In Watts v. Indiana , 338 U.S. 49 (1949),
Supreme Court Justice Jackson writes "[A]ny lawyer
worth his salt will tell the suspect in no uncertain
terms to make no statement to police under any
circumstances. " In this case, the bankruptcy court
made a finding of bad faith and imposed a sanction
on attorney Delafield for advising his clients to
remain silent by asserting attorney-client privilege
in response to a subpoena issued to his clients by the
United States Trustee 's (UST) office, a branch of the
Department of Justice.

Did the Bankruptcy
Court abuse its discretion by sanctioning Delafield
for bad faith for asserting attorney-client privilege
for his clients, when the privilege belongs to the
clients, the clients directed Delafield to assert the
privilege, the file contained evidence potentially
harmful to the clients, and the UST asserted the
debtors had participated in a criminal scheme?

In Knupfer u. Lindblade (In re Dyer),
322 F.3d 1178, 1193 (9th Cir. 2003), Adell v. John
Richards Homes Bldg. Co., L.L.C., 552 F. App 'x 401,
415 (6th Cir. 2013), and PHHMortg. Corp. v.
Sensenich (In re Gravel), 6 F.4th 503 (2nd Cir. 2021),
the Court of Appeals held that § 105(a) grants
bankruptcy courts the authority to award mild non
compensatory punitive damages, it does not provide
a basis for awarding serious non-compensatory
punitive damages. In this case, the UST argued a
sanction should be imposed on Delafield to vindicate
the authority of the court. The bankruptcy court
stated it imposed a sanction on Delafield so that
Delafield would feel the "pain. " Pet. App. 138a. The
sanction was not measured by actual monetary loss
but was to redress the debtors for "inconvenience. "
Pet. App. 155a n85, 63a nil. The Fourth Circuit
affirmed the bankruptcy court 's imposition of a
serious non-compensatory punitive sanction without
applying this court 's guidance set forth in Int 'l Union
v. Bagwell, 512 U.S. 821 (1994).

Does a
bankruptcy court have inherent authority to award a
serious non-compensatory punitive sanction on an
attorney which is not measured by actual monetary
harm but for "inconvenience " to his clients?

In Int'l Union v. Bagwell, 512 U.S. 821
(1994), this Court ruled that sanctioned parties must
be afforded the protections of criminal due process
where sanctions are punitive, but not where they are
compensatory. Here, the UST argued for sanctions to
vindicate the authority of the court. The bankruptcy
court stated "the pain is going to be felt at home "
when local attorneys join "multi-jurisdictional law
firms. "

If the second
question is answered in the affirm

Did the Bankruptcy Court abuse its discretion by sanctioning Delafield for asserting attorney-client privilege on behalf of his clients?