Petition for Writ of Certiorari — Goldman Sachs Bank USA, dba Marcus by Goldman Sachs, Petitioner v. Rhea Ann Brown, et al.

Supreme Court briefJun 16, 2026

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No. ______

In the

Supreme Court of the United States

GOLDMAN SACHS BANK USA, d/b/a Marcus by

Goldman Sachs,

Petitioner,

RHEA ANN BROWN; GREGORY KEVIN MAZE,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

JEFF G. HAMMEL

CHRISTOPHER HARRIS

JASON HEGT

LATHAM & WATKINS LLP

1271 Avenue of the

Americas

New York, NY 10020

(212) 906-1200

ROMAN MARTINEZ

Counsel of Record

CHRISTINA R. GAY

URIEL HINBERG

LATHAM & WATKINS LLP

555 11th Street, NW

Suite 1000

Washington, DC 20004

(202) 637-3377

roman.martinez@lw.com

Counsel for Petitioner

QUESTION PRESENTED

The Federal Arbitration Act (FAA) commands that

arbitration agreements “shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.” 9

U.S.C. § 2.

That command extends to federal

statutory claims—and may be displaced only by a

“clear and manifest” congressional command to the

contrary. Epic Sys. Corp. v. Lewis, 584 U.S. 497, 51011 (2018). For decades, this Court has “rejected

every . . . effort” to conjure such a conflict, across

statutes ranging from the Sherman Act to the Age

Discrimination in Employment Act (ADEA) to the

Racketeer Influenced and Corrupt Organizations Act

(RICO). Id. at 510, 516 (emphasis omitted). Yet the

decision below held that Congress intended to

displace the FAA with respect to claims seeking

money damages for alleged violations of the

Bankruptcy Code’s automatic stay, reasoning that

arbitration would “interfere and conflict with the

strong and established policies and purposes of the

Bankruptcy Code.” App.2a. That holding “creates a

clear circuit split” with the Second Circuit’s decision

in MBNA America Bank, N.A. v. Hill, 436 F.3d 104

(2d Cir. 2006). Id. at 28a (King, J., dissenting). It also

deepens broader confusion over how this Court’s

arbitration precedents apply in bankruptcy.

The question presented is:

Whether, and under what circumstances, a

bankruptcy court may override the FAA and refuse to

honor a valid arbitration agreement with respect to

Section 362(k) claims.

PARTIES TO THE PROCEEDINGS BELOW

Petitioner Goldman Sachs Bank USA, d/b/a

Marcus by Goldman Sachs (GS: NYSE—Goldman

Sachs Group, Inc.) was the defendant in the

bankruptcy court and the appellant in the district

court and court of appeals.

Respondents Rhea Ann Brown and Gregory Kevin

Maze were the plaintiffs in the bankruptcy court and

the appellees in the district court and court of appeals.

RULE 29.6 STATEMENT

Petitioner Goldman Sachs Bank USA (Goldman

Sachs) is a wholly owned, indirect subsidiary of the

Goldman Sachs Group, Inc. (GS: NYSE).

RELATED PROCEEDINGS

Goldman Sachs Bank USA, d/b/a Marcus by

Goldman Sachs v. Rhea Ann Brown; Gregory Kevin

Maze, No. 25-1439, U.S. Court of Appeals for the

Fourth Circuit. Order affirming denial of motion to

compel arbitration entered March 18, 2026.

Goldman Sachs Bank USA v. Rhea Ann Brown

and Gregory Kevin Maze, No. 7:24-cv-00490-RSBCKM, U.S. District Court for the Western District of

Virginia. Order affirming denial of motion to compel

arbitration entered March 17, 2025.

Rhea Ann Brown and Gregory Kevin Maze v.

Goldman Sachs USA d/b/a Marcus by Goldman

Sachs (In re Rhea Ann Brown), No. 24-ap-07009, U.S.

Bankruptcy Court for the Western District of

Virginia. Order denying motion to compel arbitration

entered July 15, 2024.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ......................................... i

PARTIES TO THE PROCEEDINGS BELOW .......... ii

RULE 29.6 STATEMENT.......................................... ii

RELATED PROCEEDINGS ...................................... ii

TABLE OF AUTHORITIES ..................................... vi

OPINIONS BELOW ....................................................1

JURISDICTION ..........................................................1

STATUTORY PROVISIONS INVOLVED ..................1

INTRODUCTION .......................................................2

STATEMENT OF THE CASE.....................................4

A. Factual Background .....................................4

B. Procedural Background ................................5

REASONS FOR GRANTING THE WRIT ................12

THE DECISION BELOW CREATES A CIRCUIT

SPLIT AND REFLECTS BROAD CONFUSION

OVER THE INTERSECTION OF ARBITRATION

AND BANKRUPTCY LAW ......................................12

A. The Fourth Circuit’s Decision Squarely

Conflicts With The Second Circuit Over

The Arbitrability Of Section 362(k)

Claims .........................................................13

B. Lower Courts Are Also Split Over How

The Core/Non-Core Distinction Affects

The McMahon Analysis..............................18

TABLE OF CONTENTS—Continued

Page

II.

THE DECISION BELOW IS WRONG .......................21

A. Section 362(k) Claims Are Arbitrable In

Appropriate Circumstances .......................21

B. The Fourth Circuit Failed To Correctly

Apply The “Inherent Conflict” Test ...........24

III. THIS COURT SHOULD RESOLVE HOW THE

FAA APPLIES IN BANKRUPTCY CASES ................31

CONCLUSION ..........................................................35

APPENDIX

Opinion of the United States Court of Appeals

for the Fourth Circuit, Goldman Sachs

Bank USA v. Brown, 170 F.4th 249 (4th

Cir. 2026).............................................................1a

Order of the United States Court of Appeals for

the Fourth Circuit Denying Motion to Stay

Mandate, Goldman Sachs Bank USA v.

Brown, No. 25-1439 (4th Cir. Apr. 1, 2026),

ECF No. 62 ........................................................26a

Memorandum Opinion of the United States

Bankruptcy Court for the Western District

of Virginia, Brown v. Goldman Sachs Bank

USA (In re Brown), No. 23-70426, Adv.

Proceeding No. 24-07009, 663 B.R. 449

(Bankr. W.D. Va. 2024) ....................................30a

TABLE OF CONTENTS—Continued

Page

Memorandum Opinion of the United States

District Court for the Western District of

Virginia, Goldman Sachs Bank USA v.

Brown, No. 24-cv-00490, 2025 WL 837338

(W.D. Va. Mar. 17, 2025), ECF No. 27 .............44a

9 U.S.C. § 2 ..............................................................53a

11 U.S.C. § 362(a), (k) .............................................54a

28 U.S.C. § 1334 ......................................................56a

TABLE OF AUTHORITIES

Page(s)

CASES

In re Banks,

549 B.R. 257 (Bankr. D. Or. 2016) ................14, 15

Bigelow v. Green Tree Financial Servicing

Corp.,

2000 WL 33596476 (E.D. Cal. Nov. 30,

2000) .....................................................................14

In re Brown,

354 B.R. 591 (D.R.I. 2006) ...................................19

Campos v. Bluestem Brands, Inc.,

2016 WL 297429 (D. Or. Jan. 22, 2016) ..............14

Central Virginia Community College v.

Katz,

546 U.S. 356 (2006) ..............................................30

City of Chicago v. Fulton,

592 U.S. 154 (2021) ................................................6

City of New London v. Speer,

322 A.3d 407 (Conn. App. Ct. 2024) ....................26

Dean Witter Reynolds, Inc. v. Byrd,

470 U.S. 213 (1985) ..............................................21

Epic Systems Corp. v. Lewis,

584 U.S. 497 (2018) ............... 2-3, 10, 21-23, 25, 31

Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20 (1991) ................................................28

vii

TABLE OF AUTHORITIES—Continued

Page(s)

In re Grant,

281 B.R. 721 (Bankr. S.D. Ala. 2000)..................16

In re Hagerstown Fiber Limited

Partnership,

277 B.R. 181 (Bankr. S.D.N.Y. 2002) ..................19

Hamilton v. Lanning,

560 U.S. 505 (2010) ............................................4, 5

Hays & Co. v. Merrill Lynch, Pierce, Fenner

& Smith, Inc.,

885 F.2d 1149 (3d Cir. 1989) ...............................28

Houck v. Substitute Trustee Services, Inc.,

791 F.3d 473 (4th Cir. 2015)..................................6

In re Johnson,

649 B.R. 735 (Bankr. N.D. Ill. 2023) ...................19

Jove Engineering, Inc. v. IRS,

92 F.3d 1539 (11th Cir. 1996)..............................27

Katchen v. Landy,

382 U.S. 323 (1966) ..............................................26

Marrama v. Citizens Bank of

Massachusetts,

549 U.S. 365 (2007) ................................................5

Mastrobuono v. Shearson Lehman Hutton,

Inc.,

514 U.S. 52 (1995) ................................................30

viii

TABLE OF AUTHORITIES—Continued

Page(s)

MBNA America Bank, N.A. v. Hill,

436 F.3d 104 (2d Cir. 2006) ...... 3, 12-14, 23-24, 26

In re McPherson,

630 B.R. 160 (Bankr. D. Md. 2021) ...............18, 19

In re Merrill,

343 B.R. 1 (Bankr. D. Me. 2006) .........................16

In re Mintze,

434 F.3d 222 (3d Cir. 2006) ...........................20, 25

Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, Inc.,

473 U.S. 614 (1985) .............................. 3, 28, 29, 30

Moses v. CashCall, Inc.,

781 F.3d 63 (4th Cir. 2015)..................................30

In re National Gypsum Co.,

118 F.3d 1056 (5th Cir. 1997)........................20, 21

Robertson v. Intratek Computer, Inc.,

976 F.3d 575 (5th Cir. 2020)..........................22, 23

Shearson/American Express, Inc. v.

McMahon,

482 U.S. 220 (1987) .......................2, 7, 9, 21-24, 31

In re Spookyworld, Inc.,

346 F.3d 1 (1st Cir. 2003) ....................................27

Stern v. Marshall,

564 U.S. 462 (2011) ..............................................18

TABLE OF AUTHORITIES—Continued

Page(s)

In re TexStyle, LLC,

2012 WL 1345646 (Bankr. S.D.N.Y. Apr.

17, 2012) ...............................................................16

In re Thorpe Insulation Co.,

671 F.3d 1011 (9th Cir. 2012)........................19, 20

In re Trevino,

599 B.R. 526 (Bankr. S.D. Tex. 2019) .................14

Vermont Agency of Natural Resources v.

United States ex rel. Stevens,

529 U.S. 765 (2000) ..............................................29

In re Walker,

551 B.R. 679 (Bankr. M.D. Ga. 2016) .................16

In re Windstream Holdings, Inc.,

105 F.4th 488 (2d Cir. 2024)................................27

In re Yellow Corp.,

2024 WL 1313308 (Bankr. D. Del. Mar.

27, 2024) .........................................................20, 25

CONSTITUTIONAL AND

STATUTORY PROVISIONS

U.S. Const. art. I, § 8, cl. 4 ........................................30

9 U.S.C. § 2 ................................................................21

11 U.S.C. § 101(30)......................................................4

11 U.S.C. § 105(a)......................................................27

11 U.S.C. § 109(e) ........................................................4

TABLE OF AUTHORITIES—Continued

Page(s)

11 U.S.C. § 362(a)........................................................6

11 U.S.C. § 362(k) .......................................................2

11 U.S.C. § 1327(b)......................................................5

11 U.S.C. § 1328 ..........................................................5

28 U.S.C. § 157(b)..................................................8, 18

28 U.S.C. § 157(c) ..................................................8, 18

28 U.S.C. § 1254(1)......................................................1

OTHER AUTHORITIES

Kara J. Bruce, Bankruptcy’s Arbitration

Countercurrent and the Future of the

Debtor Class, 96 Am. Bankr. L.J. 819

(2022) ..............................................................20, 32

3 Collier on Bankruptcy (16th ed. 2026) ..................27

Hon. Michelle M. Harner, Preface: The

Uneasy Relationship Between

Arbitration and Bankruptcy, 96 Am.

Bankr. L.J. 685 (2022) .........................................32

Paul F. Kirgis, Arbitration, Bankruptcy,

and Public Policy: A Contractarian

Analysis, 17 Am. Bankr. Inst. L. Rev.

503 (2009) .............................................................31

TABLE OF AUTHORITIES—Continued

Page(s)

Robert M. Lawless, Reframing Arbitration

& Bankruptcy, 96 Am. Bankr. L.J. 701

(2022) ............................................ 18, 20, 25, 31, 33

Alan N. Resnick, The Enforceability of

Arbitration Clauses in Bankruptcy, 15

Am. Bankr. Inst. L. Rev. 183 (2007) ...................32

United States Courts, Judicial Business

2025, U.S. Bankruptcy Courts (fiscal

year ending Sept. 30, 2025),

https://www.uscourts.gov/datanews/reports/statistical-reports/judicialbusiness-united-states-courts/judicialbusiness-2025 .......................................................33

PETITION FOR A WRIT OF CERTIORARI

Petitioner Goldman Sachs Bank USA (GS Bank)

respectfully petitions this Court for a writ of certiorari

to review the order of the United States Court of

Appeals for the Fourth Circuit.

OPINIONS BELOW

The Fourth Circuit’s opinion (App.1a-25a) is

reported at 170 F.4th 249. The district court’s

unreported opinion (App.44a-52a) can be found at

2025 WL 837338. The bankruptcy court’s opinion

(App.30a-43a) is reported at 663 B.R. 449.

JURISDICTION

The court of appeals entered judgment on March

18, 2026. This Court’s jurisdiction is invoked under

28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

The relevant statutory provisions are set forth in

the appendix. App.53a-57a.

INTRODUCTION

This case presents a fundamental question about

the applicability of the Federal Arbitration Act (FAA)

in bankruptcy. The Fourth Circuit held that private

damages claims brought by debtors against creditors

under 11 U.S.C. § 362(k)—the Bankruptcy Code’s

private cause of action for willful violations of the

automatic stay—may never be sent to arbitration,

regardless of the terms of the parties’ arbitration

agreement and the posture of the bankruptcy, and

notwithstanding that the Code says nothing about

displacing arbitration. App.1a-22a. As Judge King

wrote in dissent, that ruling “flout[s]” this Court’s

arbitration precedents and “creates a clear circuit

split.” Id. at 24a, 28a. This Court should grant

certiorari to resolve the split, clarify the relationship

between bankruptcy and arbitration law, and enforce

the FAA’s plain terms.

Across “many cases over many years”—spanning

the Sherman Act to RICO to the ADEA—this Court

has “rejected every . . . effort” to wall off federal

statutory claims from the FAA, holding parties to

arbitration agreements even when the relevant

statutes are of great public importance. Epic Sys.

Corp. v. Lewis, 584 U.S. 497, 516 (2018). As the Court

has explained, Congress’s intent to override the FAA

with respect to statutory claims must be “clear and

manifest.” Id. at 510. To displace the Act, an

“inherent conflict” must be truly “irreconcilable”—not

just some purported tension between arbitration and

a statute’s broader purposes. Shearson/American

Express, Inc. v. McMahon, 482 U.S. 220, 227, 239

(1987).

The Fourth Circuit’s decision contravenes that

framework.

Even while acknowledging the

“substantial arguments on both sides of the issue,”

the majority declared Section 362(k) damages claims

categorically non-arbitrable—no matter the facts of

the bankruptcy or the impact (if any) on estate

administration. App.2a. And it rested that holding

not on anything resembling a “clear and manifest”

command from Congress, but on a grab bag of

amorphous “policies and purposes,” most of which

have no connection to the claims in this case. Id. That

is precisely the type of free-floating policy balancing

that Epic Systems forbids, see 584 U.S. at 524, and

which this Court has repeatedly rejected, see, e.g.,

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 633-35 (1985).

Making matters worse, the Fourth Circuit created

a “clear circuit split” with the Second Circuit.

App.28a (King, J., dissenting). In MBNA America

Bank, N.A. v. Hill, that court ordered arbitration of a

Section 362(k) claim, holding that arbitration of such

claims “would not necessarily jeopardize or inherently

conflict with the Bankruptcy Code” and that there is

“no indication from the statute” supporting a

categorical ban on arbitration. 436 F.3d 104, 108, 110

(2d Cir. 2006). As respondents acknowledged below,

they would lose this case under the Second Circuit’s

rule.

The Second Circuit’s approach is right—and the

Fourth Circuit’s contrary rule is wrong—under this

Court’s precedent and basic textualism. As Judge

King emphasized in dissent, the panel applied the

wrong test and reached the wrong result, leaving “a

very solid chance that the Supreme Court reverses if

certiorari is granted.” App.28a.

This Court’s guidance on the applicability of the

FAA in bankruptcy is long overdue. The Section

362(k) issue frequently arises in bankruptcy and

district courts across the country, and the circuit split

reflects deeper lower-court confusion about the FAA’s

intersection with the Bankruptcy Code. This case is

an ideal vehicle for providing the necessary guidance.

The petition should be granted.

STATEMENT OF THE CASE

Factual Background

1. Petitioner GS Bank is a New York-chartered

bank. CA4 Appendix (JA) 91 ¶ 4. In 2019, GS Bank

partnered with Apple Inc. to launch the Apple Card,

with GS Bank issuing and operating Apple Card

credit card accounts. Id.

In late 2020, Respondents Rhea Ann Brown and

Gregory Kevin Maze were approved for Apple Card

credit card accounts. JA92 ¶¶ 6, 8. Each agreed to

the Apple Customer Agreement, which included a

clearly marked arbitration provision covering any

claim arising from or relating to the Agreement or the

parties’ relationship.

JA91-92 ¶ 5; JA110.

Respondents acknowledge they validly consented to

the arbitration provision and that it encompasses

their claims here. See JA115 & n.3.

2. In June 2023, Brown filed for Chapter 13

bankruptcy. In re Brown, No. 23-70426 (Bankr. W.D.

Va. filed June 14, 2023). Chapter 13 “provides . . .

protection to ‘individual[s] with regular income’

whose debts fall within statutory limits.” Hamilton v.

Lanning, 560 U.S. 505, 508 (2010) (alteration in

original) (quoting 11 U.S.C. §§ 101(30), 109(e)).

Chapter 13 debtors are “permitted to keep their

property, but they must agree to a court-approved

plan under which they pay creditors out of their

future income.” Id.

Two weeks after filing for bankruptcy, Brown

proposed a repayment plan that did not contemplate

recovery from any lawsuit. In re Brown, Dkt. No. 11.

The bankruptcy court approved that plan on

September 1, 2023 and a slightly amended one (to

account for Brown’s tenant moving out) on September

4, 2024. Id., Dkt. Nos. 20, 40.

With approval of the plan, distributions from the

bankruptcy estate to creditors have been settled,

allowing Brown to regain full ownership and control

of “the property of the [bankruptcy] estate” except as

provided in the plan. 11 U.S.C. § 1327(b). Once

Brown completes her plan, she will receive a

discharge, and her bankruptcy case will be closed. See

id. § 1328.

In November 2023, Maze filed for Chapter 7

bankruptcy. In re Maze, No. 23-70735 (Bankr. W.D.

Va. filed Nov. 9, 2023). Chapter 7 effects the

“discharge of prepetition debts following the

liquidation of the debtor’s [non-exempt] assets by a

bankruptcy trustee, who then distributes the

proceeds to creditors.” Marrama v. Citizens Bank of

Mass., 549 U.S. 365, 367 (2007). Maze received a

discharge of his pre-petition debt on February 21,

2024, and his bankruptcy case was then officially

closed. In re Maze, Dkt. Nos. 18, 19.

GS Bank was listed as a creditor in both cases, see

id., Dkt. No. 1 at PDF 29, 62; In re Brown, Dkt. No. 1

at PDF 26, 55, but filed a proof of claim in neither.

Procedural Background

1. On March 12, 2024—after Brown’s repayment

plan was approved and Maze’s Chapter 7 case was

closed—respondents filed an adversary proceeding in

the United States Bankruptcy Court for the Western

District of Virginia. JA12-30. They alleged that GS

Bank had willfully violated the Bankruptcy Code’s

automatic stay provision, 11 U.S.C. § 362(a), which

forbids “efforts to collect from the debtor outside the

bankruptcy forum,” City of Chicago v. Fulton, 592

U.S. 154, 156 (2021).

Specifically, respondents

alleged that GS Bank willfully violated Section 362

over a period of several months when it sent them

“written demands for payment of pre-petition credit

card debt” and made “collection telephone calls”

seeking to collect that debt. JA13 ¶ 1; see also JA2627 ¶¶ 2, 64-71. The alleged violations against Brown

stopped around two months before the adversary

complaint was filed, JA18 ¶ 30; those against Maze

stopped around a month before, JA20 ¶ 43.

Respondents sued on behalf of themselves and a

putative class of “all individuals in the United States[]

who currently are in a consumer bankruptcy case or

were formerly in a consumer bankruptcy case . . .

from whom [GS Bank] made a post-petition demand

for pre-petition debt.” JA24 ¶ 57. The complaint

sought, among other things, “actual damages,

punitive damages, and reasonable attorney’s fees.”

JA27, JA29 ¶¶ 71, 73, 85.

In seeking damages and attorney’s fees,

respondents invoked Section 362(k). Added to the

Bankruptcy Code in 1984, that provision “created a

private cause of action for the willful violation of a

stay.” Houck v. Substitute Tr. Servs., Inc., 791 F.3d

473, 481 (4th Cir. 2015). Before 1984, a party had no

“independent right of action for damages” flowing

from an automatic-stay violation.

Id.

Section

362(k)(1) provides that “an individual injured by any

willful violation of a stay . . . shall recover actual

damages, including costs and attorneys’ fees, and, in

appropriate circumstances, may recover punitive

damages.”

2. Because respondents’ claims indisputably fall

within the scope of the arbitration agreement—which

even respondents concede—GS Bank moved to

compel arbitration and stay the bankruptcy court

proceedings. Brown v. Goldman Sachs Bank USA,

Adv. Proc. No. 24-7009 (Bankr. W.D. Va. May 3,

2024), Dkt. No. 15 (Mot. to Compel). GS Bank first

pointed out that under this Court’s decision in

Shearson/American Exp., Inc. v. McMahon, 482 U.S.

220, 227 (1987), the bankruptcy court was required to

uphold the FAA and honor the parties’ arbitration

agreement unless Congress had “‘evinced an

intention’” to preclude the arbitration of their Section

362(k) claims. Mot. to Compel 10-11.

GS Bank then explained why respondents’ claims

failed that test. To begin, nothing in the Bankruptcy

Code’s text or legislative history evinces an intent to

preclude arbitration. Id. at 11. Nor would arbitrating

respondents’ particular claims inherently conflict

with the underlying purposes of the Bankruptcy

Code, especially given the status of respondents’

respective bankruptcies. Id. at 11-13. Maze had

already received a discharge, and his Chapter 7

bankruptcy case was closed. Id. at 11-12. And

Brown’s Chapter 13 repayment plan had already been

approved by the bankruptcy court—without

contemplating receipt of any Section 362(k)

damages—and she was set to emerge from

bankruptcy after completing that plan. Id. Because

both bankruptcy estates were effectively settled or

closed, arbitration would have no impact on the

administration and settlement of respondents’

estates, nor would it interfere with their ability to

reorganize. Id. at 11-14.

On July 15, 2024, the bankruptcy court denied GS

Bank’s motion.

App.30a-43a.

The court first

concluded that it “ha[d] the discretion to retain the

proceeding” because a Section 362(k) claim is a socalled “core” bankruptcy proceeding, such that

arbitrating the claim would automatically conflict

with the Code. Id. at 39a.1

The bankruptcy court then “exercise[d] [that]

discretion and den[ied] the motion to compel

arbitration” for several policy-based reasons. Id. at

40a. It pointed to the “financial reality” that “[t]he

vast majority of consumer debtors coming into

bankruptcy court” “have very limited resources,” and

reasoned that forcing them “to resolve their disputes”

“in multiple forums” would prevent them from

“preserv[ing] those limited resources” and gaining a

‘“fresh start.’” Id. at 40a-41a. The court never

examined whether arbitration would actually have an

effect on the administration of respondents’ specific

estates.

3. The district court affirmed in a seven-page

opinion.

App.44a-52a.

It first rejected the

bankruptcy court’s premise that “core” status alone

confers discretion to deny arbitration. Id. at 48a-49a.

But the court still refused to enforce the agreement,

concluding that “arbitrating Plaintiffs’ claims would

inherently conflict with the Bankruptcy Code’s

“[C]ore” proceedings are those over which a bankruptcy

court is authorized to enter final “orders and judgments,” as

opposed to merely submitting proposed findings of fact and

conclusions of law to the district court. 28 U.S.C. § 157(b)-(c).

objectives.” Id. at 51a. The court explained that

arbitration “could undermine the Bankruptcy Court’s

authority (1) to enforce the automatic stay to protect

debtors[’] and creditors’ rights and (2) to provide a

single centralized forum for resolving disputes related

to the Plaintiffs’ bankruptcy proceedings.”

Id.

(emphasis added). Like the bankruptcy court, it

never examined whether arbitration would actually

impact the administration of respondents’ estates.

4. The Fourth Circuit affirmed in a split decision.

The majority began by acknowledging that the FAA

“mandate[s]” that courts “rigorously enforce[]”

arbitration agreements. Id. at 10a. And it recognized

that, under McMahon, that command yields only

when the party resisting arbitration shows that “the

statute precludes waiver of judicial remedies, as

evidenced by (1) its text, (2) its legislative history, or

(3) an ‘inherent conflict between arbitration and the

statute’s underlying purposes.’”

Id. (quoting

McMahon, 482 U.S. at 227).

Focusing on the third prong, the court first held

that because Section 362(k) claims are “core,”

petitioner faced a “high bar” to showing they are

arbitrable. Id. at 11a. Applying that standard, it then

concluded that arbitration of Section 362(k) claims

would “conflict with the strong and established

policies and purposes of the Bankruptcy Code.” Id. at

2a. It offered five rationales, each applicable to

Section 362(k) claims as a class:

•

Arbitration “would . . . undermine the needed

centralization of claims” because Section

362(k) claims have “no independent grounding

outside of the Bankruptcy Code,” id. at 12a;

•

Arbitration would “undermine the ‘shield’

created by the automatic stay,” id. at 14a;

Because arbitration is individualized and

“‘judicial review of an arbitration award is

severely

circumscribed,’”

arbitration

undermines the “fundamental purpose of the

Bankruptcy Code . . . to assure that

bankruptcy laws be uniform and be uniformly

enforced,” id. at 14a-15a;

“[A]rbitration would . . . bypass the expertise of

bankruptcy judges in favor of private

arbitrators,” id. at 15a; and

“[A]rbitration would constrict the remedies

that Congress authorized” for Section 362(k)

claims because the “prophylactic purpose” of

punitive damages “‘cannot function in the

dark,’” id. at 17a.

The court never examined the facts of respondents’

bankruptcies—or the impact, if any, that arbitration

would have on the administration of their specific

estates.

The panel majority acknowledged that the Second

Circuit came out the other way in Hill, which

compelled arbitration of a Section 362(k) damages

claim. Id. at 20a. But it sought to distinguish Hill as

involving the “peculiar circumstance[]” of a closed

Chapter 7 case. Id. In doing so, the majority ignored

that Maze’s case involves a closed Chapter 7 case too.

Supra 5, 7.

The panel majority also acknowledged the “recent

trend in which the Supreme Court has consistently

declined to hold that federal statutory claims are

unsuited for arbitration.” App.20a; see Epic Sys., 584

U.S. at 516 (listing cases). But the majority held that

it was not constrained by that trend because “the

Bankruptcy Code presents a unique statutory

context,” which “the Supreme Court has not

addressed.” App.21a.

Judge King dissented. Id. at 23a-25a. In his view,

McMahon “readily compelled” the opposite result

because “arbitrating the plaintiffs’ § 362 automatic

bankruptcy stay claims . . . does not create an

‘inherent [i.e. “irreconcilable”] conflict’ with the

Bankruptcy Code.” Id. at 23a. “In fact,” he explained,

“there is no conflict at all”: The success (or failure) of

these claims “would neither add nor subtract a new

creditor to these bankruptcies, nor . . . serve to

frustrate creditor distribution.” Id.

Judge King also chided the majority for

“needlessly creat[ing] a circuit split with the Second

Circuit.” Id. at 24a. As he explained, “the Second

Circuit correctly ruled in Hill that arbitrating a § 362

automatic bankruptcy stay claim does ‘not interfere

with or affect the distribution of the estate’” where

there is no “‘ongoing reorganization’” to disturb. Id.

at 24a-25a. And Judge King rejected the majority’s

effort to cabin Hill to its facts: Hill set forth a broader

legal principle—that Section 362(k) does not displace

the FAA unless resolution of the claim is “integral to

[the] bankruptcy court’s ability to preserve and

equitably distribute assets of the estate,” or “directly

implicate[s] matters central to the purposes and

policies of the Bankruptcy Code.” Id. at 24a n.2 (first

alteration in original).

5. The Fourth Circuit then denied GS Bank’s

motion to stay the mandate pending this petition.

App.26a-29a.

Judge King again dissented,

reiterating that the panel majority had “create[d] a

clear circuit split” with the Second Circuit. Id. at 28a.

Judge King added that “there is a very solid chance

that the Supreme Court reverses if certiorari is

granted.” Id.

REASONS FOR GRANTING THE WRIT

The question presented readily satisfies this

Court’s criteria for certiorari. The Fourth Circuit’s

decision creates a clear circuit split with the Second

Circuit over whether, and when, the FAA requires

courts to enforce agreements to arbitrate Section

362(k) claims. And that split reflects deep lower-court

confusion over the proper application of McMahon’s

“inherent conflict” framework to bankruptcy disputes.

The decision below is also wrong.

It treats

generalized bankruptcy “policies and purposes” as

sufficient to disregard a valid arbitration agreement,

when this Court’s precedents demand a concrete

showing of a “clear and manifest” conflict before doing

so. Finally, these issues are undeniably important:

Courts frequently address the intersection of the FAA

and the Bankruptcy Code, including with respect to

the specific Section 362(k) question presented here.

Review is warranted.

I. THE DECISION BELOW CREATES A CIRCUIT SPLIT

AND REFLECTS BROAD CONFUSION OVER THE

INTERSECTION

ARBITRATION

AND

BANKRUPTCY LAW

The decision below squarely conflicts with the

Second Circuit’s holding on the arbitrability of

Section 362(k) claims in MBNA America Bank, N.A.

v. Hill, 436 F.3d 104 (2d Cir. 2006). It also deepens

broader lower-court splits over how McMahon’s

“inherent conflict” test applies in the bankruptcy

context. Unless and until this Court intervenes, these

disagreements over the intersection of arbitration

and bankruptcy law will persist.

The Fourth Circuit’s Decision Squarely

Conflicts With The Second Circuit Over

The Arbitrability Of Section 362(k)

Claims

As Judge King correctly observed, the panel

majority “needlessly created a circuit split with the

Second Circuit” over “whether a § 362 automatic stay

claim belongs in arbitration.” App.24a. And the split

extends beyond those circuits—district and

bankruptcy courts nationwide are divided on this

question. The split is undeniable and implicates a

significant share of bankruptcy cases.

1. The Second Circuit in Hill—joined by other

lower courts—has held that Section 362(k) claims can

be sent to arbitration.

Hill confronted the same question presented here,

in the same posture—and reached the opposite result.

Kathleen Hill filed a Chapter 7 bankruptcy and

eventually received a discharge—just like Maze in

this case. 436 F.3d at 106. Hill then filed an

adversary proceeding, alleging that her creditor,

MBNA, had violated the automatic stay as to herself

and a putative class—mirroring respondents’

allegations about GS Bank here. Id. The bankruptcy

court denied MBNA’s motion to compel arbitration,

and the district court affirmed. Id. at 106-07.

The Second Circuit reversed, applying the FAA

and holding that Section 362(k) claims may be

arbitrated. Even for “core” bankruptcy proceedings,

it explained, a court may override an arbitration

agreement only if it determines—based on “a

particularized inquiry into the nature of the claim and

the facts of the specific bankruptcy”—that the

relevant Bankruptcy Code provisions “‘inherent[ly]

conflict’” with the FAA or that arbitration would

“‘necessarily jeopardize’” the Code’s objectives. Id. at

108.

Applying that case-specific test, the Second Circuit

identified the “most important[]” question for Section

362(k) damages claims: Whether arbitration would

“interfere with or affect the distribution of the estate.”

Id. at 109. Arbitrating Hill’s claim posed no such

disruption. She had already received a Chapter 7

discharge, so resolving her claim “[could not] affect an

ongoing reorganization” and “would have no effect on

her bankruptcy estate.” Id. at 109-10. And her choice

to sue on behalf of a putative class “further

demonstrate[d] that the claim [wa]s not integral to

her individual bankruptcy proceedings.” Id. at 110.

Finding “no indication from the statute” that

Congress intended to preclude arbitration, the court

held that the bankruptcy court “did not have

discretion to deny the motion to stay or dismiss the

proceeding in favor of arbitration” on these facts. Id.

Various lower courts—including district courts

sitting in an appellate capacity—have followed Hill’s

approach. See, e.g., In re Banks, 549 B.R. 257, 268

(Bankr. D. Or. 2016) (compelling arbitration);

Campos v. Bluestem Brands, Inc., 2016 WL 297429,

at *12 (D. Or. Jan. 22, 2016) (same); Bigelow v. Green

Tree Fin. Servicing Corp., 2000 WL 33596476, at *1,

*6 (E.D. Cal. Nov. 30, 2000) (same); In re Trevino, 599

B.R. 526, 542, 551-52 (Bankr. S.D. Tex. 2019) (same).

In In re Banks, for example, the bankruptcy court

relied on Hill to compel arbitration of a debtor’s

Section 362(k) claims. 549 B.R. at 268. Applying

Hill’s “particularized inquiry into the nature of the

claim and the facts of the specific bankruptcy,” the

court found no inherent conflict where “[r]esolution of

[the] claims [would] have no direct impact on

performance of [the debtor’s] chapter 13 Plan or

estate administration in her bankruptcy case.” Id. at

265, 268 (alterations in original).

2. The Fourth Circuit below took the opposite

view, adopting precisely the categorical FAA

exemption that Hill and the lower courts aligned with

it rejected. Instead of asking whether arbitration of

these Section 362(k) claims would interfere with

administration of these particular estates, the panel

asked only whether arbitration of Section 362(k)

claims as a general matter would frustrate what it

perceived to be the Code’s broader “policies and

purposes.” App.2a. And it answered yes by invoking

general policy concerns: Arbitrating Section 362(k)

claims would (1) “undermine the needed

centralization

claims”

bankruptcy;

(2) “undermine the ‘shield’ created by the automatic

stay”; (3) frustrate the Code’s “fundamental purpose

. . . to assure that bankruptcy laws be uniform and be

uniformly enforced”; (4) “bypass the expertise of

bankruptcy judges in favor of private arbitrators”;

and (5) “constrict the remedies that Congress

authorized” by removing the “prophylactic” function

of punitive damages—which “‘cannot function in the

dark.’” Id. at 12a-15a, 17a; supra 9-10.

Each of those rationales applies equally to all

Section 362(k) claims. The Fourth Circuit thus

embraced the exact per se rule against arbitrating

Section 362(k) claims that the Second Circuit

rejected.

The Fourth Circuit is the only appellate court that

has adopted this per se rule. But various bankruptcy

courts across the country have joined the Fourth

Circuit in rejecting the Second Circuit’s framework

from Hill. See, e.g., In re Grant, 281 B.R. 721, 724-26

(Bankr. S.D. Ala. 2000) (refusing to compel

arbitration because bankruptcy courts must decide all

“core” issues); In re Merrill, 343 B.R. 1, 9 (Bankr. D.

Me. 2006) (similar); In re Walker, 551 B.R. 679, 69395 (Bankr. M.D. Ga. 2016) (similar). In In re Merrill,

for example, the court expressly “disagree[d]” with

Hill and declared Section 362(k) claims “creatures of

the Code” whose arbitration “would conflict with [the]

court’s duty to safeguard the automatic stay’s

fundamental protection for debtors.” 343 B.R. at 8-9.

The split of authority stretches across the country.

3. In its decision, the Fourth Circuit panel

suggested that any disagreement with the Second

Circuit may not be implicated because Hill involved

the “peculiar circumstance[]” of a closed Chapter 7

case, and it is unclear whether the Second Circuit

would have ruled the same way “had it been faced

with an arbitration issue in an ongoing bankruptcy

proceeding.” App.20a. But that purported distinction

fails on its own terms—and does nothing to resolve

the broader lower-court divide.

Just like Hill, Maze has received a discharge and

his Chapter 7 case is closed—meaning the

circumstances in Hill are materially identical to those

in Maze’s case. Supra 5, 7. And Brown’s Chapter 13

plan was confirmed and is being implemented

without any reliance on a Section 362(k) recovery. Id.

Under Hill’s core insight—that inherent conflict

turns on impact to estate distribution—Brown’s claim

belongs in arbitration, too. See, e.g., In re TexStyle,

LLC, 2012 WL 1345646, at *8-9 (Bankr. S.D.N.Y. Apr.

17, 2012) (applying Hill to compel arbitration on

similar facts to Brown’s).

Judge King saw the split for what it was. As he

explained, the Second Circuit compelled arbitration of

a Section 362(k) claim because it was “neither

‘integral to [the] bankruptcy court’s ability to preserve

and equitably distribute assets of the estate,’ nor

‘directly implicated matters central to the purposes

and policies of the Bankruptcy Code.’” App.24a n.2

(King, J., dissenting) (alteration in original). That is

as true here as it was in Hill. By adopting a per se

rule against arbitrating any Section 362(k) claim, the

Fourth Circuit “created a circuit split with the Second

Circuit”—and “flout[ed]” this Court’s precedent. Id.

at 24a.

Below, both the bankruptcy court and respondents

themselves recognized the conflict and saw a need to

reject Hill. The bankruptcy court acknowledged that

Hill reached the opposite conclusion on “similar facts”

but held the Second Circuit “misapprehend[ed] the

reality of consumer bankruptcies.” Id. at 32a, 40a.

And respondents urged the Fourth Circuit to reject

Hill outright because the Second Circuit’s rule

“simply cannot be reconciled with” Fourth Circuit

precedent. CA4 Resp. Br. 27-28; see also id. at 28

(arguing that the bankruptcy court “reject[ed] the

Second Circuit’s insistence in Hill that arbitration

must be compelled whenever resolution of the

plaintiffs’ claim would not have an impact on estate

administration”). The panel obliged. In doing so, it

deepened not only the circuit split with Hill, but the

broader divide among lower courts.

The untenable result of this undeniable split is

that a creditor’s ability to compel arbitration of an

automatic-stay claim now turns on geographic

happenstance. This Court should grant certiorari to

impose a uniform rule.

Lower Courts Are Also Split Over How

The Core/Non-Core Distinction Affects

The McMahon Analysis

Beyond the clear circuit split over the arbitrability

of Section 362(k) claims, lower courts are more

generally divided over what role, if any, the

distinction between “core” and “non-core” claims plays

in McMahon’s “inherent conflict” analysis. Below, the

bankruptcy court treated “core” status as

categorically rendering a claim non-arbitrable, and

the Fourth Circuit panel viewed it as a heavy thumb

on the scale against arbitration. By contrast, the

Third and Fifth Circuits—along with many other

courts—view the core/non-core distinction as

irrelevant to the McMahon inquiry.

Section 157 of the Judicial Code authorizes

bankruptcy judges to enter final judgments only in

certain matters designated “core.” 28 U.S.C. § 157(b)(c). Stern v. Marshall added a constitutional overlay:

Even for statutorily “core” claims, a bankruptcy court

may enter final judgment only if the claim “stems

from the bankruptcy itself or would necessarily be

resolved in the claims allowance process.” 564 U.S.

462, 499 (2011).

Nothing in Section 157 mentions arbitration or the

FAA. Nonetheless a “massive body of case law” treats

“core” status as dispositive of whether the FAA has

been displaced.

Robert M. Lawless, Reframing

Arbitration & Bankruptcy, 96 Am. Bankr. L.J. 701,

707-11 (2022). This approach has been endorsed by

numerous bankruptcy and district courts across the

country. See, e.g., In re McPherson, 630 B.R. 160, 168

(Bankr. D. Md. 2021); In re Brown, 354 B.R. 591, 60203 & n.18 (D.R.I. 2006) (“core/non-core distinction is

determinative”). The logic of these cases appears to

be that there is necessarily an “inherent conflict in

allowing an arbitrator to resolve proceedings that are

grounded in the Code itself.” In re McPherson, 630

B.R. at 169.

Below, the bankruptcy court adopted exactly this

categorical view. At respondents’ urging, the court

applied a blanket rule that arbitrating any “core”

claim—such as the Section 362(k) claims at issue

here—automatically conflicts with the Code.

App.39a-40a; Bankr. Resp. Br. 36 (arguing that there

is always an “inherent conflict in allowing an

arbitrator to resolve [core] proceedings”); see also CA4

Resp. Br. 36 (similar).

Other courts emphasize the core/non-core

distinction as an important factor in the McMahon

inquiry, but without treating it as dispositive. Below,

for example, the Fourth Circuit stated that the “core”

label created a “high bar” for GS Bank to surmount in

requiring arbitration, App.11a, though it nonetheless

went on to analyze whether enforcing a valid

arbitration agreement conflicts with the Code. The

Ninth Circuit likewise treats the core/non-core

distinction as “relevant” though not “dispositive.” In

re Thorpe Insulation Co., 671 F.3d 1011, 1021 (9th

Cir. 2012); see also, e.g., In re Johnson, 649 B.R. 735,

747 (Bankr. N.D. Ill. 2023) (treating core/non-core

distinction as a “factor to consider when determining

if there is an inherent conflict”); In re Hagerstown

Fiber Ltd. P’ship, 277 B.R. 181, 202-03 (Bankr.

S.D.N.Y. 2002) (similar).

Splitting sharply from all these courts, the Third

and Fifth Circuits have held that the core/non-core

distinction is completely irrelevant to McMahon’s

inherent-conflict inquiry. In re Mintze, 434 F.3d 222,

229 (3d Cir. 2006); In re Nat’l Gypsum Co., 118 F.3d

1056, 1067 (5th Cir. 1997) (core/non-core distinction

“conflate[s]” relevant inquiry). As one bankruptcy

court has explained, the core/non-core distinction has

“nothing at all to do” with arbitrability—it “affects

only the allocation of decisional authority between the

bankruptcy court and the district court,” not whether

arbitration would inherently conflict with the Code.

In re Yellow Corp., 2024 WL 1313308, at *9 (Bankr.

D. Del. Mar. 27, 2024).

The lower-court division over the role of the

core/non-core distinction in the McMahon analysis

has been widely acknowledged. Professor Bruce’s law

review article catalogues the circuit split in detail,

Kara

Bruce,

Bankruptcy’s

Arbitration

Countercurrent and the Future of the Debtor Class, 96

Am. Bankr. L.J. 819, 840-41 (2022), and at least one

court rejecting the distinction’s relevance has

acknowledged other courts reaching “the opposite

conclusion,” In re Yellow Corp., 2024 WL 1313308, at

*8 & n.52. The confusion is undeniable and can only

be resolved by this Court.2

At oral argument, Judge Harris also highlighted an

additional point of lower-court confusion in applying the

McMahon test in bankruptcy cases—namely, the role of

bankruptcy-court discretion. CA4 Oral Argument at 0:35-1:12;

see Lawless, supra, at 715-19 (discussing same point). Many

lower courts treat a finding of an “inherent conflict” as merely

giving a court discretion to deny arbitration in the bankruptcy

context. See, e.g., App.18a; In re Nat’l Gypsum Co., 118 F.3d at

1066; In re Thorpe, 671 F.3d at 1021; Lawless, supra, at 712-13,

716 nn.45, 48, 63 (listing cases). This focus on discretion is

II. THE DECISION BELOW IS WRONG

The Fourth Circuit’s decision cannot be squared

with this Court’s arbitration jurisprudence.

refusing to compel arbitration of the Section 362(k)

claims at issue here, the majority overrode the FAA

without identifying any “irreconcilable” conflict with

the underlying purposes of the Bankruptcy Code.

Instead, it stitched together generalized and illdefined policy arguments and treated them as

sufficient to displace the FAA’s command to enforce

arbitration agreements as written. That textually

unmoored, purpose-focused inquiry is foreclosed by

this Court’s precedents, which require a “clear and

manifest” congressional command to displace the

FAA. Epic Sys., 584 U.S. at 510-11.

Section 362(k) Claims Are Arbitrable In

Appropriate Circumstances

1. The FAA commands that arbitration

agreements “shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or

in equity for the revocation of any contract.” 9 U.S.C.

§ 2. That directive requires courts to “rigorously

enforce agreements to arbitrate,” “leav[ing] no place

for the exercise of discretion.” Dean Witter Reynolds,

Inc. v. Byrd, 470 U.S. 213, 218, 221 (1985). The FAA’s

clearly wrong: If a court identifies a conflict, it means “Congress

intended to preclude a waiver of judicial remedies for the

statutory rights at issue” and that there is a “congressional

command” to “overrid[e]” the FAA. McMahon, 482 U.S. at 22627 (emphasis added). Because the Fourth Circuit denied

arbitration after (incorrectly) finding an inherent conflict, this

petition does not directly implicate the discretion issue. But the

lower-court confusion on this additional point underscores the

need for this Court to clarify how arbitration and bankruptcy law

intersect more generally.

mandate, “[l]ike any statutory directive,” may be

“overridden by a contrary congressional command”—

but only where “the party opposing arbitration”

demonstrates “that Congress intended to preclude a

waiver of judicial remedies for the statutory rights at

issue.” McMahon, 482 U.S. at 226-27. This Court has

held that such intent can be “‘deduc[ed]’” from (1) the

“‘text’” of the statute; (2) its “‘legislative history’”; or

(3) “an inherent conflict between arbitration and the

statute’s underlying purposes.” Id. at 227.

In Epic Systems, this Court emphasized that the

inquiry is demanding: Any claim of an inherent

conflict “faces a stout uphill climb,” because

Congress’s intent to override the FAA must be “‘clear

and manifest.’” 584 U.S. at 510. Critically, “the

absence of any specific statutory discussion of

arbitration” is “an important and telling clue that

Congress has not displaced the Arbitration Act.” Id.

at 517. And Epic Systems warned that “[a]llowing

judges to pick and choose between statutes risks

transforming them from expounders of what the law

is into policymakers choosing what the law should

be.” Id. at 510.3

Applying that standard, the Court has “heard and

rejected efforts to conjure conflicts between the [FAA]

Epic Systems casts serious doubt on whether legislative

history can ever establish a conflict sufficient to displace the

FAA, see 584 U.S. at 523 (refusing to use legislative history to

establish inherent conflict), and whether statutory purpose—

divorced from text or structure—can ever supply the necessary

“clearly expressed” congressional intent, id. at 510.

See

Robertson v. Intratek Comp., Inc., 976 F.3d 575, 579 n.1 (5th Cir.

2020) (questioning “whether statutory purpose”—prong three of

McMahon’s test—“remains a part of the Court’s prescribed

inquiry”).

and other federal statutes” in “many cases,” including

“statutes ranging from the Sherman and Clayton Acts

to the [ADEA], the Credit Repair Organizations Act,

the Securities Act of 1933, the Securities Exchange

Act of 1934, and [RICO].” Id. at 516. Despite

repeated efforts by creative litigants, the Supreme

Court has never held that a federal statutory claim is

categorically unsuited for arbitration. See id. As a

whole, “[t]hese cases reflect [this] Court’s dogged

insistence that Congress speak with great clarity

when overriding the FAA.” Robertson v. Intratek

Comp., Inc., 976 F.3d 575, 582 (5th Cir. 2020).

2. This is not the exceptional situation where

Congress has spoken with the requisite clarity.

Section 362(k) nowhere mentions arbitration or the

FAA. After Epic Systems, that “important and telling

clue” should be the end of it. 584 U.S. at 517.

Even if the textual silence were not dispositive, the

answer would be the same. Section 362’s legislative

history is also silent on this issue, so the only possible

basis for displacing the FAA is McMahon’s third

prong: an “inherent conflict between arbitration and

the statute’s underlying purposes.” 482 U.S. at 227.

And as Epic Systems makes clear, that prong does not

license free-floating policy balancing. See 584 U.S. at

524-25. Rather, an “inherent conflict” must be truly

“irreconcilable,” McMahon, 482 U.S. at 227, 239.

There is no irreconcilable conflict here because

there is no “important purpose[]” of the Bankruptcy

Code that would be “jeopardize[d]” by adjudicating

respondents’ Section 362(k) claims in arbitration, as

opposed to in bankruptcy court. Hill, 436 F.3d at 10910. As the Second Circuit held in Hill, the only

“important purposes” that could possibly require

adjudication in bankruptcy court—as opposed to in

arbitration—are “providing debtors with a fresh start,

protecting the assets of the estate, and allowing the

bankruptcy court to centralize disputes concerning

the estate.” Id. at 109.

None of those purposes would be threatened by

arbitrating respondents’ Section 362(k) claims.

Section 362(k) provides a private damages remedy for

individual debtors; arbitrating Section 362(k) claims

leaves every function of the bankruptcy court intact.

Id. at 110. Most importantly, the administration of

the estate would not be disrupted: As Judge King

explained, “there is no conflict at all in arbitrating”

respondents’ claims because arbitration “would

neither add nor subtract a new creditor to these

bankruptcies” nor “‘frustrate creditor distribution.’”

App.23a.

The facts here underscore the point. Respondent

Maze’s Chapter 7 case was closed and his discharge

entered before petitioner moved to compel

arbitration. Supra 5, 7. There is simply no way for

arbitration to interfere with his bankruptcy case

because that case is over. And respondent Brown’s

Chapter 13 plan was already confirmed, without any

contemplated recovery from her Section 362(k) claim,

so arbitration would not impede administration of her

bankruptcy estate either. Id. Any Section 362(k)

recovery would flow to the debtors personally and

implicate no creditor’s rights. There is, in short,

nothing for arbitration to conflict with.

The Fourth Circuit Failed To Correctly

Apply The “Inherent Conflict” Test

Instead of faithfully applying the framework this

Court’s precedents prescribe, the Fourth Circuit

catalogued a series of abstract policy objectives it

associated with the Bankruptcy Code and declared—

as a categorical matter—that arbitrating any Section

362(k) claim would “frustrate” them. App.12a-18a.

That analysis says nothing about whether arbitrating

these claims would impact the administration of these

estates, much less whether such arbitration is

genuinely “irreconcilable” with the statutory scheme.

Epic Sys., 584 U.S. at 511. It is pure policy

balancing—the very thing Epic Systems forecloses.

Id. at 524-25. The panel’s decision should not stand.

1. The Fourth Circuit majority first erred by

treating the core/non-core distinction as an important

factor in the McMahon analysis. It held that because

the claims here are statutorily “core” under Section

157, petitioner faces a “high bar” to establish that

they must be arbitrated. App.11a.

That approach is mistaken. As the Third Circuit

has explained, the core/non-core distinction has no

direct bearing on whether a claim is arbitrable. See

In re Mintze, 434 F.3d at 230; see also In re Yellow

Corp., 2024 WL 1313308, at *9 & n.57; Lawless,

supra, at 707-13. A core claim may be more likely to

create an “inherent conflict,” but applying that label

to a claim does not relieve a court of conducting

McMahon’s case-specific inquiry into whether such a

conflict actually exists. Core status cannot create a

presumption of conflict or impose a “high[er] bar” to

enforcing an arbitration agreement. App.11a. The

panel erred by loading the dice at the threshold.

2. Turning to McMahon’s inherent-conflict

analysis, the panel declared that arbitration would

“undermine the needed centralization of claims” in

bankruptcy court. App.12a-13a. But nothing about

arbitrating these claims is “irreconcilable”—or even

in tension—with that principle. Centralization in

bankruptcy serves a precise and limited end:

ensuring the “prompt and effectual administration

and settlement of the [debtor’s] estate” by preventing

competing creditors from racing to dismember it.

Katchen v. Landy, 382 U.S. 323, 328 (1966).

A Section 362(k) damages claim does not implicate

these concerns. It is an affirmative suit by the debtor

against a creditor—not a dispute among competing

creditors fighting over limited assets. As the Second

Circuit and Judge King correctly explained,

arbitrating such claims “would not interfere with or

affect” the bankruptcy estate, and keeping them in

bankruptcy court is not “integral to [the] bankruptcy

court’s ability to preserve and equitably distribute

assets of the estate.” Hill, 436 F.3d at 109-10; see

App.24a-25a (King, J., dissenting). That logic applies

with even greater force here, where Maze’s

bankruptcy case is closed and Brown’s is effectively

over as her plan has been confirmed and estate

property has revested in her. Supra 5, 7.

The Fourth Circuit’s own opinion all but conceded

the point. It acknowledged that “the plaintiffs’ claim

under § 362(k) is not directly implicated in

harmonizing the interests of the debtors and their

creditors.”

App.13a.

That should have been

dispositive.

A claim that does “not directly

implicat[e]” the harmonization of debtor and creditor

interests cannot be “irreconcilabl[y]” at odds with the

centralization principle.

Congress’s own choices confirm that the

centralization principle does not require adjudication

of Section 362(k) claims in federal court. Congress

gave state courts concurrent jurisdiction over Section

362(k) claims in Section 1334(b). See City of New

London v. Speer, 322 A.3d 407, 425-27 (Conn. App. Ct.

2024) (Section 362(k) damages action is “within the

original but not exclusive jurisdiction of the federal

district courts” under Section 1334(b)). If Congress

was willing to allow state courts—which have no

specialized bankruptcy expertise—to adjudicate these

claims, it is impossible to maintain that the Code

requires centralized adjudication by a bankruptcy

judge and forbids arbitration.

3. The Fourth Circuit’s assertion that arbitration

would “undermine the ‘shield’ created by the

automatic stay” fares no better. App.14a. No one is

asking to violate the automatic stay; GS Bank seeks

only to arbitrate a private damages claim for its

alleged past violation.

Moreover, arbitrating any Section 362(k) claim for

money damages would not interfere—in the

slightest—with the bankruptcy court’s authority to

police stay violations itself under Section 105(a) of the

Bankruptcy Code.

That provision empowers

bankruptcy courts to “issue any order, process, or

judgment that is necessary or appropriate to carry out

the provisions of” the Code. 11 U.S.C. § 105(a). Even

before Congress created Section 362(k)’s private right

of action in 1984, courts “routinely used” “contempt

orders issued under [S]ection 105(a)” to “punish

violations of the automatic stay.” In re Spookyworld,

Inc., 346 F.3d 1, 8 (1st Cir. 2003); see Jove Eng’g, Inc.

v. IRS, 92 F.3d 1539, 1552 (11th Cir. 1996).

Section 362(k)’s private cause of action does not

eliminate this authority, and courts remain free to

use Section 105(a) to enforce the stay even absent a

Section 362(k) claim being filed by the debtor. See,

e.g., In re Windstream Holdings, Inc., 105 F.4th 488,

494 (2d Cir. 2024); 3 Collier on Bankruptcy ¶ 362.12

(16th ed. 2026); see also 11 U.S.C. § 105(a) (court has

power to order relief even sua sponte). Even if private

Section 362(k) claims are sent to arbitration, the

bankruptcy court retains full authority to police—and

punish—stay violations.

In any event, while the automatic stay is

undoubtedly an important protection for debtors,

significance alone cannot trump the FAA. This Court

has squarely rejected the premise that the

“fundamental importance” of a statutory provision

empowers courts to override arbitration agreements

on the assumption that arbitrators cannot vindicate

the interests that provision furthers. Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473

U.S. 614, 633-35 (1985). There is no FAA exception

for “important” matters. Arbitrators are fully capable

of assessing compensatory damages under Section

362(k), and they are fully empowered and capable of

awarding equitable relief where warranted. See

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20,

32 (1991).

4. The Fourth Circuit next posited that

arbitration would create an “‘inherent conflict’” by

“bypass[ing] the expertise of bankruptcy judges in

favor of private arbitrators.” App.11a, 15a. This

Court’s precedents foreclose that expertise-based

theory. In Mitsubishi, the Court explained that the

FAA prevents courts from “indulg[ing] the

presumption” that arbitrators cannot—or will not—

decide complex, important matters in a “competent,”

“conscientious,” and “impartial” manner. 473 U.S. at

634; see also Gilmer, 500 U.S. at 28. The Fourth

Circuit’s contrary approach reflects a “subscri[ption]

to a hierarchy of congressional concerns that places

the bankruptcy law in a position of superiority over

[the FAA].” Hays & Co. v. Merrill Lynch, Pierce,

Fenner & Smith, Inc., 885 F.2d 1149, 1161 (3d Cir.

1989). That is precisely the kind of anti-arbitrator

sentiment the FAA aimed to eliminate—and it cannot

be squared with the Code’s grant of concurrent

jurisdiction to state courts in any event. Supra 27.

The panel’s expertise-based logic threatens to

extend far beyond bankruptcy. After all, district

courts have extensive experience with all types of

statutory claims, from securities fraud to antitrust to

RICO. If judicial expertise were enough to defeat

arbitration, none of those claims would be arbitrable

either. But they are—which means the expertise

rationale fails.

5. The panel also asserted that arbitration

“would constrict the remedies that Congress

authorized in the Bankruptcy Code” because Section

362(k) makes punitive damages available for “willful”

stay violations, and the “prophylactic purpose” of

punitive damages “‘cannot function in the dark’” of

confidential arbitration. App.17a.

Yet again, the panel’s reasoning is foreclosed by

binding precedent. Taken seriously, it would bar

arbitration of any statutory claim where punitive

damages are available—a sweeping rule this Court

has long rejected. In Mitsubishi, for example, the

Court enforced an arbitration agreement covering

Sherman Act claims seeking treble damages, see 473

U.S. at 636-37—even though such damages are

“essentially punitive,” Vt. Agency of Nat. Res. v.

United States ex rel. Stevens, 529 U.S. 765, 784-86

(2000).

Arbitrators are fully empowered to award punitive

damages under Section 362(k)—and this Court has

further held that the FAA preempts state laws that

prevent arbitrators from awarding them.

See

Mastrobuono v. Shearson Lehman Hutton, Inc., 514

U.S. 52, 58-60 (1995). Under the Court’s precedent,

arbitration is an “adequate mechanism” for fully

vindicating both a statute’s “remedial” and

“deterrent” goals. Mitsubishi, 473 U.S. at 636-37.

6. Finally, the Fourth Circuit reasoned that

arbitration would undermine the Bankruptcy Clause

of the Constitution, which authorizes Congress to

establish “uniform Laws on the subject of

Bankruptcies.” U.S. Const. art. I, § 8, cl. 4; App.14a15a. That rationale fails too. The Bankruptcy Clause

authorizes Congress to enact a uniform federal

statutory framework; it says nothing about who must

adjudicate claims arising under that framework. U.S.

Const. art. I, § 8, cl. 4. The Framers’ concern was the

“wildly divergent schemes” States had adopted “for

discharging debtors and their debts.” Cent. Va. Cmty.

Coll. v. Katz, 546 U.S. 356, 363, 365 (2006). Once a

uniform federal statutory scheme displaced the preexisting patchwork, the Clause’s animating concern

was satisfied. Nothing in the Clause demands that

all bankruptcy-related matters be heard by a

specialist court, and never by arbitrators.

Again, the Fourth Circuit’s reasoning proves too

much:

If the Bankruptcy Clause’s uniformity

requirement forbids arbitration of Section 362(k)

claims, then it should likewise forbid arbitration for

all statutorily and constitutionally core bankruptcy

claims—a position not even the Fourth Circuit

endorses. See App.11a; see also Moses v. CashCall,

Inc., 781 F.3d 63, 83 (4th Cir. 2015) (Gregory, J.,

concurring in part, and concurring in the judgment)

(“The core/non-core distinction . . . is not mechanically

dispositive in deciding whether a bankruptcy judge

may refuse to send a claim to arbitration.”).

7. In sum, none of the Fourth Circuit’s policy

rationales withstands scrutiny. They echo arguments

litigants have pressed—and this Court has rejected—

in “many cases over many years.” Epic Sys., 584 U.S.

at 516. None establishes the kind of “irreconcilable”

conflict this Court’s precedents demand. McMahon,

482 U.S. at 239.

III. THIS COURT SHOULD RESOLVE HOW THE FAA

APPLIES IN BANKRUPTCY CASES

1. In the decades since McMahon, this Court has

applied its “inherent conflict” test to the securities

laws, antitrust, RICO, employment discrimination,

and more. But it has never addressed how the

“inherent conflict” test applies to Section 362(k)

claims, let alone to bankruptcy-related claims more

generally. The result has been the massive confusion

in the lower courts described above, as exemplified by

the Fourth Circuit’s splintered decision in this case.

Scholars and judges have sounded the alarm.

Professor Kirgis laments the “morass” of conflicting

decisions on “the enforceability of arbitration clauses

in bankruptcy.”

Paul F. Kirgis, Arbitration,

Bankruptcy, and Public Policy: A Contractarian

Analysis, 17 Am. Bankr. Inst. L. Rev. 503, 517 (2009).

Professor Lawless’s exhaustive survey declares that

lower courts’ approach to arbitrability in bankruptcy

has descended into a “thick haze” that “threatens to

turn both statutes into mere caricatures of their

original purposes.” Lawless, supra, at 747.

Professor Resnick highlights the substantial

“uncertainty and confusion” created by the “numerous

approaches and analyses adopted by the various

federal courts of appeals” on these issues. Alan N.

Resnick, The Enforceability of Arbitration Clauses in

Bankruptcy, 15 Am. Bankr. Inst. L. Rev. 183, 185

(2007). Professor Bruce explains that McMahon’s

“inherent conflict” standard “has proved to be difficult

to apply” in bankruptcy and has spawned “a variety

of approaches” across the lower courts. Bruce, supra,

at 840, 863.

And speaking from experience,

Bankruptcy Judge Harner emphasizes that

“[e]xisting case law” reflects “inconsistent results,”

creates “uncertainty in the law,” and is “difficult to

navigate.” Hon. Michelle M. Harner, Preface: The

Uneasy Relationship Between Arbitration and

Bankruptcy, 96 Am. Bankr. L.J. 685, 700 (2022).

Too often, lower courts have seized on this Court’s

silence on the intersection between bankruptcy and

arbitration as license to carve out bankruptcy

exceptions to how the FAA applies in other contexts.

Here, for example, the Fourth Circuit majority

acknowledged the Court’s “recent trend” of enforcing

arbitration agreements but then refused to follow it

on the ground that “the Bankruptcy Code presents a

unique statutory context” that the Court has “not

addressed.” App.20a-21a. To justify that approach,

the majority approvingly cited Professor Bruce’s

article praising bankruptcy as a “‘countercurrent’”

against this Court’s “sweeping declarations

supporting the FAA.” App.21a-22a; Bruce, supra, at

834-35, 843.

As the decision below confirms, the lower courts

are deeply confused—and that confusion is producing

error and resistance to applying this Court’s FAA

jurisprudence. Only this Court can correct course.

The Court should grant review to finally explain how

the FAA interacts with bankruptcy.

2. The practical stakes of these issues are

enormous. Arbitration clauses are commonplace in

consumer credit agreements; nearly every major

credit card issuer, auto lender, and consumer finance

company includes an arbitration agreement in its

standard contracts.

And more than 530,000

nonbusiness bankruptcy petitions were filed in Fiscal

Year 2025 alone, each one triggering the Bankruptcy

Code’s automatic stay.4 The volume of potential

Section 362(k) disputes is thus staggering, and the

decision below imperils the enforceability of

arbitration agreements in many of them.

Indeed, the decision below is likely to reverberate

far beyond the specific Section 362(k) question

presented because the Fourth Circuit’s reasoning has

no natural stopping point. The lower-court confusion

affects motions to arbitrate a wide array of

bankruptcy-related claims, including (1) claims

related to violations of the discharge injunction;

(2) state law claims (or counterclaims) seeking an

affirmative recovery for the estate; and (3) avoidance

actions. See Lawless, supra, at 719-46 (cataloguing

relevant contexts).

If generalized “policies and purposes” of the

Bankruptcy Code can override the FAA with respect

to Section 362(k) damages claims, the same could be

said of many other claims, which—at the same level

of generality—could also be described as implicating

the Code’s interest in “centraliz[ation],” “uniformity,”

or “expertise.”

App.12a, 14a-18a.

The Fourth

United States Courts, Judicial Business 2025, U.S.

Bankruptcy Courts (fiscal year ending Sept. 30, 2025),

https://www.uscourts.gov/data-news/reports/statistical-reports/

judicial-business-united-states-courts/judicial-business-2025.

Circuit’s approach thus provides a roadmap for

removing a host of additional claims from the FAA’s

domain—a result Congress never contemplated, and

this Court’s precedents foreclose.

3. This case is an ideal vehicle to resolve the

question presented. That question was pressed and

fully briefed at every stage and passed on by three

courts below. The relevant facts are undisputed and

simple: Respondents concede they signed valid

arbitration agreements that cover their Section

362(k) claims.

Supra 4.

And the fact that

respondents’ bankruptcies are at different stages

provides an additional advantage—the Court can

resolve the question presented across two distinct

factual settings.

Nor is there any reason for this Court to wait. The

unique structure of bankruptcy litigation makes

questions like this one exceedingly difficult to bring to

the Court. A bankruptcy court’s order denying a

motion to compel arbitration typically must clear two

layers of appellate review—the district court and the

court of appeals—before certiorari becomes an option.

Outside the class-action context, most of these Section

362(k) disputes settle long before that point.

Nonetheless, the question has been sufficiently

ventilated—by appellate courts, by district courts

sitting in an appellate capacity, by bankruptcy courts,

and in scholarly articles—including in a symposium

devoted to the intersection of arbitration and

bankruptcy. See supra 32. The courts of appeals and

lower courts are intractably divided, and there is no

other path to resolving the disagreement. This Court

should settle these weighty issues now, in this case.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

JEFF G. HAMMEL

CHRISTOPHER HARRIS

JASON HEGT

LATHAM & WATKINS LLP

1271 Avenue of the

Americas

New York, NY 10020

(212) 906-1200

ROMAN MARTINEZ

Counsel of Record

CHRISTINA R. GAY

URIEL HINBERG

LATHAM & WATKINS LLP

555 11th Street, NW

Suite 1000

Washington, DC 20004

(202) 637-3377

roman.martinez@lw.com

Counsel for Petitioner

June 16, 2026

APPENDIX

TABLE OF CONTENTS

Page

Opinion of the United States Court of Appeals

for the Fourth Circuit, Goldman Sachs

Bank USA v. Brown, 170 F.4th 249 (4th

Cir. 2026).............................................................1a

Order of the United States Court of Appeals for

the Fourth Circuit Denying Motion to Stay

Mandate, Goldman Sachs Bank USA v.

Brown, No. 25-1439 (4th Cir. Apr. 1, 2026),

ECF No. 62 ........................................................26a

Memorandum Opinion of the United States

Bankruptcy Court for the Western District

of Virginia, Brown v. Goldman Sachs Bank

USA (In re Brown), No. 23-70426, Adv.

Proceeding No. 24-07009, 663 B.R. 449

(Bankr. W.D. Va. 2024) ....................................30a

Memorandum Opinion of the United States

District Court for the Western District of

Virginia, Goldman Sachs Bank USA v.

Brown, No. 24-cv-00490, 2025 WL 837338

(W.D. Va. Mar. 17, 2025), ECF No. 27 .............44a

9 U.S.C. § 2 ..............................................................53a

11 U.S.C. § 362(a), (k) .............................................54a

28 U.S.C. § 1334 ......................................................56a

[170 F.4th 249]

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 25-1439

GOLDMAN SACHS BANK USA, d/b/a Marcus by

Goldman Sachs,

Appellant,

RHEA ANN BROWN; GREGORY KEVIN MAZE,

Appellees.

--------------------------NATIONAL ASSOCIATION OF CONSUMER

BANKRUPTCY ATTORNEYS, NATIONAL

CONSUMER BANKRUPTCY RIGHTS CENTER,

Amici Supporting Appellee.

Argued: January 29, 2026

Decided: March 18, 2026

Before: NIEMEYER, KING, and HARRIS, Circuit

Judges.

Affirmed published opinion. Judge Niemeyer wrote

the opinion, in which Judge Harris joined. Judge

King wrote a dissenting opinion.

NIEMEYER, Circuit Judge:

This appeal requires us to resolve the tension

between (1) having an adversary proceeding in

bankruptcy resolved by arbitration, as mandated by

an applicable contract provision and the Federal

Arbitration Act (“FAA”), and (2) having it resolved in

bankruptcy, as constitutionally authorized and

implemented by the Bankruptcy Code. In this case,

the adversary proceeding is based on an alleged

violation of the automatic stay imposed by § 362(a) of

the Bankruptcy Code. See 11 U.S.C. § 362(a).

Two debtors in bankruptcy commenced this

adversary proceeding in the bankruptcy court under

§ 362(k) against Goldman Sachs Bank USA, alleging

that it continued to collect credit card debt after the

debtors had filed for bankruptcy, in violation of the

automatic stay imposed by § 362(a). Goldman Sachs,

invoking the arbitration clause in the credit card

agreements with the debtors, filed a motion in the

bankruptcy court to compel arbitration of the debtors’

claim and to stay the adversary proceeding. The

bankruptcy court denied the motion, resolving the

tension between arbitration under the FAA and an

adversary proceeding in the bankruptcy court in favor

of continuing the adversary proceeding in the

bankruptcy court, and the district court affirmed this

ruling on appeal.

While there are substantial arguments on both

sides of the issue, in the circumstances of this case,

we conclude that arbitration would interfere and

conflict with the strong and established policies and

purposes of the Bankruptcy Code and accordingly

affirm.

Rhea Ann Brown filed a Chapter 13 proceeding in

the bankruptcy court in June 2023, and she listed,

among her debts, her credit card debt with Goldman

Sachs. Gregory Kevin Maze filed a Chapter 7

proceeding in the bankruptcy court in November

2023, and he too listed among his debts his credit card

debt with Goldman Sachs.

Within days of these filings, the Bankruptcy

Noticing Center electronically transmitted notice of

the filings to Goldman Sachs, warning it of the

automatic stay imposed by the Bankruptcy Code.

Nonetheless, Goldman Sachs continued efforts to

collect the credit card debt from both Brown and

Maze, repeatedly representing to them, “Your account

may be reported as charged off to the credit reporting

bureaus.” Brown contends that Goldman Sachs

representatives continued to contact her by email,

writings, and telephone calls for more than six

months, even though she had informed Goldman

Sachs representatives by email, telephone, and her

legal counsel that its collection efforts violated the

bankruptcy court’s automatic stay. Maze contends

similarly that Goldman Sachs representatives

continued to contact him by email and telephone for

more than three months. When, during a telephone

conversation on February 15, 2024, he gave the

Goldman Sachs representative his legal counsel’s

contact information, the representative replied that it

“was not her job to call [his] bankruptcy counsel, but

it was [his] job to pay his bills.”

Because of these continuing efforts to collect on

their credit card debts, Brown and Maze commenced

an adversary proceeding against Goldman Sachs in

the bankruptcy court, alleging that Goldman Sachs’

efforts constituted willful violations of the automatic

stay, in violation of 11 U.S.C. § 362(a)(3) and (6).

They also alleged that Goldman Sachs had similarly

violated automatic stays in at least two other

bankruptcy cases pending in the same bankruptcy

court. They sought injunctive relief, compensatory

damages, punitive damages, and attorneys fees

pursuant to § 362(k) and § 105. They also purported

to represent a class pursuant to Federal Rule of

Bankruptcy Procedure 7023, consisting of “all

individuals in the United States . . . who currently are

in a consumer bankruptcy case or were formerly in a

consumer bankruptcy case . . . from whom [Goldman

Sachs] made a post-petition demand for pre-petition

debt.”

Goldman Sachs filed a motion in the bankruptcy

court to compel arbitration of the plaintiffs’ claims

and to stay the adversary proceeding pending there.

It relied on the arbitration clause in the debtors’

credit card agreements, which provided:

ARBITRATION. You or we may elect, without

the other’s consent, to resolve any Claim by

individual binding arbitration unless the Claim has

been filed in court and trial has begun or final

judgment has been entered. Even if a Claim is

litigated in court, you or we may elect arbitration of

any Claim made by a new party or any Claim later

asserted by a party in that or any related or

unrelated lawsuit. You or we may also elect

arbitration of a Claim that the parties initially

opted to litigate in court if that Claim is later

modified (including to be asserted on a class,

representative or multi-party basis or to seek

different or additional relief).

Notwithstanding the foregoing, only a court and

not an arbitrator may decide any dispute or

controversy about the validity, enforceability,

coverage or scope of this arbitration provision, all of

which are for a court and not an arbitrator to decide.

However, disputes or controversies about the

validity or enforceability of this Agreement as a

whole are for the arbitrator and not a court to

decide.

The agreements also provided that “[c]laims may be

submitted to arbitration on an individual basis only.

Claims subject to this arbitration provision may not

be joined or consolidated in arbitration with any

Claim of any other person or be arbitrated on a class

basis.” Finally, the agreements provided that the

arbitrator “may award relief only in favor of [an]

individual Claim [and] may not award relief for or

against any other person, whether directly or

indirectly.”

The bankruptcy court denied Goldman Sachs’

motion to compel arbitration and to stay the

adversary proceeding before it. It reasoned that the

adversary proceeding, “by its very nature,” stems

from the bankruptcy itself and is both statutorily and

constitutionally core, such that it had discretion to

deny the motion. Recognizing that the automatic stay

is “one of the fundamental debtor protections

provided by the bankruptcy laws,” the bankruptcy

court held that sending the debtors’ claims to

arbitration would irreconcilably conflict with the

purposes of the Bankruptcy Code. (Quoting Grady v.

A.H. Robins Co., 839 F.2d 198, 200 (4th Cir. 1988)).

The court added that because “[l]arger systemic

issues . . . [that] implicate the foundational purposes

of the Bankruptcy Code” are at play, the “specialized

experiences” of the bankruptcy courts are

“particularly suited to address [the issues] in a global

manner.”

On appeal, the district court affirmed, holding that

the bankruptcy court had not abused its discretion.

The district court explained that “arbitrating

Plaintiffs’ claims would inherently conflict with the

Bankruptcy Code’s objectives, as it could undermine

the Bankruptcy Court’s authority (1) to enforce the

automatic stay to protect debtors and creditors’ rights

and (2) to provide a single centralized forum for

resolving disputes related to the Plaintiffs’

bankruptcy proceedings.”

From the district court’s order dated March 17,

2025, Goldman Sachs filed this appeal.

Goldman Sachs contends that the plaintiffs agreed

in their credit card agreements to arbitrate all claims

and that their agreements must be enforced in

compliance with the FAA’s strong public policy

favoring arbitration, even though their § 362(k) claim

is a statutory claim. It argues that because the

Bankruptcy Code “manifests [no] congressional intent

to preclude arbitration” for a § 362(k) claim and

arbitration would neither interfere with the

bankruptcy proceedings nor “undermine the purposes

of the Bankruptcy Code,” the bankruptcy court was

required to order arbitration. It points out that

Maze’s Chapter 7 proceeding was closed when the

court ruled and that Brown’s plan in her Chapter 13

proceeding had been approved and was successfully

being implemented without consideration of her

§ 362(k) claim. Thus, it maintains that the district

court erred in finding a conflict between arbitration

and the adversary proceeding in bankruptcy and in

giving precedence to adjudication of the adversary

proceeding in the bankruptcy court.

The plaintiffs, on the other hand, contend that

their § 362(k) claim is a “constitutionally and

statutorily core” bankruptcy claim that Goldman

Sachs seeks to have resolved with a “case-by-case

arbitration.” Ordering arbitration, they argue, would

create an “irreconcilabl[e] conflict with the purposes

of the automatic stay in § 362 of the Bankruptcy Code,

as well as with the principal ‘fresh start’ purpose of

the Bankruptcy Code.” They maintain that it would

also undermine the constitutional purpose that the

bankruptcy laws be uniformly enforced. Thus, they

conclude that the bankruptcy court properly denied

arbitration.

While the parties’ arguments highlight a tension

between ordering and denying arbitration, the parties

do not dispute the validity of the arbitration clause in

the plaintiffs’ credit card agreements, and they agree

that plaintiffs’ § 362(k) claim is a constitutionally and

statutorily core bankruptcy claim.*

Arbitration is a contractually grounded out-ofcourt procedure that can be more efficient in resolving

a dispute than a court proceeding, which is draped

with many more mandated and authorized

procedures. While arbitration was earlier treated

with hostility by the courts as an unwise bypass

around the role of courts, Congress reversed that

hostility as a matter of public policy with its

enactment of the FAA. The Supreme Court has thus

observed that the FAA establishes “a liberal federal

policy favoring [the enforcement of] arbitration

agreements.” Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74

We agree that the § 362(k) claim is constitutionally core

because it “stems from the bankruptcy itself or would necessarily

be resolved in the claims allowance process,” Stern v. Marshall,

564 U.S. 462, 499 (2011), and that it is also statutorily core, see

28 U.S.C. § 157(b)(2).

L.Ed.2d 765 (1983). And as a consequence, it has held

that the FAA requires courts to “rigorously enforce

agreements to arbitrate.” Dean Witter Reynolds, Inc.

v. Byrd, 470 U.S. 213, 221 (1985). Moreover, the “duty

to enforce arbitration agreements is not diminished

when a party bound by an agreement raises a claim

founded on statutory rights.” Shearson/Am. Express,

Inc. v. McMahon, 482 U.S. 220, 226 (1987); see also

Epic Sys. Corp. v. Lewis, 584 U.S. 497, 516–17 (2018).

As the McMahon Court explained, the FAA “provides

no basis for disfavoring agreements to arbitrate

statutory claims by skewing the otherwise hospitable

inquiry into arbitrability.” 482 U.S. at 226 (cleaned

up).

While arbitration is thus favored as a matter of

public policy, so too is the process and relief afforded

by the Bankruptcy Code. Indeed, it is assured by the

Constitution, see U.S. Const. art. I, § 8, cl. 4, and fully

implemented by Congress with its enactment of the

Bankruptcy Code, its creation of bankruptcy courts,

and its provision for the appointment of bankruptcy

judges.

As the Supreme Court has observed,

“Congress intended to grant comprehensive

jurisdiction to bankruptcy courts so that they might

deal efficiently and expeditiously with all matters

connected with the bankruptcy estate.” Celotex Corp.

v. Edwards, 514 U.S. 300, 308 (1995) (emphasis

added) (cleaned up). Thus, we have observed:

Congress intended that all legal obligations of

the debtor, no matter how remote or contingent,

will be able to be dealt with in bankruptcy. The

Code contemplates the broadest possible relief

in the bankruptcy court. Also, that history tells

us that the automatic stay is one of the

fundamental debtor protections provided by the

bankruptcy laws. It provides a breathing spell

to the debtor to restructure his affairs, which

could hardly be done with hundreds or

thousands of creditors persevering in different

courts all over the country for a first share of a

debtor’s assets. Absent a stay of litigation

against the debtor, dismemberment rather

than reorganization would, in many or even

most cases, be the inevitable result.

Grady v. A.H. Robins Co., 839 F.2d 198, 202 (4th Cir.

1988) (emphasis added); see also H.R. Rep. No. 95595, at 174 (1977), reprinted in 1978 U.S.C.C.A.N.

5963, 6135; S. Rep. No. 95-989, at 54-55 (1978),

reprinted in 1978 U.S.C.C.A.N. 5787, 5840–41. The

Bankruptcy Code implements the foundational

purposes of bankruptcy, which include (1) giving the

“honest but unfortunate debtor” a “fresh start,”

Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367

(2007) (cleaned up); (2) providing “[c]entralization of

disputes concerning a debtor’s legal obligations” to be

able to preserve assets and provide a fair allocation of

the debtor’s obligations, Phillips v. Congelton, L.L.C.

(In re White Mountain Mining Co.), 403 F.3d 164, 170

(4th Cir. 2005); Grady, 839 F.2d at 202; and (3)

applying the bankruptcy law uniformly, U.S. Const.

art. I, § 8, cl. 4; Cent. Va. Cmty. Coll. v. Katz, 546 U.S.

356, 376 n.13 (2006). And at the center of a

bankruptcy court’s facility is the automatic stay

imposed by § 362(a).

The parties’ competing claims in this case create a

tension between the pursuit of these two well

established and important public policies. And our

steps for resolving it must begin with Goldman Sachs’

motion to mandate arbitration.

10a

While the FAA does indeed mandate that

arbitration agreements be rigorously enforced, its

mandate, “[l]ike any statutory directive, . . . may be

overridden by a contrary congressional command.”

McMahon, 482 U.S. at 226. And the party seeking to

demonstrate that command has the burden of

showing that “Congress intended to preclude a waiver

of judicial remedies for the statutory rights at issue.”

Id. at 227. As the McMahon Court explained, that

intent “will be deducible from the statute’s text or

legislative history, or from an inherent conflict

between arbitration and the statute’s underlying

purposes.” Id. (cleaned up); see also Green Tree Fin.

Corp.-Ala. v. Randolph, 531 U.S. 79, 90 (2000) (noting

that the exception to arbitration must turn on

“whether Congress has evinced an intention to

preclude a waiver of judicial remedies for the

statutory rights at issue”); Dean Witter, 470 U.S. at

221 (noting that courts are to follow the requirement

of rigorous enforcement of arbitration agreements, “at

least absent a countervailing policy manifested in

another federal statute”).

Thus, to resolve the tension presented here, we

begin by applying the test set forth in McMahon.

Under McMahon, courts must enforce the arbitration

of statutory claims unless the statute precludes

waiver of judicial remedies, as evidenced by (1) its

text, (2) its legislative history, or (3) an “inherent

conflict between arbitration and the statute’s

underlying purposes.” 482 U.S. at 227. And they

must apply this test as a matter of law. If a court

concludes, after applying McMahon, that arbitration

is not mandated, it may then exercise discretion in

resolving the conflict between the forums. Moses v.

CashCall, Inc., 781 F.3d 63, 71 (4th Cir. 2015) (noting

11a

that “the court of first impression has discretion to

decide whether to withhold arbitration”).

In this case, the parties make no argument that

the text of the Bankruptcy Code precludes

arbitration. Rather, they focus on whether there is an

“inherent conflict” between arbitration and the

Bankruptcy

Code’s

“underlying

purposes.”

McMahon, 482 U.S. at 227. Thus, to this we now turn.

First, we note that unlike actions that are

independently grounded in tort, contract, or a statute

other than the Bankruptcy Code and are therefore

unlinked to a bankruptcy court’s function and

purpose, a § 362(k) claim arises from a violation of the

bankruptcy court’s stay, which falls within the

authority of the bankruptcy court under the

Bankruptcy Code’s statutory framework.

The

bankruptcy stay, which a § 362(k) claim vindicates, is

foundational to the successful function of the

bankruptcy purpose to collect all assets and debts of

the debtor and harmonize their disposition. See

Robbins v. Robbins (In re Robbins), 964 F.2d 342, 345

(4th Cir. 1992); Grady, 839 F.2d at 202. Thus, a

§ 362(k) claim is “as core” as any claim that arises

from bankruptcy proceedings.

While the categorization of a claim as “core” may

not automatically render the claim non-arbitral, the

categorization does present a high bar to deny the

bankruptcy court’s discretion. As the Fifth Circuit

has explained, “There can be little dispute that where

a core proceeding involves adjudication of federal

bankruptcy rights wholly divorced from inherited

contractual claims, the importance of the federal

bankruptcy forum provided by the Code is at its

zenith.” Ins. Co. of N. Am. v. NGC Settlement Trust of

Asbestos Claims Mgmt. Corp. (In re National Gypsum

12a

Co.), 118 F.3d 1056, 1068 (5th Cir. 1997) (emphasis

added). And as one bankruptcy court put it, “Stated

simply, the more ‘core’ the proceeding, the more likely

a conflict exists.” Huffman v. Legal Helpers Debt

Resol., L.L.C. (In re Huffman), 486 B.R. 343, 357

(Bankr. S.D. Miss. 2013).

A claim for violation of the stay is so critical

because the automatic stay is the mechanism that

enables the bankruptcy court “to harmonize the

interests of both debtor and creditors while

preserving the debtor’s assets for repayment and

reorganization of his or her obligations.” In re

Robbins, 964 F.2d at 345. It thus supports “a

principal purpose of the Bankruptcy Code . . . to

centralize disputes over the debtor’s assets and

obligations in one forum, thus protecting both debtors

and creditors from piecemeal litigation and

conflicting judgments.” CashCall, 781 F.3d at 72.

Moreover, it does not merely serve the “[e]ase and

centrality of administration” of the bankruptcy,

French v. Liebmann (In re French), 440 F.3d 145, 155

(4th Cir. 2006) (Wilkinson, J., concurring), but, by

applying to all parties to a bankruptcy—that is,

debtor and creditors alike—the stay provides a

fundamental bulwark against the collective action

problems that a debtor’s financial distress invites.

See S. Rep. No. 95-989, at 49, reprinted in 1978

U.S.C.C.A.N. at 5835 (“Without [the automatic stay]

. . . [t]hose who acted first would obtain payment of

the claims in preference to and to the detriment of

other creditors. Bankruptcy is designed to provide an

orderly liquidation procedure under which all

creditors are treated equally”).

Granting Goldman Sachs’ motion to arbitrate the

plaintiffs’ § 362(k) claim—a claim that has no

13a

independent grounding outside of the Bankruptcy

Code—would

thus

undermine

the

needed

centralization of claims and effectively allow

Goldman Sachs, after allegedly violating the stay, to

assert the primacy of a private contractual right over

the collective interests of all other creditors. This

would, we conclude, fundamentally interfere with a

core purpose of the Bankruptcy Code. In re White

Mountain Mining Co., 403 F.3d at 169 (holding that

the “centralized decision-making” so crucial to a

bankruptcy court’s ability to balance these competing

interests is inconsistent with arbitration “because

permitting an arbitrator to decide a core [bankruptcy]

issue would make debtor-creditor rights contingent

upon an arbitrator’s ruling rather than the ruling of

the bankruptcy judge assigned to hear the debtor’s

case” (cleaned up)); see also Anthony J. Casey &

Joshua C. Macey, The Bankruptcy Tribunal, 96 Am.

Bankr. L.J. 749, 751 (Winter 2022) (“Any two parties

could use a private arbitration provision to remove

from the bankruptcy tribunal a dispute that affects

the rights of other parties . . . [which] would be the

equivalent of allowing those two parties to force all

other claimants to waive their right to have their

claims collectively resolved in the bankruptcy

tribunal”).

To be sure, we recognize that the plaintiffs’ claim

under § 362(k) is not directly implicated in

harmonizing the interests of the debtors and their

creditors, but it does enforce the bankruptcy court’s

ability to do so. The stay is an ongoing status that is

monitored and enforced by the bankruptcy court such

that the court can, as necessary, enjoin violations

under 11 U.S.C. § 105 (authorizing the court to issue

14a

injunctions). This could not be done in a private

arbitral forum.

Beyond this degradation of a fundamental purpose

of bankruptcy, arbitration of the plaintiffs’ § 362(k)

claim would, we conclude, also undermine the “shield”

created by the automatic stay—a shield afforded to

the debtor against the “financial pressure during the

pendency of the bankruptcy proceeding.” Winters ex

rel. McMahon v. George Mason Bank, 94 F.3d 130, 133

(4th Cir. 1996). Such a shield bolsters the “principal

purpose of the Bankruptcy Code” of granting “a ‘fresh

start’ to the ‘honest but unfortunate debtor.’ ”

Marrama, 549 U.S. at 367 (quoting Grogan v. Garner,

498 U.S. 279, 286, 287 (1991)). Thus, as we have

observed, the automatic stay is “one of the

fundamental debtor protections provided by the

bankruptcy laws, giving the debtor a breathing spell

from his creditors.” Wood v. U.S. Dep’t of Hous. &

Urban Dev. (In re Wood), 993 F.3d 245 (4th Cir. 2021)

(emphasis added) (cleaned up). Arbitration beyond

the walls of the bankruptcy court would diminish, if

not eliminate, this breathing spell that the Code

intended be enforced. Moreover, this diminishment

could be multiplied for every claim made.

There are other underlying purposes that would

also be diminished by arbitration. A fundamental

purpose of the Bankruptcy Code is to assure that

bankruptcy laws be uniform and be uniformly

enforced. Not only is this expressly grounded in the

text of the Constitution, which authorizes Congress

“to establish . . . uniform Laws on the subject of

Bankruptcies throughout the United States,” U.S.

Const. art. I, § 8, cl. 4 (emphasis added), but it also

represents the earliest understandings of the

Constitution. As Justice Joseph Story remarked in

15a

the early years of the Republic, federal jurisdiction

over bankruptcy matters “result[s] from the

importance of preserving harmony, promoting justice,

and securing equality of rights and remedies among

the citizens of all the states.” 3 Joseph Story,

Commentaries on the Constitution § 1102 (1st ed.

1833) (emphasis added); see also The Federalist No.

42, at 221 (James Madison) (George W. Carey &

James McClellan eds., 1990) (“The power of

establishing uniform laws of bankruptcy, is so

intimately connected with the regulation of

commerce, and will prevent so many frauds where the

parties or their property may lie or be removed into

different States, that the expediency of it seems not

likely to be drawn into question”). And the Supreme

Court has readily acknowledged this, stating,

“Congress has the power to enact bankruptcy laws the

purpose and effect of which are to ensure uniformity

in treatment of state and private creditors.” Katz, 546

U.S. at 377 n.13 (emphasis added). Yet arbitration

would clearly undermine this purpose. Arbitration

individualizes the disposition of claims such that one

arbitrator’s judgment might differ from another’s or

from a court’s. And there is no ability to assure their

uniformity through appeal to the courts and

ultimately the Supreme Court. As is well understood,

“judicial review of an arbitration award is severely

circumscribed, and is among the narrowest known at

law.” Friedler v. Stifel, Nicolaus, & Co., 108 F.4th

241, 246 (4th Cir. 2024) (cleaned up).

For yet another compromised purpose, arbitration

would also bypass the expertise of bankruptcy judges

in favor of private arbitrators, who may not even be

lawyers and who normally would not be versed in the

complexities of the Bankruptcy Code. In that vein,

16a

Congress created bankruptcy courts to implement the

Bankruptcy Code and bring to the court’s jurisdiction

all property of a debtor, wherever located, as well as

the claims of all creditors, to enable the court to

harmonize the interests of both the debtors and the

creditors.

And Congress provided for the

appointment of bankruptcy judges for terms of 14

years specifically and exclusively to preside over

bankruptcy matters, see 28 U.S.C. §§ 151, 152, 157,

surely in recognition that bankruptcy is a discrete and

comprehensive process deserving dedicated and

experienced judges. As Congress recognized when

enacting the Bankruptcy Code, “[i]n bankruptcy,

specialization is necessary to the functioning of the

system.” H.R. Rep. No. 95-595, at 19, reprinted in

1978 U.S.C.C.A.N. at 5980 (emphasis added). And

the courts have routinely recognized this.

See

Robbins, 964 F.2d at 345 (recognizing that “the

expertise of the bankruptcy court” is a factor to

consider when reviewing the court’s discretion

(emphasis added)); Ackerman v. Eber (In re Eber), 687

F.3d 1123, 1131 (9th Cir. 2012) (recognizing that

bankruptcy courts have “special expertise to decide”

core matters (emphasis added)); Holland v.

Zimmerman (In re Zimmerman), 341 B.R. 77, 80

(Bankr. N.D. Ga. 2006) (recognizing the debtor’s

interest in having dischargability and related issues

“determined in one forum with particularized

expertise to do so” (emphasis added)); Huffman, 486

B.R. at 364 (recognizing that a bankruptcy court can

consider its own “specialized expertise” in exercising

discretion to deny motion to compel arbitration of

adversary proceeding (emphasis added)); Merrill v.

MBNA Am. Bank, N.A. (In re Merrill), 343 B.R. 1, 9

n.10 (Bankr. D. Me. 2006) (recognizing that “applying

17a

and enforcing the stay (and related provisions) is [not]

a simple exercise where a bankruptcy judge’s

experience and training are not required” (emphasis

added)).

Mandating arbitration of adversary

proceedings grounded in the Bankruptcy Code would

deny the parties the bankruptcy judges’ expertise and

thus frustrate this underlying purpose of the

Bankruptcy Code.

And specifically with respect to § 362(k) claims,

arbitration would constrict the remedies that

Congress authorized in the Bankruptcy Code. Section

362(k) authorizes not only an award of compensatory

damages for a violation of § 362(a), but also, when the

violation is willful, an award of punitive damages.

See 11 U.S.C. § 362(k). Punitive damages, of course,

impose punishment on the violator, but they also

provide deterrence to discourage future violations. It

has been observed, correctly, that the “primary

purpose of punitive damages awarded for a willful

violation of the automatic stay is to cause a change in

the creditor’s behavior.” In re Shade, 261 B.R. 213,

216 (Bankr. C.D. Ill. 2001). This deterrence of

punitive damages is a prophylactic purpose, and such

purpose therefore “cannot function in the dark.”

Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555,

571 (1980). Yet, relegating awards of punitive

damages to the private forum of arbitration sends

deterrence into “the dark” and therefore cannot serve

the purpose underlying the Bankruptcy Code’s

authorization of punitive damages for § 362(a)

violations.

Under the McMahon test, the determination of

whether the Bankruptcy Code precludes waiver of

judicial remedies so as to preclude arbitration may

also be informed by the Code’s “legislative history,”

18a

McMahon, 482 U.S. at 227, and the legislative

history, we conclude, also supports our conclusion in

this case. In describing the adequate protection of

property provided under the Bankruptcy Code, the

Senate Report accompanying the Bankruptcy Reform

Act of 1978 explained that the automatic stay

provides creditor protection, and the scope of the stay

is “broad.” S. Rep. No. 95-989, at 50, reprinted in 1978

U.S.C.C.A.N. at 5836. More relevantly, the Report

explains that under the automatic stay, “[a]ll

proceedings are stayed, including arbitration,

administrative, and judicial proceedings.” Id.

(emphasis added).

Thus, there are in this case several inherent

conflicts between arbitration and adjudication of the

§ 362(k) claim in bankruptcy—the degradation of the

bankruptcy court’s core purpose of conducting

comprehensive bankruptcy proceedings, the lack of

centrality for dispositions, the erosion of the

bankruptcy shield, the lack of uniformity, the lack of

bankruptcy expertise, and the deterrent purposes of

punitive damages—that, together with the legislative

history, amply demonstrate that arbitration here

would conflict with the underlying purposes of the

Bankruptcy Code. They also amply support the

district court’s discretion in retaining the plaintiffs’

adversary proceeding in the bankruptcy court.

Goldman Sachs nonetheless argues that

arbitration of the plaintiffs’ § 362(k) claim would have

no impact on the administration and settlement of

Maze’s estate, since his Chapter 7 bankruptcy is

closed, and that it would have only an ancillary effect

on Brown’s ongoing Chapter 13 bankruptcy, since her

securing a damages award would only increase the

value of her estate and the assets available to

19a

creditors. In making this argument, it relies largely

on CashCall, where we affirmed the preclusion of

arbitration for a claim seeking a declaratory

judgment about a loan’s illegality but allowed

arbitration of a state law damages claim. 781 F.3d at

66 (per curiam). As to the state law damages claim,

we explained that retaining it in bankruptcy was not

required because “enlargement of the underlying

estate due to any damages received . . . [would be]

simply too attenuated” from the bankruptcy. Id. at 82

(Gregory, J., concurring in the judgment); see id. at 93

(Davis, J., concurring in the judgment). Goldman

Sachs would have us treat the plaintiffs’ claim here as

we treated the state law damages claim in CashCall.

But the circumstances are materially distinct.

Crucially, in CashCall, we held only that the

plaintiff’s non-core claim for damages under state law

could be arbitrated, id. at 66 (per curiam), reasoning

that “the success or failure of the non-core claim may

have ancillary effects on [the debtor’s] bankruptcy”

but that such effects were “too attenuated, and indeed

extrinsic to the bankruptcy, to constitute an ‘inherent

conflict’ with the Bankruptcy Code’s purpose of

facilitating an efficient reorganization.” Id. at 82

(Gregory, J., concurring in the judgment); see id. at 93

(Davis, J., concurring in the judgment). The same,

however, cannot be said here where Brown’s claim is

statutorily and constitutionally core. And far from

being “extrinsic to the bankruptcy,” like a debtor’s

state law claim in CashCall, Brown’s claim here is

based entirely—from stem to stern—on the

Bankruptcy Code and the bankruptcy court’s

continuing jurisdiction over her estate.

Goldman Sachs also relies on the Second Circuit’s

holding in MBNA America Bank, N.A. v. Hill, 436

20a

F.3d 104 (2d Cir. 2006), to support its position. In

Hill, the court held that the bankruptcy court, in the

peculiar circumstances presented there, did not have

discretion to deny a motion for arbitration of a claim

that the creditor had violated the automatic stay. Id.

at 110–11. There, the debtor had already received her

discharge, and her Chapter 7 bankruptcy case had

been closed. Id. at 110. Thus, the court reasoned that

resolution of the debtor’s claim “[could not] affect an

ongoing reorganization, and arbitration would not

conflict with the objectives of the automatic stay.” Id.

Moreover, the court distinguished its holding on that

basis from cases where other appellate courts,

including the Fourth Circuit, had held “that

bankruptcy courts had discretion to refuse to stay

proceedings pending arbitration.” Id. (citing In re

White Mountain Mining Co., 403 F.3d at 170). Thus,

Hill’s holding is inapposite, and we cannot determine

whether the Hill court would have ruled the same

way had it been faced with an arbitration issue in an

ongoing bankruptcy proceeding, as we are here.

Finally, Goldman Sachs argues that our

conclusion runs contrary to the recent trend in which

the Supreme Court has consistently declined to hold

that federal statutory claims are unsuited for

arbitration. Indeed, the Court has observed, “[i]n

many cases over many years, this Court has heard

and rejected efforts to conjure conflicts between the

Arbitration Act and other federal statutes,” referring

to “statutes ranging from the Sherman and Clayton

Acts to the Age Discrimination in Employment Act,

the Credit Repair Organizations Act, the Securities

Act of 1933, the Securities Exchange Act of 1934, and

the Racketeer Influence and Corrupt Organizations

Act.” Epic Sys. Corp., 584 U.S. at 516.

21a

Despite the Court’s reference to those statutes,

however, the Bankruptcy Code presents a unique

statutory context, especially where, as here, the claim

is both statutorily and constitutionally grounded.

See, e.g., CashCall, 781 F.3d at 72 (recognizing that

bankruptcy “represents a fundamental public policy

. . . [g]rounded in the Constitution”); see also Roth v.

Butler Univ. (In re Roth), 594 B.R. 672, 674–76

(Bankr. S.D. Ind. 2018) (distinguishing compelled

arbitration in the bankruptcy context from the

Supreme Court’s general support for arbitration of

other statutory claims, recognizing the constitutional

basis of the Code and noting that the “very purpose of

the Bankruptcy Code is to modify the rights—

contractual

and

otherwise—of

debtors

and

creditors”).

And the Supreme Court has not

addressed whether arbitration of bankruptcy claims

is in conflict with the Bankruptcy Code, although it

has twice in recent years denied petitions for

certiorari of circuit court decisions that found no

abuse of discretion where bankruptcy courts denied

motions to compel arbitration of claims stemming

from the Bankruptcy Code. See Anderson v. Credit

One Bank, N.A. (In re Anderson), 884 F.3d 382, 391–

92 (2d Cir. 2018) (concluding that the bankruptcy

court did not abuse its discretion in retaining claim

that credit card issuer had violated bankruptcy

court’s discharge injunction), cert. denied, 586 U.S.

823 (2018) (No. 17-1652); Belton v. GE Cap. Retail

Bank (In re Belton), 961 F.3d 612, 616–18 (2d Cir.

2020) (similar), cert. denied, 141 S. Ct. 1513 (2021)

(No. 20-481). Scholars too have recognized

bankruptcy’s unique position as a counterpoint to the

Supreme Court’s trend in favor of arbitration for

statutory claims, referring to it as, for example,

22a

“bankruptcy’s arbitration countercurrent.” Kara J.

Bruce, Bankruptcy’s Arbitration Countercurrent and

the Future of the Debtor Class, 96 Am. Bankr. L.J.

819, 820 (Winter 2022) (“Despite the steady stream of

Supreme Court decisions favoring arbitration in other

contexts, bankruptcy courts have consistently refused

to enforce pre-dispute arbitration clauses”).

In short, although the Supreme Court has sided

with arbitration in the context of many statutory

frameworks, it has not done so in a bankruptcy

context, and bankruptcy is unique, as we explain,

raising important distinguishing factors.

***

For the reasons given, we therefore affirm the

order of the district court dated March 17, 2025,

denying Goldman Sachs’ motion to compel

arbitration.

AFFIRMED

23a

KING, Circuit Judge, dissenting:

With great respect, I am constrained to dissent

from the panel majority’s erroneous affirmance of the

ruling of the Western District of Virginia, which

refused to compel arbitration of the putative class

claims asserted by plaintiffs Rhea Brown and Gregory

Maze (collectively “plaintiffs”) against defendant

Goldman Sachs. Parting ways with my good friends,

I am of opinion that the outcome here is readily

compelled by the Supreme Court’s precedent of

Shearson/American Express, Inc. v. McMahon, 482

U.S. 220 (1987), and our Court’s 2015 decision in

Moses v. CashCall, Inc., 781 F.3d 63 (4th Cir. 2015).

Put simply, the plaintiffs’ claims—by which they seek

to hold Goldman Sachs liable for allegedly violating

the Bankruptcy Code’s automatic stay provision, see

11 U.S.C. § 362—belong in arbitration, not an

adversary proceeding before the bankruptcy court.

In these circumstances, arbitrating the plaintiffs’

§ 362 automatic bankruptcy stay claims—which, as

the majority has recognized, are indubitably subject

to the binding arbitration agreements between the

plaintiffs and Goldman Sachs, see ante at 255

(recognizing that “the parties do not dispute the

validity of the arbitration clause in the plaintiffs’

credit card agreements”)—does not create an

“inherent [i.e., ‘irreconcilable’] conflict” with the

Bankruptcy Code, as my friends say that it does. See

McMahon, 482 U.S. at 226; CashCall, 781 F.3d at 71.

In fact, there is no conflict at all in arbitrating the

plaintiffs’ § 362 automatic bankruptcy stay claims

because the success (or failure) thereof would neither

add nor subtract a new creditor to these bankruptcies,

nor would it serve to “frustrate creditor distribution.”

24a

See CashCall, 781 F.3d at 93 (Davis, J., concurring).1

On that basis, I would send the plaintiffs’ § 362

automatic stay claims to arbitration, despite the

majority’s unpersuasive musings about why an

“inherent conflict” exists here.

Furthermore, in addition to flouting the McMahon

and CashCall precedents, the panel majority has

needlessly created a circuit split with the Second

Circuit—that is, the only other court of appeals to

address whether a § 362 automatic stay claim belongs

in arbitration. See MBNA America Bank, N.A. v. Hill,

436 F.3d 104 (2d Cir. 2006).2 Contrary to the

majority’s take, the Second Circuit correctly ruled in

Hill that arbitrating a § 362 automatic bankruptcy

stay claim does “not interfere with or affect the

To be sure, Ms. Brown’s Chapter 13 bankruptcy was

confirmed by the bankruptcy court in September 2023. And Mr.

Maze received a discharge in his Chapter 7 bankruptcy in

February 2024. It thus strains credulity for the plaintiffs to

maintain—and for the panel majority to now accept—that the

plaintiffs are being deprived of the “fresh start” available to

debtors by way of the Bankruptcy Code. See ante at 7. And in

Ms. Brown’s case, it fully undermines the majority’s assertion

that arbitrating her § 362 automatic bankruptcy stay claim

would “substantially interfere with . . . efforts to reorganize.”

See Phillips v. Congelton, L.L.C. (In re White Mountain Mining

Co.), 403 F.3d 164, 170 (4th Cir. 2005).

The panel majority waxes poetic that the Second

Circuit’s Hill decision was resolved in “peculiar circumstances,”

and therefore its reasoning is limited. See ante at 19. But I do

not read Hill in the same manner as my friends in the majority—

the Second Circuit was clear in ruling that arbitration of the Hill

debtor’s § 362 automatic bankruptcy stay claim was warranted

because it was neither “integral to [the] bankruptcy court’s

ability to preserve and equitably distribute assets of the estate,”

nor “directly implicated matters central to the purposes and

policies of the Bankruptcy Code.” See 436 F.3d at 110.

25a

distribution of the estate,” since the debtor there had

obtained a discharge of her debts and there was no

“ongoing reorganization” left with respect to the

bankruptcy. Id. at 108-10. Otherwise, the Second

Circuit cogently and rather persuasively explained

that resolution of a debtor’s § 362 automatic

bankruptcy stay claim is not “integral to [the]

bankruptcy court’s ability to preserve and equitably

distribute assets of the estate,” and does not “directly

implicate[] matters central to the purposes and

policies of the Bankruptcy Code.” Id. at 110.3

Pursuant to the foregoing—and consistent with

McMahon, CashCall, and the Second Circuit’s Hill

decision—I would reverse and remand for entry of a

court order compelling arbitration of the plaintiffs’

§ 362 automatic bankruptcy stay claims against

Goldman Sachs. Because the majority has ruled

otherwise, I respectfully dissent.

The Second Circuit further recognized that sending the

Hill debtor’s § 362 automatic bankruptcy stay claim to

arbitration was appropriate given “the fact that [she] filed her

§ 362[] claim as a putative class action.” See 436 F.3d at 110.

That rather notable fact, the court of appeals explained,

highlighted a glaring lack of connection between the debtor’s

§ 362 claim and her bankruptcy estate: “By tying her claim to a

class of allegedly similarly situated individuals, many of whom

[were] no longer in bankruptcy proceedings, [the debtor]

demonstrates the lack of close connection between the claim and

her own underlying bankruptcy case.” Id. (emphasis added).

And the very same can be said here of the plaintiffs’ putative

class claims asserted against Goldman Sachs—i.e., they also

lack a “close connection” with the plaintiffs’ respective

bankruptcy estates. Id.

26a

FILED: April 1, 2026

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

_____________________

No. 25-1439

(7:24-cv-00490-RSB-CKM)

_____________________

GOLDMAN SACHS BANK USA, d/b/a Marcus by

Goldman Sachs

Appellant

RHEA ANN BROWN; GREGORY KEVIN MAZE

Appellees

---------------------------NATIONAL ASSOCIATION OF CONSUMER

BANKRUPTCY

ATTORNEYS;

NATIONAL

CONSUMER BANKRUPTCY RIGHTS CENTER

Amici Supporting Appellee

_____________________

ORDER

_____________________

Upon consideration of appellant’s unopposed

motion to stay the mandate pending the filing of a

petition for writ of certiorari, the court denies the

motion.

Judge Niemeyer and Judge Harris voted to deny

the motion. Judge King voted to grant the motion.

For the Court

/s/ Nwamaka Anowi, Clerk

27a

KING, Circuit Judge, dissenting:

I dissent from the panel majority’s erroneous and

summary denial of Goldman Sachs Bank USA’s

unopposed motion for a stay of our Court’s mandate,

pending the filing of a petition for a writ of certiorari

in the Supreme Court. See Goldman Sachs Bank

USA v. Brown, No. 25-1439 (4th Cir. Mar. 30, 2026),

ECF No. 60 (the “Unopposed Motion”).

Pursuant to Federal Rule of Appellate Procedure

41(d), “[a] party may move to stay the mandate

pending the filing of a petition for a writ of certiorari

in the Supreme Court.” See Fed. R. App. P. 41(d). To

obtain such relief, the motion “must show that the

petition would present a substantial question and that

there is good cause for a stay.” Id. (emphasis added).

In the same way, our Court’s Local Rules provide, in

relevant part, as follows:

Ordinarily the motion shall be denied unless

there is a specific showing that it is not

frivolous or filed merely for delay. A motion

to stay the mandate pending the filing of a

petition for certiorari must show that the

certiorari petition would present a substantial

question and set forth good cause for a stay.

See 4th Cir. L. R. 41 (emphasis added).*

As the Supreme Court has recognized, “[t]he reason for

. . . Rule [41] is straightforward: The stay of mandate is entered

solely to allow this Court time to consider a petition for

certiorari.” See Ryan v. Schad, 570 U.S. 521, 524 (2013) (citation

modified). To that end, for a question to be deemed “substantial”

under Rule 41(d), there must be “(1) ‘a reasonable probability’

that [the Supreme Court] will grant certiorari” and “(2) ‘a fair

prospect’ that the Court will then reverse the decision below.”

28a

In these circumstances, I am of opinion that the

Unopposed Motion satisfies the above-recited

standard for obtaining a stay of our Court’s mandate,

pending the filing of a certiorari petition in the

Supreme Court. That is so because the Unopposed

Motion sets forth that a certiorari petition presents a

“substantial question,” and because there is ample

“good cause” for a stay of our mandate. See Fed. R.

App. P. 42(d); 4th Cir. L. R. 41.

As to the former prong, a “substantial question”

will indisputably be presented by Goldman Sachs’s

certiorari petition, and there is a very solid chance

that the Supreme Court reverses if certiorari is

granted. As related more fully in my dissenting

opinion, see Goldman Sachs Bank USA v. Brown, __

F.4th __, 2026 WL 758739, at *9-10 (4th Cir. Mar. 18,

2026) (King, J., dissenting), the panel majority’s

decision refusing arbitration creates a clear circuit

split with the Second Circuit on the question of

whether a § 362(k) automatic stay violation claim

must be arbitrated under the Federal Arbitration Act.

See MBNA America Bank, N.A. v. Hill, 436 F.3d 104

(2d Cir. 2006). Indeed, Judge Niemeyer’s majority

opinion readily acknowledged the “substantial

arguments” on both sides of that important question.

See Goldman Sachs, 2026 WL 758739, at *1. But

regrettably, my colleagues now decline to afford the

reasonable relief sought by the Unopposed Motion.

Meanwhile, as to the issue of “good cause,” that the

Unopposed Motion is, in fact, unopposed is enough —

in my view — to satisfy the second Rule 41(d) prong.

See Maryland v. King, 567 U.S. 1301, 1302 (2012) (Roberts, C.J.,

in chambers) (citation modified).

29a

Even so, the Unopposed Motion aptly explains why

there is “good cause” for a stay of our mandate:

Absent a stay, [Goldman Sachs] will be forced

to defend these claims in bankruptcy court

and incur discovery costs on claims that its

arbitration agreement was intended to

resolve through individualized arbitration,

thereby losing the very benefits it

contractually bargained for. Those benefits

cannot be restored to [Goldman Sachs] even if

the Supreme Court ultimately rules in its

favor. Considerations of judicial economy

clinch the case for a stay, as the time and

resources spent litigating the case in

bankruptcy court would be wasted if the

Supreme Court grants certiorari and

reverses. Importantly, [the plaintiffs] do not

oppose [Goldman Sachs’s] request for a stay.

See Unopposed Motion 2-3.

***

Put simply, I would readily grant Goldman Sachs’s

Unopposed Motion and enter an order staying our

Court’s mandate pending the filing of a certiorari

petition in the Supreme Court. Because my good

friends in the panel majority have ruled otherwise, I

dissent.

30a

[663 B.R. 449]

UNITED STATES BANKRUPTCY COURT,

W.D. VIRGINIA

Roanoke Division

IN RE: Rhea Ann BROWN, Debtor.

Rhea Ann Brown and Gregory Kevin Maze on

behalf of themselves and all others similarly

situated, Plaintiffs.

Goldman Sachs Bank USA d/b/a

Marcus by Goldman Sachs, Defendant.

Case No. 23-70426

Adversary Proceeding No. 24-07009

Signed: July 15, 2024

MEMORANDUM OPINION

Paul M. Black, UNITED STATES BANKRUPTCY

JUDGE

This matter comes before the Court on a Motion to

Compel Arbitration and Stay Action (“Motion to

Compel”) filed by the Defendant, Goldman Sachs

Bank USA, by counsel. ECF No. 15. The Plaintiffs,

by counsel, filed a Response to the Defendant’s Motion

to Compel Arbitration (“Response”). ECF No. 19. The

Defendant then filed a Reply Brief in Further Support

of Defendant Goldman Sachs Bank USA’s Motion to

Compel Arbitration and Stay Action (“Reply Brief”).

ECF No. 20. A hearing was held on the Defendant’s

Motion to Compel on June 28, 2024, after which time

the Court took the matter under advisement. Upon

review of the Parties’ filings and the arguments

31a

advanced at the hearing, and for the reasons stated

below, the Court will deny the Defendant’s Motion to

Compel.

STATEMENT OF THE CASE

Plaintiff Rhea Ann Brown (“Brown”) filed for

Chapter 13 bankruptcy in this Court on June 14,

2023; she filed a Chapter 13 plan on June 27, 2023

which was confirmed on September 1, 2023. Plaintiff

Gregory Kevin Maze (“Maze”) filed for Chapter 7

bankruptcy in this Court on November 9, 2023 and

was granted a discharge on February 21, 2024.

Before their bankruptcies, the Plaintiffs both opened

Apple Card accounts with the Defendant and signed

an Apple Card Agreement. See ECF No. 15 at 3-4.

The Agreement contains an Arbitration Provision

which potential Apple Card holders needed to

affirmatively opt out of. See id. Exhibit A at 16-17.

The Plaintiffs filed this adversary proceeding on

March 12, 2024 alleging that they were sent notices

and communications from the Defendant regarding

the balance due on their Apple Card accounts even

after the Defendant was made aware of the Plaintiffs’

being in bankruptcy, actions which the Plaintiffs

allege violated the automatic stay under 11 U.S.C.

§§ 362(a)(3) and (6). See ECF No. 1 ¶¶ 17-55.1 The

Complaint is styled as a class action seeking relief for

a class of similarly situated present and former

11 U.S.C. §§ 362(a)(3) and (6) state that filing a petition

for relief “operates as a stay, applicable to all entities, of – . . .

(3) any act to obtain possession of property of the estate or of

property from the estate or to exercise control over property of

the estate; . . . [and] (6) any act to collect, assess, or recover a

claim against the debtor that arose before the commencement of

the case under this title[.]” 11 U.S.C. §§ 362(a)(3), (6).

32a

debtors in bankruptcy “from whom Defendant made a

post-petition demand for pre-petition debt.” Id. ¶ 57.

The Plaintiffs seek, not without limitation:

(1) declaratory relief for violation of 11 U.S.C. § 362;

(2) injunctive relief under 11 U.S.C. § 105(a) for both

a preliminary and permanent injunction preventing

the Defendant from engaging in such conduct; and

(3) actual, compensatory, exemplary and/or punitive

damages, including attorneys’ fees and costs, for the

Defendant’s alleged willful violation of the stay. See

id. ¶¶ 65-71, 73, 75-83, 85.

The Defendant responded by filing the Motion to

Compel asking the Court, pursuant to Federal Rule of

Civil Procedure 12(b)(3) and the Federal Arbitration

Act (“FAA”), to compel the Plaintiffs to arbitrate their

claims and to stay the adversary proceeding pending

arbitration. The Defendant alleges the Plaintiffs,

having signed the Apple Card Agreement and not

opted out of the Arbitration Provision, are bound by

the Arbitration Provision and the Plaintiffs’ claims

fall within its broad scope. See ECF No. 15 at 3-4, 910. The Defendant further asserts that the Court

should follow the U.S. Supreme Court’s decisions

favoring enforcing arbitration agreements as well as

the Second Circuit’s decision in MBNA Am. Bank,

N.A. v. Hill, 436 F.3d 104, 108 (2d Cir. 2006), with

similar facts to this case in which the Court granted

a motion to compel. See ECF No. 15 at 12-14.2

The Defendant attached to the Motion to Compel: (1) a

declaration from one of its Legal Operations Associates to

explain how the Defendant issues Apple Cards and keeps track

of customers’ acceptances of the terms and conditions of the card

agreements and (2) a copy of the Apple Card Agreement,

including the arbitration provision. See id. Exhibit A.

33a

In their Response, the Plaintiffs argue their

automatic stay violation claims are “constitutionally

core” claims that stem from their bankruptcies and

the Fourth Circuit has determined that a bankruptcy

court has the discretion to retain them in cases such

as in In re White Mountain Mining Co., L.L.C., 403

F.3d 164 (4th Cir. 2005), and Moses v. CashCall, Inc.,

781 F.3d 63 (4th Cir. 2015). See ECF No. 19 at 9-11,

19 fn.7.3 The Plaintiffs also contend that section

105(a) gives the Court the power to issue contempt

orders and injunctions to sanction automatic stay

violations but that if the Plaintiffs’ claims were sent

to arbitration, the Court would not be able to exercise

its contempt powers sua sponte in this case even if it

determines that sanctions and injunctive relief would

be appropriate. See id. at 11-13. The Plaintiffs

further contend that having an arbitrator less

experienced in bankruptcy law than this Court decide

the Plaintiffs’ claims could risk inconsistent

judgments and does not promote the Constitution’s

mandate that Congress enact uniform bankruptcy

laws. See id. at 18-20. Further, the Plaintiffs contend

that Hill is not fully on-point with the facts of this

case and is not binding precedent in this Circuit. See

id. at 16-17.

In reply, the Defendant argues that under Fourth

Circuit precedent in CashCall and White Mountain,

the Court should not exercise its discretion to retain

constitutionally core claims if it finds no inherent

conflict with the Code’s purposes. See ECF No. 20 at

1. The Defendant alleges that the Code’s central

purpose of “facilitating the efficient reorganization of

The Plaintiffs do not dispute the Apple Card Agreement

was a valid agreement.

34a

an estate through the centralization of disputes

concerning a debtor’s legal obligations,” would not be

hampered here because the Plaintiffs’ cases have been

fully administered. See id. at 3-4 (quoting In re

Geostellar, Inc., 614 B.R. 669, 674 (Bankr. N.D.W. Va.

2020) (internal quotation omitted)). The Defendant

additionally contends that injunctive relief would not

be meaningful in the Plaintiffs’ cases and that their

claims are principally about money damages.4 See id.

at 4.

At the June hearing, Counsel for the Defendant

acknowledged that the Plaintiffs’ stay violation

claims were constitutionally core. Yet, it reiterated

that this case was principally about damages, not

injunctive relief, and that the facts of this case

differed from CashCall and White Mountain, where

the Fourth Circuit found inherent conflicts with the

“animating purpose[s]” of the Code because

arbitrating the plaintiffs’ claims in those cases would

affect the claims administration process and would

jeopardize those plaintiffs’ ability to reorganize their

estates. E.g., CashCall, 781 F.3d at 83 (Gregory, J.,

concurring). Counsel for the Defendant further

contended that sending the claims to arbitration

would not affect the Plaintiffs’ fresh start or

automatic stay’s purpose of stopping creditor

harassment.

Counsel further argued that the

Plaintiffs’ fresh starts were not impaired since their

estates had been fully administered prior to filing the

The Defendant further states that the Plaintiffs can also

request and recover punitive damages in an arbitration and that

the Arbitration Provision allows for an arbitrator to award

declaratory and injunctive relief if it finds it appropriate. See

ECF No 20 at 4-5.

35a

adversary proceeding and that the cases the Plaintiffs

cited as to creditor harassment did not apply here.

These cases involved creditors threatening debtors or

taking their physical property while the Defendant in

this case sent balance notices without taking the

additional step of charging off a customer’s unsecured

debt.

Counsel for the Plaintiffs, in turn, argued that

arbitrating these agreements could result in

inconsistent judgments for different plaintiffs and

that the constitutional mandate that bankruptcy laws

be uniformly applied outweighs the statutory

presumption towards arbitration. Counsel for the

Plaintiffs also reiterated the Court has the discretion

to retain their constitutionally core claims under

CashCall and White Mountain. Counsel further

contended that discharged Chapter 7 debtors should

not be treated differently than current Chapter 13

debtors since arbitrating the claims of both types of

debtors would undermine the bankruptcy process’s

efficient administration and uniformity. In support,

Counsel for the Plaintiffs cited In re Anderson, 884

F.3d 382 (2d Cir. 2018), in which the Second Circuit

found that arbitrating a debtor’s discharge violation

claims would cause an inherent conflict with a

bankruptcy court’s ability to police violations of the

discharge order because it extends forever. Counsel

for the Plaintiffs asserted that this would be the same

in the context of an automatic stay violation for a

subsequently discharged debtor because the Court is

still administering these cases, even if the automatic

stay has become part of the discharge order.

36a

JURISDICTION

This Court has jurisdiction of this matter by virtue

of the provisions of 28 U.S.C. §§ 1334(a) and 157(a),

the referral made to this Court by Order from the

District Court on December 6, 1994, and Rule 3(a) of

the Local Rules of the United States District Court for

the Western District of Virginia. For the reasons

stated below, this Court further concludes that this

matter is a “core” bankruptcy proceeding within the

meaning of 28 U.S.C. §§ 157(b)(1) and (2).5

CONCLUSIONS OF LAW

In In re McPherson, 630 B.R. 160 (Bankr. D. Md.

2021), Judge Harner succinctly described the

competing interests between the FAA and the

Bankruptcy Code, particularly as they pertain to

efficiency and fairness. The FAA is rooted in the

notion that arbitration agreements are private

contracts affecting commerce, creating a strong

28 U.S.C. § 157 is not jurisdictional, but simply allocates

the statutory authority to enter final judgments between the

bankruptcy court and the district court. Stern v. Marshall, 564

U.S. 462, 480, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). The

bankruptcy courts’ constitutional powers, in turn, are governed

by the scope of power conferred upon Congress under the

Bankruptcy Clause of the United States Constitution, Article I,

Section 8, Clause 4 (“The Congress shall have Power To . . .

establish . . . uniform Laws on the subject of Bankruptcies

throughout the United States. . .”), and the scope of authority

allocated by and between tribunals created under Articles I and

III of the United States Constitution, each as applied and

interpreted by the opinions of the United States Supreme Court.

Therefore, in order for a bankruptcy court to hear and determine

any matter, it must have subject matter jurisdiction under 28

U.S.C. § 1334, statutory authority under 28 U.S.C. § 157, and

constitutional authority. See In re Dambowsky, 526 B.R. 590,

595 (Bankr. M.D.N.C. 2015) (Kahn, J.).

37a

presumption in favor of the parties’ agreement to

privately resolve disputes. Id. at 166-167. As stated

in Shearson/American Exp., Inc. v. McMahon, 482

U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987),

the FAA “establishes a ‘federal policy favoring

arbitration.’” Further, agreements to arbitrate are to

be rigorously enforced. Dean Witter Reynolds, Inc. v.

Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d

158 (1985). “This approach reflects the reality that,

at least in contracts subject to negotiation, the

arbitration clause may be a critical piece of the

parties’ bargain and integral to their cost-benefit

analysis of the contract itself.” McPherson, 630 B.R.

at 167.

On the other hand, the Bankruptcy Code is not

party or contract specific. Rather, it seeks to balance

the rights of many parties with many different

interests, contract and otherwise, that may affect a

single debtor. Citing CashCall and Celotex Corp., v.

Edwards, 514 U.S. 300, 308, 115 S.Ct. 1493, 131

L.Ed.2d 403 (1995), “Congress intended to grant

comprehensive jurisdiction to bankruptcy courts so

that they might deal efficiently and expeditiously

with all matters connected with the bankruptcy

estate.” McPherson, at 167. The FAA and the

Bankruptcy Code do not always compete, but when

they do a bankruptcy court must consider their

competing considerations.

McMahon sets the standard for resolving such

competing interests. In McMahon, the Supreme

Court stated that “[l]ike any statutory directive, the

[FAA’s] mandate may be overridden by a contrary

congressional command.” McMahon, 482 U.S. at 226,

107 S.Ct. 2332. The Fourth Circuit, considering

McMahon, has stated that “the party seeking to

38a

prevent enforcement of an applicable arbitration

agreement must show that ‘Congress has evinced an

intention to preclude a waiver of judicial remedies for

the statutory rights at issue.’” CashCall, 781 F.3d at

71 (quoting Green Tree Fin. Corp. v. Randolph, 531

U.S. 79, 90, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000)).

CashCall instructs lower courts to examine whether

that intent can be gleaned from (1) the statute’s text,

(2) its legislative history, or (3) “an inherent conflict

between arbitration and the statute’s underlying

purposes.” CashCall, at 71, (quoting McMahon, 482

U.S. at 227, 107 S.Ct. 2332). Significantly, “[w]here

such an intent can be deduced, the court of first

impression has discretion to decide whether to

withhold arbitration, a decision that is subject to

review for abuse of that discretion.” Id. (citations

omitted). While a deeper dive into a statute’s text and

legislative history may be instructive, the Court in

this case focuses on the third element, whether an

inherent conflict exists between the FAA and the

Bankruptcy Code provision at play here.

As the relevant court of first impression, a

bankruptcy court, it makes a difference as to whether

this Court is considering a constitutionally core claim

or a constitutionally non-core claim. As the Fourth

Circuit has stated, “forcing [a debtor] to arbitrate her

constitutionally core claim would inherently conflict

with the purposes of the Bankruptcy Code.”

CashCall, at 73.6 Do we have a ‘constitutionally core’

The Court finds persuasive Judge Gregory’s concurrence

in CashCall that “[t]he core/non-core distinction, however, is not

mechanically dispositive in deciding whether a bankruptcy judge

may refuse to send a claim to arbitration.” CashCall, at 83.

Here, the existence of constitutionally core claims unburdened

by non-core claims makes that analysis less applicable.

39a

claim at issue in this case? Yes, “[a] cause of action is

constitutionally core when it stems from the

bankruptcy itself or would necessarily be resolved in

the claims allowance process . . . . If a claim is a

constitutionally core proceeding, the bankruptcy

court has the discretion to retain the proceeding and

not enforce the terms of the parties’ arbitration

agreement.” McPherson, 630 B.R. at 168 (internal

citations omitted).

Bankruptcy courts have the statutory authority to

resolve a claim arising from a violation of the

automatic stay. Such a claim, by its very nature,

“stems from the bankruptcy itself” and has no

independent existence outside a bankruptcy case

being filed. Marshall, 564 U.S. at 499, 131 S.Ct. 2594.

Here, the Plaintiffs seek remedies for violations of the

automatic stay and relief incidental thereto. 11

U.S.C. § 362(k)(1) provides, in pertinent part, that

“. . . an individual injured by any willful violation of a

stay . . . shall recover actual damages, including costs

and

attorneys’

fees,

and,

appropriate

circumstances, may recover punitive damages.”

Resolution of the debtors’ claims under this Code

section is both constitutionally and statutorily based.

Budget Serv. Co. v. Better Homes, 804 F.2d 289,

291 (4th Cir. 1986), supports this conclusion. In

Budget Service Co., the debtor brought a claim

alleging that the creditor’s attempt to repossess

vehicles was a violation of the automatic stay. Id.

There, the Fourth Circuit held that a claim for

violation of the automatic stay is a core proceeding

under 11 U.S.C. §§ 157(b)(2)(A), (2)(E), and (2)(G)

because it involves an “integral part of the federal

rights created under the Bankruptcy Code” and that

the bankruptcy court “clearly had the power” to hear

40a

and issue a judgment. Id. at 292. These claims are

constitutionally core as the logical outgrowth of the

authority giving rise to the Bankruptcy Code itself,

and the Court will exercise its discretion and deny the

motion to compel arbitration.7

The Defendant relies on Hill, as authority for

enforcing the arbitration clauses against these

Plaintiffs in connection with their stay violation

allegations. In Hill, the Second Circuit observed that

“most importantly,” the plaintiff’s stay violation claim

“would not jeopardize the important purposes that

the automatic stay serves: providing debtors with a

fresh start, protecting the assets of the estate, and

allowing the bankruptcy court to centralize disputes

concerning the estate.” Id. at 109. Hill mentioned

that as the plaintiff’s case was a liquidating Chapter

7, there was no reorganization and any damages

awarded would not be part of the estate. Not only is

Hill at variance with Fourth Circuit precedent

in CashCall, but its primary argument also

misapprehends the reality of consumer bankruptcies

in particular. The vast majority of debtors coming

into the bankruptcy courts, especially consumer

debtors like the ones here, have very limited

resources. This Court sees it nearly every day.

Centralizing the resolution of disputes before the

bankruptcy court, whether the debtor is in a no-asset

Chapter 7 liquidation or Chapter 13 repayment plan,

enables to the debtors to preserve those limited

resources, and gain the “fresh start” so often stated as

the principal purpose of the Bankruptcy Code. As

Justice Stevens stated in Marrama v. Citizens Bank

The Court also finds that the statutory core

requirements of 28 U.S.C. §§ 157(b)(1) and (2) are satisfied.

41a

of Massachusetts, 549 U.S. 365, 367, 127 S.Ct. 1105,

166 L.Ed.2d 956 (2007), “[t]he principal purpose of the

Bankruptcy Code is to grant a ‘fresh start’ to the

‘honest but unfortunate debtor.’” (citations and

internal quotation marks omitted). Forcing debtors

to resolve their disputes, particularly in the nature of

post-filing collection actions, in multiple forums

ignores a consumer debtor’s financial reality and

contravenes this central tenant.8

In addition to the constitutionally core

considerations above, the Court believes maintaining

the claims in this case before this Court is more

consistent with the goals of the Bankruptcy Code than

of the FAA. In that regard, the legislative history

consideration of CashCall comes into play. As the

Fourth Circuit observed in Grady v. A.H. Robins Co.,

Inc., 839 F.2d 198, 200 (4th Cir. 1988), “[t]he

legislative history of the Code reveals the importance

of § 362 stay provision: The automatic stay is one of

the fundamental debtor protections provided by the

bankruptcy laws. It gives the debtor a breathing spell

from his creditors. It stops all collection efforts, all

harassment, and all foreclosure actions. It permits

the debtor to attempt a repayment or reorganization

plan, or simply to be relieved of the financial

pressures that drove him into bankruptcy. House

Report No. 95-595, 95th Cong. 1st Sess. 340-1 (1977);

Senate Report No. 95-989, 95th Cong.2d Sess. 54-55

(1978); reprinted in 1978 U.S. Code Cong. & Adm.

News 5787 at 5840 and 6296-97.”

For this reason, the Court finds the arguments that a

given plaintiff may have had a case fully administered,

discharged, or in a post-confirmation Chapter 13 plan of little

persuasion.

42a

The well pleaded allegations of the Complaint,

taken as true at this point in the proceedings, suggest

a broader issue of multiple debtors being pursued for

payment post-filing in violation of the automatic stay

in each of their cases. Whereas in a single or few cases

outside bankruptcy, an account dispute between two

parties may well best be served by submitting the

dispute to arbitration. But this is more than an

account dispute. Larger systemic issues are alleged

to be at play here, ones which implicate the

foundational purposes of the Bankruptcy Code and

which the Bankruptcy Code – and the specialized

experiences of the bankruptcy courts – are

particularly suited to address in a global manner.9

Moreover, as stated in In re Grant, 281 B.R. 721,

725 (Bankr. S.D. Ala. 2000), “[a]lowing arbitration of

alleged violations of court authority would leave

nonjudicial third parties to punish abuse of the

judicial system.” The power and authority of the

judicial system and the fundamental protections

afforded by Congress in the Bankruptcy Code,

especially in connection with the automatic stay,

would be diminished by such a delegation of power.

“An arbitrator cannot be allowed to take the role of

protector of the judicial process when he or she is

outside the system and is an alternative to the

system.” Id. See also In re Bauer, No. AP 20-80012DD, 2020 WL 3637902, at *6 (Bankr. D.S.C. June 8,

2020), where the Court stated “Congress has assigned

to the bankruptcy court the duty to enforce its orders.

‘To permit a party other than the bankruptcy court to

make such determinations would undermine the

Whether or not a class can or should be certified is a

question for another day. Fed. R. Bankr. P. 7023(a).

43a

court’s ability to enforce both its own orders and the

Bankruptcy Code and would “strip the courts of their

primary enforcement mechanism.’” Little, pg. 6

(quoting Hooks v. Acceptance Loan Co., Inc., 2011 WL

2746238 (M.D. Ala. July 14, 2011)).”

CONCLUSION

For all of the above reasons, the Defendant’s

Motion to Compel Arbitration and Stay Action will be

denied. A separate order will follow.

44a

[2025 WL 837338]

CLERK’S OFFICE

U.S. DISTRICT COURT

AT ROANOKE, VA

FILED

MARCH 17, 2025

LAURA A. AUSTIN,

CLERK

BY: s/ S. Neily,

Deputy Clerk

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF VIRGINIA

ROANOKE DIVISION

GOLDMAN SACHS

BANK USA,

Appellant,

RHEA ANN BROWN

and GREGORY

KEVIN MAZE

Appellees.

)

Case No. 7:24-cv00490

Hon. Robert S.

Ballou

United States

District Judge

MEMORANDUM OPINION

Plaintiffs Rhea Ann Brown and Gregory Kevin

Maze each filed for bankruptcy protection, triggering

the automatic stay under 11 U.S.C. §§ 362(a)(3) and

(6), which prohibits creditors from attempting to

collect pre-petition debts. Despite having notice of

45a

these bankruptcy filings, Defendant Goldman Sachs

Bank USA allegedly violated the stay by continuing

to send Plaintiffs communications regarding

outstanding balances on their Apple Card accounts.

In response, Plaintiffs initiated a consolidated

adversary proceeding, asserting that Goldman Sachs’

actions violated the automatic stay. Goldman Sachs,

in turn, moved to compel arbitration and stay the

proceedings. The Bankruptcy Court denied the

motion. Goldman Sachs now appeals that decision,

arguing that the Bankruptcy Court lacked

discretionary authority to preclude enforcement of the

arbitration provision in Plaintiffs’ Apple Card

Agreement. Finding that arbitrating enforcement of

the automatic stay is contrary to the Bankruptcy

Court’s central aims, the Bankruptcy Court had

discretion to deny arbitration of Plaintiffs’ claims.

The Bankruptcy Court order is thus AFFIRMED,

and Goldman Sachs’ appeal, Case No. 7:24-cv-490, is

DISMISSED.

I. BACKGROUND

Brown filed for Chapter 13 bankruptcy on June 14,

2023, and submitted a Chapter 13 plan on June 27,

2023, which was confirmed on September 1, 2023,

Case No. 7:23-bk-70426. On November 9, 2023, Maze

filed for Chapter 7 bankruptcy and received a

discharge on February 21, 2024, Case No. 7:23-bk70735. Before their respective bankruptcies, both

Plaintiffs opened Apple Card accounts with Goldman

Sachs, agreeing to the terms of the Apple Card

Agreement, which includes an arbitration provision

requiring affirmative opt-out action by potential

cardholders.

46a

On March 12, 2024, Plaintiffs initiated this

consolidated adversary proceeding, Case No. 7:24-ap7009, alleging that Goldman Sachs violated the

automatic stay under 11 U.S.C. §§ 362(a)(3) and (6)

by continuing to send them notices and

communications regarding balances on their Apple

Card accounts despite knowledge of their bankruptcy

filings. The Complaint is styled as a class action,

seeking relief for similarly situated current and

former bankruptcy debtors who received post-petition

demands for pre-petition debts.

Goldman Sachs filed a motion to compel

arbitration under Federal Rule of Civil Procedure

12(b)(3) and the Federal Arbitration Act, arguing that

Plaintiffs are bound by the arbitration provision in

the Apple Card Agreement and citing the general

federal preference for arbitration. The Bankruptcy

Court disagreed, concluding that under Fourth

Circuit precedent it had discretion to retain

jurisdiction over Plaintiffs’ claims which were

“constitutionally core” and stemmed directly from

their bankruptcies. The issues on appeal are whether

(1) the Bankruptcy Court had discretion to deny

Goldman Sachs’ motion to compel arbitration, and (2)

whether the Bankruptcy Court abused that

discretion.

II. STANDARD OF REVIEW

A district court “may affirm, modify, or reverse a

bankruptcy judge’s judgment, order, or decree or

remand with instructions for further proceedings.”

Fed. R. Bankr. P. 8013.

When reviewing a

bankruptcy court’s decision, “a district court functions

as an appellate court and applies the standards of

review in federal courts of appeal.” Patterson v.

47a

Mahwah Bergen Retail Grp., Inc., 636 B.R. 641, 662

(E.D. Va. 2022) (internal quotation marks and

citation omitted). A district court “review[s] the

bankruptcy court’s legal conclusions de novo and its

factual findings for clear error.” In re Harford Sands

Inc., 372 F.3d 637, 639 (4th Cir. 2004)

The legal question of whether a bankruptcy court

can exercise discretion in ruling on a motion to compel

arbitration is reviewed de novo. Midland Funding

LLC v. Thomas, 606 B.R. 687, 692 (W.D. Va. 2019). If

such discretion exists, a bankruptcy court’s exercise

of that discretion is reviewed for abuse of discretion.

Moses v. CashCall, Inc., 781 F.3d 63, 71–72 (4th Cir.

2015). A bankruptcy court abuses its discretion when

its “ruling is based on either an erroneous view of the

law or on a clearly erroneous assessment of the

evidence.” Steele v. Richland County Dep’t of Social

Servs., 25 F.3d 1041 (table), 1994 WL 200807, *2 (4th

Cir. 1994). “The question is not how the reviewing

court would have ruled, but rather whether a

reasonable person could agree with the bankruptcy

court’s decision; if reasonable persons could differ as

to the issue, then there is no abuse of discretion.” In

re Massenburg, 554 B.R. 769, 773 (D. Md. 2016)

(quoting In re M.J. Waterman & Assocs., 227 F.3d

604, 608 (6th Cir. 2000)). I find that the Bankruptcy

Court had discretion to deny Goldman Sachs’s motion

to compel arbitration and did not abuse that

discretion.

III.

ANALYSIS

Federal law favors the enforcement of arbitration

agreements.

See e.g. CompuCredit Corp. v.

Greenwood, 565 U.S. 95, 98 (2012). However, the

preference for arbitration can be superseded

48a

contrary

congressional

directive.

Shearson/American Exp., Inc. v. McMahon, 482 U.S.

220, 226 (1987).

“Congress intended to grant

comprehensive jurisdiction to bankruptcy courts so

that they might deal efficiently and expeditiously

with all matters connected with the bankruptcy

estates.” CashCall, 781 F.3d at 71 (quoting Celotex

Corp. v. Edwards, 514 U.S. 300, 308 (1995)) (internal

quotation marks and citations omitted). Where

“tension arises between the [Federal Arbitration Act]

and another statute, the Supreme Court has provided

a framework for resolving it, holding that the party

seeking to prevent enforcement of an applicable

arbitration agreement must show that ‘Congress has

evinced an intention to preclude a waiver of judicial

remedies for the statutory rights at issue.’” Id.

(quoting Green Tree Fin. Corp. v. Randolph, 531 U.S.

79, 90 (2000)). A court can determine such intent

through the statute’s text, legislative history, and any

fundamental conflict between arbitration and the

statute’s purpose. Id. “Where such an intent can be

deduced, the court of first impression has discretion

to decide whether to withhold arbitration, a decision

that is subject to review for abuse of that discretion.”

Id. at 71–72.

Claims before a bankruptcy court that may be

subject to arbitration can be categorized as

constitutionally core and or statutorily core.

Constitutionally core claims include those that

“stem[] from the bankruptcy itself.”

Stern v.

Marshall, 564 U.S. 462, 499 (2011). A matter is

statutorily core if it invokes a substantive right under

federal bankruptcy law and exclusively arises within

a bankruptcy context. In re Marshall, 600 F.3d 1037,

1067 (9th Cir. 2010), aff’d sub nom. Stern, 564 U.S.

49a

462 (citing In re Wood, 825 F.2d 90, 97 (5th Cir.

1987)). The parties do not dispute that Plaintiffs’

claims are both constitutionally and statutorily core.

Rather, Goldman Sachs contests the effect this

classification has on a bankruptcy court’s exercise of

discretion.

“The core/non-core distinction does not, however,

affect whether a bankruptcy court has the discretion

to deny enforcement of an arbitration agreement.” In

re Mintze, 434 F.3d 222, 229 (3d Cir. 2006) (citing Ins.

Co. of N. Am. v. NGC Settlement Trust & Asbestos

Claims Mgmt. Corp. (In re Nat’l Gypsum), 118 F.3d

1056, 1068 (5th Cir. 1997) and In re Statewide Realty

Co., 159 B.R. 719, 722 (Bankr. D.N.J. 1993)). For both

core and non-core claims, courts examine the nature

of the claim and the specific facts of the bankruptcy to

determine whether enforcing arbitration would

inherently conflict with the Bankruptcy Code’s

purposes. See CashCall, 781 F.3d at73–74. However,

often, “[a]rbitration of constitutionally core claims

“inherently conflict[s] with the purposes of the

Bankruptcy Code,” and therefore a bankruptcy court

is generally well within its discretion to refuse

arbitration of constitutionally core claims.” Allied

Title Lending, LLC v. Taylor, 420 F. Supp. 3d 436, 448

(E.D. Va. 2019) (citing CashCall, Inc., 781 F.3d at 73).

Here, the Bankruptcy Court determined that the

alleged violations of the automatic stay under the

Bankruptcy Code are both constitutionally and

statutorily core proceedings since they are “the logical

outgrowth of the authority giving rise to the

Bankruptcy Code itself.” Dkt. 1-3 at 9. It emphasized

that the stay is a key part of “[t]he principal purpose

of the Bankruptcy Code . . . to grant a ‘fresh start’ to

the ‘honest but unfortunate debtor.’” Id. at 10 (citing

50a

Marrama v. Citizens Bank of Massachusetts, 549 U.S.

365, 367 (2007)). The Bankruptcy Court concluded

that compelling arbitration would inherently

threaten its authority to enforce the Code and

contradict Congress’s intent to centralize bankruptcyrelated disputes within bankruptcy courts. Based on

these conclusions, the Bankruptcy Court exercised its

discretion and denied the motion to compel

arbitration. I now review de novo whether Plaintiffs’

claims inherently conflict with the purpose of the

Bankruptcy Code and thus give the Bankruptcy Court

discretion to deny Goldman Sachs’ motion to compel

arbitration.

A core purpose of the Bankruptcy Code is to

“centralize disputes over the debtor’s assets and

obligations in one forum [to] protect[] both debtors

and creditors from piecemeal litigation and

conflicting judgments. In other words, ease and

centrality of administration are [ ] foundational

characteristics of bankruptcy law.” Guthrie v. PHH

Mortg. Corp., 79 F.4th 328, 338 (4th Cir. 2023), cert.

denied, 144 S. Ct. 1458 (2024) (internal citations

omitted).

Arbitration conflicts with centralized

decision-making because allowing an arbitrator to

resolve a fundamental issue would render debtorcreditor rights dependent on the arbitrator’s

determination rather than the authoritative ruling of

the bankruptcy judge overseeing the debtor’s case. In

re White Mountain Mining Co., L.L.C., 403 F.3d 164,

169 (4th Cir. 2005) (citations and internal quotation

marks omitted).

Congress has declared the automatic stay to be one

of the fundamental protections offered under the

Bankruptcy Code. H.R. Rep. 95-595, at § 362 (Sept.

8, 1977). The initiation of a bankruptcy case triggers

51a

an automatic stay by operation of law, without the

need for formal notice or service. 11 U.S.C. § 362(a).

The stay serves multiple functions including

shielding debtors from additional collection efforts by

their creditors. H. R. Rep. 95-595, at § 362 (Sept. 8,

1977); 11 U.S.C. § 362(a)(6). Some courts have found

such efforts can include the mailing of billing

statements and collection letters. See e.g. In re

Harris, 374 B.R. 611 (Bankr. N.D. Ohio 2007); In re

Chavis, 213 B.R. 462, 31 Bankr. Ct. Dec. (CRR) 714

(Bankr. E.D.N.C. 1997). Here, arbitrating Plaintiffs’

claims would inherently conflict with the Bankruptcy

Code’s objectives, as it could undermine the

Bankruptcy Court’s authority (1) to enforce the

automatic stay to protect debtors and creditors’ rights

and (2) to provide a single centralized forum for

resolving disputes related to the Plaintiffs’

bankruptcy proceedings. The Bankruptcy Court thus

had discretion to deny Goldman Sachs’ motion to

compel arbitration.

A court abuses its discretion where its

“conclusions are based on mistaken legal principles or

clearly erroneous factual findings.” Parkway 1046,

LLC v. U.S. Home Corp., 961 F.3d 301, 311 (4th Cir.

2020). On appeal, Goldman Sachs’ primary objection

was that the Bankruptcy Court’s determination that

it possessed discretion to deny the motion to compel

arbitration. But the Bankruptcy Court reviewed the

central purposes of the Code and highlighted reasons

why arbitrating Plaintiffs claims would inherently

conflict with those goals. Moreover, Goldman Sachs

failed to demonstrate that the Bankruptcy Court’s

holding was guided by any clearly erroneous factual

finding. I conclude that the Bankruptcy Court did not

52a

abuse its discretion in denying Goldman Sachs’s

request to refer Plaintiffs’ claims to arbitration.

IV.

CONCLUSION

The Bankruptcy Court’s order denying the motion

to compel arbitration is AFFIRMED and Goldman

Sachs’ appeal is DISMISSED. An appropriate order

shall issue in each civil action.

Entered: March 17, 2025

Robert S. Ballou

United States District Judge

53a

9 U.S.C. § 2

§ 2. Validity, irrevocability, and enforcement of

agreements to arbitrate

A written provision in any maritime transaction or

a contract evidencing a transaction involving

commerce to settle by arbitration a controversy

thereafter arising out of such contract or transaction,

or the refusal to perform the whole or any part

thereof, or an agreement in writing to submit to

arbitration an existing controversy arising out of such

a contract, transaction, or refusal, shall be valid,

irrevocable, and enforceable, save upon such grounds

as exist at law or in equity for the revocation of any

contract or as otherwise provided in chapter 4.

54a

11 U.S.C. § 362

§ 362. Automatic stay

(a) Except as provided in subsection (b) of this

section, a petition filed under section 301, 302, or 303

of this title, or an application filed under section

5(a)(3) of the Securities Investor Protection Act of

1970, operates as a stay, applicable to all entities, of—

(1) the commencement or continuation,

including the issuance or employment of process,

of a judicial, administrative, or other action or

proceeding against the debtor that was or could

have been commenced before the commencement

of the case under this title, or to recover a claim

against the debtor that arose before the

commencement of the case under this title;

(2) the enforcement, against the debtor or

against property of the estate, of a judgment

obtained before the commencement of the case

under this title;

(3) any act to obtain possession of property of

the estate or of property from the estate or to

exercise control over property of the estate;

(4) any act to create, perfect, or enforce any lien

against property of the estate;

(5) any act to create, perfect, or enforce against

property of the debtor any lien to the extent that

such lien secures a claim that arose before the

commencement of the case under this title;

(6) any act to collect, assess, or recover a claim

against the debtor that arose before the

commencement of the case under this title;

(7) the setoff of any debt owing to the debtor

that arose before the commencement of the case

55a

under this title against any claim against the

debtor; and

(8) the commencement or continuation of a

proceeding before the United States Tax Court

concerning a tax liability of a debtor that is a

corporation for a taxable period the bankruptcy

court may determine or concerning the tax

liability of a debtor who is an individual for a

taxable period ending before the date of the order

for relief under this title.

***

(k)(1) Except as provided in paragraph (2), an

individual injured by any willful violation of a stay

provided by this section shall recover actual damages,

including costs and attorneys' fees, and, in

appropriate circumstances, may recover punitive

damages.

(2) If such violation is based on an action taken by

an entity in the good faith belief that subsection (h)

applies to the debtor, the recovery under paragraph

(1) of this subsection against such entity shall be

limited to actual damages.

***

56a

28 U.S.C. § 1334

§ 1334. Bankruptcy cases and proceedings

(a) Except as provided in subsection (b) of this

section, the district courts shall have original and

exclusive jurisdiction of all cases under title 11.

(b) Except as provided in subsection (e)(2), and

notwithstanding any Act of Congress that confers

exclusive jurisdiction on a court or courts other than

the district courts, the district courts shall have

original but not exclusive jurisdiction of all civil

proceedings arising under title 11, or arising in or

related to cases under title 11.

(c)(1) Except with respect to a case under chapter

15 of title 11, nothing in this section prevents a

district court in the interest of justice, or in the

interest of comity with State courts or respect for

State law, from abstaining from hearing a particular

proceeding arising under title 11 or arising in or

related to a case under title 11.

(2) Upon timely motion of a party in a proceeding

based upon a State law claim or State law cause of

action, related to a case under title 11 but not arising

under title 11 or arising in a case under title 11, with

respect to which an action could not have been

commenced in a court of the United States absent

jurisdiction under this section, the district court shall

abstain from hearing such proceeding if an action is

commenced, and can be timely adjudicated, in a State

forum of appropriate jurisdiction.

(d) Any decision to abstain or not to abstain made

under subsection (c) (other than a decision not to

abstain in a proceeding described in subsection (c)(2))

is not reviewable by appeal or otherwise by the court

of appeals under section 158(d), 1291, or 1292 of this

57a

title or by the Supreme Court of the United States

under section 1254 of this title. Subsection (c) and this

subsection shall not be construed to limit the

applicability of the stay provided for by section 362 of

title 11, United States Code, as such section applies

to an action affecting the property of the estate in

bankruptcy.

(e) The district court in which a case under title 11

is commenced or is pending shall have exclusive

jurisdiction—

(1) of all the property, wherever located, of the

debtor as of the commencement of such case, and

of property of the estate; and

(2) over all claims or causes of action that

involve construction of section 327 of title 11,

United States Code, or rules relating to disclosure

requirements under section 327.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.