GOLDMAN SACHS BANK USA, V RHEA ANN BROWN; GREGORY KEVIN MAZE
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 25-1439 (4th Circuit, Mar 18,2026) Published
- Tag(s):
-
- Ruling:
- Over a dissent, the Fourth Circuit held that a creditor cannot compel arbitration of a debtor's claim for violation of the automatic stay under § 362(k), even under a valid arbitration agreement. The majority reasoned that arbitration inherently conflicts with the Bankruptcy Code: it undermines centralization of proceedings, erodes the stay's critical function of protecting debtors, impairs uniformity, bypasses bankruptcy courts' specialized expertise, and neutralizes the deterrent effect of punitive damages awarded for willful stay violations.
- Procedural context:
- The dispute originated in two separate bankruptcy filings. Rhea Ann Brown filed a Chapter 13 petition in June 2023, and Gregory Kevin Maze filed a Chapter 7 petition in November 2023. Both scheduled credit card debt owed to Goldman Sachs Bank USA. Within days of each filing, Goldman Sachs was given notice of the bankruptcy cases and the imposition of the stay. Still, Goldman Sachs continued collection efforts. Brown alleged that Goldman Sachs contacted her by email, phone, and letters for more than six months after her filing. Maze alleged similar conduct for more than three months, with a Goldman Sachs representative telling him during a February 2024 telephone call that it was "not her job to call [his] bankruptcy counsel, but it was [his] job to pay his bills."
Brown and Maze filed an adversary proceeding, alleging that Goldman Sachs' post-petition collection activities constituted willful violations of the automatic stay under 11 U.S.C. § 362(a)(3) and (6). They sought injunctive relief, compensatory damages, punitive damages, and attorneys' fees under §§ 362(k) and 105. The debtors also purported to represent a class under Federal Rule of Bankruptcy Procedure 7023.
Goldman Sachs moved to compel arbitration pursuant to the arbitration clause in each debtor's credit card agreement, which permitted either party to elect "individual binding arbitration" for any claim. The agreements also expressly prohibited class-wide arbitration and provided that "[c]laims may be submitted to arbitration on an individual basis only." Goldman Sachs also moved to stay the adversary proceeding pending arbitration.
The bankruptcy court denied the motion, and Goldman Sachs appealed to the United States District Court for the Western District of Virginia, which affirmed.
Goldman Sachs then appealed to the Fourth Circuit., which also affirmed.
- Facts:
- The two debtors and plaintiffs below were consumer debtors who held credit card accounts with Goldman Sachs Bank USA. Rhea Ann Brown filed a Chapter 13 petition in the bankruptcy court in June 2023, and Gregory Kevin Maze filed a Chapter 7 petition in November 2023. Each debtor scheduled his or her Goldman Sachs credit card debt.
Both debtors' credit card agreements contained a broad arbitration clause. The clause permitted either party to elect "individual binding arbitration" for any claim, without the other's consent, unless the claim had already been filed in court and trial had begun or final judgment had been entered. The agreements expressly prohibited class-wide arbitration, providing that "[c]laims may be submitted to arbitration on an individual basis only" and that claims "may not be joined or consolidated in arbitration with any Claim of any other person or be arbitrated on a class basis." The arbitrator was further limited to awarding "relief only in favor of [an] individual Claim."
Despite receiving notice of the bankruptcy cases and thus the imposition of the automatic stay, Goldman Sachs continued its collection efforts against both debtors, repeatedly representing to them, "Your account may be reported as charged off to the credit reporting bureaus."
Brown's experience was particularly prolonged. She alleged that Goldman Sachs continued to contact her by email, letters, and telephone for more than six months after her bankruptcy filing — even after she had informed Goldman Sachs by email, telephone, and through counsel that its collection efforts violated the automatic stay.
Maze's experience was similar. He alleged that Goldman Sachs representatives continued to contact him by email and telephone for more than three months following his filing. The conduct culminated with a telephone call in which Maze provided the Goldman Sachs representative with his bankruptcy counsel's contact information. But the representative replied that it "was not her job to call [his] bankruptcy counsel, but it was [his] job to pay his bills."
Brown and Maze also alleged that Goldman Sachs had engaged in similar conduct in at least two other bankruptcy cases pending in the same bankruptcy court, suggesting that the stay violations were not isolated incidents but part of a broader pattern of collection activity.
Based on this conduct, the debtors commenced an adversary proceeding in the bankruptcy court, alleging that Goldman Sachs' post-petition collection activities constituted willful violations of the automatic stay under 11 U.S.C. §§ 362(a)(3) and (6). They sought injunctive relief, compensatory damages, punitive damages, and attorneys' fees pursuant to §§ 362(k) and 105. The debtors also purported to represent a nationwide class under Federal Rule of Bankruptcy Procedure 7023, consisting of all individuals in the United States who were currently in, or had formerly been in, a consumer bankruptcy case from whom Goldman Sachs made a post-petition demand for pre-petition debt.
- Judge(s):
- Judge Niemeyer wrote the opinion, in which Judge Harris joined. Judge King wrote a dissenting opinion.
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