show cause for civil contempt when he did not pay.
While state-court contempt proceedings were pending, Dingley filed a Chapter 7 bankruptcy petition and his counsel notified the state court of the automatic stay.
Yellow Logistics/Yellow Express ("Yellow") filed supplemental briefing in state court arguing the contempt proceedings were exempt from the stay; Dingley moved in bankruptcy court for sanctions under 11 U.S.C. § 362(k) for willful violation of the stay.
The bankruptcy court awarded $1,500 against Yellow for violating the stay; the Bankruptcy Appellate Panel reversed, holding civil contempt proceedings fell outside the stay under David v. Hooker.
On appeal to the Ninth Circuit, the court affirmed the BAP reversal but grounded its decision on the Bankruptcy Code’s government regulatory exemption, 11 U.S.C. § 362(b)(4), and relied principally on In re Berg.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether civil contempt proceedings to enforce court-ordered sanctions are stayed by § 362(a)	Dingley: Yellow’s submission to state court violated the automatic stay and warrants sanctions under § 362(k)	Yellow: Contempt/sanctions proceedings are exempt from the stay as regulatory/government action to deter litigation misconduct	Held: Exempt under § 362(b)(4) (government regulatory exemption) when proceedings aim to effectuate public policy deterring litigation misconduct; Yellow did not violate the stay

In re Berg, 230 F.3d 1165 (9th Cir. 2000) (Rule 38 sanctions to deter litigation misconduct fall under § 362(b)(4) and are exempt from the automatic stay)
David v. Hooker, Ltd., 560 F.2d 412 (9th Cir. 1977) (civil contempt proceedings not automatically stayed under pre-Code bankruptcy rules)
In re Universal Life Church, Inc., 128 F.3d 1294 (9th Cir. 1997) (explains pecuniary-purpose and public-policy tests for § 362(b)(4))
NLRB v. Continental Hagen Corp., 932 F.2d 828 (9th Cir. 1991) (discusses tests for government regulatory exemption)
City & County of San Francisco v. PG&E Corp., 433 F.3d 1115 (9th Cir. 2006) (satisfaction of either pecuniary-purpose or public-policy test exempts action from the stay)
Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) (addresses scope of § 362(b) exceptions)
In re Mwangi, 764 F.3d 1168 (9th Cir. 2014) (standard of review for stay-violation determinations)
In re Perl, 617 F.3d 1102 (9th Cir. 2010) (appellate review standard when reviewing BAP decisions)
Alpern v. Lieb, 11 F.3d 689 (7th Cir. 1993) (Rule 11 sanctions proceedings exempt from stay because courts impose sanctions to deter misconduct)