Bradley Weston Taggart, Petitioner v. Shelley A. Lorenzen

Summary

The Supreme Court held that a court may hold a creditor in civil contempt for attempting to collect a debt barred by a bankruptcy discharge order only where there is no fair ground of doubt as to whether the order barred the creditor's conduct — that is, no objectively reasonable basis for concluding the creditor's conduct might be lawful. Rejecting both the strict-liability-like awareness-and-intent standard applied by the Bankruptcy Court and the purely subjective good-faith-belief standard applied by the Ninth Circuit, the Court grounded its objective threshold in the traditional equitable civil-contempt principles it read into 11 U.S.C. sections 524(a)(2) and 105(a). Because the Court of Appeals applied the wrong standard, its judgment was vacated and the case remanded.