Wednesday, October 14, 2015

Ninth Circuit Overrules Controversial 2010 Bankruptcy Opinion

Written by Michael Fuller

Today, the Ninth Circuit Court of Appeals ruled that consumers in bankruptcy may seek reimbursement for the fees they incur recovering damages caused by automatic stay violations.

The court’s en banc opinion, In re Schwartz-Tallard, overruled a controversial 2010 case, Sternberg v. Johnston, which expressly prohibited courts from awarding fees incurred recovering damages under § 362(k) of the Bankruptcy Code.

See related post: Payday Lender Liable for Expenses Incurred Prosecuting its Bankruptcy Violation

In Schwartz-Tallard, a debtor sued her mortgage company after it wrongfully foreclosed on her home during bankruptcy. The mortgage company denied all liability but lost in bankruptcy court and on appeal. Due to Sternberg’s holding, Schwartz-Tallard could not recover the fees she incurred defending the bankruptcy court’s ruling on appeal.

Today’s opinion expressly overruled Sternberg. The en banc court reasoned that Sternberg’s holding undercut Congressional intent to “encourage injured debtors to bring suit to vindicate their statutory right to the automatic stay’s protection…” The opinion recognized that the purpose of the automatic stay’s remedial scheme was to deter violations and provide redress for those that do occur. The court cited a brief filed by the National Association of Consumer Bankruptcy Attorneys showing that under Sternberg’s holding, “in many cases the actual damages suffered by the injured debtor will be too small to justify the expense of litigation, even if the debtor can afford to hire counsel.”

Michael Fuller is a partner at Olsen Daines and a consumer law adjunct professor at Lewis & Clark Law School.


  1. What’s Happening i'm new to this, I stumbled upon this I have found It positively useful and it has helped me out loads. I hope to contribute & assist other users like its aided me. Good job. free advertising singapore

  2. The other day, while I was at work, my cousin stole my iPad and tested to see if it can survive a 40 foot drop, just so she can be a youtube sensation. My iPad is now broken and she has 83 views. I know this is completely off topic but I had to share it with someone! local seo company 

  3. I know this if off topic but I'm looking into starting my own weblog and was curious what all is needed to get set up? I'm assuming having a blog like yours would cost a pretty penny? I'm not very internet savvy so I'm not 100% positive. Any recommendations or advice would be greatly appreciated. Thank you
    cost of SEO

  4. I love your blog.. very nice colors & theme. Did you make this website yourself or did you hire someone to do it for you? Plz respond as I'm looking to create my own blog and would like to find out where u got this from. many thanks online offline marketing firms in Singapore

  5. Excellent items from you, man. I've be mindful your stuff prior to and you're just extremely magnificent. I really like what you have received here, certainly like what you're stating and the way in which by which you say it. You make it enjoyable and you continue to take care of to stay it sensible. I can not wait to learn far more from you. That is actually a great website. seo packages singapore

  6. Great post, Which you have shared here about the Bankruptcy. Your article is very informative and I liked your way to express your views in this post. Thank you for sharing this article here. Chapter 7 Bankruptcy Ohio