RSL Funding, LLC v. Date
15-03185
Bankr. S.D. Tex.Aug 17, 2017Background
- The June 7, 1996 injunction permanently enjoined Feldman, Mats and related entities from filing any voluntary or involuntary bankruptcy petitions, notices of removal, or adversary proceedings without leave.
- The injunction arose from prior bad-faith, vexatious litigation tied to Intermarque, MBM, Mats Real Estate Services, and related entities in state and federal proceedings.
- Feldman repeatedly filed adversary proceedings and related actions after June 7, 1996, including attempts that led to sanctions and contempt findings.
- In 1996–1997, the court imposed civil contempt sanctions on Feldman and Mats, including monetary sanctions and daily coercive sanctions, with appellate history extending to sanctions appeals.
- Debtor Date filed Chapter 7 in 2015; RSL Funding, LLC filed a Section 523 adversary in 2015; trial occurred in 2017 with Feldman testifying as RSL’s witness.
- Debtor moved to dismiss the adversary proceeding, arguing the injunction was no longer effective due to sanctions payment; the court disagreed and held the injunction remained in force.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the 1996 injunction still effective? | RSL argues the injunction lapsed after sanctions were paid. | Feldman argues the injunction expired or became moot. | Injunction remains in effect; not discharged by sanctions or related orders. |
| Did Feldman violate the injunction by filing the adversary proceeding? | Feldman filed after June 7, 1996, violating the injunction. | Feldman contends lack of ongoing injunction relaxation. | Feldman repeatedly violated the injunction by filing the adversary. |
| Do district court minute orders or withdrawal of reference alter the injunction's effect? | Withdrawn reference or minute orders ended the injunction. | Those actions do not nullify the bankruptcy court's final injunction. | Neither the minute order nor withdrawal nullified the injunction; it remains enforceable. |
| Should the case be dismissed with prejudice for contempt? | Contempt sanctions support dismissal as a remedial measure. | Dismissal with prejudice would be excessive given circumstances. | Court grants dismissal consistent with ongoing contempt and injunction violations. |
Key Cases Cited
- Firefighters v. Stotts, 467 U.S. 561 (Sup. Ct. 1984) (injunctions must be obeyed until vacated or withdrawn)
- WR Grace & Co. v. Local Union 759, 461 U.S. 757 (Sup. Ct. 1983) (an injunction's terms govern until set aside)
- Walker v. City of Birmingham, 388 U.S. 307 (Sup. Ct. 1967) (court orders must be complied with pending modification)
- United States v. United Mine Workers, 330 U.S. 258 (Sup. Ct. 1947) (injunctions and restraints can be issued by courts within their jurisdiction)
- Howat v. Kansas, 258 U.S. 181 (Sup. Ct. 1922) (injunctions and court authority principles)
- Tory v. Cochran, 125 S. Ct. 2108 (Sup. Ct. 2005) (policy considerations in injunction-related interlocutory matters)
