Opinion ID: 169875
Heading Depth: 3
Heading Rank: 2

Heading: Bankruptcy Code’s Automatic Stay Provision

Text: Lynch’s claim that Defendants violated the bankruptcy code’s automatic stay provision (11 U.S.C. § 362) by obtaining copies of his bank account records Deprivation of rights under color of law Whoever, under color of any law, statute, ordinance, regulation, or custom, willfully subjects any person . . . to the deprivation of any rights, privileges, or immunities secured or protected by the Constitution or laws of the United States, or to different punishments, pains, or penalties, on account of such person being an alien, or by reason of his color, or race, than are prescribed for the punishment of citizens, shall be fined under this title or imprisoned not more than one year, or both . . . . 4 Unpublished opinions are not binding precedent. We refer to Clements and Henry as we would any other scholarly work and rely on them only to the extent they have logical, persuasive value. See 10 TH C IR. R. A PP. P. 32.1(A). -6- is also without merit. 5 Section 362(a)(1), (3) stays “the commencement or continuation [of an] action or proceeding against the debtor” and “any act to obtain possession of property of the estate or . . . to exercise control over property of the estate.” (Emphasis added). Defendants obtained copies of the bank account records through subpoenas issued to the bank. Nothing in the record suggests the account was seized or even frozen. Defendants merely obtained information about the account. Because the records do not constitute “property of the estate” and the issuance of the subpoena was not an action “against the debtor,” Defendants’ conduct in obtaining these records did not violate § 362. Constitution Bank v. Levine, 151 F.R.D. 278, 280 (E.D. Pa. 1993) (subpoena issued to bank for production of debtor’s bank records did not violate 5 The district court rejected Lynch’s claim that Defendants violated the bankruptcy code’s automatic stay provision for two reasons. First, it concluded the automatic stay provision did not provide Lynch with a private cause of action. The court was mistaken. See 11 U.S.C. § 362(k) (2006) (“[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.”). Nevertheless, the circuits are divided as to whether district courts have original (as opposed to appellate) jurisdiction over such actions. Compare Justice Cometh, Ltd. v. Lambert, 426 F.3d 1342, 1343 (11th Cir. 2005) (district courts have original jurisdiction over § 362(k) (formerly § 362(h)) actions), with Eastern Equip. & Servs. Corp. v. Factory Point Nat’l Bank, 236 F.3d 117, 121 (2d Cir. 2001) (bankruptcy courts, not district courts, have original jurisdiction over § 362(k) (formerly § 362(h)) actions). We have yet to decide the issue. Second, relying on a California district court case, the court determined a § 1983 action could not be based on a violation of the bankruptcy code. We have not decided this issue either. Due to the uncertainty surrounding the court’s conclusions, we choose to affirm on a different basis. Smith v. Plati, 258 F.3d 1167, 1174 (10th Cir. 2001) (“We are free to affirm a district court decision on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court.”). -7- automatic stay); In re Barsky, 11 B.R. 478, 479-80 (Bankr. E.D. Pa. 1981) (Pennsylvania’s Department of Revenue’s issuance of subpoena to debtor’s accountants for production of documents relating to preparation of debtor’s tax returns did not violate automatic stay); see also Citizens Bank of M d. v. Strumpf, 516 U.S. 16, 21 (1995) (concluding a bank account does not consist of depositor’s money but rather is a bank’s promise to pay depositor; therefore, bank’s placement of administrative hold on debtor’s bank account for amount debtor owed bank did not violate automatic stay because bank was not taking possession of or exercising control over debtor’s property but rather merely refusing to perform its promise to pay).