Matter of Northland Point Partners, Bankruptcy No. 82-05387-W

• Decision Date: 07 January 1983
• Docket Number: Adv. No. 82-2277-W,Bankruptcy No. 82-05387-W,82-2332-W.
• Citation: 26 BR 860
• Parties: In the Matter of NORTHLAND POINT PARTNERS, Debtors. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. The STOUFFER CORPORATION, Defendant. NORTHLAND POINT PARTNERS, Plaintiff, v. The STOUFFER CORPORATION, Defendant.
• Court: U.S. District Court — Western District of Michigan

26 B.R. 860 (1983)

In the Matter of NORTHLAND POINT PARTNERS, Debtors.

The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. The STOUFFER CORPORATION, Defendant.

NORTHLAND POINT PARTNERS, Plaintiff, v. The STOUFFER CORPORATION, Defendant.

Bankruptcy No. 82-05387-W, Adv. No. 82-2277-W, 82-2332-W.

United States District Court, E.D. Michigan, S.D.

January 7, 1983.

Donald B. Lifton, Southfield, Mich., for Northland Point.

W. A. Steiner, Jr., Nancy S. Martin, Timothy VanDusen, Detroit, Mich., for Stouffer.

ORDER

DeMASCIO, District Judge.

This cause is before the court on appellant Stouffer Corporation's motion challenging the constitutionality of an Interim Rule governing the administration of the bankruptcy system adopted by the United States District Court for the Eastern District of Michigan. After a careful review of the relevant statutory and case law, we remain persuaded that this Interim Rule, adopted in response to the Supreme Court's decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., ___ U.S. ___, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), is constitutional and valid.

We hold that Marathon does not create a jurisdictional lapse. The relevant statutory provisions taken singularly and conjunctively manifest the Congressional intention that at the very least federal district courts would retain jurisdiction of matters arising under Title 11 or arising in or related to cases under Title 11 until April 1, 1984. Congress carefully kept in effect, until 1984, statutory provisions that give the federal district courts "original jurisdiction, exclusive of the courts of the states, of all matters and proceedings in bankruptcy." 28 U.S.C. § 1334. Congress also made clear, through incorporation by reference, that the jurisdictional powers of the federal district courts would not change during the transitional period. §§ 404 and 405, Bankruptcy Reform Act of 1978 (P.L. 95-598). Congress purposely included these provisions to satisfy its stated concern over the constitutionality of the broad jurisdictional grant afforded to bankruptcy judges under the act. It is apparent that Congress, at a minimum, wanted to maintain federal court jurisdiction over matters arising in bankruptcy proceedings.

Alternatively, it appears to us that the only jurisdictional grant that was deemed non-severable in Marathon was that given to the Article I bankruptcy courts. The two concurring justices noted that "This grant of authority is not readily severable from the remaining grant of authority to bankruptcy courts." Marathon, id. at ___, 102 S.Ct. at 2882. In considering the entire structure of the Bankruptcy Reform Act of 1978, it appears to us that the power conferred by 28 U.S.C. § 1471(a) and (b) was arguably not affected by the Marathon decision. We recognize, however, that Congress did not want federal district courts to permanently exercise the jurisdictional power found in such provisions as present § 1334 of Title 28. See, Marathon, id. at ___, n. 40, 102 S.Ct. at 2880, n. 40. The district courts are vested at least until 1984 with jurisdiction over bankruptcy matters. The rule...