February 28, 2006 | Posted By Sheppard Mullin
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District Courts Have Original Subject Matter Jurisdiction Over Stay Violation Claims

The Eleventh Circuit Court of Appeals, in Justice Cometh, Ltd. v. Lambert, 426 F.3d 1342 (11th Cir. 2005), has held that federal district courts have subject matter jurisdiction to adjudicate claims relating to the willful violation of the Bankruptcy Code's automatic stay. The appellate court found no merit in the contention that the district court has only appellate jurisdiction over such matters and that, therefore, a stay violation claim must be brought in the bankruptcy court rather than in the district court. 28 U.S.C. §§ 1331 and 1334 grant federal district courts original jurisdiction over all civil actions arising under Title 11.

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