William Carroll v. RedPen Properties, L.L.C, 850 F.3d 811

William and Carolyn Carroll (the Carrolls) and their daughters Pamela Alonso and Cynthia O’Neal (the Carroll Daughters) engaged in repeated litigation during consolidated bankruptcy proceedings overseen by trustee Samera Abide.
The bankruptcy court catalogued a pattern of obstructive conduct: efforts to frustrate sales of land and residence, repeated and unsupported filings (including in the “Movables Adversary”), contempt orders, and multiple unsuccessful attempts to remove the trustee.
The court found the conduct undertaken to harass the trustee and delay estate administration, and concluded monetary sanctions alone had not deterred the parties.
The bankruptcy court entered a pre-filing injunction (requiring leave of court before any future filings in the district’s bankruptcy court) against all four appellants as vexatious litigants.
The court assessed $49,432 in monetary sanctions jointly and severally against the Carrolls under 11 U.S.C. § 105 to reimburse attorneys’ fees incurred by the trustee defending certain bad-faith filings.
The district court affirmed; the Fifth Circuit likewise affirmed the injunction and the monetary sanction on appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Validity of pre-filing injunction as punishment for vexatious litigation	Appellants argued injunction was improper (and that pro se status bars sanctions)	Bankruptcy court argued injunction was justified by pattern of harassment and delay	Affirmed: court applied proper factors and found bad faith; injunction appropriate
Sufficiency of bad-faith finding	Appellants contended their filings were in good faith	Trustee and courts pointed to repeated, frivolous, duplicative filings and removal attempts	Affirmed: record supports bad-faith finding; not clearly erroneous
Authority to sanction for conduct in related adversary after reference withdrawal	Appellants argued court lacked power to sanction conduct heard by district court after withdrawal of reference	Court held the Movables Adversary conduct was part of the same bankruptcy ‘case’ and threatened the bankruptcy proceedings	Affirmed: sanctions available because conduct occurred within the same bankruptcy case
Imposition of $49,432 attorneys’ fees under § 105	Carrolls argued fee award was erroneous because the estate already incurred the fees	Trustee argued award prevents estate from bearing costs of appellants’ vexatious conduct and § 105 authorizes sanctions	Affirmed: § 105 supports sanction to shift fees for abuse of bankruptcy process

Markwell v. Cty. of Bexar, 878 F.2d 899 (5th Cir. 1989) (collateral-order doctrine in bankruptcy context)
Chaves v. M/V Medina Star, 47 F.3d 153 (5th Cir. 1995) (standard of review for sanctions)
In re Yorkshire, 540 F.3d 328 (5th Cir. 2008) (abuse-of-discretion standard)
FDIC v. Maxxam, Inc., 523 F.3d 566 (5th Cir. 2008) (limits on inherent power over collateral proceedings)
Scaife v. Associated Air Ctr. Inc., 100 F.3d 406 (5th Cir. 1996) (federal courts’ inherent sanctioning powers)
In re Terrebonne Fuel & Lube, Inc., 108 F.3d 609 (5th Cir. 1997) (§ 105 permits orders necessary to carry out bankruptcy code)
Baum v. Blue Moon Ventures, LLC, 513 F.3d 181 (5th Cir. 2008) (factors for pre-filing injunction against vexatious litigants)
Crowe v. Smith, 151 F.3d 217 (5th Cir. 1998) (requirement to make specific bad-faith findings for inherent-power sanctions)