The U.S. Supreme Court declined to hear a case over whether a bankruptcy judge can certify a nationwide class of individuals who allege Citigroup Inc. willfully violated their bankruptcy discharges, Bloomberg Law reported. The high court’s order yesterday leaves in place an August ruling by the U.S. Court of Appeals for the Second Circuit that freed Citi from facing a nationwide class action claim for allegedly refusing to correct the tradelines for consumers whose credit card debts were discharged in bankruptcy. The Second Circuit held that a bankruptcy court lacks the authority to hold a creditor in contempt for violating a debt discharge injunction issued by another bankruptcy court, and thus can’t grant broad relief to a nationwide class. Petitioner Kimberly Bruce said that the justices should hear the dispute because there’s nothing in the Bankruptcy Code that prohibits certification of a nationwide class of debtors or imposes the jurisdictional limitation outlined by the Second Circuit. Moreover, the August ruling stands in conflict with First Circuit precedent, she said. Bruce, who was initially permitted by the U.S. Bankruptcy Court for the Southern District of New York to bring a civil contempt claim against Citi on behalf of a nationwide class, said there’s no need to make thousands of class members return to hundreds of bankruptcy judges “to obtain the same relief against the same defendant.” Read more.
The Supreme Court will hill oral argument today in Office of the United States Trustee v. John Q. Hammons Fall 2006, LLC to determine whether the appropriate remedy for the constitutional uniformity violation found by this court in Siegel v. Fitzgerald is to require the United States Trustee to grant retrospective refunds of the increased fees paid by debtors in U.S. Trustee districts during the period of disuniformity, or is instead either to deem sufficient the prospective remedy adopted by Congress or to require the collection of additional fees from a much smaller number of debtors in Bankruptcy Administrator districts. Click here to listen to the argument today at 10 a.m. ET.
