625 F.3d 1240
10th Cir.2010Background
- Aquila filed an involuntary bankruptcy petition against CWM in January 2008; Standard and COP are creditors opposing CWM.
- Aquila alleged COP violated the automatic stay by attempting to terminate CWM’s coal agreement, collecting pre-petition royalties, and evicting CWM from the mine.
- Aquila alleged Standard violated the stay by garnishing funds from UEI and suing UEI to recover funds.
- A contempt motion was served and scheduled for August 1, 2008; responses were due by July 18, 2008.
- Standard and COP failed to respond by the deadline; Aquila filed a non-response certificate; the court granted relief under Local Rule 9013-1(c).
- The bankruptcy court entered a contempt order on July 23, 2008, voiding post-petition actions and awarding Aquila’s fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process required an actual hearing. | Standard and COP contend no actual hearing was needed. | Aquila argues due process was satisfied by notice and opportunity to be heard. | Due process satisfied; no hearing required if notice and opportunity to be heard are provided. |
| Constitutionality of Local Rule 9013-1(c). | Rule 9013-1(c) is unconstitutional for allowing decisions without a hearing. | Rule 9013-1(c) is proper and was applied to grant relief without a hearing. | Court declines to address constitutionality; issue not properly raised below. |
| Authority of bankruptcy court to issue civil contempt by motion, and use of a contempt order instead of an adversary proceeding. | Standard and COP argue Skinner limits relief to monetary damages and requires adversary proceedings. | Aquila argues motion practice and Rule 9020/9014 allow contempt by motion without adversary proceeding. | Bankruptcy court had authority to void violations and award fees; motion-based contempt permissible. |
| Whether Aquila was required to seek relief by adversary proceeding under Rule 7001. | Contempt remedies potentially implicate injunctive/adv declaratory relief requiring 7001. | Plain language of Rules 9020/9014 permits relief by motion; 7001 not required. | Relief sought by motion; 7001 not required. |
Key Cases Cited
- Boddie v. Connecticut, 401 U.S. 371 (1971) (due process requires meaningful opportunity to be heard)
- LaChance v. Erickson, 522 U.S. 262 (1998) (core due process is notice and opportunity to be heard)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (opportunity to be heard at meaningful time and manner)
- International Union, United Mine Workers of America v. Bagwell, 512 U.S. 821 (1994) (due process in civil contempt requires notice and opportunity to be heard)
- In re Skinner, 917 F.2d 444 (10th Cir. 1990) (bankruptcy court authority to issue civil contempt sanctions)
- In re Gledhill, 76 F.3d 1070 (10th Cir. 1996) (contours of motion practice for contempt under bankruptcy rules)
- Kuykendall, 371 F.3d 745 (10th Cir. 2004) (due process in civil matters requires notice and opportunity to be heard)
- C.W. Mining Co. v. Aquila, Inc., 431 B.R. 307 (10th Cir. BAP 2009) (appellate affirmation of contempt and Rule 60(b) rulings)