Bankruptcy Judge OKs Four Years of Jailing for Civil Contempt

Later this year, the Ninth Circuit will decide whether the civil contempt power enables a bankruptcy judge to jail someone for more than four years.

In May 2015, Bankruptcy Judge Theodore C. Albert of Santa Ana, Calif., jailed Kenneth Gharib for civil contempt following Gharib’s failure to turn over $1.4 million in estate funds and for failing to pay $1,000 a day in sanctions.

Since then, Judge Albert has held at least 13 hearings and decided each time that continuing incarceration was still coercive and had not become punitive. Gharib has taken numerous appeals to the district and circuit courts.

The Ninth Circuit upheld continuing incarceration in July 2017 and in June 2018. For ABI’s coverage of the circuit court opinions, click here and here. Gharib also filed a petition for certiorari, which the U.S. Supreme Court denied on January 7. Gharib v. Casey, 18-5960 (Sup. Ct.).

In an opinion on February 12, Judge Albert once again kept Gharib in jail. Gharib is now being represented by the Federal Public Defender, who also represented him in the petition to the Supreme Court.

In his new opinion, Judge Albert rejected Gharib’s arguments based on impossibility and futility. He also said there is no mathematical formula defining the permissible length of civil incarceration in relation to a prison sentence for a crime of similar gravity. We recommend reading Judge Albert’s decision regarding limits on the civil contempt power.

The next round of litigation may find Gharib in another court. At the end of the opinion, Judge Albert invited Gharib to file a motion asking the district court to withdraw the reference.

Judge Albert also said that Gharib’s counsel could hold a hearing on shortened notice, “with no preconditions except that he have something different to say.”