or m j silver i'm here for the apple a cast call suffice it to say that we believe the district court and bankruptcy court opinions in this case were seriously flawed if allowed to stay this circuit will be an outlier in this whole nexus of what a bankruptcy court should or should not do where there's an arbitration clause and in this case the district court opinion and particular it really didn't follow white mountain which is the key process in the four circuit ignore the third circuit precedent the ments case that we cite in our briefs and we kept sort of saying pick me pick made about the bankruptcy and the district court to say follow this case because where is followed in response in part to a proof of playing the third circuit says that should go to bankruptcy i mean if you mean that should go to arbitration and the issue in this case is that our clay will have no impact a she's already had her plan confirmed it doesn't impact really any of the creditor claims in the case she will receive or discharge it doesn't delay anything or impact anything neither the bankruptcy court nor the district court applied the mcmahon analysis which is the key here when mcmahon says is that when you've got this conflict between two statutory scheme in this case bankruptcy code and the f other place and force the debt yes i was wrong to prove clime not in this case because we said both in our family i said if you are allowed to withdraw all right then you wouldn't be in the bankruptcy case at all yes or she would have but she also would have we all she also have face a motion to stay and to compel arbitration and there is litigation again i'm not here if i really to talk at all but it they were talking about the discretion of the the bankruptcy judge why he refused to let you get out to keep the case even though you wanted to get out there she had filed frost claim and i'm suggesting to her suggesting that you're filing a proof of claim you waive that immunity and that seems to be maybe another also leads to the possibility of awarding damages but that is not a waiver it wasn't an men know it so it's no the waiver was the waiver of your immunity was filing to prove a claim but that's not a waiver of our right to arbitration well that's the cases that we cited were also core claims where it said that actually in the courts of appeal there's a fairly lengthy extensive body of law in the courts of appeal that say even as to a core claim where there's an arbitration clause that bears on as to that claim and in fact it may it may there's a lot of discretion but you know this case has a lot of baggage attached to it i mean we have we have allegations that there really is no arbitration confronted with that they can handle they can go to bankruptcy and have all the claims throughout the nation through nationwide service of process pulled into one form resolved efficiently to give the debtor a new start and it seems to me that the better could claim in this case the bankruptcy courts seem to think so that if we allow the arbitration to go out and now that she's going to be fighting immunities and  not even know where the arbitration can take place whether there is arbitration at all that defragmentation really undermines the effort of this person to get a new start i hear two points to your question  i want to address the second first and that as to the village of the of the arbitration which was not raised below which was not addressed by the district or bankruptcy court and where we've consistently said she has the right to go to strip away or t it doesn't say that it says it will be administered use the word minister by aaa or jams but it still says the right is under cheyenne law before shy an arbitration and actually says the procedure though problem it had with this the septic language which is different from other language my clients used in the past it just said that it read it as requiring that there be a show in reverse to try individual who's actually operator we think that a misreading and it all to me in that case helped said i'm not going to reach these issues today i'm going to stay this proceeding to exhaust for the tribal exhaustion i'm going to defer all rulings at this time with respect to the arbitration in this proceeding the debtor hasn't come forward until this appeal and said oh we have questions about this particular arbitration clause what we've said throughout is is you get to go and pick a aaa or jambs administrator and decide are arbitrator you get to have this within thirty miles of your house you get to do it for free the difference in this case and going back to your question about centralization and convening ever rising i was articulating what  that it does depend and that's that's my point is here you have to find before you even get to the discretion point there's a key that unlocks the right of the bankruptcy court to invoke some hundred discretion to keep a case like and usually at the core k not a not for case but we can talk about that and that key though it has to find there's actually an inherent conflict with respect to the debtors ability to reorganize that's raised by it with respect to  climb in a sort of here there is no such conflict they can't really articulate a conflict that existed at the time we moved to say or in connection with a year ago when when this was all being h already has her plan confirmed she already said unsecured creditors are going to get anything there's no inherent conflict here like and white mountain high over there the court said this is a core proceeding and we're going to find that the banks the court properly declined the motion to stay where in a commercial context the dispute was about whether a particular creditors claims were where they were debt or equity and they said look this is our analysis is that this debtor is a chapter eleven debtor trying to reorganize if we allow to go for an arbitration creditors are going to have an issue doing business management is going to be distracted they're going to be extraordinar additional costs as going to be extremely difficult for this data to reorganize that's not this case and i meant francis where there was a perfectly well where in fact there was a claim that the debt at issue was and predatory and all that baggage the call went with it the third circuit said now what you look at is this is just about money damages that's not in here it doesn't arise from the bankruptcy it's not a even though the party stipulated the court claim the third circuit source of we're not sure how you got there but even accepting that unless you can show that by are serving this non  conflict there's an a serious interference with the debtors ability reorganize that's not what this is about the debtors we were going to she's on her white performing under a chapter thirteen plan the debtor is alleging that you breached chapter seventy five fifty four fifty one with respect to trying to collect on the stuff and because those claims are overlapping the statute it says that you've got to make threats you've got to make right misrepresentations you've got to engage in a rafting conda it's not all about just whether or not there's a valid proof of claim with a valid line she's client emotional and the supreme court has said that just the possibility of inconsistent results when you're trying to parse out different claims doesn't get you anywhere and then that was the holding and kept him to it says what we require when the a district a bankruptcy court is parsing through what claims are archibald art our patrol to be arbitrated and shouldn't be it's what you do if you do that on a claim by claim analysis and the fact that it's inefficient to do it that way not in this case your honor i mean not that that's that's where the showing has to be what is the inherent conflict there's a lot of the only i'm sorry go ahead some say there's a lot of distrust in this case  the process of calling the unities and i've fully understand that baggage and i'm not here today to defend my client's business model i am here to say though that this district court decision is error and that if allowed if the law is in the fourth circuit because it would be contrary to every other circuit if the law is that a mere overlap of claims between core and non core claims means the bankruptcy court has discretion whether to send something arbitration then you're going to see a lot more confusion and u s c and that doesn't happen the only time actually has happened for instance is ease the gandy decision which is a fifth circuit decision that the that's the only time i can recall where a court of appeals said we're not going to send a north non chord claim to arbitration and the reason i interfere with the debtors bankruptcy thirdly it was not addressing of core claims that was ancillary are after the fact of the debtors river is a sion the law in other circuits that fills in other words might mountain really gets you to the point of you've got to look seriously as what is the inherent conflict between the debtors ability to reorganize and the claim has been asserted as that here is a serious interference and that's what judge michael said to lead off the opinion he but we're here to say that this case will not go to arbitration because it in fact seriously interferes the debtor's ability to organize that is not this case but you're better off taking his appeal you are my peace accord met wessler for the after leo terry moses this case begins and largely ends with this court's decision and white mountain there this court looked at the interplay between the f a a and the bankruptcy code and they determine that there is an inherent conflict between the two statutes and i think what's really important about that conclusion other reasons why the two statutes conflict in white mound this court explain that the very purpose of bankruptcy bankruptcy is to modify the rights of debtors and creditors aren't to be really clear there is no categorical rule about whether there is an inherent conflict when a bankruptcy court is faced with a motion to compel arbitration it is fact specific and it depends very much on the nature of the claims that are at issue in the case but what the court said in white man i think is worth reiterating the court said that arbitration in a particular case where there is this conflict is inconsistent with centralized decision making because permitting an arbitrator to decide a core issue would make better creditor rights contingent upon an arbitrator's ruling rather than the ruling of a bankruptcy judge and i think that inconsistency is front and center in this case as both the bankruptcy judge and the district court below made clear at the center of this adversary proceeding is has cause effort to recover its loan out of ms moses estate and ms moses objection to that claim against her estate because the loan agreement upon which cash calls proof of claim is based is illegal sending that matter to arbitration what unequivocally permit an arbitrator to decide a core bankruptcy issue which is the validity of tash false claim under section one fifty seven b two b of the banks the code and just to just to link this up with white men and that is exactly the core issue that was at stake in white codes objectives of centralized decision making and efficiency so to hear the bankruptcy court was well within its discretion to keep the core claims in this case in bankruptcy and that result is also no different with respect to the stern claim at issue in this case having an arbitrator resolve that claim would also run afoul of the bankruptcy code because it too would have an arbitrator decide a core bankruptcy issue which is the validity of cash called loan agreement and so it would also in the words of this court white mountain have made better creditor rights contingent upon an arbitrator's ruling rather than that of a bankruptcy what the result of that decision were only have an impact is whether or not i a state of the bankrupt only in this case even even though an arbitrator will be deciding that issue the only only question would be whether or not it's going to be additional money going to her and that certainly can't be the discretion you could use  honor to be really clear that's not the only outcome if this if that particular claim were sent to arbitration if an arbitrator even if you could get to arbitration let's assume you can arbitrator were to decide that the underlying loan was valid was not illegal all right then what you have is exactly what has happened in national gypsum in indy n d and in aber out of the ninth circuit you have the potential for collateral estoppel that but your honor back but by your honor you're right they couldn't because the judge would allow but with that that's correct your honor and the but the only reason they sought to abandon their claim was to avoid the possibility that they would have a core claim with still within the bankruptcy court to keep them out of their  preferred their newly preferred form of arbitration the point that the bankruptcy judge and the district court who affirmed the bankruptcy judges deny all of their effort to withdraw the point that those lower courts made about this this withdrawal effort is that a gamesmanship effort to manipulate the fora and bankruptcy unlike in the civil unlike if you are in district court has different rules associated with when you can abandon a proof of claim because as the fifth circuit in the ni said the filing of a proof of claim under the bankruptcy code invokes special rules of bankruptcy you can't once you file that claim simply dismiss it when it suits you because if it's potentially prejudice prejudice is the  but how is that prejudice i'm not following this at all i'm sorry you are the reason that's prejudice so the prejudice is having the arbitrary that's correct your honor the potential de lay associates not any effect on the bankruptcy other than the positive effect  gregory just described this this is beginning to sound like alice in wonderland and already we won't let we won't let the claimant go because if we let the claimant go we'll have to let the claim go and order everybody to arbitration for what's left which can possibly have an adverse impact on the on the bankruptcy that's that's a little much for me let my missing let me let me step back  so so your argument i would assume have to be based on this case not the thousands of other possible scenarios what my client ms moses wants is for the bankruptcy judge to resolve this with section one fifty seven b to b claim about whether a cash calls claim can be a four enforced against the estate with stable bandon with respect your honor that that that is not the record in this case the want this kid this is using the record it is not your honor that as this case comes to this court the record in this case is that this proof of claim remains pending against the estate and it is a core claim that is viable enforceable and if and if the if a if this case came here but there was no core one fifty seven b to be claim in this case we might have a very different kind of case if cash call is alternately successful and withdrawing the core claim in bankruptcy then if all that's left is that stern claim then then the discretion that the bankruptcy judge exercises might look very different ok so perhaps i missed missing something you're saying that the question of the propriety of the denial of the withdrawal of the claim is not before us that's that's correct your honor is absolutely not before this court that that issue didn't find it out how would it have respect to the proof of claim if you hear counsel say a few minutes ago that we've abandoned that claim i understand that that's the representation you're on is it just the representation or is that a binding judicial judicial you're stopped representation you context of the bankruptcy it's almost like it's like it's a solution in search of a problem let me let me suggest that it's in fact in fact the solution and that the bankruptcy judge properly exercised its discretion and it's and it's for the reasons judge gregory that you initially suggested it can resolve the underlying claims whether it's whether it disallows the proof of claim or finds that it's abandoned it can then turn to the stern claim in the case and easily resolve that claim as well and then whatever recovery is made in that in under that claim can be properly applied to the bankruptcy estate and can be a properly applied to modify the plan that that ms moses has to play pay now you asked an initially and i just want to return to this what's the problem with sending if they've if they've just abandoned their claim for money out of the estate and all we have left is this counter claim what's the problem with sending that to arbitration and that his head and courts have dealt with this problem the fifth circuit has dealt with this problem let's just i want to just be really clear let's just take the proof of my question out of this case for one minute let's just talk about the stern claim that is technically now a non core claim but it arose in a proceeding in which there was a core claim and there is a meaningful impact that resit resolving that claim efficiently without delay has on this case this case is not over it is no credit it will absolutely debtors that's correct your honor this is not like a chapter seven proceeding which is a snapshot proceeding that begins and ends with planned confirmation the second circuit in the n b a versus hill case reversed a bankruptcy court decision to keep even core claims in bankruptcy where that where the proceeding was a chapter seven sitting and where the plan had been confirmed and the bankruptcy case was closed because nothing that happened in resolving that claim could affect the debtor or the creditors or the est that is not the case here well how would you write the opinion because i think you agree white male doesn't resolve this case as it stands that is as well as i understand white mountain as it's written it does it the outcome here is that in your favor so for you to win some tweaking of now white mountain would be required you agree with that isin your honor i actually don't agree with that you think we could just say see my white mountain and affirm the district yes because what in your face you really do i really do your honor and i think that's what the bankruptcy court said i think that's what ninth circuit have have have looked at white mountain and interpret it this way is that is that there is there is an inherent conflict between the two statutes where the claims in the case involve core bankruptcy issues and where  sending the claims to arbitration would undermine the objectives of the bankruptcy code and i think that i thought we were still in the minute when you said ok let's assume the court claims that  e i thought we were i understand you are now now if this court believes in fact i'm sorry your honor i don't believe that this case presents that minute on the record but if we step back and we assume that it does all that exists i think to achieve i think i think i think the principle that white mountain stands for is where a claim and let me be clear i do not think that the core non chord distinction i don't think why as i said at the very beginning in response to georgie meier does not establish a categorical rule right or claims not core claims stay non chord claims go and i think what what the principle that white mountain stands for is that where a claim it implicates a core bankruptcy issue a bankruptcy court has discretion to decide what to do with it and where sending it to arbitration would conflict with certain key bankruptcy of court code objectives like the lay like the potential for duplicate proceedings for inconsistent results then the bankruptcy court is entitled to exercise his discretion to decide what to do and let me be clear on a firm and here does not change the law in the fourth circuit there are plenty of cases that will will still come up and have come up where bankruptcy courts will send these claims to arbitration there are several that are cited in the brief in re freeze in rates and both of those cases courts were faced with with either or even core claims and said it's better if we send these to arbitration and one of the one of the key points that that that that those this that those courts look to was had there been a preexisting arbitration on some of these issues in fact in white mountain itself there was a preexisting arbitration and yet the court said we still think it's within the bankruptcy judge discretion to decide what to do but but that discretion authorizes and allows bankruptcy judges to stand claims to arbitration where appropriate but we've got to be able to estate as well as maintaining inefficiency of the administration my problem my challenge thinking about this is how do we say all of that on this record i think i think the key is that it's an abuse of discretion i think if the bankruptcy judge had the discretion there was nothing arbitrary or want to me and bottom line what is the limiting aspect of it in this case you'd be saying you would agree you can't refuse arbitration soley because that claim might add to the state of the bankruptcy you agree with that they can be the sole reason i'm sorry i'm sorry judge greg can't be the sole reason for not senator robert traces that the claim outcome might increase the bank runs the state that can't be the sole reason you agree with that or agree with it ok it is always it seems to me that your stern type defense that's the sole result of that what is going to increase right now in this case says that can't be the sole reason litigation the possibility that you're having to litigate bankruptcy claims associated with your state in bankruptcy court and then also at the same time having to litigate this separate claim in a different forum she agreed  case you want somebody else the rest with your case she agreed to that that agreement is still in place that's why we're looking at f a talks about it so it piecemeal is brought by the fact that she agreed to  involve the same broad issue of there's an arc there's an otherwise enforceable arbitration agreement but what the majority of circuits including this one have said is that the the f a a yields this might be one of the only examples frankly in in in the the landscape of federal laws but the f a a yields to the the interest i've just identified in the bankruptcy code because the bankruptcy code has these core objectives of trying to it could well be that the creditors and the deserters debtors are benefit that's that's absolutely correct that's the whole interest of the trustees to have the and to have this woman get a new start as  months the case is closed it's exactly like the m b n a versus hell case at that point the case is over the trustee has no interest in the case the other creditors have no interest in the case all we're talking about for a chapter thirteen proceeding is a specific window during which a bankruptcy court should have the ability to control decisions about what gets paid into the estate and who gets money coming out of the estate and the claims in this case in both both of those questions  your honor judge dave i think you're entirely correct in this case it's not about headlines about the benefits or the purposes in general behind a bankruptcy law it's where and what the court of appeals have re in looking at whether there is an inherent conflict and whether you send a claim to arbitrary secrecy court sees these things seize hundreds of these cases and in this case we have a woman who doesn't have very many assets she has this note where she's been forced to pay two hundred thirty three percent she says the proof a claim is invalid because i shouldn't have to pay two hundred thirty three percent on the proof of claim you guys then try to withdraw the proof a claim as not to be exposed to giving the bankruptcy state more money in the bankruptcy she has a claim under a north carolina law the strong claim that maybe she's entitled to some statutory damage because of usury and all that now what would like to do is to withdraw the claim bankruptcy judge denied that you'd like to now send the starn claim and maybe the proof a claim i guess you have to disprove i'm still there somehow to bank  arbitration in a procedure which is totally undefined and very unclear how it's going to work under this language and this woman who doesn't have any money she's going to have to pursue that and the bankruptcy trustee is going to have to wait and so the bankruptcy judge says look it's more efficient to take care of it here and this is a discretionary decision and the district court looked at it isn't it a pretty high bar to reverse for use of discretion or not or if not abuse of discretion sand  white mountain and and and it it depends on the circumstance it's not categorical we have a core claim here and what the supreme court says however when you're considering whether or not to enforce an arbitration clause determine that that story damages follow automatically now they don't your honor with all respect they don't the sas if you read the statute and what's required it doesn't depend not merely on boy it's my mother she has to prove she has a out of numb number of  proof but again but if she still has to determine whether it's illegal plain which is the very same thing she has to do in opposing the proof that's one that's one potential element but as a fairly the statute says and in fact requires a understand you straddle the line on your way to this court but as i understand your argument today you have abandoned your play answers yes and with respect to straddling declaration that your proof a claim is illegal she doesn't want you to shop around and she's entitled to have her day in court and she wants it in the bankruptcy court and that is like a constitutionally and it helps her height help her a lot now