(BK) In Re: Ernesto & Marilyn Patacsil

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

10 In Re ERNESTO PATACSIL, et al., District Case No. 2:23-cv-01231-DJC 11 Debtors. Bankr. Case No. 20-23457-A-7 12 JOSEPH CABARDO, et al., Bankr. Adversary Case No. 20-02167-A 13 Appellants, 14 v. ORDER 15 ERNESTO PATACSIL, et al., 16 Appellees.

This appeal asks whether the bankruptcy court in Appellant’s adversary

proceeding was correct in holding that only 75% of the California Private Attorneys

General Act (“PAGA”) penalties awarded in Appellants’ district court case against

Appellees were n on-dischargeable under 11 U.S.C. § 523(a)(7). Section 523(a)(7) states that bankruptcy courts may not discharge non-compensatory penalties payable to and for the benefit of a governmental unit. The bankruptcy court held that 75% of the PAGA penalties, or the portion of the penalties statutorily payable to the State of California, were non-dischargeable under section 523(a)(7), while the remaining 25%, or the portion statutorily payable to aggrieved employees,…