There is no such thing as a proceeding that is a core proceeding but is not an "arising in" or "arising under" proceeding.
Section 157(b)(5) (personal injury claims) is not jurisdictional.
Although 28 USC 157 allowed the bankruptcy court to enter judgement on the debtor's counterclaim against a creditor, Article III of the Constitution does not. With respect to the "core" proceedings listed in §157(b)(2), the bankruptcy courts under the Bankruptcy Amendments and Federal Judgeship Act of 1984 exercise the same powers they wielded under the 1978 Act. The authority exercised by the newly constituted courts over an unrelated counterclaim exceeds the bounds of Article III.
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. When a suit is made of the stuff of the traditional actions at common law, and is brought within the bounds of federal jurisdiction, the responsibility for deciding that suit rests with Article III judges in Article III courts.
When a court of broad substantive jurisdiction enters a final binding judgment on a common law cause of action, and the claim neither derives from, nor is dependent on, any agency regulatory regime, the decision must be made by an Article II court. A common law claim that merely augments the value of the bankruptcy estate must be heard by an Article II judge.
The bankruptcy courts under the 1984 Act are not "adjuncts" of the district courts. A bankruptcy court resolving a counterclaim under §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.
The Court is not convinced that the removal of compulsory counterclaims from core jurisdiction of the Bankruptcy Court will significantly impede the function of the Bankruptcy Court. More importantly, 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. |