by In March, we reported on the Fourth Circuit’s 2-1 decision in Goldman Sachs Bank USA v. Brown, No. 25-1439, affirming a bankruptcy court’s refusal to compel arbitration of debtors’ claims for willful violation of the automatic stay under Section 362(k). Goldman Sachs has now sought further review, filing a petition for a writ of certiorari with the United States Supreme Court on June 16, 2026.
The petition frames a single question: whether, and under what circumstances, a bankruptcy court may override the Federal Arbitration Act (FAA) and decline to enforce a valid arbitration agreement with respect to Section 362(k) claims. Goldman Sachs argues principally that the Fourth Circuit’s decision 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), and that the panel majority departed from the Supreme Court’s arbitration precedents by relying on the general “policies and purposes” of the Bankruptcy Code rather than identifying a “clear and manifest” congressional command to displace the FAA. The petition leans heavily on Judge King’s dissent below, which made many of the same points.
NCBRC argues that the Hill opinion is not in conflict with the 4th Circuit’s opinion as the facts in each case are different. Hill involved a debtor who sought Section 362(k) relief after her chapter 7 case was discharged. Plaintiff Brown’s Chapter 13 case is still open, the automatic stay is still in effect, she will not obtain a discharge until her plan is fully performed, and her plan could still be amended to require additional payments to creditors.
Moreover, in cases subsequent to Hill, the Second Circuit issued two decisions in cases involving claims brought for violation of Section 524(a)(2) which look in a very different direction from the opinion in Hill. In Anderson v. Credit One Bank, N.A., 884 F.3d 382 (2d Cir. 2018), cert. denied, 596 U.S. 823 (2018), the Second Circuit held that a claim for violation of the discharge injunction under Section 524(a)(2) of the Bankruptcy Code was not arbitrable. Even more recently, in Belton v. GE Capital Retail Bank, 961 F.3d 612 (2d Cir. 2020), cert. denied, 141 S. Ct. 1513 (2021), the Second Circuit reaffirmed the holding in Anderson in a suit seeking damages for violation of the discharge injunction. The party demanding arbitration in that case argued, among other things, that Anderson was inconsistent with the Supreme Court’s then most recent arbitration decision, Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018). The Second Circuit rejected this contention and reaffirmed the conclusion in Anderson that claims for violation of the discharge injunction are by their nature not arbitrable.
The respondents, Rhea Ann Brown and Gregory Kevin Maze, continue to be represented by Theodore Ohmstede Bartholow III and Karen L. Kellett, of KELLET & BARTHOLOW, PLLC, Dallas, Texas; and Malissa L. Giles and Tracy A. Giles, of GILES & LAMBERT PC, Roanoke, Virginia. As we did at the Fourth Circuit, NCBRC is continuing to work closely with debtors’ counsel as the case moves into the certiorari stage.
A few words on timing for those following the case. The filing of a cert petition does not mean the Supreme Court will hear the matter—the vast majority of petitions are denied. The respondents will have the opportunity to file a brief in opposition, and the petition will then be distributed for the Justices’ consideration at conference. Given the ordinary briefing schedule and the Court’s summer recess, we do not expect to learn whether the Court will grant or deny review until roughly mid-September, when the Justices return and begin acting on petitions that accumulated over the summer.
We will continue to monitor this case and will report any developments, including the filing of a brief in opposition and the Court’s eventual disposition of the petition. The stakes for consumer debtors are significant, and NCBRC remains committed to defending the bankruptcy courts’ authority to protect the automatic stay—one of the most fundamental protections the Code affords.
The cert petition and the Fourth Circuit’s opinion are available below.