Background
Tammy R. Phillips and her law firm sued Chapter seven trustee Amy Goldman in her personal capacity, alleging gross negligence and breach of fiduciary duty for failing to preserve and safeguard real estate assets in the debtor’s estate. The trustee moved to dismiss based on quasi-judicial immunity and the statute of limitations. The bankruptcy court granted dismissal, and the district court affirmed the immunity ruling while reversing the statute of limitations ruling, remanding for potential amendment of the complaint.
The court’s reasoning
The en banc court held that quasi-judicial immunity applies only to functions involving the exercise of discretionary judgment essential to the authoritative adjudication of private rights. The court found that gathering estate property, investigating finances, and operating a business on a short-term basis are administrative functions akin to property management, not adjudicative functions. Therefore, the trustee was not entitled to quasi-judicial immunity. Regarding derived immunity, the court noted that the record showed no court orders approving the trustee’s inaction, so the trustee did not meet the four required elements. The court also concluded it had jurisdiction because the plaintiff’s counsel represented they would not amend the complaint, making the district court’s order effectively final.
These functions did not determine how assets would be divided among creditors, but rather called upon the trustee to act as a property manager.
Phillips v. Goldman, No. 24-2249 (9th Cir. May 7, 2026)
What it means going forward
The decision limits the absolute immunity of bankruptcy trustees for administrative acts, exposing them to potential liability for negligence in managing estate assets unless they obtain specific court approval under the derived immunity doctrine.
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