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In re Brown

argued: August 5, 1986.

IN RE DELORES C. BROWN, DEBTOR; DELORES C. BROWN, PLAINTIFF
v.
PENNSYLVANIA STATE EMPLOYEES CREDIT UNION, PENNSYLVANIA STATE EMPLOYEES CREDIT UNION, APPELLANT



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA - SCRANTON, D.C. Civ. No. 85-0911

Author: Seitz

Opinion OF THE COURT

Before SEITZ, ADAMS and STAPLETON, Circuit Judges.

Seitz, Circuit Judge.

The Pennsylvania State Employees Credit Union (the "Credit Union") appeals from the district court's order reversing the bankruptcy court and remanding the case for consideration of sanctions under 11 U.S.C. § 362(h).

I.

On May 1, 1984, Delores Brown filed a voluntary petition for bankruptcy under Chapter 7 of the Bankruptcy Code. One of the debts she is seeking to discharge is a debt incurred from a personal line of credit established with the Credit Union.

After receiving notice of Brown's bankruptcy petition, the Credit Union sent her a letter detailing its policy towards bankrupt members. The present dispute centers on the following language in the letter:

It is the Credit Union's policy to deny future services to members when any portion of the debt is discharged in bankruptcy. However, if the obligation is reaffirmed with court approval, you would remain eligible for services as though the bankruptcy had not occurred.

Brown filed a complaint with the bankruptcy court, alleging that this language violates 11 U.S.C. §§ 362(a)(6), 524(a)(2), and 525, and seeking injunctive relief and damages.

The bankruptcy court found that the letter did not violate the Code's antidiscrimination provision, section 525, because this provision applies only to governmental units. It also rejected her claim that the letter was an attempt to collect a discharged debt in violation of section 524(a)(2) on the ground that the section does not require a creditor to continue to do business with a debtor. Finally, although the bankruptcy court found that the letter violated the automatic stay, section 362(a)(6), it refused to impose any damages against the Credit Union because the letter constituted only a technical violation of the provision.

The district court reversed the bankruptcy court's decision as to the violation of the automatic stay. The court found that the letter was an attempt to collect on a prepetition debt, and that the attempt was more than a technical violation of section 362(a)(6). After stating that it did not believe punitive damages were appropriate, it remanded the case to the bankruptcy court for a determination of damages under section 362(h).*fn1

II.

Before this court may reach the merits of this case, we must determine whether we have jurisdiction over the appeal.*fn2 Under 11 U.S.C. § 158(d), circuit courts have jurisdiction over bankruptcy cases in which district courts ...


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