United States Trustee Manual
Bankruptcy Fraud & Abuse Enforcement Program
Criminal contempt is designed to punish a defendant for his/her conduct and to vindicate the authority of the court. Downey v. Clauder, 30 F.3d 681 (6th Cir. 1994). Criminal contempt, unlike civil contempt, cannot be purged by later compliance with a court's orders. International Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821 (1994). It is critical to specify that criminal contempt is being considered. Failure to give a person fair notice that criminal contempt is being sought will result in reversal. Downey at 686. 5-9.4.2
Authority of the Bankruptcy Court The rule in some circuits is that the bankruptcy court does not have the authority to hold a defendant in criminal contempt for conduct outside the court's presence. See In re Hipp, 895 F.2d 1503 (5th Cir. 1990), and the cases cited therein. (After remand, the defendant was convicted of criminal contempt by the district court because he violated a direct, personal order of the bankruptcy judge, In re Hipp, 5 F.3d 109 (5th Cir. 1993).) Following the Supreme Court decision in Chambers v. NASCO, 501 U.S. 32 (1991), the Ninth Circuit recently switched sides on this question and now holds that under Bankruptcy Rule 9020 bankruptcy courts do have contempt powers. In re Rainbow Magazine, 77 F.3d 278 (9th Cir. 1996). Under Rule 9020, the bankruptcy judge can find a person in civil or criminal contempt after giving detailed notice and holding a hearing. The bankruptcy judge's order of contempt has the same effect as a district judge's order unless, within ten days of service of the order of contempt, the contemptor files objections under Bankruptcy Rule 9033. If objections are filed, the matter is heard de novo on the record or on such additional evidence as the district court desires to hear. Chambers, In re Rainbow Magazine, and In re Skinner, 917 F.2d 444 (10th Cir. 1990), give the bankruptcy court power to impose civil sanctions under either Bankruptcy Rule 9011 or section 105(a) of the Bankruptcy Code.
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