1984 Amendments

Bankruptcy court structure, jurisdiction and procedure after the 1984 amendments

The 1984 Amendments to the bankruptcy act of 1978 were passed to deal with the Marathon crisis and made significant changes in the structure, jurisdiction and procedures of the bankruptcy court from the provisions of the Reform Act. These amendments remain in effect with modest changes. At the time of their enactment they were highly controversial and while some of the more dire predictions have failed to come to pass some anticipated problems are still with us.

Court jurisdiction after the 1984 amendments

The jurisdictional grant in the 1984 Amendments is codified at 28 USC § 1334(a), (b), and (d). The district courts are given original and exclusive jurisdiction of all cases under Title 11 and original, but not exclusive, jurisdiction of all civil proceedings arising under Title 11, or arising in or related to cases under Title 11. In addition, the district court in which a Title 11 case is commenced or pending is given exclusive jurisdiction of property of the debtor as of the commencement of the case and of property of the estate. The grant of jurisdiction under § 1334 may in turn be delegated to the bankruptcy court under 28 United States Code § 157.

While the matter was in some doubt, the jurisdictional grant of the 1984 Amendments, when coupled with the procedural gyrations of § 157, appears to have satisfied the requirements of Marathon. First, one is entitled to assume that every district will generally refer "core proceedings" as defined in § 157(b)(2) to the bankruptcy courts, leaving it up to the bankruptcy judge to determine under § 157(b)(3) whether a proceeding is a core proceeding. Over the years the courts have had enormous difficulty with determinations of summary and plenary jurisdiction under the bankruptcy Act and the core proceeding and non-core proceeding distinction appears to have distinct similarities. However, after Marathon it was far from certain that the old summary jurisdiction concept was in fact constitutionally sound since the Supreme Court had never directly considered the issue.

More to the point, the procedure under § 157(c)(1) whereby the bankruptcy judge is permitted to hear a related or non-core proceeding and to enter proposed findings and conclusions which may be reviewed de novo by the district court if someone insists appears to be working although designed to evade rather than comply with the dictates of Marathon. In short, for better or for worse, the vast bulk of bankruptcy litigation will be tried by a bankruptcy judge who is not an Article III judge.

As noted above, an alternative that is present is the trial of a related or non-core proceeding by the bankruptcy court upon the consent of the parties under § 157(c)(2). If true consent, rather than consent implied from a failure to object in a timely manner, is what is contemplated, then § 157(c)(2) will be more an item of curiosity rather than a functioning procedure.

The grant of jurisdiction under 28 United States Code § 147 1(b) over "civil proceedings related to cases under Title 11," was, as noted in § 2.02, very broad indeed and has been continued in 28 United States Code § 1334(b). There has been extensive debate over the extent of related to jurisdiction, marred in part by the tendency of some courts to find that no jurisdiction exists where discretionary abstention would be preferable.

 

San Diego, California


San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city of San Diego has an estimated population of 1,256,951. It is the second largest city in California and the eighth largest city in the United States. San Diego is the county seat of San Diego County and is the economic center of the San Diego–Carlsbad–San Marcos metropolitan area, the 17th-largest metro area in the U.S. with a population of 2.9 million as of 2006, and the 21st largest Metropolitan area in the Americas when including Tijuana as part of the San Diego-Tijuana Metro.