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Full Opinion
delivered the opinion of the Court.
This âsuit has, in course of time, become so complicated, that... no two ... lawyers can talk about it for five minutes, 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;â and, sadly, the original parties âhave died out of it.â A âlong procession of [judges] has come in and gone outâ during that time, and still the suit âdrags its weary length before the Court.â
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 Marshallsâ litigation has worked its way through state and federal courts in Louisiana, Texas, and California, and two of those courtsâ a Texas state probate court and the Bankruptcy Court for the Central District of California â have reached contrary decisions on its merits. 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
Although the history of this litigation is complicated, its resolution ultimately turns on very basic principles. Article III, § 1, of the Constitution commands that â[tjhe 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.â 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 Vickieâs counterclaim, it lacked the constitutional authority to do so.
I
Because we have already recounted the facts and procedural history of this case in detail, see Marshall v. Marshall, 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. Howardâs fortune. Known to the public as Anna Nicole Smith, Vickie was J. Howardâs third wife and married him about a year before his death. Id., at
After J. Howard's death, Vickie filed a petition for bankruptcy 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 dis-chargeable in the bankruptcy proceedings. 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 Pierceâs 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. 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 Pierceâs claim for defamation. On September 27, 2000, after a bench trial, the Bankruptcy Court issued a judgment on Vickieâs counterclaim in her favor. The court later awarded Vickie over $400 million in compensatory damages and $25 million in pu
In post-trial proceedings, Pierce argued that the Bankruptcy Court lacked jurisdiction over Vickieâs counterclaim. 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 because Vickieâs counterclaim was not a âcore proceedingâ under 28 U. S. C. § 157(b)(2)(C). See 257 B. R., at 39. As explained below, bankruptcy courts may hear and enter final judgments in âcore proceedingsâ in a bankruptcy case. In noncore proceedings, the bankruptcy courts instead submit proposed findings of fact and conclusions of law to the district court, for that courtâs review and issuance of final judgment. The Bankruptcy Court in this case concluded that Vickieâs counterclaim was âa core proceedingâ under § 157(b)(2)(C), and the court therefore had the âpower to enter judgmentâ on the counterclaim under § 157(b)(1). Id., at 40.
The District Court disagreed. It recognized that âVickieâs counterclaim for tortious interference falls within the literal languageâ of the statute designating certain proceedings as âcore,â see § 157(b)(2)(C), but understood this Courtâs precedent to âsuggest[] that it would be unconstitutional to hold that any and all counterclaims are core.â 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 âcounterclaim should not be characterized as coreâ when it âis 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.â 264 B. R., at 632.
Because the District Court concluded that Vickieâs counterclaim was not core, the court determined that it was re
The Court of Appeals reversed the District Court on a different ground, 392 P. 3d, at 1137, and we â in the first visit of the case to this Court â reversed the Court of Appeals on that issue. 547 U. S., at 314-315. On remand from this Court, the Court of Appeals held that §157 mandated âa two-step approachâ under which a bankruptcy judge may issue a final judgment in a proceeding only if the matter both âmeets Congressâ definition of a core proceeding and arises under or arises in title 11,â the Bankruptcy Code. 600 F. 3d, at 1055. The court also reasoned that allowing a bankruptcy judge to enter final judgments on all counterclaims raised in bankruptcy proceedings âwould certainly run afoulâ of this Courtâs decision in Northern Pipeline. 600 F. 3d, at 1057. With those concerns in mind, the court concluded that âa counterclaim under § 157(b)(2)(C) is properly a âcoreâ proceeding âarising in a case underâ the [Bankruptcy] Code only if the counterclaim is so closely related to [a creditorâs] proof of claim that the resolution of the counterclaim is necessary to resolve the allowance or disallowance of the claim itself.â Id., at 1058 (internal quotation marks omitted; second brackets added). The court ruled that Vickieâs counterclaim did not meet that test. Id., at 1059. That holding made âthe
We again granted certiorari. 561 U. S. 1058 (2010).
II
A
With certain exceptions not relevant here, the district courts of the United States have âoriginal and exclusive jurisdiction of all cases under title 11.â 28 U. S. C. § 1334(a). Congress has divided bankruptcy proceedings into three categories: those that âaris[e] under title 11â; those that âaris[e] inâ a Title 11 case; and those that are ârelated to a case under title 11.â § 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 Vickieâs bankruptcy proceedings. District courts also may withdraw a case or proceeding referred to the bankruptcy court âfor cause-shown.â § 157(d). Since Congress enacted the Bankruptcy Amendments and Federal Judgeship Act of 1984 (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 involved.
When a bankruptcy judge determines that a referred âproceeding ... is not a core proceeding but... is otherwise related to a ease under title 11,â the judge may only âsubmit proposed findings of fact and conclusions of law to the district court.â § 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
Vickieâs counterclaim against Pierce for tortious interference is a âcore proceedingâ under the plain text of § 157(b)(2)(C). That provision specifies that core proceedings include âcounterclaims by the estate against persons filing claims against the estate.â In past cases, we have suggested that a proceedingâs âcoreâ status alone authorizes a bankruptcy judge, as a statutory matter, to enter final judg-. ment in the proceeding. See, e. g., Granfinanciera, S. A. v. Nordberg, 492 U. S. 33, 50 (1989) (explaining that Congress had designated certain actions as â 'core proceedings,â which bankruptcy judges may adjudicate and in which they may issue final judgments, if a district court has referred the matter to themâ (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 âaris[es] inâ a Title 11 case or âaris[es] underâ Title 11 itself. Brief for Respondent 51 (internal quotation marks omitted).
Section 157(b)(1) authorizes bankruptcy courts to âhear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11.â As written, § 157(b)(1) is ambiguous. The âarising underâ and âarising inâ phrases might, as Pierce suggests, be read as referring to a limited category of those core pro
As an initial matter, Pierceâs reading of the statute necessarily assumes that there is a category of core proceedings that neither arise under Title 11 nor arise in a Title 11 case. The manner in which the statute delineates the bankruptcy courtsâ authority, however, makes plain that no such category exists. Section 157(b)(1) authorizes bankruptcy judges to enter final judgments in âcore proceedings arising under title 11, or arising in a case under title 11.â Section 157(c)(1) instructs bankruptcy judges to instead submit proposed findings in âa proceeding that is not a core proceeding but that is otherwise related to a case under title 11.â Nowhere does § 157 specify what bankruptcy courts are to do with respect to the category of matters that Pierce posits â 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 âdetermine, on the judgeâs 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.â 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) provides courts with ready examples of such matters. Pierceâs reading of § 157, in contrast, supposes that some core proceedings will arise in a Title 11 case or under Title 11 and some will not. Under that reading, the statute provides 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 âarisingâ proceedings, given the other
Pierce argues that we should treat core matters that arise neither under Title 11 nor in a Title 11 case as proceedings ârelated toâ a Title 11 case. Brief for Bespondent 60 (internal quotation marks omitted). We think that a contradiction in terms. It does not make sense to describe a âcoreâ bankruptcy proceeding as merely ârelated toâ the bankruptcy case; oxymoron is not a typical feature of congressional drafting. See Northern Pipeline, 458 U. S., at 71 (plurality opinion) (distinguishing âthe restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power, . . . from the adjudication of state-created private rightsâ); 1 Collier on Bankruptcy ¶ 3.02[2], p. 3-26, n. 5 (16th ed. 2010) (âThe terms 'non-core' and ârelatedâ are synonymousâ); see also id., at 3-26 (âThe phraseology of section 157 leads to the conclusion that there is no such thing as a core matter that is ârelated toâ a case under title 11. Core proceedings are, at most, those that arise in title 11 cases or arise under title 11â (footnote omitted)). And, as already discussed, the statute simply does not provide for a proceeding that is simultaneously core and yet only related to the bankruptcy case. See § 157(c)(1) (providing only for âa proceeding that is not a core proceeding but that is otherwise related to a case under title 11â).
As we explain in Part III, we agree with Pierce that designating all counterclaims as âcoreâ proceedings raises serious constitutional concerns. Pierce is also correct that we will, where possible, construe federal statutes so as âto avoid serious doubt of their constitutionality.â Commodity Futures Trading Commân v. Schor, 478 U. S. 833, 841 (1986) (internal
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 â[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.â Pierce asserts that his defamation claim is a âpersonal injury tort,â that the Bankruptcy Court therefore had no jurisdiction over that claim, and that the court therefore necessarily lacked jurisdiction over Vickieâs counterclaim as well. Brief for Respondent 65-66.
Vickie objects to Pierceâs 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 âpersonal injury tort and wrongful death claimsâ should be tried. See Reply Brief for Petitioner 16-17,19; see also Tr. of Oral Arg. 23 (Deputy Solicitor General) (Section â157(b)(5) is, in [the United Statesâ] view, not jurisdictionalâ). Given the limited scope of that provision, Vickie argues, a party may waive or forfeit any objections under § 157(b)(5), in the same way that a party may waive or forfeit an objection to the bankruptcy court finally resolving a noncore claim. Reply Brief for Petitioner 17-20;
We need not determine what constitutes a âpersonal injury tortâ 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.
Section 157(b)(5) does not have the hallmarks of a jurisdictional decree. To begin, the statutory text does not refer to either district court or bankruptcy court âjurisdiction,â instead addressing only where personal injury tort claims âshall be tried.â
The statutory context also belies Pierceâs 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 noncore case). By the same token, § 157(b)(5) simply specifies where a particular category 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 Courtâs resolution of his defamation claim. Before the Bankruptcy Court, Vickie objected to Pierceâs proof of claim for defamation, arguing that Pierceâs 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 objection, given the litigation posture of Pierceâs claim before the Bankruptcy Court. See id., at 6031. Vickieâs filing prompted Pierce to advise the Bankruptcy Court that â[a]ll parties are in agreement that the amount of the contingent Proof of Claim filed by [Pierce] shall be determined by the adversary proceedingsâ that had
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 â and several adverse discovery rulings â after he filed that claim in June 1996. The first filing Pierce cites as raising 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 âimplicated the jurisdiction of that bankruptcy court. He chose to be a party to that litigation.â App. 129. Although Pierce had objected in July 1996 to the Bankruptcy Courtâs exercise of jurisdiction over Vickieâs counterclaim, he advised the court at that time that he was âhappy to litigate [his] claimâ there. 29 Supplemental Record 6101. Counsel stated that even though Pierce thought it was âprobably cheaper for th[e] estate if [Pierceâs claim] were sent back or joined back with the State Court litigation,â Pierce âdid chooseâ the Bankruptcy Court forum and âwould be more than pleased to do it [t]here.â Id., at 6101-6102; see also App. to Pet. for Cert. 266, n. 17 (District Court referring to these statements).
Given Pierceâs course of conduct before the Bankruptcy Court, we conclude that he consented to that courtâs resolution of his defamation claim (and forfeited any argument to the contrary). We have recognized âthe value of waiver and forfeiture rulesâ in âcomplexâ cases, Exxon Shipping Co. v.
III
Although we conclude that § 157(b)(2)(C) permits the Bankruptcy Court to enter final judgment on Vickieâs counterclaim, Article III of the Constitution does not.
A
Article III, § 1, of the Constitution mandates that â[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.â The same section provides that the judges of those constitutional courts âshall hold their Offices during good Behaviourâ and âreceive for their Services[] a Compensation ] [that] shall not be diminishedâ during their tenure.
As its text and our precedent confirm, Article III is âan inseparable element of the constitutional system of checks
In establishing the system of divided power in the Constitution, the Framers considered it essential that âthe judiciary remain[] truly distinct from both the legislature and the executive.â The Federalist No. 78, p. 466 (C. Eossiter ed. 1961) (A. Hamilton). As Hamilton put it, quoting Montesquieu, â âthere is no liberty if the power of judging be not separated from the legislative and executive powers.ââ 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. Administrator of General Services, 433 U. S. 425, 443 (1977), but it remains true that Article III imposes some basic limitations that the other branches may not transgress. Those limitations serve two related purposes. âSeparation-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 Constitutionâs concern. The structural principles secured by the separation of powers protect the individual as well.â Bond v. United States, ante, at 222.
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. The colonists had been subjected to judicial abuses at the hand
Article III could neither serve its purpose in the system of checks and balances nor preserve the integrity of judicial decisionmaking if the other branches of the Federal Government could confer the Government's âjudicial Powerâ on entities outside Article III. That is why we have long recognized that, in general, Congress may not âwithdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.â Murrayâs Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 284 (1856). When a suit is made of âthe stuff of the traditional actions at common law tried by the courts at Westminster in 1789,â Northern Pipeline, 458 U. S., at 90 (Rehnquist, J., concurring 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 â resolution of âthe 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 lawâ â to the Judiciary. Id., at 86-87, n. 39 (plurality opinion).
This is not the first time we have faced an Article III challenge to a bankruptcy courtâs resolution of a debtorâs suit. In Northern Pipeline, we considered whether bankruptcy judges serving under the Bankruptcy Act of 1978 â appointed by the President and confirmed by the Senate, but lacking the tenure and salary guarantees of Article IIIâ could âconstitutionally be vested with jurisdiction to decide [a] state-law contract claimâ against an entity that was not otherwise part of the bankruptcy proceedings. Id., 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 âviolates Art. Ill of the Constitution.â 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 âpublic rightsâ that Congress could constitutionally assign to âlegislativeâ courts for resolution. That opinion concluded that this âpublic rightsâ exception extended âonly to matters arising betweenâ individuals and the Government âin connection with the performance of the constitutional functions of the executive or legislative departments ... that historically could have been determined exclusively by thoseâ branches. Id., at 67-68 (internal quotation marks omitted). 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) (âNone of the [previous cases addressing Article III power] has gone so far as to sanction the type of adjudication to which Marathon will be subjected .... To whatever extent different powers granted under [the 1978] Act might be sustained under the 'public rightsâ doctrine of Murrayâs Lessee . . .
A full majority of Justices in Northern Pipeline also rejected the debtor's argument that the bankruptcy courtâs 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) (âthe bankruptcy court is not an âadjunctâ of either the district court or the court of appealsâ).
After our decision in Northern Pipeline, Congress revised 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 âcoreâ proceedings. See supra, at 473-475.
With respect to such âcoreâ matters, however, the bankruptcy courts under the 1984 Act exercise the same powers 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 â[a]ll matters of fact and law in whatever domains of the law to whichâ a counterclaim may lead. 458 U. S,, at 91 (Rehnquist, J., concurring in judgment); see, e. g., 275 B. R., at 50-51 (noting that Vickieâs counterclaim required the bankruptcy court to determine whether Texas recognized a cause of action for tortious interference with an inter vivos gift â something the Supreme Court of Texas had yet to do). As in Northern Pipeline, the new courts in core proceedings âissue final judgments,
C
Vickie and the dissent argue that the Bankruptcy Courtâs 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 âjudicial Power of the United Statesâ in purporting to resolve and enter final judgment on a state common law claim, just as the court did in Northern Pipeline. No âpublic rightâ 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 debtorsâ 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 Vickieâs claim is a state law action independent of the federal bankruptcy law and not necessarily resolvable by a ruling on the creditorâs proof of claim in bankruptcy. Northern Pipeline and our subsequent decision in Granfinanciera, 492 U. S. 33, rejected the application of the âpublic rightsâ exception in such cases.
Nor can the bankruptcy courts under the 1984 Act be 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
1
Vickieâs counterclaim cannot be deemed a matter of âpublic rightâ 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 judgm