Celotex Corporation v. Edwards

PETITIONER: Celotex Corporation
RESPONDENT: Edwards
LOCATION: U.S. Department of Transportation

DOCKET NO.: 93-1504
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 514 US 300 (1995)
ARGUED: Dec 06, 1994
DECIDED: Apr 19, 1995

ADVOCATES:
Brent M. Rosenthal - on behalf of the Respondents
Jeffrey W. Warren - on behalf of the Petitioner

Facts of the case

Question

Media for Celotex Corporation v. Edwards

Audio Transcription for Oral Argument - December 06, 1994 in Celotex Corporation v. Edwards

Audio Transcription for Opinion Announcement - April 19, 1995 in Celotex Corporation v. Edwards

William H. Rehnquist:

I have the opinion of the court to announce number 93-1504 Celotex Corporation v. Edwards.

In this case, Bennie and Joann Edwards recover the judgment against the Celotex Corporation in the Federal Court in Texas on their claim of asbestos related personal injuries.

Celotex posted a supersedeas bond to stay the execution of the judgment on appeal and immediately after the Court of Appeals for the Fifth Circuit affirmed the judgment, Celotex filed for Chapter 11, Bankruptcy Protection in the Bankruptcy Court for the Middle District of Florida.

The Bankruptcy Court issued a temporary injunction prohibiting the Edwards and other similarly situated from executing against the sureties on Celotex’s supersedeas bond without first obtaining the permission of the Bankruptcy Court.

The Edwards thereafter requested permission of the Texas District Court to execute against the surety on the supersedeas bond in their case and permission was granted by the District Court and appalled by the Court of Appeals.

In an opinion filed with the clerk today, we reverse the Fifth Circuit and hold that the Edwards were obliged to obey the temporary injunction issued by the Bankruptcy Court.

It is well established that person subject to an injunctive order issued by a court with jurisdiction are expected to obey that decree until it is modified or reversed, even if they have proper grounds to object to the order.

The Bankruptcy Court here have jurisdiction to issue the temporary injunction because the Edwards proceeding against the surety on the supersedeas bond is at least related to Celotex bankruptcy within the meaning of the appropriate statutory section.

We don’t address here whether the Bankruptcy Court acted properly in issuing the temporary injunction.

The Bankruptcy Court’s orders are to be respected until its decision is reversed for error by orderly review, which must be conducted in the Federal Courts in Florida and not in the Federal Courts in Texas.

Justice Stevens has filed a dissenting opinion, which is joined by Justice Ginsburg.