Granfinanciera v. Nordberg/Dissent White

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Justice WHITE, dissenting.

The Court's decision today calls into question several of our previous decisions, [1] strikes down at least one federal statute, [2] and potentially concludes for the first time that the Seventh Amendment [3] guarantees litigants in a specialized non-Article III forum the right to a jury trial. Because I cannot accept these departures from established law, I respectfully dissent.

* Before I explore the Court's approach to analyzing the issues presented in this case, I first take up the question of the precedent that the Court most directly disregards today, Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966). Though the Court professes not to overrule this decision, and curiously, to be acting in reliance on it, see ante, at 57-59, there is simply no way to reconcile our decision in Katchen with what the Court holds today.

In Katchen, the petitioner filed a claim in the bankruptcy proceeding to recover funds that he alleged were due to him from a bankrupt estate; respondent, the trustee, resisted paying the claims based on § 57(g) of the old Bankruptcy Act, which forbade payments to creditors holding "void or voidable" preferences. Petitioner claimed, much as petitioners here do, that the question whether prior payments to him were preferences was a matter that could not be adjudicated without the benefit of a jury trial. We rejected this claim, holding that "there is no Seventh Amendment right to a jury trial" on claims such as Katchen's. Katchen, 382 U.S., at 337, 86 S.Ct., at 476. Not only could the issue of preference be tried without a jury for the purpose of denying the filed claim pursuant to § 57(g), but a money judgment for the amount of the pre erence could be entered without a jury trial: "[I]t makes no difference, so far as petitioner's Seventh Amendment claim is concerned, whether the bankruptcy trustee urges only a § 57(g) objection or also seeks affirmative relief." Id., at 337-338, 86 S.Ct., at 477. This holding dispositively settles the question before us today: like the petitioner in Katchen, petitioners in this case have no Seventh Amendment right to a jury trial when respondent trustee seeks to avoid the allegedly fraudulent transfers they received.

In order to escape the force of Katchen § holding, the Court exploits the circumstances under which that decision was made. Most notably, at the time Katchen was decided, the Bankruptcy Act then in force (the 1898 Act) did not include actions to set aside voidable preferences among those proceedings covered by the Act. Thus, the clause of our opinion in Katchen, supra, at 336, 86 S.Ct., at 476, on which the Court today puts so much weight-"petitioner might be entitled to a jury trial on the issue of preference if he presented no claim in the bankruptcy proceeding and awaited a federal plenary action by the trustee," see ante, at 58-simply stated the truism that, under the 1898 Act in force at that time, if petitioner had not presented his claim to the bankruptcy court, that court would have had no jurisdiction to perform a summary adjudication of the preference.

That entitlement, however, on which the Court so heavily relies, was solely the product of the statutory scheme in existence at the time. If it were not, the next phrase appearing in the Katchen decision would make little sense: "[W]hen the same issue [i.e., validity of a preference] arises as part of the process of allowance and disallowance of claims, it is triable in equity." Katchen, supra, at 336, 86 S.Ct., at 476. Katchen makes it clear that when Congress does commit the issue and recovery of a preference to adjudication in a bankruptcy proceeding, the Seventh Amendment is inapplicable. Only the limits of the 1898 Act prevented this from being the case in all instances, and thereby, left Katchen with the possibility of a jury trial right.

Today's Bankruptcy Code is markedly different. Specifically, under the Bankruptcy Amendments and Federal Judgeship Act of 1984 (1984 Amendments), an action to recover fraudulently transferred property has been classified as a "core" bankruptcy proceeding. See 28 U.S.C. § 157(b)(2)(H) (1982 ed., Supp. V). While in Katchen's day, it was only in special circumstances that adjudicating a preference was committed to bankruptcy proceedings, today, Congress has expressly designated adjudication of a preference or a fraudulent transfer a "core" bankruptcy proceeding. The portion of Katchen on which the Court relies-" 'petitioner might be entitled to a jury trial on the issue of preference if he presented no claim in the bankruptcy proceeding and awaited a federal plenary action by the trustee,' " see ante, at 58-is therefore a relic of history. The same is true of the decision in Schoen- thal v. Irving Trust Co., 287 U.S. 92, 94-95, 53 S.Ct. 50, 51, 77 L.Ed. 185 (1932), which, in holding that "[s]uits to recover preferences constitute no part of the proceedings in bankruptcy," merely reflected the then-existing statutory scheme.

The Court recognizes the distinction between the earlier law and the present Code, but calls the change a "purely taxonomic" one that "cannot alter our Seventh Amendment analysis." Ante, at 61. I disagree for two reasons. First, the change is significant because it illustrates the state of the law at the time of Katchen, and explains why that case came out as it did. It is hypocritical for the Court to rely on Katchen § statement as to the existence of a jury trial entitlement for the petitioner's claim there, but then dismiss as "taxonomic" the change that wiped out that jury entitlement-or, at the very least, profoun ly shifted the basis for it.

More fundamentally, the inclusion of actions to recover fraudulently conveyed property among core bankruptcy proceedings has meaning beyond the taxonomic. As I explain in more detail below, see Part II-A, infra, we have long recognized that the forum in which a claim is to be heard plays a substantial role in determining the extent to which a Seventh Amendment jury trial right exists. As we put it in Katchen:

" '[I]n cases of bankruptcy, many incidental questions arise in the course of administering the bankrupt estate, which would ordinarily be pure cases at law, and in respect of their facts triable by jury, but, as belonging to bankruptcy proceedings, they become cases over which the bankruptcy court, which acts as a court of equity, exercises exclusive control. Thus a claim of debt or damages against the bankrupt is investigated by chancery methods.' " Katchen, supra, at 337, 86 S.Ct., at 477 (quoting Barton v. Barbour, 104 U.S. 126, 133-134, 26 L.Ed. 672 (1881)).

The same is true here, and it counsels affirmance under our holding in Katchen. In essence, the Court's rejection of Katchen-and its classification of the change effected by the 1984 Act as "taxonomic"-comes from its conclusion that the fraudulent conveyance action at issue here is not " 'part of the process of allowance and disallowance of claims.' " Ante, at 58 (quoting Katchen, 382 U.S., at 336, 86 S.Ct., at 476). The Court misses Katchen § point, however: it was the fact that Congress had committed the determination and recovery of preferences to bankruptcy proceedings that was determinative in that case, not just the bare fact that the action "happened" to take place in the process of adjudicating claims. And the same determinative element is present here, for under the 1984 Amendments, Congress unmistakably intended to have fraudulent conveyances adjudicated and recovered in the bankruptcy court in accordance with that court's usual procedures.

Perhaps in this respect the Court means something more akin to its later restatement of its position; namely, that the 1984 Amendments simply "reclassified a pre-existing, common-law cause of action that was not integrally related to the reformation of debtor-creditor relations." Ante, at 60. The Court further indicates that it will pay little heed to the congressional inclusion of avoidance and recovery proceedings in core bankruptcy jurisdiction since that choice was not made "because [Congress found that] traditional rights and remedies were inadequate to cope with a manifest public problem." [4] Ibid. This misguided view of the congressional enactment is the crux of the problem with the Court's approach.

How does the Court determine that an action to recover fraudulently conveyed property is not "integrally related" to the essence of bankruptcy proceedings? Certainly not by reference to a current statutory definition of the core of bankruptcy proceedings-enacted by Congress under its plenary constitutional power, see U.S.C.onst., Art. I, § 8, cl. 4, to establish bankruptcy laws. As discussed in the preceding paragraph, this vision of what is "integrally related" to the resolution of creditor-debtor conflicts includes the sort of action before us today. See 28 U.S.C. § 157(b)(2)(H) (1982 ed., Supp. V). Nor does the Court find support for its contrary understanding in petitioners' submission, which concedes that the action in question here is brought to "recover monies that are properly part of the debtor's estate and should be ratably distributed among creditors," and that fraudulent transfers put at risk "the basic policy of non-discriminatory distribution that underlies the bankruptcy law." Brief for Petitioners 12. This, too, seems to belie the Court's view that actions to set aside fraudulent conveyances are not "integrally related" to reforming creditor-debtor relations.

Nor is the Court's conclusion about the nature of actions to recover fraudulently transferred property supportable either by reference to the state of American bankruptcy law prior to adoption of the 1978 Code, or by reference to the pre-1791 practice in the English courts. If the Court draws its conclusions based on the fact that these actions were not considered to be part of bankruptcy proceedings under the 1800 or 1898 Bankruptcy Acts (or, more generally, under federal bankruptcy statutes predating the 1978 Code), it has treated the power given Congress in Article I, § 8, cl. 4, as if it were a disposable battery, good for a limited period only-once the power in it has been consumed by use, it is to be discarded and considered to have no future value. The power of Congress under this Clause is plainly not so limited: merely because Congress once had a scheme where actions such as this one were solely heard in p enary proceedings in Article III courts-where the Seventh Amendment attached-does not impugn the legality of every other possible arrangement. See also Part II-B, infra. Perhaps instead the Court rests its conclusion on the practice of the 18th-century English courts. I take issue with this view of the old English law, below. But even if this were correct, I do not see why the Article I, § 8, power should be so restricted. See ibid.

One final observation with respect to Katchen. The Court attempts to distinguish Katchen by saying that a jury trial was not needed there because the funds in dispute were part of the "bankruptcy estate." Ante, at 57. "Our decision [in Katchen ] turned . . . on the bankruptcy court's having 'actual or constructive possession' of the bankruptcy estate," the Court writes. Ibid. (quoting 382 U.S., at 327, 86 S.Ct., at 471). But obviously in this case, the Bankruptcy Court similarly had " 'actual or constructive possession' of the bankruptcy estate"; certainly it had as much constructive possession of the property sought as it had of the preference recovered in Katchen. Thus, it is as true here as it was in Katchen that the funds in dispute are part of the "bankruptcy estate." The Bankruptcy Code defines that estate to be comprised of "all the following property, wherever located and by whomever held," including "[a]ny interest in property that the trustee recovers under" the provision authorizing actions to recover fraudulently transferred property. 11 U.S.C. §§ 541(a)(3), 550 (1982 ed., Supp. V). Consequently, even if the Court is accurate in pinpointing the dispositive fact in the Katchen decision, that fact equally points towards a ruling for the trustee here.

In sum, I find that our holding in Katchen, and its underlying logic, dictate affirmance. The Court's decision today amounts to nothing less than a sub silentio overruling of that precedent.

Even if the question before us were one of first impression, however, and we did not have the decision in Katchen to guide us, I would dissent from the Court's decision. Under our cases, the determination whether the Seventh Amendment guarantees a jury trial on petitioners' claims must turn on two questions: first, in what forum will those claims be heard; and second, what is the nature of those claims. A weighing of both of these factors must point toward application of the Seventh Amendment before that guarantee will attach. [5]

To read the Court's opinion, one might think that the Seventh Amendment is concerned only with the nature of a claim. If a laim is legal, the Court announces, then the Seventh Amendment guarantees a jury trial on that claim. Ante, at 42, n. 4. This is wrong. "[H]istory and our cases support the proposition that the right to a jury trial turns not solely on the nature of the issue to be resolved but also on the forum in which it is to be resolved," Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442, 460-461, 97 S.Ct. 1261, 1272, 51 L.Ed.2d 464 (1977). Perhaps like Katchen, Atlas Roofing is no longer good law after today's decision. A further examination of the issue before us reveals, though, that it is the Court's decision today, and not our prior rulings, that is in error.

In the most obvious case, it has been held that the Seventh Amendment does not apply when a "suit at common law" is heard in a state court. Minneapolis & St. L.R. Co. v. Bombolis, 241 U.S. 211, 217, 36 S.Ct. 595, 596, 60 L.Ed. 961 (1916); Woods v. Holy Cross Hospital, 591 F.2d 1164, 1171, n. 12 (CA5 1979). Even with its exclusive focus on the claim at issue here, the Court does not purport to hold that a fraudulent conveyance action brought in state court would be covered by the Seventh Amendment, because that action was one at "common law" in the Court's view.

Nor does the Seventh Amendment apply in all federal forums. "[T]he Seventh Amendment is not applicable to administrative proceedings," for example. Tull v. United States, 481 U.S. 412, 418, n. 4, 107 S.Ct. 1831, 1835, n. 4, 95 L.Ed.2d 365 (1987). In these forums " 'where jury trials would be incompatible with the whole concept of administrative adjudication,' " the Seventh Amendment has no application. Atlas Roofing Co., supra, 430 U.S., at 454, 97 S.Ct., at 1268 (emphasis deleted) (quoting Pernell v. Southall Realty, 416 U.S. 363, 383, 94 S.Ct. 1723, 1733, 40 L.Ed.2d 198 (1974)). Thus, we have often looked at the character of the federal forum in which the claim will be heard, asking if a jury has a place in that forum, when determining if the Seventh Amendment's guarantee of a jury trial will apply there.

Most specifically relevant for this case, we have indicated on several previous occasions that bankruptcy courts-by their very nature, courts of equity-are forums in which a jury would be out of place. "[A] bankruptcy court . . . [is] a specialized court of equity . . . a forum before which a jury would be out of place," Atlas Roofing, supra, 430 U.S., at 454, n. 11, 97 S.Ct., at 1268; consequently, the Seventh Amendment has no application to these courts. "[T]he Court [has] recognized that a bankruptcy court has been traditionally viewed as a court of equity, and that jury trials would 'dismember' the statutory scheme of the Bankruptcy Act." Curtis v. Loether, 415 U.S. 189, 195, 94 S.Ct. 1005, 1009, 39 L.Ed.2d 260 (1974). Atlas Roofing, Curtis, and countless other cases have recognized that Congress has the power to "entrust enforcement of statutory rights to [a] . . . specialized court of equity free from the strictures of the Seventh Amendment." Curtis, supra, at 195, 94 S.Ct., at 1009. Prior cases emphatically hold that bankruptcy courts are such specialized courts of equity. Indeed, we have stated that "bankruptcy courts are inherently proceedings in equity." Katchen v. Landy, 382 U.S., at 336, 86 S.Ct., at 476; see also Local Loan Co. v. Hunt, 292 U.S. 234, 240, 54 S.Ct. 695, 697, 78 L.Ed. 1230 (1934).

Before today, this Court has never held that a party in a bankruptcy court has a Seventh Amendment right to a jury trial on its claims. Of course, the Court does not actually so hold today, preferring to be obtuse about just where petitioners are going to obtain the jury trial to which the Court deems them entitled. See ante, at 64. But in blithely ignoring the relevance of the forum Congress has designated to hear this action-focusing instead exclusively on the "legal" nature of petitioners' claim the Court turns its back on a long line of cases that have rested, in varying degrees, on that point. The Court's decision today ignores our statement in Atlas Roofing that "even if the Seventh Amendment would have required a jury where the adjudication of [some types of] rights is assigned to a federal court of law instead of an administrative agency," this constitutional provision does not apply when Congress assigns the adjudication of these rights to specialized tribunals where juries have no place. Atlas Roofing, 430 U.S., at 455, 97 S.Ct., at 1269. Indeed, we observed in Atlas Roofing that it was even true in "English or American legal systems at the time of the adoption of the Seventh Amendment [that] the question whether a fact would be found by a jury turned to a considerable degree on the nature of the forum in which a litigant found himself." Id., at 458, 97 S.Ct., at 1270.

The Court's decision also substantially cuts back on Congress' power to assign selected causes of action to specialized forums and tribunals (such as bankruptcy courts), by holding that these forums will have to employ juries when hearing claims like the one before us today-a requirement that subverts in large part Congress' decision to create such forums in the first place. Past decisions have accorded Congress far more discretion in making these assignments. Thus, Block v. Hirsh, 256 U.S. 135, 158, 41 S.Ct. 458, 460, 65 L.Ed. 865 (1921), found that a Seventh Amendment "objection amount[ed] to little" when Congress assigned what was, in essence, a common-law action for ejectment to a specialized administrative tribunal. We reiterated the vitality of Block v. Hirsh as recently as our decision in Pernell v. Southall Realty, supra, 416 U.S., at 383, 94 S.Ct., at 1733, and the principle was reaffirmed in several cases between these two decisions. See n. 10, infra. In Pernell, referring to Block v. Hirsh, we stated that "the Seventh Amendment would not be a bar to a congressional effort to entrust landlord-tenant disputes, including those over the right to possession, to an administrative agency." Pernell, supra, at 383, 94 S.Ct., at 1733. Yet to the extent that such disputes involve matters that are "legal" in nature-as they clearly do-the Court's decision today means that Congress cannot do what we said in Block and Pernell that it could. [6]

Finally, the Court's ruling today ignores several additional reasons why juries have no place in bankruptcy courts and other "specialized courts of equity" like them. First, two of the principal rationales for the existence of the Seventh Amendment guarantee-the notions of "jury equity" and of juries serving as popular checks on life-tenured judges-are inapt in bankruptcy courts. As one scholar noted:

"We have kept the civil jury . . . as a check on the federal judge whose life tenure makes [him] suspect [under]

. . . the Populist traditions of this country. The function of the civil jury is to diffuse the otherwise autocratic power and authority of the judge.

"This . . . function . . . has little application to non-traditional civil proceedings such as those which occur in bankruptcy. . . . The condition of autocracy which would bring the underlying values of the Seventh Amendment [into force] is not present; the right to jury trial therefore has no application." Hearings on S. 558 before the Subcommittee on the Constitution of the Senate Committee on the Judiciary, 100th Cong., 1st Sess., 5 2-573 (1987) (statement of Paul Carrington).

Others have made this same observation. See, e.g., id., at 684-685 (statement of Prof. Rowe). Cf., e.g., In re Japanese Electronic Products Antitrust Litigation, 631 F.2d 1069, 1085 (CA3 1980). As respondent put it: "A jury in an equitable tribunal such as a bankruptcy court would in a sense be redundant." Brief for Respondent 22.

Beyond its redundancy, a requirement that juries be used in bankruptcy courts would be disruptive and would unravel the statutory scheme that Congress has created. The Court dismisses this prospect, and scoffs that it "can[not] seriously be argued that permitting jury trials" on this sort of claim would undermine the statutory bankruptcy scheme. Ante, at 61. Yet this argument has not only been "seriously" made, it was actually accepted by this Court in Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974). In Curtis, we observed that Katchen had rejected a Seventh Amendment claim (similar to the one before us today), due to our "recogni[tion] that a bankruptcy court has been traditionally viewed as a court of equity, and that jury trials would 'dismember' the statutory scheme of the Bankruptcy Act." Curtis, supra, 415 U.S., at 195, 94 S.Ct., at 1009; see also Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S., at 454, n. 11, 97 S.Ct., at 1268, n. 11. I fear that the Court's decision today will have the desultory effect we feared when Curtis was decided.

The above is not to say that Congress can vitiate the Seventh Amendment by assigning any claim that it wishes to a specialized tribunal in which juries are not employed. Cf. Atlas Roofing, supra, at 461, n. 16, 97 S.Ct., at 1272, n. 16. Our cases require a second inquiry-the one that the Court focuses exclusively upon concerning the nature of the claim so assigned.

To resolve this query, the Court properly begins its analysis with a look at English practice of the 18th century. See ante, at 43-47. After conducting this review, the Court states with confidence that "in 18th-century England . . . a court of equity would not have adjudicated" respondent's suit. Ante, at 47. While I agree that this action could have been brought at law-and perhaps even that it might have been so litigated in the most common case-my review of the English cases from the relevant period leaves me unconvinced that the chancery court would have refused to hear this action-the Court's conclusion today.

The Court itself confesses that "courts of equity sometimes provided relief in fraudulent conveyance actions." Ante, at 43. The Chancery Court put it stronger, though: "Courts of Equity have most certainly been in the habit of exercising a concurrent jurisdiction with the Courts of Law on the statutes of Elizabeth respecting fraudulent conveyances." Hobbs v. Hull, 1 Cox 445, 445-446, 29 Eng.Rep. 1242 (1788). Rarely has a more plain statement of the prevailing English practice at the time of ratification of the Seventh Amendment been discovered than this one; this alone should be enough to make respondent's case. Yet instead of accepting the pronouncement of the equity court about its own jurisdiction, this Court assumes the role of High Court of Historical Review, questioning the soundness of Hobbs' decision because it was issued without adequate supporting citations. Ante, at 45-46. A similar criticism is levied against another case from the same period, Ex parte Scudamore, 3 Ves.jun. 85, 30 Eng.Rep. 907 (Ch. 1796), which, as even the Court concedes, "demonstrates that fraudulent conveyance actions could be brought in equity." Ante at 45.

In addition to nitpicking respondent's supporting case law into oblivion, the Court's more general rejection of respondent's claim rests on two sources: a passing citation to a wholly inapposite case, Buzard v. Houston, 119 U.S. 347, 7 S. t. 249, 30 L.Ed. 451 (1886); and a more lengthy quotation from Professor Glenn's treatise on fraudulent conveyances. See ante, at 44. I will not deny that Professor Glenn's work supports the historical view that the Court adopts today. But notwithstanding his scholarly eminence, Professor Glenn's view of what the 18th-century English equity courts would have done with an action such as this one is not dispositive. Other scholars have looked at the same history and come to a different conclusion. [7] Still others have questioned the soundness of the distinction that Professor Glenn drew-between suits to set aside monetary conveyances and suits to avoid the conveyances of land-as unwise or unsupported. See, e.g., In re Wencl, 71 B.R. 879, 883, n. 2 (Bkrtcy. Ct., DC Minn.1987). Indeed, just a few pages after it rests its analysis of the 18th-century case law on Professor Glenn's writing, the Court itself dismisses this aspect of Professor Glenn's historical conclusions. See ante, at 46, n. 5. The Court embraces Professor Glenn's treatise where it agrees with it and calls it authoritative, while rejecting the portions it finds troublesome.

Trying to read the ambiguous history concerning fraudulent conveyance actions in equity-a task which the Court finds simple today-has perplexed jurists in each era, who have come to conflicting decisions each time that the question has found relevance. Even in Schoenthal § time, and under the statutory regime applicable when that case was decided, many courts reviewing the same historical sources considered by us today had concluded that actions such as this one sounded in equity. See Schoenthal v. Irving Trust Co., 287 U.S., at 96, n. 3, 53 S.Ct., at 52, n. 3; Note, 42 Yale L.J. 450, 450-452 (1933). In more recent times, an impressive collection of courts have come to a similar conclusion, finding that actions to avoid fraudulent conveyances were historically considered equitable in nature. [8]

In sum, I do not think that a fair reading of the history-our understanding of which is inevitably obscured by the passage of time and the irretrievable loss of subtleties in interpretation clearly proves or disproves that respondent's action would have sounded in equity in England in 1791. [9]

With the historical evidence thus in equipoise-and with the nature of the relief sought here not dispositive either, see n. 8, supra-we should not hesitate to defer to Congress' exercise of its power under the express constitutional grant found in Article I, § 8, cl. 4, authorizing Congress "[t]o establish . . . uniform Laws on the subject of Bankruptcies." Congress has exercised that power, defining actions such as the one before us to be among the "core" of bankruptcy proceedings, triable in a bankruptcy court before a bankruptcy judge and without a jury. I would defer to these decisions.

The Court, however, finds that some (if not all) of these congressional judgments are constitutionally suspect. While acknowledging that "[t]o be sure, we owe some deference to Congress' judgment after it has given careful consideration to" such a legislative enactment, the Court declines to defer here because "respondent has adduced no evidence that Congress considered the constitutional implications of its designation of all fraudulent conveyance actions as core proceedings." Ante, at 61. See also ante, at 61-62, n. 16. This statement is remarkable, for it should not be assumed that Congress in enacting 28 U.S.C. § 157(b)(2)(H) (1982 ed., Supp. V) ignored its constitutional implications. [10] The Court does not say from where it draws its requirement that the Congress must provide us with some indication that it considered the constitutional dimensions of its decision before acting, as a prerequisite for obtaining our deference to those enactments. [11]

Moreover, the Court's cramped view of Congress' power under the Bankruptcy Clause to enlarge the scope of bankruptcy proceedings, ignoring that changing times dictate changes in these proceedings, stands in sharp contrast to a more generous view expressed some years ago:

"The fundamental and radically progressive nature of [congressional] extensions [in the scope of bankruptcy laws] becomes apparent upon their mere statement. . . . Taken altogether, they demonstrate in a very striking way the capacity of the bankruptcy clause to meet new conditions as they have been disclosed as a result of the tremendous growth of business and development of human activities from 1800 to the present day. And these acts, far-reaching though they may be, have not gone beyond the limit of congressional power; but rather have constituted extensions into a field whose boundaries may not yet be fully revealed." Continental Illinois National Bank v. Chicago, R.I. & P.R. Co., 294 U.S. 648, 671, 55 S.Ct. 595, 604, 79 L.Ed. 1110 (1935).

See also Katchen v. Landy, 382 U.S., at 328-329, 86 S.Ct., at 472.

One of that period's leading constitutional historians expressed the same view, saying that the Framers of the Bankruptcy Clause "clearly understood that they were not building a straight-jacket to restrain the growth and shackle the spirits of their descendants for all time to come," but rather, were attempting to devise a scheme "which, while firm, was nevertheless to be flexible enough to serve the varying social needs of changing generations." C. Warren, Bankruptcy in United States History 4 (1935). Today, the Court ignores these lessons and places a straitjacket on Congress' power under the Bankruptcy Clause: a straitjacket designed in an era, as any reader of Dickens is aware, that was not known for its enlightened thinking on debtor-creditor relations.

Indeed, the Court calls into question the longstanding assumption of our cases and the bankruptcy courts that the equitable proceedings of those courts, adjudicating creditor-debtor disputes, are adjudications concerning "public rights." See Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 71, 102 S.Ct. 2858, 2871, 73 L.Ed.2d 598 (1982); id., at 91, 102 S.Ct., at 2881 (REHNQUIST, J., concurring in judgment); id., at 92, 102 S.Ct., at 2882 (Burger, C.J., dissenting); id., at 108-118, 102 S.Ct., at 2890-95 (WHITE, J., dissenting). The list of lower court opinions that have reasoned from this assumption is so lengthy that I cannot reasonably include it in the text; a mere sampling fills the margin. [12] Yet today the Court calls all of this into doubt merely because these cases have been subjected to "substantial scholarly criticism." Ante, at 56, n. 11. [13] If no part of bankruptcy proceedings involve the adjudication of public rights, as the Court implies today, then all bankruptcy proceedings are saved from the strictures of the Seventh Amendment only to the extent that such proceedings are the descendants of earlier analogue heard in equity in 18th-century England. Because, as almost every historian has observed, this period was marked by a far more restrictive notion of equitable jurisdiction in bankruptcies, see, e.g., Warren, supra, at 3-5, the Court's decision today may threaten the efficacy of bankruptcy courts as they are now constituted. I see no reason to use the Seventh Amendment as a tool to achieve this dubious result.

Because I find the Court's decision at odds with our precedent, and peculiarly eager to embark on an unclear course in Seventh Amendment jurisprudence, I respectfully dissent. [14]


This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).