In Re Les Deville, Debtor. In Re Steven J. Dagget, Debtor. In Re Daniel Miller, Debtor. Daniel Miller, Jr. Arlo Hale Smith v. Noreen Cardinale

This appeal from the Bankruptcy Appellate Panel (BAP) presents challenges to sanctions imposed by the Northern District of California, San Francisco Division, of the bankruptcy court on appellants Arlo Hale Smith and Daniel Miller. The sanctions — which were largely sustained by the BAP — were based on appellants’ misconduct in improperly invoking the processes of the bankruptcy court to block the progress of a state court civil action in which Smith was counsel for the defendants, one of whom was Miller. The obstructionist techniques employed by Smith and Miller involved a series of bankruptcy filings and concurrent removal petitions from the state court to the bankruptcy court on behalf of certain of the state-court defendants — each removal delaying trial in the state court until the granting of a remand petition.

On appeal, Smith and Miller challenge the procedures followed by the bankruptcy court in imposing sanctions. They do not take serious issue with the bankruptcy court’s findings of misconduct.

FACTS AND PROCEEDINGS IN THE BANKRUPTCY COURT

The opinion of the BAP describes the preposterous misconduct of Smith and Miller and the proceedings in the bankruptcy…