Executive Benefits Insurance Agency v. Arkison ( 2014 )

(Slip Opinion) OCTOBER TERM, 2013 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
EXECUTIVE BENEFITS INSURANCE AGENCY v.
ARKISON, CHAPTER 7 TRUSTEE OF ESTATE OF
BELLINGHAM INSURANCE AGENCY, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 12–1200. Argued January 14, 2014—Decided June 9, 2014
Bellingham Insurance Agency, Inc. (BIA), filed a voluntary chapter 7
bankruptcy petition. Respondent Peter Arkison, the bankruptcy
trustee, filed a complaint in the Bankruptcy Court against petitioner
Executive Benefits Insurance Agency (EBIA) and others alleging the
fraudulent conveyance of assets from BIA to EBIA. The Bankruptcy
Court granted summary judgment for the trustee. EBIA appealed to
the District Court, which affirmed the Bankruptcy Court’s decision
after de novo review and entered judgment for the trustee. While
EBIA’s appeal to the Ninth Circuit was pending, this Court held that
Article III did not permit a Bankruptcy Court to enter final judgment
on a counterclaim for tortious interference, even though final
adjudication of that claim by the Bankruptcy Court was authorized
by statute. Stern v. Marshall, 564 U. S. ___, ___. In light of Stern,
EBIA moved to dismiss its appeal for lack of jurisdiction. The Ninth
Circuit rejected EBIA’s motion and affirmed. It acknowledged the
trustee’s claims as “Stern claims,” i.e., claims designated for final
adjudication in the bankruptcy court as a statutory matter, but
prohibited from proceeding in that way as a constitutional matter.
The Court of Appeals nevertheless concluded that EBIA had
impliedly consented to jurisdiction. The Court of Appeals also
observed that the Bankruptcy Court’s judgment could instead be
treated as proposed findings of fact and conclusions of law, subject to
de novo review by the District Court.
Held:
1. Under the Bankruptcy Amendments and Federal Judgeship Act
2 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Syllabus
of 1984, federal district courts have original jurisdiction in
bankruptcy cases and may refer to bankruptcy judges two statutory
categories of proceedings: “core” proceedings and “non-core”
proceedings. See generally 28 U. S. C. §157. In core proceedings, a
bankruptcy judge “may hear and determine . . . and enter
appropriate orders and judgments,” subject to the district court’s
traditional appellate review. §157(b)(1). In non-core proceedings—
those that are “not . . . core” but are “otherwise related to a case
under title 11,” §157(c)(1)—final judgment must be entered by the
district court after de novo review of the bankruptcy judge’s proposed
findings of fact and conclusions of law, ibid., except that the
bankruptcy judge may enter final judgment if the parties consent,
§157(c)(2).
In Stern, the Court confronted an underlying conflict between the
1984 Act and the requirements of Article III. The Court held that
Article III prohibits Congress from vesting a bankruptcy court with
the authority to finally adjudicate the “core” claim of tortious
interference. The Court did not, however, address how courts should
proceed when they encounter a Stern claim. Pp. 4–8.
2. Stern claims may proceed as non-core within the meaning of
§157(c). Lower courts have described Stern claims as creating a
statutory “gap,” since bankruptcy judges are not explicitly authorized
to propose findings of fact and conclusions of law in a core proceeding.
However, this so-called gap is closed by the Act’s severability
provision, which instructs that where a “provision of the Act or [its]
application . . . is held invalid, the remainder of th[e] Act . . . is not
affected thereby.” 98 Stat. 344. As applicable here, when a court
identifies a Stern claim, it has “held invalid” the “application” of
§157(b), and the “remainder” not affected includes §157(c), which
governs non-core proceedings. Accordingly, where a claim otherwise
satisfies §157(c)(1), the bankruptcy court should simply treat the
Stern claim as non-core. This conclusion accords with the Court’s
general approach to severability, which is to give effect to the valid
portion of a statute so long as it “remains ‘fully operative as a law,’ ”
Free Enterprise Fund v. Public Company Accounting Oversight Bd.,
561 U. S. 477, 509, and so long as the statutory text and context do
not suggest that Congress would have preferred no statute at all,
ibid. Pp. 8–10.
3. Section 157(c)(1)’s procedures apply to the fraudulent
conveyance claims here. This Court assumes without deciding that
these claims are Stern claims, which Article III does not permit to be
treated as “core” claims under §157(b). But because the claims assert
that property of the bankruptcy estate was improperly removed, they
are self-evidently “related to a case under title 11.” Accordingly, they
Cite as: 573 U. S. ____ (2014) 3
Syllabus
fit comfortably within the category of claims governed by §157(c)(1).
The Bankruptcy Court would have been permitted to follow that
provision’s procedures, i.e., to submit proposed findings of fact and
conclusions of law to the District Court for de novo review. Pp. 11–
12.
4. Here, the District Court’s de novo review of the Bankruptcy
Court’s order and entry of its own valid final judgment cured any
potential error in the Bankruptcy Court’s entry of judgment. EBIA
contends that it was constitutionally entitled to review by an Article
III court regardless of whether the parties consented to bankruptcy
court adjudication. In the alternative, EBIA asserts that even if such
consent were constitutionally permissible, it did not in fact consent.
Neither contention need be addressed here, because EBIA received
the same review from the District Court that it would have received
had the Bankruptcy Court treated the claims as non-core proceedings
under §157(c)(1). Pp. 12–13.
702 F. 3d 553, affirmed.
THOMAS, J., delivered the opinion for a unanimous Court.
Cite as: 573 U. S. ____ (2014) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–1200
_________________
EXECUTIVE BENEFITS INSURANCE AGENCY, PETI-
TIONER v. PETER H. ARKISON, CHAPTER 7 TRUSTEE
OF THE ESTATE OF BELLINGHAM INSURANCE
AGENCY, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 9, 2014]
JUSTICE THOMAS delivered the opinion of the Court.
In Stern v. Marshall, 564 U. S. ___ (2011), this Court
held that even though bankruptcy courts are statutorily
authorized to enter final judgment on a class of bankruptcy-
related claims, Article III of the Constitution prohibits
bankruptcy courts from finally adjudicating certain of
those claims. Stern did not, however, decide how bank-
ruptcy or district courts should proceed when a “Stern
claim” is identified. We hold today that when, under
Stern’s reasoning, the Constitution does not permit a
bankruptcy court to enter final judgment on a bankruptcy-
related claim, the relevant statute nevertheless permits a
bankruptcy court to issue proposed findings of fact and
conclusions of law to be reviewed de novo by the district
court. Because the District Court in this case conducted
the de novo review that petitioner demands, we affirm the
judgment of the Court of Appeals upholding the District
Court’s decision.
2 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Opinion of the Court
I
Nicolas Paleveda and his wife owned and operated two
companies—Aegis Retirement Income Services, Inc.
(ARIS), and Bellingham Insurance Agency, Inc. (BIA). By
early 2006, BIA had become insolvent, and on January 31,
2006, the company ceased operation. The next day,
Paleveda used BIA funds to incorporate Executive Bene-
fits Insurance Agency, Inc. (EBIA), petitioner in this case.
Paleveda and others initiated a scheme to transfer assets
from BIA to EBIA. The assets were deposited into an
account held jointly by ARIS and EBIA and ultimately
credited to EBIA at the end of the year.
On June 1, 2006, BIA filed a voluntary Chapter 7 bank-
ruptcy petition in the United States Bankruptcy Court for
the Western District of Washington. Peter Arkison, the
bankruptcy trustee and respondent in this case, filed a
complaint in the same Bankruptcy Court against EBIA
and others. As relevant here, the complaint alleged that
Paleveda used various methods to fraudulently convey
BIA assets to EBIA.1 EBIA filed an answer and denied
many of the trustee’s allegations.
After some disagreement as to whether the trustee’s
claims should continue in the Bankruptcy Court or instead
proceed before a jury in Federal District Court, the trustee
filed a motion for summary judgment against EBIA in the
Bankruptcy Court. The Bankruptcy Court granted sum-
mary judgment for the trustee on all claims, including the
fraudulent conveyance claims. EBIA then appealed that
determination to the District Court. The District Court
conducted de novo review, affirmed the Bankruptcy
Court’s decision, and entered judgment for the trustee.
EBIA appealed to the United States Court of Appeals for
the Ninth Circuit. After EBIA filed its opening brief, this
——————
1 The trustee asserted claims of fraudulent conveyance under 11
U. S. C. §544, and under state law, Wash. Rev. Code, ch. 19.40 (2012).
Cite as: 573 U. S. ____ (2014) 3
Opinion of the Court
Court decided Stern, supra. In Stern, we held that Article
III of the Constitution did not permit a bankruptcy court
to enter final judgment on a counterclaim for tortious
interference, id., at ___, even though final adjudication of
that claim by the Bankruptcy Court was authorized by
statute, see Part II–B, infra.2 In light of Stern, EBIA
moved to dismiss its appeal in the Ninth Circuit for lack of
jurisdiction, contending that Article III did not permit
Congress to vest authority in a bankruptcy court to finally
decide the trustee’s fraudulent conveyance claims.
The Ninth Circuit rejected EBIA’s motion and affirmed
the District Court. In re Bellingham Ins. Agency, Inc., 702
F. 3d 553 (2012). As relevant here, the court held that
Stern, supra, and Granfinanciera, S. A. v. Nordberg, 492
U. S. 33 (1989),3 taken together, lead to the conclusion
that Article III does not permit a bankruptcy court to
enter final judgment on a fraudulent conveyance claim
against a noncreditor unless the parties consent. 702
F. 3d, at 565. The Ninth Circuit concluded that EBIA had
impliedly consented to the Bankruptcy Court’s jurisdic-
tion, and that the Bankruptcy Court’s adjudication of the
fraudulent conveyance claim was therefore permissible.
Id., at 566, 568. The Court of Appeals also observed that
the Bankruptcy Court’s judgment could instead be treated
as proposed findings of fact and conclusions of law, subject
to de novo review by the District Court. Id., at 565–566.
We granted certiorari, 570 U. S. ___ (2013).
——————
2 As we explain below, see Part II–B, infra, the statutory scheme
at issue both in Stern and in this case grants bankruptcy courts the
authority to “hear and determine” and “enter appropriate orders and
judgments” in “core” proceedings. 28 U. S. C. §157(b)(1). The statute
lists counterclaims like the one brought in Stern as “core” claims.
§157(b)(2)(C).
3 Granfinanciera held that a fraudulent conveyance claim under Title
11 is not a matter of “public right” for purposes of Article III, 492 U. S.,
at 55, and that the defendant to such a claim is entitled to a jury trial
under the Seventh Amendment, id., at 64.
4 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Opinion of the Court
II
In Stern, we held that Article III prohibits Congress
from vesting a bankruptcy court with the authority to
finally adjudicate certain claims. 564 U. S., at ___. But
we did not address how courts should proceed when they
encounter one of these “Stern claims”—a claim designated
for final adjudication in the bankruptcy court as a statu-
tory matter, but prohibited from proceeding in that way as
a constitutional matter.4
As we explain in greater detail below, when a bankruptcy
court is presented with such a claim, the proper course
is to issue proposed findings of fact and conclusions of law.
The district court will then review the claim de novo and
enter judgment. This approach accords with the bank-
ruptcy statute and does not implicate the constitutional
defect identified by Stern.
A
We begin with an overview of modern bankruptcy legis-
lation. Prior to 1978, federal district courts could refer
matters within the traditional “summary jurisdiction” of
bankruptcy courts to specialized bankruptcy referees.5
See Northern Pipeline Constr. Co. v. Marathon Pipe Line
Co., 458 U. S. 50, 53 (1982) (plurality opinion). Summary
jurisdiction covered claims involving “property in the
actual or constructive possession of the [bankruptcy]
court,” ibid., i.e., claims regarding the apportionment of
——————
4 Because we conclude that EBIA received the de novo review and
entry of judgment to which it claims constitutional entitlement, see
Part IV–B, infra, this case does not require us to address whether EBIA
in fact consented to the Bankruptcy Court’s adjudication of a Stern
claim and whether Article III permits a bankruptcy court, with the
consent of the parties, to enter final judgment on a Stern claim. We
reserve that question for another day.
5 Bankruptcy referees were designated “judges” in 1973. See North-
ern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U. S. 50, 53,
n. 2 (1982) (plurality opinion).
Cite as: 573 U. S. ____ (2014) 5
Opinion of the Court
the existing bankruptcy estate among creditors. See
Brubaker, A “Summary” Statutory and Constitutional
Theory of Bankruptcy Judges’ Core Jurisdiction After
Stern v. Marshall, 86 Am. Bankr. L. J. 121, 124 (2012).
Proceedings to augment the bankruptcy estate, on the
other hand, implicated the district court’s plenary jurisdic-
tion and were not referred to the bankruptcy courts absent
both parties’ consent. See MacDonald v. Plymouth County
Trust Co., 286 U. S. 263, 266 (1932); see also Brubaker,
supra, at 128.
In 1978, Congress enacted sweeping changes to the
federal bankruptcy laws. See 92 Stat. 2549. The Bank-
ruptcy Reform Act eliminated the historical distinction
between “ ‘summary’ ” jurisdiction belonging to bankruptcy
courts and “ ‘plenary’ ” jurisdiction belonging to either a
district court or an appropriate state court. Northern
Pipeline, supra, at 54 (plurality opinion); see also 1 W.
Norton & W. Norton Bankruptcy Law and Practice §4:12,
p. 4–44 (3d ed. 2013). Instead, the 1978 Act mandated
that bankruptcy judges “shall exercise” jurisdiction over
“all civil proceedings arising under title 11 or arising in or
related to cases under title 11.” 28 U. S. C. §§1471(b)–(c)
(1976 ed., Supp. IV). Under the 1978 Act, bankruptcy
judges were “vested with all of the ‘powers of a court of
equity, law, and admiralty,’ ” with only a few limited ex-
ceptions. Northern Pipeline, 458 U. S., at 55 (plurality
opinion) (quoting §1481). Notwithstanding their expanded
jurisdiction and authority, these bankruptcy judges were
not afforded the protections of Article III—namely, life
tenure and a salary that may not be diminished. Id.,
at 53.
In Northern Pipeline, this Court addressed whether
bankruptcy judges under the 1978 Act could “constitution-
ally be vested with jurisdiction to decide [a] state-law
contract claim” against an entity not otherwise a party to
the proceeding. Id., at 53, 87, n. 40. The Court concluded
6 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Opinion of the Court
that assignment of that claim for resolution by the bank-
ruptcy judge “violates Art. III of the Constitution.” Id., at
52, 87 (plurality opinion); see id., at 91 (Rehnquist, J.,
concurring in judgment). The Court distinguished be-
tween cases involving so-called “public rights,” which may
be removed from the jurisdiction of Article III courts, and
cases involving “private rights,” which may not. See id., at
69–71 (plurality opinion); id., at 91 (Rehnquist, J., concur-
ring in judgment). Specifically, the plurality noted that
“the restructuring of debtor-creditor relations, which is at
the core of the federal bankruptcy power, must be distin-
guished from the adjudication of state-created private
rights,” which belong in an Article III court. Id., at 71–72,
and n. 26.
B
Against that historical backdrop, Congress enacted the
Bankruptcy Amendments and Federal Judgeship Act of
1984—the Act at issue in this case. See 28 U. S. C. §151et seq. Under the 1984 Act, federal district courts have
“original and exclusive jurisdiction of all cases under title
11,” §1334(a), and may refer to bankruptcy judges any
“proceedings arising under title 11 or arising in or related
to a case under title 11,” §157(a).6 Bankruptcy judges
serve 14-year terms subject to removal for cause,
§§152(a)(1), (e), and their salaries are set by Congress,
§153(a).
The 1984 Act largely restored the bifurcated jurisdic-
tional scheme that existed prior to the 1978 Act. The 1984
Act implements that bifurcated scheme by dividing all
matters that may be referred to the bankruptcy court
into two categories: “core” and “non-core” proceedings. See
generally §157.7 It is the bankruptcy court’s responsibility
——————
6 In addition, district courts may also withdraw such matters from the
bankruptcy courts for “cause shown.” §157(d).
7 In using the term “core,” Congress tracked the Northern Pipeline
Cite as: 573 U. S. ____ (2014) 7
Opinion of the Court
to determine whether each claim before it is core or non-
core. §157(b)(3); cf. Fed. Rule Bkrtcy. Proc. 7012. For core
proceedings, the statute contains a nonexhaustive list of
examples, including—as relevant here—“proceedings to
determine, avoid, or recover fraudulent conveyances.”
§157(b)(2)(H). The statute authorizes bankruptcy judges
to “hear and determine” such claims and “enter appropri-
ate orders and judgments” on them. §157(b)(1). A final
judgment entered in a core proceeding is appealable to the
district court, §158(a)(1), which reviews the judgment
under traditional appellate standards, Rule 8013.
As for “non-core” proceedings—i.e., proceedings that are
“not . . . core” but are “otherwise related to a case under
title 11”—the statute authorizes a bankruptcy court to
“hear [the] proceeding,” and then “submit proposed find-
ings of fact and conclusions of law to the district court.”
§157(c)(1). The district court must then review those
proposed findings and conclusions de novo and enter any
final orders or judgments. Ibid. There is one statutory
exception to this rule: If all parties “consent,” the statute
permits the bankruptcy judge “to hear and determine and
to enter appropriate orders and judgments” as if the pro-
ceeding were core. §157(c)(2).
Put simply: If a matter is core, the statute empowers the
bankruptcy judge to enter final judgment on the claim,
subject to appellate review by the district court. If a mat-
ter is non-core, and the parties have not consented to final
adjudication by the bankruptcy court, the bankruptcy
judge must propose findings of fact and conclusions of law.
Then, the district court must review the proceeding
de novo and enter final judgment.
——————
plurality’s use of the same term as a description of those claims that fell
within the scope of the historical bankruptcy court’s power. See 458
U. S., at 71 (“[T]he restructuring of debtor-creditor relations, which is
at the core of the federal bankruptcy power, must be distinguished from
the adjudication of state-created private rights . . .” (emphasis added)).
8 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Opinion of the Court
C
Stern v. Marshall, 564 U. S. ___, confronted an underly-
ing conflict between the 1984 Act and the requirements of
Article III. In particular, Stern considered a constitutional
challenge to the statutory designation of a particular claim
as “core.” The bankrupt in that case had filed a common-
law counterclaim for tortious interference against a credi-
tor to the estate. Id., at ___. Section 157(b)(2)(C), as
added by the 1984 Act, lists “counterclaims by the estate
against persons filing claims against the estate” as a core
proceeding, thereby authorizing the bankruptcy court to
adjudicate the claim to final judgment. See supra this
page. The respondent in Stern objected that Congress had
violated Article III by vesting the power to adjudicate the
tortious interference counterclaim in bankruptcy court.
Stern, 564 U. S., at ___.
We agreed. Id., at ___. In that circumstance, we held,
Congress had improperly vested the Bankruptcy Court
with the “ ‘ judicial Power of the United States,’ ” just as in
Northern Pipeline. 564 U. S., at ___, ___ (slip op., at 21,
38). Because “[n]o ‘public right’ exception excuse[d] the
failure to comply with Article III,” we concluded that
Congress could not confer on the Bankruptcy Court the
authority to finally decide the claim. Id., at ___. (slip op.,
at 21).
III
Stern made clear that some claims labeled by Congress
as “core” may not be adjudicated by a bankruptcy court in
the manner designated by §157(b). Stern did not, how-
ever, address how the bankruptcy court should proceed
under those circumstances. We turn to that question now.
The Ninth Circuit held that the fraudulent conveyance
claims at issue here are Stern claims—that is, proceedings
that are defined as “core” under §157(b) but may not, as a
constitutional matter, be adjudicated as such (at least in
Cite as: 573 U. S. ____ (2014) 9
Opinion of the Court
the absence of consent, see n. 4, supra. See 702 F. 3d, at
562. Neither party contests that conclusion.
The lower courts, including the Ninth Circuit in this
case, have described Stern claims as creating a statutory
“gap.” See, e.g., 702 F. 3d, at 565. By definition, a Stern
claim may not be adjudicated to final judgment by the
bankruptcy court, as in a typical core proceeding. But the
alternative procedure, whereby the bankruptcy court
submits proposed findings of fact and conclusions of law,
applies only to non-core claims. See §157(c)(1). Because
§157(b) does not explicitly authorize bankruptcy judges to
submit proposed findings of fact and conclusions of law in
a core proceeding, the argument goes, Stern created a
“gap” in the bankruptcy statute. See 702 F. 3d, at 565.
That gap purportedly renders the bankruptcy court power-
less to act on Stern claims, see Brief for Petitioner 46–48,
thus requiring the district court to hear all Stern claims in
the first instance.
We disagree. The statute permits Stern claims to pro-
ceed as non-core within the meaning of §157(c). In partic-
ular, the statute contains a severability provision that
accounts for decisions, like Stern, that invalidate certain
applications of the statute:
“If any provision of this Act or the application thereof
to any person or circumstance is held invalid, the re-
mainder of this Act, or the application of that provi-
sion to persons or circumstances other than those as
to which it is held invalid, is not affected thereby.” 98
Stat. 344, note following 28 U. S. C. §151.
The plain text of this severability provision closes the
so-called “gap” created by Stern claims. When a court
identifies a claim as a Stern claim, it has necessarily “held
invalid” the “application” of §157(b)—i.e., the “core” label
and its attendant procedures—to the litigant’s claim.
Note following §151. In that circumstance, the statute
10 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Opinion of the Court
instructs that “the remainder of th[e] Act . . . is not affected
thereby.” Ibid. That remainder includes §157(c), which
governs non-core proceedings. With the “core” category no
longer available for the Stern claim at issue, we look to
§157(c)(1) to determine whether the claim may be adjudi-
cated as a non-core claim—specifically, whether it is “not a
core proceeding” but is “otherwise related to a case under
title 11.” If the claim satisfies the criteria of §157(c)(1),
the bankruptcy court simply treats the claims as non-core:
The bankruptcy court should hear the proceeding and
submit proposed findings of fact and conclusions of law
to the district court for de novo review and entry of
judgment.
The conclusion that the remainder of the statute may
continue to apply to Stern claims accords with our general
approach to severability. We ordinarily give effect to the
valid portion of a partially unconstitutional statute so long
as it “remains ‘ “fully operative as a law,” ’ ” Free Enterprise
Fund v. Public Company Accounting Oversight Bd., 561
U. S. 477, 509 (2010) (quoting New York v. United States,
505 U. S. 144, 186 (1992)), and so long as it is not “ ‘evi-
dent’ ” from the statutory text and context that Congress
would have preferred no statute at all, 561 U. S., at 509(quoting Alaska Airlines, Inc. v. Brock, 480 U. S. 678, 684
(1987)). Neither of those concerns applies here. Thus,
§157(c) may be applied naturally to Stern claims. And,
EBIA has identified “nothing in the statute’s text or his-
torical context” that makes it “evident” that Congress
would prefer to suspend Stern claims in limbo. 561 U. S.,
at 509.8
——————
8 To the contrary, we noted in Stern that removal of claims from core
bankruptcy jurisdiction does not “meaningfully chang[e] the division of
labor in the current statute.” 564 U. S., at ___ (slip op., at 37). Accept-
ing EBIA’s contention that district courts are required to hear all Stern
claims in the first instance, see Brief for Petitioner 46–48, would
dramatically alter the division of responsibility set by Congress.
Cite as: 573 U. S. ____ (2014) 11
Opinion of the Court
IV
A
Now we must determine whether the procedures set
forth in §157(c)(1) apply to the fraudulent conveyance
claims at issue in this case. The Court of Appeals held,
and we assume without deciding, that the fraudulent
conveyance claims in this case are Stern claims. See Part
III, supra. For purposes of this opinion, the “application”
of both the “core” label and the procedures of §157(b) to
the trustee’s claims has therefore been “held invalid.”
Note following §151. Accordingly, we must decide whether
the fraudulent conveyance claims brought by the trustee
are within the scope of §157(c)(1)—that is, “not . . . core”
proceedings but “otherwise related to a case under title
11.” We hold that this language encompasses the trustee’s
claims of fraudulent conveyance.
First, the fraudulent conveyance claims in this case are
“not . . . core.” The Ninth Circuit held—and no party
disputes—that Article III does not permit these claims to
be treated as “core.” See Part III, supra. Second, the
fraudulent conveyance claims are self-evidently “related to
a case under title 11.” At bottom, a fraudulent conveyance
claim asserts that property that should have been part of
the bankruptcy estate and therefore available for distribu-
tion to creditors pursuant to Title 11 was improperly
removed. That sort of claim is “related to a case under
title 11” under any plausible construction of the statutory
text, and no party contends otherwise. See, e.g., Celotex
Corp. v. Edwards, 514 U. S. 300, 307, n. 5, 308 (1995)
(“Proceedings ‘related to’ the bankruptcy include . . . suits
between third parties which have an effect on the bank-
ruptcy estate”). Accordingly, because these Stern claims
fit comfortably within the category of claims governed by
§157(c)(1), the Bankruptcy Court would have been permit-
ted to follow the procedures required by that provision,
i.e., to submit proposed findings of fact and conclusions of
12 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
Opinion of the Court
law to the District Court to be reviewed de novo.
B
Although this case did not proceed in precisely that
fashion, we affirm nonetheless. A brief procedural history
of the case helps explain why.
As noted, §157 permits a bankruptcy court to adjudicate
a claim to final judgment in two circumstances—in core
proceedings, see §157(b), and in non-core proceedings
“with the consent of all the parties,” §157(c)(2). In this
case, the Bankruptcy Court entered judgment in favor of
the bankruptcy trustee without specifying in its order
whether it was acting pursuant to §157(b) (core) or
§157(c)(2) (non-core with consent). EBIA immediately
appealed to the District Court, see §158, but it did not
argue that the Bankruptcy Court lacked constitutional
authority to grant summary judgment. As a result, the
District Court did not analyze whether there was a Stern
problem and did not, as some district courts have done,
relabel the bankruptcy order as mere proposed findings of
fact and conclusions of law. See, e.g., In re Parco Merged
Media Corp., 489 B. R. 323, 326 (Me. 2013) (collecting
cases). The District Court did, however, review de novo
the Bankruptcy Court’s grant of summary judgment for
the trustee—a legal question—and issued a reasoned
opinion affirming the Bankruptcy Court. The District
Court then separately entered judgment in favor of the
trustee. See 28 U. S. C. §1334(b) (“[T]he district courts
shall have original but not exclusive jurisdiction of all civil
proceedings . . . related to cases under title 11”).
EBIA now objects on constitutional grounds to the
Bankruptcy Court’s disposition of the fraudulent convey-
ance claims. EBIA contends that it was constitutionally
entitled to review of its fraudulent conveyance claims by
an Article III court regardless of whether the parties
consented to adjudication by a bankruptcy court. Brief for
Cite as: 573 U. S. ____ (2014) 13
Opinion of the Court
Petitioner 25–27. In an alternative argument, EBIA
asserts that even if the Constitution permitted the Bank-
ruptcy Court to adjudicate its claim with the consent of
the parties, it did not in fact consent. Id., at 38.
In light of the procedural posture of this case, however,
we need not decide whether EBIA’s contentions are correct
on either score. At bottom, EBIA argues that it was enti-
tled to have an Article III court review de novo and enter
judgment on the fraudulent conveyance claims asserted by
the trustee. In effect, EBIA received exactly that. The
District Court conducted de novo review of the summary
judgment claims, concluding in a written opinion that
there were no disputed issues of material fact and that the
trustee was entitled to judgment as a matter of law. In
accordance with its statutory authority over matters
related to the bankruptcy, see §1334(b), the District Court
then separately entered judgment in favor of the trustee.
EBIA thus received the same review from the District
Court that it would have received if the Bankruptcy Court
had treated the fraudulent conveyance claims as non-core
proceedings under §157(c)(1). In short, even if EBIA is
correct that the Bankruptcy Court’s entry of judgment was
invalid, the District Court’s de novo review and entry of its
own valid final judgment cured any error. Cf. Carter v.
Kubler, 320 U. S. 243, 248 (1943) (bankruptcy commis-
sioner’s error was cured after the District Court “made
an independent and complete review of the conflicting
evidence”).
Accordingly, we affirm the judgment of the Court of
Appeals.
It is so ordered.