this appeal and they went into that case because they were involved in a situation of financial difficulty they wanted to go through bankruptcy to discharge what debts they could and to find out what debts they still owed at the conclusion of the bankruptcy case with then in mind they asked the bankruptcy court to determine the amount of any debts penalties that they would still being liable for following their bankruptcy just charge since those text penalties would be  court lacked jurisdiction to decide the question we believe that is wrong for two reasons wolf section five zero five eight of the bankruptcy code and section thirteen thirty four b of the judicial co feet relating to tax and of course the plain language of the statute of supposed to be applied the government argues the context of this language somehow undercuts the the language appears in the bankruptcy code rather than in the judicial code word general bankruptcy jurisdiction is set out but the problem with that argument is that prior to the adoption of the bankruptcy code all bankruptcy jurisdiction was in the bankruptcy act in title love and and all that happened here was that one of the specific provisions above think procedure stiction that had been in the bankruptcy act was continued in the bankruptcy code so we had general jurisdiction in the judicial co and the specific grant of jurisdiction in five o five the plain meaning is underscored by the fact that there is no other apparent purpose for the grant of jurisdiction the government argues th i say there's because the supreme court has been trying very hard to distinguish jurisdictional roles from substantive ones and jurisdictional rules as you know are the kind of things that we have to decide even if the parties are perfectly content no why should we think of this is a jurisdictional rule for two reasons judge easterbrook number one it accords authority to determine a specific issue in that is in everything in the bankruptcy code does that section five forty seven does that make it if you would let me finish please the other reason that i would add to what the plain language says and again jurisdiction is the authority to it is decided dispute there is no other apparent reason for this language being in the bankruptcy code this does not create any new procedure for determining the amount of a claim it does not set it up as to i still don't get it why is  jurisdiction of bankruptcy judges is created and regulated by title twenty eight not title levon well as i was saying before it's perfectly permissible that it has anything to do with subject matters i'm going to ask the same question of your adversary but maybe you should just go back to the merits for a well to get into what i had begun to argue earlier there's no other apparent basis for this language being in the bankruptcy code the only argument the government has made in response to that observation is that this is somehow a waiver of sovereign immunity but the question of the debtors liability for texas does not implicate sovereign immunity wanted to make is first section five zero five a is concerned is that this question has been addressed by eight other courts of appeal and every one of them has held that it's a jurisdictional grant of the only argument that the responsible person not the debtor and because of that the context the third circuit said indicated this grant and again they call the jurisdiction had to be found other than in section five zero five ad but ten years later quattrone versus custom distributor services the third circuits said and i quote we have consistently interpreted section five zero five and as a jurisdictional stance you confers on the bankruptcy court authority to determine certain text claims so certainly the earlier case was not a finding that there's no jurisdiction under five zero five day those are the reasons the plain language of court's authority to decide this question its context supports that and it has been held by a court of appeals to have that impaired now the second point that we raised five o five a we're not in the bankruptcy code with their nevertheless be jurisdiction here in the answer is yes section thirteen thirty four of title twenty eight the traditional code accords jurisdiction over matters that are related to other matters in the bankruptcy case here argument is that the question of the extent of the debtors remaining liability is related to their bankruptcy discharge they went into bankruptcy wanting to find out what they would go with the end knowing the amount of tax penalty is intimately related to their discharge as to this question there is a seventh circuit decision decided last year in re koat so which specifically holds that there's related to jurisdiction that is the precise language of the court's holding my hand  well put it was a real into the bankruptcy court your honor to decide precisely that issue with direction and how it ought to be decided so although there was no extensive discussion of the rich chanel for the holding it was the holding of the incumbent on the court to follow those directions that's why i do believe that as a whole but beyond the act this is also a continuation of what had been the jurisdictional framework of the bankruptcy acts sixteen seventeen feet seventeen a the bankruptcy good afternoon i think there are two overarching flaws that moment on the crucial aspects of this case two flaws in my opponent's arguments one for each argument they have two arguments one is five and five is in the ten and one is thirteen thirty four related to  actually like to start with the flaw in thirteen thirty four even though the briefs took in the opposite direction because of the closet case the they are overarching flaw which i think is in colossal joke or has a drive by statement  anything is that it conflates the relationship that you have to have to relate it to jersey action with what their relationship is supposed to be the actual relationship that cited in colossal is a relationship between the liability in a fraud case and the discharge ability and they turned on into related facts the relationship that's required for thirteen thirty four p is very specific it says it must be related to the case not to another civil proceeding in the case the case is the jurisdiction under way under section thirteen thirty four a it's it starts out saying bankruptcy courts have exclusive jurisdiction over the case and that would be things like determining confirmation of a plan things that nobody else can do  court can do within the automatic stay if something relates to the case which is the administration of the state that's why courts have said in order to relate to the case you have to have some relationship to the estate of the distribution of  estate among its creditors that what closet does is conflate that and assume that because there's a relation to you think the supreme court of the united states acted without jurisdiction last week in midland funding against johnson into the satchel limitations issue someone making a claim that was beyond the period of limitations then that the argument about the statute of limitations was an argument under the fair debt collection  but the supreme court resolved that by saying that the word claim in bankruptcy reaches every possible kind of claim against the estate even though it is utterly spurious and never going to be paid so the line in your brief which the district court also took that a bankruptcy judge has no jurisdiction if the claim is going to be paid sounds like it amounts to the statement that the supreme court was acting without jurisdiction in midland funding or telling just bankruptcy judges to do things over which they had no jurisdiction because none of those claims was ever going to be paid i think there's a key distinction there your honor the supreme court said that a right to payment whether or not it was subject to a statute limitations was enough shirted right and asserted right that was the whole point it doesn't have to be an actual right to payment i agree your honor i'm not going to try to detract from that i think it's very distinguish this case because can in in this case the we would have agreed that the claim against the estate in this case can be adjudicated the question of whether it's a frivolous claim or not drops out very quickly the claim can adjudicated there was no question in that case that the estate would have been impacted by the claim if you go back to sell a tax and this is part of the problem i'm going to give you a solution to the problem as well today a promise about the conflict here with colossal  used for related to jurisdiction whatever test is used bankruptcy courts have no jurisdiction over proceedings that have no effect on the state of the debt this and therefore midland funding was incorrect because none of those claim any conceivable effect on the state of the debtor yes they would if they were a lad that was just if they were allowed in the supreme court said i'm not going to argue midland funding but the supreme court said that something is a claim even if it has no more trying to talk over a judge is not a strategy sorry her and therefore the supreme court said the bankruptcy court that authority and you're trying to tell us the bankruptcy court had no authority that is no subject matter sure i do believe there's a very big difference between what i'm admitting was a claim in this case and it may have been a valid claim they may even be right on the penalty we don't know who's right yet unlike the one in the supreme court case there is a claim here the quick here was the claim against the a state that's not what this case is about the claim against the estate is actually being held in abeyance right now it was never dismissed it was as objection to the claim the judge held it in a benz because he doesn't know yet whether that whether they'll be any point in judah kading it and because they have been cases that have said that a debtor in a chapter seven case doesn't have standing to object to the claim against the estate if it won't produce a surplus the district court agreed with that as well the is twelve i don't understand what any of this has to do with subject matter jurisdiction or all parties arguments may be perfectly fine just give up on this jurisdictional characterization of a statute that doesn't read on jurisdiction or my answer that your honour's that i really don't think the supreme court overruled sell a texan saying that in order to adjudicate this claim frivolous or not it would have to if it was allowed have to have some impact on bankruptcy administration this court has held twelve times lad i have the citations for you which i think would take too long twelve times three by your honor judge  decisions of the court are speak for the court the person who wrote them is zero for this court has held regardless of who wrote the decision at least twelve times that there has to be an impact on the state prior but there's a way to harmonize colossal with those twelve cases and sell a tax it's actually relatively easy if you want to assume that colossal up a allows related to jurisdiction where the non discharge ability is determined and then you go on determine the liability kalonzo did that in the context in which the facts were intertwined and interrelated the no court has ever to our knowledge allowed took or not since the  seventy eight act allowed a bankruptcy court to go on in a clearly non dischargeable case or clearly dischargeable and determine the amount of the debt that's left od'd by the debtor where it has no relationship to the liability determination and to do so would bring in all kinds of new cases that have never been adjudicated bankruptcy state courts normally adjudicate state claims that are not dischargeable here you have congress saying this kind of debt this kind of tax is accepted from destruction not affected by pankisi and the question is and you can lead a bankruptcy court determine the amount when it's not affected by bankruptcy and there's no state let's say a gunman o s c case at all nothing to administer nothing going on at all then you bringing in all you could bring california into indiana to determine a california state tax that congress set is unaffected by fact recy and determined indiana because the debtor moved indiana from california in federal court when it would normally be determined in a state court that's not the purpose of five o five it's now it's never been held to be the purpose of file five the and that that wasn't the purpose of five o five under the old act either and there are not a court of appeals that even remotely suggest that is the purpose the five o five where that you have that kind of jurisdiction we go through those you know in our brief as well the the old act essentially  relied on section seventeen eighty three which was a discharge ability provision that said right in it the bankruptcy court once it had limits let me be sure i just understand your position five zero five a is paragraph two court may determine the amount of legality of any tax penalty and so you're not arguing that sub to paragraph two applies again correct so it's your contention is we should read this with an implicit second exception where the implicit second exception is it would read something like except as provided in paragraph two of this subsection antics or situations in which the a state lacks sufficient funds comma the court may determine the amount or legality of any tax i would say it a different way i would say it says and many courts have said the major discretionary the may says you can do it and there are plenty cases it as this case comes here the only question is whether five zero five day allows something there isn't a question about whether it was a good idea for the bankruptcy judge to do it we think that five o five a only allows it jurisdiction under thirteen thirty four and section thirteen thirty four limits jurisdiction to where you're going to have one of these throw your argument is that there is a second but unstated exception in five zero five eight one not only would i argue that i would argue that's an unstated exception in every provision of the bankruptcy code where there are lots of provisions of the back of that start out saying the court may do something and the courts have universally helped the jurisdiction do it in a particular case must be found in a bankruptcy purpose where the facts either be a state or it's it is a determination for example of discharge ability which is the quintessential bankruptcy purpose but of turning the amount of the debt left over in a no asset case that congress basically said will not be affected by bankruptcy doesn't seem to us to even fit within the bankruptcy clause of the constitution and and no courts have held that can be done in that kind of a situation the courts of appeals have not gone that far and certainly not situations where there is a purpose for that determination under the bankruptcy clause rather than read it to go beyond that purpose because there are two supreme court cases that say where there are two readings you have got the reading that doesn't even raise a serious constitutional question unless you're really compelled to adopt the alternative reading we think five or five days very easily harmonize with section thirteen thirty four there are many many many cases in which five o five a has a purpose so my opponent said it has no other purpose other than this that's just doesn't make sense of five and five it overrides administrative or a stupid kata it overrides cases where the other courts have held against the taxpayer in a default judgment because it allows creditors to object to the claim as well it has many purposes besides the refund purpose and file five eight eight two it has many purposes and five o five a one it allows the determination of the actual merits of the taps that are normally not allowed in a claim objection proceeding if you look at probate case law  there's no ability when even when the iris files a claim to look beyond the procedural requisite to the assessment in order to get to the merits of the tax it's got to be a separate grant and i don't call that a jurisdictional cramp it's a grant  congress to go to the merits of the tax in that context it exists in the internal revenue code for state court receiver ships it exists in the bankruptcy code in one zero six reference to five a five day it doesn't exist for probate cases it's been held pleaders it's been held not to exist or mortgage foreclosure you can't look at the merits of the tax when a senior mortgagee is foreclosing or even a junior mortgage you would like to attack the senior tax claim they don't have the right to look beyond th procedural compliance with the code to reach the assessment so there's a two very good reasons for a five a five day one it allows looking at the merits of the tax and playing with jackson to it allows looking at the merits of the tax in a refund suit three it allows overriding default judgments and state proceedings that have state a lot of states have rules that if you don't contest the tax within a certain time period you're out period unlike the federal government which let you then sue for a refund if you pay it or let you  determine the to the merits of the judgment so there are lots of ways to harmonize this and you can harmonize it with colossal by noting that colossal did have this intertwining how a hand is a great case the other side cites it for their position i think it supports ours how man doesn't mention thirteen thirty four b it cites two bankruptcy court cases that allow the court to determine the non discharge given the amount of the  step rable from the determination of the of the destructibility because the two turned on the same facts that's the way to distinguish palazzo so you don't have this conflict with with twelve prior seven circuit cases that all agree with selig taxing you have would like to just make a couple points first aspired section five o five a what it says is that the district court the court excuse me but the court with bankruptcy jurisdiction can determine the amount of any penalty the amount of  penalty is almost invariably one that's not going to affect the distribution of the estate in every no as a chapter seven case there is no impact about the amount of the ten actually how is your argument that five or five is an independent jurisdiction or are other court and is the designated bankruptcy court under this title title of and shall be determined by reference to the provisions set forth and have a twenty so you have to have twenty eight thirteen thirty provided it's just that the standard power of the court provision which i know you're very well off of this is just not a point that came up in any of the arguments for any of the cases that i read so i have to apologize now the other point that i wanted to make very recognized supplemental jurisdiction in bankruptcy and its decision in town square media versus rule two thousand and eleven case express we stated that and there was no indication in quite so that there was going to be for the first time recognition