Opinion ID: 451963
Heading Depth: 1
Heading Rank: 2

Heading: appellant's jurisdictional challenge

Text: 6 Appellant contends that jurisdiction to determine the issue of dischargeability rests exclusively with the bankruptcy court. Accordingly, appellant contends that the district court erred in assuming jurisdiction over the issue rather than allowing it to remain in the bankruptcy court. We review determinations of subject matter jurisdiction de novo. See Clayton v. Republic Airlines, Inc., 716 F.2d 729, 730 (9th Cir.1983). 7 An examination of the relevant jurisdictional statute demonstrates that Adams' contention is meritless. Enacted as part of the 1978 Bankruptcy Reform Act, 28 U.S.C. Sec. 1471 (1982), amended by 28 U.S.C. Sec. 1334 (Supp.1985), originally provided, in relevant part, as follows: 8 (a) Except as provided in subsection (b) of this section, the district courts shall have original and exclusive jurisdiction of all cases under title 11. 9 (b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11 or arising in or related to cases under title 11. 10 (c) The bankruptcy court for the district in which a case under title 11 is commenced shall exercise all of the jurisdiction conferred by this section on the district courts. 11 In Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), the Supreme Court invalidated the trial court jurisdiction of bankruptcy judges provided by subsection (c). In re Burley, 738 F.2d 981, 984 (9th Cir.1984). Northern Pipeline did not, however, diminish the jurisdiction of the district courts. Thus, at the time the district court conducted the proceedings at issue in this case, subsections (a) and (b) were valid, and the district court had original jurisdiction in all cases under Title 11. See White Motor Corp. v. Citibank, N.A., 704 F.2d 254, 259-60 (6th Cir.1983). 12 Notwithstanding this clear statutory grant of original jurisdiction, Adams contends that a determination of dischargeability must be made in the first instance by the bankruptcy court. However, Adams' contention conflicts with an Emergency Rule which was issued by the Judicial Conference of the United States subsequent to Northern Pipeline and which was adopted, with minor variations, by all the district courts in the Ninth Circuit. See In re Burley, 738 F.2d at 984 n. 2. The Rule, which was adopted on January 10, 1983 and which has since been superseded by the 1984 Bankruptcy Amendments and Federal Judgeship Act, authorized direct reference to a bankruptcy judge of [a]ll cases under Title 11 and all civil proceedings arising under Title 11 or arising in or related to cases under Title 11.... General Order No. 279-B(c)(1) (S.D.Cal.1983) (as amended). The Rule also prescribed the manner in which the district court might withdraw reference of a matter which had been referred, by virtue of the Rule, to a bankruptcy judge. The Rule provided that 13 The reference to a bankruptcy judge may be withdrawn by the district court at any time on its own motion or on timely motion by a party.... If a reference is withdrawn, the district court may retain the entire matter, may refer part of the matter back to the bankruptcy judge, or may refer the entire matter back to the bankruptcy judge with instructions specifying the powers and functions that the bankruptcy judge may exercise. 14 Id. 279-B(c)(2). Thus, pursuant to the Emergency Rule, the district court had explicit authority to revoke referral of any matter to the bankruptcy court on its own motion. 15 Here, it is apparent from the record that although Adams' petition and Moraes' adversary complaint had been filed in bankruptcy court, the district court, upon its own motion, properly withdrew reference of the dischargeability issue along with its mandatory withdrawal of the liability issue. 3 In the absence of any statutory duty to defer to the bankruptcy court on the issue of dischargeability, and in light of the clear direction provided by 28 U.S.C. Sec. 1471 (1982), we conclude that the issue of dischargeability was properly before the district court. 16