In Re: Mosdos Chofetz Chaim Inc.

Background

This case was an appeal from an April 14, 2022 order and judgment entered by the United States Bankruptcy Court for the Southern District of New York. The bankruptcy court had partially granted a motion by Rabbi Aryeh Zaks, Chofetz Chaim Inc., and Congregation Radin Development Inc. for contempt sanctions against Rabbi Mayer Zaks, Sima Weintraub Zaks, Shimon Zaks, Nochum Z. Brody, Yisroel Hochman, and Faige Hochman.

The dispute concerned property referred to as the “Property.” In May 2021, the bankruptcy court issued an injunction barring the appellants and others acting with them from entering or remaining on the Property, obstructing access, disrupting religious services or study, or telling residential-unit occupants not to pay rent. The bankruptcy court later clarified that people with valid leases or property rights were not barred from exercising those rights. It also later stated that the appellants had no constitutional or legal right to enter or remain on the Property.

After an evidentiary hearing, the bankruptcy court found by clear and convincing evidence that the appellants intentionally violated the injunction and a later enforcement order by occupying housing units on the Property and failed to establish that compliance was impossible. It also found that Shimon intentionally violated the orders by attempting to encourage people seeking to enter the synagogue building to go elsewhere. The bankruptcy court did not find that Brody engaged in the same conduct, did not find that certain alleged interference with student groups or tenants had been established, and issued only a warning to Sima concerning a confrontation.

The bankruptcy court imposed compensatory judgments against appellants occupying housing units, based on the fair market value of rent from April 2021 through April 2022; prospective monthly monetary sanctions while those appellants remained; an additional $5,000 judgment against Shimon; and a judgment of possession directing occupants to leave. It also authorized a writ of assistance for the United States Marshals Service to remove occupants who did not comply.

Arguments on Appeal

The appellants argued that earlier assurances by the bankruptcy court that it would not evict them prevented the later removal order. They also argued that the order punished Shimon for protected speech and that the injunction’s restrictions were unconstitutionally vague. The district court did not address an additional argument that the injunction was pending on appeal because the appellants did not seek relief on that ground and did not press it in reply.

Analysis

The district court reviewed the bankruptcy court’s contempt order for abuse of discretion, applying more exacting review because a bankruptcy court’s contempt power is limited. It reviewed factual findings for clear error and legal conclusions independently.

The district court held that the injunction clearly prohibited the appellants from entering or remaining on the Property. The appellants did not argue that the injunction was facially ambiguous or that the bankruptcy court’s factual findings were erroneous. The district court concluded that earlier comments about the possibility of eviction did not modify or make unclear the injunction. The appellants had repeatedly violated the injunction, and earlier monetary sanctions had not secured compliance. The district court therefore held that the bankruptcy court acted within its discretion by ordering the more coercive remedy of removal.

The district court also rejected the protected-speech argument. It held that the First Amendment did not give an uninvited person a right to communicate messages on privately owned property that had not been dedicated to public use. Because the injunction protected Congregation Radin Development Inc.’s property rights and prohibited both entry and the conduct at issue, the bankruptcy court could sanction Shimon for attempting to persuade synagogue-goers to worship elsewhere while he was on the Property in violation of the injunction. The district court also rejected the vagueness challenge, concluding that the injunction gave sufficient notice of the prohibited conduct.

Disposition

Judge Halpern affirmed the Bankruptcy Court’s April 14, 2022 order. The Clerk of Court was directed to terminate the district-court case.