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RSL Funding, LLC v. Date
15-03185
Bankr. S.D. Tex.
Oct 31, 2017
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Background

  • In 1996 the court entered a permanent injunction barring Stewart A. Feldman and entities he owns from filing adversary proceedings in bankruptcy court without leave, based on prior vexatious litigation.
  • RSL Funding, LLC (an entity owned by Feldman) filed the instant adversary proceeding in 2015 without first obtaining leave of the court.
  • Defendant orally moved to dismiss the adversary proceeding as a violation of the 1996 injunction; the Court dismissed the adversary proceeding for that reason.
  • Plaintiff moved for reconsideration/new trial/alter-or-amend judgment, arguing the 1996 injunction was invalidated or unenforceable after the District Court’s withdrawal of the reference in related cases and that sanctions issues altered the injunction’s scope.
  • Defendant moved for a civil contempt finding and sanctions (including attorney’s fees) for filing in violation of the injunction.
  • The Bankruptcy Court denied reconsideration and found the 1996 injunction remains in effect; it awarded defendant attorney’s fees as a sanction and directed submission of a fee bill.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Enforceability of the 1996 injunction Withdrawal of the reference in related district-court matters nullified or stripped this Court of power to enforce the injunction The 1996 injunction remains a valid, final court order and must be obeyed Injunction remains in effect and controls; Plaintiff’s argument rejected
Sanctions / civil contempt for filing without leave Plaintiff suggested sanctions framework or payment interpreted the injunction’s scope and contested sanction imposition Filing without leave violated the injunction; defendant sought attorney’s fees and other relief for contempt Court found violation and exercised discretion to award defendant attorney’s fees; directed submission of fee bill

Key Cases Cited

  • In re Carroll, 851 F.3d 811 (5th Cir. 2017) (discussing factors and district-court discretion for imposing injunctions and sanctions)
  • F.D.I.C. v. LeGrand, 43 F.3d 163 (5th Cir. 1995) (elements required to prove civil contempt)
  • W.R. Grace & Co. v. Local Union 759, 461 U.S. 757 (1983) (final orders and the obligation to obey them)
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Case Details

Case Name: RSL Funding, LLC v. Date
Court Name: United States Bankruptcy Court, S.D. Texas
Date Published: Oct 31, 2017
Docket Number: 15-03185
Court Abbreviation: Bankr. S.D. Tex.