Opinion ID: 413419
Heading Depth: 2
Heading Rank: 2

Heading: Supreme Court Balancing

Text: 39 On three occasions the Supreme Court has held that bankruptcy jurisdiction should yield to the expertise of an administrative tribunal. In Order of Railway Conductors v. Pitney, 326 U.S. 561, 66 S.Ct. 322, 90 L.Ed. 318 (1946), the Court held that a railroad reorganization court should not have decided a dispute between two rival unions regarding which union had the right to conduct trains of the bankrupt inside and outside railroad yards. The Court in part relied on the Railway Labor Act, 45 U.S.C. Secs. 151-188, which gave the Railway Labor Adjustment Board jurisdiction over such controversies. 40 Smith v. Hoboken Railroad Co., 328 U.S. 123, 66 S.Ct. 947, 90 L.Ed. 1123 (1946), held that the reorganization court should have deferred to the Interstate Commerce Commission for it to decide whether a bankrupt railroad had forfeited its right to leased tracks. Again, the Court relied on statutory enactments. Section 1(18) of the Interstate Commerce Act, 49 U.S.C. Sec. 1(18) provided that no railroad shall abandon its track without first obtaining a certificate of public convenience and necessity from the Commission. Furthermore, section 77 of the Bankruptcy Act, 11 U.S.C. Sec. 205, leaves no doubt that Congress did not mean to grant to the district courts [in bankruptcy] the same scope as to bankrupt roads that they may have in dealing with other bankrupt estates. Smith, supra, 328 U.S. at 133 n. 5, 66 S.Ct. at 953 n. 5 (quoting Palmer v. Massachusetts, 308 U.S. 79, 87, 60 S.Ct. 34, 38, 84 L.Ed. 93 (1939)). 41 Most recently, though not very recently, in Nathanson v. NLRB, 344 U.S. 25, 73 S.Ct. 80, 97 L.Ed. 23 (1952), the Court held that the bankruptcy court must defer to the NLRB for liquidation of unfair labor practice claims. The NLRB had found the employer guilty of unfair labor practices and ordered payment of back wages. While an action to enforce the order was pending in the court of appeals, an involuntary bankruptcy petition was filed against the employer. The court of appeals subsequently enforced the NLRB order and the NLRB filed a claim in bankruptcy. The bankruptcy court denied the claim and the Supreme Court reversed on the following rationale: 42 The bankruptcy court normally supervises the liquidation of claims. But the rule is not inexorable. A sound discretion may indicate that a particular controversy should be remitted to another tribunal for litigation. And where the matter in controversy has been entrusted by Congress to an administrative agency, the bankruptcy court normally should stay its hand pending an administrative decision.... It is the Board, not the referee in bankruptcy nor the court, that has been entrusted by Congress with authority to determine what measures will remedy unfair labor practices. 43 Id. at 30, 73 S.Ct. at 83 (citations omitted). Now we must decide how these three decisions suggest that we mediate the conflict between the ASBCA and bankruptcy court.