Stern v. Marshall , 131 S. Ct. 2594 ( 2011 )

(Slip Opinion) OCTOBER TERM, 2010 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
STERN, EXECUTOR OF THE ESTATE OF MARSHALL
v. MARSHALL, EXECUTRIX OF THE ESTATE OF
MARSHALL
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 10–179. Argued January 18, 2011—Decided June 23, 2011
Article III, §1, of the Constitution mandates that “[t]he judicial Power
of the United States, shall be vested in one supreme Court, and in
such inferior Courts as the Congress may from time to time ordain
and establish,” and provides that the judges of those constitutional
courts “shall hold their Offices during good Behaviour” and “receive
for their Services[ ] a Compensation[ ] [that] shall not be diminished”
during their tenure. The questions presented in this case are
whether a bankruptcy court judge who did not enjoy such tenure and
salary protections had the authority under 28 U. S. C. §157 and Arti
cle III to enter final judgment on a counterclaim filed by Vickie Lynn
Marshall (whose estate is the petitioner) against Pierce Marshall
(whose estate is the respondent) in Vickie’s bankruptcy proceedings.
Vickie married J. Howard Marshall II, Pierce’s father, approxi
mately a year before his death. Shortly before J. Howard died, Vickie
filed a suit against Pierce in Texas state court, asserting that J.
Howard meant to provide for Vickie through a trust, and Pierce tor
tiously interfered with that gift. After J. Howard died, Vickie filed
for bankruptcy in federal court. Pierce filed a proof of claim in that
proceeding, asserting that he should be able to recover damages from
Vickie’s bankruptcy estate because Vickie had defamed him by induc
ing her lawyers to tell the press that he had engaged in fraud in con
trolling his father’s assets. Vickie responded by filing a counterclaim
for tortious interference with the gift she expected from J. Howard.
The Bankruptcy Court granted Vickie summary judgment on the
defamation claim and eventually awarded her hundreds of millions of
dollars in damages on her counterclaim. Pierce objected that the
2 STERN v. MARSHALL
Syllabus
Bankruptcy Court lacked jurisdiction to enter a final judgment on
that counterclaim because it was not a “core proceeding” as defined
by 28 U. S. C. §157(b)(2)(C). As set forth in §157(a), Congress has di
vided bankruptcy proceedings into three categories: those that
“aris[e] under title 11”; those that “aris[e] in” a Title 11 case; and
those that are “related to a case under title 11.” District courts may
refer all such proceedings to the bankruptcy judges of their district,
and bankruptcy courts may enter final judgments in “all core pro
ceedings arising under title 11, or arising in a case under title 11.”
§§157(a), (b)(1). In non-core proceedings, by contrast, a bankruptcy
judge may only “submit proposed findings of fact and conclusions of
law to the district court.” §157(c)(1). Section 157(b)(2) lists 16 cate
gories of core proceedings, including “counterclaims by the estate
against persons filing claims against the estate.” §157(b)(2)(C).
The Bankruptcy Court concluded that Vickie’s counterclaim was a
core proceeding. The District Court reversed, reading this Court’s
precedent in Northern Pipeline Constr. Co. v. Marathon Pipe Line
Co., 458 U. S. 50, to “suggest[ ] that it would be unconstitutional to
hold that any and all counterclaims are core.” The court held that
Vickie’s counterclaim was not core because it was only somewhat re
lated to Pierce’s claim, and it accordingly treated the Bankruptcy
Court’s judgment as proposed, not final. Although the Texas state
court had by that time conducted a jury trial on the merits of the par
ties’ dispute and entered a judgment in Pierce’s favor, the District
Court went on to decide the matter itself, in Vickie’s favor. The
Court of Appeals ultimately reversed. It held that the Bankruptcy
Court lacked authority to enter final judgment on Vickie’s counter
claim because the claim was not “so closely related to [Pierce’s] proof
of claim that the resolution of the counterclaim is necessary to re
solve the allowance or disallowance of the claim itself.” Because that
holding made the Texas probate court’s judgment the earliest final
judgment on matters relevant to the case, the Court of Appeals held
that the District Court should have given the state judgment preclu
sive effect.
Held: Although the Bankruptcy Court had the statutory authority to
enter judgment on Vickie’s counterclaim, it lacked the constitutional
authority to do so. Pp. 6–38.
1. Section 157(b) authorized the Bankruptcy Court to enter final
judgment on Vickie’s counterclaim. Pp. 8–16.
(a) The Bankruptcy Court had the statutory authority to enter
final judgment on Vickie’s counterclaim as a core proceeding under
§157(b)(2)(C). Pierce argues that §157(b) authorizes bankruptcy
courts to enter final judgments only in those proceedings that are
both core and either arise in a Title 11 case or arise under Title 11 it
Cite as: 564 U. S. ____ (2011) 3
Syllabus
self. But that reading necessarily assumes that there is a category of
core proceedings that do not arise in a bankruptcy case or under
bankruptcy law, and the structure of §157 makes clear that no such
category exists. Pp. 8–11.
(b) In the alternative, Pierce argues that the Bankruptcy Court
lacked jurisdiction to resolve Vickie’s counterclaim because his defa
mation claim is a “personal injury tort” that the Bankruptcy Court
lacked jurisdiction to hear under §157(b)(5). The Court agrees with
Vickie that §157(b)(5) is not jurisdictional, and Pierce consented to
the Bankruptcy Court’s resolution of the defamation claim. The
Court is not inclined to interpret statutes as creating a jurisdictional
bar when they are not framed as such. See generally Henderson v.
Shinseki, 562 U. S. ___; Arbaugh v. Y & H Corp., 546 U. S. 500. Sec
tion 157(b)(5) does not have the hallmarks of a jurisdictional decree,
and the statutory context belies Pierce’s claim that it is jurisdictional.
Pierce consented to the Bankruptcy Court’s resolution of the defama
tion claim by repeatedly advising that court that he was happy to
litigate his claim there. Pp. 12–16.
2. Although §157 allowed the Bankruptcy Court to enter final judg
ment on Vickie’s counterclaim, Article III of the Constitution did not.
Pp. 16–38.
(a) Article III is “an inseparable element of the constitutional
system of checks and balances” that “both defines the power and pro
tects the independence of the Judicial Branch.” Northern Pipeline,
458 U. S., at 58 (plurality opinion). Article III protects liberty not
only through its role in implementing the separation of powers, but
also by specifying the defining characteristics of Article III judges to
protect the integrity of judicial decisionmaking.
This is not the first time the Court has faced an Article III chal
lenge to a bankruptcy court’s resolution of a debtor’s suit. In North
ern Pipeline, the Court considered whether bankruptcy judges serv
ing under the Bankruptcy Act of 1978—who also lacked the tenure
and salary guarantees of Article III—could “constitutionally be
vested with jurisdiction to decide [a] state-law contract claim” against
an entity that was not otherwise part of the bankruptcy proceedings.
Id., at 53, 87, n. 40 (plurality opinion). The plurality in Northern
Pipeline recognized that there was a category of cases involving “pub
lic rights” that Congress could constitutionally assign to “legislative”
courts for resolution. A full majority of the Court, while not agreeing
on the scope of that exception, concluded that the doctrine did not en
compass adjudication of the state law claim at issue in that case, and
rejected the debtor’s argument that the Bankruptcy Court’s exercise
of jurisdiction was constitutional because the bankruptcy judge was
acting merely as an adjunct of the district court or court of appeals.
4 STERN v. MARSHALL
Syllabus
Id., at 69–72; see id., at 90–91 (Rehnquist, J., concurring in judg
ment). After the decision in Northern Pipeline, Congress revised the
statutes governing bankruptcy jurisdiction and bankruptcy judges.
With respect to the “core” proceedings listed in §157(b)(2), however,
the bankruptcy courts under the Bankruptcy Amendments and Fed
eral Judgeship Act of 1984 exercise the same powers they wielded
under the 1978 Act. The authority exercised by the newly consti
tuted courts over a counterclaim such as Vickie’s exceeds the bounds
of Article III. Pp. 16–22.
(b) Vickie’s counterclaim does not fall within the public rights ex
ception, however defined. The Court has long recognized that, in
general, Congress may not “withdraw from judicial cognizance any
matter which, from its nature, is the subject of a suit at the common
law, or in equity, or admiralty.” Murray’s Lessee v. Hoboken Land &
Improvement Co., 18 How. 272, 284. The Court has also recognized
that “[a]t the same time there are matters, involving public rights,
. . . which are susceptible of judicial determination, but which con
gress may or may not bring within the cognizance of the courts of the
United States, as it may deem proper.” Ibid. Several previous deci
sions have contrasted cases within the reach of the public rights ex
ception—those arising “between the Government and persons subject
to its authority in connection with the performance of the constitu
tional functions of the executive or legislative departments”—and
those that are instead matters “of private right, that is, of the liabil
ity of one individual to another under the law as defined.” Crowell v.
Benson, 285 U. S. 22, 50, 51.
Shortly after Northern Pipeline, the Court rejected the limitation of
the public rights exception to actions involving the Government as a
party. The Court has continued, however, to limit the exception to
cases in which the claim at issue derives from a federal regulatory
scheme, or in which resolution of the claim by an expert Government
agency is deemed essential to a limited regulatory objective within
the agency’s authority. In other words, it is still the case that what
makes a right “public” rather than private is that the right is inte
grally related to particular Federal Government action. See United
States v. Jicarilla Apache Nation, 564 U. S. ___, ___–___ (slip op., at
10–11); Thomas v. Union Carbide Agricultural Products Co., 473
U. S. 568, 584; Commodity Futures Trading Commission v. Schor,
478 U. S. 833, 844, 856.
In Granfinanciera, S. A. v. Nordberg, 492 U. S. 33, the most recent
case considering the public rights exception, the Court rejected a
bankruptcy trustee’s argument that a fraudulent conveyance action
filed on behalf of a bankruptcy estate against a noncreditor in a
bankruptcy proceeding fell within the exception. Vickie’s counter
Cite as: 564 U. S. ____ (2011) 5
Syllabus
claim is similar. It is not a matter that can be pursued only by grace
of the other branches, as in Murray’s Lessee, 18 How., at 284; it does
not flow from a federal statutory scheme, as in Thomas, 473 U. S., at584–585; and it is not “completely dependent upon” adjudication of a
claim created by federal law, as in Schor, 478 U. S., at 856. This case
involves the most prototypical exercise of judicial power: the entry of
a final, binding judgment by a court with broad substantive jurisdic
tion, on a common law cause of action, when the action neither de
rives from nor depends upon any agency regulatory regime. If such
an exercise of judicial power may nonetheless be taken from the Arti
cle III Judiciary simply by deeming it part of some amorphous “public
right,” then Article III would be transformed from the guardian of in
dividual liberty and separation of powers the Court has long recog
nized into mere wishful thinking. Pp. 22–29.
(c) The fact that Pierce filed a proof of claim in the bankruptcy
proceedings did not give the Bankruptcy Court the authority to adju
dicate Vickie’s counterclaim. Initially, Pierce’s defamation claim does
not affect the nature of Vickie’s tortious interference counterclaim as
one at common law that simply attempts to augment the bankruptcy
estate—the type of claim that, under Northern Pipeline and Granfi
nanciera, must be decided by an Article III court. The cases on which
Vickie relies, Katchen v. Landy, 382 U. S. 323, and Langenkamp v.
Culp, 498 U. S. 42 (per curiam), are inapposite. Katchen permitted a
bankruptcy referee to exercise jurisdiction over a trustee’s voidable
preference claim against a creditor only where there was no question
that the referee was required to decide whether there had been a
voidable preference in determining whether and to what extent to al
low the creditor’s claim. The Katchen Court “intimate[d] no opinion
concerning whether” the bankruptcy referee would have had “sum
mary jurisdiction to adjudicate a demand by the [bankruptcy] trustee
for affirmative relief, all of the substantial factual and legal bases for
which ha[d] not been disposed of in passing on objections to the
[creditor’s proof of ] claim.” 382 U. S., at 333, n. 9. The per curiam
opinion in Langenkamp is to the same effect. In this case, by con
trast, the Bankruptcy Court—in order to resolve Vickie’s counter
claim—was required to and did make several factual and legal de
terminations that were not “disposed of in passing on objections” to
Pierce’s proof of claim. In both Katchen and Langenkamp, moreover,
the trustee bringing the preference action was asserting a right of re
covery created by federal bankruptcy law. Vickie’s claim is instead a
state tort action that exists without regard to any bankruptcy pro
ceeding. Pp. 29–34.
(d) The bankruptcy courts under the 1984 Act are not “adjuncts”
of the district courts. The new bankruptcy courts, like the courts
6 STERN v. MARSHALL
Syllabus
considered in Northern Pipeline, do not “ma[k]e only specialized, nar
rowly confined factual determinations regarding a particularized
area of law” or engage in “statutorily channeled factfinding func
tions.” 458 U. S., at 85 (plurality opinion). Whereas the adjunct
agency in Crowell v. Benson “possessed only a limited power to issue
compensation orders . . . [that] could be enforced only by order of the
district court,” ibid., a bankruptcy court resolving a counterclaim un
der §157(b)(2)(C) has the power to enter “appropriate orders and
judgments”—including final judgments—subject to review only if a
party chooses to appeal, see §§157(b)(1), 158(a)–(b). Such a court is
an adjunct of no one. Pp. 34–36.
(e) Finally, Vickie and her amici predict that restrictions on a
bankruptcy court’s ability to hear and finally resolve compulsory
counterclaims will create significant delays and impose additional
costs on the bankruptcy process. It goes without saying that “the fact
that a given law or procedure is efficient, convenient, and useful in
facilitating functions of government, standing alone, will not save it if
it is contrary to the Constitution.” INS v. Chadha, 462 U. S. 919,
944. In addition, the Court is not convinced that the practical conse
quences of such limitations are as significant as Vickie suggests. The
framework Congress adopted in the 1984 Act already contemplates
that certain state law matters in bankruptcy cases will be resolved by
state courts and district courts, see §§157(c), 1334(c), and the Court
does not think the removal of counterclaims such as Vickie’s from
core bankruptcy jurisdiction meaningfully changes the division of la
bor in the statute. Pp. 36–38.
600 F. 3d 1037, affirmed.
ROBERTS, C. J., delivered the opinion of the Court, in which SCALIA,
KENNEDY, THOMAS, and ALITO, JJ., joined. SCALIA, J., filed a concurring
opinion. BREYER, J., filed a dissenting opinion, in which GINSBURG, SO-
TOMAYOR, and KAGAN, JJ., joined.
Cite as: 564 U. S. ____ (2011) 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. 10–179
_________________
HOWARD K. STERN, EXECUTOR OF THE ESTATE OF
VICKIE LYNN MARSHALL, PETITIONER v.
ELAINE T. MARSHALL, EXECUTRIX OF THE
ESTATE OF E. PIERCE MARSHALL
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 23, 2011]
CHIEF JUSTICE ROBERTS delivered the opinion of the
Court.
This “suit has, in course of time, become so complicated,
that . . . no two . . . lawyers can talk about it for five min­
utes, without coming to a total disagreement as to all
the premises. Innumerable children have been born into
the cause: innumerable young people have married into
it;” and, sadly, the original parties “have died out of it.” A
“long procession of [judges] has come in and gone out” dur­
ing that time, and still the suit “drags its weary length
before the Court.”
Those words were not written about this case, see
C. Dickens, Bleak House, in 1 Works of Charles Dickens
4–5 (1891), but they could have been. This is the second
time we have had occasion to weigh in on this long­
running dispute between Vickie Lynn Marshall and E.
Pierce Marshall over the fortune of J. Howard Marshall II,
a man believed to have been one of the richest people in
Texas. The Marshalls’ litigation has worked its way
2 STERN v. MARSHALL
Opinion of the Court
through state and federal courts in Louisiana, Texas, and
California, and two of those courts—a Texas state probate
court and the Bankruptcy Court for the Central District
of California—have reached contrary decisions on its mer­
its. The Court of Appeals below held that the Texas state
decision controlled, after concluding that the Bankruptcy
Court lacked the authority to enter final judgment on a
counterclaim that Vickie brought against Pierce in her
bankruptcy proceeding.1 To determine whether the Court
of Appeals was correct in that regard, we must resolve two
issues: (1) whether the Bankruptcy Court had the statu­
tory authority under 28 U. S. C. §157(b) to issue a final
judgment on Vickie’s counterclaim; and (2) if so, whether
conferring that authority on the Bankruptcy Court is
constitutional.
Although the history of this litigation is complicated, its
resolution ultimately turns on very basic principles. Arti­
cle III, §1, of the Constitution commands that “[t]he judi­
cial Power of the United States, shall be vested in one
supreme Court, and in such inferior Courts as the Con­
gress may from time to time ordain and establish.” That
Article further provides that the judges of those courts
shall hold their offices during good behavior, without
diminution of salary. Ibid. Those requirements of Article
III were not honored here. The Bankruptcy Court in this
case exercised the judicial power of the United States by
entering final judgment on a common law tort claim, even
though the judges of such courts enjoy neither tenure
during good behavior nor salary protection. We conclude
that, although the Bankruptcy Court had the statutory
authority to enter judgment on Vickie’s counterclaim, it
lacked the constitutional authority to do so.
——————
1 Because both Vickie and Pierce passed away during this litigation,
the parties in this case are Vickie’s estate and Pierce’s estate. We
continue to refer to them as “Vickie” and “Pierce.”
Cite as: 564 U. S. ____ (2011) 3
Opinion of the Court
I
Because we have already recounted the facts and proce­
dural history of this case in detail, see Marshall v. Mar
shall, 547 U. S. 293, 300–305 (2006), we do not repeat
them in full here. Of current relevance are two claims
Vickie filed in an attempt to secure half of J. Howard’s
fortune. Known to the public as Anna Nicole Smith,
Vickie was J. Howard’s third wife and married him about
a year before his death. Id., at 300; see In re Marshall,
392 F. 3d 1118, 1122 (CA9 2004). Although J. Howard
bestowed on Vickie many monetary and other gifts during
their courtship and marriage, he did not include her in
his will. 547 U. S., at 300. Before J. Howard passed away,
Vickie filed suit in Texas state probate court, asserting
that Pierce—J. Howard’s younger son—fraudulently in­
duced J. Howard to sign a living trust that did not include
her, even though J. Howard meant to give her half his
property. Pierce denied any fraudulent activity and de­
fended the validity of J. Howard’s trust and, eventually,
his will. 392 F. 3d, at 1122–1123, 1125.
After J. Howard’s death, Vickie filed a petition for bank­
ruptcy in the Central District of California. Pierce filed a
complaint in that bankruptcy proceeding, contending that
Vickie had defamed him by inducing her lawyers to tell
members of the press that he had engaged in fraud to gain
control of his father’s assets. 547 U. S., at 300–301; In re
Marshall, 600 F. 3d 1037, 1043–1044 (CA9 2010). The
complaint sought a declaration that Pierce’s defamation
claim was not dischargeable in the bankruptcy proceed­
ings. Ibid.; see 11 U. S. C. §523(a). Pierce subsequently
filed a proof of claim for the defamation action, meaning
that he sought to recover damages for it from Vickie’s
bankruptcy estate. See §501(a). Vickie responded to
Pierce’s initial complaint by asserting truth as a defense to
the alleged defamation and by filing a counterclaim for
tortious interference with the gift she expected from J.
4 STERN v. MARSHALL
Opinion of the Court
Howard. As she had in state court, Vickie alleged that
Pierce had wrongfully prevented J. Howard from taking
the legal steps necessary to provide her with half his
property. 547 U. S., at 301.
On November 5, 1999, the Bankruptcy Court issued
an order granting Vickie summary judgment on Pierce’s
claim for defamation. On September 27, 2000, after a
bench trial, the Bankruptcy Court issued a judgment
on Vickie’s counterclaim in her favor. The court later
awarded Vickie over $400 million in compensatory dam­
ages and $25 million in punitive damages. 600 F. 3d, at
1045; see 253 B. R. 550, 561–562 (Bkrtcy. Ct. CD Cal.
2000); 257 B. R. 35, 39–40 (Bkrtcy. Ct. CD Cal. 2000).
In post-trial proceedings, Pierce argued that the Bank­
ruptcy Court lacked jurisdiction over Vickie’s counter­
claim. In particular, Pierce renewed a claim he had made
earlier in the litigation, asserting that the Bankruptcy
Court’s authority over the counterclaim was limited be­
cause Vickie’s counterclaim was not a “core proceeding”
under 28 U. S. C. §157(b)(2)(C). See 257 B. R., at 39. As
explained below, bankruptcy courts may hear and en-
ter final judgments in “core proceedings” in a bankruptcy
case. In non-core proceedings, the bankruptcy courts
instead submit proposed findings of fact and conclusions of
law to the district court, for that court’s review and issu­
ance of final judgment. The Bankruptcy Court in this case
concluded that Vickie’s counterclaim was “a core proceed­
ing” under §157(b)(2)(C), and the court therefore had
the “power to enter judgment” on the counterclaim under
§157(b)(1). Id., at 40.
The District Court disagreed. It recognized that
“Vickie’s counterclaim for tortious interference falls within
the literal language” of the statute designating certain
proceedings as “core,” see §157(b)(2)(C), but understood
this Court’s precedent to “suggest[ ] that it would be un­
constitutional to hold that any and all counterclaims are
Cite as: 564 U. S. ____ (2011) 5
Opinion of the Court
core.” 264 B. R. 609, 629–630 (CD Cal. 2001) (citing
Northern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
458 U. S. 50, 79, n. 31 (1982) (plurality opinion)). The
District Court accordingly concluded that a “counterclaim
should not be characterized as core” when it “is only
somewhat related to the claim against which it is asserted,
and when the unique characteristics and context of the
counterclaim place it outside of the normal type of set-off
or other counterclaims that customarily arise.” 264 B. R.,
at 632.
Because the District Court concluded that Vickie’s
counterclaim was not core, the court determined that it
was required to treat the Bankruptcy Court’s judgment as
“proposed[,] rather than final,” and engage in an “inde­
pendent review” of the record. Id., at 633; see 28 U. S. C.
§157(c)(1). Although the Texas state court had by that
time conducted a jury trial on the merits of the parties’
dispute and entered a judgment in Pierce’s favor, the
District Court declined to give that judgment preclusive
effect and went on to decide the matter itself. 271 B. R.
858, 862–867 (CD Cal. 2001); see 275 B. R. 5, 56–58 (CD
Cal. 2002). Like the Bankruptcy Court, the District Court
found that Pierce had tortiously interfered with Vickie’s
expectancy of a gift from J. Howard. The District Court
awarded Vickie compensatory and punitive damages, each
in the amount of $44,292,767.33. Id., at 58.
The Court of Appeals reversed the District Court on a
different ground, 392 F. 3d, at 1137, and we—in the first
visit of the case to this Court—reversed the Court of Ap­
peals on that issue. 547 U. S., at 314–315. On remand
from this Court, the Court of Appeals held that §157 man­
dated “a two-step approach” under which a bankruptcy
judge may issue a final judgment in a proceeding only
if the matter both “meets Congress’ definition of a core
proceeding and arises under or arises in title 11,” the
Bankruptcy Code. 600 F. 3d, at 1055. The court also
6 STERN v. MARSHALL
Opinion of the Court
reasoned that allowing a bankruptcy judge to enter final
judgments on all counterclaims raised in bankruptcy
proceedings “would certainly run afoul” of this Court’s
decision in Northern Pipeline. 600 F. 3d, at 1057. With
those concerns in mind, the court concluded that “a coun­
terclaim under §157(b)(2)(C) is properly a ‘core’ proceeding
‘arising in a case under’ the [Bankruptcy] Code only if the
counterclaim is so closely related to [a creditor’s] proof of
claim that the resolution of the counterclaim is necessary
to resolve the allowance or disallowance of the claim it­
self.” Id., at 1058 (internal quotation marks omitted;
second brackets added). The court ruled that Vickie’s
counterclaim did not meet that test. Id., at 1059. That
holding made “the Texas probate court’s judgment . . . the
earliest final judgment entered on matters relevant to this
proceeding,” and therefore the Court of Appeals concluded
that the District Court should have “afford[ed] preclusive
effect” to the Texas “court’s determination of relevant legal
and factual issues.” Id., at 1064–1065.2
We again granted certiorari. 561 U. S. __ (2010).
II
A
With certain exceptions not relevant here, the district
courts of the United States have “original and exclusive
jurisdiction of all cases under title 11.” 28 U. S. C.
§1334(a). Congress has divided bankruptcy proceedings
into three categories: those that “aris[e] under title 11”;
those that “aris[e] in” a Title 11 case; and those that are
——————
2 One judge wrote a separate concurring opinion. He concluded that
“Vickie’s counterclaim . . . [wa]s not a core proceeding, so the Texas
probate court judgment preceded the district court judgment and
controls.” 600 F. 3d, at 1065 (Kleinfeld, J.). The concurring judge
also “offer[ed] additional grounds” that he believed required judgment
in Pierce’s favor. Ibid. Pierce presses only one of those additional
grounds here; it is discussed below, in Part II–C.
Cite as: 564 U. S. ____ (2011) 7
Opinion of the Court
“related to a case under title 11.” §157(a). District courts
may refer any or all such proceedings to the bankruptcy
judges of their district, ibid., which is how the Bankruptcy
Court in this case came to preside over Vickie’s bank­
ruptcy proceedings. District courts also may withdraw a
case or proceeding referred to the bankruptcy court “for
cause shown.” §157(d). Since Congress enacted the Bank­
ruptcy Amendments and Federal Judgeship Act of
1984 (the 1984 Act), bankruptcy judges for each district
have been appointed to 14-year terms by the courts of
appeals for the circuits in which their district is
located. §152(a)(1).
The manner in which a bankruptcy judge may act on
a referred matter depends on the type of proceeding in­
volved. Bankruptcy judges may hear and enter final
judgments in “all core proceedings arising under title 11,
or arising in a case under title 11.” §157(b)(1). “Core
proceedings include, but are not limited to” 16 different
types of matters, including “counterclaims by [a debtor’s]
estate against persons filing claims against the estate.”
§157(b)(2)(C).3 Parties may appeal final judgments of a
——————
3 In full, §§157(b)(1)–(2) provides:
“(1) Bankruptcy judges may hear and determine all cases under title
11 and all core proceedings arising under title 11, or arising in a case
under title 11, referred under subsection (a) of this section, and may
enter appropriate orders and judgments, subject to review under
section 158 of this title.
“(2) Core proceedings include, but are not limited to—
“(A) matters concerning the administration of the estate;
“(B) allowance or disallowance of claims against the estate or exemp­
tions from property of the estate, and estimation of claims or interests
for the purposes of confirming a plan under chapter 11, 12, or 13 of title
11 but not the liquidation or estimation of contingent or unliquidated
personal injury tort or wrongful death claims against the estate for
purposes of distribution in a case under title 11;
“(C) counterclaims by the estate against persons filing claims against
the estate;
“(D) orders in respect to obtaining credit;
8 STERN v. MARSHALL
Opinion of the Court
bankruptcy court in core proceedings to the district court,
which reviews them under traditional appellate stan­
dards. See §158(a); Fed. Rule Bkrtcy. Proc. 8013.
When a bankruptcy judge determines that a referred “pro­
ceeding . . . is not a core proceeding but . . . is other-
wise related to a case under title 11,” the judge may only
“submit proposed findings of fact and conclusions of law
to the district court.” §157(c)(1). It is the district court
that enters final judgment in such cases after reviewing de
novo any matter to which a party objects. Ibid.
B
Vickie’s counterclaim against Pierce for tortious inter­
ference is a “core proceeding” under the plain text of
§157(b)(2)(C). That provision specifies that core proceed­
ings include “counterclaims by the estate against persons
filing claims against the estate.” In past cases, we have
suggested that a proceeding’s “core” status alone author­
izes a bankruptcy judge, as a statutory matter, to enter
——————
“(E) orders to turn over property of the estate;
“(F) proceedings to determine, avoid, or recover preferences;
“(G) motions to terminate, annul, or modify the automatic stay;
“(H) proceedings to determine, avoid, or recover fraudulent convey­
ances;
“(I) determinations as to the dischargeability of particular debts;
“(J) objections to discharges;
“(K) determinations of the validity, extent, or priority of liens;
“(L) confirmations of plans;
“(M) orders approving the use or lease of property, including the use
of cash collateral;
“(N) orders approving the sale of property other than property result­
ing from claims brought by the estate against persons who have not
filed claims against the estate;
“(O) other proceedings affecting the liquidation of the assets of the
estate or the adjustment of the debtor-creditor or the equity security
holder relationship, except personal injury tort or wrongful death
claims; and
“(P) recognition of foreign proceedings and other matters under
chapter 15 of title 11.”
Cite as: 564 U. S. ____ (2011) 9
Opinion of the Court
final judgment in the proceeding. See, e.g., Granfinanci
era, S. A. v. Nordberg, 492 U. S. 33, 50 (1989) (explaining
that Congress had designated certain actions as “ ‘core
proceedings,’ which bankruptcy judges may adjudicate and
in which they may issue final judgments, if a district court
has referred the matter to them” (citations omitted)). We
have not directly addressed the question, however, and
Pierce argues that a bankruptcy judge may enter final
judgment on a core proceeding only if that proceeding also
“aris[es] in” a Title 11 case or “aris[es] under” Title 11
itself. Brief for Respondent 51 (internal quotation marks
omitted).
Section 157(b)(1) authorizes bankruptcy courts to “hear
and determine all cases under title 11 and all core pro­
ceedings arising under title 11, or arising in a case under
title 11.” As written, §157(b)(1) is ambiguous. The “aris­
ing under” and “arising in” phrases might, as Pierce sug­
gests, be read as referring to a limited category of those
core proceedings that are addressed in that section. On
the other hand, the phrases might be read as simply de­
scribing what core proceedings are: matters arising under
Title 11 or in a Title 11 case. In this case the structure
and context of §157 contradict Pierce’s interpretation of
§157(b)(1).
As an initial matter, Pierce’s reading of the statute
necessarily assumes that there is a category of core pro­
ceedings that neither arise under Title 11 nor arise in a
Title 11 case. The manner in which the statute delineates
the bankruptcy courts’ authority, however, makes plain
that no such category exists. Section 157(b)(1) authorizes
bankruptcy judges to enter final judgments in “core pro­
ceedings arising under title 11, or arising in a case under
title 11.” Section 157(c)(1) instructs bankruptcy judges to
instead submit proposed findings in “a proceeding that is
not a core proceeding but that is otherwise related to a
case under title 11.” Nowhere does §157 specify what
10 STERN v. MARSHALL
Opinion of the Court
bankruptcy courts are to do with respect to the category of
matters that Pierce posits—core proceedings that do not
arise under Title 11 or in a Title 11 case. To the contrary,
§157(b)(3) only instructs a bankruptcy judge to “deter­
mine, on the judge’s own motion or on timely motion of a
party, whether a proceeding is a core proceeding under
this subsection or is a proceeding that is otherwise related
to a case under title 11.” Two options. The statute does
not suggest that any other distinctions need be made.
Under our reading of the statute, core proceedings are
those that arise in a bankruptcy case or under Title 11.
The detailed list of core proceedings in §157(b)(2) pro-
vides courts with ready examples of such matters. Pierce’s
reading of §157, in contrast, supposes that some core pro­
ceedings will arise in a Title 11 case or under Title 11
and some will not. Under that reading, the statute pro­
vides no guidance on how to tell which are which.
We think it significant that Congress failed to provide
any framework for identifying or adjudicating the asserted
category of core but not “arising” proceedings, given the
otherwise detailed provisions governing bankruptcy court
authority. It is hard to believe that Congress would go to
the trouble of cataloging 16 different types of proceedings
that should receive “core” treatment, but then fail to spec­
ify how to determine whether those matters arise under
Title 11 or in a bankruptcy case if—as Pierce asserts—the
latter inquiry is determinative of the bankruptcy court’s
authority.
Pierce argues that we should treat core matters that
arise neither under Title 11 nor in a Title 11 case as pro­
ceedings “related to” a Title 11 case. Brief for Respondent
60 (internal quotation marks omitted). We think that a
contradiction in terms. It does not make sense to describe
a “core” bankruptcy proceeding as merely “related to” the
bankruptcy case; oxymoron is not a typical feature of
congressional drafting. See Northern Pipeline, 458 U. S.,
Cite as: 564 U. S. ____ (2011) 11
Opinion of the Court
at 71 (plurality opinion) (distinguishing “the restructuring
of debtor-creditor relations, which is at the core of the
federal bankruptcy power, . . . from the adjudication of
state-created private rights”); Collier on Bankruptcy
¶3.02[2], p. 3–26, n. 5 (16th ed. 2010) (“The terms ‘non­
core’ and ‘related’ are synonymous”); see also id., at 3–26,
(“The phraseology of section 157 leads to the conclusion
that there is no such thing as a core matter that is ‘related
to’ a case under title 11. Core proceedings are, at most,
those that arise in title 11 cases or arise under title 11”
(footnote omitted)). And, as already discussed, the statute
simply does not provide for a proceeding that is simulta­
neously core and yet only related to the bankruptcy case.
See §157(c)(1) (providing only for “a proceeding that is
not a core proceeding but that is otherwise related to a case
under title 11”).
As we explain in Part III, we agree with Pierce that
designating all counterclaims as “core” proceedings raises
serious constitutional concerns. Pierce is also correct that
we will, where possible, construe federal statutes so as “to
avoid serious doubt of their constitutionality.” Commod
ity Futures Trading Comm’n v. Schor, 478 U. S. 833,
841 (1986) (internal quotation marks omitted). But that
“canon of construction does not give [us] the prerogative to
ignore the legislative will in order to avoid constitutional
adjudication.” Ibid. In this case, we do not think the plain
text of §157(b)(2)(C) leaves any room for the canon of
avoidance. We would have to “rewrit[e]” the statute,
not interpret it, to bypass the constitutional issue
§157(b)(2)(C) presents. Id., at 841 (internal quotation
marks omitted). That we may not do. We agree with
Vickie that §157(b)(2)(C) permits the bankruptcy court
to enter a final judgment on her tortious interference
counterclaim.
12 STERN v. MARSHALL
Opinion of the Court
C
Pierce argues, as another alternative to reaching the
constitutional question, that the Bankruptcy Court lacked
jurisdiction to enter final judgment on his defamation
claim. Section 157(b)(5) provides that “[t]he district court
shall order that personal injury tort and wrongful death
claims shall be tried in the district court in which the
bankruptcy case is pending, or in the district court in the
district in which the claim arose.” Pierce asserts that
his defamation claim is a “personal injury tort,” that the
Bankruptcy Court therefore had no jurisdiction over that
claim, and that the court therefore necessarily lacked
jurisdiction over Vickie’s counterclaim as well. Brief for
Respondent 65–66.
Vickie objects to Pierce’s statutory analysis across the
board. To begin, Vickie contends that §157(b)(5) does not
address subject matter jurisdiction at all, but simply
specifies the venue in which “personal injury tort and
wrongful death claims” should be tried. See Reply Brief
for Petitioner 16–17, 19; see also Tr. of Oral Arg. 23 (Dep­
uty Solicitor General) (Section “157(b)(5) is in [the United
States’] view not jurisdictional”). Given the limited scope
of that provision, Vickie argues, a party may waive or for­
feit any objections under §157(b)(5), in the same way that
a party may waive or forfeit an objection to the bank­
ruptcy court finally resolving a non-core claim. Reply
Brief for Petitioner 17–20; see §157(c)(2) (authorizing the
district court, “with the consent of all the parties to the
proceeding,” to refer a “related to” matter to the bank­
ruptcy court for final judgment). Vickie asserts that in
this case Pierce consented to the Bankruptcy Court’s
adjudication of his defamation claim, and forfeited any
argument to the contrary, by failing to seek withdrawal of
the claim until he had litigated it before the Bankruptcy
Court for 27 months. Id., at 20–23. On the merits, Vickie
contends that the statutory phrase “personal injury tort
Cite as: 564 U. S. ____ (2011) 13
Opinion of the Court
and wrongful death claims” does not include non-physical
torts such as defamation. Id., at 25–26.
We need not determine what constitutes a “personal
injury tort” in this case because we agree with Vickie that
§157(b)(5) is not jurisdictional, and that Pierce consented
to the Bankruptcy Court’s resolution of his defamation
claim.4 Because “[b]randing a rule as going to a court’s
subject-matter jurisdiction alters the normal operation of
our adversarial system,” Henderson v. Shinseki, 562 U. S.
___, ___–___ (2011) (slip op., at 4–5), we are not inclined to
interpret statutes as creating a jurisdictional bar when
they are not framed as such. See generally Arbaugh v.
Y & H Corp., 546 U. S. 500, 516 (2006) (“when Congress
does not rank a statutory limitation on coverage as juris­
dictional, courts should treat the restriction as nonjuris­
dictional in character”).
——————
4 Although Pierce suggests that consideration of “the 157(b)(5) issue”
would facilitate an “easy” resolution of the case, Tr. of Oral Arg. 47–48,
he is mistaken. Had Pierce preserved his argument under that provi­
sion, we would have been confronted with several questions on which
there is little consensus or precedent. Those issues include: (1) the
scope of the phrase “personal injury tort”—a question over which there
is at least a three-way divide, see In re Arnold, 407 B. R. 849, 851–853
(Bkrtcy. Ct. MDNC 2009); (2) whether, as Vickie argued in the Court of
Appeals, the requirement that a personal injury tort claim be “tried” in
the district court nonetheless permits the bankruptcy court to resolve
the claim short of trial, see Appellee’s/Cross-Appellant’s Supplemental
Brief in No. 02–56002 etc. (CA9), p. 24; see also In re Dow Corning
Corp., 215 B. R. 346, 349–351 (Bkrtcy. Ct. ED Mich. 1997) (noting
divide over whether, and on what grounds, a bankruptcy court may
resolve a claim pretrial); and (3) even if Pierce’s defamation claim
could be considered only by the District Court, whether the Bankruptcy
Court might retain jurisdiction over the counterclaim, cf. Arbaugh v.
Y & H Corp., 546 U. S. 500, 514 (2006) (“when a court grants a motion
to dismiss for failure to state a federal claim, the court generally
retains discretion to exercise supplemental jurisdiction, pursuant to 28
U. S. C. §1367, over pendent state-law claims”). We express no opinion
on any of these issues and simply note that the §157(b)(5) question is
not as straightforward as Pierce would have it.
14 STERN v. MARSHALL
Opinion of the Court
Section 157(b)(5) does not have the hallmarks of a juris­
dictional decree. To begin, the statutory text does not
refer to either district court or bankruptcy court “jurisdic­
tion,” instead addressing only where personal injury tort
claims “shall be tried.”
The statutory context also belies Pierce’s jurisdictional
claim. Section 157 allocates the authority to enter final
judgment between the bankruptcy court and the district
court. See §§157(b)(1), (c)(1). That allocation does not
implicate questions of subject matter jurisdiction. See
§157(c)(2) (parties may consent to entry of final judgment
by bankruptcy judge in non-core case). By the same
token, §157(b)(5) simply specifies where a particular cate­
gory of cases should be tried. Pierce does not explain why
that statutory limitation may not be similarly waived.
We agree with Vickie that Pierce not only could but did
consent to the Bankruptcy Court’s resolution of his defa­
mation claim. Before the Bankruptcy Court, Vickie ob­
jected to Pierce’s proof of claim for defamation, arguing
that Pierce’s claim was unenforceable and that Pierce
should not receive any amount for it. See 29 Court of
Appeals Supplemental Excerpts of Record 6031, 6035
(hereinafter Supplemental Record). Vickie also noted
that the Bankruptcy Court could defer ruling on her objec­
tion, given the litigation posture of Pierce’s claim before
the Bankruptcy Court. See id., at 6031. Vickie’s filing
prompted Pierce to advise the Bankruptcy Court that “[a]ll
parties are in agreement that the amount of the contin­
gent Proof of Claim filed by [Pierce] shall be determined
by the adversary proceedings” that had been commenced
in the Bankruptcy Court. 31 Supplemental Record 6801.
Pierce asserted that Vickie’s objection should be overruled
or, alternatively, that any ruling on the objection “should
be continued until the resolution of the pending adversary
proceeding litigation.” Ibid. Pierce identifies no point in
the record where he argued to the Bankruptcy Court that
Cite as: 564 U. S. ____ (2011) 15
Opinion of the Court
it lacked the authority to adjudicate his proof of claim be­
cause the claim sought recompense for a personal injury tort.
Indeed, Pierce apparently did not object to any court
that §157(b)(5) prohibited the Bankruptcy Court from
resolving his defamation claim until over two years—and
several adverse discovery rulings—after he filed that
claim in June 1996. The first filing Pierce cites as rais-
ing that objection is his September 22, 1998 motion to the
District Court to withdraw the reference of the case to the
Bankruptcy Court. See Brief for Respondent 26–27. The
District Court did initially withdraw the reference as
requested, but it then returned the proceeding to the
Bankruptcy Court, observing that Pierce “implicated the
jurisdiction of that bankruptcy court. He chose to be a
party to that litigation.” App. 129. Although Pierce had
objected in July 1996 to the Bankruptcy Court’s exercise of
jurisdiction over Vickie’s counterclaim, he advised the
court at that time that he was “happy to litigate [his]
claim” there. 29 Supplemental Record 6101. Counsel
stated that even though Pierce thought it was “probably
cheaper for th[e] estate if [Pierce’s claim] were sent back
or joined back with the State Court litigation,” Pierce “did
choose” the Bankruptcy Court forum and “would be more
than pleased to do it [t]here.” Id., at 6101–6102; see also
App. to Pet. for Cert. 266, n. 17 (District Court referring to
these statements).
Given Pierce’s course of conduct before the Bankruptcy
Court, we conclude that he consented to that court’s reso­
lution of his defamation claim (and forfeited any argument
to the contrary). We have recognized “the value of waiver
and forfeiture rules” in “complex” cases, Exxon Shipping
Co. v. Baker, 554 U. S. 471, 487–488, n. 6 (2008), and
this case is no exception. In such cases, as here, the
consequences of “a litigant . . . ‘sandbagging’ the court—
remaining silent about his objection and belatedly raising
the error only if the case does not conclude in his favor,”
16 STERN v. MARSHALL
Opinion of the Court
Puckett v. United States, 556 U. S. ___, ___ (2009) (slip op.,
at 5) (some internal quotation marks omitted)—can be
particularly severe. If Pierce believed that the Bank­
ruptcy Court lacked the authority to decide his claim for
defamation, then he should have said so—and said so
promptly. See United States v. Olano, 507 U. S. 725, 731
(1993) (“ ‘No procedural principle is more familiar to this
Court than that a constitutional right,’ or a right of any
other sort, ‘may be forfeited . . . by the failure to make
timely assertion of the right before a tribunal having
jurisdiction to determine it’ ” (quoting Yakus v. United
States, 321 U. S. 414, 444 (1944))). Instead, Pierce repeat­
edly stated to the Bankruptcy Court that he was happy
to litigate there. We will not consider his claim to the
contrary, now that he is sad.
III
Although we conclude that §157(b)(2)(C) permits the
Bankruptcy Court to enter final judgment on Vickie’s
counterclaim, Article III of the Constitution does not.
A
Article III, §1, of the Constitution mandates that “[t]he
judicial Power of the United States, shall be vested in one
supreme Court, and in such inferior Courts as the Con­
gress may from time to time ordain and establish.” The
same section provides that the judges of those constitu­
tional courts “shall hold their Offices during good Behav­
iour” and “receive for their Services[ ] a Compensation[ ]
[that] shall not be diminished” during their tenure.
As its text and our precedent confirm, Article III is “an
inseparable element of the constitutional system of checks
and balances” that “both defines the power and protects
the independence of the Judicial Branch.” Northern Pipe
line, 458 U. S., at 58 (plurality opinion). Under “the basic
concept of separation of powers . . . that flow[s] from the
Cite as: 564 U. S. ____ (2011) 17
Opinion of the Court
scheme of a tripartite government” adopted in the Consti­
tution, “the ‘judicial Power of the United States’ . . . can no
more be shared” with another branch than “the Chief
Executive, for example, can share with the Judiciary the
veto power, or the Congress share with the Judiciary the
power to override a Presidential veto.” United States v.
Nixon, 418 U. S. 683, 704 (1974) (quoting U. S. Const.,
Art. III, §1).
In establishing the system of divided power in the Con­
stitution, the Framers considered it essential that “the
judiciary remain[ ] truly distinct from both the legisla-
ture and the executive.” The Federalist No. 78, p. 466
(C. Rossiter ed. 1961) (A. Hamilton). As Hamilton put it,
quoting Montesquieu, “ ‘there is no liberty if the power of
judging be not separated from the legislative and execu­
tive powers.’ ” Ibid. (quoting 1 Montesquieu, Spirit of
Laws 181).
We have recognized that the three branches are not
hermetically sealed from one another, see Nixon v. Admin
istrator of General Services, 433 U. S. 425, 443 (1977), but
it remains true that Article III imposes some basic limita­
tions that the other branches may not transgress. Those
limitations serve two related purposes. “Separation-of­
powers principles are intended, in part, to protect each
branch of government from incursion by the others. Yet
the dynamic between and among the branches is not the
only object of the Constitution’s concern. The structural
principles secured by the separation of powers protect the
individual as well.” Bond v. United States, 564 U. S. ___,
___ (2011) (slip op., at 10).
Article III protects liberty not only through its role in
implementing the separation of powers, but also by speci­
fying the defining characteristics of Article III judges. The
colonists had been subjected to judicial abuses at the hand
of the Crown, and the Framers knew the main reasons
why: because the King of Great Britain “made Judges
18 STERN v. MARSHALL
Opinion of the Court
dependent on his Will alone, for the tenure of their offices,
and the amount and payment of their salaries.” The
Declaration of Independence ¶11. The Framers undertook
in Article III to protect citizens subject to the judicial
power of the new Federal Government from a repeat of
those abuses. By appointing judges to serve without term
limits, and restricting the ability of the other branches to
remove judges or diminish their salaries, the Framers
sought to ensure that each judicial decision would be
rendered, not with an eye toward currying favor with
Congress or the Executive, but rather with the “[c]lear
heads . . . and honest hearts” deemed “essential to good
judges.” 1 Works of James Wilson 363 (J. Andrews ed.
1896).
Article III could neither serve its purpose in the system
of checks and balances nor preserve the integrity of judi­
cial decisionmaking if the other branches of the Federal
Government could confer the Government’s “judicial
Power” on entities outside Article III. That is why we
have long recognized that, in general, Congress may not
“withdraw from judicial cognizance any matter which,
from its nature, is the subject of a suit at the common law,
or in equity, or admiralty.” Murray’s Lessee v. Hoboken
Land & Improvement Co., 18 How. 272, 284 (1856). When
a suit is made of “the stuff of the traditional actions at
common law tried by the courts at Westminster in 1789,”
Northern Pipeline, 458 U. S., at 90 (Rehnquist, J., concur­
ring in judgment), and is brought within the bounds of
federal jurisdiction, the responsibility for deciding that
suit rests with Article III judges in Article III courts. The
Constitution assigns that job—resolution of “the mundane
as well as the glamorous, matters of common law and
statute as well as constitutional law, issues of fact as well
as issues of law”—to the Judiciary. Id., at 86–87, n. 39
(plurality opinion).
Cite as: 564 U. S. ____ (2011) 19
Opinion of the Court
B
This is not the first time we have faced an Article III
challenge to a bankruptcy court’s resolution of a debtor’s
suit. In Northern Pipeline, we considered whether bank­
ruptcy judges serving under the Bankruptcy Act of 1978—
appointed by the President and confirmed by the Senate,
but lacking the tenure and salary guarantees of Article
III—could “constitutionally be vested with jurisdiction to
decide [a] state-law contract claim” against an entity that
was not otherwise part of the bankruptcy proceedings.
458 U. S., at 53, 87, n. 40 (plurality opinion); see id., at
89–92 (Rehnquist, J., concurring in judgment). The Court
concluded that assignment of such state law claims for
resolution by those judges “violates Art. III of the Con­
stitution.” Id., at 52, 87 (plurality opinion); id., at 91(Rehnquist, J., concurring in judgment).
The plurality in Northern Pipeline recognized that
there was a category of cases involving “public rights”
that Congress could constitutionally assign to “legislative”
courts for resolution. That opinion concluded that this
“public rights” exception extended “only to matters arising
between” individuals and the Government “in connection
with the performance of the constitutional functions of the
executive or legislative departments . . . that historically
could have been determined exclusively by those”
branches. Id., at 67–68 (internal quotation marks omit­
ted). A full majority of the Court, while not agreeing on
the scope of the exception, concluded that the doctrine did
not encompass adjudication of the state law claim at issue
in that case. Id., at 69–72; see id., at 90–91 (Rehnquist, J.,
concurring in judgment) (“None of the [previous cases
addressing Article III power] has gone so far as to sanction
the type of adjudication to which Marathon will be sub­
jected . . . . To whatever extent different powers granted
under [the 1978] Act might be sustained under the ‘public
rights’ doctrine of Murray’s Lessee . . . and succeeding
20 STERN v. MARSHALL
Opinion of the Court
cases, I am satisfied that the adjudication of Northern’s
lawsuit cannot be so sustained”).5
A full majority of Justices in Northern Pipeline also
rejected the debtor’s argument that the bankruptcy court’s
exercise of jurisdiction was constitutional because the
bankruptcy judge was acting merely as an adjunct of the
district court or court of appeals. Id., at 71–72, 81–86
(plurality opinion); id., at 91 (Rehnquist, J., concurring in
judgment) (“the bankruptcy court is not an ‘adjunct’ of
either the district court or the court of appeals”).
After our decision in Northern Pipeline, Congress re­
vised the statutes governing bankruptcy jurisdiction and
bankruptcy judges. In the 1984 Act, Congress provided
that the judges of the new bankruptcy courts would be
appointed by the courts of appeals for the circuits in which
their districts are located. 28 U. S. C. §152(a). And, as we
have explained, Congress permitted the newly constituted
bankruptcy courts to enter final judgments only in “core”
proceedings. See supra, at 7–8.
With respect to such “core” matters, however, the bank­
ruptcy courts under the 1984 Act exercise the same pow­
ers they wielded under the Bankruptcy Act of 1978 (1978
Act), 92 Stat. 2549. As in Northern Pipeline, for example,
the newly constituted bankruptcy courts are charged
under §157(b)(2)(C) with resolving “[a]ll matters of fact
and law in whatever domains of the law to which” a coun­
terclaim may lead. 458 U. S., at 91 (Rehnquist, J., concur­
ring in judgment); see, e.g., 275 B. R., at 50–51 (noting
that Vickie’s counterclaim required the bankruptcy court
to determine whether Texas recognized a cause of ac-
tion for tortious interference with an inter vivos gift—
something the Supreme Court of Texas had yet to do). As
——————
5 The dissent is thus wrong in suggesting that less than a full Court
agreed on the points pertinent to this case. Post, at 2 (opinion of
BREYER, J.).
Cite as: 564 U. S. ____ (2011) 21
Opinion of the Court
in Northern Pipeline, the new courts in core proceedings
“issue final judgments, which are binding and enforceable
even in the absence of an appeal.” 458 U. S., at 85–86
(plurality opinion). And, as in Northern Pipeline, the
district courts review the judgments of the bankruptcy
courts in core proceedings only under the usual limited
appellate standards. That requires marked deference to,
among other things, the bankruptcy judges’ findings of
fact. See §158(a); Fed. Rule Bkrtcy. Proc. 8013 (findings of
fact “shall not be set aside unless clearly erroneous”).
C
Vickie and the dissent argue that the Bankruptcy
Court’s entry of final judgment on her state common law
counterclaim was constitutional, despite the similarities
between the bankruptcy courts under the 1978 Act and
those exercising core jurisdiction under the 1984 Act. We
disagree. It is clear that the Bankruptcy Court in this
case exercised the “judicial Power of the United States” in
purporting to resolve and enter final judgment on a state
common law claim, just as the court did in Northern Pipe
line. No “public right” exception excuses the failure to
comply with Article III in doing so, any more than in
Northern Pipeline. Vickie argues that this case is different
because the defendant is a creditor in the bankruptcy.
But the debtors’ claims in the cases on which she relies
were themselves federal claims under bankruptcy law,
which would be completely resolved in the bankruptcy
process of allowing or disallowing claims. Here Vickie’s
claim is a state law action independent of the federal
bankruptcy law and not necessarily resolvable by a ruling
on the creditor’s proof of claim in bankruptcy. Northern
Pipeline and our subsequent decision in Granfinanciera,
492 U. S. 33, rejected the application of the “public rights”
exception in such cases.
Nor can the bankruptcy courts under the 1984 Act be
22 STERN v. MARSHALL
Opinion of the Court
dismissed as mere adjuncts of Article III courts, any more
than could the bankruptcy courts under the 1978 Act. The
judicial powers the courts exercise in cases such as this
remain the same, and a court exercising such broad pow­
ers is no mere adjunct of anyone.
1
Vickie’s counterclaim cannot be deemed a matter of
“public right” that can be decided outside the Judicial
Branch. As explained above, in Northern Pipeline we
rejected the argument that the public rights doctrine
permitted a bankruptcy court to adjudicate a state law
suit brought by a debtor against a company that had not
filed a claim against the estate. See 458 U. S., at 69–72
(plurality opinion); id., at 90–91 (Rehnquist, J., concurring
in judgment). Although our discussion of the public rights
exception since that time has not been entirely consistent,
and the exception has been the subject of some debate,
this case does not fall within any of the various formula­
tions of the concept that appear in this Court’s opinions.
We first recognized the category of public rights in Mur
ray’s Lessee v. Hoboken Land & Improvement Co., 18
How. 272 (1856). That case involved the Treasury De­
partment’s sale of property belonging to a customs collec­
tor who had failed to transfer payments to the Federal
Government that he had collected on its behalf. Id., at
274, 275. The plaintiff, who claimed title to the same land
through a different transfer, objected that the Treasury
Department’s calculation of the deficiency and sale of the
property was void, because it was a judicial act that could
not be assigned to the Executive under Article III. Id., at
274–275, 282–283.
“To avoid misconstruction upon so grave a subject,” the
Court laid out the principles guiding its analysis. Id., at
284. It confirmed that Congress cannot “withdraw from
judicial cognizance any matter which, from its nature, is
Cite as: 564 U. S. ____ (2011) 23
Opinion of the Court
the subject of a suit at the common law, or in equity, or
admiralty.” Ibid. The Court also recognized that “[a]t the
same time there are matters, involving public rights,
which may be presented in such form that the judicial
power is capable of acting on them, and which are suscep­
tible of judicial determination, but which congress may or
may not bring within the cognizance of the courts of the
United States, as it may deem proper.” Ibid.As an example of such matters, the Court referred to
“[e]quitable claims to land by the inhabitants of ceded
territories” and cited cases in which land issues were
conclusively resolved by Executive Branch officials. Ibid.(citing Foley v. Harrison, 15 How. 433 (1854); Burgess v.
Gray, 16 How. 48 (1854)). In those cases “it depends upon
the will of congress whether a remedy in the courts shall
be allowed at all,” so Congress could limit the extent to
which a judicial forum was available. Murray’s Lessee, 18
How., at 284. The challenge in Murray’s Lessee to the
Treasury Department’s sale of the collector’s land likewise
fell within the “public rights” category of cases, because it
could only be brought if the Federal Government chose to
allow it by waiving sovereign immunity. Id., at 283–284.
The point of Murray’s Lessee was simply that Congress
may set the terms of adjudicating a suit when the suit
could not otherwise proceed at all.
Subsequent decisions from this Court contrasted cases
within the reach of the public rights exception—those
arising “between the Government and persons subject to
its authority in connection with the performance of the
constitutional functions of the executive or legislative
departments”—and those that were instead matters “of
private right, that is, of the liability of one individual to
another under the law as defined.” Crowell v. Benson, 285
U. S. 22, 50, 51 (1932).6 See Atlas Roofing Co. v. Occupa
——————
6 Although the Court in Crowell went on to decide that the facts of the
24 STERN v. MARSHALL
Opinion of the Court
tional Safety and Health Review Comm’n, 430 U. S. 442,
458 (1977) (Exception extends to cases “where the Gov­
ernment is involved in its sovereign capacity under . . . [a]
statute creating enforceable public rights,” while “[w]holly
private tort, contract, and property cases, as well as a vast
range of other cases . . . are not at all implicated”); Ex
parte Bakelite Corp., 279 U. S. 438, 451–452 (1929). See
also Northern Pipeline, supra, at 68 (plurality opinion)
(citing Ex parte Bakelite Corp. for the proposition that the
doctrine extended “only to matters that historically could
have been determined exclusively by” the Executive and
Legislative Branches).
Shortly after Northern Pipeline, the Court rejected the
——————
private dispute before it could be determined by a non-Article III
tribunal in the first instance, subject to judicial review, the Court did so
only after observing that the administrative adjudicator had only
limited authority to make specialized, narrowly confined factual deter­
minations regarding a particularized area of law and to issue orders
that could be enforced only by action of the District Court. 285 U. S., at
38, 44–45, 54; see Northern Pipeline Constr. Co. v. Marathon Pipe Line
Co., 458 U. S. 50, 78 (1982) (plurality opinion). In other words, the
agency in Crowell functioned as a true “adjunct” of the District Court.
That is not the case here. See infra, at 34–36.
Although the dissent suggests that we understate the import of
Crowell in this regard, the dissent itself recognizes—repeatedly—that
Crowell by its terms addresses the determination of facts outside
Article III. See post, at 4 (Crowell “upheld Congress’ delegation of
primary factfinding authority to the agency”); post, at 12 (quoting
Crowell, 285 U. S., at 51, for the proposition that “ ‘there is no require­
ment that, in order to maintain the essential attributes of the judicial
power, all determinations of fact in constitutional courts shall be made
by judges’ ”). Crowell may well have additional significance in the
context of expert administrative agencies that oversee particular
substantive federal regimes, but we have no occasion to and do not
address those issues today. See infra, at 29. The United States appar­
ently agrees that any broader significance of Crowell is not pertinent in
this case, citing to Crowell in its brief only once, in the last footnote,
again for the limited proposition discussed above. Brief for United
States as Amicus Curiae 32, n. 5.
Cite as: 564 U. S. ____ (2011) 25
Opinion of the Court
limitation of the public rights exception to actions involv­
ing the Government as a party. The Court has continued,
however, to limit the exception to cases in which the claim
at issue derives from a federal regulatory scheme, or in
which resolution of the claim by an expert government
agency is deemed essential to a limited regulatory objec­
tive within the agency’s authority. In other words, it is
still the case that what makes a right “public” rather than
private is that the right is integrally related to particular
federal government action. See United States v. Jicarilla
Apache Nation, 564 U. S. ___, ___–___ (2011) (slip op., at
10–11) (“The distinction between ‘public rights’ against
the Government and ‘private rights’ between private
parties is well established,” citing Murray’s Lessee and
Crowell).
Our decision in Thomas v. Union Carbide Agricultural
Products Co., for example, involved a data-sharing ar­
rangement between companies under a federal statute pro­
viding that disputes about compensation between the
companies would be decided by binding arbitration. 473
U. S. 568, 571–575 (1985). This Court held that the
scheme did not violate Article III, explaining that “[a]ny
right to compensation . . . results from [the statute] and
does not depend on or replace a right to such compensa­
tion under state law.” Id., at 584.
Commodity Futures Trading Commission v. Schor con­
cerned a statutory scheme that created a procedure for
customers injured by a broker’s violation of the federal
commodities law to seek reparations from the broker
before the Commodity Futures Trading Commission
(CFTC). 478 U. S. 833, 836 (1986). A customer filed such
a claim to recover a debit balance in his account, while the
broker filed a lawsuit in Federal District Court to recover
the same amount as lawfully due from the customer. The
broker later submitted its claim to the CFTC, but after
that agency ruled against the customer, the customer
26 STERN v. MARSHALL
Opinion of the Court
argued that agency jurisdiction over the broker’s counter­
claim violated Article III. Id., at 837–838. This Court
disagreed, but only after observing that (1) the claim and
the counterclaim concerned a “single dispute”—the same
account balance; (2) the CFTC’s assertion of authority
involved only “a narrow class of common law claims” in
a “ ‘particularized area of law’ ”; (3) the area of law in
question was governed by “a specific and limited federal
regulatory scheme” as to which the agency had “obvious
expertise”; (4) the parties had freely elected to resolve
their differences before the CFTC; and (5) CFTC orders
were “enforceable only by order of the district court.” Id.,
at 844, 852–855 (quoting Northern Pipeline, 458 U. S., at
85); see 478 U. S., at 843–844; 849–857. Most signifi­
cantly, given that the customer’s reparations claim before
the agency and the broker’s counterclaim were competing
claims to the same amount, the Court repeatedly empha­
sized that it was “necessary” to allow the agency to exer­
cise jurisdiction over the broker’s claim, or else “the
reparations procedure would have been confounded.”
Id., at 856.
The most recent case in which we considered application
of the public rights exception—and the only case in which
we have considered that doctrine in the bankruptcy con­
text since Northern Pipeline—is Granfinanciera, S. A. v.
Nordberg, 492 U. S. 33 (1989). In Granfinanciera we
rejected a bankruptcy trustee’s argument that a fraudu­
lent conveyance action filed on behalf of a bankruptcy
estate against a noncreditor in a bankruptcy proceeding
fell within the “public rights” exception. We explained
that, “[i]f a statutory right is not closely intertwined with
a federal regulatory program Congress has power to enact,
and if that right neither belongs to nor exists against the
Federal Government, then it must be adjudicated by an
Article III court.” Id., at 54–55. We reasoned that fraudu­
lent conveyance suits were “quintessentially suits at com­
Cite as: 564 U. S. ____ (2011) 27
Opinion of the Court
mon law that more nearly resemble state law contract
claims brought by a bankrupt corporation to augment the
bankruptcy estate than they do creditors’ hierarchically
ordered claims to a pro rata share of the bankruptcy res.”
Id., at 56. As a consequence, we concluded that fraudulent
conveyance actions were “more accurately characterized as
a private rather than a public right as we have used those
terms in our Article III decisions.” Id., at 55.7
Vickie’s counterclaim—like the fraudulent conveyance
claim at issue in Granfinanciera—does not fall within any
of the varied formulations of the public rights exception in
this Court’s cases. It is not a matter that can be pursued
only by grace of the other branches, as in Murray’s Lessee,
18 How., at 284, or one that “historically could have been
determined exclusively by” those branches, Northern
Pipeline, supra, at 68 (citing Ex parte Bakelite Corp., 279
U. S., at 458). The claim is instead one under state com­
mon law between two private parties. It does not “de­
pend[ ] on the will of congress,” Murray’s Lessee, supra, at
284; Congress has nothing to do with it.
In addition, Vickie’s claimed right to relief does not flow
from a federal statutory scheme, as in Thomas, 473 U. S.,
at 584–585, or Atlas Roofing, 430 U. S., at 458. It is not
“completely dependent upon” adjudication of a claim cre­
ated by federal law, as in Schor, 478 U. S., at 856. And in
contrast to the objecting party in Schor, id., at 855–856,
Pierce did not truly consent to resolution of Vickie’s claim
in the bankruptcy court proceedings. He had nowhere else
to go if he wished to recover from Vickie’s estate. See
——————
7 We noted that we did not mean to “suggest that the restructuring of
debtor-creditor relations is in fact a public right.” 492 U. S., at 56,
n. 11. Our conclusion was that, “even if one accepts this thesis,” Con­
gress could not constitutionally assign resolution of the fraudulent
conveyance action to a non-Article III court. Ibid. Because neither
party asks us to reconsider the public rights framework for bankruptcy,
we follow the same approach here.
28 STERN v. MARSHALL
Opinion of the Court
Granfinanciera, supra, at 59, n. 14 (noting that “[p]arallel
reasoning [to Schor] is unavailable in the context of bank­
ruptcy proceedings, because creditors lack an alternative
forum to the bankruptcy court in which to pursue their
claims”).8
Furthermore, the asserted authority to decide Vickie’s
claim is not limited to a “particularized area of the law,”
as in Crowell, Thomas, and Schor. Northern Pipeline, 458
U. S., at 85 (plurality opinion). We deal here not with an
agency but with a court, with substantive jurisdiction
reaching any area of the corpus juris. See ibid.; id., at 91(Rehnquist, J., concurring in judgment). This is not a
situation in which Congress devised an “expert and inex­
pensive method for dealing with a class of questions of fact
which are particularly suited to examination and determi­
nation by an administrative agency specially assigned to
that task.” Crowell, 285 U. S., at 46; see Schor, supra, at
855–856. The “experts” in the federal system at resolving
common law counterclaims such as Vickie’s are the Article
III courts, and it is with those courts that her claim must
stay.
The dissent reads our cases differently, and in particu­
lar contends that more recent cases view Northern Pipe
line as “ ‘establish[ing] only that Congress may not vest in
a non-Article III court the power to adjudicate, render
final judgment, and issue binding orders in a traditional
contract action arising under state law, without consent of
——————
8 Contrary to the claims of the dissent, see post, at 12–13, Pierce did
not have another forum in which to pursue his claim to recover from
Vickie’s pre-bankruptcy assets, rather than take his chances with
whatever funds might remain after the Title 11 proceedings. Creditors
who possess claims that do not satisfy the requirements for nondis­
chargeability under 11 U. S. C. §523 have no choice but to file their
claims in bankruptcy proceedings if they want to pursue the claims at
all. That is why, as we recognized in Granfinanciera, the notion of
“consent” does not apply in bankruptcy proceedings as it might in other
contexts.
Cite as: 564 U. S. ____ (2011) 29
Opinion of the Court
the litigants, and subject only to ordinary appellate re­
view.’ ” Post, at 6 (quoting Thomas, supra, at 584). Just
so: Substitute “tort” for “contract,” and that statement
directly covers this case.
We recognize that there may be instances in which the
distinction between public and private rights—at least as
framed by some of our recent cases—fails to provide con­
crete guidance as to whether, for example, a particular
agency can adjudicate legal issues under a substantive
regulatory scheme. Given the extent to which this case is
so markedly distinct from the agency cases discussing the
public rights exception in the context of such a regime,
however, we do not in this opinion express any view on
how the doctrine might apply in that different context.
What is plain here is that this case involves the most
prototypical exercise of judicial power: the entry of a final,
binding judgment by a court with broad substantive juris­
diction, on a common law cause of action, when the action
neither derives from nor depends upon any agency regula­
tory regime. If such an exercise of judicial power may
nonetheless be taken from the Article III Judiciary simply
by deeming it part of some amorphous “public right,” then
Article III would be transformed from the guardian of
individual liberty and separation of powers we have long
recognized into mere wishful thinking.
2
Vickie and the dissent next attempt to distinguish
Northern Pipeline and Granfinanciera on the ground that
Pierce, unlike the defendants in those cases, had filed a
proof of claim in the bankruptcy proceedings. Given
Pierce’s participation in those proceedings, Vickie argues,
the Bankruptcy Court had the authority to adjudicate her
counterclaim under our decisions in Katchen v. Landy, 382
U. S. 323 (1966), and Langenkamp v. Culp, 498 U. S. 42(1990) (per curiam).
30 STERN v. MARSHALL
Opinion of the Court
We do not agree. As an initial matter, it is hard to see
why Pierce’s decision to file a claim should make any
difference with respect to the characterization of Vickie’s
counterclaim. “ ‘[P]roperty interests are created and de­
fined by state law,’ and ‘[u]nless some federal interest
requires a different result, there is no reason why such
interests should be analyzed differently simply because an
interested party is involved in a bankruptcy proceeding.”
Travelers Casualty & Surety Co. of America v. Pacific Gas
& Elec. Co., 549 U. S. 443, 451 (2007) (quoting Butner v.
United States, 440 U. S. 48, 55 (1979)). Pierce’s claim for
defamation in no way affects the nature of Vickie’s coun­
terclaim for tortious interference as one at common law
that simply attempts to augment the bankruptcy estate—
the very type of claim that we held in Northern Pipeline
and Granfinanciera must be decided by an Article III court.
Contrary to Vickie’s contention, moreover, our decisions
in Katchen and Langenkamp do not suggest a different
result. Katchen permitted a bankruptcy referee acting
under the Bankruptcy Acts of 1898 and 1938 (akin to a
bankruptcy court today) to exercise what was known as
“summary jurisdiction” over a voidable preference claim
brought by the bankruptcy trustee against a creditor who
had filed a proof of claim in the bankruptcy proceeding.
See 382 U. S., at 325, 327–328. A voidable preference
claim asserts that a debtor made a payment to a particu­
lar creditor in anticipation of bankruptcy, to in effect
increase that creditor’s proportionate share of the estate.
The preferred creditor’s claim in bankruptcy can be disal­
lowed as a result of the preference, and the amounts paid
to that creditor can be recovered by the trustee. See id., at
330; see also 11 U. S. C. §§502(d), 547(b).
Although the creditor in Katchen objected that the
preference issue should be resolved through a “plenary
suit” in an Article III court, this Court concluded that
summary adjudication in bankruptcy was appropriate,
Cite as: 564 U. S. ____ (2011) 31
Opinion of the Court
because it was not possible for the referee to rule on the
creditor’s proof of claim without first resolving the void­
able preference issue. 382 U. S., at 329–330, 332–333, and
n. 9, 334. There was no question that the bankruptcy
referee could decide whether there had been a voidable
preference in determining whether and to what extent
to allow the creditor’s claim. Once the referee did that,
“nothing remains for adjudication in a plenary suit”; such
a suit “would be a meaningless gesture.” Id., at 334. The
plenary proceeding the creditor sought could be brought
into the bankruptcy court because “the same issue [arose]
as part of the process of allowance and disallowance of
claims.” Id., at 336.
It was in that sense that the Court stated that “he who
invokes the aid of the bankruptcy court by offering a proof
of claim and demanding its allowance must abide the
consequences of that procedure.” Id., at 333, n. 9. In
Katchen one of those consequences was resolution of the
preference issue as part of the process of allowing or disal­
lowing claims, and accordingly there was no basis for the
creditor to insist that the issue be resolved in an Article
III court. See id., at 334. Indeed, the Katchen Court
expressly noted that it “intimate[d] no opinion concerning
whether” the bankruptcy referee would have had “sum­
mary jurisdiction to adjudicate a demand by the [bank­
ruptcy] trustee for affirmative relief, all of the substantial
factual and legal bases for which ha[d] not been disposed
of in passing on objections to the [creditor’s proof of]
claim.” Id., at 333, n. 9.
Our per curiam opinion in Langenkamp is to the same
effect. We explained there that a preferential transfer
claim can be heard in bankruptcy when the allegedly
favored creditor has filed a claim, because then “the ensu­
ing preference action by the trustee become[s] integral to
the restructuring of the debtor-creditor relationship.” 498
U. S., at 44. If, in contrast, the creditor has not filed a
32 STERN v. MARSHALL
Opinion of the Court
proof of claim, the trustee’s preference action does not
“become[ ] part of the claims-allowance process” subject to
resolution by the bankruptcy court. Ibid.; see id., at 45.
In ruling on Vickie’s counterclaim, the Bankruptcy
Court was required to and did make several factual and
legal determinations that were not “disposed of in pass-
ing on objections” to Pierce’s proof of claim for defama-
tion, which the court had denied almost a year earlier.
Katchen, supra, at 332, n. 9. There was some overlap
between Vickie’s counterclaim and Pierce’s defamation
claim that led the courts below to conclude that the coun­
terclaim was compulsory, 600 F. 3d, at 1057, or at least in
an “attenuated” sense related to Pierce’s claim, 264 B. R.,
at 631. But there was never any reason to believe that the
process of adjudicating Pierce’s proof of claim would neces­
sarily resolve Vickie’s counterclaim. See id., at 631, 632(explaining that “the primary facts at issue on Pierce’s
claim were the relationship between Vickie and her attor­
neys and her knowledge or approval of their statements,”
and “the counterclaim raises issues of law entirely dif­
ferent from those raise[d] on the defamation claim”). The
United States acknowledges the point. See Brief for
United States as Amicus Curiae, p. (I) (question presented
concerns authority of a bankruptcy court to enter final
judgment on a compulsory counterclaim “when adjudica­
tion of the counterclaim requires resolution of issues that
are not implicated by the claim against the estate”); id.,
at 26.
The only overlap between the two claims in this case
was the question whether Pierce had in fact tortiously
taken control of his father’s estate in the manner alleged
by Vickie in her counterclaim and described in the alleg­
edly defamatory statements. From the outset, it was clear
that, even assuming the Bankruptcy Court would (as it
did) rule in Vickie’s favor on that question, the court could
not enter judgment for Vickie unless the court additionally
Cite as: 564 U. S. ____ (2011) 33
Opinion of the Court
ruled on the questions whether Texas recognized tortious
interference with an expected gift as a valid cause of
action, what the elements of that action were, and
whether those elements were met in this case. 275 B. R.,
at 50–53. Assuming Texas accepted the elements adopted
by other jurisdictions, that meant Vickie would need to
prove, above and beyond Pierce’s tortious interference, (1)
the existence of an expectancy of a gift; (2) a reasonable
certainty that the expectancy would have been realized
but for the interference; and (3) damages. Id., at 51; see
253 B. R., at 558–561. Also, because Vickie sought puni­
tive damages in connection with her counterclaim, the
Bankruptcy Court could not finally dispose of the case in
Vickie’s favor without determining whether to subject
Pierce to the sort of “retribution,” “punishment[,] and
deterrence,” Exxon Shipping Co., 554 U. S., at 492, 504
(internal quotation marks omitted), those damages are
designed to impose. There thus was never reason to
believe that the process of ruling on Pierce’s proof of
claim would necessarily result in the resolution of Vickie’s
counterclaim.
In both Katchen and Langenkamp, moreover, the trus­
tee bringing the preference action was asserting a right of
recovery created by federal bankruptcy law. In Langen
kamp, we noted that “the trustee instituted adversary
proceedings under 11 U. S. C. §547(b) to recover, as avoid­
able preferences,” payments respondents received from the
debtor before the bankruptcy filings. 498 U. S., at 43; see,
e.g., §547(b)(1) (“the trustee may avoid any transfer of an
interest of the debtor in property—(1) to or for the benefit
of a creditor”). In Katchen, “[t]he Trustee . . . [asserted]
that the payments made [to the creditor] were preferences
inhibited by Section 60a of the Bankruptcy Act.” Memo­
randum Opinion (Feb. 8, 1963), Tr. of Record in O. T.
1965, No. 28, p. 3; see 382 U. S., at 334 (considering im­
pact of the claims allowance process on “action by the
34 STERN v. MARSHALL
Opinion of the Court
trustee under §60 to recover the preference”); 11 U. S. C.
§96(b) (1964 ed.) (§60(b) of the then-applicable Bankruptcy
Act) (“preference may be avoided by the trustee if the
creditor receiving it or to be benefited thereby . . . has, at
the time when the transfer is made, reasonable cause to
believe that the debtor is insolvent”). Vickie’s claim, in
contrast, is in no way derived from or dependent upon
bankruptcy law; it is a state tort action that exists without
regard to any bankruptcy proceeding.
In light of all the foregoing, we disagree with the dissent
that there are no “relevant distinction[s]” between Pierce’s
claim in this case and the claim at issue in Langenkamp.
Post, at 14. We see no reason to treat Vickie’s counter­
claim any differently from the fraudulent conveyance
action in Granfinanciera. 492 U. S., at 56. Granfinanci
era’s distinction between actions that seek “to augment
the bankruptcy estate” and those that seek “a pro rata
share of the bankruptcy res,” ibid., reaffirms that Con­
gress may not bypass Article III simply because a proceed­
ing may have some bearing on a bankruptcy case; the
question is whether the action at issue stems from the bank­
ruptcy itself or would necessarily be resolved in the
claims allowance process. Vickie has failed to demon­
strate that her counterclaim falls within one of the “lim­
ited circumstances” covered by the public rights exception,
particularly given our conclusion that, “even with respect
to matters that arguably fall within the scope of the ‘public
rights’ doctrine, the presumption is in favor of Art. III
courts.” Northern Pipeline, 458 U. S., at 69, n. 23, 77,
n. 29 (plurality opinion).
3
Vickie additionally argues that the Bankruptcy Court’s
final judgment was constitutional because bankruptcy
courts under the 1984 Act are properly deemed “adjuncts”
of the district courts. Brief for Petitioner 61–64. We
Cite as: 564 U. S. ____ (2011) 35
Opinion of the Court
rejected a similar argument in Northern Pipeline, see 458
U. S., at 84–86 (plurality opinion); id., at 91 (Rehnquist,
J., concurring in judgment), and our reasoning there holds
true today.
To begin, as explained above, it is still the bankruptcy
court itself that exercises the essential attributes of judi­
cial power over a matter such as Vickie’s counterclaim.
See supra, at 20. The new bankruptcy courts, like the old,
do not “ma[k]e only specialized, narrowly confined factual
determinations regarding a particularized area of law”
or engage in “statutorily channeled factfinding functions.”
Northern Pipeline, 458 U. S., at 85 (plurality opinion).
Instead, bankruptcy courts under the 1984 Act resolve
“[a]ll matters of fact and law in whatever domains of the
law to which” the parties’ counterclaims might lead. Id.,
at 91 (Rehnquist, J., concurring in judgment).
In addition, whereas the adjunct agency in Crowell v.
Benson “possessed only a limited power to issue compensa­
tion orders . . . [that] could be enforced only by order of the
district court,” Northern Pipeline, supra, at 85, a bank­
ruptcy court resolving a counterclaim under 28 U. S. C.
§157(b)(2)(C) has the power to enter “appropriate orders
and judgments”—including final judgments—subject to
review only if a party chooses to appeal, see §§157(b)(1),
158(a)–(b). It is thus no less the case here than it was in
Northern Pipeline that “[t]he authority—and the respon­
sibility—to make an informed, final determination . . .
remains with” the bankruptcy judge, not the district court.
458 U. S., at 81 (plurality opinion) (internal quotation
marks omitted). Given that authority, a bankruptcy court
can no more be deemed a mere “adjunct” of the district
court than a district court can be deemed such an “ad­
junct” of the court of appeals. We certainly cannot accept
the dissent’s notion that judges who have the power to
enter final, binding orders are the “functional[ ]” equiva­
lent of “law clerks[ ] and the Judiciary’s administrative
36 STERN v. MARSHALL
Opinion of the Court
officials.” Post, at 11. And even were we wrong in this
regard, that would only confirm that such judges should
not be in the business of entering final judgments in the
first place.
It does not affect our analysis that, as Vickie notes,
bankruptcy judges under the current Act are appointed by
the Article III courts, rather than the President. See Brief
for Petitioner 59. If—as we have concluded—the bank­
ruptcy court itself exercises “the essential attributes of
judicial power [that] are reserved to Article III courts,”
Schor, 478 U. S., at 851 (internal quotation marks omit­
ted), it does not matter who appointed the bankruptcy
judge or authorized the judge to render final judgments in
such proceedings. The constitutional bar remains. See The
Federalist No. 78, at 471 (“Periodical appointments, however
regulated, or by whomsoever made, would, in some way or
other, be fatal to [a judge’s] necessary independence”).
D
Finally, Vickie and her amici predict as a practical
matter that restrictions on a bankruptcy court’s ability to
hear and finally resolve compulsory counterclaims will
create significant delays and impose additional costs on
the bankruptcy process. See, e.g., Brief for Petitioner 34–
36, 57–58; Brief for United States as Amicus Curiae 29–
30. It goes without saying that “the fact that a given law
or procedure is efficient, convenient, and useful in facili­
tating functions of government, standing alone, will not
save it if it is contrary to the Constitution.” INS v.
Chadha, 462 U. S. 919, 944 (1983).
In addition, we are not convinced that the practical
consequences of such limitations on the authority of bank­
ruptcy courts to enter final judgments are as significant as
Vickie and the dissent suggest. See post, at 16–17. The
dissent asserts that it is important that counterclaims
such as Vickie’s be resolved “in a bankruptcy court,” and
Cite as: 564 U. S. ____ (2011) 37
Opinion of the Court
that, “to be effective, a single tribunal must have broad
authority to restructure [debtor-creditor] relations.” Post,
at 14, 15 (emphasis deleted). But the framework Congress
adopted in the 1984 Act already contemplates that certain
state law matters in bankruptcy cases will be resolved by
judges other than those of the bankruptcy courts. Section
1334(c)(2), for example, requires that bankruptcy courts
abstain from hearing specified non-core, state law claims
that “can be timely adjudicated[ ] in a State forum of ap­
propriate jurisdiction.” Section 1334(c)(1) similarly pro­
vides that bankruptcy courts may abstain from hearing
any proceeding, including core matters, “in the interest of
comity with State courts or respect for State law.”
As described above, the current bankruptcy system also
requires the district court to review de novo and enter
final judgment on any matters that are “related to” the
bankruptcy proceedings, §157(c)(1), and permits the dis­
trict court to withdraw from the bankruptcy court any
referred case, proceeding, or part thereof, §157(d). Pierce
has not argued that the bankruptcy courts “are barred
from ‘hearing’ all counterclaims” or proposing findings of
fact and conclusions of law on those matters, but rather
that it must be the district court that “finally decide[s]”
them. Brief for Respondent 61. We do not think the re­
moval of counterclaims such as Vickie’s from core bank­
ruptcy jurisdiction meaningfully changes the division of
labor in the current statute; we agree with the United
States that the question presented here is a “narrow” one.
Brief for United States as Amicus Curiae 23.
If our decision today does not change all that much, then
why the fuss? Is there really a threat to the separation of
powers where Congress has conferred the judicial power
outside Article III only over certain counterclaims in
bankruptcy? The short but emphatic answer is yes. A
statute may no more lawfully chip away at the authority
of the Judicial Branch than it may eliminate it entirely.
38 STERN v. MARSHALL
Opinion of the Court
“Slight encroachments create new boundaries from which
legions of power can seek new territory to capture.” Reid
v. Covert, 354 U. S. 1, 39 (1957) (plurality opinion). Al­
though “[i]t may be that it is the obnoxious thing in its
mildest and least repulsive form,” we cannot overlook the
intrusion: “illegitimate and unconstitutional practices get
their first footing in that way, namely, by silent ap­
proaches and slight deviations from legal modes of proce­
dure.” Boyd v. United States, 116 U. S. 616, 635 (1886).
We cannot compromise the integrity of the system of
separated powers and the role of the Judiciary in that
system, even with respect to challenges that may seem
innocuous at first blush.
* * *
Article III of the Constitution provides that the judicial
power of the United States may be vested only in courts
whose judges enjoy the protections set forth in that Arti­
cle. We conclude today that Congress, in one isolated
respect, exceeded that limitation in the Bankruptcy Act of
1984. The Bankruptcy Court below lacked the constitu­
tional authority to enter a final judgment on a state law
counterclaim that is not resolved in the process of ruling
on a creditor’s proof of claim. Accordingly, the judgment of
the Court of Appeals is affirmed.
It is so ordered.
Cite as: 564 U. S. ____ (2011) 1
SCALIA, J., concurring
SUPREME COURT OF THE UNITED STATES
_________________
No. 10–179
_________________
HOWARD K. STERN, EXECUTOR OF THE ESTATE OF
VICKIE LYNN MARSHALL, PETITIONER v.
ELAINE T. MARSHALL, EXECUTRIX OF THE
ESTATE OF E. PIERCE MARSHALL
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 23, 2011]
JUSTICE SCALIA, concurring.
I agree with the Court’s interpretation of our Article III
precedents, and I accordingly join its opinion. I adhere to
my view, however, that—our contrary precedents notwith
standing—“a matter of public rights . . . must at a mini
mum arise between the government and others,” Granfi
nanciera, S. A. v. Nordberg, 492 U. S. 33, 65 (1989)
(SCALIA, J., concurring in part and concurring in judg
ment) (internal quotation marks omitted).
The sheer surfeit of factors that the Court was required
to consider in this case should arouse the suspicion that
something is seriously amiss with our jurisprudence in
this area. I count at least seven different reasons given in
the Court’s opinion for concluding that an Article III judge
was required to adjudicate this lawsuit: that it was one
“under state common law” which was “not a matter that
can be pursued only by grace of the other branches,” ante,
at 27; that it was “not ‘completely dependent upon’ adjudi
cation of a claim created by federal law,” ibid.; that “Pierce
did not truly consent to resolution of Vickie’s claim in the
bankruptcy court proceedings,” ibid.; that “the asserted
authority to decide Vickie’s claim is not limited to a ‘par
ticularized area of the law,’ ” ante, at 28; that “there was
2 STERN v. MARSHALL
SCALIA, J., concurring
never any reason to believe that the process of adjudi
cating Pierce’s proof of claim would necessarily resolve
Vickie’s counterclaim,” ante, at 32; that the trustee was
not “asserting a right of recovery created by federal bank
ruptcy law,” ante, at 33; and that the Bankruptcy Judge
“ha[d] the power to enter ‘appropriate orders and judg
ments’—including final judgments—subject to review only
if a party chooses to appeal,” ante, at 35.
Apart from their sheer numerosity, the more fundamen
tal flaw in the many tests suggested by our jurisprudence
is that they have nothing to do with the text or tradition of
Article III. For example, Article III gives no indication
that state-law claims have preferential entitlement to an
Article III judge; nor does it make pertinent the extent to
which the area of the law is “particularized.” The multi
factors relied upon today seem to have entered our juris
prudence almost randomly.
Leaving aside certain adjudications by federal adminis
trative agencies, which are governed (for better or worse)
by our landmark decision in Crowell v. Benson, 285 U. S.
22 (1932), in my view an Article III judge is required in all
federal adjudications, unless there is a firmly established
historical practice to the contrary. For that reason—and
not because of some intuitive balancing of benefits and
harms—I agree that Article III judges are not required in
the context of territorial courts, courts-martial, or true
“public rights” cases. See Northern Pipeline Constr. Co. v.
Marathon Pipe Line Co., 458 U. S. 50, 71 (1982) (plurality
opinion). Perhaps historical practice permits non-Article
III judges to process claims against the bankruptcy estate,
see, e.g., Plank, Why Bankruptcy Judges Need Not and
Should Not Be Article III Judges, 72 Am. Bankr. L. J. 567,
607–609 (1998); the subject has not been briefed, and so I
state no position on the matter. But Vickie points to no
historical practice that authorizes a non-Article III judge
to adjudicate a counterclaim of the sort at issue here.
Cite as: 564 U. S. ____ (2011) 1
BREYER, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 10–179
_________________
HOWARD K. STERN, EXECUTOR OF THE ESTATE OF
VICKIE LYNN MARSHALL, PETITIONER v.
ELAINE T. MARSHALL, EXECUTRIX OF THE
ESTATE OF E. PIERCE MARSHALL
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 23, 2011]
JUSTICE BREYER, with whom JUSTICE GINSBURG,
JUSTICE SOTOMAYOR, and JUSTICE KAGAN, join dissenting.
Pierce Marshall filed a claim in Federal Bankruptcy
Court against the estate of Vickie Marshall. His claim
asserted that Vickie Marshall had, through her lawyers,
accused him of trying to prevent her from obtaining money
that his father had wanted her to have; that her accusa­
tions violated state defamation law; and that she conse­
quently owed Pierce Marshall damages. Vickie Marshall
filed a compulsory counterclaim in which she asserted that
Pierce Marshall had unlawfully interfered with her hus­
band’s efforts to grant her an inter vivos gift and that he
consequently owed her damages.
The Bankruptcy Court adjudicated the claim and the
counterclaim. In doing so, the court followed statutory
procedures applicable to “core” bankruptcy proceedings.
See 28 U. S. C. §157(b). And ultimately the Bankruptcy
Court entered judgment in favor of Vickie Marshall. The
question before us is whether the Bankruptcy Court pos­
sessed jurisdiction to adjudicate Vickie Marshall’s coun­
terclaim. I agree with the Court that the bankruptcy
statute, §157(b)(2)(C), authorizes a bankruptcy court to
adjudicate the counterclaim. But I do not agree with the
2 STERN v. MARSHALL
BREYER, J., dissenting
majority about the statute’s constitutionality. I believe
the statute is consistent with the Constitution’s delegation
of the “judicial Power of the United States” to the Judicial
Branch of Government. Art. III, §1. Consequently, it is
constitutional.
I
My disagreement with the majority’s conclusion stems
in part from my disagreement about the way in which it
interprets, or at least emphasizes, certain precedents. In
my view, the majority overstates the current relevance of
statements this Court made in an 1856 case, Murray’s
Lessee v. Hoboken Land & Improvement Co., 18 How. 272(1856), and it overstates the importance of an analysis
that did not command a Court majority in Northern Pipe
line Constr. Co. v. Marathon Pipe Line Co., 458 U. S.
50 (1982), and that was subsequently disavowed. At the
same time, I fear the Court understates the importance of
a watershed opinion widely thought to demonstrate the
constitutional basis for the current authority of adminis­
trative agencies to adjudicate private disputes, namely,
Crowell v. Benson, 285 U. S. 22 (1932). And it fails to
follow the analysis that this Court more recently has held
applicable to the evaluation of claims of a kind before
us here, namely, claims that a congressional delegation
of adjudicatory authority violates separation-of-powers
principles derived from Article III. See Thomas v. Union
Carbide Agricultural Products Co., 473 U. S. 568 (1985);
Commodity Futures Trading Comm’n v. Schor, 478 U. S.
833 (1986).
I shall describe these cases in some detail in order to
explain why I believe we should put less weight than does
the majority upon the statement in Murray’s Lessee and
the analysis followed by the Northern Pipeline plurality
and instead should apply the approach this Court has
applied in Crowell, Thomas, and Schor.
Cite as: 564 U. S. ____ (2011) 3
BREYER, J., dissenting
A
In Murray’s Lessee, the Court held that the Constitution
permitted an executive official, through summary, nonju­
dicial proceedings, to attach the assets of a customs col­
lector whose account was deficient. The Court found
evidence in common law of “summary method[s] for the
recovery of debts due to the crown, and especially those
due from receivers of the revenues,” 18 How., at 277, and
it analogized the Government’s summary attachment
process to the kind of self-help remedies available to pri­
vate parties, id., at 283. In the course of its opinion, the
Court wrote:
“[W]e do not consider congress can either withdraw
from judicial cognizance any matter which, from its na-
ture, is the subject of a suit at the common law, or
in equity, or admiralty; nor, on the other hand, can it
bring under the judicial power a matter which, from
its nature, is not a subject for judicial determination.
At the same time there are matters, involving public
rights, which may be presented in such form that the
judicial power is capable of acting on them, and which
are susceptible of judicial determination, but which
congress may or may not bring within the cognizance
of the courts of the United States, as it may deem
proper.” Id., at 284.
The majority reads the first part of the statement’s first
sentence as authoritatively defining the boundaries of
Article III. Ante, at 18. I would read the statement in a
less absolute way. For one thing, the statement is in effect
dictum. For another, it is the remainder of the statement,
announcing a distinction between “public rights” and
“private rights,” that has had the more lasting impact.
Later Courts have seized on that distinction when uphold
ing non-Article III adjudication, not when striking it
down. See Ex parte Bakelite Corp., 279 U. S. 438, 451–452
4 STERN v. MARSHALL
BREYER, J., dissenting
(1929) (Court of Customs Appeals); Williams v. United
States, 289 U. S. 553, 579–580 (1933) (Court of Claims).
The one exception is Northern Pipeline, where the Court
struck down the Bankruptcy Act of 1978. But in that case
there was no majority. And a plurality, not a majority,
read the statement roughly in the way the Court does
today. See 458 U. S., at 67–70.
B
At the same time, I believe the majority places insuf­
ficient weight on Crowell, a seminal case that clarified the
scope of the dictum in Murray’s Lessee. In that case,
the Court considered whether Congress could grant to an
Article I administrative agency the power to adjudicate an
employee’s workers’ compensation claim against his em­
ployer. The Court assumed that an Article III court would
review the agency’s decision de novo in respect to ques­
tions of law but it would conduct a less searching review
(looking to see only if the agency’s award was “supported
by evidence in the record”) in respect to questions of fact.
Crowell, 285 U. S., at 48–50. The Court pointed out that
the case involved a dispute between private persons (a
matter of “private rights”) and (with one exception not
relevant here) it upheld Congress’ delegation of primary
factfinding authority to the agency.
Justice Brandeis, dissenting (from a here-irrelvant por­
tion of the Court’s holding), wrote that the adjudicatory
scheme raised only a due process question: When does due
process require decision by an Article III judge? He an­
swered that question by finding constitutional the stat­
ute’s delegation of adjudicatory authority to an agency.
Id., at 87.
Crowell has been hailed as “the greatest of the cases
validating administrative adjudication.” Bator, The Con­
stitution as Architecture: Legislative and Administrative
Courts Under Article III, 65 Ind. L. J. 233, 251 (1990).
Cite as: 564 U. S. ____ (2011) 5
BREYER, J., dissenting
Yet, in a footnote, the majority distinguishes Crowell as a
case in which the Court upheld the delegation of adjudica­
tory authority to an administrative agency simply because
the agency’s power to make the “specialized, narrowly
confined factual determinations” at issue arising in a
“particularized area of law,” made the agency a “true
‘adjunct’ of the District Court.” Ante, at 23, n. 6. Were
Crowell’s holding as narrow as the majority suggests,
one could question the validity of Congress’ delegation of
authority to adjudicate disputes among private parties to
other agencies such as the National Labor Relations
Board, the Commodity Futures Trading Commission, the
Surface Transportation Board, and the Department of
Housing and Urban Development, thereby resurrecting
important legal questions previously thought to have been
decided. See 29 U. S. C. §160; 7 U. S. C. §18; 49 U. S. C.
§10704; 42 U. S. C. §3612(b).
C
The majority, in my view, overemphasizes the preceden­
tial effect of the plurality opinion in Northern Pipeline.
Ante, at 19–21. There, the Court held unconstitutional the
jurisdictional provisions of the Bankruptcy Act of 1978
granting adjudicatory authority to bankruptcy judges who
lack the protections of tenure and compensation that
Article III provides. Four Members of the Court wrote
that Congress could grant adjudicatory authority to a non-
Article III judge only where (1) the judge sits on a “territo­
rial cour[t]” (2) the judge conducts a “courts-martial,” or
(3) the case involves a “public right,” namely, a “matter”
that “at a minimum arise[s] ‘between the government and
others.’ ” 458 U. S., at 64–70 (plurality opinion) (quoting
Ex parte Bakelite Corp., supra, at 451). Two other Mem­
bers of the Court, without accepting these limitations,
agreed with the result because the case involved a breach­
of-contract claim brought by the bankruptcy trustee on
6 STERN v. MARSHALL
BREYER, J., dissenting
behalf of the bankruptcy estate against a third party who
was not part of the bankruptcy proceeding, and none of
the Court’s preceding cases (which, the two Members
wrote, “do not admit of easy synthesis”) had “gone so far as
to sanction th[is] type of adjudication.” 458 U. S., at 90–91
(Rehnquist, J. concurring in judgment).
Three years later, the Court held that Northern Pipeline
“establishes only that Congress may not vest in a non-
Article III court the power to adjudicate, render final
judgment, and issue binding orders in a traditional
contract action arising under state law, without con­
sent of the litigants, and subject only to ordinary ap­
pellate review.” Thomas, 473 U. S., at 584.
D
Rather than leaning so heavily on the approach taken
by the plurality in Northern Pipeline, I would look to this
Court’s more recent Article III cases Thomas and Schor—
cases that commanded a clear majority. In both cases
the Court took a more pragmatic approach to the constitu­
tional question. It sought to determine whether, in the
particular instance, the challenged delegation of adjudica­
tory authority posed a genuine and serious threat that one
branch of Government sought to aggrandize its own con­
stitutionally delegated authority by encroaching upon a
field of authority that the Constitution assigns exclusively
to another branch.
1
In Thomas, the Court focused directly upon the nature
of the Article III problem, illustrating how the Court
should determine whether a delegation of adjudicatory
authority to a non-Article III judge violates the Constitu­
tion. The statute in question required pesticide manufac­
turers to submit to binding arbitration claims for compen­
sation owed for the use by one manufacturer of the data of
Cite as: 564 U. S. ____ (2011) 7
BREYER, J., dissenting
another to support its federal pesticide registration. After
describing Northern Pipeline’s holding in the language I
have set forth above, supra, at 6, the Court 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 (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 rights”/“public rights” distinction, id., at
585–586. And it upheld the arbitration provision of the
statute.
The Court pointed out that the right in question was
created by a federal statute, it “represent[s] a pragmatic
solution to the difficult problem of spreading [certain]
costs,” and the statute “does not preclude review of the
arbitration proceeding by an Article III court.” Id., at
589–592. The Court concluded:
“Given the nature of the right at issue and the con­
cerns motivating the Legislature, we do not think this
system threatens the independent role of the Judici­
ary in our constitutional scheme.” Id., at 590.
2
Most recently, in Schor, the Court described in greater
detail how this Court should analyze this kind of Article
III question. The question at issue in Schor involved a
delegation of authority to an agency to adjudicate a coun­
terclaim. A customer brought before the Commodity
Futures Trading Commission (CFTC) a claim for repara­
tions against his commodity futures broker. The customer
noted that his brokerage account showed that he owed the
broker money, but he said that the broker’s unlawful
actions had produced that debit balance, and he sought
damages. The broker brought a counterclaim seeking the
money that the account showed the customer owed. This
Court had to decide whether agency adjudication of such a
8 STERN v. MARSHALL
BREYER, J., dissenting
counterclaim is consistent with Article III.
In doing so, the Court expressly “declined to adopt
formalistic and unbending rules.” Schor, 478 U. S., at 851.
Rather, it “weighed a number of factors, none of which has
been deemed determinative, with an eye to the practical
effect that the congressional action will have on the consti­
tutionally assigned role of the federal judiciary.” Ibid.Those relevant factors include (1) “the origins and im­
portance of the right to be adjudicated”; (2) “the extent to
which the non-Article III forum exercises the range of ju­
risdiction and powers normally vested only in Article III
courts”; (3) the extent to which the delegation nonetheless
reserves judicial power for exercise by Article III courts;
(4) the presence or “absence of consent to an initial adjudi­
cation before a non-Article III tribunal”; and (5) “the con­
cerns that drove Congress to depart from” adjudication in
an Article III court. Id., at 849, 851.
The Court added that where “private rights,” rather
than “public rights” are involved, the “danger of encroach­
ing on the judicial powers” is greater. Id., at 853–854
(internal quotation marks omitted). Thus, while non-
Article III adjudication of “private rights” is not necessar­
ily unconstitutional, the Court’s constitutional “examina­
tion” of such a scheme must be more “searching.” Ibid.Applying this analysis, the Court upheld the agency’s
authority to adjudicate the counterclaim. The Court con­
ceded that the adjudication might be of a kind tradi­
tionally decided by a court and that the rights at issue
were “private,” not “public.” Id., at 853. But, the Court
said, the CFTC deals only with a “ ‘particularized area of
law’ ”; the decision to invoke the CFTC forum is “left en­
tirely to the parties”; Article III courts can review the
agency’s findings of fact under “the same ‘weight of the
evidence’ standard sustained in Crowell” and review its
“legal determinations . . . de novo”; and the agency’s “coun­
terclaim jurisdiction” was necessary to make “workable” a
Cite as: 564 U. S. ____ (2011) 9
BREYER, J., dissenting
“reparations procedure,” which constitutes an important
part of a congressionally enacted “regulatory scheme.” Id.,at 852–856. The Court concluded that for these and other
reasons “the magnitude of any intrusion on the Judicial
Branch can only be termed de minimis.” Id., at 856.
II
A
This case law, as applied in Thomas and Schor, requires
us to determine pragmatically whether a congressional
delegation of adjudicatory authority to a non-Article III
judge violates the separation-of-powers principles inherent
in Article III. That is to say, we must determine through
an examination of certain relevant factors whether that
delegation constitutes a significant encroachment by the
Legislative or Executive Branches of Government upon
the realm of authority that Article III reserves for exercise
by the Judicial Branch of Government. Those factors
include (1) the nature of the claim to be adjudicated; (2)
the nature of the non-Article III tribunal; (3) the extent to
which Article III courts exercise control over the proceed­
ing; (4) the presence or absence of the parties’ consent; and
(5) the nature and importance of the legislative purpose
served by the grant of adjudicatory authority to a tribunal
with judges who lack Article III’s tenure and compensa­
tion protections. The presence of “private rights” does not
automatically determine the outcome of the question but
requires a more “searching” examination of the relevant
factors. Schor, supra, at 854.
Insofar as the majority would apply more formal stan­
dards, it simply disregards recent, controlling precedent.
Thomas, supra, at 587 (“[P]ractical attention to substance
rather than doctrinaire reliance on formal categories
should inform application of Article III”); Schor, supra, at
851 (“[T]he Court has declined to adopt formalistic and
unbending rules” for deciding Article III cases).
10 STERN v. MARSHALL
BREYER, J., dissenting
B
Applying Schor’s approach here, I conclude that the
delegation of adjudicatory authority before us is consti­
tutional. A grant of authority to a bankruptcy court
to adjudicate compulsory counterclaims does not violate
any constitutional separation-of-powers principle related to
Article III.
First, I concede that the nature of the claim to be adju
dicated argues against my conclusion. Vickie Marshall’s
counterclaim—a kind of tort suit—resembles “a suit at the
common law.” Murray’s Lessee, 18 How., at 284. Although
not determinative of the question, see Schor, 478 U. S., at
853, a delegation of authority to a non-Article III judge to
adjudicate a claim of that kind poses a heightened risk of
encroachment on the Federal Judiciary, id., at 854.
At the same time the significance of this factor is miti­
gated here by the fact that bankruptcy courts often decide
claims that similarly resemble various common-law ac­
tions. Suppose, for example, that ownership of 40 acres of
land in the bankruptcy debtor’s possession is disputed by a
creditor. If that creditor brings a claim in the bankruptcy
court, resolution of that dispute requires the bankruptcy
court to apply the same state property law that would
govern in a state court proceeding. This kind of dispute
arises with regularity in bankruptcy proceedings.
Of course, in this instance the state-law question is
embedded in a debtor’s counterclaim, not a creditor’s
claim. But the counterclaim is “compulsory.” It “arises
out of the transaction or occurrence that is the subject
matter of the opposing party’s claim.” Fed. Rule Civ. Proc.
13(a); Fed. Rule Bkrtcy. Proc. 7013. Thus, resolution of
the counterclaim will often turn on facts identical to, or at
least related to, those at issue in a creditor’s claim that is
undisputedly proper for the bankruptcy court to decide.
Second, the nature of the non-Article III tribunal argues
in favor of constitutionality. That is because the tribunal
Cite as: 564 U. S. ____ (2011) 11
BREYER, J., dissenting
is made up of judges who enjoy considerable protection
from improper political influence. Unlike the 1978 Act
which provided for the appointment of bankruptcy judges
by the President with the advice and consent of the
Senate, 28 U. S. C. §152 (1976 ed., Supp. IV), current
law provides that the federal courts of appeals appoint fed­
eral bankruptcy judges, §152(a)(1) (2006 ed.). Bankruptcy
judges are removable by the circuit judicial counsel (made
up of federal court of appeals and district court judges)
and only for cause. §152(e). Their salaries are pegged to
those of federal district court judges, §153(a), and the cost
of their courthouses and other work-related expenses are
paid by the Judiciary, §156. Thus, although Congress
technically exercised its Article I power when it created
bankruptcy courts, functionally, bankruptcy judges can be
compared to magistrate judges, law clerks, and the Judi­
ciary’s administrative officials, whose lack of Article III
tenure and compensation protections do not endanger the
independence of the Judicial Branch.
Third, the control exercised by Article III judges over
bankruptcy proceedings argues in favor of constitutional­
ity. Article III judges control and supervise the bank­
ruptcy court’s determinations—at least to the same degree
that Article III judges supervised the agency’s determina­
tions in Crowell, if not more so. Any party may appeal
those determinations to the federal district court, where
the federal judge will review all determinations of fact for
clear error and will review all determinations of law de
novo. Fed. Rule Bkrtcy. Proc. 8013; 10 Collier on Bank­
ruptcy ¶8013.04 (16th ed. 2011). But for the here­
irrelevant matter of what Crowell considered to be special
“constitutional” facts, the standard of review for factual
findings here (“clearly erroneous”) is more stringent than
the standard at issue in Crowell (whether the agency’s
factfinding was “supported by evidence in the record”).
285 U. S., at 48; see Dickinson v. Zurko, 527 U. S. 150,
12 STERN v. MARSHALL
BREYER, J., dissenting
152, 153 (1999) (“unsupported by substantial evidence”
more deferential than “clearly erroneous” (internal quota­
tion marks omitted)). And, as Crowell noted, “there is no
requirement that, in order to maintain the essential at­
tributes of the judicial power, all determinations of fact in
constitutional courts shall be made by judges.” 285 U. S.,
at 51.
Moreover, in one important respect Article III judges
maintain greater control over the bankruptcy court pro­
ceedings at issue here than they did over the relevant
proceedings in any of the previous cases in which this
Court has upheld a delegation of adjudicatory power. The
District Court here may “withdraw, in whole or in part,
any case or proceeding referred [to the Bankruptcy Court]
. . . on its own motion or on timely motion of any party, for
cause shown.” 28 U. S. C. §157(d); cf. Northern Pipeline,
458 U. S., at 80, n. 31 (plurality opinion) (contrasting
pre-1978 law where “power to withdraw the case from
the [bankruptcy] referee” gave district courts “control”
over case with the unconstitutional 1978 statute, which
provided no such district court authority).
Fourth, the fact that the parties have consented to Bank­
ruptcy Court jurisdiction argues in favor of constitutional­
ity, and strongly so. Pierce Marshall, the counterclaim
defendant, is not a stranger to the litigation, forced to
appear in Bankruptcy Court against his will. Cf. id., at 91(Rehnquist, J., concurring in judgment) (suit was litigated
in Bankruptcy Court “over [the defendant’s] objection”).
Rather, he appeared voluntarily in Bankruptcy Court as
one of Vickie Marshall’s creditors, seeking a favorable
resolution of his claim against Vickie Marshall to the
detriment of her other creditors. He need not have filed a
claim, perhaps not even at the cost of bringing it in the
future, for he says his claim is “nondischargeable,” in
which case he could have litigated it in a state or federal
court after distribution. See 11 U. S. C. §523(a)(6). Thus,
Cite as: 564 U. S. ____ (2011) 13
BREYER, J., dissenting
Pierce Marshall likely had “an alternative forum to the
bankruptcy court in which to pursue [his] clai[m].” Gran
financiera, S. A. v. Nordberg, 492 U. S. 33, 59, n. 14
(1989).
The Court has held, in a highly analogous context, that
this type of consent argues strongly in favor of using ordi­
nary bankruptcy court proceedings. In Granfinanciera,
the Court held that when a bankruptcy trustee seeks to
void a transfer of assets from the debtor to an individual
on the ground that the transfer to that individual consti­
tutes an unlawful “preference,” the question of whether
the individual has a right to a jury trial “depends upon
whether the creditor has submitted a claim against the
estate.” Id., at 58. The following year, in Langenkamp v.
Culp, 498 U. S. 42 (1990) (per curiam), the Court empha­
sized that when the individual files a claim against the
estate, that individual has
“trigger[ed] the process of ‘allowance and disallowance
of claims,’ thereby subjecting himself to the bank­
ruptcy court’s equitable power. If the creditor is met,
in turn, with a preference action from the trustee,
that action becomes part of the claims-allowance proc­
ess which is triable only in equity. In other words, the
creditor’s claim and the ensuing preference action by
the trustee become integral to the restructuring of the
debtor-creditor relationship through the bankruptcy
court’s equity jurisdiction.” Id., at 44 (quoting Granfi
nanciera, 492 U. S., at 58; citations omitted).
As we have recognized, the jury trial question and the
Article III question are highly analogous. See id., at 52–
53. And to that extent, Granfinanciera’s and Langen
kamp’s basic reasoning and conclusion apply here: Even
when private rights are at issue, non-Article III adjudica­
tion may be appropriate when both parties consent. Cf.
Northern Pipeline, supra, at 80, n. 31 (plurality opinion)
14 STERN v. MARSHALL
BREYER, J., dissenting
(noting the importance of consent to bankruptcy juris­
diction). See also Schor, 478 U. S., at 849 (“[A]bsence of
consent to an initial adjudication before a non-Article III
tribunal was relied on [in Northern Pipeline] as a signifi­
cant factor in determining that Article III forbade such
adjudication”). The majority argues that Pierce Marshall
“did not truly consent” to bankruptcy jurisdiction, ante, at
27–28, but filing a proof of claim was sufficient in Lan
genkamp and Granfinanciera, and there is no relevant
distinction between the claims filed in those cases and the
claim filed here.
Fifth, the nature and importance of the legislative pur
pose served by the grant of adjudicatory authority to
bankruptcy tribunals argues strongly in favor of constitu­
tionality. Congress’ delegation of adjudicatory powers
over counterclaims asserted against bankruptcy claimants
constitutes an important means of securing a constitu­
tionally authorized end. Article I, §8, of the Constitution
explicitly grants Congress the “Power To . . . establish . . .
uniform Laws on the subject of Bankruptcies throughout
the United States.” James Madison wrote in the Federal­
ist Papers that the
“power of establishing uniform laws of bankruptcy is
so intimately connected with the regulation of com­
merce, and will prevent so many frauds where the
parties or their property may lie or be removed into
different States, that the expediency of it seems not
likely to be drawn into question.” The Federalist No.
42, p. 271 (C. Rossiter ed. 1961).
Congress established the first Bankruptcy Act in 1800.
2 Stat. 19. From the beginning, the “core” of federal bank­
ruptcy proceedings has been “the restructuring of debtor­
creditor relations.” Northern Pipeline, supra, at 71 (plu­
rality opinion). And, to be effective, a single tribunal must
have broad authority to restructure those relations, “hav­
Cite as: 564 U. S. ____ (2011) 15
BREYER, J., dissenting
ing jurisdiction of the parties to controversies brought
before them,” “decid[ing] all matters in dispute,” and
“decree[ing] complete relief.” Katchen v. Landy, 382 U. S.
323, 335 (1966) (internal quotation marks omitted).
The restructuring process requires a creditor to file a
proof of claim in the bankruptcy court. 11 U. S. C. §501;
Fed. Rule Bkrtcy. Proc. 3002(a). In doing so, the creditor
“triggers the process of ‘allowance and disallowance of
claims,’ thereby subjecting himself to the bankruptcy
court’s equitable power.” Langenkamp, supra, at 44 (quot­
ing Granfinanciera, supra, at 58). By filing a proof of
claim, the creditor agrees to the bankruptcy court’s resolu­
tion of that claim, and if the creditor wins, the creditor will
receive a share of the distribution of the bankruptcy es­
tate. When the bankruptcy estate has a related claim
against that creditor, that counterclaim may offset the
creditor’s claim, or even yield additional damages that
augment the estate and may be distributed to the other
creditors.
The consequent importance to the total bankruptcy
scheme of permitting the trustee in bankruptcy to assert
counterclaims against claimants, and resolving those
counterclaims in a bankruptcy court, is reflected in the
fact that Congress included “counterclaims by the estate
against persons filing claims against the estate” on its list
of “[c]ore proceedings.” 28 U. S. C. §157(b)(2)(C). And it
explains the difference, reflected in this Court’s opinions,
between a claimant’s and a nonclaimant’s constitutional
right to a jury trial. Compare Granfinanciera, supra, at
58–59 (“Because petitioners . . . have not filed claims
against the estate” they retain “their Seventh Amendment
right to a trial by jury”), with Langenkamp, supra, at 45(“Respondents filed claims against the bankruptcy estate”
and “[c]onsequently, they were not entitled to a jury
trial”).
Consequently a bankruptcy court’s determination of
16 STERN v. MARSHALL
BREYER, J., dissenting
such matters has more than “some bearing on a bank­
ruptcy case.” Ante, at 34 (emphasis deleted). It plays a
critical role in Congress’ constitutionally based effort to
create an efficient, effective federal bankruptcy system.
At the least, that is what Congress concluded. We owe
deference to that determination, which shows the absence
of any legislative or executive motive, intent, purpose, or
desire to encroach upon areas that Article III reserves
to judges to whom it grants tenure and compensation
protections.
Considering these factors together, I conclude that, as in
Schor, “the magnitude of any intrusion on the Judicial
Branch can only be termed de minimis.” 478 U. S., at 856.
I would similarly find the statute before us constitutional.
III
The majority predicts that as a “practical matter” to­
day’s decision “does not change all that much.” Ante, at
36–37. But I doubt that is so. Consider a typical case:
A tenant files for bankruptcy. The landlord files a claim
for unpaid rent. The tenant asserts a counterclaim for
damages suffered by the landlord’s (1) failing to fulfill his
obligations as lessor, and (2) improperly recovering pos­
session of the premises by misrepresenting the facts in
housing court. (These are close to the facts presented in
In re Beugen, 81 B. R. 994 (Bkrtcy. Ct. ND Cal. 1988).)
This state-law counterclaim does not “ste[m] from the
bankruptcy itself,” ante, at 34, it would not “necessarily be
resolved in the claims allowance process,” ibid., and it
would require the debtor to prove damages suffered by the
lessor’s failures, the extent to which the landlord’s repre­
sentations to the housing court were untrue, and damages
suffered by improper recovery of possession of the prem­
ises, cf. ante, at 33-33. Thus, under the majority’s holding,
the federal district judge, not the bankruptcy judge, would
have to hear and resolve the counterclaim.
Cite as: 564 U. S. ____ (2011) 17
BREYER, J., dissenting
Why is that a problem? Because these types of disputes
arise in bankruptcy court with some frequency. See, e.g.,
In re CBI Holding Co., 529 F. 3d 432 (CA2 2008) (state­
law claims and counterclaims); In re Winstar Communica
tions, Inc., 348 B. R. 234 (Bkrtcy. Ct. Del. 2005) (same);
In re Ascher, 128 B. R. 639 (Bkrtcy. Ct. ND Ill. 1991)
(same); In re Sun West Distributors, Inc., 69 B. R. 861(Bkrtcy. Ct. SD Cal. 1987) (same). Because the volume of
bankruptcy cases is staggering, involving almost 1.6 mil­
lion 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 36, compul­
sory counterclaims involve the same factual disputes as
the claims that may be finally adjudicated by the bank­
ruptcy courts. Because under these circumstances, a
constitutionally required game of jurisdictional 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.