StayViolation.Com

Mary Newton Gets Accepted To UH

This news is not necessarily about automatic stay and discharge order violations.  It is proud father time.  With my oldest daughter, Mary, finishing her studies in Japanese at The University of Texas in Austin in May, we have learned that she has now been accepted to the School of Law at The University of Houston.  As most of us know, it is a hard row to hoe to get through college and to get accepted to a state law school.  In Mary's case she is completing her undergraduate studies at UT in a record three years.  It takes much dedication and tenacity to do this, and her entire family is very proud of her indeed.  Mary is still trying to get all of her options together.  Among these she is seeking a one year teaching position in Japan through what is known as the JET program.  She has an interview scheduled concerning such a position at the Japanese Consulate in Houston.  Mary does want to go to law school, but would like to manage all of the opportunities offered to her.  Should she decide to go to Japan first, we can only hope that UH is willing to wait a year to have such a talented young lady attend.  All I can say is -- WAY TO GO GIRL!!!!

From Whince Stay Enforcement Comes

One cannot begin to understand the impact of the bankruptcy automatic stay until its lineage is understood.

It was once joked that Marilyn Monroe told Albert Einstein that they should have a child together. She purportedly asked Einstein, “Can you just imagine a child with my looks and your brain”? “Yes”, said Einstein, “but what if the child had my looks and your brain”? As with Congress birthing any law, you are never quite sure what you are going to get. Once the biology of the law is set in motion, however, there is little that can be done about it, despite what some judges might like to do to defeat Congressional intent. From the debtors’ standpoint, Congress birthed a beautiful child of high intellect when it passed 11 U.S.C. § 362. From the creditors’ perspective, Congress delivered a Frankenstein. As they say in East Texas, if you want to know what a child is going to look like just look at the child’s parents. To fully appreciate 11 U.S.C. § 362, you have to understand its parentage. This is supported by the United States Supreme Court who stated in Morissette v. United States, 71 S.Ct. 240, 250 (1952), “where Congress borrows terms of art in which are accumulated the legal traditions and meanings of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it has taken and the meaning its use will convey to the judicial mind unless otherwise instructed.” The tendency in automatic stay litigation is to focus too narrowly on bankruptcy court decisions, when in fact there are volumes of related published Supreme Court and circuit court opinions that define the sum and substance of the automatic stay and the litigation that derives from its violation. Automatic stay litigation is born of two parents. The beautiful mother is federal injunction law. The smart father is federal fee-shifting laws, or what is commonly called “private attorneys general” statutes. The legal heritage of both of these parents directly relates to automatic stay litigation. The case law should be fully utilized.

The beautiful mother is the automatic stay provisions of 11 U.S.C. § 362(a) that constitutes, essentially, a codification of federal law concerning injunctions. The 11th Circuit Court of Appeals explains it well:

“We have characterized the automatic stay of 11 U.S.C. § 362(a) as ‘essentially a court ordered injunction, [and] any person or entity who violates the stay may be found in contempt of court.’…Although essentially a court-ordered injunction, the automatic stay nevertheless is actually a legislative creation with unique properties different from court ordered injunctions. As its common name suggests, the ‘automatic stay’ arises automatically when a petition is filed, unless falling within an exception under § 362(b). In contrast, a court-ordered injunction is discretionary, not automatic, and usually does not arise until after a complainant files a separate motion. The metes and bounds of the automatic stay are provided by statute and systematically applied to all cases. However, the metes and bounds of court ordered injunctions are provided on a case-by-case basis by the issuing court specifically tailoring the injunction to fit the specific circumstances of the specific case…The nature of court-ordered injunctions requires the enforcing court not only to determine whether the order was valid, but to make case specific determinations whether ‘1) the allegedly violated order was valid and lawful; 2) the order was clear, definite and unambiguous; and 3) the alleged violator had the ability to comply with the order’…In contrast, determinations (1) whether the automatic stay is valid and lawful and (2) whether the automatic stay is clear, definite and unambiguous do not vary on a case-by-case basis.” (Internal cites omitted). Jove Engineering, Inc. v. IRS, 92 F.3d 1539, 1546 (11th Cir. 1996).

The stern and intellectual father of automatic stay litigation is the federal private attorneys general statute of 11 U.S.C. § 362(k)(or § 362(h) under the old Code), which essentially says “do what your mother tells you to do, or else”!

I am a child of the Cold War and I remember Nikita Khrushchev saying, “If you feed the people just with revolutionary slogans they will listen today, they will listen tomorrow, they will listen the day after tomorrow, but on the fourth day they will say, ‘To hell with you.’” It does not matter which side of the divide you are on, we all know that rights are not self-enforcing. That is to say that the protections allowed the debtor in § 362(a) are nice, they are inspiring, but they are just slogans. The government does not know when a debtor’s rights are being violated. It does not have the infrastructure to pursue the perpetrators when it is informed. That is the reason for the addition of §362(k). As with all fee-shifting statutes, it places the debtor, and his or her attorney, in the position of private attorneys general authorized to identify stay violations and prosecute those that commit the wrong. We know this because the standards the Court sets out for the Civil Rights Attorney’s Fees Award Act “are generally applicable in all cases in which Congress has authorized an award of attorney’s fees to a prevailing party.” Hensley v. Echerhart, 103 S.Ct. 1933, 1939 (1983). To this we add the authority of the circuit courts. Congress has “created a system of ‘private attorneys general’ who will be able to aid the effective enforcement of the [Code].” Gram v. Bank of Louisiana, 691 F.2d 728, 729 (5th Cir. 1982) (TILA).  The intent is to allow the consumer to participate in policing the enforcement of the automatic stay, and its language should be construed liberally in light of its broad remedial purpose. See, Thomas v. Myers-Dickson Furniture Co., 479 F.2d 740,748 (5th Cir. 1993) (TILA). The award of consumer attorney fees is critical to the effective enforcement of fee-shifting statutes by encouraging consumers to act as private attorneys general, where available actual and statutory damages would not otherwise justify an action. Jaffee v. Redmond, 142 F.3d 409 (7th Cir. 1998) (Civil Rights). Plant v. Blazer Fin. Servs., Inc., 589 F.2d 1357 (5th Cir. 1979 (TILA). McGowan v. King, Inc. 569 F.2d 845 (5th Cir. 1978) (TILA). Private enforcement obviates the need for a large federal enforcement bureaucracy. In re Steingbrecher, 110 B.R. 155 (Bankr. E.D. Pa. 1990) (TILA).

If you have ever watched any of the “Kids Say The Darndest Things” shows, you know it is true. “Don’t trust a dog to watch your food”. “Never hold a cat and a dust buster at the same time”. “Felt markers aren’t good to use as lipstick”. “When your Dad asks you, ‘Do I look stupid’ don’t answer him”. And, “When you get a bad grade at school, show it to your Mom when she’s on the phone”. Like any kid, 11 U.S.C. §362, says the darndest things as well. These darndest things will be the subject of future posts.