Battles v. First Citizens National Bank

36 B.R. 774, 1984 Bankr. LEXIS 6367
CourtUnited States Bankruptcy Court, D. New Hampshire
DecidedJanuary 25, 1984
DocketBankruptcy No. 83-00292; Adv. No. 83-00241
StatusPublished

This text of 36 B.R. 774 (Battles v. First Citizens National Bank) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Battles v. First Citizens National Bank, 36 B.R. 774, 1984 Bankr. LEXIS 6367 (N.H. 1984).

Opinion

MEMORANDUM OPINION

JAMES E. YACOS, Bankruptcy Judge.

The issue presented in this case is whether this court has jurisdiction to issue a restraining order to stop a foreclosure sale of the Chapter 13 debtor’s farm and home property.

The foreclosing mortgagee asserts that the bankruptcy court lacks jurisdiction due to the Supreme Court’s decision in Northern Pipeline Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). It challenges as invalid the “Order For Interim Administration of the United States Bankruptcy Court For The District of New Hampshire”, entered on December 23, 1982 by District Judges Devine and Loughlin, which otherwise clearly does give this court the power to act directly on this basic “core” matter of preserving the debt- or’s estate pending further proceedings relating to his Chapter 13 petition and plan.

The mortgagee makes a three-part argument: (1) that the Northern Pipeline decision struck down the entire jurisdictional grant in 28 U.S.C. § 1471, including that pertaining to the district judges as well as to the bankruptcy judges; (2) that even if the district court continues to have bankruptcy jurisdiction it had no statutory or other authority to support the entry of the Order of December 23, 1982; and (3) that the interim procedures adopted by that Order (“... until Congress enacts appropriate remedial legislation in response to the Supreme Court’s decision in Northern Pipeline ... or until March 31,1984, whichever first occurs ... ”) once again attempts to give Article I bankruptcy judges powers which the Supreme Court held they can not constitutionally exercise.

[775]*775The first and third arguments do not require any extended commentary. The contention that the district court no longer has any bankruptcy jurisdiction was demolished by District Judge Vining in his recent opinion in In re Seven Springs Apartments, Phase II, 34 B.R. 987,11 B.C.D. 170 (D.N.D. Ga.1983), in which he collects the cases. All district and circuit courts which have reached the issue have agreed.

The contrary position taken by a number of bankruptcy courts, on the question of continuing jurisdiction in the district courts, was succinctly answered by District Judge Carter in In re South Portland Shipyard Carp., 32 B.R. 1012, 10 B.C.D. 1385 (D.Maine 1983) as follows:

“For the most part, these [bankruptcy] courts base their analysis on congressional intent to eliminate a bifurcated system of bankruptcy jurisdiction by placing all bankruptcy jurisdiction in a single forum, the Bankruptcy Court. The jurisdictional grants to the District Courts in § 1471(a) and (b) are viewed as non-grants, mere legitimating devices which are insevera-ble from § 1471(c)’s grant to the Bankruptcy Courts of the exercise of ‘all of the jurisdiction conferred by this section on the district court.’ 28 U.S.C. § 1471(c). Without doubt Congress did intend to eliminate the bifurcated system of bankruptcy jurisdiction with the enactment of Section 1471(c). Congress’ far more fundamental intent, however, was to establish a functioning bankruptcy system. A determination that jurisdiction exists in the District Court is essential if that purpose is to be attained.” (Emphasis supplied)

This court likewise finds it inappropriate to strain to read into the Northern Pipeline decision any intent to strike down all jurisdiction of bankruptcy matters in the federal courts in the face of the dominant Congressional purpose.

The further contention that the district court’s December 23, 1982 Order requires an unconstitutional exercise of power by an Article I court simply does not fit the facts of the present case. The restraining order in question in no sense is a mere “related” matter such as the “state law” lawsuit that the Supreme Court held in Northern Pipeline must be tried by an Article III judge.

The matter at issue here is fundamental to administration of a bankruptcy estate, i.e., protection against its dismemberment while Bankruptcy Code proceedings are being pursued. Regardless of any intimations that may or may not be “sensed” from the numerous separate opinions and footnotes included in the Northern Pipeline plurality decision, it is quite clear that the Supreme Court to date has not held that an Article I bankruptcy judge can not exercise jurisdiction as to “core” bankruptcy matters.

Similarly, the citation by analogy to the recent decision by a Ninth Circuit panel in Pacemaker Diagnostic Clinic, Inc., v. Instromedix, Inc., 712 F.2d 1305 (9th Cir.1983), is inapposite to the present case since Pacemaker involved the entry of ordinary civil money judgments by the U.S. Magistrates. [Rehearing en banc has been granted in Pacemaker but no decision by the entire Court of Appeals has yet been reported.]

This brings us to the real crux of the matter, i.e., the validity of the referral of “core” bankruptcy matters to this court by virtue of the Order’of December 23, 1982.

The Order quotes the prior mandating action by the Judicial Council for the First Circuit:

“Acting pursuant to the authority vested in the Judicial Council by 28 U.S.C. § 332(d), the Judicial Council of the First Circuit concludes that the uniform effective and expeditious administration of justice within this circuit requires that the attached rule for the administration of the bankruptcy system in this circuit be adopted by the district courts of this circuit pursuant to 11 U.S.C. § 105.”

The Rule attached and adopted by the Order (hereinafter referred to as the “interim rule”) begins with the following “Emergency Resolution” subsection:

“The purpose of this rule is to supplement existing law and rules in respect to the [776]*776authority of the bankruptcy judges of this district to act in bankruptcy cases and proceedings until Congress enacts appropriate remedial legislation in response to the Supreme Court’s decision in Northern Pipeline Construction Co., v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858 [73 L.Ed.2d 598] (1982), or until March 31, 1984, whichever first occurs.” “The judges of the district court find that exceptional circumstances exist.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
36 B.R. 774, 1984 Bankr. LEXIS 6367, Counsel Stack Legal Research, https://law.counselstack.com/opinion/battles-v-first-citizens-national-bank-nhb-1984.