Seventh Circuit Opinion on Contempt Raises Questions under Taggart
Without citing the Taggart decision by the Supreme Court in June, the Seventh Circuit reversed the lower courts and held a creditor in contempt of the discharge injunction.
In Taggart v. Lorenzen, 139 S. Ct. 1795, 204 L. Ed. 2d 129 (June 3, 2019), the Supreme Court rejected a strict-liability standard for the imposition of contempt for violating the discharge injunction. Instead, the high court held unanimously that the bankruptcy court “may impose civil contempt sanctions when there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful under the discharge order.” Id. 139 S. Ct. at 1801.
Later, we will explore the question of whether the outcome would have been different had the parties relied on Taggart.
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