Court Opinion

ID: 9002601
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:18:11.196423+00
Date Added: 2024-06-11T17:11:14.005108
License: Public Domain

BECKER, Circuit Judge,
concurring in No. 91-1407 and dissenting in No. 91-1438.
I am pleased to join in Parts I, II, III, IV.A, IV.B, IV.C, IV.D, and IV.E.l of Judge Roth’s superb opinion. I wholeheartedly concur in the majority’s sensitive harmonization of the competing interests of the Medicare and bankruptcy statutes. I also agree with the majority that in 11 U.S.C. § 106(a) Congress waived the sovereign immunity of the United States against awards of costs and fees under 11 U.S.C. § 362(h). If we were writing on a clean slate, moreover, I would further agree with the majority that, in light of the case law at the time, the United States did not “willfully” violate the automatic stay provision of II U.S.C. § 362(a) because it had good reason to believe that the automatic stay did not apply. In my view, however, the standard set forth in our opinion in Atlantic Business and Community Corp., 901 F.2d 325, 329 (3d Cir.1990), compels the conclusion that the United States “willfully” violated the automatic stay.
As the majority recognizes, in Atlantic Business we interpreted “willful violation” to mean that the defendant knew of the automatic stay and that its actions in violation of the automatic stay were intentional — not to require that the defendant specifically intended to violate the automatic stay. Id. (adopting the standard of In re Bloom, 875 F.2d 224, 227 (9th Cir.1989)). We explicitly rejected good faith as a defense to “willfulness.” Id.
In this case, the United States knew that UMC had declared bankruptcy when it refused to reimburse UMC and hence knew of the automatic stay. The withholding of reimbursement was an intentional act. Under the interpretation of 11 U.S.C. § 362(h) in Atlantic Business, that is enough to entitle UMC to its actual damages, including costs and attorneys' fees. In my view, if the United States relied on the case law at the time, that would demonstrate its good faith, but we have held that good faith is insufficient to defeat a finding of “willfulness.” I agree that Atlantic Business may be distinguished on its facts, but I do not believe that we can avoid applying its legal standard.
I would therefore remand the case for the bankruptcy court to determine UMC’s actual damages, including costs and attorneys’ fees. I accordingly respectfully dissent from the disposition of UMC’s cross-appeal.