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