mr caught up wreck you are the primary question presented by this appeal is whether epic systems vs lewis directs that arbitration be conducted and ordered by the bankruptcy court in this case we submit that it does now the issue obviously before the court and it's understandable does epic systems and plainly overrule national  m and the difficulty we see with national gypsum is the discretionary aspect we think the supreme court clearly indicated that in epic systems that there must be a clear and manifest intent on the part of congress to override the federal arbitration act with another statute we have yet to see any argument or indication from the apple lead in this case that such a clear unmanifested  and we believe that the pronouncement an epic satisfies that standard standing alone it doesn't call or doesn't permit for discretionary determination by the lower court if it did the lower court could find for example that indeed the inconsistency or the difficulty of resolving the federal arbitration act with the subsequent federal statute rejected and that is that you can imply or find congressional intent through legislative history the majority pretty clearly spoke and said that's not the law the law is in the statute and we have to read the statute for what it is your argument to us is you accept that ma'am but you don't accept the extension of it in candy and chips that is correct your honor i can't take away the words from that man they stand that being said citation was it was difficult but that's an f l s a case that's true and so i mean the primary argument against your position is that the congress did something quite unique and the text and structure are sufficient clues by creating an entire court system and giving powers that aren't given to arbitrators it is unlike the n l r a d f l s a right that's the argument that there is an irreconcilable con conflict that is the argument that's advanced by the at the lead but there is no irreconcilable conflict indeed in the posture that this case is in that conflict is easily resolved there is a bilateral agreement between  client to arbitrate any matter any controversy relating to the underlying indebtedness and that is what this is ok but that language is going to be important and i've gone in the wrong direction with it with the holy ground less exception but the dream and your client had with the wells fargo predecessor said any claim or controversy not any matter any claim or contra so so we've got some scholarship is a professor westbrook and the emmy who say this isn't a claim or controversy between those two litigants this is the district court's fresh start order with the most respected professor westbrook it is a controversy it relates to the  lead contends that the note is discharged the court seems to imply to have gotten over the predicate steps it must take to come to that conclusion it entered a discharge order no question however for purposes of resolving this case we have to go st to the exceptions to discharge under five hundred and twenty three a congress established sixteen exceptions with many subparts to the discharge we have to determine whether or not our claim our case are no falls within the scope of those exceptions we next turn to whether or not having responded to a letter sent by the  days after she was discharged constitutes an attempt to collect a discharge debt then we have to go to the question just recently addressed by the supreme court in the tagore case well did we have an objective  violated and if so what the penalty will be it's a civil contempt penalty that's all he can do but why am i not right that that's assigning to the arbitrator the authority to decide whether to enforce judge jones's injunction i would differ a bit your honor because as i said there are these three predicate questions that must be determined the exceptions to discharge  her debt is not within the exceptions to discharge that can be determined by an arbitrator a true to stop asking too many questions to question you cited trevino as support of authority then we did some trevino and i think that's an interesting address this would be the way that judge jones fellow jurors in the southern district approached that is he combed the statute but i thought judge jones ruled in the alternative one i don't think this can never go to an arbitrator but if it could be applying gypsum i may be wrong applying gypsum i wouldn't use my discretion and send i know you don't read it that way i don't read it that way it was essentially was set forth the national gypsum which the th circuit indicated was applicable if you're trying to adjudicate purely federal rights by statute that would have to show that the the  language specifically here have questions you're well prepared going to present the rest your argument all right essentially it is that your honor judge jones with all of the greatest respect  essentially concedes that this is a ballot arbitration agreement in her note she simply wishes to be excused from that in order to pursue a putative class action in bankruptcy court she could not do that in arbitra stuart nielsen lamps plus direct that this is not an available forum or remedy she cannot serve as a class representative in a collective action under arbitration that is right that my client bargain for with me and read the failure to honor that arbitration agreement places my client in an untenable position of having to defend in bankruptcy court a matter that i will point out is before this court in the crocker vs naveen case puts us at an extreme disadvantage and we believe that the arbitration agreement must be honored that is our position this case it is a closed chapter thirteen the centralized resolution of purely bankruptcy disputes is not it issue this is only one dispute it can be adjudicated by an arbitrary there is no reason to believe that an arbitrator would be and in able to adjudicate that issue there is no need to protect creditors and reorganizing debtors from piecemeal litigation this is one case that's all we have so this is on the framework accepting that national gypsum accepting that national gypsum is still good law again you know the intricacies better and i do what's the best case where we've reversed a district court i mean bankruptcy judges exercise of discretion i'm sorry what's the best case where we have if we don't decide that the vaster epic decision but this is just did judge jones abused his discretion applying national gypsum if we're on that frame that is in terms of the best case i'm unable to cite actually to such a case merely to argue that having failed to address those standards to me it's prime if a she and a brit abuse of discretion because none of the factors really exist and i think one additional thing that we must recognize and it was cited significantly by judge jones and that is the sanctity of his own we don't dispute the importance of a bankruptcy court discharge order but we would point out it's significantly different from the order that was under consideration in national gypsum which was entered in the early stages of a twelve year conform to that standard form and another issue in terms of the four ship of that order and the the importance of preserving judge jones ability to enforce that order a bankruptcy rule four thousand and four dollars f which permits that order to be docketed in any judicial district in the united states and inforced in that district so congress has recognized that this order can be enforced in other for it can be enforced by the parties and we submit that that refutes any suggestion that there is a congressional intent that would preserve this case before the bankruptcy  change them and the st is that busy this court national you have some really resolved the issue in this appeal in this panel follows national gypsum it will have to affirm the bankruptcy court ruling and i think your question got right to those judgments and to overrule national gypsum this panel would have to find either that the supreme court's decision epic unequivocally overrules national gypsum or establishes a question of law that is irreconcilable with national chip something epic systems which cites the mcmahon decision with approval is simply not that kind of case and nd this is a case about violations of a court order wells fargo has not cited a single case nor am i aware of one where parties were compelled to arbitrate violations of a court order i think that's a critical point because a violation of a court order and the contempt proceedings that followed including the content proceeding in this case it's not merely a private matter the court has an interest in that matter as well and our position and i think the national gypsum position is that parties are not allowed to privately contract the way the court's ability to enforce its own orders the bankruptcy court has to have the discretion to decide whether it's going to enforce that order or whether it believes a rd party can force that so he's kind of layered argument and you've got a layered answer the you would like us to write an opinion that says there is no discretion when it comes to a discharge order and whether some forcible that can never be assigned i disagree i think there is definitely discretion i think the bankruptcy court having entered the order has the undisputed power to enforce it and the bankruptcy court has the discretion or not embracing the a me keep position i'm not embracing the mickey position and i actually don't think trevino was improperly decided i think the whole point here is it's about the trevino is exactly right and but judge rodriguez didn't elaborate analysis of the national gypsum factors there isn't he i mean there is much here to look at why couldn't an arbitrator just look at this education loan i r s code provision and your position is that would be legal error well i believe he has to reach the discretion and he has to decide yes to exercise his discretion and i believe he clearly did so so you are in agreement with opposing counsel that that it would be clarifying and helpful if we said that the mickey positions some of the scholarship that these can't be given to arbitrators is incorrect i don't believe that's the law ok go ahead keep going i believe national gypsum creates a discretionary standard yet i think judge jones exercise that discretion i think if you look at national gypsum it's a test which at this point has been embraced by i want to say five to six to seven circuits there's the nd circuit manderson just last year the th circuit in the the th circuit in two thousand and five the night circuit more recently this is become the law it's the same law in the rd circuit that when you have a core proceeding with rights derived exclusively from the bankruptcy code the bankruptcy court has discretion to assess whether arbitration would be consistent the purpose of the code and one of the three national dips and factors which don't specifically cited it is the undisputed power of a bankruptcy court to enforce its own orders and so chief judge jones followed national gypsum he recognised he had that discretion and because claims are not in any way derivative of her pre partition contractual relationship with the defendant but rather relate to defendant post discharge conduct and if you look at the issues that tom just raised where he said these are the three issues that are going to have to be decided before we get to the and in their brief wells fargo suggest well there is a tax law issue we're going to you know there have might be mandatory withdrawals we've got to decide what's an eligible school i'd submit that is a complete red hair because if you take a look at this class in this henry specifically herself she attended the ultrasound diagnostic school that's a trade school it is not a title for eligible school and if you look and we lay this out explicitly in our brief in order to have a qualified education loan you have to go to an eligible institution want to do it and that's a list maintained by the department of education the ultrasound diagnostic school is not on that list in fact we've defined the class in this case to only include schools that are not on that and you both again can get to levels factually that i'm not briefed on or prepared but  maybe then step back for me and discuss the it's the six of the th i don't remember the gaffer's decision well the gaffer's decision was in f l as a case it was looking at literally the exact same issue that have been decided by a pick systems does the n l r a and the language from the national labor relations act affect your ability to bring an action to the f l s a with the gaffer's decision set is it followed the supreme court and said no it doesn't reach there but i don't believe the gaffer's decision said busy the mcmahon test is dead all you can look at now is text and frankly i think if you look at epic systems epic systems didn't say that the court in epic systems it didn't just look at the text it looked at the quote broader structure of the n l already it looked at the statutory context it made a big deal out of the fact that a has no provisions providing for class action treatment of f l s a claim to doesn't give you any guidance well the great thing we have here is we have the bankruptcy code we have the bankruptcy rules of procedure i've got extensive guidance as to how this case should proceed i know exactly you know rule twenty three under but under rule one thousand seven hundred and twenty three of the bankruptcy code rule twenty three applies in adversary proceedings i've got a full set of procedures a got an entire court system set up to deal with these kind of claims that's completely different than half of the text of the structure of the bankruptcy code you're saying is itself irreconcilable is irreconcilable with the idea of mandatory arbitration and that's kind of the the point that i think is really the heart of the conflict here we're not saying that you can never have arbitration of claims that have something to do with bankruptcy i think of course you can and there are numerous cases cited where people or work courts of applied the national gypsum standard but said say with a non core proceeding you can have an arbitration of that even with a core proceeding the court might decide like hill did in the nd circuit that it's a state issue but we're past the arbitration i mean we're past the close of bankruptcy the stay is no longer applicable that could be arbitron trevino there was a discharge order pretty core and yet he exercised his discretion to say in this situation particularly where they have asserted a lot of non bankruptcy claims there were tyler claims there were other state law claims he said if i look at the entirety of the suit i think this could be handled elsewhere in this case we only have core bankruptcy issues are only issue is were these loans discharged how does that get handled under fifty one dollars those are all the claims of been the sort of this have to your knowledge have every reverse a district courts i mean sorry bankruptcy judges discretion no i'm not aware of a single case that has come out and in fact what this court has done is in in or a gandy five years after national gypsum they affirmed the exact same ruling as national gypsum it was a different presentation it was about fraudulent transfer claims rather than discharge violations but judge king was on the panel and we affirmed that national gypsum holding i think i counted there are eighty four courts decisions of this circuit following national gypsum you'd be hard pressed to find a better more established precedent for star he doesn't believe epic systems overruled mcmahon and he said it he said it took out one of the legs of men with respect to looking at legislative history well i don't think it's surprising given what we know about the supreme court to discover that they're not a fan of looking at legislative history but i think what's important here is that national overturned but certainly i don't think there's a suggestion of excessive as they've overturned that they're not conflict now i will concede that the supreme court has not yet found a statute that inherently conflicts with the f a a but the supreme court is also never dealt presidential opinion but you would expect that if the supreme court thought that epic systems overruled gypsum they would have just g v ard and said you know nd circuit or take a look at this in light of epic systems they did not so i think you can certainly read into that rec nicer and i think inflicting about this case i think it's important to focus on that violation of the court because if you look at the factual legal context and epic you're talking about a statutory claim under the fair labor standards act and how that's going to be dealt with i just think that's fundamentally different than when you're talking about a court order and the undisputed power of all federal courts not just bankruptcy courts to be able to enforce their own order what wells fargo is seeking to do here is to say parties can contract before any dispute before any bankruptcy to take away the power of the court to enforce the orders that come through the bankruptcy system and if you think logically about what effect that's going to have about bankruptcy i think that has the potential to undermine the bankruptcy system entirely i think if you you know if you asked my opposing counsel do i think that bankruptcy courts never have discretion to avoid arbitration clauses if you had that rule the bankruptcy proceeding would stop because essentially so many of these consumer debt contracts are going to have arbitration agreements how are you going to have an effective bankruptcy process of every single that gets pulled out of the bankruptcy process to be dealt with in an individualized arbitration that's not a functional system that's an inherent conflict and i think if you look at the very facts of this case of stephanie henry and her chapter thirteen proceeded you can see the importance of the bankruptcy court being able to enforce its own orders because this wasn't a chapter seven bankruptcy this was chapter thirteen and henry had to meet with the court and the trustee she had to develop a plan she had to get that plan approved by the court and then she spent five years paying down the debts and that plan before the court decided she had complied with the plan and granted her a destruction what wells fargo is saying is that  that ms henry spent five years of her life complying with court directives in order to get a discharge she's not entitled to have the court enforce that discharge she has to take that discharge to a private arbitrator who knows nothing about what she's gone through in the plan to decide whether those debts have been discharged and in a related case and crocker when the same issue came up judge jones himself said this goes to the very heart of the integrity of the bankruptcy process itself if the conduct that is alleged here turns out to be true how can folks come in here and ask for a discharge and have confidence and some of these people spend years chapter thirteen they spend five years trying to get a discharge in a grocery cart when i should remember it was crocker pending before us proper is it was argued in february  would consider to be the merits of this case although wells fargo might disagree it was the issue of discharge ability of trade school loans under fifty two thousand three hundred and eighty two dollars that's the specific language about funds received as an educational benefit scholarship or stipend so that really i think that could be determinative here and would be of the case but not of the issue presented of this arbitration issue at all ok that's the that america the case and then there was a jurisdictional issue about the bankruptcy courts ability to rule on bankruptcy orders from other districts which tangentially related but i don't think determine if you look at there was an arbitration issue in crocker but naveen chose not to appeal it so that issue never came before this and i think the final point i really want to make that i think it's worthwhile to look at wells fargo zone conduct in this case when we think about arbitration in bankruptcy because i don't think wells fargo is really here in good faith without some dirt on their hands because wells fargo filed a proof of claim in this henry bankruptcy if you look at the case law we cited lane campground finance sierra they submitted to the bankruptcy courts jurisdiction for this very debt they received payments in the chapter thirteen plan and then having submitted to the bankruptcy court's jurisdiction having received those payments when the time comes to determine whether that is discharged they want to say well now and not subject to the bankruptcy court anymore now you've got to take these issues to a separate arbitrator because i liked what i got when i was getting payments from the chapter thirteen plan but i might not like what i'm going to get now so now i want arbitration if you look at that language can't case where the court said once you submit your claim you're waving your right to a jury trial i think similarly it's not hard to find one to submitted your claim in accepted payments under the plan at this point you can assert that you get to arbitrate these issues and certainly not if you wait five years after you get many payments to do it i just don't think there's any equity in that position at all if wells fargo really wanted arbitration of these claims it should have asserted that at an earlier point in the process not once it's already taken advantage of the chapter thirteen plan and receive those that's really why i think when you're thinking about claims and specifically bankruptcy related claims relating to assertions of the bankruptcy process once you participate in the process i think it's discretionary i don't think it's absolute to actually gets in and affirm that judge jones properly exercised his discretion thank you counsel thank you your honor i want to address the issue of grand finance here and the filing of the proof of claim it should be noted that ms henry did not object to the proof of claim the proof of claim is prime the facie evidence of it's a little d an extent is henry could have objected to that claim during the course of her bankruptcy she did not the bankruptcy case is closed all granted it's the era that suggests is that in the case of the filing of a proof of claim it enables the debtor to set up a counter this is not that case because henry is not contesting that she executed the no misandry is not contesting that she owes amounts under the note but for the discharge and we're not suggesting that we're trying to put it set aside the so it's very clear that you could present this issue of discharge ability to a state court judge why not to an arbitrator i have another issue about the presentation of the sanctity of the court order this is pretty much undercut by the fact that ms henry's pleading seeks to have judge jones adjudicate the discharge orders of countless debtors in the other ninety seven judicial districts i think that belies the fact that that this order is a formal order it means what it is and we're not here to take away his henry's discharge that discharge was granted what we're here to argue is that this debt fell within the five thousand two hundred and thirty eight exceptions you agree we shouldn't hold that no reason to hold this for crocker there national gypsum cases subsequent to that like candy would also go fall i believe gandy would would have to follow and it is the abuse of discretion for the simple reason this is an illegal issue and if there is incorrect reading of that book it is an abuse of discretion and really unless the court has other questions i think we thank you both and i will just say braga as presiding judge it is a pleasure when lawyers come as prepared and knowledgeable and especially as collegial on a free clearly you're on a st name basis and i think you both have would have fun arguing uptick in the supreme court all right we'll take a short recess before we hear our final case