United States District Court, N.D. Illinois, Eastern Division
IN RE AL-HAROON B. HUSAIN, Respondent-Appellant,
PATRICK S. LAYNG, U.S. Trustee, Appellee.
MEMORANDUM OPINION AND ORDER
Honorable Edmond E. Chang United States District Judge.
Husain was disbarred and held in contempt by the bankruptcy
court. The Seventh Circuit affirmed the disbarment. In
the Matter of: Al-Haroon B. Husain, 866 F.3d 832, 834
(7th Cir. 2017). This is Husain's separate appeal
challenging the finding of contempt. He contends that the
bankruptcy court's findings were clearly erroneous and
that the contempt should be vacated. R. 15, Appellant Br. at
For the reasons discussed in this Opinion, the contempt order
his disbarment, Al-Haroon Husain was an attorney representing
Chapter 7 debtors in the Bankruptcy Court of the Northern
District of Illinois. Disciplinary Order, Trustee Appx. at
After the United States Trustee uncovered several instances
of alleged misconduct in Husain's bankruptcy cases, the
bankruptcy court instituted disciplinary proceedings against
him. See Bankr. Discipline Record at 1135; Bankr.
Docket, Trustee Appx. at 2. After an evidentiary hearing on
the alleged misconduct, the bankruptcy court found that
Husain engaged in misconduct by, among other things, signing
clients' names to under-perjury declarations (without
saying that he was doing so); copying and reusing
clients' signatures so that it looked like they had
signed documents that they had not read; and submitting
documents that omitted important assets of clients.
Disciplinary Order, Trustee Appx. at 18; In the Matter
of: Husain, 866 F.3d 832, 834-35 (7th Cir. 2017). As a
result, the bankruptcy court “permanently
suspended” (that is, disbarred) Husain from practicing
before the Bankruptcy Court for the Northern District of
Illinois. Id.; In re Husain, 533 B.R. 658,
698 (Bankr. N.D.Ill. 2015). In later orders, the bankruptcy
court ordered Husain to pay restitution to an array of former
clients and to pay costs to the United States Trustee for the
costs of prosecuting the disciplinary proceeding. Restitution
Order, Husain Appx. at 1304; Costs Order, Trustee Appx. at
73. In total, Husain was ordered to pay $28, 100 in
restitution to 18 clients and $16, 809.21 in prosecution
costs. Disciplinary Order, Trustee Appx. at 60; Costs Order,
Trustee Appx. at 73; Motion to Show Cause, Trustee Appx. at
restitution-payment deadline was set for August 28, 2015, and
the Trustee costs were due by September 24, 2015.
See Motion to Combine, Trustee Appx. at 63. On
August 31, 2015 (three days after the restitution payment was
due), Husain filed a motion in the bankruptcy court,
arguing—for the first time—that he was unable to
afford the restitution payment. Motion to Combine, Trustee
Appx. at 63. Accompanying the motion was an affidavit
executed by Husain, and in turn, the affidavit attached a
document that bore a title of “Personal Financial
Statement.” Trustee Appx. at 65-67. The financial
statement asserted that Husain had only $2775 in assets and
an underwater net worth of negative $37, 225. Id. at
The Trustee fired back with a motion seeking the issuance of
a show-cause order against Husain as to why he should not be
held in contempt. Motion to Show Cause, Trustee Appx. at 70.
order signed on September 1, 2015, the bankruptcy court
memorialized Husain's obligation to pay $16, 809.21 to
the Trustee for the costs of prosecution. Costs Order,
Trustee Appx. at 73. In early October 2015, the bankruptcy
court ordered Husain to show cause why he should not be held
in contempt of court for “failing to comply with the
July 29, 2015, Restitution Order and the September 1, 2015,
Order Awarding Costs.” Show Cause Order, Trustee Appx.
at 75. That hearing was set for December 1, 2015.
day of the hearing, Husain and his counsel moved to strike
the contempt hearing, because they had brought the full
payment. Husain Appx., Hrg. Tr. 2:12-16. But there were two
problems. First, Husain had brought a single check for the
full amount, even though there were separate sets of payees
(the individual clients and the United States Trustee).
Id. 5:1-4. Second, the Trustee also wanted to elicit
testimony on where the funds came from to ensure that Husain
properly obtained the money comprising the payments (instead
of, for example, by misappropriating client funds).
Id. 8:14-19; 14:19-23. The bankruptcy court recessed
so that Husain could correctly split the checks for the
restitution payments, and then the proceeding resumed later
that day. Id. 10:4-13. At that hearing, attorneys
for the Trustee questioned Husain, who testified that he
obtained the funds through his wife and father-in-law and
denied that the money came from any client trust accounts.
Id. 18:19-23; id. 21:2-12. After the
examination, the Trustee asked the bankruptcy court to hold
Husain in contempt for failing to make the payments on time,
but at the same time the Trustee took the position that the
contempt could be purged with the payment made that day.
Id. 25:3-15. The Trustee also asked that the
bankruptcy court order Husain to pay the Trustee's
out-of-pockets costs for pursuing the contempt proceeding,
which totaled $6, 178.68. Id. 25:16-23. Husain
(through his attorney) argued that he could not be held in
contempt, because he could not afford to pay the restitution
and costs when they had come due. See e.g.,
id. 41:4-10. But the bankruptcy court found
Husain's defense to be not credible and held him in
contempt for missing the deadlines—though it did not
order any further punishment, because he had brought the
payment to the hearing. Id. 45:7-11; 46:6-8. Later,
the bankruptcy court entered an order memorializing those
findings, that is, holding Husain in contempt, declining
further punishment, and awarding the United States Trustee
its attorney's fees and costs in prosecuting the
contempt. Contempt Order, Husain Appx. at 1302.
week after the bankruptcy court's rulings, Husain
appealed both his disbarment and the contempt holding to the
District Court for the Northern District of Illinois.
See Bankr. Docket, Trustee Appx at 16-17; Executive
Committee Order, Trustee Appx. at 76. The District Court
assigned both appeals to the Executive Committee for the
Northern District of Illinois, the five-judge panel which
handles the District Court's disciplinary proceedings.
7th Circuit Opinion, Trustee Appx. at 79. The Executive
Committee issued an order dismissing the contempt appeal due
to a lack of jurisdiction. Executive Committee Order, Trustee
Appx. at 76. From there, Husain appealed again. Bankr.
Docket, Trustee Appx. at 16-17. The Seventh Circuit affirmed
Husain's disbarment, but noted that the Executive
Committee should have transferred the contempt appeal to a
single district judge for review. 7th Circuit Opinion,
Trustee Appx. at 79-81. So the Seventh Circuit remanded the
contempt appeal for assignment and decision by a district
judge. Id.; see also 28 U.S.C. §
158(a). The contempt appeal is now before this Court for
Standard of Review
courts have jurisdiction to hear appeals from the final
judgments and orders of the bankruptcy courts. 28 U.S.C.
§ 158(a). When deciding an appeal from the
bankruptcy court, the district court sits as an appellate
court. See id.; Matter of Neis, 723 F.2d
584, 588 (7th Cir. 1983). On appeal, civil contempt findings
are reviewed only for an abuse of discretion. In re
Taylor, 793 F.3d 814, 818 (7th Cir. 2015). So the Court
will only reverse a finding of civil contempt if it
“depends on faulty legal premises [or] clearly
erroneous factual findings.” Id. (quoting
Harrell ex rel. N.L.R.B. v. Am. Red Cross, Heart of Am.
Blood Servs. Region, 714 F.3d 553, 556 (7th Cir. 2013)).
The district court reviews the bankruptcy court's legal
findings de novo and its factual findings for clear
error. In re Miss. Valley Livestock, Inc., 745 F.3d
299, 302 (7th Cir. 2014). The clear-error standard of review
means that the district court will not reverse a factual
finding simply because it would have decided the issue
differently; instead, a reviewing court must ask whether,
considering all of the evidence, “it is left with the
definite and firm conviction that a mistake has been
committed.” Easley v. Cromartie, 532 U.S. 234,
242 (2001) (cleaned up).
contempt acts as a vehicle to compel a party “to do
what a court had previously ordered him to do.”
Turner v. Rogers, 564 U.S. 431, 441 (2011) (cleaned
up). So before digging into the facts leading to Husain's
civil contempt, the Court must address whether the case is
moot, because Husain eventually did make the underlying
payments. “Ordinarily[, ] compliance with an order of
civil contempt makes the order moot.” Szabo v. U.S.
Marine Corp., 819 F.2d 714, 716 (7th Cir. 1987) (citing
Marshall v. Whittaker Corp., 610 F.2d 1141, 1145 (3d
Cir. 1979)). That makes sense, because the purpose of civil
contempt is to coerce compliance with an order, and once that
is done—that is, once the contempt is purged—then
there is no purpose to an appellate challenge against the
contempt finding because “reversing the order would not
benefit the party held in contempt.” Id.
when an order that is associated with the finding of contempt
imposed some other obligation, then that separate order can
be challenged on appeal, even when the contemnor has complied
with the primary obligation of the order. Szabo, 819
F.2d at 716. In Szabo, a company was held in
contempt, and as a result was ordered to, among other things,
bargain with a particular union and to pay the National Labor
Relations Board its attorney's fees and expenses incurred
in prosecuting the contempt. Id. The company then
complied with the order. The Seventh Circuit acknowledged the
general rule that a contemnor who has complied with the
underlying order no longer has anything at stake.
Id. But Szabo held that, among other
things, the order to pay attorney's fees and expenses
remained a live dispute. See Id. The same is true
here. Although Husain has substantially complied with the
underlying order that resulted in the contempt finding, he