In Re: Alba Sanchez ( 2019 )

18-679
In re: Alba Sanchez
In the
United States Court of Appeals
For the Second Circuit
August Term, 2019
Submitted: September 4, 2019
Decided: October 30, 2019
Docket No. 18‐679
IN RE: ALBA SANCHEZ,
Debtor.
KENNETH ROSELLINI,
Appellant,
v.
UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF NEW YORK,
Appellee.
Appeal from the United States District Court
for the Eastern District of New York
No. 16‐cv‐5522, Block, Judge.
Before: WALKER, CARNEY, AND SULLIVAN, Circuit Judges.
Kenneth Rosellini, an attorney proceeding pro se, appeals the district court’s
orders affirming the bankruptcy court’s award of monetary sanctions pursuant to
its inherent power. As a matter of first impression in our Circuit, we hold that
bankruptcy courts possess inherent power to sanction attorneys in appropriate
circumstances. Because Rosellini’s challenges to the bankruptcy court’s exercise
of that power fails for the reasons set forth in a separately‐filed summary order,
we affirm.
AFFIRMED.
Kenneth Rosellini, Esq., pro se, Clifton, NJ, for
Appellant.
No appearance, for Appellee.
PER CURIAM.
In September 2013, Appellant Kenneth Rosellini filed a Chapter 7 petition in
the United States Bankruptcy Court for the Eastern District of New York on behalf
of his client, Alba Sanchez. Rosellini subsequently failed to prosecute the case,
however, prompting the bankruptcy court to issue multiple orders to show cause.
After he failed to comply with those orders, the bankruptcy court ultimately
sanctioned him $1,000. Rosellini then filed a motion to vacate the sanctions order,
which the bankruptcy court denied, citing its inherent power “to manage its
calendar and the courtroom.” App’x at 5 (quoting United States v. Seltzer, 227 F.3d
36, 42 (2d Cir. 2000)). Rosellini appealed the bankruptcy court’s orders denying
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his motion to vacate and denying reconsideration, and the district court (Block, J.)
affirmed. He now appeals to this Court.
“A district court’s order in a bankruptcy case is subject to plenary review,
meaning that this Court undertakes an independent examination of the factual
findings and legal conclusions of the bankruptcy court.” Goldman, Sachs & Co. v.
Esso Virgin Islands, Inc. (In re Duplan Corp.), 212 F.3d 144, 151 (2d Cir. 2000). Here,
because the bankruptcy court relied exclusively on its inherent power to support
its sanctions order, we confine our review to the question of whether the court
properly exercised that power, and thus we do not consider potential alternative
sources of authority. See Solow v. Kalikow (In re Kalikow), 602 F.3d 82, 96 (2d Cir.
2010) (“The Bankruptcy Court’s discretion to award sanctions may be exercised
only on the basis of the specific authority invoked by that court.”).
As a threshold matter, although Rosellini does not argue that bankruptcy
courts lack an inherent sanctioning power, we consider this issue to be
jurisdictional. See, e.g., Zeisl v. Watman (In re Austrian & German Bank Holocaust
Litig.), 317 F.3d 91, 99 (2d Cir. 2003); United States v. Uccio, 917 F.2d 80, 84 (2d Cir.
1990), superseded by rule on other grounds as recognized in United States v. Werber, 51
F.3d 342 (2d Cir. 1995). Thus, we have an independent obligation to ensure that
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bankruptcy courts in fact possess such power. See Bender v. Williamsport Area Sch.
Dist., 475 U.S. 534, 541 (1986) (“[E]very federal appellate court has a special
obligation to satisfy itself not only of its own jurisdiction, but also that of the lower
courts in a cause under review, even though the parties are prepared to concede
it.” (internal quotation marks omitted)); see also, e.g., Green Point Credit, LLC v.
McLean (In re McLean), 794 F.3d 1313, 1318–20 (11th Cir. 2015) (considering sua
sponte whether the bankruptcy court had jurisdiction to enforce an injunction
through its contempt power); Plastiras v. Idell (In re Sequoia Auto Brokers Ltd., Inc.),
827 F.2d 1281, 1283–84 (9th Cir. 1987) (considering sua sponte the jurisdictional
question of whether bankruptcy judges have inherent contempt power), superseded
by statute on other grounds as recognized in Caldwell v. Unified Capital Corp. (In re
Rainbow Magazine, Inc.), 77 F.3d 278 (9th Cir. 1996).
In fulfilling this obligation here, we consider an issue of first impression in
our Circuit – but we do not write on a blank slate. Both the Supreme Court and
this Court have previously suggested that bankruptcy courts possess inherent
sanctioning powers. See Law v. Siegel, 571 U.S. 415, 427 (2014) (“The [bankruptcy]
court may also possess further sanctioning authority under . . . its inherent
powers.”); In re Kalikow, 602 F.3d at 96–97 (rejecting the bankruptcy court’s
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“attempt to exercise a combination of inherent and statutory authority” to award
sanctions, while implying that bankruptcy courts possess such inherent authority
as a general matter); Casse v. Key Bank Nat’l Ass’n (In re Casse), 198 F.3d 327, 336,
341 (2d Cir. 1999) (holding that the bankruptcy court had authority under 11 U.S.C.
§§ 105(a) and 349(a) to enjoin future filings, but also noting in dicta that
bankruptcy courts, “through their inherent powers as courts, . . . are able to police
their dockets and afford appropriate relief” (quoting 2 Collier on Bankruptcy
¶ 105.01[2] (15th ed. 1999))). And beyond our circuit, the “[c]ourts of appeals
consistently have recognized that bankruptcy courts may impose various forms of
inherent‐power sanctions.” Charbono v. Sumski (In re Charbono), 790 F.3d 80, 87 (1st
Cir. 2015) (collecting cases).
As our sister circuits have explained, inherent sanctioning powers are not
contingent on Article III, but rather are, as their name suggests, inherent in the
nature of federal courts as institutions charged with judicial functions. See id. at
86–87; Citizens Bank & Tr. Co. v. Case (In re Case), 937 F.2d 1014, 1023 (5th Cir. 1991);
see also Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991) (“Certain implied powers
must necessarily result to our Courts of justice from the nature of their institution
. . . . These powers are governed not by rule or statute but by the control
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necessarily vested in courts to manage their own affairs so as to achieve the orderly
and expeditious disposition of cases.” (internal quotation marks, citations, and
brackets omitted)). We therefore hold that bankruptcy courts, like Article III
courts, possess inherent sanctioning powers. And, as relevant here, these include
the power to impose relatively minor non‐compensatory sanctions on attorneys
appearing before the court in appropriate circumstances. See Wilder v. GL Bus
Lines, 258 F.3d 126, 130 (2d Cir. 2001) (per curiam); Seltzer, 227 F.3d at 41–42. We
express no opinion on the outermost bounds of bankruptcy courts’ inherent
sanctions powers, including their power to impose more substantial punitive
sanctions. See Adell v. John Richards Homes Bldg. Co. (In re John Richards Homes Bldg.
Co.), 552 F. App’x 401, 415 (6th Cir. 2013); Knupfer v. Lindblade (In re Dyer), 322 F.3d
1178, 1194, 1198 (9th Cir. 2003).
In these circumstances, the bankruptcy court’s order imposing sanctions on
Rosellini in the amount of $1,000 was appropriate for the reasons stated in a
separately‐filed summary order. Accordingly, we AFFIRM the orders of the
district court.
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