Petition for Writ of Certiorari — Amy L. Goldman, Petitioner v. Tammy R. Phillips, et al.

No.

In the Supreme Court of the United States

AMY L. GOLDMAN, PETITIONER

v.

TAMMY R. PHILLIPS; TAMMY R. PHILLIPS, APLC

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

DANIEL L. GEYSER*

Counsel of Record

AYLA LIMA

HERBERT SMITH FREEHILLS

KRAMER (US) LLP

2000 K Street, N.W., 4th Fl.

Washington, DC 20006

(202) 775-4490

daniel.geyser@hsfkramer.com

QUESTION PRESENTED

This case presents an important question of federal

bankruptcy law that has squarely divided the lower

courts.

In the proceedings below, the en banc Ninth Circuit,

siding with three circuits, held that a Chapter 7 trustee

can be sued in her personal capacity for simple negligence. Unlike the Ninth Circuit (and its three companion

circuits), four other circuits limit personal-capacity suits

to “willful and deliberate” misconduct. And unlike both

competing factions, the Fifth Circuit has staked out yet a

third intermediate position—requiring a showing of

“gross negligence” before a Chapter 7 trustee is personally liable.

The decision below solidifies this three-way conflict. It

involves a critical question that affects thousands of bankruptcies nationwide, and this is the perfect opportunity

for the Court to impose a uniform rule in an area generating needless waste, inefficiency, and confusion.

The question presented is:

Whether Chapter 7 trustees may be personally liable

for their official acts, and if so, under what standard liability is permitted.

(I)

II

PARTIES TO THE PROCEEDING BELOW

Petitioner is Amy L. Goldman, appellee below and defendant (in her individual and official capacity as the

Chapter 7 trustee) in an adversary proceeding in the

bankruptcy court.

Respondents are Tammy R. Phillips and Tammy R.

Phillips, APLC, appellants below and plaintiffs in the adversary proceeding.*

RELATED PROCEEDINGS

United States Bankruptcy Court (Bankr. C.D.

Cal.):

Tammy Phillips, et al. v. Amy L. Goldman (In re Gilman), Adv. No. 1:22-ap-1014-VK (June 9, 2022)

United States District Court (C.D. Cal.):

Tammy Phillips, et al. v. Amy L. Goldman (In re Gilman), No. 2:22-cv-4450-MWF (Jan. 25, 2024)

Tammy Phillips, et al. v. Amy L. Goldman (In re Gilman), No. 2:22-cv-4450-MWF (Mar. 6, 2024) (order

denying rehearing)

United States Court of Appeals (9th Cir.):

Tammy R. Phillips, et al. v. Amy L. Goldman (In re

Gilman), No. 24-2249 (May 7, 2026)

Goldman was appointed the Chapter 7 trustee in debtor Kevan

Harry Gilman’s bankruptcy case, and this adversary proceeding

arose out of that case. Gilman is not participating in these proceedings.

*

III

TABLE OF CONTENTS

Page

Opinions below .............................................................................. 1

Jurisdiction .................................................................................... 1

Introduction................................................................................... 2

Statement ...................................................................................... 4

Reasons for granting the petition ............................................... 9

A. There is a square and intolerable conflict

over a significant question of federal

bankruptcy law—whether and when

trustees can be personally liable for their

official acts under the Code ............................................ 9

B. The question presented is exceptionally

important and warrants review in this case................ 17

Conclusion ................................................................................... 21

Appendix A — Court of appeals opinion (May 7, 2026) .......... 1a

Appendix B — District court opinion (Jan. 25, 2024) ........... 25a

Appendix C — Bankruptcy court order (June 9, 2022) ........ 44a

Appendix D — Court of appeals order (Nov. 7, 2025) .......... 48a

TABLE OF AUTHORITIES

Cases:

Ajax Integrated, LLC, In re, 554 B.R. 568

(Bankr. N.D.N.Y. 2016) .................................................. 15

Alonso v. Weiss, 98 F. Supp. 3d 956 (N.D. Ill. 2015) .... 3, 13

Banerjee v. Branigan, No. CV TDC-24-0077,

2024 WL 863714 (D. Md. Feb. 8, 2024) ......................... 13

Chicago Pacific Corp., In re, 773 F.2d 909

(7th Cir. 1985) ............................................................ 10, 13

Cisco Sys., Inc. v. Doe, 146 S. Ct. 1882 (2026) ................... 19

Cont’l Coin Corp., In re, 380 B.R. 1

(Bankr. C.D. Cal. 2007)................................................... 18

IV

Page

Cases—continued:

Cruz, In re, 562 B.R. 812 (Bankr. M.D. Fla. 2016) ........... 15

Cutright, In re, No. 08-70160, 2012 WL 1945703

(Bankr. E.D. Va. May 30, 2012) ................................. 3, 13

Ebel, In re, 338 B.R. 862 (Bankr. D. Colo. 2005) ............... 11

Feeley, In re, 393 B.R. 43 (Bankr. D. Mass. 2008) ............ 14

Ford Motor Credit Co. v. Weaver, 680 F.2d 451

(6th Cir. 1982) ............................................................ 10, 11

Gorski, In re, 766 F.2d 723 (2d Cir. 1985)...................... 9, 14

Grant, Konvalinka & Harrison, PC v. Banks

(In re McKenzie), 716 F.3d 404

(6th Cir. 2013) ...................................................9, 12, 16, 19

Grochocinski v. Mayer Brown Rowe & Maw LLP,

452 B.R. 676 (N.D. Ill. 2011) .......................................... 13

Grochocinski v. Mayer Brown Rowe & Maw, LLP,

719 F.3d 785 (7th Cir. 2013) ............................................. 2

Hall v. Perry (In re Cochise Coll. Park, Inc.),

703 F.2d 1339 (9th Cir. 1983) ......................................... 14

Heinsohn, In re, 231 B.R. 48 (Bankr. E.D. Tenn. 1999) .. 19

Herrera, In re, 472 B.R. 839 (Bankr. D.N.M. 2012) ......... 11

Hunter, In re, 553 B.R. 866 (Bankr. D.N.M. 2016) ...... 3, 11

J & J Video, LLC, In re, No. 08-56835-SWR,

2011 WL 3319864 (E.D. Mich. Aug. 1, 2011) ................ 12

Jefferson Dev. Partners, LLC, In re, 575 B.R. 4

(Bankr. D. Mass. 2017) ................................................... 14

Lebovits v. Scheffel (In re Lehal Realty Assocs.),

101 F.3d 272 (2d Cir. 1996) ......................................... 9, 17

Mailman Steam Carpet Cleaning Corp., In re,

196 F.3d 1 (1st Cir. 1999) ........................................ 2, 9, 14

Maxwell v. KPMG, LLP, No. 07-2819,

2008 WL 6140730 (7th Cir. Aug. 19, 2008) .....3, 10, 13, 16

McGahren v. First Citizens Bank & Trust Co.

(In re Weiss), 111 F.3d 1159 (4th Cir. 1997)............. 9, 13

Mosser v. Darrow, 341 U.S. 267 (1951) .............11, 12, 14, 16

Ngan Gung Rest., In re, 254 B.R. 566

(Bankr. S.D.N.Y. 2000) ................................................... 15

V

Page

Cases—continued:

PSN USA, Inc., In re, 426 B.R. 916

(Bankr. S.D. Fla. 2010) ................................................... 15

Red Carpet Corp. of Panama City Beach v. Miller,

708 F.2d 1576 (11th Cir. 1983) ................................... 9, 15

Sanchez Energy Corp., In re, 661 B.R. 522

(Bankr. S.D. Tex. 2024) .................................................. 16

Schooler, In re, 725 F.3d 498 (5th Cir. 2013) ........2, 3, 10, 16

Sherr v. Winkler, 552 F.2d 1367

(10th Cir. 1977) .....................................................10, 11, 12

Smyth, In re, 207 F.3d 758 (5th Cir. 2000) .........3, 10, 16, 18

United States v. Sapp, 641 F.2d 182

(4th Cir. 1981) .................................................................... 4

Yadkin Valley Bank & Trust Co. v. McGee

(In re Hutchinson), 5 F.3d 750 (4th Cir. 1993) ........ 9, 12

Statutes:

Bankruptcy Code, 11 U.S.C. 101 et seq. .......... 4, 9, 12, 18-19

11 U.S.C. 324 ................................................................... 19

11 U.S.C. 362(k) ............................................................... 19

11 U.S.C. 704(a) ........................................................... 5, 19

11 U.S.C. 726 ..................................................................... 5

18 U.S.C. 153-157 ................................................................. 19

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

Miscellaneous:

Nathaniel E. Arabov, A Chapter 7 Trustee’s Qualified

Right of Immunity May Be No Shield for Intentional,

Negligent, or Grossly Negligent Conduct: Analyzing

and Applying the Three-Way Circuit Split, 10 St.

John’s Bankr. Research Libr. No. 3 (2018) ........ 3, 18, 20

Douglas G. Baird, The Elements of Bankruptcy

(Foundation Press, 7th ed. 2022) ..................................... 4

6 Collier on Bankruptcy (16th ed. 2026) .............................. 4

VI

Page

Miscellaneous—continued:

1 Hon. Joan N. Feeney, et al., Bankruptcy Law Manual

(5th ed. rev. 2022) ........................................................ 3, 10

National Bankruptcy Review Commission, Bankruptcy:

The Next Twenty Years (Oct. 20, 1997) ........................ 18

Charles Jordan Tabb, Law of Bankruptcy (West

Academic Publishing, 5th ed. 2020)................................. 5

U.S. Bankr. Ct. for the Cent. Dist. of Cal., 2025 Filings

For Central District

<https://www.cacb.uscourts.gov/statistics/2025-filingscentral-district> ............................................................. 17

U.S. Courts, Bankruptcy Filings Rise 11.5 Percent Over

Previous Year <https://www.uscourts.gov/datanews/judiciary-news/

2025/07/31/bankruptcy-filings-rise-115-percent-overprevious-year>................................................................ 17

U.S. Tr. Program, U.S. Dep’t of Justice, Chapter 7 Trustee

Final Reports

<https://www.justice.gov/ust/bankruptcy-datastatistics/chapter-7-trustee-final-reports>.................. 17

In the Supreme Court of the United States

No.

AMY L. GOLDMAN, PETITIONER

v.

TAMMY R. PHILLIPS; TAMMY R. PHILLIPS, APLC

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

Amy L. Goldman respectfully petitions for a writ of

certiorari to review the judgment of the United States

Court of Appeals for the Ninth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App., infra, 1a24a) is reported at 176 F.4th 1152. The opinion of the district court (App., infra, 25a-43a) is reported at 656 B.R.

639. The order of the bankruptcy court (App., infra, 44a47a) is unreported.

JURISDICTION

The judgment of the en banc court of appeals was entered on May 7, 2026. On July 29, 2026, Justice Kagan extended the time within which to file a petition for a writ of

certiorari to and including September 4, 2026. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

(1)

2

INTRODUCTION

This case presents a clear and intractable conflict over

an exceptionally important question of federal bankruptcy law: whether Chapter 7 trustees may be personally

liable for their official activities, and if so, under what

standard liability is permitted. In the proceedings below,

the en banc Ninth Circuit held that a Chapter 7 trustee

can be sued in her personal capacity for simple negligence. App., infra, 21a-24a. In so holding, the Ninth Circuit cemented a three-way circuit conflict—and sided with

the wrong side of that split.

This case easily satisfies the traditional criteria for

granting review. The circuit conflict is obvious, acknowledged, and entrenched. While the Ninth Circuit

“squarely” holds mere “negligence” is “enough” (App., infra, 21a), the contrary rule is “well established” in other

circuits: “a bankruptcy trustee may not be held personally

liable for a breach of her fiduciary duties unless the

breach was ‘willful and deliberate.’” Grochocinski v.

Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 799-800

(7th Cir. 2013); see also, e.g., In re Mailman Steam Carpet

Cleaning Corp., 196 F.3d 1, 7 (1st Cir. 1999) (circuits have

“split almost evenly” over “whether a bankruptcy trustee

can be held personally liable for negligence (as opposed to

deliberate misconduct)”). Adding to those two factions,

the Fifth Circuit has staked out yet a third position, declaring itself “bound” by a “gross negligence” standard.

In re Schooler, 725 F.3d 498, 512-513 n.10 (5th Cir. 2013)

(so holding while admitting “some courts” require “willful[] and deliberate[]” misconduct, “whereas others”

deem “a trustee * * * liable for mere negligence”).

3

This deep conflict is significant. It has been acknowledged (repeatedly) by multiple courts—circuit courts1 and

lower courts2 alike. It has been recognized by expert commentators.3 It was even conceded by respondents below:

“Because of the differing statements of the various circuit

courts, it is possible the Supreme Court could grant a writ

of certiorari.” Opp. to Mot. to Stay Mandate, C.A. Doc. 109

at 8; see also 9th Cir. Order, C.A. Doc. 110 (granting motion to stay mandate).

Further percolation is pointless: the Ninth Circuit’s

“longstanding” views (App., infra, 21a) are irreconcilable

with “established” law in other circuits (Grochocinski, 719

F.3d at 799-800), and there is no hint any circuit will back

down. See, e.g., App., infra, 6a-8a, 19a-24a (reversing

lower courts for applying “gross negligence” standard,

and repudiating requirement of “intentional—as opposed

to negligent—conduct”); contra, e.g., Schooler, 725 F.3d at

512-513 n.10 (“bound” by contrary “gross negligence”

standard); contra again, e.g., United States v. Sapp, 641

See, e.g., Maxwell v. KPMG, LLP, No. 07-2819, 2008 WL 6140730,

at *4 (7th Cir. Aug. 19, 2008) (flagging “circuit split”); In re Smyth,

207 F.3d 758, 761 (5th Cir. 2000) (“a circuit split [has] developed on

the question of the proper standard of care”).

1

See, e.g., Alonso v. Weiss, 98 F. Supp. 3d 956, 967 (N.D. Ill. 2015)

(recognizing “circuit split” over trustee’s liability); In re Hunter, 553

B.R. 866, 873-874 & n.6 (Bankr. D.N.M. 2016) (same); In re Cutright,

No. 08-70160, 2012 WL 1945703, at *12 n.13 (Bankr. E.D. Va. May 30,

2012) (same).

3

See, e.g., 1 Hon. Joan N. Feeney, et al., Bankruptcy Law Manual

§ 4:16 (5th ed. rev. 2022) (there is a “split in the circuits regarding the

standard of care when a trustee is personally sued”); Nathaniel E.

Arabov, A Chapter 7 Trustee’s Qualified Right of Immunity May Be

No Shield for Intentional, Negligent, or Grossly Negligent Conduct:

Analyzing and Applying the Three-Way Circuit Split, 10 St. John’s

Bankr. Research Libr. No. 3, at 7 (2018) (“a three-way circuit split”

has “emerge[d]” over “trustee personal liability”).

2

4

F.2d 182, 184-185 (4th Cir. 1981) (“it is settled that the

trustee may not be held liable for any mistake of judgment; that his liability personally is ‘only for acts determined to be willful and deliberate in violation of his duties’”). The resulting disuniformity frustrates the proper

administration of a nationwide scheme governing hundreds of thousands of cases, and the conflict will not dissipate on its own. The “tension in this area of the law” is

palpable, and the “morass” will continue until this Court

intervenes. Schooler, 725 F.3d at 512-513 n.10.

Because this case presents an ideal vehicle for resolving this important question of federal law, the petition

should be granted.

STATEMENT

1. Chapter 7 of the United States Bankruptcy Code is

the primary vehicle through which an individual or entity

seeks relief through liquidation. This Chapter facilitates

the “collection, liquidation, and distribution of the nonexempt property of a debtor and culminates * * * in the discharge of that debtor’s eligible obligations.” 6 Collier on

Bankruptcy ¶ 700.01 (16th ed. 2026). At the center of this

process stands the Chapter 7 trustee, a statutory officer

whose appointment, authority, and obligations are defined by the Bankruptcy Code. The Chapter 7 trustee, often described as the “principal officer” of the Chapter 7

case, serves as the representative of the bankruptcy estate. See Douglas G. Baird, The Elements of Bankruptcy

(Foundation Press, 7th ed. 2022). In that capacity, the

trustee bears the dual responsibility of managing assets

of the debtor and ensuring that creditor rights are respected and enforced throughout the proceeding. Ibid.

The statutory duties of the Chapter 7 trustee are set

forth in Section 704 of the Bankruptcy Code. These duties

require the trustee to: collect and reduce to money the

5

property of the estate; investigate the debtor’s financial

affairs; examine proofs of claim filed by creditors and object to those that are improper or overstated; oppose the

debtor’s discharge where grounds for denial exist; and,

upon completion of administration, file a final report and

accounting with the court and the United States Trustee.

11 U.S.C. 704(a); see also Charles Jordan Tabb, Law of

Bankruptcy (West Academic Publishing, 5th ed. 2020).

The proceeds realized through this process are then distributed to creditors in accordance with the statutory priority scheme, generally on a pro rata basis within each

creditor class. 11 U.S.C. 726. Each of the trustee’s (many)

functions is performed under the authority of the Code,

subject to judicial oversight, and in furtherance of the

bankruptcy system’s core objectives: equitable treatment

of creditors and a meaningful fresh start for the debtor.

These duties, taken together, reflect the trustee’s role as

an integral officer of the federal bankruptcy process, accountable to the court, the United States Trustee, and

parties in interest.

2. a. This case involves the respondents’ “long-standing efforts” to collect a pre-petition judgment against the

debtor and later to sue petitioner in her personal capacity

as the Chapter 7 trustee. App., infra, 2a.

As relevant here, among other assets, the debtor had

an interest in certain properties. App., infra, 2a-3a. Over

the course of the bankruptcy, petitioner determined those

properties were heavily encumbered; petitioner accordingly moved to abandon the properties, citing their “inconsequential value” and “burden[] to the bankruptcy estate.” Id. at 3a-4a. As petitioner explained, “the properties

had no realizable equity because the amount of secured

debts, estimated costs of sale, potential adverse tax consequences, and estimated administrative fees exceeded

6

the properties’ anticipated values.” Id. at 4a. Although respondents disagreed, the bankruptcy court “overruled

[their] objections and entered orders abandoning the

properties at issue.” Ibid.

Respondents, however, were not finished. In February 2022, respondents initiated this adversary proceeding

against

petitioner,

targeting

her

alleged

“[mis]manag[ement]” of the commercial property. App.,

infra, 4a-5a. Their complaint accused petitioner of “allowing waste and failing to collect rent,” “breach[ing] her fiduciary duties to creditors[].” Id. at 5a.

b. The bankruptcy court dismissed the action with

prejudice, ruling the complaint was time-barred and petitioner had “quasi-judicial immunity.” App., infra, 5a-6a;

id. at 29a-30a. In the court’s view, petitioner “has immunity if her discretionary decisions to act or refrain from acting amounted only to negligence—as opposed to gross

negligence.” Id. at 5a-6a. Because the court determined

respondents “allege[d] only ordinary negligence,” their

complaint necessarily failed. Ibid.

c. Respondents appealed to the district court, which

issued a mixed ruling. App., infra, 6a-7a; id. at 25a-43a.

The district court first reversed on limitations grounds,

but it also affirmed on “quasi-judicial immunity.” Id. at 6a7a; id. at 42a-43a. It concluded that a trustee’s immunity

generally covers “acts of ordinary negligence,” but not

“‘gross negligence’” or “‘intentional wrongdoing.’” Ibid.

And while it agreed that respondents “failed to allege conduct exceeding ordinary negligence,” it “remanded” to

give respondents an opportunity to amend their complaint

and assert gross negligence. Ibid.

Rather than take up that opportunity, respondents instead appealed to the Ninth Circuit. A three-judge panel

heard oral argument, followed by a sua sponte vote to

hear the case en banc. App., infra, 7a, 48a.

7

d. The en banc Ninth Circuit reversed. App., infra, 1a24a. The court initially confirmed it had jurisdiction.

While the remand theoretically rendered the decision below “non-final,” respondents cured that problem by affirmatively electing to “stand[] on the complaint.” Id. at

10a-11a. They accordingly locked in their simple-negligence theory and abandoned any effort to plead gross

negligence, confirming the lower court’s dismissal would

stand unless ordinary negligence was sufficient. Id. at 11a.

The court then addressed two potential categories of

trustee immunity. First, the court held that “quasi-judicial immunity” grants “absolute immunity” for “‘functions

involving the exercise of discretionary judgment’ that are

‘essential to the authoritative adjudication of private

rights to the bankruptcy estate.’” App., infra, 12a. According to the court, “the modern bankruptcy trustee” is

“‘a hybrid official,’” with “‘many legal, adjudicative, clerical, financial, administrative, and business functions’ that

can loosely be categorized as either ‘adjudicatory’ or ‘administrative.’” Id. at 15a. The court concluded absolute

immunity covers trustees if and when “‘their judgments

are “functionally comparable” to those of judges.’” Id. at

14a-15a.

Second, the court found that so-called “‘derived immunity’” provides a defense in “discrete circumstances.”

App., infra, 12a. In order to avoid liability, a trustee must

show “(1) her acts were within the scope of her authority;

(2) the debtor, creditors, and other interested parties had

notice of the proposed acts; (3) the trustee candidly disclosed the proposed acts to the bankruptcy court; and

(4) the bankruptcy court approved the acts.” Ibid. Unless

each of those specific steps were satisfied (including “the

court’s approval”), a trustee could be “liable for even negligent violations” of her official duties. Id. at 17a-21a.

8

In so holding, the Ninth Circuit directly repudiated

the lower courts’ position that “‘ordinary negligence’” was

insufficient and “‘gross negligence or willful misconduct’”

was required. App., infra, 20a. In the Ninth Circuit’s view,

the Supreme Court has “suggested” that “negligent conduct is enough to impose liability on a trustee,” and “we

have squarely so held.” Id. at 21a. “Under principles of

stare decisis,” the court found, “there is no reason to upset

this longstanding principle.” Ibid. It accordingly upheld

“subjecting trustees to liability for negligence.” Ibid.4

In applying those two tests, the Ninth Circuit concluded petitioner was not protected against respondents’

suit. It first refused to grant petitioner absolute immunity: the complaint “relate[s] to a bankruptcy trustee’s

functions of gathering estate property, investigating the

debtor’s finances, and operating the debtor’s business on

a short-term basis,” functions the court deemed “not analogous to or intertwined with ‘the authoritative adjudication of private rights to the bankruptcy estate.’” App., infra, 23a.

The Ninth Circuit then concluded petitioner, “on the

current record,” was “not entitled to derived immunity.”

App., infra, 24a. Because the court could not “discern”

any “orders” on the docket “authorizing” petitioner’s conduct, it declared petitioner could be personally liable for

ordinary negligence. Id. at 20a-23a, 24a. It accordingly reversed the decisions below, and remanded for further proceedings under a negligence standard.

The court noted the “‘business judgment rule’” provides additional protection for trustees. App., infra, 21a-22a. But while the

court explained that rule “accord[s] deference to the trustee’s business management decisions,” such protection applies only “‘absent

negligence.’” Ibid. (emphasis added).

4

9

REASONS FOR GRANTING THE PETITION

A. There Is A Square And Intolerable Conflict Over

A Significant Question Of Federal Bankruptcy

Law—Whether And When Trustees Can Be Personally Liable For Their Official Acts Under The

Code

The Ninth Circuit’s decision further cements a preexisting three-way conflict over an important question of

federal bankruptcy law: whether Chapter 7 trustees may

be personally liable for their official acts, and if so, under

what standard of liability.

As widely acknowledged, the circuits have “split almost evenly” over the question. In re Mailman Steam

Carpet Cleaning Corp., 196 F.3d 1, 7 (1st Cir. 1999). Four

circuits (the Ninth, First, Second, and Eleventh) hold

trustees can be sued in their personal capacity for simple

negligence.5 Taking the opposite position, four other circuits (the Fourth, Sixth, Seventh, and Tenth) reject negligence and restrict personal liability to willful and deliberate violations.6 And the Fifth Circuit alone has declared

5

See, e.g., App., infra, 21a (“subjecting trustees to liability for negligence” and declaring standard entrenched as “stare decisis”); In re

Cochise College Park, Inc., 703 F.2d 1339, 1357 (9th Cir. 1983); In re

Mailman Steam Carpet Cleaning Corp., 196 F.3d 1, 7 (1st Cir. 1999)

(“a bankruptcy trustee can be personally liable for negligent breach

of fiduciary duty”); Lebovits v. Scheffel (In re Lehal Realty Assocs.),

101 F.3d 272, 277 (2d Cir. 1996) (same); In re Gorski, 766 F.2d 723,

727 (2d Cir. 1985) (same); Red Carpet Corp. of Panama City Beach v.

Miller, 708 F.2d 1576, 1578-1579 (11th Cir. 1983) (same).

See, e.g., McGahren v. First Citizens Bank & Trust Co. (In re

Weiss), 111 F.3d 1159, 1168 (4th Cir. 1997) (“a trustee may be held

personally liable only for willful or intentional misconduct”); Yadkin

Valley Bank & Trust Co. v. McGee (In re Hutchinson), 5 F.3d 750,

752-753 (4th Cir. 1993) (same and disclosing “[t]he circuits have divided on this question”); United States ex rel. Julien P. Benjamin

6

10

itself “bound” by yet a third standard (“gross negligence”)—while admitting “some courts” require “willful[]

and deliberate[]” misconduct, “whereas others” deem “a

trustee * * * liable for mere negligence.” In re Schooler,

725 F.3d 498, 512-513 n.10 (5th Cir. 2013); see also 1 Hon.

Joan N. Feeney, et al., Bankruptcy Law Manual 4:16 (5th

ed. rev. 2022) (there is a “split in the circuits regarding the

standard of care when a trustee is personally sued”).

The existing conflict is deep and mature, and there is

no chance it will resolve itself. Further percolation is

pointless: courts on each side have squarely rejected each

other’s positions, and the few remaining circuits are

simply left to pick sides. The result is a “morass,” and the

“tension in this area of the law” is palpable. Schooler, 725

F.3d at 511 n.10; Dodson v. Huff (In re Smyth), 207 F.3d

758, 761 (5th Cir. 2000) (repeating the National Bankruptcy Review Committee’s description of “the state of

the law on the trustee standard of care question as a ‘crazy

quilt’ of decisions”). As it now stands, a trustee’s personal

exposure turns entirely on the jurisdiction in which a dispute happens to arise. This profound “confus[ion]” will

Equip. Co. v. Sapp, 641 F.2d 182, 184-185 (4th Cir. 1981); Grant, Konvalinka & Harrison, PC v. Banks (In re McKenzie), 716 F.3d 404,

413 (6th Cir. 2013) (“Although there is disagreement among the circuits concerning the applicable standard of proof, this court has held

that: ‘A bankruptcy trustee is liable personally only for acts willfully

and deliberately in violation of his fiduciary duties.’”) (citing Ford Motor Credit Co. v. Weaver, 680 F.2d 451, 461-62 (6th Cir. 1982)); Maxwell v. KPMG LLP, No. 07-2819, 2008 WL 6140730, at *4 (7th Cir.

Aug. 19, 2008) (flagging “circuit split” on “the proper standard” for

holding “a trustee * * * personally liable”; “in this circuit [a trustee]

is personally liable only if he willfully and deliberately violated his fiduciary duties”) (citing In re Chicago Pacific Corp., 773 F.2d 909, 915

(7th Cir. 1985)); Sherr v. Winkler, 552 F.2d 1367, 1375 (10th Cir. 1977)

(“a trustee” is “liable personally only for acts determined to be willful

and deliberate in violation of his duties”).

11

persist until this Court intervenes. Mckenzie, 716 F.3d at

412 (recounting complaints by “several courts”). Immediate review is warranted.

1. The decision below directly conflicts with established law in multiple circuits. Unlike the Ninth Circuit,

these circuits have squarely held that “willful and deliberate” misconduct is necessary before holding a trustee personally liable for official acts.

a. The Tenth Circuit established the foundational

“willful-and-deliberate” standard in Sherr v. Winkler, 552

F.2d 1367 (10th Cir. 1977). The Tenth Circuit looked to

this Court’s decision in Mosser v. Darrow, 341 U.S. 267

(1951), and read this Court’s analysis as establishing a tripartite framework: (i) a trustee is not liable for a mistake

in judgment where discretion is allowed; (ii) a trustee is

personally liable only for “willful and deliberate” violations of fiduciary duties; and (iii) a trustee is liable only in

an official capacity for negligent conduct. 552 F.2d at 1375.

The Tenth Circuit accordingly held “a trustee in bankruptcy is not to be held personally liable unless he acts

willfully and deliberately in violation of his fiduciary duties.” Ibid.

Although lower courts in the Tenth Circuit have

acknowledged the circuit conflict, they have consistently

adhered to the Tenth Circuit’s binding standard. See, e.g.,

In re Hunter, 553 B.R. 866, 873-874 (Bankr. D.N.M. 2016);

In re Herrera, 472 B.R. 839, 849-850 (Bankr. D.N.M.

2012); In re Ebel, 338 B.R. 862, 875 (Bankr. D. Colo. 2005).

b. Like the Tenth Circuit, the Sixth Circuit has also

long applied the “willful-and-deliberate” standard. In

Ford Motor Credit Co. v. Weaver, 680 F.2d 451 (6th Cir.

1982), the court squarely held that “bankruptcy trustee[s]” are “liable personally only for acts willfully and deliberately in violation of [their] fiduciary duties.” 680 F.2d

at 462 (citing Sherr, 552 F.2d at 1375). The Sixth Circuit

12

has since recognized the “confusing” and “contradictory”

standards “governing personal liability for trustees,” including the obvious “disagreement among the circuits.”

McKenzie, 716 F.3d at 413 (flagging authority “describing

the split over whether trustee may incur personal liability

for negligent or only willful breach of fiduciary duty”). But

the court has considered its position settled: notwithstanding the circuit conflict, “this court has held” that

trustees are “‘liable personally only for’” “willful[] and deliberate[]” misconduct. Ibid. (citing Ford Motor Credit,

supra).

Despite the overall confusion, given the clarity of the

Sixth Circuit’s own position, it is little surprise lower

courts in that circuit have faithfully applied the willfuland-deliberate standard. See, e.g., In re J & J Video, LLC,

No. 08-56835-SWR, 2011 WL 3319864, at *1-*2 (E.D.

Mich. Aug. 1, 2011).

c. Also drawing on Mosser and Sherr, the Fourth Circuit has repeatedly applied the willful-and-deliberate

standard to trustee personal liability. In United States ex

rel. Julien P. Benjamin Equip. Co. v. Sapp, 641 F.2d 182,

183 (4th Cir. 1981), for example, the Fourth Circuit concluded personal liability is reserved for acts deemed “willful and deliberate in violation of [the trustee’s] duties”;

negligence, by contrast, only permits liability in the trustee’s official capacity. 641 F.2d at 184-85.

The Fourth Circuit later tracked the source of the extant confusion. As the court explained, “[a]lthough the

Bankruptcy Code imposes specific duties on bankruptcy

trustees,” “the Code does not explicitly make trustees liable for breach of those duties.” Hutchinson, 5 F.3d at 752.

On the contrary, the “source of trustee liability” is a

judge-made implied right of action—which it found originated with this Court’s Mosser decision “and its progeny.”

Ibid. And because “Mosser did not directly address to

13

what extent, if any, bankruptcy trustees are liable for negligent breaches of their duties,” “[t]he circuits have divided on this question.” Id. at 752-753 (outlining split between “willful and deliberate” circuits and “negligence”

circuits). The Hutchinson court then reaffirmed it had

adopted a modified version of the Sixth and Tenth Circuits’ approach: as relevant here, it imposes the identical

requirement of “willful and deliberate” misconduct, but it

adds that trustees are “completely immune” when acting

“pursuant to explicit instructions of the bankruptcy

court.” Id. at 753.

Again, lower courts within the Fourth Circuit have

consistently required a showing of willful-and-deliberate

misconduct. See, e.g., Banerjee v. Branigan, No. CV

TDC-24-0077, 2024 WL 863714, at *1-*2 (D. Md. Feb. 8,

2024); In re Cutright, No. 08-70160-SCS, 2012 WL

1945703, at *1 (Bankr. E.D. Va. May 30, 2012).

d. Finally, the Seventh Circuit has likewise adopted

the willful-and-deliberate standard. The circuit recognized that standard in Chicago Pacific Corp., 773 F.2d at

915, and it has reapplied it ever since—even in the face of

the recognized circuit conflict. See, e.g., Maxwell, 2008

WL 6149730, at *4. As Maxwell explained, “[a] circuit split

has developed on the question” (flagging competing

camps for “willful and deliberate,” “negligence,” and

“gross negligence”), but “in this circuit [a trustee] is personally liable only if he willfully and deliberately violated

his fiduciary duties.” Ibid. (emphasis added).

As in the other jurisdictions, lower courts in the Seventh Circuit acknowledge the circuit conflict and continue

to apply the governing Seventh Circuit standard. See, e.g.,

Grochocinski v. Mayer Brown Rowe & Maw LLP, 452

B.R. 676, 683-84 (N.D. Ill. 2011); Alonso v. Weiss, 301

F.Supp.3d 885, 893-94 (N.D. Ill. 2018).

14

2. Like the Ninth Circuit, however, multiple circuits

have expressly rejected any heightened showing and instead determined negligence alone suffices.

a. In the proceedings below, the en banc Ninth Circuit

confirmed that court’s longstanding approach. App., infra, 21a. The Ninth Circuit earlier adopted a negligence

standard in Hall v. Perry (In re Cochise Coll. Park, Inc.),

703 F.2d 1339 (9th Cir. 1983). Like other circuits, the

Ninth Circuit looked to Mosser for guidance—but it read

that decision the opposite way. In the Ninth Circuit’s

view, “[p]roperly construed,” Mosser “does not ‘hold’ in

any sense that personal liability does not obtain if * * * a

showing of negligence is made.” 703 F.2d at 1357 n.26. On

the contrary, the Ninth Circuit found Mosser endorsed a

negligence standard, and it accordingly “reject[ed]” the

competing views “of the Tenth and Sixth Circuits.” Ibid.

(labeling the contrary circuit position as “an apparent

misreading”).

b. The First Circuit reached the same conclusion in In

re Mailman Steam Carpet Cleaning Corp., 196 F.3d 1 (1st

Cir. 1999). Like the Ninth Circuit, the First Circuit

grounded its position directly in Mosser, acknowledged

the “split,” and rejected the reasoning of other circuits:

“there is simply no principled way after Mosser to avoid

the conclusion that a bankruptcy trustee can be personally liable for negligent breach of fiduciary duty.” 196 F.3d

at 7-8. Lower courts in the First Circuit have since followed suit. See, e.g., In re Feeley, 393 B.R. 43 (Bankr. D.

Mass. 2008); In re Jefferson Dev. Partners, LLC, 575 B.R.

4 (Bankr. D. Mass. 2017).

c. The Second Circuit also adopted the negligence

standard in In re Gorski, 766 F.2d 723 (2d Cir. 1985). Relying on the Ninth Circuit’s decision in Cochise, the Second Circuit determined that bankruptcy trustees may be

15

personally liable for both “negligent” and “knowing or intentional” breaches. 766 F.2d at 727 (citing Cochise, supra). And lower courts in the Second Circuit continue to

reaffirm and apply that negligence standard. See, e.g., In

re Ngan Gung Rest., 254 B.R. 566, 570 (Bankr. S.D.N.Y.

2000) (acknowledging circuit split in footnote); In re Ajax

Integrated, LLC, 554 B.R. 568 (Bankr. N.D.N.Y. 2016).

d. Finally, the Eleventh Circuit has applied the negligence standard in Red Carpet Corp. of Panama City

Beach v. Miller, 708 F.2d 1576 (11th Cir. 1983). The court

candidly acknowledged the implied nature of the right of

action: “The law regarding surcharge of bankruptcy trustees and receivers already extends well beyond the language of the bankruptcy statutes.” 708 F.2d at 1578. And

the court reproduced analysis from a commentator underscoring the same point: “‘The [Bankruptcy] Act, while

enumerating many of the specific duties, rights, and powers of trustees and receivers in bankruptcy, was not designed to be nor has it proven to be the final world in all

questions concerning the personal liability of bankruptcy

officers. Rather, courts have found it necessary to go beyond the Bankruptcy Act to general non-bankruptcy principles,’” creating “‘a distinct bankruptcy “common law”

covering the personal liability of bankruptcy trustees.’”

Ibid. And in looking to that common law, the Eleventh

Circuit concluded that mere negligence was sufficient. Id.

at 1578-1579.

Unlike other circuits, however, lower courts in the

Eleventh Circuit have since diverged, with some courts

nonetheless applying a willful-and-deliberate standard.

See, e.g., In re Cruz, 562 B.R. 812 (Bankr. M.D. Fla. 2016)

(declining to follow Red Carpet on the ground that its commentary was dicta); In re PSN USA, Inc., 426 B.R. 916

(Bankr. S.D. Fla. 2010).

16

3. Rejecting the views of all other circuits, the Fifth

Circuit has charted its own intermediate path. In Dodson

v. Huff (In re Smyth), 207 F.3d 758 (5th Cir. 2000), the

court expressly acknowledged the split on the standard of

liability (“a ‘crazy quilt’ of decisions”), declared the issue

driven by “policy,” and balanced the competing interests:

“we conclude that trustees should not be subjected to personal liability unless they are found to have acted with

gross negligence.” 207 F.3d at 761-762. The Fifth Circuit

has since declared that position entrenched and refused

to reconsider its position. Schooler, 725 F.3d at 511-512 &

n.10. Lower courts in the Fifth Circuit have likewise consistently applied the gross-negligence standard since its

adoption. See, e.g., In re Sanchez Energy Corp., 661 B.R.

522, 538 (Bankr. S.D. Tex. 2024).

*

*

*

The conflict over this fundamental bankruptcy question is deep, obvious, and entrenched. The circuits are in

complete disarray. Eight circuits have sharply split down

the middle, and the Fifth Circuit has struck its own path.

The debate has been fully exhausted at the circuit level,

and additional percolation is pointless—each side is fully

aware of the competing viewpoints but maintained their

own circuit’s position. There is no realistic prospect that

multiple courts of appeals will suddenly abandon their

own precedent, especially when most circuits have adhered to their own views for decades. See, e.g., App., infra,

21a (“stare decisis”); Schooler, 725 F.3d at 511-512 n.10

(not budging); McKenzie, 716 F.3d at 413 (same); Maxwell, 2008 WL 6140730, at *4 (same).

To make matters worse, the disagreement largely

stems from disparate readings of this Court’s decision in

Mosser. Some circuits read the case as endorsing a negligence standard; others read the same passages to require

willful-and-deliberate misconduct. This Court alone can

17

resolve that dispute and say what the case definitively

means. Until that happens, this critical bankruptcy question will vary by geography, and the widespread confusion

will continue wasting significant time and resources in

bankruptcy cases nationwide. It is past time to settle the

debate. Review is plainly warranted.

B. The Question Presented Is Exceptionally Important And Warrants Review In This Case

The question presented is of obvious legal and practical importance, and it warrants review in this case.

1. The legal and practical stakes are self-evident. The

sheer number of reported cases confirms the need for review, and the numbers are unsurprising. E.g., Lehal, 101

F.3d at 275-276 (“there is a long history of cases dealing

with attempts to hold a bankruptcy trustee personally liable”). Last year, over 1,100 Chapter 7 trustees were assigned more than 330,000 cases. See U.S. Tr. Program,

U.S. Dep’t of Justice, Chapter 7 Trustee Final Reports

<https://www.justice.gov/ust/bankruptcy-data-statistics/chapter-7-trustee-final-reports>; U.S. Courts, Bankruptcy Filings Rise 11.5 Percent Over Previous Year

<https://www.uscourts.gov/data-news/judiciary-news/

2025/07/31/bankruptcy-filings-rise-115-percent-over-previous-year>. In the Central District of California alone,

approximately 27 panel trustees were assigned nearly

25,000 cases. See U.S. Bankr. Ct. for the Cent. Dist. of

Cal.,

2025

Filings

For

Central

District

<https://www.cacb.uscourts.gov/statistics/2025-filingscentral-district>; U.S. Tr. Program, U.S. Dep’t of Justice,

List of Chapter 7 Panel Trustees <https://www.justice.gov/ust/list-chapter-7-panel-trustees>. It is untenable to subject Chapter 7 trustees (operating at this scale

and magnitude) to different liability standards based on

geography alone. And it is especially untenable to expose

18

trustees to aggressive creditors armed with a mere negligence standard: “no trustee in his right mind would regularly subject himself to personal liability for negligence or

even to having to defend a lawsuit for such alleged behavior.” In re Cont’l Coin Corp., 380 B.R. 1, 7 (Bankr. C.D.

Cal. 2007).

A “negligence” threshold is a recipe for burdening

busy courts, wasting scarce resources, and introducing

friction in a process that requires efficiency. “The role of

the chapter 7 bankruptcy trustee is an integral part to the

proceeding,” and that role is impaired by personal liability—especially when endlessly pursued by “disgruntled

creditors.” Arabov, supra, at 12. Proper bankruptcy administration requires reasonable protections for those

acting to discharge key duties under the Code. It is critical

to restore a proper balance to the equation. See, e.g.,

Smyth, 207 F.3d at 761-762.

Just to give a sense of the breadth of the problem: by

its own account, the Ninth Circuit would apply a negligence standard to a trustee’s routine “‘activities such as

collecting, liquidating, and distributing the debtor’s property to creditors’” (App., infra, 23a-24a)—areas where

one could easily see allegations (unfounded or not) of negligence. National Bankruptcy Review Commission, Bankruptcy: The Next Twenty Years 858 n.2182 (Oct. 20, 1997)

(Commission Report) (“Chapter 7 trustees are the most

prone to suit due to the broad nature of their duties.”).

These activities reflect a significant part of a trustee’s job,

and trustees are now personally exposed for any accidental missteps. The opportunities for mischief are palpable. E.g., Smyth, 207 F.3d at 762 (“the trustee must make

enormously complex decisions within tight time constraints and without the assistance of—in fact, in the face

of opposition or hostility from—both secured and unsecured creditors”). And it does not matter whether a suit

19

attacking the trustee has merit or not; the mere threat of

a suit can influence the trustee’s conduct, distorting the

proper administration of her or her important statutory

duties. See, e.g., McKenzie, 716 F.3d at 424 (granting

leave to sue trustee “could distract from the ongoing

bankruptcy case”); Commission Report, supra, at 862

(“Even the threat of a suit against the trustee during negotiations in order to gain leverage may have equally pernicious effects.”).

Trustees play a critical role in the bankruptcy process.

The en banc Ninth Circuit solidified an acknowledged and

entrenched three-way split. That split has now persisted

for decades, producing massive confusion and disarray. In

re Heinsohn, 231 B.R. 48, 64 (Bankr. E.D. Tenn. 1999) (“It

is difficult from the caselaw alone to formulate guidelines

specifying when a trustee is immune from personal liability and when he is not.”). This Court alone can resolve the

problem, and it is time for a uniform answer to this pressing question.7

2. The issue is accordingly important, and this is the

ideal vehicle for (finally) resolving the split. The question

presented is a pure question of law. It was outcome-determinative below, and it was squarely resolved at each level.

The lower courts applied a gross-negligence standard and

The Bankruptcy Code exhaustively enumerates a Chapter 7 trustee’s duties (11 U.S.C. 704(a)), yet provides no textual authority for

personal-capacity suits—despite authorizing a trustee’s removal for

cause (11 U.S.C. 324) and codifying express causes of action against

other parties (see, e.g., 11 U.S.C. 362(k)). See also, e.g., 18 U.S.C. 153157 (criminalizing certain willful conduct including embezzling from a

bankruptcy estate). Unlike this Court’s modern jurisprudential approach, claims against a trustee and her personal assets are judgemade implied rights, and they are mentioned nowhere in the Bankruptcy Code. Cf., e.g., Cisco Sys., Inc. v. Doe, 146 S. Ct. 1882, 1890

(2026) (“the power to create causes of action belongs to Congress”).

7

20

petitioner won (App., infra, 5a-7a); the en banc Ninth Circuit applied a mere-negligence standard and petitioner

lost (id. at 20a-23a). Courts outside the Ninth Circuit (applying a “willful-and-deliberate” standard or “gross-negligence” standard) would have reached the opposite result. “As it stands now, trustee liability depends upon the

jurisdiction in which the trustee is appointed.” Arabov, supra, at 12. This issue is critical to the proper administration of bankruptcy cases, and there are no conceivable obstacles to resolving it here.

21

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

DANIEL L. GEYSER*

Counsel of Record

AYLA LIMA

HERBERT SMITH FREEHILLS

KRAMER (US) LLP

2000 K Street, N.W., 4th Fl.

Washington, DC 20006

(202) 775-4490

daniel.geyser@hsfkramer.com

SEPTEMBER 2026

*

Admitted in Texas and California and practicing law in the District of Columbia pending application for admission to the D.C. Bar

under the supervision of bar members pursuant to D.C. Court of Appeals Rule 49(c)(8).

*