Case Information
*2 Before TJOFLAT and MARTIN, Circuit Judges, and DAWSON, District Judge. [*]
TJOFLAT, Circuit Judge:
The threshold issue this appeal presents is whether a bankruptcy court in one federal district has jurisdiction to determine whether a debt was discharged in a bankruptcy case litigated in another federal district. We hold that the court lacks jurisdiction and therefore do not reach the other issues the appeal presents.
I.
*3 A. The debt at issue consists of claims of tort liability possessed by relatives of people buried in a Miami, Florida cemetery, known as Graceland. The claims are set out in the class action complaint filed in the Circuit Court for Miami-Dade County, Florida (“State Court”) by Reyvis Garcia, Ramona Johnson, and Mercedes Woodberry (“Creditors”) in March 2008. The defendants are Alderwoods Group, Inc., Osiris Holding of Florida, Inc., and Northstar Graceland, LLC (“Debtors”), Graceland’s owners. Creditors allege that Debtors are liable to them and the [2]
members оf their class for damages because, due to inadequate record keeping, Debtors are unable to locate upon request the grave sites of family members or close relatives buried in Graceland. This liability is based on the common law theories of tortious interference with dead bodies, intentional or reckless infliction of emotional distress, and gross negligence under Florida tort law.
Debtors contend that Creditors’ claims were discharged in a Chapter 11 bankruptcy case in the United States Bankruptcy Court for the District of Delaware (“Delaware Bankruptcy Court”), a case they initiated on June 1, 1999, when they petitioned that court for Chapter 11 relief (“Chapter 11 Case”) under the Bankruptcy Code. On October 21, 1999, the Delaware Bankruptcy Court [3]
*4 entered an order establishing bar dates for filing proofs of claim and approving the notice of the bankruptcy procеedings to be mailed to all known creditors and published for the benefit of all unknown creditors (the “Bar Date Order”). Later [4] that October and in November 1999, Debtors published the notice in the Wall Street Journal, the New York Times, and USA Today.
On December 5, 2001, the Delaware Bankruptcy Court entered an Order confirming Debtors’ plan of reorganization (“Confirmation Order”) and fixing January 2, 2002, as the plan’s “Effective Date.” The Confirmation Order discharged all claims against Debtors, including unknown claims such as those Creditors asserted in the State Court case, that arose on or before the Effective Date and provided that the court retained jurisdiction over the reorganization after the Effective Date.
B.
On April 7, 2008, Debtors filed a “complaint” against Creditors in the United States Bankruptcy Court for the Southern District of Florida (“Florida Bankruptcy Court”). The complaint invoked that court’s jurisdiction under 28 U.S.C. §§ 157 and 1334 and sought (1) a declarаtion that the claims Creditors [5] [6]
*5 were attempting to litigate in State Court were discharged in the Chapter 11 Case, as of January 2, 2002, pursuant to § 1141 of the Bankruptcy Code, and (2) an [7] order, entered pursuant to § 524 of the Bankruptcy Code, enjoining Creditors [8] from pursuing their case in State Court. [9]
hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11 . . . .
28 U.S.C. § 157(a)–(b)(1).
Section 1334 states, in pertinent part: “[T]he district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(b).
[6] The complaint invoked the Declaratory Judgement Act, 28 U.S.C. § 2201, which provides that “[i]n a case of actual controversy within its jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration.”
[7] Section 1141 states, in pertinent рart: “Except as otherwise provided in this subsection, in the plan, or in the order confirming the plan, the confirmation of a plan discharges the debtor from any debt that arose before the date of such confirmation . . . .” 11. U.S.C. § 1141(d)(1)(A). Section 524 states, in pertinent part:
A discharge in a case under this title voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged . . . .
. . . .
After notice and hearing, a court that enters an order confirming a plan of reorganization under chapter 11 may issue, in connection with such order, an injunction in accordance with this subsection to supplement the injunctive effect of a discharge under this section.
11 U.S.C. § 524(a)(2), (g)(1)(A). Compl. for Declaratory Relief at 5–6, Alderwoods Grp. v. Garcia, No. 08-1266-BKC-
RAM-A (Bankr. S.D. Fla. Apr. 7, 2008). In addition to damages and injunctive relief, the *6 In response, Creditors moved the Florida Bankruptcy Court to dismiss the Debtors’ complaint for lack of subject matter jurisdiction or, in the alternative, to abstain from exercising jurisdiction and/or to remand the case to state court. The [10] Florida Bankruptcy Court heard Creditors’ motion and denied it, concluding that it had subject matter jurisdiction over the dispute and that neither abstention nor remand was required or appropriate.
On June 9, 2008, Creditors answered Debtors’ complaint. Creditors alleged that the the notice to unknown creditors published in the Chapter 11 Case pursuant to the Bar Date Order was constitutionally inadequate; therefore, their claims had not been discharged.
After the pleadings closed, the parties filed cross-motions for summary judgment. Addressing Creditors’ assertion concerning the notice to unknown [11]
complaint sought “such other and further relief as the Court deems just and proper.” Id. at 6. The gist of the Creditors’ motion was that the Florida Bankruptcy Court could not exercise jurisdiction over what was effectively an affirmative defense of discharge masquerading as a request for declaratory relief—in essence, that Debtors were asserting no federally created right. Debtors, in turn, argued that the Chapter 11 Case discharge injunction was a matter of federal bankruptcy law and that, in determining whether Creditors’ State Court action was barred by that discharge, the Florida Bankruptcy Court was properly exercising federal jurisdiction. At the hearing held on the motions for summary judgment, Creditors’ counsel apparently conceded that the State Court claims were subject to discharge provided that adequate notice of the Chapter 11 Case had been provided. Presumably because of this concession, the Florida Bankruptcy Court framed the issues before it as whether Creditors’ requested injunctive relief was a claim subject to discharge and whether the notice published in the Chapter 11 Case provided adequate notice as to all of Creditors’ claims.
creditors, the Florida Bankruptcy Court ruled that the publication of the notice was
inadequate. The publication failed to meet the standard set by Fifth Amendment’s
Due Process Clause, as explicated by Mullane v. Central Hanover Bank & Trust
Co.,
08-1266-BKC-RAM-A, slip op. at 16 (Bankr. S.D. Fla. Nov. 25, 2009) (quoting
Mullane,
C.
Debtors appealed the court’s decision to the United States District Court for the Southern District of Florida, presenting four arguments for reversal: (1) One [13]
of the Creditors was a nonresident alien at the time the Chapter 11 Case was being heard and therefore had no right to due process; (2) the published notice comported with due process; (3) even if the notice did not meet Mullane’s due process standard, Creditors suffered no prejudice; and (4) the State Court claims should be considered discharged because the notice contained Debtors’ names. The District Court rejected all four argumеnts and affirmed. The District Court thereafter denied Debtors’ motion to alter or amend judgment. See Fed. R. Civ. [14]
P. 59(e). Debtors now appeal the District Court’s judgment and the order denying Rule 59(e) relief. [15]
*9 In its brief to this court, Debtors raise four issues: (1) whether the Florida Bankruptcy Court had subject matter jurisdiction to consider Creditors’ due process defense; (2) whether the District Court erred in denying Debtors’ motion to alter or amend judgment; (3) whether the Florida Bankruptcy Court erred in granting Creditors summary judgment; and (4) whether the Florida Bankruptcy Court erred in denying Debtors’ motion for summary judgment. We do not address these issues because we conclude that the Florida Bankruptcy Court lacked jurisdiction to entertain Debtors’ complaint for declaratory relief.
II.
A.
The Bankruptcy Code provides that “the confirmation of a
plan . . . discharges the debtor from any debt that arose before the date of such
confirmation” and that “after cоnfirmation of a plan, the property dealt with by the
plan is free and clear of all claims and interests of creditors.” 11 U.S.C. § 1141(c),
(d)(1)(A). Moreover, the discharge “operates as an injunction against the
commencement or continuation of an action, the employment of process, or an act,
1996). Of course, “[a] court of appeals’ jurisdiction over a district court’s review of a bankruptcy
court order can only be based on a proper exercise of the district court’s jurisdiction.” In re
Vlasek,
to collect, recover or offset any such debt as a personal liability of the debtor.” Id. § 524(a)(2). “[The] court that enters an order confirming a plan of reorganization under chapter 11 may issue, in connection with such order, an injunction in accordance with this subsection to supplеment the injunctive effect of a discharge under [§ 524].” Id. § 524(g)(1)(A). Indeed, the Confirmation Order so provided: “as of the Effective Date, all entities that . . . hold a Claim or other debt or liability that is discharged . . . are permanently enjoined from . . . commencing or continuing in any manner any action . . . against the Debtors.” In re Loewen Grp. Int’l, Jointly Administered Case No. 99-1244 (PJW), slip op. at 60–61 (Bankr. D. Del. Dec. 5, 2001) (Confirmation Order).
Once Debtors were served with Creditors’s complaint in the State Court
case, they had four options to challenge Creditors’ prosecution of that case.
Debtors could (1) assert the discharge provided by the Confirmation Order as an
affirmative defense in the State Court case; (2) remove the case to United States
District Court for the Southern District of Florida under 28 U.S.C. § 1452(a); (3)
move the Delaware Bankruptcy Court to reopen the Chapter 11 Case pursuant to
11 U.S.C. § 350(b); or (4) initiate a proceeding in the Delaware Bankruptcy
*11
Court for the enforcement of the statutory injunction provided by 11 U.S.C.
§ 524(a)(2), as reflected in the Confirmation Order. In re Kewanee Boiler Corp.,
B.
Bankruptcy judges, like district judges, have the power to coerce compliance with injunctive orders. In the bankruptcy context, “the creditor who attempts to collect a discharged debt is violating not only a statute but also an have original jurisdiction.” 28 U.S.C. § 1441(a).
As for option (3), 11 U.S.C. § 350 provides for the bankruptcy courts’ administrative powers to open and close bankruptcy cases:
(a) After an estate is fully administered and the court has discharged the trustee, the court shall close the case.
(b) A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.
11 U.S.C. § 350. “[U]nder Bankruptcy Rule 4007(b) either the debtor or the creditor can move
to reopen the case for the purpose of filing a complaint to determine dischargeability.” In re
James,
Debtors did not choose option (3) because they did not—and could not—move the Florida Bankruptcy Court to reopen the Chapter 11 Case. The case would have to be reopened, if at all, by the Delaware Bankruptcy Court which had administered the case. See 11 U.S.C. § 350(b) (“A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.” (emphasis added)).
injunction and is therefore in contempt of the bankruptcy court that issued the
order of discharge.” Cox v. Zale Del., Inc.,
Bankruptcy-court power in this respect is given also by § 105(a) of the Bankruptcy Code: The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court frоm, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.
11 U.S.C. § 105(a); see also Hardy v. United States ex rel. I.R.S. (In re Hardy),
an injunction when necessary to prevent the defeat or impairment of its
jurisdiction is inherent in a court of bankruptcy, as it is in a duly established court
of equity.”); Local Loan Co. v. Hunt,
The party seeking to enforce an injunction cannot, however, obtain a
successive injunction—i.e., an injunction ordering compliance with an existing
injunction. See, e.g., Barrientos v. Wells Fargo Bank, N.A.,
*16
In this case, Debtors seeks to prevent Creditors from pursuing in State Court
claims purportedly discharged in the Chapter 11 Case. If the claims were
discharged, Creditors may be in contempt of the discharge injunction for
maintaining the State Court action. See Cox,
We think it unnecessary to distill any further the relief Debtors’ complaint seeks. What Debtors want is the enforcement of their discharge injunction. If they meant to obtain it by having a bankruptcy court sanction Creditors’ contempt for disregarding the injunction by, for example, enjoining Creditors from prosecuting the State Court action, then the Florida Bankruptcy Court was not the court with the power to do so.
C.
The ultimate question in a case like this one is which court has the power to enforce the discharge injunction. To answer this question, we must understand the relationship between a bankrupt’s estate and the administration of the estate.
1.
mandate. If satisfied that the plaintiff’s motion states a case of non-compliance, the court orders the defendant to show cause why he should not be held in contempt and schedules a hearing for that purpose. At the hearing, if the plaintiff proves what he has alleged in his motion for an order to show cause, the court hears from the defendant. At the end of the day, the court determines whether the defendant has complied with the injunctivе provision at issue and, if not, the sanction(s) necessary to ensure compliance.
Reynolds v. Roberts,
As a matter of basic policy, “[b]ankruptcy jurisdiction, as understood today
and at the time of the framing, is principally in rem jurisdiction.” Cent. Va. Cmty.
Coll. v. Katz,
applicable to bankruptcy, see Tenn. Student Assistance Corp. v. Hood, 541 U.S.
440, 446–47,
(citing 28 U.S.C. § 1334(e)). It is this aspect of a bankruptcy court’s jurisdiction
that “permits it to ‘determin[e] all claims that anyone, whether named in the action
or not, has to the property or thing in question,’” in that “‘[t]he proceeding is “one
against the world.”’” Id. at 448,
Logically, then, a bankruptcy court necessarily has power to enforce its own
orders regarding its administration of the estate. Local Loan Co.,
Moreover, the court that enters an injunctive order retains jurisdiction to
enforce its order. In this respect, a bankruptcy court is no different than any other
federal court, which possesses the inherent power to sanction contempt of its
orders. See Chambers v. NASCO, Inc.,
Perhaps most importantly, then, the power to sanction contempt is jurisdictional.
[T]he power of a court to make an order carries with it the equal power to punish for a disobedience of that order, and the inquiry as to the question of disobedience has been, from time immemorial, the special function of the [ordering] court. . . . To submit the question of disobedience to another tribunal . . . would operate to deprive the proceeding of half its efficiency. . . . [T]he sole adjudication of contempts, and the punishments thereof [belong] exclusively . . . to each respective court.
In re Debs,
Thus, the court that issued the injunctive order alone possesses the power to
enforce compliance with and punish contempt of that order. In re Debs, 158 U.S.
at 595,
In the case at hand, it is apparent that if Creditors’ filing of the State Court
action indeed violated the discharge injunction contained in the Confirmation
Order, then it was the Delaware Bankruptcy Court’s injunction to enforce—not the
Florida Bankruptcy Court’s. The Chapter 11 Case was administered by the
Delaware Bankruptcy Court; that court confirmed Debtors’ reorganization plan
and entered the order discharging Debtors’ preconfirmation liabilities. As the
court that controlled the res of Debtors’ estate, thе Delaware Bankruptcy Court
retained jurisdiction to effectuate and enforce the discharge injunction. This is
even more apparent considering that the Confirmation Order explicitly enjoined
suits to collect on discharged debts and vested continuing jurisdiction in the
Delaware Bankruptcy Court to enforce violations of the discharge injunction. See
In re Chateaugay Corp.,
2.
That alleged contemnors are without the territorial jurisdiction of the
rendition forum is of no moment. As a general principle, the Due Process Clause
requires that a federal court has jurisdiction over a person in order to bind that
person through judgment. See U.S. Const. amend. V; Omni Capital Int’l, Ltd. v.
Rudolf Wolff & Co., Ltd.,
1215–16 (10th Cir. 2011); Sec. & Exch. Comm’n v. Homa,
(7th Cir. 2008); Waffenschmidt,
*26
In the bankruptcy context, a bar-date notice, published to unknown
creditors, suffices to bring creditors within the power of the Bankruptcy Court
administering the estate. This is true regardless of whether actual notice is
received—provided that the means of publication are those “reasonably calculated,
under all the circumstances, to apprise interested parties of the pendency of the
action.” Mullane v. Central Hanover Bank & Trust Co.,
Court adjudicate the rights of Creditors аnd the members of their class, notwithstanding that Creditors and those similarly situated may or may not have independent jurisdictional ties to the District of Delaware.
3.
This conclusion does not fully resolve the matter at hand, for there remains the issue of how we are to dispose of this appeal. Above all, the Delaware *28 Bankruptcy Court should be the court to consider the merits of Debtor’s assertion that Creditors are pursuing discharged claims. The simplest option would be to remand the case with the instruction that Debtors’ complaint be dismissed without prejudice. If that were the disposition, Debtors presumably would turn to the Delaware Bankruptcy Court for relief. Taking that course, however, would seem unnecessarily cumbersome and wasteful of judicial resources.
Instead, we believe that transferring the case to the United States District
Court for the District of Delaware would be more efficient. The bankruptcy
jurisdiction and venue statutes provide that “[a] district court may transfer a case
or proceeding under title 11 to a district court for another district, in the interest of
justice or for the convenience of the parties.” 28 U.S.C. § 1412. First, if
characterized as an attempt to enforce the Confirmation Order’s discharge
injunction, Debtors’ complaint initiated a “proceeding under title 11,” 28 U.S.C.
§ 1412, that triggered the Florida Bankruptcy Court’s statutory transfer power, see
Cont’l Nat’l Bank of Miami v. Sanchez (In re Toledo),
Second, although courts cite myriad factors in determining whether to transfer a case under § 1412 “in the interest of justice,” we think no factors favor transfer more heavily here than that (1) the transferor forum has no power to adjudicate Debtor’s claim for relief and (2) the transferee forum is the only court with jurisdiction to provide the relief Debtors seek. If the case is transferred to the United States District Court for the District of Delaware, that court may refer it to the Delaware Bankruptcy Court pursuant to that District Court’s procedures. See 28 U.S.C. § 157(a) (“Each district court may provide that any or all . . . proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district.”). Accordingly, we shall vacate the District Court’s judgment and remand the case with the *30 instruction that the District Court transfer the case to the United States District Court for the District of Delaware.
III.
For the foregoing reasons, the judgment of the District Court is VACATED and the case is REMANDED to the District Court for the disposition set out above.
SO ORDERED.
Notes
[*] Honorable Robert T. Dawson, United States District Judge for the Western District of Arkansas, sitting by designation.
[1] The class action complaint was Creditors’ fourth amended complaint. Creditors filed their first complaint in December 2004. The allegations of that complaint and of the second and third amended complaints are not pertinent here.
[2] Alderwoods Group, Inc. (“Alderwoods”) was previously known as Loewen Group International, Inc. It and 816 Alderwoods subsidiaries—including Osiris Holding of Florida, Inc. (“Osiris”)—operated cemeteries or other funerary facilities in dozens of states and were the debtors in the Chapter 11 bankruptcy cases referred to infra. These cases were consolidated and jointly administered under case number 99-01244 (PJW) in the Bankruptcy Court for the District of Delaware. As indicated infra, we refer to all of the cases as the “Chapter 11 Case.” Osiris purchased Graceland in 1991. Four years later, Alderwoods acquired Osiris. On December 19, 2006, Northstar Graceland, LLC (“Northstar”) acquired Graceland from Osiris. Northstar is included in the term Debtors even though it was not a debtor in any of the consolidated Chapter 11 cases referred to in note 2, supra.
[3] See 11 U.S.C. § 101 et seq.
[4] The Bar Date Order provided that any creditor that did not file a proof of claim before the bar date could no longer assert its claim against Alderwoods or its subsidiaries.
[5] Section 157 states, in pertinent part: Each district court may provide that any or all cases under title 11 and any or all proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district. Bankruptcy judges may
[12] The Bankruptcy Court reasoned that because “prior to the Effective Dаte of their plan of reorganization, [Debtors] knew enough about record-keeping problems and lost burials, or at the very least, the difficulties it was experiencing locating grave-sites at Graceland,” Debtors could “reasonably expect future problems and future claims from family members like [Creditors] here.” Alderwoods Grp. v. Garcia, No. 08-1266-BKC-RAM-A, slip op. at 27–28 (Bankr. S.D. Fla. Nov. 25, 2009). The Florida Bankruptcy Court found the notice inadequate in that Creditors could not have known from reading the notice that it referred to Graceland.
[13] The District Court had appellate jurisdiction pursuant to 28 U.S.C. § 158(a): “The district courts of the United States shall have jurisdiction to hear appeals . . . from final judgments, orders, and decrees . . . entered in cases and proceedings referred to the bankruptcy judges . . . .”
[14] In its Rule 59(e) motion, Debtors argued that the nonresident alien Creditor—who lived in Cuba at the time of the Chapter 11 Case—did not enjoy the right of due process and thus was not entitled to adequate notice of the bankruptcy proceeding.
[15] We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1), which gives the courts of
appeals appellate jurisdiction over “final decisions, judgments, orders, and decrees entered” by
the district courts in exercise of their appellate jurisdiction under 28 U.S.C. § 158(a). “The plain
meaning of this provision grants this court jurisdiction of appeals only where the district court
exercised appellate jurisdiction from a decision by a bankruptcy judge, not where the district
court exercised original jurisdiction.” Jove Eng’g, Inc. v. I.R.S.,
[16] Section 350(b) states, in pertinent part, that “[a] case may be reopened . . . to accord relief to the debtor, or for other cause.” 11 U.S.C. § 350(b).
[17] Debtors rejected option (1) by not pleading the discharge as an affirmative defense in the State Court case. As for option (2), 28 U.S.C. § 1452 gives thе district courts removal jurisdiction for “claims related to bankruptcy cases”: A party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit’s police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title. 28 U.S.C. § 1452(a). Removal of cases under § 1452(a) is possible only within “30 days after receipt, through service or otherwise, of a copy of the initial pleading setting forth the claim or cause of action sought to be removed.” Fed. R. Bankr. P. 9027(a)(3)(A); see also 28 U.S.C. § 1446(b) (“The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.”). Section 1334 refers to 28 U.S.C. § 1334, “Bankruptcy Cases and Proceedings,” which gives “the district courts . . . original and exclusive jurisdiction of all cases under [the Bankruptcy Code], ” id. § 1334(a), and for “original but not exclusive jurisdiction of all civil proceedings arising under [the Bankruptcy Code], or arising in or related to cases under [the Bankruptcy Code],” id. § 1334(b). Debtors did not choose option (2) by timely removing the State Court case —in whole or in part—to federal court. Debtors did not file their complaint for declaratory relief in the Florida Bankruptcy Court until April 2008, nearly four years after Creditors filed the State Court action, in December 2004. Thus, even if the Florida Bankruptcy Court had treated the complaint as a de facto removal under 28 U.S.C. § 1452(a), that removal would have been untimely. And the gеneral removal statute, 28 U.S.C. § 1441, would not have applied; the State Court case, consisting only of state-law claims, was not one “of which the district courts of the United States
[18] Federal judges have inherent power under Article III of the United States Constitution
to hold litigants in civil contempt for violating court orders, see Chambers v. NASCO, Inc., 501
U.S. 32, 44,
[19] 11 U.S.C. § 105(a) empowers the bankruptcy courts to enjoin state suits. See In re
Hardy,
[20] We say misguided because Alderwoods’s complaint does not reflect the proper procedure to invoke the court’s civil contempt power. If the plaintiff (the party obtaining the writ) believеs that the defendant (the enjoined party) is failing to comply with the decree’s mandate, the plaintiff moves the court to issue an order to show cause why the defendant should not be adjudged in civil contempt and sanctioned. The plaintiff’s motion cites the injunctive provision at issue and alleges that the defendant has refused to obey its
[21] Libels against salvaged vessels or the proceeds thereof are in rem proceedings. The
Sabine, 101 U.S. (11 Otto) 384, 386,
[22] The same is true of civil forfeiture proceedings. “[I]t long has been understood that a
valid seizure of the res is a prerequisite to the initiation of an in rem civil forfeiture proceeding.”
Republic Nat’l Bank of Miami v. United States,
[23] In Bonner v. City of Prichard,
[24] An injunction to cease prosecuting a claim that was discharged in bankruptcy is such
an injunction. The disсharge granted by operation of 11 U.S.C. § 524 “embodies the ‘fresh start'
concept of the bankruptcy code.” In re Hardy,
[25] By analogy, posit one alternative to Debtors’ course in the present setting: rather than
Creditors suing Debtors in state court, Creditors sue Debtors in federal court seeking relief from
Debtor’s bankruрtcy discharge. Creditors’ remedy is not an in personam action against Debtors,
but relief through Fed. R. Civ. P. 60(d)—made applicable to the bankruptcy courts, with certain
exceptions, by Fed. R. Bankr. P. 9024—which provides that a court may “entertain an
independent action to relieve a party from a judgment, order, or proceeding; grant relief . . . to a
defendant who was not personally notified of the action; or set aside a judgment for fraud on the
court.” Indeed, one such ground for relief from the discharge injunction is lack of notice:
A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title
does not discharge an individual debtor from any debt neither listed nor scheduled
under section 521(a)(1) of this title, with the name, if known to the debtor, of the
creditor to whom such debt is owed, in time to permit—
(A) if such debt is not of a kind specified in paragraph (2), (4), or
(6) of this subsection, timely filing of a proof of claim, unless such
creditor had notice or actual knowledge of the case in time for such
timely filing; or
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of
this subsection, timely filing of a proof of claim and timely request
for a determination of dischargeability of such debt under one of
such paragraphs, unless such creditor had notice or actual
knowledge of the case in time for such timely filing and
request . . . .
11 U.S.C. § 523(a)(3). This is because in an in rem proceeding, the enforceability of an in rem
judgment is premised upon either actual or constructive notice to any persons who may have a
claim to the res. See, e.g., Betty K Agencies, Ltd. v. M/V MONADA,
[26] See, for example, the interest-of-justice factors listed in A.B. Real Estate, Inc. v.
Bruno’s, Inc. (In re Brunos, Inc.),