In Re: Jenny ThuMy Ho

Filing 9

ORDER AND REASONS that the decision of the bankruptcy court is REVERSED. Signed by Judge Martin L.C. Feldman on 2/8/2012. (tsf, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CIVIL ACTION
IN RE: JENNY THUMY HO, DEBTOR

NO. 11-01512
SECTION “F”

ORDER AND REASONS
Before

the

Court

is

an

appeal

from

the

United

States

Bankruptcy Court’s order finding appellant in contempt of court and
imposing sanctions.

For the reasons that follow, the bankruptcy

court’s judgment is REVERSED.
Background
This appeal arises out of a final order of the bankruptcy
court finding appellant, William G. Cherbonnier, Jr., counsel for
the debtor, Jenny Thumy Ho, in contempt of court and fining him
$500.
Appellant represented the debtor in a Chapter 13 bankruptcy
case. After experiencing financial difficulties during the term of
her plan, the debtor proposed a plan modification.
court approved the modification.

The bankruptcy

This approval, however, was

subject to counsel filing an amended plan, which was to include
certain language that the court orally specified.
Mr. Cherbonnier timely filed an amended plan. However, the
bankruptcy court found that the plan did not comply with the
court’s ruling.

Accordingly, the bankruptcy court had its deputy

1

contact

appellant

corrected.

to

advise

him

of

the

deficiencies

to

be

After a month, Appellant still failed to file a

corrected version of the amended plan. As a result, the bankruptcy
judge ordered, sua sponte, appellant to appear to show cause “why
the

Court

should

not

reconsider

approval

of

debtor’s

plan

modification for failure to comply with the order of the Court.”
Appellant appeared as ordered, and tried to explain his
failure.

At

the

hearing,

appellant

explained

that

when

he

submitted the amended plan, he thought that he had complied with
the court’s directions.

He further explained that after speaking

with the court deputy, he made an effort to amend using the Best
Case

Bankruptcy

software,

and

attempted

to

file

the

plan.

Appellant thought he had filed the plan, but he had in fact not.
Appellant did not realize that his attempt had been unsuccessful
until he received the bankruptcy court’s order to show cause.
At the hearing, the court rejected appellant’s explanation,
and fined him. In imposing the fine, the bankruptcy court made the
following remarks:
Okay, $500 fine for failure to file the
document into the record even after the Order
to Show Cause has been filed. No excuse for
not having done it. I could have reviewed it
by this point.
The Trustee could have
commented on it. We could be done. Instead
we’re going to have a whole other round of
this because you haven’t done what you needed
to do even after the Court advised you that
you hadn’t. No excuse.
The next day, the bankruptcy court issued its Order Imposing
2

Sanctions.

The court held appellant in contempt “for failure to

timely file the appropriate modified plan as ordered by the Court,”
and sanctioned appellant in the amount of $500 to be paid into the
bankruptcy
protest.

court’s

registry.

Appellant

paid

the

fine

under

He now appeals.
I.

Standard of Review

When a district court reviews a bankruptcy court proceeding,
the standard of review is the same as when an appellate court
reviews a district court proceeding. 28 U.S.C. § 158(c).

Findings

of fact are reviewed under the clearly erroneous standard; while
conclusions of law and mixed questions of law and fact are reviewed
de no novo. See In re Asarco, L.L.C., 650 F.3d 593, 600-01 (5th
Cir. 2011).
II.

Contempt Order

18 U.S.C. § 401(3) grants the federal courts criminal contempt
power in certain situations, including where a party has violated
a court order.
has

held

that

However, the Fifth Circuit U.S. Court of Appeals
bankruptcy

courts

have

no

power—inherent

or

statutory—to hear and decide questions of criminal contempt for
violations of court orders.

In re Hipp, Inc. 895 F.2d 1503, 1509,

1521 (5th Cir. 1990)(holding that the bankruptcy courts have no
such power, at least as to contempts not committed in or near their
presence).

Accordingly, the threshold question is whether the

contempt order at issue should be classified as civil or criminal.

3

In re Bradley, 588 F.3d 254, 263 (5th Cir. 2009).

If it is

criminal, then the bankruptcy court lacked the power to issue it.
See Hipp, 895 F.2d at 1521.
A contempt order is classified as civil or criminal according
to its primary purpose.

Bradley, 588 F.3d at 263.

A contempt

order is civil if its purpose is to coerce the contemnor into
compliance with a court order, or to compensate another party for
injuries or costs resulting from the contemnor’s misconduct.

Id.

A contempt order is criminal if its purpose is to punish the
contemnor for past conduct and to vindicate the court’s authority.
Id.

In determining whether a contempt order is civil or criminal,

a central question is whether the penalty imposed is absolute, or
is conditioned upon the contemnor’s future conduct.

Id. (holding

that a lump-sum fine that punishes past conduct is criminal, but a
fine that accrues on an ongoing basis for continued noncompliance
is civil).
The contempt order here was patently intended to be punitive.
The order served no coercive purpose,1 and did not compensate
another party.2

The order’s purposes were to punish appellant and

1

The contempt order could not possibly coerce appellant
into compliance, because he had already complied by the time the
court issued its written order. Appellant filed an updated
version of the amended plan the very same day of the hearing on
the order to show cause, the day before the court issued its
written contempt order.
2

The fine was payable not to another party, but rather to
the court’s registry.
4

to vindicate the bankruptcy court’s authority.
The court’s order was simply imposed to punish appellant for
his failure to timely file an updated version of the amended plan.
The court sanctioned appellant for failing to file the plan before
the hearing on the order to show cause. The fine was not at all
conditioned on appellant’s future conduct.

It was entirely based

on appellant’s failure to file the revised plan before the hearing.
Once the hearing began, appellant could do nothing to purge himself
of contempt.
The

order

authority.

was

also

intended

to

vindicate

the

court’s

The contempt proceeding was initiated by the judge on

her own, after appellant failed to timely file the updated plan.
The

court

proceeding.

observed

counsel’s

failure

How long is unclear.

delayed

the

bankruptcy

In order to vindicate judicial

authority, the court held appellant in contempt, and imposed the
fine.3
The fine can only be taken as criminal in nature on this
record.

As such, the bankruptcy court had no power to issue the

contempt order, and the contempt order must therefore be reversed.4

3

Compare Bradley, 588 F.3d at 264, classifying a contempt
order as civil where “the bankruptcy court held [appellant]
liable to the bankruptcy estate rather than imposing a fine
payable to the court.”
4

This section of this Court is apparently not the first to
find that the bankruptcy court exceeded its contempt authority.
See In re Ritter, No. 11-1513, 2011 WL 5974623, at *4 (E.D. La.
Nov. 29, 2011)(Barbier, J.)(involving the same attorney, but a
5

For the foregoing reasons, IT IS ORDERED that the decision
of the bankruptcy court is REVERSED.

New Orleans, Louisiana, February 8, 2012

_____________________________
MARIN L.C. FELDMAN
UNITED STATES DISTRICT JUDGE

different debtor). In that decision, Judge Barbier advised the
bankruptcy court that it was not powerless in situations
involving potential criminal contempt. Id. at *4 n.9. While the
bankruptcy court has no § 401(3) criminal contempt power, the
district court does. Therefore, upon violation of its order, if
the judge feels a contempt order is justified, the bankruptcy
court should certify the matter to the district court for further
proceedings.
6