FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE IRENE MICHELLE SCHWARTZTALLARD,

Debtor,

AMERICA’S SERVICING COMPANY,

Appellant,

v.

IRENE MICHELLE SCHWARTZTALLARD,

Appellee.

No. 12-60052

BAP No.

11-1429

OPINION

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Kirscher, Pappas, and Dunn, Bankruptcy Judges, Presiding

Argued and Submitted En Banc

June 17, 2015—San Francisco, California

Filed October 14, 2015

Before: Sidney R. Thomas, Chief Judge, and Stephen

Reinhardt, Diarmuid F. O’Scannlain, M. Margaret

McKeown, William A. Fletcher, Richard C. Tallman,

Carlos T. Bea, Milan D. Smith, Jr., Sandra S. Ikuta, Paul J.

Watford, and Andrew D. Hurwitz, Circuit Judges.
2 IN RE SCHWARTZ-TALLARD

Opinion by Judge Watford;

Concurrence by Judge Bea;

Dissent by Judge Ikuta

SUMMARY*

Bankruptcy

Affirming the judgment of the Bankruptcy Appellate

Panel, the en banc court held that 11 U.S.C. § 362(k)

authorizes an award of attorney’s fees reasonably incurred in

a debtor’s prosecution of a suit for damages to provide

redress for a violation of the automatic bankruptcy stay.

When a debtor files for bankruptcy, the BankruptcyCode

imposes an automatic stay on actions against the debtor to

collect pre-petition debts. Sternberg v. Johnston, 595 F.3d

937 (9th Cir. 2010), held that § 362(k) allowed a debtor to

recover only those fees incurred to end the stay violation

itself, not the fees incurred to prosecute a damages action.

Agreeing with other circuits, the en banc court held that

§ 362(k) authorizes recovery of the fees incurred to prosecute

a damages action. The en banc court overruled Sternberg to

the extent it was inconsistent with the en banc court’s

opinion.

Concurring in the judgment, Judge Bea, joined by Judge

O’Scannlain, concurred in the majority’s conclusion that

§ 362(k) has an unambiguous meaning allowing recovery of

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
IN RE SCHWARTZ-TALLARD 3

attorney’s fees incurred in prosecuting a damages action.

Judge Bea wrote that the majority’s discussion of Congress’s

plan in enacting the automatic-stay provision was

unnecessary.

Dissenting, Judge Ikuta wrote that the statutory text was

ambiguous, and the en banc court should have adhered to the

better reading set forth in Sternsberg.

COUNSEL

Andrew Jacobs (argued), Snell & Wilmer, Tucson, Arizona;

Kelly H. Dove, Snell & Wilmer, Las Vegas, Nevada, for

Appellant.

Christopher P. Burke (argued), Law Office of Christopher P.

Burke, Las Vegas, Nevada, for Appellee.

Daniel L. Geyser (argued), McKool Smith, Dallas, Texas;

Tara Twomey, National Association of Consumer

Bankruptcy Attorneys, San Jose, California, for Amicus

Curiae National Association of Consumer Bankruptcy

Attorneys.

OPINION

WATFORD, Circuit Judge:

When a debtor files for bankruptcy, the BankruptcyCode

imposes an automatic stay on virtually all actions against the

debtor to collect pre-petition debts. 11 U.S.C. § 362(a). To

deter violations of the automatic stay and to provide redress
4 IN RE SCHWARTZ-TALLARD

for those that do occur, the Code permits injured debtors to

sue for “actual damages, including costs and attorneys’ fees.” 

§ 362(k). With one exception, courts have uniformly held

that this provision authorizes an award of all attorney’s fees

reasonably incurred to remedy a stay violation, including fees

incurred in prosecuting the damages action that § 362(k)

authorizes. See, e.g., In re Repine, 536 F.3d 512, 522 (5th

Cir. 2008); In re Duby, 451 B.R. 664, 674–77 (1st Cir. BAP

2011).

The one exception is our decision in Sternberg v.

Johnston, 595 F.3d 937 (9th Cir. 2010). There, we held that

§ 362(k) allows a debtor to recover only those fees incurred

to end the stay violation itself, not the fees incurred to

prosecute a damages action. Id. at 947. Thus, under

Sternberg, once the stay violation has ended, no fees incurred

after that point may be recovered. That holding has been the

subject of widespread criticism. Having reconsidered the

matter, we conclude that Sternberg misconstrued the plain

meaning of § 362(k). To the extent it is inconsistent with this

opinion, Sternberg is overruled.

I

This case has a convoluted procedural history, which for

our purposes can be briefly summarized. The debtor, Irene

Schwartz-Tallard, took out a mortgage on her home in

Henderson, Nevada. After filing a Chapter 13 bankruptcy

petition, she continued to make her monthly mortgage

payments to America’s Servicing Company (ASC), the

company servicing her loan. Due to a mistake on its part,

ASC wrongfully foreclosed on Schwartz-Tallard’s home. 

ASC purchased the home at the foreclosure sale and promptly

served Schwartz-Tallard with an eviction notice. Schwartz-
IN RE SCHWARTZ-TALLARD 5

Tallard filed a motion in the bankruptcy court requesting

relief under 11 U.S.C. § 362(k). She sought an order

requiring ASC to reconvey title to the home as well as an

award of actual damages, punitive damages, and attorney’s

fees. The bankruptcy court found that ASC’s actions

constituted a willful violation of the automatic stay and

ordered ASC to reconveytitle to Schwartz-Tallard. The court

also awarded Schwartz-Tallard $40,000 in economic and

emotional distress damages, $20,000 in punitive damages,

and $20,000 in attorney’s fees.

None of that relief is now at issue. ASC did not challenge

the reconveyance order; soon after the bankruptcy court

issued the order, ASC complied with it. While ASC did

challenge the damages award by pursuing an appeal in the

district court, the district court ultimately upheld the award,

and ASC chose not to seek further review in this court.

After successfully defending the damages award on

appeal, Schwartz-Tallard returned to the bankruptcycourt and

asked it to award her, under § 362(k), the roughly $10,000 in

additional attorney’s fees she had incurred in the district court

opposing ASC’s appeal. The bankruptcy court denied the

motion. The court stated that although it thought SchwartzTallard should be entitled to recover her fees on appeal, it

could not award them under Sternberg. The stay violation

ended, the court explained, once ASC reconveyed title to

Schwartz-Tallard. Because Schwartz-Tallard incurred all of

her fees on appeal after that point, the court held that

Sternberg barred their recovery.

Schwartz-Tallard appealed, and the BankruptcyAppellate

Panel (BAP) reversed. It concluded that Sternberg does not

bar an award of attorney’s fees to a debtor who successfully
6 IN RE SCHWARTZ-TALLARD

defends a § 362(k) damages award on appeal. In re

Schwartz-Tallard, 473 B.R. 340, 350 (9th Cir. BAP 2012). 

A divided three-judge panel of this court affirmed. In re

Schwartz-Tallard, 765 F.3d 1096 (9th Cir. 2014). The

majority concluded that ASC’s reconveyance of title did not

end the stay violation because, on appeal, ASC continued to

challenge the bankruptcy court’s determination that the

automatic stay had been violated in the first place. Id. at

1102. Judge Wallace dissented. In his view, the stay

violation ended once ASC reconveyed title to the home and

chose not to challenge the validity of the reconveyance order

on appeal. Because Schwartz-Tallard incurred all of her

attorney’s fees on appeal after that point, Judge Wallace

concluded that under Sternberg those fees could not be

awarded. Id. at 1106 (Wallace, J., dissenting).

II

We find it unnecessary to resolve the issue that divided

the three-judge panel. Rather than decide whether

Sternberg’s holding extends to the facts of this case, we think

the better course is to jettison Sternberg’s erroneous

interpretation of § 362(k) altogether.

A

When Congress enacted the Bankruptcy Code in 1978, it

included the automatic stay provision now found in § 362. At

the time, the Code did not contain a provision specifically

authorizing imposition of sanctions for violations of the

automatic stay. Nonetheless, courts treated the automatic

stay as akin to a court order and relied on their civil contempt

powers to impose compensatory sanctions on creditors who

knowingly violated the stay. Those sanctions sometimes
IN RE SCHWARTZ-TALLARD 7

included an award of the attorney’s fees the debtor incurred

in prosecuting the contempt proceeding. See, e.g., In re

Roman, 283 B.R. 1, 14 (9th Cir. BAP 2002); In re Zartun,

30 B.R. 543, 546 (9th Cir. BAP 1983). Although the

“American Rule” usually requires parties to bear their own

attorney’s fees, a common-law exception to the rule permits

fee awards in litigation brought to remedy willful violations

of court orders. Fleischmann Distilling Corp. v. Maier

Brewing Co., 386 U.S. 714, 717–18 (1967).

Perhaps to eliminate any doubt about the source of a

court’s authority to remedy violations of the automatic stay,

Congress enacted § 362(h) in 1984. Act of July 10, 1984,

Pub. L. No. 98-353, 98 Stat. 333, 352. Congress redesignated the statute § 362(k) in 2005 and added the

exception now found in paragraph (2), but its text has

otherwise remained unchanged. Act of Apr. 20, 2005, Pub.

L. No. 109-8, 119 Stat. 23, 114. It provides in full:

(1) Except as provided in paragraph (2),

an individual injured by any willful violation

of a stay provided by this section shall recover

actual damages, including costs and attorneys’

fees, and, in appropriate circumstances, may

recover punitive damages.

(2) If such violation is based on an action

taken by an entity in the good faith belief that

subsection (h) applies to the debtor, the

recovery under paragraph (1) of this

subsection against such entity shall be limited

to actual damages.

11 U.S.C. § 362(k).
8 IN RE SCHWARTZ-TALLARD

In some respects the statute strengthened the remedies

previously available to debtors injured by willful stay

violations. It makes an award of actual damages and

attorney’s fees mandatory, and grants bankruptcy courts the

discretion to impose punitive damages in appropriate cases.

B

Both parties agree that § 362(k) authorizes an award of

attorney’s fees incurred in ending a violation of the automatic

stay. Those fees can be incurred out of court, as when a

debtor retains an attorney to call or write a creditor to demand

that it end its stay-violating conduct. When those efforts fail,

a debtor can also incur attorney’s fees in court by pursuing

injunctive relief aimed at ending the stay violation. No one

disputes that, given the statute’s explicit reference to “costs”

as well as “attorneys’ fees,” at least some fees incurred in

litigation are recoverable.

If that much is true, and we agree that it is, the question

becomes: Did Congress intend to authorize recovery of

attorney’s fees incurred in litigation for one purpose (ending

the stay violation) but not for another (recovering damages)?

We see nothing in the statute that suggests Congress intended

to cleave litigation-related fees into two categories, one

recoverable by the debtor, the other not. The statute says

“including costs and attorneys’ fees,” with no limitation on

the remedy for which the fees were incurred. To uphold

Sternberg’s interpretation of § 362(k), we would have to read

into the statute limiting language—something like, “including

costs and attorneys’ fees incurred to end the stay

violation”—that is simply not present.
IN RE SCHWARTZ-TALLARD 9

Sternberg concluded that such a limitation should be

inferred because the statute makes attorney’s fees recoverable

only as a component of the debtor’s “actual damages,” not as

attorney’s fees as such. Section 362(k) is somewhat unusual

in that regard. Most statutes that deviate from the American

Rule authorize the award of “a reasonable attorney’s fee” to

a “prevailing party,” usually in the context of the action as a

whole rather than a discrete proceeding. Baker Botts L.L.P.

v. ASARCO LLC, 135 S. Ct. 2158, 2164 (2015). Section

362(k) differs from those statutes, but if anything its phrasing

signals an intent to permit, not preclude, an award of fees

incurred in pursuing a damages recovery. Under the

American Rule, a statutory right to recover damages

ordinarily “does not include an implicit authorization to

award attorney’s fees” incurred in bringing the action. 

Summit Valley Industries, Inc. v. Carpenters, 456 U.S. 717,

722 (1982). That rule does not apply, however, “where

Congress has made specific and explicit provisions for the

allowance of such fees.” Id. (internal quotation marks

omitted). Congress did just that in § 362(k), by stating

specificallyand explicitly that the debtor “shall recover actual

damages, including costs and attorneys’ fees.”

Sternberg’s reading of § 362(k) might have made sense

if the statute had said that an injured individual “shall recover

actual damages,” period. That phrasing might well have

conveyed Congress’ intent to adhere to the default rule

precluding an award of attorney’s fees incurred in prosecuting

the damages action itself. In this case, Congress’ contrary

intent is evident not only from the explicit language of

§ 362(k), but also from the historical backdrop against which

the statute was enacted. As noted, at the time Congress

enacted § 362(k), courts were already awarding debtors the

attorney’s fees incurred in prosecuting civil contempt
10 IN RE SCHWARTZ-TALLARD

proceedings. Far from seeking to end that practice, Congress

appears to have intended to provide statutory authorization

for its continuance.

We do not think the language of § 362(k) is ambiguous,

but even if it were, we would then be required to decide

which of the two competing readings of the statute more

closely aligns with Congress’ “plan” in enacting the statute. 

King v. Burwell, 135 S. Ct. 2480, 2496 (2015). That strikes

us as an easy choice.

We do not have legislative history that speaks directly to

Congress’ purpose in enacting § 362(k). It seems evident,

however, that Congress sought to encourage injured debtors

to bring suit to vindicate their statutory right to the automatic

stay’s protection, one of the most important rights afforded to

debtors by the Bankruptcy Code. The automatic stay

provides the debtor with a “breathing spell” from the

harassing actions of creditors, and it protects the interests of

all creditors by preventing “dismemberment” of the debtor’s

assets before the debtor can formulate a repayment plan or, in

liquidation cases, the court can oversee equitable distribution

of the debtor’s assets. 3 Collier on Bankruptcy ¶ 362.03 at

362–23 & n.6 (Alan N. Resnick & Henry J. Sommer eds.,

16th ed. 2015); see In re Bloom, 875 F.2d 224, 226 (9th Cir.

1989). By providing robust remedies for debtors who prevail,

the statute acts to deter creditors from violating the automatic

stay in the first instance.

That legislative plan can be carried out, of course, only if

injured debtors are actually able to sue to recover the

damages that § 362(k) authorizes. Congress undoubtedly

knew that unless debtors could recover the attorney’s fees

they incurred in prosecuting an action for damages, many
IN RE SCHWARTZ-TALLARD 11

would lack the means or financial incentive (or both) to

pursue such actions. After all, the very class of plaintiffs

authorized to sue—individual debtors in bankruptcy—by

definition will typically not have the resources to hire private

counsel. And 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. See

Brief for National Association of Consumer Bankruptcy

Attorneys as Amicus Curiae at 22. Thus, Congress could not

have expected § 362(k) to serve as an effective deterrent

unless it authorized recovery of the attorney’s fees incurred

in prosecuting an action for damages. In that respect,

§ 362(k) is no different from the many statutes Congress has

enacted “making it possible for persons without means to

bring suit to vindicate their rights.” Perdue v. Kenny A.,

559 U.S. 542, 559 (2010).

Finally, if we needed further reason to reject Sternberg’s

reading of § 362(k), we could look as well to the difficulties

courts have encountered in administering it. When

interpreting statutes that authorize an award of attorney’s

fees, we try to avoid construing them in a way that will

“multiply litigation.” Commissioner v. Jean, 496 U.S. 154,

163 (1990). Sternberg’s interpretation of § 362(k) violates

that guiding principle. When a debtor sues under § 362(k)

both for injunctive relief aimed at ending the stay violation

and for damages, and the creditor does not end the violation

until after litigation has ensued, Sternberg requires the

bankruptcy court to sort out how much attorney time was

devoted to ending the stay violation (recoverable) as opposed

to pursuing damages (not recoverable). See, e.g., In re

Snowden, 769 F.3d 651, 660 (9th Cir. 2014). In addition, as

this case well illustrates, Sternberg’s reading of the statute

can spawn further litigation over when, exactly, a stay
12 IN RE SCHWARTZ-TALLARD

violation actually came to an end—a matter that can be

deceptively tricky to resolve. It is hard to imagine why

Congress would have wanted to invite litigation over these

highly factbound matters, particularly since doing so would

effectivelyundermine, rather than advance, the statutory aims

Congress sought to achieve by enacting § 362(k).

For these reasons, § 362(k) is best read as authorizing an

award of attorney’s fees incurred in prosecuting an action for

damages under the statute. Although § 362(k) makes such

fee awards mandatory rather than discretionary, we do not

think that feature of the statute will result in unnecessary

litigation brought solely to drive up the award. Only an

award of fees reasonably incurred is mandated by the statute;

courts awarding fees under § 362(k) thus retain the discretion

to eliminate unnecessary or plainly excessive fees. In re

Dawson, 390 F.3d 1139, 1152 (9th Cir. 2004). Sound

exercise of this discretion will provide a sufficient check on

any abuses that might otherwise arise.

III

Having determined that § 362(k) authorizes an award of

attorney’s fees incurred in prosecuting an action for damages,

we can quickly dispose of this appeal. When a party is

entitled to an award of attorney’s fees in the court of first

instance, as Schwartz-Tallard was here, she is ordinarily

entitled to recover fees incurred in successfully defending the

judgment on appeal. Voice v. Stormans, Inc., 757 F.3d 1015,

1016 (9th Cir. 2014). We see no reason why fee awards

under § 362(k) should be subject to a different rule. 

Schwartz-Tallard is therefore entitled to recover the

attorney’s fees reasonablyincurred in opposing ASC’s appeal

in the district court.
IN RE SCHWARTZ-TALLARD 13

The judgment of the Bankruptcy Appellate Panel is

AFFIRMED.

BEA, Circuit Judge, joined by O’SCANNLAIN, Circuit

Judge, concurring in the judgment:

I concur in the majority’s conclusion that 11 U.S.C.

§ 362(k) has an unambiguous meaning which permits

Schwartz-Tallard to recover the attorney’s fees she incurred

in defending against ASC’s appeal. Maj. Op. at 3–9. In my

view, however, this should be the beginning and end of our

analysis. I am troubled that the majority proceeds to

speculate about “Congress’ plan” in enacting the automaticstay provision of the Bankruptcy Code in reliance on King v.

Burwell, 135 S. Ct. 2480 (2015). Maj. Op. at 10–11. Given

themajority’s acknowledgment that § 362(k) is unambiguous,

this discussion strikes me as unnecessary. We should always

bear in mind the “cardinal principle of judicial restraint”: “if

it is not necessary to decide more, it is necessary not to decide

more.” PDK Labs., Inc. v. DEA, 362 F.3d 786, 799 (D.C. Cir.

2004) (Roberts, J., concurring in part and concurring in the

judgment).

“If a court, employing traditional tools of statutory

construction, ascertains that Congress had an intention on the

precise question at issue, that intention is the law and must be

given effect.” Chevron, U.S.A., Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 843 n.9 (1984). If the language

of the statute is unambiguous, that is the end of the inquiry. 

See City of Arlington v. FCC, 133 S. Ct. 1863, 1868 (2013)

(“‘If the intent of Congress is clear, that is the end of the

matter; for the court . . . must give effect to the
14 IN RE SCHWARTZ-TALLARD

unambiguously expressed intent of Congress.’” (quoting

Chevron, 467 U.S. at 842–43)).

Engaging in gratuitous speculation of what “Congress’

plan” must have been when it enacted § 362(k) ignores years

of Supreme Court and Ninth Circuit precedent requiring

judicial inquiry to cease when a court finds a statute

unambiguous.

“If the statutory language is unambiguous, in the absence

of a clearly expressed legislative intent to the contrary, that

language must ordinarily be regarded as conclusive.” Reves

v. Ernst & Young, 507 U.S. 170, 177 (1993) (internal

quotation marks omitted). “[E]ven the most formidable

argument concerning the statute’s purposes could not

overcome the clarity [of] the statute’s text.” Kloeckner v.

Solis, 133 S. Ct. 596, 607 n.4 (2012). “The purposes of a law

must be ‘collected chiefly from its words,’ not ‘from extrinsic

circumstances.’” King v. Burwell, 135 S. Ct. 2480, 2503

(2015) (Scalia, J., dissenting) (quoting Sturges v.

Crowninshield, 17 U.S. (4 Wheat.) 122, 202 (1819)

(Marshall, C.J.)); see also Exxon Mobil Corp. v. Allapattah

Servs., Inc., 545 U.S. 546, 568 (2005) (“As we have

repeatedly held, the authoritative statement is the statutory

text, not the legislative history or any other extrinsic

material.”).

Here, the majority finds the language of § 362(k) to be

unambiguous. Although that should be the end of the inquiry,

the majority then looks to the legislative history, which it

finds silent as to Congress’ purpose in enacting that

provision. With the traditional tools of statutory construction

now far behind it, the majority proceeds to engage in pure

speculation as to Congress’ motivations in enacting § 362(k)
IN RE SCHWARTZ-TALLARD 15

of the Bankruptcy Code. Because I believe that our

constitutional role is confined to giving effect only to the

words that Congress wrote when the statutory text is

unambiguous, I respectfully decline to join the majority’s

unnecessary discussion of “Congress’s plan.”

IKUTA, Circuit Judge, dissenting:

I prefer the result reached by the majority, which reads

11 U.S.C. § 362(k) as if it were a typical attorneys’ fees

provision that shifts the fees incurred in bringing the damages

action to a prevailing plaintiff. Because courts are familiar

with this sort of fee shifting statute, such a reading makes it

simpler for bankruptcy courts and district courts to apply

§ 362(k). But the ordinary tools of statutory interpretation

compel me to conclude that this interpretation is not the best

reading of the statutory text. Because our job is to do our best

to interpret the statute as Congress wrote it, we should adhere

to the better reading set forth in Sternberg v. Johnston,

595 F.3d 937 (9th Cir. 2010).

“The starting point in discerning congressional intent is

the existing statutory text.” Lamie v. U.S. Trustee, 540 U.S.

526, 534 (2004). The statutory text here states, “[A]n

individual injured by any willful violation of a stay provided

by this section shall recover actual damages, including costs

and attorneys’ fees, and, in appropriate circumstances, may

recover punitive damages.” 11 U.S.C. § 362(k)(1). As we

acknowledged in Sternberg, the term “actual damages” is

ambiguous. 595 F.3d at 947. It might refer to all of the costs

resulting from a violation of the stay, including the fees

incurred in bringing the damages action. Maj. Op. at 8–10. 
16 IN RE SCHWARTZ-TALLARD

But it is reasonable to interpret “actual damages” as including

only the fees incurred in correcting the automatic stay

violation, and not the fees incurred in bringing the lawsuit

itself, because “actual damages” are “[a]n amount awarded

. . . to compensate for a proven injury or loss; damages that

repay actual losses.” Id. (alterations in original) (quoting

BLACK’SLAWDICTIONARY 416 (8th ed. 2004)). And “[o]nce

the violation has ended, any fees the debtor incurs after that

point in pursuit of a damage award would not be to

compensate” the debtor for a violation of the stay. Id.

As explained in Sternberg, a number of states have

adopted a similar approach to cases in which attorneys’ fees

are part of the damages incurred from tortious conduct. Id. at

946. In suits to recover attorneys’ fees for malpractice, or to

obtain the benefits due under an insurance policy, state courts

have allowed the plaintiff to recover only the damages the

plaintiff actually incurred from the underlying tort, but not

the attorneys’ fees incurred to bring the action for damages. 

Id. Indeed, the majority acknowledges that the phrase “shall

recover actual damages,” standing alone, is best read as

conveying “Congress’ intent to adhere to the default rule

precluding an award of attorney’s fees incurred in prosecuting

the damages action itself.” Maj. Op. at 9.

When the language of a statute is ambiguous, canons of

statutory interpretation are useful rules of thumb to help

courts determine the meaning of legislation. See Conn. Nat.

Bank v. Germain, 503 U.S. 249, 253 (1992). The most

relevant canon here is that “Congress legislates against the

backdrop of the ‘American Rule.’” Sternberg, 595 F.3d at

945–46 (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 533

(1994)). In other words, statutes regarding attorneys’ fees

should be read with a presumption in favor of the American
IN RE SCHWARTZ-TALLARD 17

Rule, except when a statutory purpose to the contrary is

evident. See Fogerty, 510 U.S. at 534. This principle

supports the conclusion that Congress did not intend to allow

the debtor to recover the fees incurred in the action itself. 

Indeed, as the majorityacknowledges, when Congress intends

to abrogate the American Rule, it typically uses different

language. Maj. Op. at 9. Most statutes that deviate from the

American Rule do not provide a cause of action for “actual

damages, including costs and attorneys’ fees,” but instead

authorize the award of “a reasonable attorney’s fee” to a

“prevailing party.” Maj. Op. at 9. Thus, Congress knows

how to include language abrogating the American Rule, and

it chose different language for § 362(k). See Baker Botts

L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2164 (2015)

(“Although . . . statutory changes to the American Rule take

various forms, they tend to authorize the award of ‘a

reasonable attorney’s fee,’ ‘fees,’ or ‘litigation costs,’ and

usually refer to a ‘prevailing party’ in the context of an

adversarial ‘action.’” (citations and internal quotation marks

omitted)); id. at 2166 (“Had Congress wished to shift the

burdens of . . . litigation under [the statute at issue], it easily

could have done so. We accordingly refuse to invade the

legislature’s province by redistributing litigation costs here.”

(internal quotation marks omitted)).

In reaching the opposite conclusion, the majority does not

apply these ordinary principles of statutory construction. 

Except for making the conclusory statement that the “explicit

language of § 362(k)” is unambiguous, Maj. Op. at 9–10, the

majority does not analyze the text or apply standard

principles of statutory construction at all. Instead, the

majorityjumps immediatelyto the statute’s historical context,

its legislative history, and policy, but none of these sources

are particularly helpful here.
18 IN RE SCHWARTZ-TALLARD

No doubt the historical context of a statute can help a

court interpret an otherwise ambiguous term. See D.C. v.

Heller, 554 U.S. 570, 605 (2008) (“[T]he examination of a

variety of legal and other sources to determine the public

understanding of a legal text in the period after its enactment

. . . is a critical tool of . . . interpretation.” (emphasis

omitted)). As the majority explains, at the time Congress

enacted § 362(k), courts relied on their civil contempt powers

to impose sanctions on creditors who wilfully violated the

automatic stay, and those sanctions sometimes included an

award of attorneys’ fees the debtor incurred in the contempt

proceeding. Maj. Op. at 9–10. Relying on this history, the

majority says that Congress “appears to have intended”

§ 362(k) to eliminate any doubt about the court’s authority to

remedy violations of the automatic stay, Maj. Op. at 7, 9–10,

and perhaps it did. But perhaps not: Rather than codifying

the court’s civil contempt powers to award attorneys’ fees,

which Congress is capable of doing, see, e.g., In re Pace,

67 F.3d 187, 193 (9th Cir. 1995) (finding that 11 U.S.C.

§ 105 authorizes bankruptcy courts to award costs and

attorneys’ fees through civil contempt sanctions), Congress

enacted an entirely different scheme, which gives debtors a

cause of action to recover damages caused by a stay violation. 

Unlike civil contempt sanctions, actual damages under

§ 362(k) are mandatory, and the bankruptcy court has the

discretion to award punitive damages. As the majority notes,

§ 362(k) “strengthened the remedies previously available to

debtors injured by willful stay violations” rather than merely

codify historical practice. Maj. Op at 8. In other words,

Congress decided to enact something entirely different from

past practice, so the past practice does not shed light on what

Congress meant by the words “actual damages, including

costs and attorneys’ fees.”
IN RE SCHWARTZ-TALLARD 19

Turning to legislative history, the majority acknowledges

that there is none, so it proposes some of its own. Maj. Op.

at 10–11. It speculates that Congress’ purpose must have

been to protect debtors: After all, the automatic stay prevents

creditors from collecting from a debtor who has declared

bankruptcy, and interpreting § 362(k) to include the fees

incurred in the damages action provides extra deterrent to

prevent creditors from violating the stay. Maj. Op. at 10–11. 

The majority’s interpretation also empowers the debtor to sue

to recover the damages, because in some cases the damages

will be too small to justify the expense of litigation. Maj. Op.

at 10–11. It is possible that Congress had those purposes in

mind, but because there is no evidence of those purposes,

they do not support the majority’s interpretation. See Baker

Botts, 135 S.Ct. at 2169 (“Whether or not [awarding fees] is

desirable as a matter of policy, Congress has not granted us

roving authority to allow counsel fees whenever we might

deem them warranted. Our job is to follow the text even if

doing so will supposedly undercut a basic objective of the

statute.” (citations and internal quotation marks omitted)). In

any event, even without awarding fees incurred in the

damages action, the action itself deters creditors from

violating the stay, and it is possible that Congress did not

want to encourage costly litigation for relatively minor

violations or violations that were not clearly willful. While

it is true that depriving the debtor of the attorneys’ fees

incurred in bringing the damages action fails to make the

debtor whole, that is the ordinary result of the American Rule.

Finally, the majority turns toward the difficulties that

have resulted from Sternberg’s reading of § 362(k). Maj. Op.

at 11. Here, I am in complete sympathy. The interpretation

provided by Sternberg is difficult to apply, and has puzzled

bankruptcy courts and district courts alike. In addition, the
20 IN RE SCHWARTZ-TALLARD

Sternberg interpretation is counterintuitive; courts are used to

fee-shifting provisions that shift fees incurred in bringing the

damages action, as well as fees incurred as part of the

damages. I am not aware, however, of any canon that guides

us to select an interpretation of a statute based on the ease or

difficulty of administering it, and the majority does not rely

on one. The majority states only that we try to avoid

construing statutes in a way that will “multiply litigation,”

Maj. Op. at 11, but the majority’s interpretation might do just

that by creating an extra incentive to bring an action under

§ 362(k). Thus, the practical effects of interpreting § 362(k)

one way or the other also do not evince Congress’s intent to

abrogate the American Rule.

Although I understand the impulse to improve Congress’s

legislative efforts, our role is a modest one, and we should

simply do our best to give effect to the plain language of the

text. Congress is always free to correct our interpretation.

Therefore, I reluctantly dissent.