Through Gritted Teeth and Clenched Jaw: Court-Initiated Sanctions Opinions in Bankruptcy Courts.

Bankruptcy courts see too many incompetent bankruptcy lawyers, and the courts have few options for dealing with them. A court can rule against the lawyer, but this strategy punishes the lawyer’s client, who may be an innocent bystander. Alternatively, nothing prohibits a judge from deciding to hand down a sanctions opinion. Sanctions opinions arise when one party makes a request, or the court believes a lawyer’s behavior is serious enough to merit a written order.

These instances include flouting the law—either bankruptcy law or the ethical rules—or being unaware of the fundamentals of bankruptcy practice and policy. In the instance of a sua sponte written order, these court-initiated sanctions are written after the lawyer has crossed the line of reasonable behavior. When a sanctions order has been issued, often the recipients have the option to appeal. As with court-initiated sanctions opinions, however, in non-bankruptcy cases no party represents the court’s reasoning on appeal.

The reviewing court can take any one of four positions: (1) it can affirm the court’s decision; (2) it can reverse the decision on procedural grounds; (3) it can reverse the decision due to an inappropriate understanding of the decision; or (4) it can disagree with the bankruptcy court. Yet, there are two injured parties when a sanctions opinion is written—the client and the legal system. While the injured client may have a voice during a sanctions appeal, the legal system merely has an empty chair. Courts need a system which educates Article III judges of the intricacies of bankruptcy law.

Alternatively, the Office of the United States Trustee can take a greater role in appeals. A third option is to have courts appoint an expert to represent the court’s position on appeal, which ensures the court understands the significance of the behavior.