Debtor Facing Sanctions Nabs High Court Review

WASHINGTON (CN) - The Supreme Court on Monday took up a pro se debtor's challenge to discovery sanctions in a bankruptcy case.

Stephen Law, a Chapter 7 debtor, had gone to the 9th Circuit after a Bankruptcy Appellate Panel affirmed orders surcharging his homestead exemption and imposing discovery sanctions.

In an unpublished 2011 decision, the federal appeals court agreed that there was no abuse of discretion.

"The BAP properly affirmed the bankruptcy court's order granting the trustee's surcharge motion because the surcharge was calculated to compensate the estate for the actual monetary costs imposed by the debtor's misconduct, and was warranted to protect the integrity of the bankruptcy process," according to the unsigned decision."

"The BAP properly affirmed the bankruptcy court's order imposing discovery sanctions on Law, in light of Law's refusal to comply with the trustee's permissible discovery requests in a contested matter," the judges added.

In granting Law's petition for a writ of certiorari Monday, the Supreme Court followed its custom of issuing no comment. It noted only that Law can proceed in forma pauperis.

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