In the beginning of the opinion he wrote for Stern v. Marshall, Chief Justice Roberts referenced Charles Dickens’ Bleak House, in which Dickens gives a grim description of a lawsuit litigated in a foggy courtroom.[1] In resolving the tumultuous Stern dispute, the Supreme Court created a new fogginess in bankruptcy courtrooms as to the exact contours and scope of a bankruptcy courts’ authority. As our readers are aware, the Supreme Court and the various Circuit Courts have issued a number of opinions in the wake of Stern to clarify the exact parameters of a bankruptcy court powers and the recent opinion by the Fourth Circuit in In re Lewis addressing the specific power of a bankruptcy court to discipline attorneys further helps clear the proverbial fog surrounding the bankruptcy courts’ powers.[2]
In In re Lewis, Mr. Lewis was the attorney to a debtor in bankruptcy.[3] The Bankruptcy Administrator observed several discrepancies in Mr. Lewis’ representation, prompting the Bankruptcy Court to sanction and temporarily suspend Mr. Lewis from further proceedings.[4] On appeal, Mr. Lewis contended that the court did not have the authority, as an Article I tribunal, to suspend his bar privileges or to sanction him.[5] Relying on Stern, he argued that the court did not possess the authority to rule on disciplinary matters against him.[6] The Fourth Circuit disagreed.[7]
The Court of Appeals explained that the Bankruptcy Court appropriately exercised its authority to sanction Lewis for his misconduct.[8] Bankruptcy courts have inherent power, “‘incidental to all courts’ to ‘discipline attorneys who appear before it,’”[9] including “issu[ing] any order, process, or judgment that is necessary or appropriate to carry out the provisions of [Title 11] or to prevent an abuse of power”[10] and suspending or disbarring attorneys from their court.[11] So, despite any Constitutional restrictions prescribed upon Article I courts, all courts may admonish and discipline those who appear before them.
[1] Stern v. Marshall, 131 S. Ct. 2594 (2011)
[2] In re Lewis, 2015 WL 3561277 (E.D. N.C. June 9, 2015).
[3] In re Lewis, 2015 WL 3561277 at *1.
[4] Id.
[5] Id. at *2.
[6] Id.
[7] Id.
[8] Id.
[9] Id. (quoting Chambers v. NASCO, Inc., 501 US 32, 43 (1991).
[10] Id. (quoting 11 USC § 105(a)).
[11] Id. (citing In re Snyder, 472 U.S. 634, 643 (1985)).