Heightened Standard for Imposition of Civil Contempt Sanctions Arising from Violation of Discharge Order
November 27, 2019
American Bankruptcy Institute
Types : Bylined Articles
On June 3, 2019, the U.S. Supreme Court released a unanimous decision in Taggart v. Lorenzen concluding that a court is authorized to “impose civil contempt sanctions when there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful under the discharge order.”  Put another way, “civil contempt … may be appropriate when the creditor violates a discharge order based on an objectively unreasonable understanding of the discharge order or the statutes that govern its scope.”  In doing so, the Supreme Court held that “the [Ninth] Court of Appeals erred in applying a subjective standard for civil contempt. Based on the traditional principles that govern civil contempt, the proper standard is an objective one.” 
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