Dingley v. Yellow Logistics, LLC, No. 14-60055 (9th Cir. 2017)
Annotate this CaseDebtor was the former owner and operator of two towing companies, Yellow Logistics and Yellow Express. In this case, the bankruptcy court sanctioned the companies for violating the automatic stay by pursuing civil contempt proceedings against debtor based on his failure to pay discovery sanctions in a state court action. The court held that under In re Berg, civil contempt proceedings are exempted from the automatic stay under the Bankruptcy Code's government regulatory exemption, when, as here, the contempt proceedings are intended to effectuate the court's public policy interest in deterring litigation misconduct. Therefore, the court concluded that the bankruptcy court erred, and affirmed the decision of the Bankruptcy Appellate Panel (BAP), though on a different basis than that discussed by the BAP.
Court Description: Bankruptcy. Affirming the Bankruptcy Appellate Panel’s opinion, though on a different basis than that discussed by the BAP, the panel held that the bankruptcy court erred by sanctioning creditors for violating the automatic stay by pursuing civil contempt proceedings against the debtor based on his failure to pay discovery sanctions in a state court action. The Bankruptcy Code imposes an automatic stay prohibiting creditors from attempting to collect pre-petition debts against the debtor. The panel held that civil contempt proceedings are exempted from the automatic stay under the Bankruptcy Code’s government regulatory exemption, 11 U.S.C. § 362(b)(4), when, as here, the contempt proceedings are intended to effectuate the court’s public policy interest in deterring litigation misconduct. The BAP reasoned that the civil contempt proceedings were exempted from the automatic stay because, under David v. Hooker Ltd., 560 F.2d 412 (9th Cir. 1977), they did not turn on the determination or collection of an underlying debt and were not a ploy to harass the debtor. Because the panel relied instead upon the government regulatory exemption set forth in the Bankruptcy Code, enacted after Hooker, it did not address whether Hooker remains good law. IN RE DINGLEY 3
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.