let's call the next case the chief judge of the michigan bankruptcy court found as a matter of fact in a core proceeding that mr adel had come a cockpit out of whole cloth a series of misrepresentations made under rope in proceedings before the michigan court which were designed to do and end run around and eleven u s c three zero three i award which judge rhodes had entered in the first instance which this court affirmed in every particular and march one two thousand and six and which sanction mr adel two million dollars punitive damages under three o three i for making a misrepresentation under oath to begin with to initiate an involuntary bankruptcy petition judge rhodes found as a matter of there are there were three facets to the misrepresentations under oath which mr adel made number one he misrepresented under oath in the michigan proceedings that he had borrowed money from his employers that was to do an compensation between two thousand and three and two thousand and nine but there was attorney fees that was awarded with respect to this project yes there were attorney fees large attorney's fees yes there were large attorney fees awarded your honor and what i would indicate so so the question then is whether there whether it's proper to punish in addition to for compensation yes your honor i think that i think that's exactly correct what's the source of that power i mean it's kind of an extraordinary power there are two sources to the  understand but it's a punitive sanctions and also compensated for loss that that that is correct but i don't any support for the idea that it can be entered of without compensating for a loss would be yes your honor this court's decision in man versus  university of cincinnati that was a case where the court specifically approved an award of punitive damages under chambers versus nasco in addition to an award of attorney fees what happened in that case was was that a party and its counsel reviewed the documents had bit which had been subpoenaed before the opposing party had a chance to object to the subpoena the district who are awarded a standalone punitive damages award sanction how much twenty five hundred dollars and separate and apart from that it awarded another thirty three hundred dollars for fees incurred in objecting to the subpoena and redressing the problem that was caused by the early look at the award obviously your honor this case is a considerable a multiple of twenty five hundred dollars however and that's really the only support that you have no it is not the only support that i have your honor there are numerous what some of these cases minor punitive sanctions or do you have something that would just say you might give punitive sanctions that fit the appropriate damage or harm or teach the lesson that needs to be taught in this case as opposed to you have jurisdiction to do these minor punitive but nothing more yes your honor the campbell case the gore case the t x cream court cases indicated two things number one the most significant consideration which your honour's want to take into account in determining whether punitive damages are awarded is the reprehensible a t of the in  court to protect the integrity of of that order that it issues and to protect the integrity of the process yes a lawyer matt yes your honor and that is exactly what this court held in the  tourism transportation inc three fifty nine b r three thirty six which awarded fifty thousand dollars in punitive damages under the authority of chambers and eleven u s c one hundred five in addition to thirty five thousand dollars an attorney bankruptcy court awarded fifty thousand dollars in punitive damages against the creditor providing the automatic stay plus fifty one thousand dollars in compensatory damages plus there including thirty three thousand dollars in legal fees  and that was under the authority of chambers and eleven u s c one hundred five in watkins the bankruptcy court imposed as a sanction a punitive damages awarded of trouble the debtors actual damages as a going to make more sense to me if you tell fifty three fifty f second for ninety seven and this court held that if compensatory damages were insufficient in the bankruptcy courts reasoned judgment to achieve the purpose that was necessary and the bankruptcy court under chambers has the inherent power to to control its own dock the here's what archer said quote the bankruptcy court is free to impose an appropriate amount of punitive damages we believe that's to the bankruptcy courts discretion and the judge throws exercised his discretion in this case your honor because the two million dollar punitive damages award which was upheld by this court at four thirty nine after two forty eight wasn't enough to stop mr rebell from making misrepresentations under oath as a matter of fact your honor if you look at the very bankruptcy plan which was proposed by mr adele when he filed his voluntary bankruptcy petition in florida in november of two thousand and three it would have ripped wired it would have required john richard's homes to judge rhodes as a warning why because that plan and the next three after it said that john richard's homes right to recovery anything of that bankruptcy would be dependent upon a successful recovery and a mail practice litigation against mr adele's then lawyers who filed the involuntary bankruptcy petition the schaefer unwinder firm here was the problem with that your honor the problem was was the judge wrote specifically found had withheld the information from those lawyers which is why they filed the petition in the first place it was dead in the water that if you want to continue you'll be using your rebuttal i understand that that's all i'm addressing in the  good morning america ronstadt on behalf of heaven adele i think i'd like to start at the beginning which is judge rhodes initial orders where he denied on it men's request for attorney's fees and he denied jr each his request for sanction bankruptcy court but we're reviewing the district for one to speak formally speaking it's an appeal from the district court to this board but out of the on king case which we cite in our brief the court in essence looks at this as though it were in the same shoes and of course of the court looks at what the court made a couple of decisions made it made later decisions that were inconsistent well that's because the district court reversed the initial decisions so we were very we must review in the first instance the initial decisions of the bank the corp of those were actual dollar figures that we're talking about today derive from the october twenty seventh two thousand and eleven that's correct and correct that is that is correct your honor the one point zero million dollars in attorney's fees in the two point eight million dollars in sanctions punitive damages but sanctions under the and what judge rose did initially though was he said quote one hundred men not only six attorneys fees and cost for the appeals that's the appeal of the initial six point four million but for all fees and costs incurring incurred trying to collect the judgment on it been offered no legal support for this request in light of the case law to the contrary this court must deny its application for the attorneys fees initially denied and in the second instance with respect to punitive sanctions the court says this court declines the client's exercising is destruction to sanction a dell either pursuant to any inherent power it may have or pursuant to section one of five and the court said if you have a problem with mr adele's filing for bankruptcy in florida go see judge past day which of course they did and judge pass gay then decided no sanctions not appropriate that was affirmed by the eleventh circuit court of appeals that we review judge throws his initial decisions for rope use of discretion you can say that but basically we have a decision below then went through several steps back and forth we have petition itself it does not authorize an award of fees on that being kind of anomalous i mean it seems like you should be able to get the cost of the fees regardless of how you spent the day and they did in section in getting the six point four million dollars or they got three hundred thousand dollars worth of attorney's fees which is what the statute provides for if this court were to say the judge wrote was wrong this court would establish a conflict among the circuits with the ninth circuit in higgins and its subsequent cases because the ninth circuit has said that in three with three  this kind of award also this ice rep respectfully submit it would be in conflict with the supreme court's analysis for how we must evaluate these kinds of statutes regardless of whether you think of it as a sanction statute or the fee shifting statute whether it's whether it's because we construe them narrowly and there must be some evidence of compelling congressional intent that the statute was intended to apply in this kind of a context in order for a court to conclude that there isn't what they literal the literal language of the statute your honor eleven u s c section three zero three if the court dismisses a petition under the section other than consent of all the petitioners and the debtor and if the debtor does not waive the right to judgment under the subsection the court may grant judgment against the petitioners and in favor of the debtor for cost or a reasonable attorney's feet in the singular and that's what judge roe did with part of the six point four million dollars judgment and that we had a judgment on  j r h not in favor of honigman bottom and simply went to the bankruptcy court and said order mr adel to pay our fees after that involves a back of the case had been dismissed after the judgment had been entered and as we know once you have a judgment that's entered the case jurisdiction because there's no conceivable impact on the estate but more ortley section three o three i does not authorize this the ninth circuit is ruled out and begins the supreme court says we construe these things narrowly the supreme court said and began and one of the reasons why is because we don't want satellite there are other mechanisms for doing it and they wanted their attorneys fees on appeal with respect to the six point four million judgement they should have come to this for under rule thirty eight now ask for it they didn't judge rhodes said specifically in denying sanctions sanctions he said specifically if you have a complaint go to the florida court judge past day they did and judge passed a into the very thoughtful opinion he heard all of the evidence about kevin adele did this and kevin adele did that and just passed a rule in his decision the post filing litigation for which sanctions was primarily initiated by jerry who relentlessly pursued its claim and objected to the debt or have an adult every attempt to achieve the rehabilitation through confirmation of his chapter eleven plans the court is satisfied that adel attempted to pursue a legitimate goal within the most of his ability and therefore to impose a sanction would be a double punishment in addition to the two million judgement imposed by the michigan bankruptcy court judge past heard all of these arguments he rejected them that decision by judge passed in florida was affirmed by the just the court in florida and by the eleventh circuit court of appeals now in order for there to be an inherent sanction against mr adel here in a subsequent proceeding it's basically a collateral attack and what judge asked i already ruled initially judge rhodes said again you have a problem with what mr they'll did go to the florida court go to the court or the alleged misconduct occurred and ask for it they did they went to florida they lost and now they want to say we could have a second bite at the apple here but there's a big jurisdictional problem with that under twenty eight u s c section thirteen thirty four a the judge presiding over a bankruptcy case as distinct from the proceeding the case has exclusive  not we can't have a situation where the state court or the other federal court issued the judgment comes in and pre amps and says oh no the bankruptcy is improper or dismiss the case wide because under thirteen thirty four they exclusive jurisdiction bankruptcy judge to decide whether the case was properly filed or not so that precluded not concurrent jurisdiction with what judge rhodes can do as it is a court issuing a judgment it's exclusive jurisdiction so now when they come back and they say conclusive but even more importantly the ninth circuit in dire and the fifth circuit in hip have both hell but the bankruptcy courts do not have inherent authority to issue criminal sanctions under bagwell this criminal sanctions that's what we're talking about here the two point eight million dollars why not really criminal it must be your honor judge rogers and here's why because as the supreme court said in bad well when you issue a significant amount of award like this if the content or the party doesn't have the keys to his own release if he cannot purge the contempt by his future conduct that is criminal and under under all all the authorities that means that you have all the protections of a criminal proceeding you that's correct just donell here's what it is it was go over into the room and this is what the supreme court made plain and bagwell if it's not compensatory here it's not compensatory because they already got separately a compensatory judgment of six point four million and they claim they understand that but if it's not contempt if it's not an award because of defiance or insult or or disrespect of the court but rather harm to the other party then that's damages which can be punitive but it doesn't make it a criminal drug it's not i can see why it's sort of like criminal in the sense that it's punished and it's not comp and satori but unitive damages in an ordinary tort case are that as well aren't they and nobody opposing counsel is arguing that in fact what mr adel did was he lied under oath the gaijin perjury and things like that those are those are criminal matters but what will they say you said those are contempt i'm not sure that they're you know if you don't comply with discovery and you get sanctions that's not necessarily content if it's if if it is compensatory yes or if it's a small amount to de minimus amount like twenty five hundred dollars and like that bankruptcy judge and i don't understand well i think that the cases that are  you can only use your inherent powers to sanction what's happening in your own or after a case has been dismissed you don't you don't reach out because that intrudes upon the function of some other court to manage judge in this respect the district court judge was correct although we were arguing initially as an initial matter the district judge should never have initially reversed judge rhodes on the second go around the district judge said oops four plans of reorganization that were offered by mr dale would have had the recovery of anything by john richard holmes was successful malpractise litigation against the lawyers filed the involuntary p involuntary petition max newman who was a lawyer for that firm for the firm who filed the involuntary testified in that original proceeding and he said i sat with mr a day out and i said is this an undisputed debt because if it's not you're going to be in a lot of home and john ritter's holmes answered the complaint and filed a counterclaim denying the material allegations of liability and disputing that it only a penny of anything to anyone if we had sat there and done nothing we would have been get in the water it wasn't until november of two thousand and four in connection with these florida bankruptcy proceedings that mr revelle even ever posted an offer to post a bond and by that point in the process exhibit seventy five makes this clear john richards had already spent a million dollars in fees because it was contesting these plans all the way eleven u s c three  attorney fees in the event of a bad faith by law with respect to the bankruptcy proceeding itself but they don't have an obligation to do so the three o three high standard is different in there for the fact the judge past gave found what he found is not precluded as a matter of fact the florida district court in the bankruptcy proceedings did find that mr adelle acted in bad faith here's what judge hernandez covington said a male of in two thousand and five when that about what judge passkey did is simply incorrect as a matter of fact as we indicated to the court in our briefing in august on august eighteenth two thousand and four when judge past gave was evaluating the issue of good faith in connection with the filing of the voluntary bankruptcy petition one of the things that john richards tried to bring up at the proceeding is hey there's this whole history there is this prior awarded by judge promised them that he is to make litigation as expensive as possible and in both chambers and in this court's holding in the mariana case your honor said you shouldn't have to go to ten different places where there is a pattern any practice processes because it was precisely an effort to enron by coming up with a plan of reorganization that was essentially a slap in the face of that initial sanctions and i want you to address counsel's assertion that then the case continues for the purpose of determining whether there's an entitlement to cost an attorney fees whether there's an entitle mint and compensatory damages whether this entitle him to punitive damages so the case remained lot the lawsuit was not dismissed there was you can have adversary proceedings but the petition is the pain that initiate the that case the involuntary petition was dismissed in july of two thousand and two but the case continued and the reason why the why eleven u s c three of three i has that structure is is that congress appreciated and understood that the very filing of an involuntary petition can were catastrophic impact on the reputation of a debtor and therefore as soon as the court finds out as your honor knows from having but a bankruptcy the there is supposed to be a preliminary hearing in which the court determines whether this is even suitable for involuntary treatment and the reason why orders dismissing in volunteers are entered even while the case continues is that it's an effort to try to eliminate that stigma is quickly as possible to reduce the amount of damage which is there but the case continued and the award and there were enforcement efforts that were being made with respect to this and that's exactly what mr adel was trying to en