United States v. Silva
United States v. Silva
Opinion of the Court
ORDER
Before the Court in the above styled and numbered cause of action is Plaintiff United States’ Emergency Motion For Order Declaring 11 U.S.C. § 362 Does Not Apply To This Case and Memorandum Of Law In Support filed February 2, 2007 (Clerk’s Document No. 139). After reviewing the motion, the file, and the applicable law, the Court is of the opinion that the motion should be granted because this cause is an action by a governmental unit to enforce a governmental unit’s regulatory power, which is not subject to the automatic stay provisions of the United States Bankruptcy Code (the “Code”). See 11 U.S.C. § 362(b)(4).
The United States, by the Office of the Attorney General, Civil Rights Division, Civil Enforcement Section, filed this cause of action on September 5, 2005, against Aníbal and Janet Silva alleging that they violated the federal Fair Housing Act (“FHA”)
Mr. Silva, pro se, filed an answer, by which he asserts affirmative defenses, on November 4, 2005, (Clerk’s Document No. 4) and he continues to proceed pro se in this cause of action. On March 17, 2006, this Court signed a Scheduling Order, which set discovery to close on October 31, 2006, a Final Pretrial Conference on February 23, 2007, and set the cause for jury trial in the month of March 2007.
On January 30, 2007, by faxed letters dated the same, Mr. Silva notified this Court and counsel for the United States that on January 26, 2007, he filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code in the Southern District of California, San Diego Division, Cause Number 07-00324 (Clerk’s Document No. 136).
Initially, the Court notes that it has jurisdiction to determine whether the Code’s automatic-stay provision applies in this cause. See Hunt v. Bankers Trust Co., 799 F.2d 1060, 1069 (5th Cir. 1986). Upon filing of a voluntary petition in bankruptcy, Section 362(a) provides an automatic stay of the continuation of judicial proceedings against the debtor except for “an action or proceeding by a governmental unit to enforce such governmental unit’s ... police or regulatory power.” See 11 § 362(b)(4). In support if its position, the United States cites two cases commenced by the Equal Employment Opportunity Commission (“EEOC”), which alleged that the defendants engaged in past discriminatory actions and seek injunctive and monetary damages, and the courts determined that, despite the defendants filing bankruptcy petitions, the automatic-stay provision of the Code did not apply. See E.E.O.C. v. McLean Trucking Co., 834 F.2d 398 (4th Cir. 1987); E.E.O.C. v. Hall’s Motor Transit Co., 789 F.2d 1011 (3rd Cir. 1986). This Court finds these cases persuasive. Central to the court’s reasoning in McLean Trucking was what the congressional committee meant by the language in Section 362(b)(4), which that court noted was, “where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay.” McLean Trucking,
In the cause before this Court, the United States commenced the action against the Silvas after HUD determined there was reasonable cause to believe the Silvas had engaged in discriminatory housing practices in violation of the FHA. See 42 U.S.C. § 3612(o). The Court finds the allegations here similar to the EEOC’s allegations against McLean, as both causes allege that the defendants engaged in discriminatory practices in violation of federal acts, which prohibit discrimination. This Court finds, as in McLean Trucking, that the cause here is an action by a governmental unit to enforce it’s regulatory power, which seeks relief for alleged discriminatory practices in violation of a federal act. The Court, therefore, holds that the automatic-stay provision of the Code does not apply. See 11 U.S.C. § 362(b)(4). Accordingly, the Court will proceed in this cause under the terms of the Court’s Scheduling Order.
THIS COURT HOLDS that the action before this Court is an action to enforce a governmental unit’s regulatory power, which is an action excepted from and not subject to the automatic-stay provision of the United States Bankruptcy Code, Section 362(a).
IT IS THEREFORE ORDERED that Plaintiff United States’ Emergency Motion For Order Declaring 11 U.S.C. § 362 Does Not Apply To This Case filed February 2, 2007 (Clerk’s Document No. 139) is GRANTED.
IT FURTHER IS ORDERED that this Court will proceed in this cause under the terms and conditions set in the Court’s March 17, 2006 Scheduling Order.
. The filing of a voluntary petition under Chapter 7 of the United States Bankruptcy Code does not operate as an automatic stay in the continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power. 11 U.S.C. § 362(b)(4).
. See 42 U.S.C. §§ 3601-3619, 3631.
. See 42 U.S.C. §§ 3612(o), 3613(c)(1), 3614(d)(1)(B).
. See 42 U.S.C. § 3614(d)(1)(C).
. Mr. Silva also refers to the filing of his bankruptcy petition in his Response Opposing Motion Of Plaintiff For Entry Of Default Judgment Against Anibal Silva filed January 29, 2007 (Clerk's Document No. 135).
Reference
- Full Case Name
- United States v. Anibal and Janet SILVA
- Status
- Published