Case 7:15-cv-06408-CS Document 19-1 Filed 11/20/15 Page 1 of 23

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

In re:
CONGREGATION BIRCHOS YOSEF,

Docket No. 7:15-cv-06408(CS)

Debtor.

BRIEF AMICUS CURIAE OF PROFESSORS RICHARD EPSTEIN,

ARTHUR J. GONZALEZ, BURT NEUBORNE, AND MICHAEL McCONNELL
IN SUPPORT OF CONTEMNORS-APPELLANTS

Burt Neuborne
40 Washington Square South, 307
New York, NY 10012
Telephone: (212) 998-6172
Facsimile: (212) 995-4341
burt.neuborne@nyu.edu
Attorney for Amici Curiae

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TABLE OF CONTENTS
TABLE OF AUTHORITIES ...................................................................................................... iii
INTEREST OF AMICI CURIAE ............................................................................................... 1
I. ENFORCEMENT OF THE AUTOMATIC STAY VIOLATES THE FIRST
AMENDMENT RIGHTS OF THE CONTEMNORS ............................................................... 2
II. ENJOINING THE BEIS DIN VIOLATES THE RELIGIOUS FREEDOM
RESTORATION ACT (RFRA) ............................................................................................... 6
A. The Religious Freedom Restoration Act applies to this case ......................................... 6
B. No compelling state interest supports this intrusion on Free Exercise ......................... 8
C. Enjoining the beis din and its sirov constitutes a substantial burden on religion 10
III. THE DEFENDANTS INVOCATION OF THE BEIS DIN DID NOT VIOLATE THE
AUTOMATIC STAY.................................................................................................................. 11
A. The beis din could not have been commenced prior to the bankruptcy filing ........... 12
B. Seeking the beis dins imposition of strictly religious sanctions does not constitute
control, as that term is defined by 362(a)(3) .................................................................. 12
1. The beis din is not intertwined with the cause of action ................................................ 14
C. The beis din is not comparable to a debt-collection sign .............................................. 15
CONCLUSION ........................................................................................................................... 16
APPENDIX .................................................................................................................................. 17

ii

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CASES
48th St. Steakhouse, Inc. v. Rockefeller Group, Inc. (In re 48th St. Steakhouse), 835 F.2d 427 (2d
Cir. 1987) .................................................................................................................................. 15
Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961) ..................................................... 7
Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014) .................................................. 8, 12
Christians v. Crystal Evangelical Free Church, 89 F.3d 494 (8th Cir. 1996).............................. 10
Edmonson v. Leesville Concrete Company, 500 U.S. 614 (1991) .................................................. 7
Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U.S. 872 (1990) ................... 2
Fraternal Order of Police Newark Lodge No. 12 v. City of Newark, 170 F.3d 359 (3d Cir. 1999)
................................................................................................................................................... 10
Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) .......................................................................... 7
Gonzales v. O Centro Esprita Beneficente Unio do Vegetal, 546 U.S. 418 (2006) .................... 8
Hankins v. Lyght, 441 F.3d 96 (2d Cir. 2006) ................................................................................ 6
Hosanna-Tabor Evangelical Lutheran Church & Sch. v. E.E.O.C., 132 S. Ct. 694 (2012) .......... 2
In re Albion Disposal, Inc., 217 B.R. 394 (W.D.N.Y. 1997) ................................................. 15, 17
In re Ampal-American Israel Corp., 502 B.R. 361 (Bankr. S.D.N.Y. 2013) ............................... 16
In re Chateaugay Corp., 920 F.2d 183 (2d Cir. 1990) ................................................................. 13
In re Collier, 410 B.R. 464 (Bankr. E.D. Tex. 2009) ............................................................. 17, 18
In re Congregation Birchos Yosef, 535 B.R. 629 (Bankr. S.D.N.Y. 2015) ........................... passim
In re Parr Meadows Racing Ass'n, Inc., 880 F.2d 1540 (2d Cir. 1989) ......................................... 9
Keene Corp. v. Coleman (In re Keene Corp.), 164 B.R. 844 (Bankr. S.D.N.Y. 1994) ................ 16
Litzman v. New York City Police Dep't, No. 12 CIV. 4681 HB, 2013 WL 6049066 (S.D.N.Y.
Nov. 15, 2013) ........................................................................................................................... 10

iii

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Marshall v. Picard (In re Bernard L. Madoff Inv. Secs. LLC), 740 F.3d 81 (2d Cir. 2014) ........ 14
New York Times v. Sullivan, 376 U.S. 254 (1964) .......................................................................... 7
Penn v. New York Methodist Hosp., No. 11-cv-9137 (NSR), 2013 WL 5477600 (S.D.N.Y. Sept.
30, 2013)...................................................................................................................................... 3
Picard v. Fairfield Greenwich Ltd., 762 F.3d 199 (2d Cir. 2014) .................................... 12, 14, 15
SEC v. Brennan, 230 F.3d 65 (2d Cir. 2000) .................................................................................. 9
Secs. Invr Prot. Corp. v. Bernard L. Madoff Inv. Securities, LLC, 460 B.R. 106 (Bankr. S.D.N.Y.
2011).......................................................................................................................................... 15
Tantilla v. Stonegate Sec. Servs., Ltd., 56 B.R. 1014 (N.D.Ill. 1986) .......................................... 17
Turner Advertising Co. v. National Serv. Corp, 742 F.2d 859 (5th Cir. 1984) ............................ 17
STATUTES
11 U.S.C. 105 ............................................................................................................................... 8
11 U.S.C. 1104(a) ........................................................................................................................ 8
11 U.S.C. 1106 ............................................................................................................................. 8
11 U.S.C. 307 ............................................................................................................................... 8
11 U.S.C. 362 ........................................................................................................... 10, 12, 13, 16
42 U.S.C. 2000bb-1 ..................................................................................................................... 8
RULES
Fed. R. Bankr. P. 9020 .................................................................................................................... 9

iv

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INTEREST OF AMICI CURIAE

Amici curiae, Richard Epstein, Arthur J. Gonzalez, Michael McConnell, and Burt
Neuborne (hereinafter amici) respectfully submit this brief amici curiae urging reversal of the
Bankruptcy Courts July 2, 2015 order staying the Bais Chinuch L'Bonois, Inc. (Bais Chinuch)
and certain named individuals (hereinafter, collectively, the Defendants or Contemnors)
from pursuing religious proceedings in the Beis Din of Mechon LHoyroa (described herein as
the beis din), involving the principals of Congregation Birchos Yosef. 1 Amici also urge reversal
of the daily $10,000 fine imposed by the Bankruptcy Court as a coercive sanction. In the opinion
of amici, given the intensely religious nature of the beis din proceeding, and the conceded
inability of the beis din to enforce its rulings in any secular court, any effort by a bankruptcy
tribunal to restrain the Bais Chinuch and other individuals from invoking the beis din as a
parallel non-coercive forum of religious conscience violates the Free Exercise Clause of the First
Amendment, the provisions of the Religious Freedom Restoration Act (hereafter RFRA), and the
Bankruptcy Code.
Amici, who are described more fully in the appendix to this brief, have adjudicated,
litigated, taught, and written about the important issues of religious freedom and bankruptcy law
presented by this case: specifically, whether a person is deprived of free exercise of religion
when he or she is prohibited from pursuing a proceeding in a non-coercive religious tribunal
(such as the beis din) by a Bankruptcy Courts order, and whether the pursuit of such a noncoercive proceeding violates the automatic stay.
ARGUMENT

Congregation Birchos Yosef is the debtor in this matter, hereinafter referred to as the Debtor.

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I.

ENFORCEMENT OF THE AUTOMATIC STAY VIOLATES THE FIRST

AMENDMENT RIGHTS OF THE CONTEMNORS
The decision of the Bankruptcy Court misapplies settled First Amendment doctrine

designed to preserve the free exercise of religion. Where, as here, the sole purpose of a religious
tribunal is to function as a non-coercive forum of religious conscience, the state cannot forbid
believers from seeking its guidance and influence. As explained in Hosanna-Tabor Evangelical
Lutheran Church & Sch. v. E.E.O.C., 132 S. Ct. 694 (2012), among the numerous ways that the
Free Exercise clause protects intensely religious activity (including internal church decisions)
from governmental interference is by recognizing a ministerial exception 2 from state
regulatory authority. The avowed purpose of such a ministerial exception is to insulate deeply
personal religious activity from well-meaning government regulation capable of stifling it.
In the Jewish tradition, seeking the guidance of a beis din in the context of an economic
dispute, while not strictly ministerial in nature because the hiring of clergy is not involved, is
precisely the type of deeply personal religious activity that is protected by the reasoning of
Hosanna-Tabor. Such a Free Exercise exeception is not absolute. It does not, for example, entitle
a believer or a religious institution to deny third-persons the enjoyment of secular rights and
benefits, such as access to a bankruptcy court. In this case, however, while a beis din is not
without substantial influence within the community of believers, the community sanction it
endorses (shunning) is purely voluntary, not coercive, and similar to the secular analogue of a
conscientiously-motivated boycott. Since a beis din concededly lacks power to coercively deny
any person full enjoyment of the secular aspects of bankruptcy, amici believe that the act of

The doctrine is referred to as an exception because it is an exception from the general rule
that laws of neutral application are validthe rule articulated in Dept. of Human Resources of
Ore. v. Smith, 494 U.S. 872 (1990)that characterizes modern Free Exercise jurisprudence.

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invoking the religious authority of a beis din constitutes the non-coercive religiously-motivated
behavior protected by the Free Exercise Clause.3
1. The ministerial exception protects the beis din proceedings
The ministerial exception protects religious activity that involves an internal church
decision that affects the faith and mission of the church itself. Hosanna-Tabor, 132 S. Ct at 707.
The doctrine stands for the proposition that a religious institution should remain free to shape its
religious worship services in any way it [chooses]. Bronx Household of Faith v. Bd. of Educ. of
City of New York, 750 F.3d 184, 203 (2d Cir. 2014). The Hosanna-Tabor Court noted that its
ruling was limitedas it had to beto the employment retaliation suit before it, and that it
would leave "the applicability of the [ministerial] exception to other circumstances" to be
resolved in later cases. Hosanna-Tabor, 132 S. Ct. at 710. This case presents one such
circumstance.
The principle underlying the ministerial exception protects internal religious decisions by
institutions such as a beis din. Like the Lutheran church that prevailed in Hosanna-Tabor,4 the
beis din is a wholly religious institution. Cf. Penn v. New York Methodist Hosp., No. 11-cv-9137
(NSR), 2013 WL 5477600, at *7 (S.D.N.Y. Sept. 30, 2013) (holding the ministerial exception

Amici assume that the beis din will abide by its counsels representations, and refrain from
attempting to exercise civil control over estate property. See Tr. at 36. In other words, amici
support the beis din inasmuch as it seeks to impose a strictly religious sanction. Amici do not
support an attempt by the beis din to exercise actual control over estate property, or to seek
enforcement of its rulings in a secular tribunal.
3

In Hosanna-Tabor, a parochial school teacher was dismissed for threatening to bring a lawsuit
under the Americans with Disabilities Act. Were the defendant not a religious institution, its
retaliatory action would have been illegal. Hosanna-Tabor, 132 S. Ct. at 700. However, the
Court found that the retaliatory termination was protected because the teacher was fired for a
"religious reason," "namely, that her threat to sue the Church violated the Synod's belief that
Christians should resolve their disputes internally." Id. at 701.

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applied to a Methodist-affiliated hospital). It claims no power of a secular court, and its sirov5
has no civil consequenceit is a form of religiously-based moral disapproval without the force
of secular law.6 See Tr. 23:69 (The issues in the beis din are just whether or not these
individuals were or were not in violation of Jewish law and community norms.).
Further, the Bankruptcy Court order interferes with an internal church norm that is crucial
to the faith and mission of the church. At issue here is the same religious norm that was so
important (and crucial) to the Lutheran community in Hosanna-Tabornamely, a rule that
internal disputes be resolved by internal religious institutions. See 132 S. Ct. at 701; n.3, supra.
Unlike Hosanna-Tabor, where the school enforced this religious rule by firing a teacher who
sought civil resolution of her employment dispute, the religious institution in this case seeks to
enforce the same rule without any economic or civil penalty. Rather, it seeks to recommend, if
found appropriate, a religious sanction (shunning). Thus, while in Hosanna-Tabor the ministerial
exception protected termination of the regulated employment relationship between teacher and
school, here the consequences of the beis dins action do not extend beyond purely volitional
religious-social relationships.
In this case, therefore, the same norm of religious autonomy recognized in HosannaTabor is at issue, but the civil legal consequences of respecting that norm are far less severe than
they were in that caseindeed, they are practically non-existent. If expressions of religious and

The beis dins sirov is a proclamation of its judgment. 535 B.R. at 632.

The Bankruptcy Court similarly foundfor purposes of its rulingthat the sirov implemented
strictly religious/social sanctions. While admitting some uncertainty about the full extent of the
consequences of the sirov, the Court found that at a minimum, the potential consequences of
ignoring [the beis dins] summons were a sirov, or communal shunning. In re Congregation
Birchos Yosef, 535 B.R. 629, 632 (Bankr. S.D.N.Y. 2015). The Court made no further findings
regarding any possible consequences of the sirov beyond that minimum.

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moral disapproval are generally protected by the First Amendmenteven when they have direct
secular effects (such as the loss of employment) that violate otherwise-valid laws (such as the
ADA)then such protected expressions of religious conscience do not lose their First
Amendment protection through operation of the Bankruptcy Code.
The Bankruptcy Court said that the beis din proceeding involves no issues of religious
doctrine, nor is it an interchurch dispute. 535 B.R. at 635. Yet the very reason for issuance of
the sirov is to uphold religious doctrinespecifically, the rule demanding that disputes between
members of this congregational community be resolved in religious courts. Admittedly, by
threatening to enforce this religious rule with religious sanctions, the beis dins actions have an
indirect effect on non-religious mattersit may be that the fear of religious disapproval will
motivate the principals of the Debtor to alter their behavior in the Bankruptcy Court. But as
Hosanna-Tabor shows, the mere possibility of non-religious consequences does not remove the
protections of the ministerial exception from a religious act.7
Religious communities are always defined by norms that differ to some degree from
purely secular rules. When such civil, secular rules of general applicability conflict with the
norms of religious communities, the civil law must prevail. However, enforcing civil law does
not require denying religious communities the right to expel or socially sanction a member who
violates its normsa strictly religious consequence for breaking a religious rule. Thus, while the

Indeed, in Hosanna-Tabor, the non-religious consequence (the teachers loss of her job) was
not merely a speculative indirect consequence of the schools action, but the actual, certain and
direct consequence. Here, any non-religious consequences of the sirov on the bankruptcy
proceedingand any possible effects on other creditors which the Bankruptcy Court feared, see
535 B.R. at 639would only materialize if the debtors principals decided that they would rather
resolve their dispute in the beis din than lose membership in their current religious community.
The communal shunning of the sirov would not be a direct cause, and perhaps not even a
proximate cause, of any action taken in the Bankruptcy Court.

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beis din cannot prevent the Debtor or its principals from utilizing the Bankruptcy Code, the
Bankruptcy Code should also not be used to prevent the beis din from expressing purely
religious opprobrium.8
II.

ENJOINING THE BEIS DIN VIOLATES THE RELIGIOUS FREEDOM

RESTORATION ACT (RFRA)

Because RFRA applies to this case, and because no compelling state interest is served by
substantially burdening the religious practices of the beis dins members, the Bankruptcy Courts
action violates RFRA.
A. The Religious Freedom Restoration Act applies to this case
The Bankruptcy Court erred in holding that RFRA does not apply herea decision it
supported by its conclusion that RFRA does not apply to private actions between private
parties. 535 B.R. at 637 n.6. Because a motion to enforce the automatic stay is an action that at
least can be made by a government partyspecifically, the U.S. TrusteeRFRA applies to
disposition of such a motion, under Hankins v. Lyght, 441 F.3d 96 (2d Cir. 2006).
As the Second Circuit explained in Hankins, RFRA applies to laws that are enforceable
by the [government] as well as private plaintiffs. Hankins, 441 F.3d at 103; see also New York
Methodist Hosp., 2013 WL 5477600, at *10 (The Second Circuit has held that the RFRA
applies to suits between private parties where the federal government could have brought an

The religious community here is one that many would not choose to join. But, having
voluntarily joined the community, and enjoying the right to exit from the community at will, the
principals of the Debtor have placed themselves under its socio-religious rules, and exposed
themselves to its socio-religious sanctions. The principals are certainly entitled to break the
community's rules -- as well as leave the community entirely -- but the community is equally
entitled to express religious and social disapproval.

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action, as the EEOC could have chosen to assert a plaintiff's federal discrimination claims on his
behalf. (citing Hankins, 441 F.3d at 103)).
Although the Bankruptcy Court was aware of this precedent, see 535 B.R. at 637 n.6, it
failed to apply it to this case, apparently because it found there were no acts by the government
at issue, only private actions between private parties. Id. However, the action at issue here is
no more private than the ADEA enforcement action at issue in Hankinsboth cases involve
actions between private parties, but both cases are nonetheless governed by RFRA because the
action at issue was an action a government actor could have taken.9
Although the actions complained of herethe injunction, and concomitant coercive
sanctions designed to end the beis din proceedinghave been taken at the behest of a private
entity (the Debtor), the right to pursue these actions was created by the statespecifically, by
Congresss passage of the intricate statutory scheme that undergirds the bankruptcy system. And
just as the ADEAs creation of various statutory rights placed enforcement of such rightseven
enforcement by a private partyunder RFRAs ambit in Hankins, enforcement of statutory
rights created by the Bankruptcy Code is similarly governed by RFRAprovided that, as in
Hankins, the rights could be enforced by a government actor.
9

The Bankruptcy Courts conclusion that there was no state action would be indistinguishable
from holding there was no state action and therefore no applicability of the First
Amendmentin New York Times v. Sullivan, 376 U.S. 254, 265 (1964), which was a suit by
private parties seeking enforcement of obligations allegedly arising from state common law. It is
too late in the day to claim that private actions to enforce legal duties allegedly arising under
state law do not involve state action. Id. (holding that state action existed because Alabama
courts have applied a state rule of law which petitioners claim to impose invalid restrictions on
their constitutional freedoms); cf. Edmonson v. Leesville Concrete Company, 500 U.S. 614
(1991) (holding that a private litigant in a civil case may not use preemptory challenges to
exclude jurors based on their race); Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) (holding
that states could not enforce strict liability libel laws in cases of defamation involving private
figures); Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961) (holding that a private
entity acting in a close relationship with the government was a state actor).

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And indeed, the motion at issue here is an action the federal governmentspecifically,
the United States Trusteecould have brought. N.Y. Methodist Hosp., 2013 WL 5477600, at
*10. As the Bankruptcy Court explained, its general contempt power under 11 U.S.C. 105
functions as the source of the coercive authority it applied against the beis din. 535 B.R. at 635.
The United States Trusteescertainly a branch, department, agency, instrumentality, and
official of the United Stateshas the power to seek 105 contempt orders and
accompanying sanctions. See, e.g., 11 U.S.C. 307; Fed. R. Bankr. P. 9020. Thus, the United
States Trustee could seek the kind of stay enforcement that was sought here, meaning that, under
Hankins, RFRA applies.
B. No compelling state interest supports this intrusion on Free Exercise
Even when, as here, RFRA governs a contested state action, such action survives scrutiny
if it is taken in furtherance of a compelling governmental interest, and if it is the least
restrictive means of furthering such an interest. 42 U.S.C. 2000bb-1. However, enjoining the
beis dins issuance of a purely religious sanction does not further any compelling state interest.
The Bankruptcy Court found that application of the stay here serves the interests of
preservation of value, efficiency and equality of distribution. 535 B.R. at 637. However, RFRA
requires that courts look beyond such broadly formulated interests and scrutiniz[e] the
asserted harm of granting specific exemptions to particular religious claimants. Burwell v.
Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2779 (2014). Under this more focused inquiry,
courts look to the marginal interest in enforcing the challenged law against the individual
whose exercise of religion is burdened. Id.
Although Hobby Lobby did not provide extensive guidance regarding how to conduct this
marginal interest inquiry, or how a state interest would satisfy this inquiry, there are certainly

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no such interests at stake here. While the stay is undoubtedly critical to ensuring the orderly
progress of the bankruptcy process, the beis din poses no threat to that process. The Bankruptcy
Court accurately described the stay as the fundamental protection of debtors and their estates
during the bankruptcy case, 535 B.R. at 636 n.6, and the stays importance in serving
not only the debtor, but also the debtor's creditors in the collective context of the case by
ensuring the orderly determination of the debtor's liabilities, realization on the estate's
assets, and allocation of that value to creditors and interest holders according to the
Bankruptcy Code's priority scheme and policy of equality of distribution.
Id. (internal citations omitted).
However, after accurately describing the crucial role the automatic stay plays in the
bankruptcy process, the Bankruptcy Court erred in concluding that this role is impaired if the
beis din expresses religious disapproval for the Debtors principals actions. As explained above,
the beis din is not attempting to control estate assets, and thus it will not disrupt the orderly
processing and disposition of the estates assets and liabilities. Therefore, even if the issuance of
the sirov constitutes a technical violation of the stayand we believe that it does not, see Part III,
infraprohibiting its operation does not forward any of the important interests the stay serves.10
Further, if the government is going to allow exceptions from the stay for secular
reasonsas it does for the suspension of an occupational license, paternity suits, or the
enforcement of a medical obligation, 11 U.S.C. 362(b)then it must offer a substantial
reason not to offer exceptions for religious reasons. As then-Judge Alito stated in the context of

10

The Bankruptcy Court also found that because the bankruptcy process implicates the
Bankruptcy Clause of the Constitution, the states interest in enjoining the beis din is compelling.
This assertion is a non sequitur. The fact that a law was passed under authority granted by the
Constitution does not insulate such a law from First Amendment scrutinyindeed, all
Congressional action is taken pursuant to constitutional grants. Cf. Christians v. Crystal
Evangelical Free Church, 89 F.3d 494 (8th Cir. 1996) (explaining that RFRA applies to the
Bankruptcy Code).

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a religious challenge to a police departments ban on beards, [b]ecause the Department makes
exemptions from its policy for secular reasons and has not offered any substantial justification
for refusing to provide similar treatment for officers who are required to wear beards for
religious reasons, we conclude that the Department's policy violates the First Amendment.
Fraternal Order of Police Newark Lodge No. 12 v. City of Newark, 170 F.3d 359, 360 (3d Cir.
1999); see also Litzman v. New York City Police Dep't, No. 12 CIV. 4681 HB, 2013 WL
6049066, at *4 (S.D.N.Y. Nov. 15, 2013) (citing Fraternal Order for the proposition that
secular explanations for policy exemptions cannot be valued over religious explanations.).
Much like in Fraternal Order, here secular exemptions from the stay have been granted without
any concomitant religious exemptions. And, much like in Fraternal Order, no substantial
reason to avoid granting a religious exemption is present here. 11
C. Enjoining the beis din and its sirov constitutes a substantial burden on religion
Prohibiting the beis din from issuing its sirov is a substantial burden on the members of
the religious community who have petitioned the beis din. The members of this community have
chosen to abide by a religious norm -- a norm which requires that certain disputes by governed
by a religious tribunal. If the members of this community cannot express religious disapproval
for violation of this norm, then the Bankruptcy Court has effectively rewritten their religious
code -- rendering their rule in favor of religious tribunals a nullity.
The Court acted erroneously in assuming that the substantial burden here is the
bankruptcy courts resolution of an essentially commercial dispute, see 535 B.R. at 637 n.6,

11

Not only is no compelling state interest served here, but the Bankruptcy Code offers many less
restrictive means for ensuring the assets of the estate are managed effectively. The Code
provides a panoply of options, including appointing a trustee or an examiner. 11 U.S.C. 1104,
1106(a)-(c).

10

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when, in fact, the beis dins petitioners admit that the assets of the estate -- and their commercial
value -- will be controlled by the Bankruptcy Court. It is not commercial values that are at stake
here, but religious ones. The petitioners are not burdened by the bankruptcy filing itself, but are
burdened because they are prohibited from expressing religious disapproval at that filing.
Although the Bankruptcy Court assumed the communitys members were misguided in
invok[ing] a rabbinical court to decide (and interfere with) an essentially commercial dispute,
535 B.R. at 637, it is not for [a Court] to say that [] religious beliefs are mistaken or
insubstantial. Hobby Lobby, 134 S. Ct. at 2779. The courts narrow functionin this context is
to determine whether the line drawn reflects an honest conviction, and there is no dispute that it
does. Id. (internal quotation marks omitted). Because RFRA governs this action to enforce the
stay, and because the order against the beis din and its petitioners substantially burdens religion
without narrowly forwarding a compelling state interest, the Courts injunction and sanctions
violate RFRA.
III.

THE DEFENDANTS INVOCATION OF THE BEIS DIN DID NOT VIOLATE

THE AUTOMATIC STAY
An act does not violate the automatic stay merely because it may make Chapter 11

reorganization more difficult. Rather, an act violates the stay only when it falls under one of the
specific categories listed in 362(a) of the Bankruptcy Code. See, e.g., Picard v. Fairfield
Greenwich Ltd., 762 F.3d 199, 207 (2d Cir. 2014). Although the Bankruptcy Court found that
invoking the beis din violated 362(a)(1) and (3), 535 B.R. at 634., these findings were incorrect
as a matter of lawneither the beis din nor those petitioning it have violated the stay.12

12

Sections 362(a)(1) and (3) of the Bankruptcy Code, upon which the Court relied in
finding a stay violation, state, in relevant part, that a Bankruptcy petition,
operates as a stay, applicable to all entities, of
11

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Here, neither 362(a)(1) nor (3) were violated, because the beis din proceeding: (1)
could not have been commenced prior to the filing of the Chapter 11 case, (2) is not an action to
enforce a debt, and (3) is not an attempt to control property of the estate. Thus, neither
commencing the beis din nor issuance of its sirov is a violation of the automatic stay.13
A. The beis din could not have been commenced prior to the bankruptcy filing
For the use of the beis din to constitute a violation of 362(a)(1), the proceeding before
the beis din must have been one that was or could have been commenced before the
commencement of the [Chapter 11] casebut the harm complained of in the beis din was the
filing of the adversary proceeding in the Bankruptcy Court, an act that occurred after the Chapter
11 case began. While 362(a)(1) prevents piecemeal dismemberment of the debtors estate by
pursuit of pre-petition claims, it does not absolutely bar the pursuit of claims that arise postpetition.
B. Seeking the beis dins imposition of strictly religious sanctions does not constitute
control, as that term is defined by 362(a)(3)

(1) the commencement or continuation, including the issuance or employment of process,

of a judicial, administrative, or other action or proceeding against the debtor that was or
could have been commenced before the commencement of the case under this title, or to
recover a claim against the debtor that arose before the commencement of the case under
this title . . .
(3) any act to obtain possession of property of the estate or of property from the estate or
to exercise control over property of the estate . . .
11 U.S.C. 362.
13
Further, even if the stay was violated, the Bankruptcy Court erred in applying 362(k), given
that the Debtor is a corporate personnot a natural one. It is not the case, as the Bankruptcy
Court held, that [t]he Debtor's principals are individuals covered by 11 U.S.C. 362(k). 535
B.R. at 635 n.5. The Second Circuit has held that a bankruptcy court may impose sanctions
pursuant to 362(h) [now (k)] . . . only for violating a stay as to debtors who are natural persons.
In re Chateaugay Corp., 920 F.2d 183, 186-87 (2d Cir. 1990) (emphasis added). The principals
of the Debtor are natural persons, but they are not the Debtor; therefore, controlling law in the
Second Circuit makes 362(k) inapplicable.

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Of course, the stay does bar proceedings that are aimed at controlling property of the
estate, but, as explained supra, the beis din proceedings cannot exercise control over the estates
property -- the sirov only calls for a communal shunning and social ostracization. Although the
beis din proceedings were commenced in response to the adversary proceeding -- a proceeding
which is property of the estate -- the commencement of the beis din and the issuance of its sirov
do not constitute an act to exercise control over that proceeding. Voicing religious and moral
disapprovalwhich is all the beis din is empowered to dodoes not constitute control under
362(a)(3).
The standards for finding that an act constitutes an exercise of control over a cause of
action are high, for good reason. While a cause of action is property of the estate, it is uniquely
well-protected property, because it can only be utilized in or by permission of the court in which
the bankruptcy case is currently pending. See Marshall v. Picard (In re Bernard L. Madoff Inv.
Secs. LLC), 740 F.3d 81 (2d Cir. 2014) (bankruptcy court had power to disapprove settlement of
or issue injunctions against claims duplicative of those in which the estate had an interest).
Partially because of this protection, the category of acts that rise to the level of exercis[ing]
control over causes of action has been narrowly circumscribed. Fairfield Greenwich, 762 F.3d
at 207 (describing the two theoriesintertwinement and duplicative assertionunder which
control of a cause of action may be found).
Courts have generally recognized two sets of circumstances in which a party
impermissibly exercises control over intangible estate propertysuch as the cause of action
pursued in this adversary proceedingand neither circumstance is implicated here.

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1. The beis din is not intertwined with the cause of action

The first type of act that may be an exercise of control over intangible rights is one that is
intertwined with a cause of action of the estate. See 48th St. Steakhouse, Inc. v. Rockefeller
Group, Inc. (In re 48th St. Steakhouse), 835 F.2d 427, 431 (2d Cir. 1987)/
For an act to violate the stay it must be legally certainnot merely factually likely
to effect those rights. Fairfield Greenwich, 762 F.3d at 207 (We decline to extend our holding
in 48th St. Steakhouse to automatically stay actions taken against third parties that are only
factually likely, as opposed to legally certain, to impact estate property.); cf. Secs. Invr Prot.
Corp. v. Bernard L. Madoff Inv. Securities, LLC, 460 B.R. 106, 113 (Bankr. S.D.N.Y. 2011).
As discussed above, the beis din cannot legally impact the cause of action with which it is
alleged to interfere. Although the Debtorss principals may choose to respond to the beis dins
summons rather than face religious disapproval and shunning, there is no legal certainty that
they will do so. Thus, the exertion of socio-religious pressure at issue here is not sufficiently
intertwined with the debtors cause of action to control that action. In re Albion Disposal,
Inc., 217 B.R. 394, 406 (W.D.N.Y. 1997) ((a)(3) does not stay acts simply because they may
have an indirect effect of limiting the manner in which the debtor had intended to use his
property.).
2. The beis din is not duplicative of the cause of action
The other category of acts that the Second Circuit has recognized as exercising control
over a cause of action are those of creditors who assert, on their own behalf, a claim to which the
estate is entitled. See, e.g., In re Ampal-American Israel Corp., 502 B.R. 361, 373 (Bankr.
S.D.N.Y. 2013). This arises most often in cases where an alter ego cause of action belongs to a
debtor corporation, and not to the creditors or shareholders of that corporation. See e.g., Keene

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Case 7:15-cv-06408-CS Document 19-1 Filed 11/20/15 Page 19 of 23

Corp. v. Coleman (In re Keene Corp.), 164 B.R. 844, 854 (Bankr. S.D.N.Y. 1994). By using up
the cause of action, which can only be brought once, for its personal benefit, a creditor prevents
the estate from realizing the value of the action. Id.
Here, however, the Defendants religious claims belong to them alonethe estate has no
equivalent claim against its principals for failing to act in accordance with the dictates of
religious law. The assertion by the Defendants of their religious action in the beis din takes
nothing away from the Debtor, and cannot be swept into the reach of 362(a)(3) on this theory.
C. The beis din is not comparable to a debt-collection sign
The Bankruptcy Court saw the petitioning of the beis din not as a religious act, but rather
as an insincere and cynical attempt to control estate property through social pressureand thus
as impermissible as the public posting of a sign stating PLEASE PAY ME! in In re Collier,
410 B.R. 464 (Bankr. E.D. Tex. 2009). See, 535 B.R. at 636 (stating that it is hard to see how
the enforcement of the automatic stay here has any religious nature); id. at 638 (citing Collier).
But the sign in Collier is easily distinguished, as that sign was erected in order to collect a
particular debt, while here the Bais Chinuch is only seeking to express religious disapproval. In
Collier, the Court found that while embarrassing the Debtor in their shared community was
certainly a motive of the Defendant, such a motive had an objectiveto coerce the Debtor into
paying his debt. Collier, 410 B.R. at 473. Yet here, the Bais Chinuch was not attempting to
coerce the Debtor into paying [a] debt. Rather, embarrassing the Debtor in [the] shared
community was not only a motive of the Bais Chinuch, but its only objective. As the Collier
Court explained, actionsincluding public shamingthat are not an effort to collect an
underlying debt are not stay violations. 410 B.R. at 475 (citing Turner Advertising Co. v.
National Serv. Corp, 742 F.2d 859 (5th Cir. 1984); Tantilla v. Stonegate Sec. Servs., Ltd., 56 B.R.

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1014 (N.D.Ill. 1986)). Because the invocation of the beis din is not an effort to collect an
underlying debt, and thus poses no threat to the debtor's protections under the Code or to the
principles of equitable distribution, it is not a stay violation under Collier. 410 B.R. at 475.14
CONCLUSION
Because the effort by the bankruptcy tribunal to restrain the Bais Chinuch and other
individuals from invoking the beis din as a parallel non-coercive forum of religious conscience
violates both the Free Exercise Clause of the First Amendment and provisions of the Religious
Freedom Restoration Act, and because the invocation of the beis dins authority does not violate
the automatic stay, amici urge this Court to reverse the order of the Bankruptcy Court.
November 16, 2015
New York, New York
Respectfully submitted,

Burt Neuborne
40 Washington Square South
New York, New York 10012
212 998-6172
Burt.neuborne@nyu.edu
Attorney for Amici Curiae*
Amici gratefully note that this brief has been substantially prepared, under the
supervision of counsel, by the following students and alumnus of NYU School of
Law:
Jack Millman, Dan Nowicki, Max Raskin, James Salwen, and Michael Stachiw
cc: Clerk of the Court
Michael Levine, Esq. (via email)
14

The beis din-imposed shunning is distinguishable from the Collier sign in another respect.
Enjoining the erection of the sign only harmed the Collier creditor and his personal efforts at
debt collection, but enjoining the beis dins operation harms all who believe in the beis dins
importance in resolving inter-church disputes.

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Ira Tokayer, Esq. (via email)

Yitzchak Cohen, Esq. (via email)
Neil Siegel, Esq. (via email)
APPENDIX

Richard Epstein
Richard A. Epstein is the inaugural Laurence A. Tisch Professor of Law at NYU School of Law.
Prior to his joining the faculty, he was a visiting law professor at NYU from 2007 through 2009.
He has served as the Peter and Kirstin Bedford Senior Fellow at the Hoover Institution since
2000. Epstein is also the James Parker Hall Distinguished Service Professor of Law Emeritus
and a senior lecturer at the University of Chicago. His initial law school appointment was at the
University of Southern California from 1968 to 1972. Epstein received an LLD, honoris causa,
from the University of Ghent in 2003. He has been a member of the American Academy of Arts
and Sciences since 1985 and has been a senior fellow of the Center for Clinical Medical Ethics at
the University of Chicago Division of Biological Sciences, also since 1983. He served as editor
of the Journal of Legal Studies from 1981 to 1991, and of the Journal of Law and
Economics from 1991 to 2001. From 2001 to 2010, he was a director of the John M. Olin
Program in Law and Economics at the University of Chicago.
Professor Epstein has written numerous articles on a wide range of legal and interdisciplinary
subjects. He has taught courses in administrative law, antitrust law, civil procedure,
communications law, constitutional law, contracts, corporations, criminal law, employment
discrimination law, environmental law, food and drug law, health law and policy, legal history,
labor law, property, real estate development and finance, jurisprudence, labor law, land use
planning, patents, individual, estate and corporate taxation, Roman Law, torts, water law, and
workers' compensation.
Arthur J. Gonzalez
Arthur J. Gonzalez received an undergraduate degree in accounting from Fordham University in
1969 and a masters degree in education from Brooklyn College in 1974. Thereafter, he received
a J.D. from Fordham University School of Law in 1982 and received an LL.M. in taxation from
New York University School of Law in 1990. After receiving his J.D. degree, he began his legal
career as an attorney in the Office of Chief Counsel of the Internal Revenue Service earning the
Chief Counsels Special Achievement Award for three consecutive years. Following his tenure
at the IRS, he was in private practice until his appointment as an Assistant United States Trustee
in the Southern District of New York in 1991. Thereafter, he was appointed the United States
Trustee for Region 2 (Second Circuit) in 1993, serving in that position until his appointment to
the United States Bankruptcy Court for the Southern District of New York in 1995. At the
completion of his first term in 2009, he was reappointed to another term and became Chief Judge
in 2010. During his tenure on the bench, he has presided over numerous large complex Chapter
11 cases, including the Enron, WorldCom and Chrysler cases. Upon his retirement from the
bench in March 2012, he became a Senior Fellow at NYU School of Law where he had served as
an adjunct professor since 2008. Since his retirement he has been a court appointed examiner,
independent monitor, mediator and arbitrator.

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Michael McConnell
Michael W. McConnell is the Richard and Frances Mallery Professor and director of the
Constitutional Law Center at Stanford Law School, as well as Senior Fellow at the Hoover
Institution. He is a leading authority on freedom of speech and religion, the relation of individual
rights to government structure, originalism, and various other aspects of constitutional history
and constitutional law. He is author of numerous articles and co-author of two casebooks: The
Constitution of the United States (Foundation Press) and Religion and the Constitution (Aspen).
He is co-editor of Christian Perspectives on Legal Thought (Yale Univ. Press). Since 1996, he
has been a fellow of the American Academy of Arts and Sciences.
Professor McConnell brings wide practical experience to bear on his teaching and scholarship.
Before joining Stanford in 2009, he served as a circuit judge on the U.S. Court of Appeals for the
Tenth Circuit. He has argued 14 cases in the United States Supreme Court, most recently Horne
v. Department of Agriculture, in 2015. Before his appointment to the bench, McConnell was
Presidential Professor of Law at the S.J. Quinney College of Law at the University of Utah, and
prior to that the William B. Graham Professor of Law at the University of Chicago Law School.
He has taught six times as a visiting professor at Harvard Law School. McConnell was assistant
general counsel at the Office of Management and Budget, and Assistant to the Solicitor General
in the Department of Justice, under President Ronald Reagan, and a member of the Presidents
Intelligence Oversight Board from 1988-1990. He served as law clerk to then Chief Judge J.
Skelly Wright of the U.S. Court of Appeals for the District of Columbia Circuit, and to Justice
William J. Brennan Jr. of the U.S. Supreme Court. He is a graduate of Michigan State University
(1976) and the University of Chicago Law School (1979). He is of counsel to the law firm of
Kirkland & Ellis.
Burt Neuborne
Burt Neuborne is the Norman Dorsen Professor of Civil Liberties and founding Legal Director of
the Brennan Center for Justice at NYU Law School. For more than 50 years, he has been one of
the nation's foremost civil liberties lawyers, serving as National Legal Director of the ACLU
from 1981-86, Special Counsel to the NOW Legal Defense and Education Fund from 1990-1996,
and as a member of the New York City Human Rights Commission from 1988-1992. He has
argued numerous Supreme Court cases, and has litigated literally hundreds of important
constitutional cases in the state and federal courts. He challenged the constitutionality of the
Vietnam War, pioneered the flag burning cases, worked on the Pentagon Papers case, worked
with Justice Ruth Bader Ginsburg when she headed the ACLU Women's Rights Project,
anchored the ACLU's legal program during the Reagan years, and defended the Legal Services
program against unconstitutional attacks. From 1995 to 2007, he directed the legal program of
the Brennan Center, focusing on efforts to reinforce American democracy and secure campaign
finance reform. The Brennan Center was established at NYU in 1994 to honor Justice William
Brennan, Jr.s monumental contribution to American Law.
At the same time, Professor Neuborne has forged a national reputation as a constitutional scholar
and teacher. In 1990, he was the recipient of the University-wide Distinguished Teacher Award

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at New York University for his work in teaching Civil Procedure, Evidence, Federal Courts and
Constitutional Law. He is the author of four books and over 20 law review articles on diverse
areas of constitutional law and procedure. Among his best known scholarly works is the twovolume Political and Civil Rights in the United States, which he co-authored with NYU
colleagues Norman Dorsen and Sylvia Law and the Deputy Solicitor General of the United
States, Paul Bender. His 1992 lectures on American law at Universitat Pompeu Fabra in
Barcelona have been translated and published in Spanish. In 2001, in recognition of his
scholarship and his work in the courts, Professor Neuborne was elected to membership in the
American Academy of Arts and Sciences. In 2012, Professor Neuborne delivered nine Jay Iselin
memorial lectures at Cooper Union on the American constitution. His most recent book
is Madison's Music: On Reading the First Amendment." (The New Press, 2015)
Since 1996 Professor Neuborne has served as a principal counsel in a series of lawsuits seeking
to recover property unjustly taken from Holocaust victims by Swiss banks and German
corporations during the Nazi era. The litigation has succeeded in assembling more than $7.5
billion for distribution to 450,000 Holocaust victims and their families throughout the world.
Professor Neuborne was appointed by the Court to oversee the $1.25 Swiss bank settlement, and
was appointed by the United States to serve on the Board of Trustees of the German Foundation
Remembrance, Responsibility and Future, established to distribute the $5.2 billion settlement
in the German slave labor litigation.

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