Civil v. Criminal Contempt

The civil-criminal distinction was outcome determinative of the issue presented in Charitable DAF Fund, L.P. v. Highland Capital Management, L.P.:

“Highland incurred virtually all its contempt-related expenses because the bankruptcy court permitted extensive discovery and conducted a marathon evidentiary hearing to unearth Dondero’s role in filing the Motion [for Leave]. But Dondero’s intentions were relevant only to criminal contempt—a sanction the bankruptcy court was powerless to impose. Dondero’s intentions—and virtually all of the discovery and the bankruptcy court’s mini-trial—were irrelevant to civil contempt. The only question in civil contempt is whether and to what extent Highland was damaged by DAF’s choice to file the  Motion in the wrong forum. Neither Highland nor the bankruptcy court was permitted to seize on DAF’s error and leverage it into a punitive proceeding.”

No. 22-11036 (April 4, 2024) (citations omitted).