Court Opinion

ID: 1011005
Source: CourtListenerOpinion
Date Created: 2013-07-04 20:20:26.224043+00
Date Added: 2024-06-11T15:36:48.988142
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

In Re: DAVID ARTHUR SIMONINI, In        
Re: DANA ELIZABETH SIMONINI, a/k/a
Dana B. Simonini,
                         Debtors.
DAVID ARTHUR SIMONINI,
                Plaintiff-Appellee,
                 v.
STEWART L. BELL, District Attorney
of Clark County, Nevada,
               Defendant-Appellant,             No. 02-2021

                and
RIO SUITE HOTEL AND CASINO,
                        Defendant,
JIM PENDERGRAPH, Sheriff; MICHAEL
F. EASLEY; DANIEL AWSTROM, Chief
Deputy DA; MARY CATHERINE
HOLCOMB,
                 Parties in Interest.
                                        
            Appeal from the United States District Court
      for the Western District of North Carolina, at Charlotte.
              Graham C. Mullen, Chief District Judge.
           (CA-02-275-3-MU, BK-02-30033, AP-02-3151)

                       Argued: May 6, 2003

                       Decided: July 1, 2003

       Before WILKINS, Chief Judge, and WILLIAMS and
                 GREGORY, Circuit Judges.
2                          In Re: SIMONINI
Vacated by unpublished per curiam opinion.

                             COUNSEL

ARGUED: Douglas Ronald Ghidina, MOORE & VAN ALLEN,
P.L.L.C., Charlotte, North Carolina, for Appellant. Margaret Howard,
WASHINGTON AND LEE UNIVERSITY SCHOOL OF LAW,
Lexington, Virginia, for Appellee. ON BRIEF: James P.
McLoughlin, Jr., MOORE & VAN ALLEN, P.L.L.C., Charlotte,
North Carolina, for Appellant.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   Stewart L. Bell, District Attorney of Clark County, Nevada,
appeals from the district court’s grant of a permanent injunction under
11 U.S.C.A. § 105(a) (West 1993), enjoining Nevada’s criminal pros-
ecution of David Arthur Simonini for financial fraud. Because
§ 105(a) of the Bankruptcy Code does not give the federal courts the
authority to enjoin a state criminal proceeding, we vacate the injunc-
tion.

  On December 12, 2001, Simonini was charged in Clark County,
Nevada, with five felony violations of Nev. Rev. Stat. § 205.130
(West 2003) and § 205.132 (West 2003). The indictment alleged that
Simonini wrote bad checks to the Rio Suite Hotel and Casino, with
an intent to defraud. On December 14, 2001, a Nevada court issued
a warrant for Simonini’s arrest. On January 7, 2002, Simonini and his
wife filed a joint Chapter 7 bankruptcy petition in the United States
Bankruptcy Court for the Western District of North Carolina.
Simonini was arrested on the Nevada warrant on April 5, 2002.
                            In Re: SIMONINI                            3
   On July 31, 2002, Simonini filed a complaint against Rio Suite
Hotel and Casino, and Bell, seeking injunctive relief under Bank-
ruptcy Code § 105(a), arguing that the Nevada criminal prosecution
was, in essence, a debt collection on behalf of Rio Suite Hotel and
Casino. The district court held that the criminal prosecution was not
stayed under the automatic stay provision in 11 U.S.C.A. § 362 (West
1993). The district court found, however, that "[w]hen a criminal
prosecution resembles a debt collection strongly enough, a debtor
should be able to avail himself of injunctive relief." (J.A. at 302-03.)
The district court held that an injunction under § 105(a) was available
in such circumstances. On August 9, 2002, the district court entered
judgment permanently enjoining under § 105(a) "[t]he prosecution of
Petitioner by the District Attorney of Clark County, Nevada on any
matter related to the criminal charges that resulted in Petitioner’s
arrest on April 5, 2002." (J.A. at 292.) Bell filed a timely notice of
appeal on August 30, 2002.

   "While decisions pertaining to injunctive relief normally are
reviewed solely for abuse of discretion in applying the injunction
standard, we review such a decision de novo where it ‘rests solely on
a premise as to the applicable rule of law, and the facts are established
or of no controlling relevance.’" Va. Carolina Tools, Inc. v. Int’l Tool
Supply, Inc., 984 F.2d 113, 116 (4th Cir. 1993) (internal citation and
emphasis omitted) (quoting Thornburgh v. Am. Coll. of Obstetricians
& Gynecologists, 476 U.S. 747, 757 (1986)). The district court’s deci-
sion rests solely on a premise as to the applicable rule of law, and the
facts are established. Accordingly, we review the district court’s grant
of the permanent injunction de novo.

   The district court correctly held that the automatic stay of Bank-
ruptcy Code § 362(a) does not apply to criminal prosecutions. Section
362(b) provides that "[t]he filing of a [bankruptcy] petition . . . does
not operate as a stay . . . of the commencement or continuation of a
criminal action or proceeding against the debtor." 11 U.S.C.A.
§ 362(b)(1). Giving the words of the statute their plain meaning,
§ 362(b) applies to all criminal actions, regardless of the underlying
aim of the prosecution. See In re Gruntz, 202 F.3d 1074, 1085 (9th
Cir. 2000) (en banc) ("Quite simply, the Bankruptcy Code declares
that § 362 does not stay ‘the commencement or continuation of a
criminal action or proceeding against the debtor.’ On its face, it does
4                           In Re: SIMONINI
not provide any exception for prosecutorial purpose or bad faith. If
the statutory command of the Bankruptcy Code is clear, we need look
no further: it must be enforced according to its terms.").

    Although the automatic stay does not apply to criminal prosecu-
tions, the district court held that it had the power under § 105(a) to
enjoin the Nevada prosecution. Section 105(a) grants a court the
power to "issue any order, process, or judgment that is necessary or
appropriate to carry out the provisions of [the Bankruptcy Code]." 11
U.S.C.A. § 105(a). Although the grant of power in § 105(a) is broad,
it is not unlimited. "It cannot be invoked, for example, to achieve ends
contrary to other specific Code provisions." Kestell v. Kestell (In re
Kestell), 99 F.3d 146, 148 (4th Cir. 1996). "The equitable powers of
section 105(a) ‘are not a license for a court to disregard the clear lan-
guage and meaning of the bankruptcy statutes and rules.’" United
States, Dep’t of Air Force v. Carolina Parachute Corp., 907 F.2d
1469, 1475 (4th Cir. 1990) (quoting Official Comm. of Equity Sec.
Holders v. Mabey, 832 F.2d 299, 302 (4th Cir. 1987)).

   Given the clear language of § 362(b) excepting all criminal prose-
cutions from the automatic stay and "‘the fundamental policy against
federal interference with state criminal prosecutions,’" Kelly v. Robin-
son, 479 U.S. 36, 47 (1986) (quoting Younger v. Harris, 401 U.S. 37,
46 (1971)), we hold that an injunction barring a Nevada state criminal
proceeding is not necessary or appropriate to carry out the provisions
of the Bankruptcy Code or to prevent an abuse of the process. In fact,
allowing an injunction of a state criminal proceeding would achieve
ends contrary to § 362(b) and would disregard the clear language and
meaning of other bankruptcy rules.

   Accordingly, the district court did not have the power under
§ 105(a) to enjoin the Nevada criminal proceeding, and we vacate the
injunction. We need not and do not reach the question of whether
Simonini’s bankruptcy and subsequent discharge limit in any way the
penalties that a Nevada court could impose if Simonini is convicted.

                                                             VACATED