Nearly 30 years after enactment of the Bankruptcy Amendments and Federal Judgeship Act of 1984 and establishment of the current bankruptcy court structure, courts are still struggling to understand the bounds of a bankruptcy court’s jurisdiction and power. Unfortunately for one recent appellant, a bankruptcy court’s power to enter punitive damages is not as great as it had hoped.

In Adell v. Honigman, Miller, Schwartz & Cohn, LLP (In re John Richards Homes Building Company, LLC), Case Nos. 12-2012, 12-2013, 12-2014, and 12-2015 (6th Cir. Nov. 20, 2013) (unpublished),1 the Sixth Circuit held that neither 11 U.S.C. § 105 nor the inherent powers of a bankruptcy court permit a bankruptcy court to enter “serious noncompensatory punitive damages.”2 The bankruptcy court in Adell had entered an award of sanctions in the amount $2.8 million as a consequence of a party’s continuing pattern of abuse of the judicial process in evading a prior monetary judgment entered against him by the bankruptcy court. As the bankruptcy court had found, this pattern of abuse included repeated instances of perjury, active participation with related entities in falsely responding to garnishments and filing an “unnecessary and abusive bankruptcy petition.”…