Sanctions — Supreme Court Indicates Bankruptcy Courts May Be Empowered to Issue Inherent Power Sanctions — No Question That They May Sanction under § 1927

Dahiya v. Kramer (In re Khan), 2015 U.S. App. LEXIS 1792 (2d Cir. Feb. 5, 2015):

Dahiya argues as a threshold matter that the bankruptcy court lacked the authority to sanction pursuant to 28 U.S.C. § 1927 and its inherent authority to sanction. We need not reach the issue of whether bankruptcy courts possess the inherent authority to sanction attorneys. But see Law v. Siegel, 134 S. Ct. 1188, 1194 (2014) (noting that a bankruptcy court "may . . . possess inherent power to sanction abusive litigation practices") (internal quotation marks omitted). Section 1927, standing alone, plainly endows the bankruptcy court with authority to impose the sanctions at issue. See Baker v. Latham Sparrowbush Assoc. (In re Cohoes Indus. Terminal, Inc.), F.2d 222, 230 (2d Cir. 1991) ("A bankruptcy court may impose sanctions pursuant to 28 U.S.C. § 1927 if it finds that "[a]n attorney’s actions are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose such as delay.") (quoting Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986)).

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