Stern v. Marshall

No. 10-179.
Argued January 18, 2011

U.S. Supreme Court
Stern v. Marshall
564 U.S. 462 (2011) •
131 S. Ct. 2594 • 180 L. Ed. 2d 475
Decided Jun 23, 2011
No. 10–179. CHIEF JUSTICE ROBERTS delivered the

opinion of the Court.
06-23-2011
Kent L. Richland, Los Angeles, CA, for Petitioner.
Howard K. STERN, Executor of the Estate of
Vickie Lynn Marshall, Petitioner, v. Elaine T. Malcolm L. Stewart, for United States as amicus
MARSHALL, Executrix of the Estate of E. Pierce curiae, by special leave of the Court, supporting
Marshall. the Petitioner.
Kent L. Richland, Los Angeles, CA, for Petitioner. Roy T. Engler, Jr., Washington, DC, for
Malcolm L. Stewart, for United States as amicus Respondent.
curiae, by special leave of the Court, supporting
Roy T. Englert, Jr., Robbins, Russell, Englert,
the Petitioner. Roy T. Engler, Jr., Washington, DC,
Orseck, Untreiner & Sauber LLP, Washington,
for Respondent. Roy T. Englert, Jr., Robbins,
2600 DC, *2600 G. Eric Brunstad, Jr., Collin O'Connor
Russell, Englert, Orseck, Untreiner & Sauber LLP,
Udell, Matthew J. Delude, Dechert LLP, Hartford,
Washington, DC, G. Eric Brunstad, Jr., Collin
CT, Seth P. Waxman, Craig Goldblatt, Danielle
O'Connor Udell, Matthew J. Delude, Dechert LLP,
Spinelli, Wilmer Cutler Pickering Hale and Dorr,
Hartford, CT, Seth P. Waxman, Craig Goldblatt,
LLP, Washington, DC, Kenneth N. Klee, Daniel J.
Danielle Spinelli, Wilmer Cutler Pickering Hale
Bussel, Whitman L. Holt, Klee, Tuchin,
and Dorr, LLP, Washington, DC, Kenneth N. Klee,
Bogdanoff & Stern LLP, Los Angeles, CA, Don
Daniel J. Bussel, Whitman L. Holt, Klee, Tuchin,
Jackson, Ware, Jackson, Lee & Chambers, LLP,
Bogdanoff & Stern LLP, Los Angeles, CA, Don
Houston, TX, Sanford Svetcov, Robbins Geller
Jackson, Ware, Jackson, Lee & Chambers, LLP,
Rudman & Dowd LLP, San Francisco, CA, Joseph
Houston, TX, Sanford Svetcov, Robbins Geller
A. Eisenberg, Julia J. Rider, Jeffer, Mangels,
Rudman & Dowd LLP, San Francisco, CA, Joseph
Butler & Marmaro LLP, Los Angeles, CA, for
A. Eisenberg, Julia J. Rider, Jeffer, Mangels,
Respondent.
Butler & Marmaro LLP, Los Angeles, CA, for
Respondent. Philip W. Boesch, Jr., The Boesch Philip W. Boesch, Jr., The Boesch Law Group,
Law Group, Santa Monica, California, Bruce S. Santa Monica, California, Bruce S. Ross, Vivian
Ross, Vivian L. Thoreen, Holland & Knight LLP, L. Thoreen, Holland & Knight LLP, Los Angeles,
Los Angeles, California, Kent L. Richland, Alan California, Kent L. Richland, Alan Diamond,
Diamond, Edward L. Xanders, Greines, Martin, Edward L. Xanders, Greines, Martin, Stein &
Stein & Richland LLP, Los Angeles, California, Richland LLP, Los Angeles, California, for
for Petitioner Howard K. Stern, Executor of the Petitioner Howard K. Stern, Executor of the Estate
Estate of Vickie Lynn Marshall. of Vickie Lynn Marshall.
1
Stern v. Marshall 564 U.S. 462 (2011)
CHIEF JUSTICE ROBERTS delivered the Although the history of this litigation is
468 opinion of the Court.*468 This "suit has, in course complicated, its resolution ultimately turns on
of time, become so complicated, that ... no two ... very basic principles. Article III, § 1, of the
lawyers can talk about it for five minutes, without Constitution commands that "[t]he judicial Power
coming to a total disagreement as to all the of the United States, shall be vested in one
premises. Innumerable children have been born supreme Court, and in such inferior Courts as the
into the cause: innumerable young people have Congress may from time to time ordain and
married into it;" and, sadly, the original parties establish." That Article further provides that the
"have died out of it." A "long procession of judges of those courts shall hold their offices
[judges] has come in and gone out" during that during good behavior, without diminution of
time, and still the suit "drags its weary length 2601 salary. Ibid. Those requirements *2601 of Article III
before the Court." were not honored here. The Bankruptcy Court in
this case exercised the judicial power of the
Those words were not written about this case, see
United States by entering final judgment on a
C. Dickens, Bleak House, in 1 Works of Charles
common law tort claim, even though the judges of
Dickens 4–5 (1891), but they could have been.
such courts enjoy neither tenure during good
This is the second time we have had occasion to
behavior nor salary protection. We conclude that,
weigh in on this long-running dispute between
although the Bankruptcy Court had the statutory
Vickie Lynn Marshall and E. Pierce Marshall over
authority to enter judgment on Vickie's
the fortune of J. Howard Marshall II, a man
counterclaim, it lacked the constitutional authority
believed to have been one of the richest people in
to do so.
Texas. The Marshalls' litigation has worked its
way through state and federal courts in Louisiana, I
Texas, and California, and two of those courts—a
Because we have already recounted the facts and
Texas state probate court and the Bankruptcy
procedural history of this case in detail, see
Court for the Central District of California—have
Marshall v. Marshall, 547 U.S. 293, 300–305, 126
reached contrary decisions on its merits. The
S.Ct. 1735, 164 L.Ed.2d 480 (2006), we do not
Court of Appeals below held that the Texas state
repeat them in full here. Of current relevance are
decision controlled, after concluding that the
two claims Vickie filed in an attempt to secure
Bankruptcy Court lacked the authority to enter
half of J. Howard's fortune. Known to the public
final judgment on a counterclaim that Vickie
as Anna Nicole Smith, Vickie was J. Howard's
469 brought against *469 Pierce in her bankruptcy
third wife and married him about a year before his
proceeding.1 To determine whether the Court of
470 death. *470 Id., at 300, 126 S.Ct. 1735; see In
Appeals was correct in that regard, we must
reMarshall, 392 F.3d 1118, 1122 (C.A.9 2004).
resolve two issues: (1) whether the Bankruptcy
Although J. Howard bestowed on Vickie many
Court had the statutory authority under 28 U.S.C.
monetary and other gifts during their courtship
§ 157(b) to issue a final judgment on Vickie's
and marriage, he did not include her in his will.
counterclaim; and (2) if so, whether conferring
547 U.S., at 300, 126 S.Ct. 1735. Before J.
that authority on the Bankruptcy Court is
Howard passed away, Vickie filed suit in Texas
constitutional.
state probate court, asserting that Pierce—J.
1 Because both Vickie and Pierce passed Howard's younger son—fraudulently induced J.
away during this litigation, the parties in Howard to sign a living trust that did not include
this case are Vickie's estate and Pierce's her, even though J. Howard meant to give her half
estate. We continue to refer to them as
"Vickie" and "Pierce."
2
his property. Pierce denied any fraudulent activity over the counterclaim was limited because
and defended the validity of J. Howard's trust and, Vickie's counterclaim was not a "core proceeding"
eventually, his will. 392 F.3d, at 1122–1123, 1125. under 28 U.S.C. § 157(b)(2)(C). See 257 B.R., at
39. As explained below, bankruptcy courts may
After J. Howard's death, Vickie filed a petition for
2602 hear and enter final *2602 judgments in "core
bankruptcy in the Central District of California.
proceedings" in a bankruptcy case. In non-core
Pierce filed a complaint in that bankruptcy
proceedings, the bankruptcy courts instead submit
proceeding, contending that Vickie had defamed
proposed findings of fact and conclusions of law
him by inducing her lawyers to tell members of
to the district court, for that court's review and
the press that he had engaged in fraud to gain
issuance of final judgment. The Bankruptcy Court
control of his father's assets. 547 U.S., at 300–301,
in this case concluded that Vickie's counterclaim
126 S.Ct. 1735; In re Marshall, 600 F.3d 1037,
was "a core proceeding" under § 157(b)(2)(C), and
1043–1044 (C.A.9 2010). The complaint sought a
the court therefore had the "power to enter
declaration that Pierce's defamation claim was not
judgment" on the counterclaim under § 157(b)(1).
dischargeable in the bankruptcy proceedings. Ibid.
Id., at 40.
; see 11 U.S.C. § 523(a). Pierce subsequently filed
a proof of claim for the defamation action, The District Court disagreed. It recognized that
meaning that he sought to recover damages for it "Vickie's counterclaim for tortious interference
from Vickie's bankruptcy estate. See § 501(a). falls within the literal language" of the statute
Vickie responded to Pierce's initial complaint by designating certain proceedings as "core," see §
asserting truth as a defense to the alleged 157(b)(2)(C), but understood this Court's
defamation and by filing a counterclaim for precedent to "suggest[ ] that it would be
tortious interference with the gift she expected unconstitutional to hold that any and all
from J. Howard. As she had in state court, Vickie counterclaims are core." 264 B.R. 609, 629–630
alleged that Pierce had wrongfully prevented J. (C.D.Cal.2001) (citing Northern Pipeline Constr.
Howard from taking the legal steps necessary to Co. v. Marathon Pipe Line Co., 458 U.S. 50, 79, n.
provide her with half his property. 547 U.S., at 31, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982)
301, 126 S.Ct. 1735. (plurality opinion)). The District Court
accordingly concluded that a "counterclaim should
On November 5, 1999, the Bankruptcy Court
not be characterized as core" when it "is only
issued an order granting Vickie summary
somewhat related to the claim against which it is
judgment on Pierce's claim for defamation. On
asserted, and when the unique characteristics and
September 27, 2000, after a bench trial, the
context of the counterclaim place it outside of the
Bankruptcy Court issued a judgment on Vickie's
normal type of set-off or other counterclaims that
counterclaim in her favor. The court later awarded
customarily arise." 264 B.R., at 632.
Vickie over $400 million in compensatory
471 damages and $25 million in punitive *471 damages. Because the District Court concluded that Vickie's
600 F.3d, at 1045; see 253 B.R. 550, 561–562 counterclaim was not core, the court determined
(Bkrtcy.Ct.C.D.Cal.2000) ; 257 B.R. 35, 39–40 472 that it was required *472 to treat the Bankruptcy
(Bkrtcy.Ct.C.D.Cal.2000). Court's judgment as "proposed[,] rather than
final," and engage in an " independent review" of
In post-trial proceedings, Pierce argued that the
the record. Id., at 633; see 28 U.S.C. § 157(c)(1).
Bankruptcy Court lacked jurisdiction over Vickie's
Although the Texas state court had by that time
counterclaim. In particular, Pierce renewed a
conducted a jury trial on the merits of the parties'
claim he had made earlier in the litigation,
dispute and entered a judgment in Pierce's favor,
asserting that the Bankruptcy Court's authority
the District Court declined to give that judgment
3
preclusive effect and went on to decide the matter 2 One judge wrote a separate concurring
itself. 271 B.R. 858, 862–867 (C.D.Cal.2001) ; see opinion. He concluded that "Vickie's
275 B.R. 5, 56–58 (C.D.Cal.2002). Like the counterclaim ... [wa]s not a core
proceeding, so the Texas probate court
Bankruptcy Court, the District Court found that
judgment preceded the district court
Pierce had tortiously interfered with Vickie's
judgment and controls." 600 F.3d, at 1065
expectancy of a gift from J. Howard. The District
(Kleinfeld, J.). The concurring judge also
Court awarded Vickie compensatory and punitive
"offer[ed] additional grounds" that he
damages, each in the amount of $44,292,767.33.
believed required judgment in Pierce's
Id., at 58. favor. Ibid. Pierce presses only one of those
additional grounds here; it is discussed
The Court of Appeals reversed the District Court
below, in Part II–C.
on a different ground, 392 F.3d, at 1137, and we—
in the first visit of the case to this Court—reversed We again granted certiorari. 561 U.S. ––––, 131
the Court of Appeals on that issue. 547 U.S., at S.Ct. 63, 177 L.Ed.2d 1152 (2010).
314–315, 126 S.Ct. 1735. On remand from this
Court, the Court of Appeals held that § 157 II
mandated "a two-step approach" under which a A
bankruptcy judge may issue a final judgment in a
proceeding only if the matter both "meets With certain exceptions not relevant here, the
Congress' definition of a core proceeding and district courts of the United States have "original
arises under or arises in title 11," the Bankruptcy and exclusive jurisdiction of all cases under title
Code. 600 F.3d, at 1055. The court also reasoned 11." 28 U.S.C. § 1334(a). Congress has divided
that allowing a bankruptcy judge to enter final bankruptcy proceedings into three categories:
judgments on all counterclaims raised in those that "aris[e] under title 11"; those that
bankruptcy proceedings "would certainly run "aris[e] in" a Title 11 case; and those that are
afoul" of this Court's decision in Northern "related to a case under title 11." § 157(a). District
Pipeline . 600 F.3d, at 1057. With those concerns courts may refer any or all such proceedings to the
in mind, the court concluded that "a counterclaim bankruptcy judges of their district, ibid., which is
under § 157(b)(2)(C) is properly a ‘core’ how the Bankruptcy Court in this case came to
proceeding ‘arising in a case under’ the preside over Vickie's bankruptcy proceedings.
[Bankruptcy] Code only if the counterclaim is so District courts also may withdraw a case or
closely related to [a creditor's] proof of claim that proceeding referred to the bankruptcy court "for
the resolution of the counterclaim is necessary to cause shown." § 157(d). Since Congress enacted
resolve the allowance or disallowance of the claim the Bankruptcy Amendments and Federal
itself." Id., at 1058 (internal quotation marks Judgeship Act of 1984 (the 1984 Act), bankruptcy
omitted; second brackets added). The court ruled judges for each district have been appointed to 14–
that Vickie's counterclaim did not meet that test. year terms by the courts of appeals for the circuits
473 Id., at 1059. That holding made "the *473 Texas in which their district is located. § 152(a)(1).
probate court's judgment ... the earliest final
The manner in which a bankruptcy judge may act
judgment entered on matters relevant to this
on a referred matter depends on the type of
proceeding," and therefore the Court of Appeals
474 proceeding involved. *474 Bankruptcy judges may
concluded that the District Court should have
hear and enter final judgments in "all core
2603 "afford[ed] *2603 preclusive effect" to the Texas
proceedings arising under title 11, or arising in a
"court's determination of relevant legal and factual
case under title 11." § 157(b)(1). "Core
issues." Id., at 1064–1065.2
proceedings include, but are not limited to" 16
4
different types of matters, including "(J) objections to discharges;

"counterclaims by [a debtor's] estate against "(K) determinations of the validity, extent,
persons filing claims against the estate." § 157(b) or priority of liens;
2604 (2)(C).3 Parties *475 may appeal final *2604
475 "(L) confirmations of plans;
judgments of a bankruptcy court in core "(M) orders approving the use or lease of
proceedings to the district court, which reviews property, including the use of cash
them under traditional appellate standards. See § collateral;
158(a) ; Fed. Rule Bkrtcy. Proc. 8013. "(N) orders approving the sale of property
other than property resulting from claims
3 In full, §§ 157(b)(1)-(2) provides:
brought by the estate against persons who
"(1) Bankruptcy judges may hear and have not filed claims against the estate;
determine all cases under title 11 and all
"(O) other proceedings affecting the
core proceedings arising under title 11, or
liquidation of the assets of the estate or the
arising in a case under title 11, referred
adjustment of the debtor-creditor or the
under subsection (a) of this section, and
equity security holder relationship, except
may enter appropriate orders and
personal injury tort or wrongful death
judgments, subject to review under section
claims; and
158 of this title.
"(P) recognition of foreign proceedings and
"(2) Core proceedings include, but are not
other matters under chapter 15 of title 11."
limited to—
"(A) matters concerning the administration When a bankruptcy judge determines that a
of the estate; referred "proceeding ... is not a core proceeding
"(B) allowance or disallowance of claims but ... is otherwise related to a case under title 11,"
against the estate or exemptions from the judge may only "submit proposed findings of
property of the estate, and estimation of fact and conclusions of law to the district court." §
claims or interests for the purposes of 157(c)(1). It is the district court that enters final
confirming a plan under chapter 11, 12, or judgment in such cases after reviewing de novo
13 of title 11 but not the liquidation or
any matter to which a party objects. Ibid.
estimation of contingent or unliquidated
personal injury tort or wrongful death B
claims against the estate for purposes of
Vickie's counterclaim against Pierce for tortious
distribution in a case under title 11;
interference is a "core proceeding" under the plain
"(C) counterclaims by the estate against
text of § 157(b)(2)(C). That provision specifies
persons filing claims against the estate;
that core proceedings include "counterclaims by
"(D) orders in respect to obtaining credit;
the estate against persons filing claims against the
"(E) orders to turn over property of the
estate." In past cases, we have suggested that a
estate;
proceeding's "core" status alone authorizes a
"(F) proceedings to determine, avoid, or
bankruptcy judge, as a statutory matter, to enter
recover preferences;
final judgment in the proceeding. See, e.g.,
"(G) motions to terminate, annul, or
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 50,
modify the automatic stay;
109 S.Ct. 2782, 106 L.Ed.2d 26 (1989)
"(H) proceedings to determine, avoid, or
(explaining that Congress had designated certain
recover fraudulent conveyances;
actions as " ‘core proceedings,’ which bankruptcy
"(I) determinations as to the judges may adjudicate and in which they may
dischargeability of particular debts;
issue final judgments, if a district court has
5
referred the matter to them" (citations omitted)). proceeding that is otherwise related to a case
We have not directly addressed the question, under title 11." Two options. The statute does not
however, and Pierce argues that a bankruptcy suggest that any other distinctions need be made.
judge may enter final judgment on a core
Under our reading of the statute, core proceedings
proceeding only if that proceeding also "aris[es]
are those that arise in a bankruptcy case or under
in" a Title 11 case or "aris[es] under" Title 11
Title 11. The detailed list of core proceedings in §
itself. Brief for Respondent 51 (internal quotation
157(b)(2) provides courts with ready examples of
marks omitted).
such matters. Pierce's reading of § 157, in contrast,
Section 157(b)(1) authorizes bankruptcy courts to supposes that some core proceedings will arise in
"hear and determine all cases under title 11 and all a Title 11 case or under Title 11 and some will not.
core proceedings arising under title 11, or arising Under that reading, the statute provides no
in a case under title 11." As written, § 157(b)(1) is guidance on how to tell which are which.
ambiguous. The "arising under" and "arising in"
We think it significant that Congress failed to
phrases might, as Pierce suggests, be read as
provide any framework for identifying or
referring to a limited category of those core
adjudicating the asserted category of core but not
476 proceedings *476 that are addressed in that section.
477 "arising" proceedings, given the otherwise *477
On the other hand, the phrases might be read as
detailed provisions governing bankruptcy court
simply describing what core proceedings are:
authority. It is hard to believe that Congress would
matters arising under Title 11 or in a Title 11 case.
go to the trouble of cataloging 16 different types
In this case the structure and context of § 157
of proceedings that should receive "core"
contradict Pierce's interpretation of § 157(b)(1).
treatment, but then fail to specify how to
As an initial matter, Pierce's reading of the statute determine whether those matters arise under Title
necessarily assumes that there is a category of core 11 or in a bankruptcy case if—as Pierce asserts—
proceedings that neither arise under Title 11 nor the latter inquiry is determinative of the
arise in a Title 11 case. The manner in which the bankruptcy court's authority.
statute delineates the bankruptcy courts' authority,
Pierce argues that we should treat core matters that
however, makes plain that no such category exists.
arise neither under Title 11 nor in a Title 11 case
Section 157(b)(1) authorizes bankruptcy judges to
as proceedings "related to" a Title 11 case. Brief
enter final judgments in "core proceedings arising
for Respondent 60 (internal quotation marks
under title 11, or arising in a case under title 11."
omitted). We think that a contradiction in terms. It
Section 157(c)(1) instructs bankruptcy judges to
does not make sense to describe a "core"
instead submit proposed findings in "a proceeding
bankruptcy proceeding as merely "related to" the
that is not a core proceeding but that is otherwise
bankruptcy case; oxymoron is not a typical feature
related to a case under title 11." Nowhere does §
of congressional drafting. See Northern Pipeline,
157 specify what bankruptcy courts are to do with
458 U.S., at 71, 102 S.Ct. 2858 (plurality opinion)
respect to the category of matters that Pierce posits
(distinguishing "the restructuring of debtor-
—core proceedings that do not arise under Title 11
creditor relations, which is at the core of the
or in a Title 11 case. To the contrary, § 157(b)(3)
federal bankruptcy power, ... from the adjudication
only instructs a bankruptcy judge to "determine,
of state-created private rights"); Collier on
2605 *2605 on the judge's own motion or on timely
Bankruptcy ¶ 3.02[2], p. 3–26, n. 5 (16th ed.
motion of a party, whether a proceeding is a core
2010) ("The terms ‘non-core’ and ‘related’ are
proceeding under this subsection or is a
synonymous"); see also id., at 3–26, ("The
phraseology of section 157 leads to the conclusion
6
that there is no such thing as a core matter that is court therefore necessarily lacked jurisdiction over
‘related to’ a case under title 11. Core proceedings Vickie's counterclaim as well. Brief for
are, at most, those that arise in title 11 cases or Respondent 65–66.
arise under title 11" (footnote omitted)). And, as
Vickie objects to Pierce's statutory analysis across
already discussed, the statute simply does not
the board. To begin, Vickie contends that § 157(b)
provide for a proceeding that is simultaneously
(5) does not address subject matter jurisdiction at
core and yet only related to the bankruptcy case.
all, but simply specifies the venue in which
See § 157(c)(1) (providing only for "a proceeding
"personal injury tort and wrongful death claims"
that is not a core proceeding but that is otherwise
should be tried. See Reply Brief for Petitioner 16–
related to a case under title 11").
17, 19; see also Tr. of Oral Arg. 23 (Deputy
As we explain in Part III, we agree with Pierce Solicitor General) (Section "157(b)(5) is in [the
that designating all counterclaims as "core" United States'] view not jurisdictional"). Given the
proceedings raises serious constitutional concerns. limited scope of that provision, Vickie argues, a
Pierce is also correct that we will, where possible, party may waive or forfeit any objections under §
construe federal statutes so as "to avoid serious 157(b)(5), in the same way that a party may waive
doubt of their constitutionality." Commodity or forfeit an objection to the bankruptcy court
Futures Trading Comm'n v. Schor, 478 U.S. 833, finally resolving a non-core claim. Reply Brief for
841, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986) 479 Petitioner 17–20; *479 see § 157(c)(2) (authorizing
478 (internal *478 quotation marks omitted). But that the district court, "with the consent of all the
"canon of construction does not give [us] the parties to the proceeding," to refer a "related to"
prerogative to ignore the legislative will in order matter to the bankruptcy court for final judgment).
to avoid constitutional adjudication." Ibid. In this Vickie asserts that in this case Pierce consented to
case, we do not think the plain text of § 157(b)(2) the Bankruptcy Court's adjudication of his
(C) leaves any room for the canon of avoidance. defamation claim, and forfeited any argument to
We would have to "rewrit[e]" the statute, not the contrary, by failing to seek withdrawal of the
interpret it, to bypass the constitutional issue § claim until he had litigated it before the
157(b)(2)(C) presents. Id., at 841, 106 S.Ct. 3245 Bankruptcy Court for 27 months. Id., at 20–23. On
(internal quotation marks omitted). That we may the merits, Vickie contends that the statutory
not do. We agree with Vickie that § 157(b)(2)(C) phrase "personal injury tort and wrongful death
permits the bankruptcy court to enter a final claims" does not include non-physical torts such
judgment on her tortious interference as defamation. Id., at 25–26.
2606 counterclaim.*2606 C
We need not determine what constitutes a
Pierce argues, as another alternative to reaching "personal injury tort" in this case because we
the constitutional question, that the Bankruptcy agree with Vickie that § 157(b)(5) is not
Court lacked jurisdiction to enter final judgment jurisdictional, and that Pierce consented to the
on his defamation claim. Section 157(b)(5) Bankruptcy Court's resolution of his defamation
provides that "[t]he district court shall order that claim.4 Because "[b]randing a rule as going to a
personal injury tort and wrongful death claims court's subject-matter jurisdiction alters the normal
shall be tried in the district court in which the 2607 operation of our adversarial *480 *2607
480
bankruptcy case is pending, or in the district court
4 Although Pierce suggests that
in the district in which the claim arose." Pierce
consideration of "the 157(b)(5) issue"
asserts that his defamation claim is a "personal
would facilitate an "easy" resolution of the
injury tort," that the Bankruptcy Court therefore case, Tr. of Oral Arg. 47–48, he is
had no jurisdiction over that claim, and that the
7
mistaken. Had Pierce preserved his Congress does not rank a statutory limitation on
argument under that provision, we would coverage as jurisdictional, courts should treat the
have been confronted with several restriction as nonjurisdictional in character").
questions on which there is little consensus
or precedent. Those issues include: (1) the Section 157(b)(5) does not have the hallmarks of a
scope of the phrase "personal injury tort"— jurisdictional decree. To begin, the statutory text
a question over which there is at least a does not refer to either district court or bankruptcy
three-way divide, see In re Arnold, 407 court "jurisdiction," instead addressing only where
B.R. 849, 851–853 personal injury tort claims "shall be tried."
(Bkrtcy.Ct.M.D.N.C.2009) ; (2) whether, as
Vickie argued in the Court of Appeals, the The statutory context also belies Pierce's
requirement that a personal injury tort jurisdictional claim. Section 157 allocates the
claim be "tried" in the district court authority to enter final judgment between the
nonetheless permits the bankruptcy court to bankruptcy court and the district court. See §§
resolve the claim short of trial, see 157(b)(1), (c)(1). That allocation does not
Appellee's/Cross–Appellant's implicate questions of subject matter jurisdiction.
Supplemental Brief in No. 02–56002 etc. See § 157(c)(2) (parties may consent to entry of
(CA9), p. 24; see also In re Dow Corning
final judgment by bankruptcy judge in non-core
Corp., 215 B.R. 346, 349–351
case). By the same token, § 157(b)(5) simply
(Bkrtcy.Ct.E.D.Mich.1997) (noting divide
specifies where a particular category of cases
over whether, and on what grounds, a
should be tried. Pierce does not explain why that
bankruptcy court may resolve a claim
statutory limitation may not be similarly waived.
pretrial); and (3) even if Pierce's
defamation claim could be considered only We agree with Vickie that Pierce not only could
by the District Court, whether the
but did consent to the Bankruptcy Court's
Bankruptcy Court might retain jurisdiction
resolution of his defamation claim. Before the
over the counterclaim, cf. Arbaugh v. Y &
Bankruptcy Court, Vickie objected to Pierce's
H Corp., 546 U.S. 500, 514, 126 S.Ct.
proof of claim for defamation, arguing that
1235, 163 L.Ed.2d 1097 (2006) ("when a
Pierce's claim was unenforceable and that Pierce
court grants a motion to dismiss for failure
to state a federal claim, the court generally
should not receive any amount for it. See 29 Court
retains discretion to exercise supplemental of Appeals Supplemental Excerpts of Record
jurisdiction, pursuant to 28 U.S.C. § 1367, 6031, 6035 (hereinafter Supplemental Record).
over pendent state-law claims"). We Vickie also noted that the Bankruptcy Court could
express no opinion on any of these issues defer ruling on her objection, given the litigation
and simply note that the § 157(b)(5) posture of Pierce's claim before the Bankruptcy
question is not as straightforward as Pierce Court. See id., at 6031. Vickie's filing prompted
would have it. Pierce to advise the Bankruptcy Court that "[a]ll
parties are in agreement that the amount of the
system," Henderson v. Shinseki, 562 U.S. ––––,
contingent Proof of Claim filed by [Pierce] shall
–––– – ––––, 131 S.Ct. 1197, 1201–03, 179
be determined by the adversary proceedings" that
L.Ed.2d 159 (2011), we are not inclined to
481 had *481 been commenced in the Bankruptcy
interpret statutes as creating a jurisdictional bar
Court. 31 Supplemental Record 6801. Pierce
when they are not framed as such. See generally
asserted that Vickie's objection should be
Arbaugh v. Y & H Corp., 546 U.S. 500, 516, 126
overruled or, alternatively, that any ruling on the
S.Ct. 1235, 163 L.Ed.2d 1097 (2006) ("when
objection "should be continued until the resolution
of the pending adversary proceeding litigation."
8
Ibid. Pierce identifies no point in the record where Baker, 554 U.S. 471, 487–488, n. 6, 128 S.Ct.
he argued to the Bankruptcy Court that it lacked 2605, 171 L.Ed.2d 570 (2008), and this case is no
the authority to adjudicate his proof of claim exception. In such cases, as here, the
because the claim sought recompense for a consequences of "a litigant ... ‘sandbagging’ the
personal injury tort. court—remaining silent about his objection and
belatedly raising the error only if the case does not
Indeed, Pierce apparently did not object to any
conclude in his favor," Puckett v. United States,
court that § 157(b)(5) prohibited the Bankruptcy
556 U.S. 129, ––––, 129 S.Ct. 1423, 1428–29, 173
Court from resolving his defamation claim until
L.Ed.2d 266 (2009) (some internal quotation
over two years—and several adverse discovery
marks omitted)—can be particularly severe. If
rulings—after he filed that claim in June 1996.
Pierce believed that the Bankruptcy Court lacked
The first filing Pierce cites as raising that
the authority to decide his claim for defamation,
objection is his September 22, 1998 motion to the
then he should have said so—and said so
District Court to withdraw the reference of the
promptly. See United States v. Olano, 507 U.S.
case to the Bankruptcy Court. See Brief for
725, 731, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)
Respondent 26–27. The District Court did initially
(" ‘No procedural principle is more familiar to this
withdraw the reference as requested, but it then
Court than that a constitutional right,’ or a right of
returned the proceeding to the Bankruptcy Court,
any other sort, ‘may be forfeited ... by the failure
observing that Pierce "implicated the jurisdiction
to make timely assertion of the right before a
of that bankruptcy court. He chose to be a party to
tribunal having jurisdiction to determine it’ "
that litigation." App. 129. Although Pierce had
(quoting Yakus v. United States, 321 U.S. 414,
objected in July 1996 to the Bankruptcy Court's
444, 64 S.Ct. 660, 88 L.Ed. 834 (1944) )). Instead,
exercise of jurisdiction over Vickie's counterclaim,
Pierce repeatedly stated to the Bankruptcy Court
he advised the court at that time that he was
that he was happy to litigate there. We will not
"happy to litigate [his] claim" there. 29
consider his claim to the contrary, now that he is
Supplemental Record 6101. Counsel stated that
sad.
even though Pierce thought it was "probably
cheaper for th[e] estate if [Pierce's claim] were III
sent back or joined back with the State Court
Although we conclude that § 157(b)(2)(C) permits
2608 litigation," *2608 Pierce "did choose" the
the Bankruptcy Court to enter final judgment on
Bankruptcy Court forum and "would be more than
Vickie's counterclaim, Article III of the
pleased to do it [t]here." Id., at 6101–6102; see
Constitution does not.
also App. to Pet. for Cert. 266, n. 17 (District
Court referring to these statements). A
Given Pierce's course of conduct before the Article III, § 1, of the Constitution mandates that "
Bankruptcy Court, we conclude that he consented [t]he judicial Power of the United States, shall be
to that court's resolution of his defamation claim vested in one supreme Court, and in such inferior
(and forfeited any argument to the contrary). We Courts as the Congress may from time to time
have recognized "the value of waiver and ordain and establish." The same section provides
forfeiture rules" in "complex" cases, Exxon that the judges of those constitutional courts "shall
Shipping Co. v. hold their Offices during good Behaviour" and
"receive for their Services[ ] a Compensation[ ]
482 *482
[that] shall not be diminished" during their tenure.
9
As its text and our precedent confirm, Article III is Article III protects liberty not only through its role
"an inseparable element of the constitutional in implementing the separation of powers, but also
483 system of checks *483 and balances" that "both by specifying the defining characteristics of
defines the power and protects the independence Article III judges. The colonists had been
of the Judicial Branch." Northern Pipeline, 458 484 subjected to judicial abuses at the hand *484 of the
U.S., at 58, 102 S.Ct. 2858 (plurality opinion). Crown, and the Framers knew the main reasons
Under "the basic concept of separation of powers why: because the King of Great Britain "made
... that flow[s] from the scheme of a tripartite Judges dependent on his Will alone, for the tenure
government" adopted in the Constitution, "the of their offices, and the amount and payment of
‘judicial Power of the United States' ... can no their salaries." The Declaration of Independence ¶
more be shared" with another branch than "the 11. The Framers undertook in Article III to protect
Chief Executive, for example, can share with the citizens subject to the judicial power of the new
Judiciary the veto power, or the Congress share Federal Government from a repeat of those
with the Judiciary the power to override a abuses. By appointing judges to serve without
Presidential veto." United States v. Nixon, 418 term limits, and restricting the ability of the other
U.S. 683, 704, 94 S.Ct. 3090, 41 L.Ed.2d 1039 branches to remove judges or diminish their
(1974) (quoting U.S. Const., Art. III, § 1 ). salaries, the Framers sought to ensure that each
judicial decision would be rendered, not with an
In establishing the system of divided power in the
eye toward currying favor with Congress or the
Constitution, the Framers considered it essential
Executive, but rather with the "[c]lear heads ... and
that "the judiciary remain[ ] truly distinct from
honest hearts" deemed "essential to good judges."
both the legislature and the executive." The
1 Works of James Wilson 363 (J. Andrews ed.
Federalist No. 78, p. 466 (C. Rossiter ed. 1961)
1896).
(A. Hamilton). As Hamilton put it, quoting
Montesquieu, " ‘there is no liberty if the power of Article III could neither serve its purpose in the
judging be not separated from the legislative and system of checks and balances nor preserve the
2609 executive powers.’ " *2609 Ibid. (quoting 1 integrity of judicial decisionmaking if the other
Montesquieu, Spirit of Laws 181). branches of the Federal Government could confer
the Government's "judicial Power" on entities
We have recognized that the three branches are not
outside Article III. That is why we have long
hermetically sealed from one another, see Nixon v.
recognized that, in general, Congress may not
Administrator of General Services, 433 U.S. 425,
"withdraw from judicial cognizance any matter
443, 97 S.Ct. 2777, 53 L.Ed.2d 867 (1977), but it
which, from its nature, is the subject of a suit at
remains true that Article III imposes some basic
the common law, or in equity, or admiralty."
limitations that the other branches may not
Murray's Lessee v. Hoboken Land & Improvement
transgress. Those limitations serve two related
Co., 59 U.S. 272, 18 How. 272, 284, 15 L.Ed. 372
purposes. "Separation-of-powers principles are
(1856). When a suit is made of "the stuff of the
intended, in part, to protect each branch of
traditional actions at common law tried by the
government from incursion by the others. Yet the
courts at Westminster in 1789," Northern Pipeline,
dynamic between and among the branches is not
458 U.S., at 90, 102 S.Ct. 2858 (Rehnquist, J.,
the only object of the Constitution's concern. The
concurring in judgment), and is brought within the
structural principles secured by the separation of
bounds of federal jurisdiction, the responsibility
powers protect the individual as well." Bond v.
for deciding that suit rests with Article III judges
United States, 564 U.S. ––––, ––––, 131 S.Ct.
in Article III courts. The Constitution assigns that
2355, ––––, 180 L.Ed.2d 269, 2011 WL 2369334,
job—resolution of "the mundane as well as the
*8 (2011).
10
glamorous, matters of common law and statute as subjected .... To whatever extent different powers
well as constitutional law, issues of fact as well as granted under [the 1978] Act might be sustained
issues of law"—to the Judiciary. Id., at 86–87, n. under the ‘public rights' doctrine of Murray's
485 39, 102 S.Ct. 2858 (plurality opinion).*485 B 486 Lessee ... *486 and succeeding cases, I am satisfied
that the adjudication of Northern's lawsuit cannot
This is not the first time we have faced an Article
be so sustained").5
III challenge to a bankruptcy court's resolution of
a debtor's suit. In Northern Pipeline, we 5 The dissent is thus wrong in suggesting
considered whether bankruptcy judges serving that less than a full Court agreed on the
under the Bankruptcy Act of 1978—appointed by points pertinent to this case. Post, at 2622
the President and confirmed by the Senate, but (opinion of BREYER, J.).
lacking the tenure and salary guarantees of Article

A full majority of Justices in Northern Pipeline
III —could "constitutionally be vested with
also rejected the debtor's argument that the
jurisdiction to decide [a] state-law contract claim"
bankruptcy court's exercise of jurisdiction was
2610 against an entity *2610 that was not otherwise part
constitutional because the bankruptcy judge was
of the bankruptcy proceedings. 458 U.S., at 53,
acting merely as an adjunct of the district court or
87, n. 40, 102 S.Ct. 2858 (plurality opinion); see
court of appeals. Id., at 71–72, 81–86, 102 S.Ct.
id., at 89–92, 102 S.Ct. 2858 (Rehnquist, J.,
2858 (plurality opinion); id., at 91, 102 S.Ct. 2858
concurring in judgment). The Court concluded
(Rehnquist, J., concurring in judgment) ("the
that assignment of such state law claims for
bankruptcy court is not an ‘adjunct’ of either the
resolution by those judges "violates Art. III of the
district court or the court of appeals").
Constitution." Id., at 52, 87, 102 S.Ct. 2858
(plurality opinion); id., at 91, 102 S.Ct. 2858 After our decision in Northern Pipeline, Congress
(Rehnquist, J., concurring in judgment). revised the statutes governing bankruptcy
jurisdiction and bankruptcy judges. In the 1984
The plurality in Northern Pipeline recognized that
Act, Congress provided that the judges of the new
there was a category of cases involving "public
bankruptcy courts would be appointed by the
rights" that Congress could constitutionally assign
courts of appeals for the circuits in which their
to "legislative" courts for resolution. That opinion
districts are located. 28 U.S.C. § 152(a). And, as
concluded that this "public rights" exception
we have explained, Congress permitted the newly
extended "only to matters arising between"
constituted bankruptcy courts to enter final
individuals and the Government "in connection
judgments only in "core" proceedings. Seesupra,
with the performance of the constitutional
at 2603 – 2604.
functions of the executive or legislative
departments ... that historically could have been With respect to such "core" matters, however, the
determined exclusively by those" branches. Id., at bankruptcy courts under the 1984 Act exercise the
67–68, 102 S.Ct. 2858 (internal quotation marks same powers they wielded under the Bankruptcy
omitted). A full majority of the Court, while not Act of 1978 (1978 Act), 92 Stat. 2549. As in
agreeing on the scope of the exception, concluded Northern Pipeline, for example, the newly
that the doctrine did not encompass adjudication constituted bankruptcy courts are charged under §
of the state law claim at issue in that case. Id., at 157(b)(2)(C) with resolving "[a]ll matters of fact
69–72, 102 S.Ct. 2858; see id., at 90–91, 102 S.Ct. and law in whatever domains of the law to which"
2858 (Rehnquist, J., concurring in judgment) a counterclaim may lead. 458 U.S., at 91, 102
("None of the [previous cases addressing Article S.Ct. 2858 (Rehnquist, J., concurring in
III power] has gone so far as to sanction the type judgment); see, e.g., 275 B.R., at 50–51 (noting
of adjudication to which Marathon will be that Vickie's counterclaim required the bankruptcy
11
court to determine whether Texas recognized a 492 U.S. 33, 109 S.Ct. 2782, rejected the
cause of action for tortious interference with an application of the "public rights" exception in such
inter vivos gift—something the Supreme Court of cases.
Texas had yet to do). As in Northern Pipeline, the
Nor can the bankruptcy courts under the 1984 Act
new courts in core proceedings "issue final
be dismissed as mere adjuncts of Article III courts,
2611 judgments, *487 *2611
487
any more than could the bankruptcy courts under
which are binding and enforceable even in the the 1978 Act. The judicial powers the courts
absence of an appeal." 458 U.S., at 85–86, 102 488 exercise in cases such as this remain *488 the same,
S.Ct. 2858 (plurality opinion). And, as in Northern and a court exercising such broad powers is no
Pipeline, the district courts review the judgments mere adjunct of anyone.
of the bankruptcy courts in core proceedings only
1
under the usual limited appellate standards. That
requires marked deference to, among other things, Vickie's counterclaim cannot be deemed a matter
the bankruptcy judges' findings of fact. See § of "public right" that can be decided outside the
158(a) ; Fed. Rule Bkrtcy. Proc. 8013 (findings of Judicial Branch. As explained above, in Northern
fact "shall not be set aside unless clearly Pipeline we rejected the argument that the public
erroneous"). rights doctrine permitted a bankruptcy court to
adjudicate a state law suit brought by a debtor
C
against a company that had not filed a claim
Vickie and the dissent argue that the Bankruptcy against the estate. See 458 U.S., at 69–72, 102
Court's entry of final judgment on her state S.Ct. 2858 (plurality opinion); id., at 90–91, 102
common law counterclaim was constitutional, S.Ct. 2858 (Rehnquist, J., concurring in
despite the similarities between the bankruptcy judgment). Although our discussion of the public
courts under the 1978 Act and those exercising rights exception since that time has not been
core jurisdiction under the 1984 Act. We disagree. entirely consistent, and the exception has been the
It is clear that the Bankruptcy Court in this case subject of some debate, this case does not fall
exercised the "judicial Power of the United States" within any of the various formulations of the
in purporting to resolve and enter final judgment concept that appear in this Court's opinions.
on a state common law claim, just as the court did
We first recognized the category of public rights in
in Northern Pipeline . No "public right" exception
Murray's Lessee v. Hoboken Land & Improvement
excuses the failure to comply with Article III in
Co., 59 U.S. 272, 18 How. 272, 15 L.Ed. 372
doing so, any more than in Northern Pipeline .
(1856). That case involved the Treasury
Vickie argues that this case is different because the
Department's sale of property belonging to a
defendant is a creditor in the bankruptcy. But the
customs collector who had failed to transfer
debtors' claims in the cases on which she relies
payments to the Federal Government that he had
were themselves federal claims under bankruptcy
collected on its behalf. Id., at 274, 275. The
law, which would be completely resolved in the
plaintiff, who claimed title to the same land
bankruptcy process of allowing or disallowing
through a different transfer, objected that the
claims. Here Vickie's claim is a state law action
Treasury Department's calculation of the
independent of the federal bankruptcy law and not
deficiency and sale of the property was void,
necessarily resolvable by a ruling on the creditor's
because it was a judicial act that could not be
proof of claim in bankruptcy. Northern Pipeline
assigned to the Executive under Article III. Id., at
and our subsequent decision in Granfinanciera,
2612 274–275, 282–283.*2612 "To avoid
misconstruction upon so grave a subject," the
12
Court laid out the principles guiding its analysis. as defined." Crowell v. Benson, 285 U.S. 22, 50,
Id., at 284. It confirmed that Congress cannot 2613 51, 52 S.Ct. 285, 76 L.Ed. 598 (1932).6 See *2613
"withdraw from judicial cognizance any matter Atlas Roofing Co. v. Occupational Safety
which, from its nature, is the subject of a suit at
6 Although the Court in Crowell went on to
the common law, or in equity, or admiralty." Ibid.
decide that the facts of the private dispute
The Court also recognized that "[a]t the same time
before it could be determined by a non-
there are matters, involving public rights, which Article III tribunal in the first instance,
may be presented in such form that the judicial subject to judicial review, the Court did so
power is capable of acting on them, and which are only after observing that the administrative
489 susceptible of judicial determination, *489 but adjudicator had only limited authority to
which congress may or may not bring within the make specialized, narrowly confined
cognizance of the courts of the United States, as it factual determinations regarding a
may deem proper." Ibid. particularized area of law and to issue
orders that could be enforced only by
As an example of such matters, the Court referred action of the District Court. 285 U.S., at
to "[e]quitable claims to land by the inhabitants of 38, 44–45, 54, 52 S.Ct. 285 ; see Northern
ceded territories" and cited cases in which land Pipeline Constr. Co. v. Marathon Pipe Line
issues were conclusively resolved by Executive Co., 458 U.S. 50, 78, 102 S.Ct. 2858, 73
Branch officials. Ibid. (citing Foley v. Harrison, L.Ed.2d 598 (1982) (plurality opinion). In
56 U.S. 433, 15 How. 433, 14 L.Ed. 761 (1854) ; other words, the agency in Crowell
Burgess v. Gray, 57 U.S. 48, 16 How. 48, 14 L.Ed. functioned as a true "adjunct" of the
839 (1854) ). In those cases "it depends upon the District Court. That is not the case here.
will of congress whether a remedy in the courts See infra, at 2618 – 2619.
shall be allowed at all," so Congress could limit Although the dissent suggests that we
the extent to which a judicial forum was available. understate the import of Crowell in this
regard, the dissent itself recognizes—
Murray's Lessee, 18 How., at 284. The challenge
repeatedly—that Crowell by its terms
in Murray's Lessee to the Treasury Department's
addresses the determination of facts outside
sale of the collector's land likewise fell within the
Article III. See post, at 2623 (Crowell
"public rights" category of cases, because it could
"upheld Congress' delegation of primary
only be brought if the Federal Government chose
factfinding authority to the agency"); post,
to allow it by waiving sovereign immunity. Id., at at 2627 (quoting Crowell, 285 U.S., at 51,
283–284. The point of Murray's Lessee was 52 S.Ct. 285, for the proposition that "
simply that Congress may set the terms of ‘there is no requirement that, in order to
adjudicating a suit when the suit could not maintain the essential attributes of the
otherwise proceed at all. judicial power, all determinations of fact in
constitutional courts shall be made by
Subsequent decisions from this Court contrasted
judges' "). Crowell may well have
cases within the reach of the public rights additional significance in the context of
exception—those arising "between the expert administrative agencies that oversee
Government and persons subject to its authority in particular substantive federal regimes, but
connection with the performance of the we have no occasion to and do not address
constitutional functions of the executive or those issues today. See infra, at 2615. The
legislative departments"—and those that were United States apparently agrees that any
instead matters "of private right, that is, of the broader significance of Crowell is not
liability of one individual to another under the law pertinent in this case, citing to Crowell in
its brief only once, in the last footnote,
13
again for the limited proposition discussed about compensation between the companies would
above. Brief for United States as Amicus be decided by binding arbitration. 473 U.S. 568,
Curiae 32, n. 5. 571–575, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985).
This Court held that the scheme did not violate
490 *490
Article III, explaining that "[a]ny right to
and Health Review Comm'n, 430 U.S. 442, 458, compensation ... results from [the statute] and does
97 S.Ct. 1261, 51 L.Ed.2d 464 (1977) (Exception not depend on or replace a right to such
extends to cases "where the Government is compensation under state law." Id., at 584, 105
involved in its sovereign capacity under ... [a] S.Ct. 3325.
statute creating enforceable public rights," while "
Commodity Futures Trading Commission v. Schor
[w]holly private tort, contract, and property cases,
concerned a statutory scheme that created a
as well as a vast range of other cases ... are not at
procedure for customers injured by a broker's
all implicated"); Ex parte Bakelite Corp., 279 U.S.
violation of the federal commodities law to seek
438, 451–452, 49 S.Ct. 411, 73 L.Ed. 789 (1929).
reparations from the broker before the Commodity
See also Northern Pipeline, supra, at 68, 102 S.Ct.
Futures Trading Commission (CFTC). 478 U.S.
2858 (plurality opinion) (citing Ex parte Bakelite
833, 836, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986).
Corp. for the proposition that the doctrine
A customer filed such a claim to recover a debit
extended " only to matters that historically could
balance in his account, while the broker filed a
have been determined exclusively by" the
lawsuit in Federal District Court to recover the
Executive and Legislative Branches).
same amount as lawfully due from the customer.
Shortly after Northern Pipeline, the Court rejected The broker later submitted its claim to the CFTC,
the limitation of the public rights exception to but after that agency ruled against the customer,
actions involving the Government as a party. The the customer argued that agency jurisdiction over
Court has continued, however, to limit the the broker's counterclaim violated Article III. Id.,
exception to cases in which the claim at issue at 837–838, 106 S.Ct. 3245. This Court disagreed,
derives from a federal regulatory scheme, or in but only after observing that (1) the claim and the
which resolution of the claim by an expert counterclaim concerned a "single dispute"—the
government agency is deemed essential to a same account balance; (2) the CFTC's assertion of
limited regulatory objective within the agency's authority involved only "a narrow class of
authority. In other words, it is still the case that common law claims" in a " ‘particularized area of
what makes a right "public" rather than private is law’ "; (3) the area of law in question was
that the right is integrally related to particular governed by "a specific and limited federal
491 federal government *491 action. See United States regulatory scheme" as to which the agency had
v. Jicarilla Apache Nation, 564 U.S. ––––, "obvious expertise"; (4) the parties had freely
––––-––––, 131 S.Ct. 2313, 180 L.Ed.2d 187, elected to resolve their differences before the
2011 WL 2297786, *8–9 (2011) ("The distinction CFTC; and (5) CFTC orders were "enforceable
between ‘public rights' against the Government only by order of the district court." Id., at 844,
and ‘private rights' between private parties is well 852–855, 106 S.Ct. 3245 (quoting Northern
established," citing Murray's Lessee and Crowell Pipeline, 458 U.S., at 85, 102 S.Ct. 2858); see
). 492 *492 478 U.S., at 843–844; 849–857, 106 S.Ct.
2614 3245. Most significantly, *2614 given that the
Our decision in Thomas v. Union Carbide
customer's reparations claim before the agency
Agricultural Products Co., for example, involved
and the broker's counterclaim were competing
a data-sharing arrangement between companies
claims to the same amount, the Court repeatedly
under a federal statute providing that disputes
14
emphasized that it was "necessary" to allow the 49 S.Ct. 411). The claim is instead one under state
agency to exercise jurisdiction over the broker's common law between two private parties. It does
claim, or else "the reparations procedure would not "depend[ ] on the will of congress," Murray's
have been confounded." Id., at 856, 106 S.Ct. Lessee, supra, at 284; Congress has nothing to do
3245. with it.
7 We noted that we did not mean to "suggest
The most recent case in which we considered
application of the public rights exception—and the that the restructuring of debtor-creditor
only case in which we have considered that relations is in fact a public right." 492 U.S.,
at 56, n. 11, 109 S.Ct. 2782. Our
doctrine in the bankruptcy context since Northern
conclusion was that, "even if one accepts
Pipeline —is Granfinanciera, S.A. v. Nordberg,
this thesis," Congress could not
492 U.S. 33, 109 S.Ct. 2782, 106 L.Ed.2d 26
constitutionally assign resolution of the
(1989). In Granfinanciera we rejected a
fraudulent conveyance action to a non-
bankruptcy trustee's argument that a fraudulent
Article III court. Ibid. Because neither
conveyance action filed on behalf of a bankruptcy party asks us to reconsider the public rights
estate against a noncreditor in a bankruptcy framework for bankruptcy, we follow the
proceeding fell within the "public rights" same approach here.
exception. We explained that, "[i]f a statutory right
is not closely intertwined with a federal regulatory In addition, Vickie's claimed right to relief does
program Congress has power to enact, and if that not flow from a federal statutory scheme, as in
right neither belongs to nor exists against the Thomas, 473 U.S., at 584–585, 105 S.Ct. 3325, or
Federal Government, then it must be adjudicated Atlas Roofing, 430 U.S., at 458, 97 S.Ct. 1261. It
by an Article III court." Id., at 54–55, 109 S.Ct. is not "completely dependent upon" adjudication
2782. We reasoned that fraudulent conveyance of a claim created by federal law, as in Schor, 478
suits were "quintessentially suits at common law U.S., at 856, 106 S.Ct. 3245. And in contrast to
that more nearly resemble state law contract the objecting party in Schor, id., at 855–856, 106
claims brought by a bankrupt corporation to S.Ct. 3245, Pierce did not truly consent to
augment the bankruptcy estate than they do resolution of Vickie's claim in the bankruptcy
creditors' hierarchically ordered claims to a pro court proceedings. He had nowhere else to go if he
rata share of the bankruptcy res." Id., at 56, 109 wished to recover from Vickie's estate. See
S.Ct. 2782. As a consequence, we concluded that Granfinanciera, supra, at 59, n. 14, 109 S.Ct.
fraudulent conveyance actions were "more 2782 (noting that "[p]arallel reasoning [to Schor ]
accurately characterized as a private rather than a is unavailable in the context of bankruptcy
public right as we have used those terms in our proceedings, because creditors lack an alternative
Article III decisions." Id., at 55, 109 S.Ct. 2782.7 2615 forum *2615 to the bankruptcy court in which to
493 *493 Vickie's counterclaim—like the fraudulent pursue their claims").8

conveyance claim at issue in Granfinanciera — 8 Contrary to the claims of the dissent, see
does not fall within any of the varied formulations post, at 2627 – 2628, Pierce did not have
of the public rights exception in this Court's cases. another forum in which to pursue his claim
It is not a matter that can be pursued only by grace to recover from Vickie's prebankruptcy
of the other branches, as in Murray's Lessee, 18 assets, rather than take his chances with
How., at 284, or one that "historically could have whatever funds might remain after the Title
been determined exclusively by" those branches, 11 proceedings. Creditors who possess
Northern Pipeline, supra, at 68, 102 S.Ct. 2858 claims that do not satisfy the requirements
for nondischargeability under 11 U.S.C. §
(citing Ex parte Bakelite Corp., 279 U.S., at 458,
523 have no choice but to file their claims
15
in bankruptcy proceedings if they want to scheme. Given the extent to which this case is so
pursue the claims at all. That is why, as we markedly distinct from the agency cases
recognized in Granfinanciera, the notion discussing the public rights exception in the
of "consent" does not apply in bankruptcy
context of such a regime, however, we do not in
proceedings as it might in other contexts.
this opinion express any view on how the doctrine
might apply in that different context.
Furthermore, the asserted authority to decide
Vickie's claim is not limited to a "particularized What is plain here is that this case involves the
area of the law," as in Crowell,Thomas, and Schor most prototypical exercise of judicial power: the
. Northern Pipeline, 458 U.S., at 85, 102 S.Ct. entry of a final, binding judgment by a court with
2858 (plurality opinion). We deal here not with an broad substantive jurisdiction, on a common law
494 *494 agency but with a court, with substantive cause of action, when the action neither derives
jurisdiction reaching any area of the corpus juris . from nor depends upon any agency regulatory
See ibid. ; id., at 91, 102 S.Ct. 2858 (Rehnquist, J., 495 regime. *495 If such an exercise of judicial power
concurring in judgment). This is not a situation in may nonetheless be taken from the Article III
which Congress devised an "expert and Judiciary simply by deeming it part of some
inexpensive method for dealing with a class of amorphous " public right," then Article III would
questions of fact which are particularly suited to be transformed from the guardian of individual
examination and determination by an liberty and separation of powers we have long
administrative agency specially assigned to that recognized into mere wishful thinking.
task." Crowell, 285 U.S., at 46, 52 S.Ct. 285; see
Schor,supra, at 855–856, 106 S.Ct. 3245. The " 2
experts" in the federal system at resolving Vickie and the dissent next attempt to distinguish
common law counterclaims such as Vickie's are Northern Pipeline and Granfinanciera on the
the Article III courts, and it is with those courts ground that Pierce, unlike the defendants in those
that her claim must stay. cases, had filed a proof of claim in the bankruptcy
The dissent reads our cases differently, and in proceedings. Given Pierce's participation in those
2616 proceedings, Vickie argues, the Bankruptcy *2616
particular contends that more recent cases view
Northern Pipeline as " ‘establish[ing] only that Court had the authority to adjudicate her
Congress may not vest in a non-Article III court counterclaim under our decisions in Katchen v.
the power to adjudicate, render final judgment, Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d
and issue binding orders in a traditional contract 391 (1966), and Langenkamp v. Culp, 498 U.S. 42,
action arising under state law, without consent of 111 S.Ct. 330, 112 L.Ed.2d 343 (1990) (per
the litigants, and subject only to ordinary appellate curiam ).
review.’ " Post, at 2624 (quoting Thomas, supra, We do not agree. As an initial matter, it is hard to
at 584, 105 S.Ct. 3325). Just so: Substitute "tort" see why Pierce's decision to file a claim should
for "contract," and that statement directly covers make any difference with respect to the
this case. characterization of Vickie's counterclaim. "
We recognize that there may be instances in which ‘[P]roperty interests are created and defined by
the distinction between public and private rights— state law,’ and ‘[u]nless some federal interest
at least as framed by some of our recent cases— requires a different result, there is no reason why
fails to provide concrete guidance as to whether, such interests should be analyzed differently
for example, a particular agency can adjudicate simply because an interested party is involved in a
legal issues under a substantive regulatory bankruptcy proceeding.’ " Travelers Casualty &
Surety Co. of America v. Pacific Gas & Elec. Co.,
16
549 U.S. 443, 451, 127 S.Ct. 1199, 167 L.Ed.2d gesture." Id., at 334, 86 S.Ct. 467. The plenary
178 (2007) (quoting Butner v. United States, 440 proceeding the creditor sought could be brought
U.S. 48, 55, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979) into the bankruptcy court because "the same issue
). Pierce's claim for defamation in no way affects [arose] as part of the process of allowance and
the nature of Vickie's counterclaim for tortious disallowance of claims." Id., at 336, 86 S.Ct. 467.
interference as one at common law that simply
It was in that sense that the Court stated that "he
attempts to augment the bankruptcy estate—the
who invokes the aid of the bankruptcy court by
very type of claim that we held in Northern
offering a proof of claim and demanding its
Pipeline and Granfinanciera must be decided by
allowance must abide the consequences of that
an Article III court.
procedure." Id., at 333, n. 9, 86 S.Ct. 467. In
Contrary to Vickie's contention, moreover, our Katchen one of those consequences was resolution
decisions in Katchen and Langenkamp do not of the preference issue as part of the process of
suggest a different result. Katchen permitted a allowing or disallowing claims, and accordingly
bankruptcy referee acting under the Bankruptcy there was no basis for the creditor to insist that the
Acts of 1898 and 1938 (akin to a bankruptcy court issue be resolved in an Article III court. See id., at
today) to exercise what was known as "summary 334, 86 S.Ct. 467. Indeed, the Katchen Court
496 jurisdiction" *496 over a voidable preference claim expressly noted that it "intimate[d] no opinion
brought by the bankruptcy trustee against a 2617 concerning whether" the bankruptcy *497 *2617
497
creditor who had filed a proof of claim in the
referee would have had "summary jurisdiction to
bankruptcy proceeding. See 382 U.S., at 325,
adjudicate a demand by the [bankruptcy] trustee
327–328, 86 S.Ct. 467. A voidable preference
for affirmative relief, all of the substantial factual
claim asserts that a debtor made a payment to a
and legal bases for which ha[d] not been disposed
particular creditor in anticipation of bankruptcy, to
of in passing on objections to the [creditor's proof
in effect increase that creditor's proportionate
of] claim." Id., at 333, n. 9, 86 S.Ct. 467.
share of the estate. The preferred creditor's claim
in bankruptcy can be disallowed as a result of the Our per curiam opinion in Langenkamp is to the
preference, and the amounts paid to that creditor same effect. We explained there that a preferential
can be recovered by the trustee. See id., at 330, 86 transfer claim can be heard in bankruptcy when
S.Ct. 467; see also 11 U.S.C. §§ 502(d), 547(b). the allegedly favored creditor has filed a claim,
because then "the ensuing preference action by the
Although the creditor in Katchen objected that the
trustee become[s] integral to the restructuring of
preference issue should be resolved through a
the debtor-creditor relationship." 498 U.S., at 44,
"plenary suit" in an Article III court, this Court
111 S.Ct. 330. If, in contrast, the creditor has not
concluded that summary adjudication in
filed a proof of claim, the trustee's preference
bankruptcy was appropriate, because it was not
action does not "become[ ] part of the claims-
possible for the referee to rule on the creditor's
allowance process" subject to resolution by the
proof of claim without first resolving the voidable
bankruptcy court. Ibid. ; see id., at 45, 111 S.Ct.
preference issue. 382 U.S., at 329–330, 332–333,
330.
and n. 9, 334, 86 S.Ct. 467. There was no question
that the bankruptcy referee could decide whether In ruling on Vickie's counterclaim, the Bankruptcy
there had been a voidable preference in Court was required to and did make several factual
determining whether and to what extent to allow and legal determinations that were not "disposed
the creditor's claim. Once the referee did that, of in passing on objections" to Pierce's proof of
"nothing remains for adjudication in a plenary claim for defamation, which the court had denied
suit"; such a suit "would be a meaningless almost a year earlier. Katchen, supra, at 332, n. 9.,
17
86 S.Ct. 467 There was some overlap between B.R., at 558–561. Also, because Vickie sought
Vickie's counterclaim and Pierce's defamation punitive damages in connection with her
claim that led the courts below to conclude that counterclaim, the Bankruptcy Court could not
the counterclaim was compulsory, 600 F.3d, at finally dispose of the case in Vickie's favor
1057, or at least in an "attenuated" sense related to without determining whether to subject Pierce to
Pierce's claim, 264 B.R., at 631. But there was the sort of "retribution," "punishment[,] and
never any reason to believe that the process of deterrence," Exxon Shipping Co., 554 U.S., at 492,
adjudicating Pierce's proof of claim would 504, 128 S.Ct. 2605 (internal quotation marks
necessarily resolve Vickie's counterclaim. See id., omitted), those damages are designed to impose.
at 631, 632 (explaining that "the primary facts at There thus was never reason to believe that the
issue on Pierce's claim were the relationship 2618 process of ruling *2618 on Pierce's proof of claim
between Vickie and her attorneys and her would necessarily result in the resolution of
knowledge or approval of their statements," and Vickie's counterclaim.
"the counterclaim raises issues of law entirely
In both Katchen and Langenkamp, moreover, the
different from those raise[d] on the defamation
trustee bringing the preference action was
claim"). The United States acknowledges the
asserting a right of recovery created by federal
point. See Brief for United States as Amicus
bankruptcy law. In Langenkamp , we noted that
Curiae, p. (I) (question presented concerns
"the trustee instituted adversary proceedings under
authority of a bankruptcy court to enter final
11 U.S.C. § 547(b) to recover, as avoidable
judgment on a compulsory counterclaim "when
preferences," payments respondents received from
498 adjudication *498 of the counterclaim requires
the debtor before the bankruptcy filings. 498 U.S.,
resolution of issues that are not implicated by the
499 at 43, 111 S.Ct. 330; see, *499 e.g., § 547(b)(1)
claim against the estate"); id., at 26.
("the trustee may avoid any transfer of an interest
The only overlap between the two claims in this of the debtor in property—(1) to or for the benefit
case was the question whether Pierce had in fact of a creditor"). In Katchen, " [t]he Trustee ...
tortiously taken control of his father's estate in the [asserted] that the payments made [to the creditor]
manner alleged by Vickie in her counterclaim and were preferences inhibited by Section 60a of the
described in the allegedly defamatory statements. Bankruptcy Act." Memorandum Opinion (Feb. 8,
From the outset, it was clear that, even assuming 1963), Tr. of Record in O.T.1965, No. 28, p. 3; see
the Bankruptcy Court would (as it did) rule in 382 U.S., at 334, 86 S.Ct. 467 (considering impact
Vickie's favor on that question, the court could not of the claims allowance process on "action by the
enter judgment for Vickie unless the court trustee under § 60 to recover the preference"); 11
additionally ruled on the questions whether Texas U.S.C. § 96(b) (1964 ed.) (§ 60(b) of the then-
recognized tortious interference with an expected applicable Bankruptcy Act) ("preference may be
gift as a valid cause of action, what the elements avoided by the trustee if the creditor receiving it or
of that action were, and whether those elements to be benefited thereby ... has, at the time when the
were met in this case. 275 B.R., at 50–53. transfer is made, reasonable cause to believe that
Assuming Texas accepted the elements adopted by the debtor is insolvent"). Vickie's claim, in
other jurisdictions, that meant Vickie would need contrast, is in no way derived from or dependent
to prove, above and beyond Pierce's tortious upon bankruptcy law; it is a state tort action that
interference, (1) the existence of an expectancy of exists without regard to any bankruptcy
a gift; (2) a reasonable certainty that the proceeding.
expectancy would have been realized but for the
interference; and (3) damages. Id., at 51; see 253
18
In light of all the foregoing, we disagree with the Instead, bankruptcy courts under the 1984 Act
dissent that there are no "relevant distinction[s]" 2619 resolve *2619 "[a]ll matters of fact and law in
between Pierce's claim in this case and the claim whatever domains of the law to which" the parties'
at issue in Langenkamp .Post, at 2628. We see no counterclaims might lead. Id., at 91, 102 S.Ct.
reason to treat Vickie's counterclaim any 2858 (Rehnquist, J., concurring in judgment).
differently from the fraudulent conveyance action
In addition, whereas the adjunct agency in Crowell
in Granfinanciera . 492 U.S., at 56, 109 S.Ct.
v. Benson "possessed only a limited power to issue
2782. Granfinanciera 's distinction between
compensation orders ... [that] could be enforced
actions that seek "to augment the bankruptcy
only by order of the district court," Northern
estate" and those that seek "a pro rata share of the
Pipeline, supra, at 85, 102 S.Ct. 2858, a
bankruptcy res," ibid., reaffirms that Congress
bankruptcy court resolving a counterclaim under
may not bypass Article III simply because a
28 U.S.C. § 157(b)(2)(C) has the power to enter
proceeding may have some bearing on a
"appropriate orders and judgments"—including
bankruptcy case; the question is whether the
final judgments—subject to review only if a party
action at issue stems from the bankruptcy itself or
chooses to appeal, see §§ 157(b)(1), 158(a) - (b). It
would necessarily be resolved in the claims
is thus no less the case here than it was in
allowance process. Vickie has failed to
Northern Pipeline that "[t]he authority—and the
demonstrate that her counterclaim falls within one
responsibility—to make an informed, final
of the "limited circumstances" covered by the
determination ... remains with" the bankruptcy
public rights exception, particularly given our
judge, not the district court. 458 U.S., at 81, 102
conclusion that, "even with respect to matters that
S.Ct. 2858 (plurality opinion) (internal quotation
arguably fall within the scope of the ‘public rights'
marks omitted). Given that authority, a bankruptcy
doctrine, the presumption is in favor of Art. III
court can no more be deemed a mere "adjunct" of
courts." Northern Pipeline, 458 U.S., at 69, n. 23,
the district court than a district court can be
500 77, n. 29, 102 S.Ct. 2858 (plurality opinion).*500 3
deemed such an "adjunct" of the court of appeals.
Vickie additionally argues that the Bankruptcy 501 We certainly *501 cannot accept the dissent's
Court's final judgment was constitutional because notion that judges who have the power to enter
bankruptcy courts under the 1984 Act are properly final, binding orders are the "functional [ ]"
deemed "adjuncts" of the district courts. Brief for equivalent of "law clerks[ ] and the Judiciary's
Petitioner 61–64. We rejected a similar argument administrative officials." Post, at 2627. And even
in Northern Pipeline, see 458 U.S., at 84–86, 102 were we wrong in this regard, that would only
S.Ct. 2858 (plurality opinion); id., at 91, 102 S.Ct. confirm that such judges should not be in the
2858 (Rehnquist, J., concurring in judgment), and business of entering final judgments in the first
our reasoning there holds true today. place.
To begin, as explained above, it is still the It does not affect our analysis that, as Vickie notes,
bankruptcy court itself that exercises the essential bankruptcy judges under the current Act are
attributes of judicial power over a matter such as appointed by the Article III courts, rather than the
Vickie's counterclaim. See supra, at 2610. The President. See Brief for Petitioner 59. If—as we
new bankruptcy courts, like the old, do not have concluded—the bankruptcy court itself
"ma[k]e only specialized, narrowly confined exercises "the essential attributes of judicial power
factual determinations regarding a particularized [that] are reserved to Article III courts," Schor,
area of law" or engage in "statutorily channeled 478 U.S., at 851, 106 S.Ct. 3245 (internal
factfinding functions." Northern Pipeline, 458 quotation marks omitted), it does not matter who
U.S., at 85, 102 S.Ct. 2858 (plurality opinion). appointed the bankruptcy judge or authorized the
19
judge to render final judgments in such As described above, the current bankruptcy
proceedings. The constitutional bar remains. See system also requires the district court to review de
The Federalist No. 78, at 471 ("Periodical novo and enter final judgment on any matters that
appointments, however regulated, or by are "related to" the bankruptcy proceedings, §
whomsoever made, would, in some way or other, 157(c)(1), and permits the district court to
be fatal to [a judge's] necessary independence"). withdraw from the bankruptcy court any referred
case, proceeding, or part thereof, § 157(d). Pierce
D
has not argued that the bankruptcy courts "are
Finally, Vickie and her amici predict as a practical barred from ‘hearing’ all counterclaims" or
matter that restrictions on a bankruptcy court's proposing findings of fact and conclusions of law
ability to hear and finally resolve compulsory on those matters, but rather that it must be the
counterclaims will create significant delays and district court that "finally decide[s]" them. Brief
impose additional costs on the bankruptcy process. for Respondent 61. We do not think the removal of
See, e.g., Brief for Petitioner 34–36, 57–58; Brief counterclaims such as Vickie's from core
for United States as Amicus Curiae 29–30. It goes bankruptcy jurisdiction meaningfully changes the
without saying that "the fact that a given law or division of labor in the current statute; we agree
procedure is efficient, convenient, and useful in with the United States that the question presented
facilitating functions of government, standing here is a "narrow" one. Brief for United States as
alone, will not save it if it is contrary to the Amicus Curiae 23.
Constitution." INS v. Chadha, 462 U.S. 919, 944,
If our decision today does not change all that
103 S.Ct. 2764, 77 L.Ed.2d 317 (1983).
much, then why the fuss? Is there really a threat to
In addition, we are not convinced that the practical the separation of powers where Congress has
consequences of such limitations on the authority conferred the judicial power outside Article III
of bankruptcy courts to enter final judgments are only over certain counterclaims in bankruptcy?
as significant as Vickie and the dissent suggest. The short but emphatic answer is yes. A statute
502 See post, at 2630. The dissent *502 asserts that it is 503 *503 may no more lawfully chip away at the
important that counterclaims such as Vickie's be authority of the Judicial Branch than it may
resolved "in a bankruptcy court," and that, "to be eliminate it entirely. "Slight encroachments create
effective, a single tribunal must have broad new boundaries from which legions of power can
authority to restructure [debtor-creditor] seek new territory to capture." Reid v. Covert, 354
relations." Post, at 2628, 2629 (emphasis deleted). U.S. 1, 39, 77 S.Ct. 1222, 1 L.Ed.2d 1148 (1957)
But the framework Congress adopted in the 1984 (plurality opinion). Although "[i]t may be that it is
Act already contemplates that certain state law the obnoxious thing in its mildest and least
matters in bankruptcy cases will be resolved by repulsive form," we cannot overlook the intrusion:
judges other than those of the bankruptcy courts. "illegitimate and unconstitutional practices get
2620 *2620 Section 1334(c)(2), for example, requires their first footing in that way, namely, by silent
that bankruptcy courts abstain from hearing approaches and slight deviations from legal modes
specified non-core, state law claims that "can be of procedure." Boyd v. United States, 116 U.S.
timely adjudicated[ ] in a State forum of 616, 635, 6 S.Ct. 524, 29 L.Ed. 746 (1886). We
appropriate jurisdiction." Section 1334(c)(1) cannot compromise the integrity of the system of
similarly provides that bankruptcy courts may separated powers and the role of the Judiciary in
abstain from hearing any proceeding, including that system, even with respect to challenges that
core matters, "in the interest of comity with State may seem innocuous at first blush.
courts or respect for State law."
***
20
Article III of the Constitution provides that the trustee was not "asserting a right of recovery
judicial power of the United States may be vested created by federal bankruptcy law," ante, at 2618;
only in courts whose judges enjoy the protections and that the Bankruptcy Judge "ha[d] the power to
set forth in that Article. We conclude today that enter ‘appropriate orders and judgments'—
Congress, in one isolated respect, exceeded that including final judgments—subject to review only
limitation in the Bankruptcy Act of 1984. The if a party chooses to appeal," ante, at 2619.
Bankruptcy Court below lacked the constitutional
Apart from their sheer numerosity, the more
authority to enter a final judgment on a state law
fundamental flaw in the many tests suggested by
counterclaim that is not resolved in the process of
our jurisprudence is that they have nothing to do
ruling on a creditor's proof of claim. Accordingly,
with the text or tradition of Article III. For
the judgment of the Court of Appeals is affirmed.
example, Article III gives no indication that state-
It is so ordered. law claims have preferential entitlement to an
Article III judge; nor does it make pertinent the
Justice SCALIA, concurring.
extent to which the area of the law is
I agree with the Court's interpretation of our "particularized." The multifactors relied upon
Article III precedents, and I accordingly join its today seem to have entered our jurisprudence
opinion. I adhere to my view, however, that—our almost randomly.
contrary precedents notwithstanding—"a matter of
Leaving aside certain adjudications by federal
public rights ... must at a minimum arise between
administrative agencies, which are governed (for
the government and others," Granfinanciera, S.A.
better or worse) by our landmark decision in
v. Nordberg, 492 U.S. 33, 65, 109 S.Ct. 2782, 106
Crowell v. Benson, 285 U.S. 22, 52 S.Ct. 285, 76
L.Ed.2d 26 (1989) (SCALIA, J., concurring in
L.Ed. 598 (1932), in my view an Article III judge
part and concurring in judgment) (internal
is required in all federal adjudications, unless
504 quotation marks omitted).*2621 *504
2621
505 there is a firmly established historical *505 practice
The sheer surfeit of factors that the Court was to the contrary. For that reason—and not because
required to consider in this case should arouse the of some intuitive balancing of benefits and harms
suspicion that something is seriously amiss with —I agree that Article III judges are not required in
our jurisprudence in this area. I count at least the context of territorial courts, courts-martial, or
seven different reasons given in the Court's true "public rights" cases. See Northern Pipeline
opinion for concluding that an Article III judge Constr. Co. v. Marathon Pipe Line Co., 458 U.S.
was required to adjudicate this lawsuit: that it was 50, 71, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982)
one "under state common law" which was "not a (plurality opinion). Perhaps historical practice
matter that can be pursued only by grace of the permits non-Article III judges to process claims
other branches," ante, at 2614; that it was "not against the bankruptcy estate, see, e.g., Plank,
‘completely dependent upon’ adjudication of a Why Bankruptcy Judges Need Not and Should
claim created by federal law," ibid.; that " Pierce Not Be Article III Judges, 72 Am. Bankr.L.J. 567,
did not truly consent to resolution of Vickie's 607–609 (1998) ; the subject has not been briefed,
claim in the bankruptcy court proceedings," ibid.; and so I state no position on the matter. But Vickie
that "the asserted authority to decide Vickie's points to no historical practice that authorizes a
claim is not limited to a ‘particularized area of the non-Article III judge to adjudicate a counterclaim
law,’ " ante, at 2615; that "there was never any of the sort at issue here.
reason to believe that the process of adjudicating
Pierce's proof of claim would necessarily resolve
Vickie's counterclaim," ante, at 2617; that the
21
Justice BREYER, with whom Justice not command a Court majority in Northern
GINSBURG, Justice SOTOMAYOR, and Justice Pipeline Constr. Co. v. Marathon Pipe Line Co.,
KAGAN, join dissenting. 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598
(1982), and that was subsequently disavowed. At
Pierce Marshall filed a claim in Federal
the same time, I fear the Court understates the
Bankruptcy Court against the estate of Vickie
importance of a watershed opinion widely thought
Marshall. His claim asserted that Vickie Marshall
to demonstrate the constitutional basis for the
had, through her lawyers, accused him of trying to
current authority of administrative agencies to
prevent her from obtaining money that his father
adjudicate private disputes, namely, Crowell v.
had wanted her to have; that her accusations
Benson, 285 U.S. 22, 52 S.Ct. 285, 76 L.Ed. 598
violated state defamation law; and that she
(1932). And it fails to follow the analysis that this
consequently owed Pierce Marshall damages.
Court more recently has held applicable to the
Vickie Marshall filed a compulsory counterclaim
evaluation of claims of a kind before us here,
in which she asserted that Pierce Marshall had
namely, claims that a congressional delegation of
unlawfully interfered with her husband's efforts to
adjudicatory authority violates separation-of-
grant her an inter vivos gift and that he
powers principles derived from Article III. See
consequently owed her damages.
Thomas v. Union Carbide Agricultural Products
The Bankruptcy Court adjudicated the claim and Co., 473 U.S. 568, 105 S.Ct. 3325, 87 L.Ed.2d
2622 the counterclaim. In doing so, *2622 the court 409 (1985) ; Commodity Futures Trading Comm'n
followed statutory procedures applicable to "core" v. Schor, 478 U.S. 833, 106 S.Ct. 3245, 92 L.Ed.2d
bankruptcy proceedings. See 28 U.S.C. § 157(b). 675 (1986).
And ultimately the Bankruptcy Court entered
I shall describe these cases in some detail in order
judgment in favor of Vickie Marshall. The
to explain why I believe we should put less weight
question before us is whether the Bankruptcy
than does the majority upon the statement in
Court possessed jurisdiction to adjudicate Vickie
Murray's Lessee and the analysis followed by the
Marshall's counterclaim. I agree with the Court
Northern Pipeline plurality and instead should
506 that the bankruptcy statute, *506 § 157(b)(2)(C),
apply the approach this Court has applied in
authorizes a bankruptcy court to adjudicate the
507 Crowell,Thomas, and Schor .*507 A
counterclaim. But I do not agree with the majority
about the statute's constitutionality. I believe the In Murray's Lessee , the Court held that the
statute is consistent with the Constitution's Constitution permitted an executive official,
delegation of the "judicial Power of the United through summary, nonjudicial proceedings, to
States" to the Judicial Branch of Government. Art. attach the assets of a customs collector whose
III, § 1. Consequently, it is constitutional. account was deficient. The Court found evidence
in common law of "summary method[s] for the
I
recovery of debts due to the crown, and especially
My disagreement with the majority's conclusion those due from receivers of the revenues," 18
stems in part from my disagreement about the way How., at 277, and it analogized the Government's
in which it interprets, or at least emphasizes, summary attachment process to the kind of self-
certain precedents. In my view, the majority help remedies available to private parties, id ., at
overstates the current relevance of statements this 283. In the course of its opinion, the Court wrote:
Court made in an 1856 case, Murray's Lessee v.
Hoboken Land & Improvement Co., 59 U.S. 272,
18 How. 272, 15 L.Ed. 372 (1856), and it
overstates the importance of an analysis that did
22
"[W]e do not consider congress can either At the same time, I believe the majority places
withdraw from judicial cognizance any insufficient weight on Crowell, a seminal case that
matter which, from its nature, is the clarified the scope of the dictum in Murray's
subject of a suit at the common law, or in Lessee . In that case, the Court considered whether
equity, or admiralty; nor, on the other Congress could grant to an Article I administrative
hand, can it bring under the judicial power agency the power to adjudicate an employee's
a matter which, from its nature, is not a workers' compensation claim against his
subject for judicial determination. At the employer. The Court assumed that an Article III
same time there are matters, involving court would review the agency's decision de novo
public rights, which may be presented in in respect to questions of law but it would conduct
such form that the judicial power is a less searching review (looking to see only if the
capable of acting on them, and which are agency's award was "supported by evidence in the
susceptible of judicial determination, but record") in respect to questions of fact. Crowell,
which congress may or may not bring 285 U.S., at 48–50, 52 S.Ct. 285. The Court
within the cognizance of pointed out that the case involved a dispute
between private persons (a matter of "private
2623 *2623
rights") and (with one exception not relevant here)
the courts of the United States, as it may it upheld Congress' delegation of primary
deem proper." Id., at 284. factfinding authority to the agency.
The majority reads the first part of the statement's Justice Brandeis, dissenting (from a here-irrelvant
first sentence as authoritatively defining the portion of the Court's holding), wrote that the
boundaries of Article III. Ante, at 2609. I would adjudicatory scheme raised only a due process
read the statement in a less absolute way. For one question: When does due process require decision
thing, the statement is in effect dictum. For by an Article III judge? He answered that question
another, it is the remainder of the statement, by finding constitutional the statute's delegation of
announcing a distinction between "public rights" adjudicatory authority to an agency. Id., at 87, 52
and "private rights," that has had the more lasting S.Ct. 285.
impact. Later Courts have seized on that
Crowell has been hailed as "the greatest of the
distinction when upholding non- Article III
cases validating administrative adjudication."
adjudication, not when striking it down. See Ex
Bator, The Constitution as Architecture:
parte Bakelite Corp., 279 U.S. 438, 451–452, 49
Legislative and Administrative Courts Under
S.Ct. 411, 73 L.Ed. 789 (1929) (Court of Customs
Article III, 65 Ind. L.J. 233, 251 (1990). Yet, in a
Appeals); Williams v. United States, 289 U.S. 553,
footnote, the majority distinguishes Crowell as a
579–580, 53 S.Ct. 751, 77 L.Ed. 1372 (1933)
case in which the Court upheld the delegation of
(Court of Claims). The one exception is Northern
adjudicatory authority to an administrative agency
508 *508 simply because the agency's power to make the
509 "specialized, narrowly confined *509 factual
Pipeline, where the Court struck down the
determinations" at issue arising in a
Bankruptcy Act of 1978. But in that case there
"particularized area of law," made the agency a
was no majority. And a plurality, not a majority,
"true ‘adjunct’ of the District Court." Ante, at
read the statement roughly in the way the Court
2612, n. 6. Were Crowell' s holding as narrow as
does today. See 458 U.S., at 67–70, 102 S.Ct.
the majority suggests, one could question the
2858.
validity of Congress' delegation of authority to
B adjudicate disputes among private parties to other
23
agencies such as the National Labor Relations "establishes only that Congress may not
Board, the Commodity Futures Trading vest in a non- Article III court the power to
Commission, the Surface Transportation Board, adjudicate, render final judgment, and
and the Department of Housing and Urban issue binding orders in a traditional
Development, thereby resurrecting important legal contract action arising under state law,
questions previously thought to have been without consent of the litigants, and
decided. See 29 U.S.C. § 160 ; 7 U.S.C. § 18 ; 49 subject only to ordinary appellate review."
U.S.C. § 10704 ; 42 U.S.C. § 3612(b). Thomas, 473 U.S., at 584, 105 S.Ct. 3325.
C D
The majority, in my view, overemphasizes the Rather than leaning so heavily on the approach
2624 precedential effect of the plurality *2624 opinion in taken by the plurality in Northern Pipeline, I
Northern Pipeline .Ante, at 2609 – 2610. There, would look to this Court's more recent Article III
the Court held unconstitutional the jurisdictional cases Thomas and Schor— cases that commanded
provisions of the Bankruptcy Act of 1978 granting a clear majority. In both cases the Court took a
adjudicatory authority to bankruptcy judges who more pragmatic approach to the constitutional
lack the protections of tenure and compensation question. It sought to determine whether, in the
that Article III provides. Four Members of the particular instance, the challenged delegation of
Court wrote that Congress could grant adjudicatory authority posed a genuine and serious
adjudicatory authority to a non- Article III judge threat that one branch of Government sought to
only where (1) the judge sits on a "territorial aggrandize its own constitutionally delegated
cour[t]" (2) the judge conducts a "courts-martial," authority by encroaching upon a field of authority
or (3) the case involves a "public right," namely, a that the Constitution assigns exclusively to
"matter" that "at a minimum arise[s] ‘between the another branch.
government and others.’ " 458 U.S., at 64–70, 102
1
S.Ct. 2858 (plurality opinion) (quoting Ex parte
Bakelite Corp ., supra, at 451, 49 S.Ct. 411). Two In Thomas, the Court focused directly upon the
other Members of the Court, without accepting nature of the Article III problem, illustrating how
these limitations, agreed with the result because the Court should determine whether a delegation
the case involved a breach-of-contract claim of adjudicatory authority to a non- Article III
brought by the bankruptcy trustee on behalf of the judge violates the Constitution. The statute in
bankruptcy estate against a third party who was question required pesticide manufacturers to
not part of the bankruptcy proceeding, and none of submit to binding arbitration claims for
the Court's preceding cases (which, the two compensation owed for the use by one
Members wrote, "do not admit of easy synthesis") manufacturer of the data of another to support its
had "gone so far as to sanction th[is] type of federal pesticide registration. After describing
adjudication." 458 U.S., at 90–91, 102 S.Ct. 2858 Northern Pipeline 's holding in the language I
510 (Rehnquist, J. concurring in judgment).*510 Three have set forth above, supra, at 2624, the Court
years later, the Court held that Northern Pipeline stated that "practical attention to substance rather
than doctrinaire reliance on formal categories
should inform application of Article III." Thomas,
473 U.S., at 587, 105 S.Ct. 3325 (emphasis
added). It indicated that Article III's requirements
could not be "determined" by "the identity of the
parties alone," ibid., or by the "private
24
511 rights"/"public *511 rights" distinction, id., at 585– 512 adjudicated"; (2) "the extent to which *512 the non-
586, 105 S.Ct. 3325. And it upheld the arbitration Article III forum exercises the range of
provision of the statute. jurisdiction and powers normally vested only in
Article III courts"; (3) the extent to which the
The Court pointed out that the right in question
delegation nonetheless reserves judicial power for
was created by a federal statute, it "represent[s] a
exercise by Article III courts; (4) the presence or
pragmatic solution to the difficult problem of
"absence of consent to an initial adjudication
spreading [certain] costs," and the statute "does
before a non- Article III tribunal"; and (5) "the
not preclude review of the arbitration proceeding
concerns that drove Congress to depart from"
2625 by an *2625 Article III court." Id ., at 589–592, 105
adjudication in an Article III court. Id ., at 849,
S.Ct. 3325. The Court concluded:
851, 106 S.Ct. 3245.
"Given the nature of the right at issue and
The Court added that where "private rights," rather
the concerns motivating the Legislature,
than "public rights" are involved, the "danger of
we do not think this system threatens the
encroaching on the judicial powers" is greater. Id .,
independent role of the Judiciary in our
at 853–854, 106 S.Ct. 3245 (internal quotation
constitutional scheme." Id ., at 590, 105
marks omitted). Thus, while non- Article III
S.Ct. 3325.
adjudication of "private rights" is not necessarily
2 unconstitutional, the Court's constitutional
"examination" of such a scheme must be more
Most recently, in Schor, the Court described in
"searching." Ibid .
greater detail how this Court should analyze this
kind of Article III question. The question at issue Applying this analysis, the Court upheld the
in Schor involved a delegation of authority to an agency's authority to adjudicate the counterclaim.
agency to adjudicate a counterclaim. A customer The Court conceded that the adjudication might be
brought before the Commodity Futures Trading of a kind traditionally decided by a court and that
Commission (CFTC) a claim for reparations the rights at issue were "private," not "public." Id
against his commodity futures broker. The ., at 853, 106 S.Ct. 3245. But, the Court said, the
customer noted that his brokerage account showed CFTC deals only with a " ‘particularized area of
that he owed the broker money, but he said that law’ "; the decision to invoke the CFTC forum is
the broker's unlawful actions had produced that "left entirely to the parties"; Article III courts can
debit balance, and he sought damages. The broker review the agency's findings of fact under "the
brought a counterclaim seeking the money that the same ‘weight of the evidence’ standard sustained
account showed the customer owed. This Court in Crowell " and review its "legal determinations
had to decide whether agency adjudication of such ... de novo "; and the agency's "counterclaim
a counterclaim is consistent with Article III. jurisdiction" was necessary to make "workable" a
"reparations procedure," which constitutes an
In doing so, the Court expressly "declined to adopt
important part of a congressionally enacted
formalistic and unbending rules." Schor, 478 U.S.,
"regulatory scheme." Id ., at 852–856, 106 S.Ct.
at 851, 106 S.Ct. 3245. Rather, it "weighed a
3245. The Court concluded that for these and
number of factors, none of which has been
other reasons "the magnitude of any intrusion on
deemed determinative, with an eye to the practical
the Judicial Branch can only be termed de
effect that the congressional action will have on
minimis. " Id., at 856, 106 S.Ct. 3245.
the constitutionally assigned role of the federal
judiciary." Ibid . Those relevant factors include (1) II
"the origins and importance of the right to be
A
25
This case law, as applied in Thomas and Schor, First, I concede that the nature of the claim to be
2626 requires us to determine pragmatically *2626 adjudicated argues against my conclusion. Vickie
513 whether a congressional delegation *513 of Marshall's counterclaim—a kind of tort suit—
adjudicatory authority to a non- Article III judge resembles "a suit at the common law." Murray's
violates the separation-of-powers principles 514 Lessee, 18 How., at 284. Although not *514
inherent in Article III. That is to say, we must determinative of the question, see Schor, 478 U.S.,
determine through an examination of certain at 853, 106 S.Ct. 3245, a delegation of authority to
relevant factors whether that delegation constitutes a non- Article III judge to adjudicate a claim of
a significant encroachment by the Legislative or that kind poses a heightened risk of encroachment
Executive Branches of Government upon the on the Federal Judiciary, id., at 854, 106 S.Ct.
realm of authority that Article III reserves for 3245.
exercise by the Judicial Branch of Government.
At the same time the significance of this factor is
Those factors include (1) the nature of the claim to
mitigated here by the fact that bankruptcy courts
be adjudicated; (2) the nature of the non- Article
often decide claims that similarly resemble various
III tribunal; (3) the extent to which Article III
common-law actions. Suppose, for example, that
courts exercise control over the proceeding; (4)
ownership of 40 acres of land in the bankruptcy
the presence or absence of the parties' consent;
debtor's possession is disputed by a creditor. If that
and (5) the nature and importance of the
creditor brings a claim in the bankruptcy court,
legislative purpose served by the grant of
resolution of that dispute requires the bankruptcy
adjudicatory authority to a tribunal with judges
court to apply the same state property law that
who lack Article III's tenure and compensation
would govern in a state court proceeding. This
protections. The presence of " private rights" does
kind of dispute arises with regularity in
not automatically determine the outcome of the
bankruptcy proceedings.
question but requires a more "searching"
examination of the relevant factors. Schor, supra, Of course, in this instance the state-law question is
at 854, 106 S.Ct. 3245. embedded in a debtor's counterclaim, not a
creditor's claim. But the counterclaim is
Insofar as the majority would apply more formal
"compulsory." It "arises out of the transaction or
standards, it simply disregards recent, controlling
occurrence that is the subject matter of the
precedent. Thomas, supra, at 587, 105 S.Ct. 3325
opposing party's claim." Fed. Rule Civ. Proc. 13(a)
("[P]ractical attention to substance rather than
; Fed. Rule Bkrtcy. Proc. 7013. Thus, resolution of
doctrinaire reliance on formal categories should
the counterclaim will often turn on facts identical
inform application of Article III"); Schor,supra, at
to, or at least related to, those at issue in a
851, 106 S.Ct. 3245 ("[T]he Court has declined to
creditor's claim that is undisputedly proper for the
adopt formalistic and unbending rules" for
bankruptcy court to decide.
deciding Article III cases).
Second, the nature of the non- Article III tribunal
B
argues in favor of constitutionality. That is
Applying Schor' s approach here, I conclude that because the tribunal is made up of judges who
the delegation of adjudicatory authority before us 2627 enjoy considerable protection *2627 from improper
is constitutional. A grant of authority to a political influence. Unlike the 1978 Act which
bankruptcy court to adjudicate compulsory provided for the appointment of bankruptcy judges
counterclaims does not violate any constitutional by the President with the advice and consent of the
separation-of-powers principle related to Article Senate, 28 U.S.C. § 152 (1976 ed., Supp. IV),
III. current law provides that the federal courts of
26
appeals appoint federal bankruptcy judges, § Moreover, in one important respect Article III
152(a)(1) (2006 ed.). Bankruptcy judges are judges maintain greater control over the
removable by the circuit judicial counsel (made up bankruptcy court proceedings at issue here than
of federal court of appeals and district court they did over the relevant proceedings in any of
judges) and only for cause. § 152(e). Their salaries the previous cases in which this Court has upheld
are pegged to those of federal district court judges, a delegation of adjudicatory power. The District
§ 153(a), and the cost of their courthouses and Court here may "withdraw, in whole or in part,
515 other *515 work-related expenses are paid by the 516 any case or *516 proceeding referred [to the
Judiciary, § 156. Thus, although Congress Bankruptcy Court] ... on its own motion or on
technically exercised its Article I power when it timely motion of any party, for cause shown." 28
created bankruptcy courts, functionally, U.S.C. § 157(d) ; cf. Northern Pipeline, 458 U.S.,
bankruptcy judges can be compared to magistrate at 80, n. 31, 102 S.Ct. 2858 (plurality opinion)
judges, law clerks, and the Judiciary's (contrasting pre–1978 law where "power to
administrative officials, whose lack of Article III withdraw the case from the [bankruptcy] referee"
tenure and compensation protections do not gave district courts "control" over case with the
endanger the independence of the Judicial Branch. unconstitutional 1978 statute, which provided no
such district court authority).
Third, the control exercised by Article III judges
over bankruptcy proceedings argues in favor of Fourth, the fact that the parties have consented to
constitutionality. Article III judges control and Bankruptcy Court jurisdiction argues in favor of
supervise the bankruptcy court's determinations— constitutionality, and strongly so. Pierce Marshall,
at least to the same degree that Article III judges the counterclaim defendant, is not a stranger to the
supervised the agency's determinations in Crowell, litigation, forced to appear in Bankruptcy Court
if not more so. Any party may appeal those against his will. Cf. id., at 91, 102 S.Ct. 2858
determinations to the federal district court, where (Rehnquist, J., concurring in judgment) (suit was
the federal judge will review all determinations of litigated in Bankruptcy Court "over [the
fact for clear error and will review all defendant's] objection"). Rather, he appeared
determinations of law de novo. Fed. Rule Bkrtcy. voluntarily in Bankruptcy Court as one of Vickie
Proc. 8013 ; 10 Collier on Bankruptcy ¶ 8013.04 Marshall's creditors, seeking a favorable
(16th ed.2011). But for the here-irrelevant matter resolution of his claim against Vickie Marshall to
of what Crowell considered to be special 2628 the detriment of her other creditors. *2628 He need
"constitutional" facts, the standard of review for not have filed a claim, perhaps not even at the cost
factual findings here ("clearly erroneous") is more of bringing it in the future, for he says his claim is
stringent than the standard at issue in Crowell "nondischargeable," in which case he could have
(whether the agency's factfinding was "supported litigated it in a state or federal court after
by evidence in the record"). 285 U.S., at 48, 52 distribution. See 11 U.S.C. § 523(a)(6). Thus,
S.Ct. 285; see Dickinson v. Zurko, 527 U.S. 150, Pierce Marshall likely had "an alternative forum to
152, 153, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999) the bankruptcy court in which to pursue [his]
( "unsupported by substantial evidence" more clai[m]." Granfinanciera, S.A. v. Nordberg, 492
deferential than "clearly erroneous" (internal U.S. 33, 59, n. 14, 109 S.Ct. 2782, 106 L.Ed.2d 26
quotation marks omitted)). And, as Crowell noted, (1989).
"there is no requirement that, in order to maintain
The Court has held, in a highly analogous context,
the essential attributes of the judicial power, all
that this type of consent argues strongly in favor
determinations of fact in constitutional courts shall
of using ordinary bankruptcy court proceedings. In
be made by judges." 285 U.S., at 51, 52 S.Ct. 285.
Granfinanciera, the Court held that when a
27
bankruptcy trustee seeks to void a transfer of jurisdiction, ante, at 2614 – 2615, but filing a
assets from the debtor to an individual on the proof of claim was sufficient in Langenkamp and
ground that the transfer to that individual Granfinanciera, and there is no relevant
constitutes an unlawful "preference," the question distinction between the claims filed in those cases
of whether the individual has a right to a jury trial and the claim filed here.
"depends upon whether the creditor has submitted
Fifth, the nature and importance of the legislative
a claim against the estate." Id ., at 58, 109 S.Ct.
purpose served by the grant of adjudicatory
517 2782. The following year, in *517 Langenkamp v.
authority to bankruptcy tribunals argues strongly
Culp, 498 U.S. 42, 111 S.Ct. 330, 112 L.Ed.2d 343
in favor of constitutionality. Congress' delegation
(1990)(per curiam), the Court emphasized that
518 of adjudicatory powers over counterclaims *518
when the individual files a claim against the
asserted against bankruptcy claimants constitutes
estate, that individual has
an important means of securing a constitutionally
"trigger[ed] the process of ‘allowance and authorized end. Article I, § 8, of the Constitution
disallowance of claims,’ thereby explicitly grants Congress the "Power To ...
subjecting himself to the bankruptcy establish ... uniform Laws on the subject of
court's equitable power. If the creditor is Bankruptcies throughout the United States." James
met, in turn, with a preference action from Madison wrote in the Federalist Papers that the
the trustee, that action becomes part of the
"power of establishing uniform laws of
claims-allowance process which is triable
bankruptcy is so intimately connected with
only in equity. In other words, the
the regulation of commerce, and will
creditor's claim and the ensuing preference
prevent so many frauds where the
action by the trustee become integral to the
restructuring of the debtor-creditor 2629 *2629
relationship through the bankruptcy court's
parties or their property may lie or be
equity jurisdiction ." Id., at 44, 111 S.Ct.
removed into different States, that the
330 (quoting Granfinanciera, 492 U.S., at
expediency of it seems not likely to be
58, 109 S.Ct. 2782; citations omitted).
drawn into question." The Federalist No.
As we have recognized, the jury trial question and 42, p. 271 (C. Rossiter ed.1961).
the Article III question are highly analogous. See
Congress established the first Bankruptcy Act in
id., at 52–53, 111 S.Ct. 330. And to that extent,
1800. 2 Stat. 19. From the beginning, the "core" of
Granfinanciera 's and Langenkamp 's basic
federal bankruptcy proceedings has been "the
reasoning and conclusion apply here: Even when
restructuring of debtor-creditor relations."
private rights are at issue, non- Article III
Northern Pipeline, supra, at 71, 102 S.Ct. 2858
adjudication may be appropriate when both parties
(plurality opinion). And, to be effective, a single
consent. Cf. Northern Pipeline, supra, at 80, n. 31,
tribunal must have broad authority to restructure
102 S.Ct. 2858 (plurality opinion) (noting the
those relations, "having jurisdiction of the parties
importance of consent to bankruptcy jurisdiction).
to controversies brought before them," "decid[ing]
See also Schor, 478 U.S., at 849, 106 S.Ct. 3245 ("
all matters in dispute," and "decree[ing] complete
[A]bsence of consent to an initial adjudication
relief." Katchen v. Landy, 382 U.S. 323, 335, 86
before a non- Article III tribunal was relied on [in
S.Ct. 467, 15 L.Ed.2d 391 (1966) (internal
Northern Pipeline ] as a significant factor in
quotation marks omitted).
determining that Article III forbade such
adjudication"). The majority argues that Pierce
Marshall "did not truly consent" to bankruptcy
28
The restructuring process requires a creditor to file deference to that determination, which shows the
a proof of claim in the bankruptcy court. 11 U.S.C. absence of any legislative or executive motive,
§ 501 ; Fed. Rule Bkrtcy. Proc. 3002(a). In doing intent, purpose, or desire to encroach upon areas
so, the creditor "triggers the process of ‘allowance that Article III reserves to judges to whom it
and disallowance of claims,’ thereby subjecting grants tenure and compensation protections.
himself to the bankruptcy court's equitable
Considering these factors together, I conclude that,
power." Langenkamp, supra, at 44, 111 S.Ct. 330
as in Schor, "the magnitude of any intrusion on the
(quoting Granfinanciera, supra, at 58, 109 S.Ct.
Judicial Branch can only be termed de minimis ."
2782). By filing a proof of claim, the creditor
478 U.S., at 856, 106 S.Ct. 3245. I would
agrees to the bankruptcy court's resolution of that
similarly find the statute before us constitutional.
claim, and if the creditor wins, the creditor will
receive a share of the distribution of the III
bankruptcy estate. When the bankruptcy estate has
The majority predicts that as a "practical matter"
a related claim against that creditor, that
today's decision "does not change all that much."
counterclaim may offset the creditor's claim, or
Ante, at 2619 – 2620. But I doubt that is so.
519 even *519 yield additional damages that augment
520 Consider a typical case: A tenant *520 files for
the estate and may be distributed to the other
bankruptcy. The landlord files a claim for unpaid
creditors.
rent. The tenant asserts a counterclaim for
The consequent importance to the total bankruptcy 2630 damages *2630 suffered by the landlord's (1) failing
scheme of permitting the trustee in bankruptcy to to fulfill his obligations as lessor, and (2)
assert counterclaims against claimants, and improperly recovering possession of the premises
resolving those counterclaims in a bankruptcy by misrepresenting the facts in housing court.
court, is reflected in the fact that Congress (These are close to the facts presented in In re
included "counterclaims by the estate against Beugen, 81 B.R. 994 (Bkrtcy.Ct.N.D.Cal.1988).)
persons filing claims against the estate" on its list This state-law counterclaim does not "ste[m] from
of "[c]ore proceedings." 28 U.S.C. § 157(b)(2)(C). the bankruptcy itself," ante, at 2618, it would not
And it explains the difference, reflected in this "necessarily be resolved in the claims allowance
Court's opinions, between a claimant's and a process," ibid ., and it would require the debtor to
nonclaimant's constitutional right to a jury trial. prove damages suffered by the lessor's failures, the
Compare Granfinanciera, supra, at 58–59, 109 extent to which the landlord's representations to
S.Ct. 2782 ("Because petitioners ... have not filed the housing court were untrue, and damages
claims against the estate" they retain "their suffered by improper recovery of possession of the
Seventh Amendment right to a trial by jury"), with premises, cf. ante, at 2617 – 2618. Thus, under the
Langenkamp, supra, at 45, 111 S.Ct. 330 majority's holding, the federal district judge, not
("Respondents filed claims against the bankruptcy the bankruptcy judge, would have to hear and
estate" and "[c]onsequently, they were not entitled resolve the counterclaim.
to a jury trial").
Why is that a problem? Because these types of
Consequently a bankruptcy court's determination disputes arise in bankruptcy court with some
of such matters has more than "some bearing on a frequency. See, e.g., In re CBI Holding Co., 529
bankruptcy case." Ante, at 2618 (emphasis F.3d 432 (C.A.2 2008) (state-law claims and
deleted). It plays a critical role in Congress' counterclaims); In re Winstar Communications,
constitutionally based effort to create an efficient, Inc., 348 B.R. 234 (Bkrtcy.Ct.Del.2005) (same);
effective federal bankruptcy system. At the least, In re Ascher, 128 B.R. 639
that is what Congress concluded. We owe (Bkrtcy.Ct.N.D.Ill.1991) (same); In re Sun West
29
Distributors, Inc., 69 B.R. 861

(Bkrtcy.Ct.S.D.Cal.1987) (same). Because the
volume of bankruptcy cases is staggering,
involving almost 1.6 million filings last year,
compared to a federal district court docket of
around 280,000 civil cases and 78,000 criminal
cases. Administrative Office of the United States
Courts, J. Duff, Judicial Business of the United
States Courts: Annual Report of the Director 14
(2010). Because unlike the "related" non-core
state law claims that bankruptcy courts must
abstain from hearing, see ante, at 2619,
compulsory counterclaims involve the same
factual disputes as the claims that may be finally
adjudicated by the bankruptcy courts. Because
under these circumstances, a constitutionally
521 required game of jurisdictional *521 ping-pong
between courts would lead to inefficiency,
increased cost, delay, and needless additional
suffering among those faced with bankruptcy.
For these reasons, with respect, I dissent.
30

Stern v. Marshall

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No. 10-179.

Argued January 18, 2011

No. 10–179. CHIEF JUSTICE ROBERTS delivered the

different types of matters, including "(J) objections to discharges;

lacking the tenure and salary guarantees of Article

493 *493 Vickie's counterclaim—like the fraudulent pursue their claims").8

Distributors, Inc., 69 B.R. 861

For these reasons, with respect, I dissent.

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