Document Type
Article
Publication Title
UMKC Law Review
Publication Date
1991
Volume
Vol. 59, No. 4
First Page
991
Abstract
(Excerpt)
Like a worm in an apple, the recent Granfinanciera, S.A. v. Nordberg decision has eaten away the article III heart of the current bankruptcy jurisdictional scheme while leaving nothing more than a seventh amendment blemish on the surface.
Granfinanciera ostensibly involves only the question whether Congress may, consistent with the seventh amendment jury trial guarantee, bar trial by jury in a fraudulent conveyance action brought in the bankruptcy court. The Court, however, converts the issue into an article III delegation question by equating Congress' power to override the seventh amendment with its power to delegate matters to non-article III tribunals. Having thus set the stage, the Court uses the case as a vehicle to announce the return of a modified "public rights" doctrine to the article III arena. Applying that doctrine, the Court holds that Congress could not override the seventh amendment in the fraudulent conveyance action before the Court because that action could not have been delegated to a non-article III tribunal.
Having necessarily decided that article III prohibits the delegation of such fraudulent conveyance actions to the non-article III bankruptcy courts, the Court stopped short of holding unconstitutional the current bankruptcy scheme, which permits such delegation. By limiting its holding to the seventh amendment issue, the Court preserved the facade of the bankruptcy jurisdictional scheme; but, with the structural supports removed, the Bankruptcy Amendments and Federal Judgeship Act of 1984 (hereinafter "BAFJA") cannot withstand a direct article III challenge.