On July 24, 2025, the National Consumer Bankruptcy Rights Center (NCBRC) and the National Association of Consumer Bankruptcy Attorneys (NACBA) filed an amicus curiae brief in the U.S. Court of Appeals for the Fourth Circuit in Goldman Sachs Bank USA v. Brown, No. 25-1439. The case concerns whether consumer debtors’ claims under 11 U.S.C. § 362(k)—seeking damages for willful violations of the automatic stay—must be resolved through private arbitration, rather than in the bankruptcy courts tasked with enforcing that stay.
[Read more…] about NCBRC and NACBA File Amicus Brief in the Fourth Circuit to Preserve Enforcement of the Automatic Stay in Brown v. Goldman SachsNo Abuse of Discretion in Denying Motion to Compel Arbitration
The bankruptcy court did not abuse its discretion in denying the creditor’s motion to compel arbitration of two counts of the debtor’s adversary complaint where one count sought to disallow the creditor’s claim as based on a contract that violated Virginia’s usury and consumer finance laws and the other count asserted claims for violation of those same laws. Allied Title Lending, LLC v. Taylor, 2019 WL 5406039 (E.D. Va. Oct. 22, 2019) (case no. 3:18-cv-845), appeal filed, Taylor v. Allied Title Lending LLC, Case No. 19-2283 (4th Cir. filed Nov. 15, 2019).
The Chapter 13 debtor entered into a credit agreement with Allied Title Lending under which she agreed to pay back a $1,500 loan at an annualized interest rate of 273.75%. Allied filed a proof of claim for $2,756.92 in her bankruptcy, and the debtor filed an adversary complaint alleging, in pertinent part, that the underlying lending agreement was null and void because it violated Virginia’s usury and consumer finance laws. Ms. Taylor sought disallowance of Allied’s claim as well as monetary damages, fees, and costs for herself and a putative class of similarly situated plaintiffs. Allied moved to compel arbitration under the terms of the credit agreement. The Attorney General for the Commonwealth of Virginia then moved to intervene to press a claim against Allied for violation of Virginia consumer protection laws. At that time, the commonwealth had already filed a case against Allied in state court alleging that Allied’s open-end credit plan and interest rates violated state laws. [Read more…] about No Abuse of Discretion in Denying Motion to Compel Arbitration
Court Has Discretion to Deny Arbitration in Discharge Injunction Case
The Fifth Circuit found that the test it established in In re Nat’l Gypsum Co., 118 F.3d 1059, 1069 (5th Cir. 1997), was still good law notwithstanding the intervening case of Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), and that, under National Gypsum, the bankruptcy properly exercised its discretion to deny the creditor’s motion to compel arbitration in an action alleging discharge injunction violation. Henry v. Educ. Fin. Serv., No 18-20809 (5th Cir. Oct. 17, 2019).
NCBRC, NACBA and Professor Jay Westbrook provided an amicus brief, authored by NACBA member Allan Gropper, in support of the debtor in this case.
Stephanie Henry filed for chapter 13 bankruptcy ten years after entering into a student loan contract with Wells Fargo’s predecessor. After she successfully completed her five-year plan, Wells Fargo sent her a letter containing language to the effect that it was attempting to collect the remaining debt on the loan. Ms. Henry filed an adversary proceeding alleging violation of the discharge injunction. Wells Fargo moved to compel arbitration in accordance with a clause in the lending agreement under which Ms. Henry agreed to have any complaint “arising under or relating to” the debt settled by arbitration. The bankruptcy court denied Wells Fargo’s motion to compel arbitration on the basis that the cause of action did not arise under or relate to the student loan contract. The court certified the case for interlocutory appeal directly to the Fifth Circuit. [Read more…] about Court Has Discretion to Deny Arbitration in Discharge Injunction Case
Arbitration Clause Does Not Constrain Court’s Contempt Power
Finding that “[w]ords in a consumer agreement cannot deprive the bankruptcy court of the inherent power to enforce compliance with an injunction,” the district court found an arbitration clause in a consumer contract did not constrain the court’s contempt powers. Verizon Wireless Personal Communications, LP v. Bateman, No. 14-5369, Adv. Proc. No. 18-1394 (M.D. Fla. Sept. 24, 2019).
Christopher Bateman filed for chapter 7 bankruptcy listing Verizon as an unsecured creditor. Verizon did not acknowledge or take part in the bankruptcy in any way. Five months after Mr. Bateman obtained his discharge, Verizon sent him a letter attempting to collect the discharged debt. Mr. Bateman moved the court to hold Verizon in contempt for violation of the discharge injunction. In response, Verizon moved to compel arbitration, invoking its Customer Agreement with Mr. Bateman which provided that any dispute which “in any way relates to or arises out of” the agreement is subject to arbitration. The bankruptcy court found that its power to enforce its order was not subject to the terms of Mr. Bateman’s Customer Agreement with Verizon. [Read more…] about Arbitration Clause Does Not Constrain Court’s Contempt Power
Henry v. Educational Financial Service, No. 18-20809 (5th Cir.)
Type: Amicus
Date: April 12, 2019
Description: Denial of creditor’s motion to compel arbitration in dishargeability proceeding.
Result: Pending
Arbitration Issue Goes to Fifth Circuit
The bankruptcy court denied the creditor’s motion to compel arbitration where the debtor’s adversary complaint, based on the creditor’s violation of the discharge injunction, was based on a purely bankruptcy issue. Henry v. Educ. Fin. Serv., No. 13-30519, Adv. Proc. No. 18-3154 (Bankr. S.D. Tex. Oct. 17, 2018). [Read more…] about Arbitration Issue Goes to Fifth Circuit
Anderson v. Credit One Bank, No. 16-2496 (2d Cir.)
Type: Amicus
Date: February 27, 2017
Description: Whether a predispute arbitration agreement strip a court of the inherent power of contempt to enforce its own orders.
Result: Affirmed and remanded, March 7, 2018.
Hayes v. Delbert Services Corp. No. 15-1170 & 15-1217 (4th Cir.)
Type: Amicus
Date: June 17, 2015
Description: Whether Western Sky’s arbitration provision is enforceable.
Result: Reversed and remanded, February 2, 2016. Debtor won.
Discharge Injunction Claim Subject to Arbitration – Overturned on Reconsideration
Discharge of the credit card debts did not render the arbitration clause of the credit card agreement unenforceable and, where the clause was valid and not in conflict with the Code, the credit card companies’ motion to compel should have been granted. Belton v. GE Capital Consumer Lending Inc., No. 15-1934, consolidated with In re Bruce, No.15-3311 (S.D. N.Y. Oct. 14, 2015). [Read more…] about Discharge Injunction Claim Subject to Arbitration – Overturned on Reconsideration
Moses v. Cash Call, No. 14-1195 (4th Cir.)
Type: Amicus on petition for rehearing
Date: April 7, 2015
Description: Whether CashCall entitled to arbitration pursuant to lending agreement where debtor filed adversary complaint seeking judgment that agreement illegal and void.
Result: Affirmed in part, reversed in part. March 16, 2015; Debtor’s petition for rehearing denied April 27, 2015.