Document: 514 U.S. 300115 S.Ct. 1493131 L.Ed.2d 403 CELOTEX CORPORATION, Petitioner,v.Bennie EDWARDS et ux. No. 93-1504. Supreme Court of the United States Argued Dec. 6, 1994. Decided April 19, 1995. Syllabus * The District for Northern Texas entered a judgment in favor respondents and against petitioner Celotex Corp. To stay execution pending appeal, posted supersedeas bond, with an insurance company (Northbrook) serving as surety. After Fifth Circuit affirmed judgment, filed Chapter 11 bankruptcy Bankruptcy Middle Florida. Exercising its equitable powers under U.S.C. § 105(a), issued injunction, which, pertinent part, prohibited creditors from proceeding sureties without Court's permission. Respondents thereafter motion pursuant to Federal Rule Civil Procedure 65.1 seeking permission execute Northbrook on bond. granted motion. later denied Celotex' petition rehearing, rejecting argument that decision allowed collateral attack order. Held: must obey injunction. well-established rule "persons subject injunctive order by court jurisdiction are expected decree until it is modified or reversed, even if they have proper grounds object order," GTE Sylvania, Inc. v. Consumers Union States, Inc., 445 375, 386, 100 1194, 1201, 63 467, applies cases, Oriel Russell, 278 358, 49 173, 73 L.Ed. 419. A has over proceedings "arising under," in," "related to" case. 28 §§ 1334(b) 157(a). language be read grant more than simple involving debtor's property estate. Respondents' immediate bond at least question bankruptcy. While does not directly involve Celotex, found allowing other bonded immediately bonds would direct substantial adverse effect ability undergo successful reorganization. fact provides expedited procedure executing mean such cannot stayed lawfully Board Governors MCorp Financial, 502 32, 112 459, 116 distinguished. issue whether properly injunction need addressed here. Since first instance determine validity law, since orders respected should challenged rather collaterally attacking federal courts. Pp. __. 6 F.3d 312, reversed. REHNQUIST, C.J., delivered opinion Court, which O'CONNOR, SCALIA, KENNEDY, SOUTER, THOMAS, BREYER, JJ., joined. STEVENS, J., dissenting opinion, GINSBURG, Jeffrey W. Warren, Tampa, FL, petitioner. Brent M. Rosenthal, Dallas, TX, respondents. Chief Justice REHNQUIST Court. 1 Appeals held petitioner's surety where occasioned had become final. It so though Florida previously prohibiting We hold were obligated 2 In 1987 Bennie Joann Edwards suit (and others) alleging asbestos-related injuries. 1989 $281,025.80 Celotex. amount $294,987.88, Property Casualty Insurance Company As retain money owed settlement agreement resolving coverage disputes between 3 affirmed, issuing mandate October 12, 1990, thus rendering "final" respondents' (Edwards I) Armstrong World Industries, 911 F.2d 1151 (1990). That same day, voluntary relief Code Florida.1 filing automatically both continuation "proceeding[s] against" commencement "any act obtain possession property" Celotex.2 362(a)(1) (3). 4 On 17, exercised 105(a) (the "Section 105 Injunction") augment protection afforded automatic stay. Section Injunction all "regardless . matter appeal been [Celotex]." App. Pet. Cert. A-28.3 Respondents, whose already Both opposed this motion, asserting enforce enjoined Injunction. brought attention that, their reaffirmed made clear like permission: 5 "Where time petition, appellate process Debtor creditor concluded, precluded any vacate Court." re (Celotex I), 128 B.R. 478, 485 (Bkrtcy.Ct. MD Fla.1991). Despite reaffirmation clarification Injunction, Northbrook.4 7 appealed, affirmed. II) 312 (1993). because was completed, no longer interest provisions 362 therefore did prevent Northbrook. II, supra, 315-317. then acknowledged "[t]he courts extended include stays third parties auspices 1334(b)," F.3d, 318, itself ruled junction Ibid. nevertheless disagreed merits holding "the integrity estate implicated present case debtor future bond." Id., 320. reasoned "manifestly unfair" "unjust result" "to cover precisely type eventuality occurred case, insolvency debtor." 319. concluding improper, expressly reasoning result Willis Corp., 978 146 (CA4 1992), cert. denied, 507 ----, 113 1846, 123 470 (1993), Fourth Circuit, examining power bonds. 8 arguing Circuit's sitting Eleventh 9 Circuit. stating part "we necessarily wrong; we only concluded district court, do jurisdiction, right." 321. Because conflict Willis, certiorari. 511 114 2099, 661. now reverse. II 10 acknowledge them attempting Brief Opposition n. (recognizing "was intended to, did, enjoin collection attempts those [respondents] case"). 467 (1980), well established order." went say: "There doubt Delaware temporary restraining preliminary permanent injunctions. Nor decrees frivolous pretense validity, although course there disagreement erred Under these circumstances, CPSC required injunctions out respect judicial process." 386-387, S.Ct., 1201-1202 (internal quotation marks, citations, footnote omitted). This applied context 60 years ago 419 (1929), turnover old regime could attacked contempt proceeding. but contend application They argue lacked much goes correctness so. 12 courts, grounded limited statute. Title shall original exclusive civil arising title 11, related cases 11." 1334(b). may, turn, refer judges district." Here, based 13 Petitioner argues indeed jurisdiction. Congress delineate scope to"5 choice words suggests some breadth. jurisdictional distinct departure conferred previous acts, either consent basis See S.Rep. 95-989, 2nd Sess., pp. 153, 154 (1978) U.S.Code Cong. & Admin.News 1978, 5787, 5939, 5940. agree views expressed Third Pacor, Higgins, 743 984 (1984), "Congress comprehensive might deal efficiently expeditiously matters connected estate," id., 994; see also H.Rep. 95-595, 43-48 (1977), give 157(a)) observation court's limitless. cf. 40, 464, 358 (1991) (stating vested "limited authority" courts).6 14 believe entitled bankruptcy.7 Admittedly, except satisfy secured But induce serve agreed allow proceeds respondents—and 227 creditors—to stated: 15 "[I]f lifted enable reach sureties, turn seek lift Debtor's collateral, corresponding actions preserve rights agreements. Such scenario completely destroy chance prolonged currently being adjudicated insurers may linchpin formulation feasible plan. Absent confirmation plan, liquidated cease exist after carrion feast victors race courthouse." II), 140 912, 915 (MD Fla.1992). light findings relevant note dealing here reorganization liquidation 7. extend broadly former latter. Cf. Continental Illinois Nat. Bank Trust Co. Chicago, R.I. P.R. Co., 294 648, 676, 55 595, 606, 79 1110 (1935). And think our holding—that bankruptcy—is accord representative recent decisions Courts Appeals. American Hardwoods, Deutsche Credit 885 621, 623 (CA9 1989) (finding enforcement state guarantors affect administration plan); MacArthur Johns-Manville 837 89, 93 (CA2) (noting suits "might impede process"), 488 868, 109 176, 102 145 (1988); A.H. Robins 828 1023, 1024-1026 1987) (affirming barring products liability plaintiffs bringing interfere reorganization), sub nom., 969, 108 1246, 99 444 (1988).8 16 relying (1991), 1334(b)'s statutory reconciled harmonized 65.1, MCorp, authorize regulatory proceeding, relied specific preclusive language" 1818(i)(1) stated "no otherwise issuance [Board] notice 39, 42, 463, 465. There analogous prohibition enjoining maintenance 65.1. provides: 17 "Whenever rules require permit giving security party, given form stipulation undertaking one each submits irrevocably appoints clerk surety's agent upon whom papers affecting served. enforced necessity independent action. ." Fed.Rule Civ.Proc. 18 outlines streamlined assures bring separate action instead allows collect merely Just simplified collecting however, procedure, complicated full-fledged law suit, 19 Much discussion 157(a) likewise applicable determining "only validity." U.S., 1202 marks citation upheld F.2d, 149-150, find "that wrong." not, address acted Injunction.9 20 " '[i]t reversed error orderly review, higher respected.' Walker Birmingham, 388 307, 314, 87 1824, 1828, 1210 (1967) (quoting Howat Kansas, 258 181, 189-190, 42 277, 281, 66 550 (1922)). If believed similarly situated done. B.R., 912. dissatisfied ultimate decision, can judge serving," 158(a), 158(d). chose pursue action, Texas. permitted seriously undercutting law. 21 Appeals, accordingly, 22 ordered. 23 GINSBURG joins, dissenting. 24 Today majority holds Article III when who prevailed face non-Article judge. Because, my view, attaches insufficient weight judge, I respectfully dissent. 25 problems perceive best drawn starting examination opinions notes, Edwards) won tort damages suffered exposure asbestos. arranged post full judgment. before Code, Edwards' undisputed retained extinguished. 26 Celotex's triggered Code. 362(a). acting 105(a),1 supplemented emergency staying, inter alia, "involving Debtors [i.e., Celotex]." 28. evidences obligation For reason, neither 362(a) nor judge's restrained Northbrook's obligations correctly held, prosecution Debtors," 315 (CA5 1993). 27 May 3, 1991, commenced Rules Procedure2 Several weeks later—on June 13, 1991 —the new three-paragraph Paragraph yet concluded. creditors, Edwards, appeals petition. "without supporting explains Paragraphs rest theory retains complete, attempt covered 362(a)'s provisions. recognized rationale litigation complete. gave him efforts creditors. contended utilized preclude 'impede process,' 483, quoting (CA2), (1988), 'which will impact formulate plan,' Piccinin, 788 994 (CA4), 479 876, 107 251, 177 (1986). infra. Apparently viewing his own authority virtually limitless, described general stop ongoing peripheral issues opportunity review potential 484. He "mega" "potential conflicts determinations" arise, initial stage absolute." 29 "must absolute" stage. Instead, cabined important constitutional constraints operate every phase 30 concludes 'frivolous validity.' Ante, Even applying majority's framework, affirm demonstrate, compel conclusion "frivolous explain, why deferential approach seems particularly inappropriate particular fifth year preventing lodged court. 31 prevents nondebtor. reaching contrary conclusion, relies primarily first. observes 1334(b), broad extending "all 11."3 notes within jurisdiction,4 reorganization." __.5 157(a), "refe[r]" 11."6 Thus, referred 32 pays remaining 157, and, importantly, rise creation. current structure reflects Pipeline Constr. Marathon Pipe Line 458 50, 2858, 598 (1982), Reform Act 92 Stat. 2549. 1978 significantly restructured created "bankruptcy courts" "jurisdiction 'civil [the title] 11.' Pipeline, 54, 2862, 1471(b) (1976 ed., Supp. IV). plurality observed, "[t]his empowers entertain wide variety cases," "claims law." 2863. bestowed accompany expanded infra, ___; 55, make newly empowered judges. particular, life tenure salary Constitution requires Const., Art. III, 1. 33 unconstitutional, insofar "entertain decide" purely claim. 91, 2882 (REHNQUIST, concurring judgment); 86, 2879 (plurality opinion). distinguished revamped prior "adjuncts" violate III. noted contrast narrow, specialized adjuncts, subject-matter encompasses traditional bankruptcy, 'all 85, 2877. addition, adjuncts "engaged statutorily channeled factfinding functions," while "exercis[e] jurisdiction' courts."7 34 response passed Amendments Judgeship 1984 (1984 amendments), 98 333. 157 amendments. establishes two categories proceedings: "core proceedings" "non-core proceedings." core [§ ]," 157(b)(1) permits "hear determine" "enter appropriate judgments." noncore "otherwise 11", 157(c)(1) "hear" "submit proposed conclusions court." Collier ¶ 3.01[1][c][iv], 3-28 ("Civil 'related 11' "excluded treated 'core proceedings' 157(b)(1), special procedures contained section (c)(2)"). proceedings," 3-28, enter final judgment."8 35 distinction hand critical, dispositive. hear determine) binding exercising conceded case.9 unambiguous text participation advisory adjudicative. having decide inconsistent role. An extraordinary remedy private just onerous determination. concerns animate deny tribunals controversies apply equal force entry interfering exercise admitted tribunal.10 36 sum, view sufficiency sustain quite simply: lacks "determine" question, concededly question.11 Any trivialize imperatives shaped Code's provisions.12 37 Petitioners rely Indeed, appears almost entirely whenever ante, Two footnotes suggesting alternative bases __, 4, 8. Those brief response. 38 refers different claims advanced claim able because, virtue collateralization bonds, beneficiaries asset transfers voidable preferences fraudulent transfers"; punitive portions judgments voided subordinated." little characterized ones under" meaning 1334(b);13 follow characterization support claims. complaint months issued. raised retroactively provide 39 Moreover, set aside patently meritless. strains credulity, suggest half filed, preference transfer benefit adversaries bitterly contested litigation. Conceivably, provision voidable, possibility impair unwitting fraud. possibility, most, respective pledged collateral. Similarly, included compensatory arguable reducing subordinating portion eventual grounds," nothing obvious manufacture thereby justify earlier. Siler Louisville Nashville R. 213 175, 191, 451, 455, 53 753 (1909) ("Of course, colorable fraudulently up mere purpose endeavoring jurisdiction"). 40 8, (described "stay proceeding") "aris[e] "arise in" Perhaps accurate literal sense: whatever "arises originated. conceivable party request simply authorizes 105.01[1], 105-2 (Section "is source grants flexibility protect another forum bootstrap enabling exist. IV 41 still 1898, codified laws. 1898 Act, most conducted "referees" resolved actual constructive certain parties. 2(a)(15) to: 43 "[M]ake orders, process, addition specifically provided necessary Act." July 1, 546. 44 1938, clarified limitations referees adding end 2(a)(15), "Provided, restrain only." 52 843 (emphasis original). 45 through revised role referees.14 Though stopping short making judges, increased status, duties, referees. example, jury trials, declaratory judgments, [and] writs habeas corpus circumstances." again powers. place added 105, part: "The order, carry title." 2863 ("Congress aid Once again, along marked expansion delegation authority, indicated intent limit courts: Although "[a] equity, admiralty," "may 1481 (1982 ed.).15 50 adoption amendments 46 amendments, repealed express limitation authority), leaving authority.16 Given contraction judges,17 regarding comply Pipeline,18 perverse "frivolous"—to repeal authorization expanding 47 My consequence reinforced 1481. When placed restrictions 1481, right clause granting admiralty." saw 1481—and —as removal viewed eliminating sole congressionally-granted Hipp, 895 1503, 1515-1516 1990) (concluding similar punish criminal Act). 48 anything 1986 alter analysis.19 primary sua sponte.20 therefore, reflect clear, falls, exception recognize, legitimately "frivolousness" upholding very (1992), number colleagues. sufficiently plain justified bond.21 V today rests largely concedes, exceeded supported "a reasons stated, conditions satisfied unquestioned indirectly important, add few explaining especially troubling critical eye. 51 First, justification offered pause. originally articulated, lest impossible follow. Apart "emergency" plainly improper lasted four years, reveals reliance misguided notion good sufficient existence power. His reference "absolute" override debtor" invite far exacting scrutiny deems appropriate. Second, makes suspect. putting line. noted, "promised court" available appeal. questions relating enforceability generally answered posted. possible, accepts appealed. benefitted postponement successors-in-interest normally estopped detriment risk promptly. served forestalling levies assets—levies precipitated earlier bankruptcy—it inequitable postpone payment actually occurred. 319 ("It manifestly unfair delay promise refuse plaintiff sought laws bankruptcy"); Southmark, 138 820, 827-828 ND Tex.1992) omitted) ("The principal insolvency. contingency guard shall, happens, discharge them, us bad worse logic"). inequity condones demonstrate legal analysis incorrect. does, persuade me presented ordinary court.22 should, believe, carefully consider competing guilty trespassing other's domain. 54 Accordingly, syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Lumber 200 321, 337, 282, 287, 499. purposes assume became date, 141,000 bodily injury lawsuits totaling nearly $70 million following days written hearing, "consider restraints imposed" A-28. motions requesting (1) proceed (2) once favor. second. 484 several who, respondents, explained 914 refused time, finding suffer irreparable harm. agreements, possibly destroying 914-915. ordered that: involved, including Northbrook, establish escrow accounts insure bonds; create interest-bearing reserve account increase confirmation; (3) plan claimants' paid unless determined claimant. 917. directed file avoid subordinate creditor's entry" adversary Second Amended Complaint Allstate Ins. Adversary 92-584 Fla.). asserts transfers. ibid. contends subordinated grounds. Proceedings causes owned 541, p. (15th ed. 1994). involves breach contract (1982). instant second strike balance, devised test jurisdiction: usual articulation outcome conceivably administered property. rights, liabilities, options, freedom (either positively negatively) way impacts handling bankrupt estate." original; citations Fourth, Fifth, Sixth, Eighth, Ninth, Tenth Circuits adopted Pacor variation. G.S.F. 938 1467, 1475 (CA1 1991); 994, 1002, (1986); Wood, 825 90, 1987); Robinson Michigan Consol. Gas 918 579, 583-584 (CA6 1990); Dogpatch U.S.A., 810 782, 786 (CA8 Fietz, 852 457 1988); Gardner, 913 1515, 1518 (CA10 Lemco Gypsum, 910 784, 788, (CA11 1990). Seventh Circuits, hand, seem slightly test. Turner, 724 338, 341 (CA2 1983); Xonics, 813 127, 131 (CA7 Home Cooper Cooper, Ltd., 889 746, 749 1989). used, debtor. dissent agrees post, __ 5, noting [under ] 'any judgment' possess Post, interlocutory challenge. lack "final judgment." event, waived "non-core" 157(c)(1). base arguments solely 1334, concede then, 'related' 1334(b)." Respondent 22. conclude, agrees, related. 5. not) "core" recognize theoretical distinguishing One argue, technically, Monroe Well Serv., 67 ED Pa.1986). "patently meritless" none premise, recovered party. Air Conditioning, Stuart, 845 293, 296-299 (CA11), 993, 557, 584 Compton 831 586, 595 (1987), grounds, 835 1988). offer fits facts here, supports frivolous. title. No providing raising construed from, sponte, taking determination implement rules, abuse states: action." 1334 reads follows: "(a) Except subsection (b) section, 11. "(b) Notwithstanding confers "(c)(1) Nothing justice, comity State abstaining hearing "(2) Upon timely cause absent abstain commenced, adjudicated, reviewable 158(d), 1291, 1292 1254 applicability "(d) property, wherever located, (1988 supp. V). indicates, "original exclusive." take falls L. King, 3-29 1994) (hereinafter Collier) (" 'Related' parties, illustrated guarantors"). contrary, recover am willing enforced, fail liquidated. specter acceptable performance party's fixed creditor. majority, resolve (CA3 1984), articulates Each district. "(b)(1) (a) 158 submit considering reviewing de novo objected. paragraph subsection, possessed courts." 2879. ___. recommendation objection. ground purported interpreted narrowly. enjoined, Entities" "commencing continuing judicial, administrative Debtors." word "entities" includes tracks provisions, provide, entities" administrative, 362(a)(1). uniformly "entities," used 362, See, e.g., Maritime Electric Jersey Bank, 959 1206 1991) ("§ 362's mandatory 'applicable entities', courts"); Pope Manville Forest Products 778 238, 239 1985) ("just dismissal, toward disposition hence 'continuation' proceeding"); Ellis Consolidated Diesel 894 371, 372-373 (district summary violated stay); (collecting cases). 101.15, 101-62 101-63 'Entity' broadest definitions relate bodies units"). More enjoins 'the creditor,' Fla.1991), clearly practical directly. objection depend indirectly. ready doing 1334(c)(2) abstention tried distinguish proceedings, fails implications provision. show deference adjudicating diversity purports "timely adjudicated." nature irrelevant. repeatedly text, scheme deprives ones—that it. consistent approach, indirect 997 (1986) ("the Robins' injunction"); policies estate, 91-92 (1988). affects engaged detailed omitted significance status. "[W]hen 'arising 3.01[1][c][iii], 3-26. perusal seeks Count (11 547(b) (seeking preferential transfers)); 548(a)(2)(A) constructively 544 transactions constitute law)); VII disallow damage awards)); 510(c)(1) subordination awards unsecured creditors)). 3-27 ("[C]ourts interpreting conveyances"). acknowledgement claims, suggestion merit. 1973, redesignated "judges." 2, 2862 ibid., continue pre-1978 "referees." "punish committed presence warranting punishment imprisonment." ed.). All Writs Act. 105-3. about 7, supra. 130 Cong.Rec. 20089 (1984) ("[Northern Pipeline] Constitution. Bill cure problem"). Judges, Trustees, Family Farmer 1986, Pub 99-554, 3088. With sentence version 105(a). Stat., 3097. legislative history changes Senator Hatch's amendment "allows own, help expedite manner." 132 28610 Neither cited 9, reason conclude otherwise. trustee (e.g., funds transferred Celotex) Northbrook) Northbrook-like guarantor (a bank case) pay issue. 590 (1987) ("[T]he payments bank] party] letter credit preference"), 295-296 nom. First Interstate Alliance Martin County, nonfrivolous Edwards. wonders litigant nondebtor 23.4.

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