JUSTICE BRENNAN delivered the opinion of the Court.
The question presented is whether a person who has not submitted a claim against a bankruptcy estate has a right to a jury trial when sued by the trustee in bankruptcy to recover an allegedly fraudulent monetary transfer. We hold that the Seventh Amendment entitles such a person to a trial by jury, notwithstanding Congress' designation of fraudulent conveyance actions as "core proceedings" in 28 U. S. C. § 157(b)(2)(H) (1982 ed., Supp. V).
I
The Chase & Sanborn Corporation filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in 1983. A plan of reorganization approved by the United States Bankruptcy Court for the Southern District of Florida vested in respondent Nordberg, the trustee in bankruptcy, causes of action for fraudulent conveyances. App. to Pet. for Cert. 37. In 1985, respondent filed suit against petitioners Granfinanciera, S. A., and Medex, Ltda., in the United States District Court for the Southern District of Florida. The complaint alleged that petitioners had received $1.7 million from Chase & Sanborn's corporate predecessor within one year of the date its bankruptcy petition was filed, without receiving consideration or reasonably equivalent value in return. Id., at 39-40. Respondent sought to avoid what he alleged were constructively and actually fraudulent transfers and to recover damages, costs, expenses, and interest under 11 U. S. C. §§ 548(a)(1) and (a)(2), 550(a)(1) (1982 ed. and Supp. V). App. to Pet. for Cert. 41.
The District Court referred the proceedings to the Bankruptcy Court. Over five months later, and shortly before the Colombian Government nationalized Granfinanciera, respondent
The Court of Appeals for the Eleventh Circuit also affirmed. 835 F.2d 1341 (1988). The court found that petitioners lacked a statutory right to a jury trial, because the constructive fraud provision under which suit was brought — 11 U. S. C. § 548(a)(2) (1982 ed., Supp. V) — contains no mention of a right to a jury trial, and 28 U. S. C. § 1411 (1982 ed., Supp. V) "affords jury trials only in personal injury or wrongful death suits." 835 F. 2d, at 1348. The Court of Appeals further ruled that the Seventh Amendment supplied no right to a jury trial, because actions to recover fraudulent conveyances are equitable in nature, even when a plaintiff seeks only monetary relief, id., at 1348-1349, and because "bankruptcy itself is equitable in nature and thus bankruptcy proceedings are inherently equitable." Id., at 1349. The court read our opinion in Katchen v. Landy, 382 U.S. 323 (1966), to say that "Congress may convert a creditor's legal right into an equitable claim and displace any seventh amendment right to trial by jury," and held that Congress had done so by designating fraudulent conveyance actions "core proceedings" triable by bankruptcy judges sitting without juries. 835 F. 2d, at 1349.
II
Before considering petitioners' claim to a jury trial, we must confront a preliminary argument. Respondent contends that the judgment below should be affirmed with respect to Granfinanciera — though not Medex — because Granfinanciera was a commercial instrumentality of the Colombian Government when it made its request for a jury trial. Respondent argues that the Seventh Amendment preserves only those jury trial rights recognized in England at common law in the late 18th century, and that foreign sovereigns and their instrumentalities were immune from suit at common law. Suits against foreign sovereigns are only possible, respondent asserts, in accordance with the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U. S. C. §§ 1330, 1602-1611, and respondent reads § 1330(a)
We decline to address this argument because respondent failed to raise it below and because the question it poses has not been adequately briefed and argued. Without cross-petitioning for certiorari, a prevailing party may, of course, "defend its judgment on any ground properly raised below whether or not that ground was relied upon, rejected, or even considered by the District Court or the Court of Appeals," Washington v. Yakima Indian Nation, 439 U.S. 463,
This is not such an exceptional case. Not only do we lack guidance from the District Court or the Court of Appeals on this issue, but difficult questions remain whether a jury trial is available to a foreign state upon request under 28 U. S. C. § 1330 and, if not, under what circumstances a business enterprise that has since become an arm of a foreign state may be entitled to a jury trial. Compare Gould, Inc. v. Pechiney
III
Petitioners rest their claim to a jury trial on the Seventh Amendment alone.
The form of our analysis is familiar. "First, we compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. Second, we examine the remedy sought and determine whether it is legal or equitable in nature." Tull v. United States, 481 U.S. 412, 417-418 (1987) (citations omitted). The second stage of this analysis is more important than the first. Id., at 421. If, on balance, these two factors indicate that a party is entitled to a jury trial under the Seventh Amendment, we must decide whether Congress may assign and has assigned resolution of the relevant claim to a non-Article III adjudicative body that does not use a jury as factfinder.
There is no dispute that actions to recover preferential or fraudulent transfers were often brought at law in late 18th-century England. As we noted in Schoenthal v. Irving Trust Co., 287 U.S. 92, 94 (1932) (footnote omitted): "In England, long prior to the enactment of our first Judiciary Act, common law actions of trover and money had and received were resorted to for the recovery of preferential payments by bankrupts." See, e. g., Smith v. Payne, 6 T. R. 152, 101 Eng. Rep. 484 (K. B. 1795) (trover); Barnes v. Freeland, 6 T. R. 80, 101 Eng. Rep. 447 (K. B. 1794) (trover); Smith v. Hodson, 4 T. R. 211, 100 Eng. Rep. 979 (K. B. 1791) (assumpsit; goods sold and delivered); Vernon v. Hanson, 2 T. R. 287, 100 Eng. Rep. 156 (K. B. 1788) (assumpsit; money had and received); Thompson v. Freeman, 1 T. R. 155, 99 Eng. Rep. 1026 (K. B. 1786) (trover); Rust v. Cooper, 2 Cowp. 629, 98 Eng. Rep. 1277 (K. B. 1777) (trover); Harman v. Fishar, 1 Cowp. 117, 98 Eng. Rep. 998 (K. B. 1774) (trover); Martin v. Pewtress, 4 Burr. 2477, 98 Eng. Rep. 299 (K. B. 1769) (trover); Alderson v. Temple, 4 Burr. 2235, 98 Eng. Rep. 165 (K. B. 1768) (trover). These actions, like all suits at law, were conducted before juries.
Respondent does not challenge this proposition or even contend that actions to recover fraudulent conveyances or preferential transfers were more than occasionally tried in courts of equity. He asserts only that courts of equity had concurrent jurisdiction with courts of law over fraudulent conveyance actions. Brief for Respondent 37-38. While respondent's assertion that courts of equity sometimes provided relief in fraudulent conveyance actions is true, however, it hardly suffices to undermine petitioners' submission that the present action for monetary relief would not have sounded in equity 200 years ago in England. In Parsons v. Bedford, supra, at 447 (emphasis added), we contrasted suits at law with "those where equitable rights alone were recognized" in holding that the Seventh Amendment right to a jury
The two cases respondent discusses confirm this account of English practice. Ex parte Scudamore, 3 Ves. jun. 85, 30 Eng. Rep. 907 (Ch. 1796), involved the debtor's assignment of his share of a law partnership's receivables to repay a debt shortly before the debtor was declared bankrupt. Other creditors petitioned chancery for an order directing the debtor's law partner to hand over for general distribution among creditors the debtor's current and future shares of the partnership's receivables, which he held in trust for the assignee. The Chancellor refused to do so, finding the proposal inequitable. Instead, he directed the creditors to bring an action at law against the assignee if they thought themselves entitled
Hobbs v. Hull, 1 Cox 445, 29 Eng. Rep. 1242 (Ch. 1788), also fails to advance respondent's case. The assignees in bankruptcy there sued to set aside an alleged fraudulent conveyance of real estate in trust by a husband to his wife, in return for her relinquishment of a cause of action in divorce upon discovering his adultery. The court dismissed the suit, finding that the transfer was not fraudulent, and allowed the assignees to bring an ejectment or other legal action in the law courts. The salient point is that the bankruptcy assignees sought the traditional equitable remedy of setting aside a conveyance of land in trust, rather than the recovery of money or goods, and that the court refused to decide their legal claim to ejectment once it had ruled that no equitable remedy would lie. The court's sweeping statement that "Courts of Equity have most certainly been in the habit of exercising a concurrent jurisdiction with the Courts of Law on the statutes of Elizabeth respecting fraudulent conveyances," id., at 445-446, 30 Eng. Rep., at 1242, is not supported by reference to any cases that sought the recovery of a fixed sum of money without the need for an accounting or
B
The nature of the relief respondent seeks strongly supports our preliminary finding that the right he invokes should be denominated legal rather than equitable. Our decisions establish beyond peradventure that "[i]n cases of fraud or mistake, as under any other head of chancery jurisdiction, a court of the United States will not sustain a bill in equity to obtain only a decree for the payment of money by way of
Indeed, in our view Schoenthal v. Irving Trust Co., 287 U.S. 92 (1932), removes all doubt that respondent's cause of action should be characterized as legal rather than as equitable. In Schoenthal, the trustee in bankruptcy sued in equity to recover alleged preferential payments, claiming that it had no adequate remedy at law. As in this case, the recipients of the payments apparently did not file claims against the bankruptcy estate. The Court held that the suit had to proceed at law instead, because the long-settled rule that suits in equity will not be sustained where a complete remedy exists at law, then codified at 28 U. S. C. § 384, "serves to guard the right of trial by jury preserved by the Seventh Amendment and to that end it should be liberally construed." 287 U. S., at 94. The Court found that the trustee's suit — indistinguishable from respondent's suit in all relevant respects — could not go forward in equity because an adequate remedy
IV
Prior to passage of the Bankruptcy Reform Act of 1978, Pub. L. 95-598, 92 Stat. 2549 (1978 Act), "[s]uits to recover preferences constitute[d] no part of the proceedings in bankruptcy."
In Atlas Roofing, we noted that "when Congress creates new statutory `public rights,' it may assign their adjudication to an administrative agency with which a jury trial would be incompatible, without violating the Seventh Amendment's injunction that jury trial is to be `preserved' in `suits at common law.' " 430 U. S., at 455 (footnote omitted). We emphasized, however, that Congress' power to block application of the Seventh Amendment to a cause of action has limits. Congress may only deny trials by jury in actions at law, we said, in cases where "public rights" are litigated: "Our prior cases support administrative factfinding in only those situations involving `public rights,' e. g., where the Government is involved in its sovereign capacity under an otherwise valid statute creating enforceable public rights. Wholly private tort, contract, and property cases, as well as a vast range of other cases, are not at all implicated." Id., at 458.
We adhere to that general teaching. As we said in Atlas Roofing: " `On the common law side of the federal courts, the aid of juries is not only deemed appropriate but is required by the Constitution itself.' " Id., at 450, n. 7, quoting Crowell v. Benson, 285 U.S. 22, 51 (1932). Congress may devise novel causes of action involving public rights free from the strictures of the Seventh Amendment if it assigns their adjudication to tribunals without statutory authority to employ juries as factfinders.
In certain situations, of course, Congress may fashion causes of action that are closely analogous to common-law claims and place them beyond the ambit of the Seventh Amendment by assigning their resolution to a forum in which jury trials are unavailable. See, e. g., Atlas Roofing, supra, at 450-461 (workplace safety regulations); Block v. Hirsh, 256 U.S. 135, 158 (1921) (temporary emergency regulation of rental real estate). See also Pernell v. Southall Realty, 416 U. S., at 382-383 (discussing cases); Murray's Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 284 (1856) (Congress "may or may not bring within the cognizance of the courts of the United States, as it may deem proper," matters involving public rights). Congress' power to do so is limited, however, just as its power to place adjudicative authority in non-Article III tribunals is circumscribed. See Thomas v.
In Atlas Roofing, supra, at 458, we noted that Congress may effectively supplant a common-law cause of action carrying with it a right to a jury trial with a statutory cause of action shorn of a jury trial right if that statutory cause of action inheres in, or lies against, the Federal Government in its sovereign capacity. Our case law makes plain, however, that the class of "public rights" whose adjudication Congress may assign to administrative agencies or courts of equity sitting without juries is more expansive than Atlas Roofing's discussion suggests. Indeed, our decisions point to the conclusion that, if a statutory cause of action is legal in nature, the question whether the Seventh Amendment permits Congress to assign its adjudication to a tribunal that does not employ juries as factfinders requires the same answer as the question whether Article III allows Congress to assign adjudication of that cause of action to a non-Article III tribunal. For if a statutory cause of action, such as respondent's right to recover a fraudulent conveyance under 11 U. S. C. § 548(a)(2), is not a "public right" for Article III purposes, then Congress may not assign its adjudication to a specialized non-Article III court lacking "the essential attributes of the judicial power." Crowell v. Benson, supra, at 51. And if the action must be tried under the auspices of an Article III court, then the Seventh Amendment affords the parties a right to a jury trial whenever the cause of action is legal in nature. Conversely, if Congress may assign the adjudication of a statutory cause of action to a non-Article III tribunal, then the
In our most recent discussion of the "public rights" doctrine as it bears on Congress' power to commit adjudication of a statutory cause of action to a non-Article III tribunal, we rejected the view that "a matter of public rights must at a minimum arise `between the government and others.' " Northern Pipeline Construction Co., supra, at 69 (opinion of BRENNAN, J.), quoting Ex parte Bakelite Corp., 279 U.S. 438, 451 (1929). We held, instead, that the Federal Government need not be a party for a case to revolve around "public rights." Thomas v. Union Carbide Agricultural Products Co., 473 U. S., at 586; id., at 596-599 (BRENNAN, J., concurring in judgment). The crucial question, in cases not involving the Federal Government, is whether "Congress, acting for a valid legislative purpose pursuant to its constitutional powers under Article I, [has] create[d] a seemingly `private' right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary." Id., at 593-594. See id., at 600 (BRENNAN, J., concurring in judgment) (challenged provision involves public rights because "the dispute arises in the context of a federal regulatory scheme that virtually occupies the field"). If a statutory right is not closely intertwined with a federal regulatory program Congress has power to enact, and if that right neither belongs to nor exists against the Federal Government,
B
Although the issue admits of some debate, a bankruptcy trustee's right to recover a fraudulent conveyance under 11 U. S. C. § 548(a)(2) seems to us more accurately characterized as a private rather than a public right as we have used those terms in our Article III decisions. In Northern Pipeline Construction Co., 458 U. S., at 71, the plurality noted
Unlike JUSTICE WHITE, see post, at 72-75, 78, we do not view the Court's conclusion in Katchen as resting on an accident of statutory history. We read Schoenthal and Katchen as holding that, under the Seventh Amendment, a creditor's right to a jury trial on a bankruptcy trustee's preference claim depends upon whether the creditor has submitted a claim against the estate, not upon Congress' precise definition of the "bankruptcy estate" or upon whether Congress chanced to deny jury trials to creditors who have not filed claims and who are sued by a trustee to recover an alleged preference. Because petitioners here, like the petitioner in Schoenthal, have not filed claims against the estate, respondent's fraudulent conveyance action does not arise "as part of the process of allowance and disallowance of claims." Nor is that action integral to the restructuring of debtor-creditor relations. Congress therefore cannot divest petitioners of
Nor can Congress' assignment be justified on the ground that jury trials of fraudulent conveyance actions would "go far to dismantle the statutory scheme," Atlas Roofing, 430 U. S., at 454, n. 11, or that bankruptcy proceedings have been placed in "an administrative forum with which the jury would be incompatible." Id., at 450. To be sure, we owe some deference to Congress' judgment after it has given careful consideration to the constitutionality of a legislative provision. See Northern Pipeline Construction Co., 458 U. S., at 61 (opinion of BRENNAN, J.). But respondent has adduced no evidence that Congress considered the constitutional implications of its designation of all fraudulent conveyance actions as core proceedings. Nor can it seriously be argued that permitting jury trials in fraudulent conveyance actions brought by a trustee against a person who has not entered a claim against the estate would "go far to dismantle the statutory scheme," as we used that phrase in Atlas Roofing, when our opinion in that case, following Schoenthal, plainly assumed that such claims carried with them a right to a jury trial.
It may be that providing jury trials in some fraudulent conveyance actions — if not in this particular case, because respondent's suit was commenced after the Bankruptcy Court approved the debtor's plan of reorganization — would impede swift resolution of bankruptcy proceedings and increase the expense of Chapter 11 reorganizations.
V
We do not decide today whether the current jury trial provision — 28 U. S. C. § 1411 (1982 ed., Supp. V) — permits bankruptcy courts to conduct jury trials in fraudulent conveyance actions like the one respondent initiated. Nor do we express any view as to whether the Seventh Amendment or Article III allows jury trials in such actions to be held before non-Article III bankruptcy judges subject to the oversight provided by the district courts pursuant to the 1984 Amendments. We leave those issues for future decisions.
It is so ordered.
I join all but Part IV of the Court's opinion. I make that exception because I do not agree with the premise of its discussion: that "the Federal Government need not be a party for a case to revolve around `public rights.' " Ante, at 54, quoting Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568, 586 (1985). In my view a matter of "public rights," whose adjudication Congress may assign to tribunals lacking the essential characteristics of Article III courts, "must at a minimum arise `between the government and others.' " Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 69 (1982) (plurality opinion), quoting Ex parte Bakelite Corp., 279 U.S. 438, 451 (1929). Until quite recently this has also been the consistent view of the Court. See 458 U. S., at 69, n. 23 ("[T]he presence of the United States as a proper party . . . is a necessary but not sufficient means of distinguishing `private rights' from `public rights' "); Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442, 450 (1977) (public rights cases are "cases in which the Government sues in its sovereign capacity to enforce public rights created by statutes"); id., at 457 (noting "distinction between cases of private right and those which arise between the Government and persons subject to its authority"); id., at 458 (situations involving "public rights" are those "where the Government is involved in its sovereign capacity under an otherwise valid statute creating enforceable public rights"); Crowell v. Benson, 285 U.S. 22, 50-51 (1932) (public rights are "those which arise between the Government and persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative departments");
The notion that the power to adjudicate a legal controversy between two private parties may be assigned to a non-Article III, yet federal, tribunal is entirely inconsistent with the origins of the public rights doctrine. The language of Article III itself, of course, admits of no exceptions; it directs unambiguously that the "judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." In Murray's Lessee, supra, however, we recognized a category of "public rights" whose adjudication, though a judicial act, Congress may assign to tribunals lacking the essential characteristics of Article III courts. That case involved the Act of May 15, 1820, 3 Stat. 592, which established a summary procedure for obtaining from collectors of federal revenue funds that they owed to the Treasury. Under that procedure, after a federal auditor made the determination that the funds were due, a "distress warrant" would be issued by the Solicitor of the Treasury, authorizing a United States marshal to seize and sell the personal property of the collector, and to convey his real property, in satisfaction of the debt. The United States' lien upon the real property would be effective upon the marshal's filing of the distress warrant in the district court of the district where the property was located. The debtor could, however, bring a challenge to the distress warrant in any United States district court, in which judicial challenge "every fact upon which the legality of the extra-judicial remedy depends may be drawn in[to] question,"
It was in the course of answering the plaintiff's rejoinder to this holding that we uttered the words giving birth to the public rights doctrine. The plaintiff argued that if we were correct that the matter was "not in its nature a judicial controversy, congress could not make it such, nor give jurisdiction over it to the district courts" in the bills permitted to be filed by collectors challenging distress warrants — so that "the fact that congress has enabled the district court to pass upon it, is conclusive evidence that it is a judicial controversy." Id., at 282. That argument, we said, "leaves out of view the fact that the United States is a party." Id., at 283. Unlike a private party who acts extrajudicially to recapture his property, the marshal who executes a distress warrant "cannot
It is clear that what we meant by public rights were not rights important to the public, or rights created by the public, but rights of the public — that is, rights pertaining to claims brought by or against the United States. For central to our reasoning was the device of waiver of sovereign immunity, as a means of converting a subject which, though its resolution involved a "judicial act," could not be brought before the courts, into the stuff of an Article III "judicial controversy." Waiver of sovereign immunity can only be implicated, of course, in suits where the Government is a party. We understood this from the time the doctrine of public rights was born, in 1856, until two Terms ago, saying as recently as 1982 that the suits to which it applies "must at a minimum arise `between the government and others,' " Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U. S., at 69, quoting Ex parte Bakelite Corp., 279
In Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568 (1985), however, we decided to interpret the phrase "public rights" as though it had not been developed in the context just discussed and did not bear the meaning just described. We pronounced, as far as I can tell by sheer force of our office, that it applies to a right "so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary." Id., at 593-594 (emphasis added). The doctrine reflects, we announced, "simply a pragmatic understanding that when Congress selects a quasi-judicial method of resolving matters that `could be conclusively determined by the Executive and Legislative Branches,' the danger of encroaching on the judicial powers is reduced," id., at 589, quoting Northern Pipeline, supra, at 68 — without pointing out, as had Murray's Lessee, that the only adjudications of private rights that "could be conclusively determined by the Executive and Legislative Branches" were a select category of private rights vis-a-vis the Government itself. We thus held in Thomas, for the first time, that a purely private federally created action did not require Article III courts.
There was in my view no constitutional basis for that decision. It did not purport to be faithful to the origins of the public rights doctrine in Murray's Lessee; nor did it replace the careful analysis of that case with some other reasoning that identifies a discrete category of "judicial acts" which, at the time the Constitution was adopted, were not thought to implicate a "judicial controversy." The lines sought to be established by the Constitution did not matter. "Pragmatic understanding" was all that counted — in a case-by-case evaluation of whether the danger of "encroaching" on the "judicial
I do not think one can preserve a system of separation of powers on the basis of such intuitive judgments regarding "practical effects," no more with regard to the assigned functions of the courts, see Mistretta v. United States, 488 U.S. 361, 426-427 (1989) (SCALIA, J., dissenting), than with regard to the assigned functions of the Executive, see Morrison v. Olson, 487 U.S. 654, 708-712 (1988) (SCALIA, J., dissenting). This central feature of the Constitution must be anchored in rules, not set adrift in some multifactored "balancing test" — and especially not in a test that contains as its last and most revealing factor "the concerns that drove Congress to depart from the requirements of Article III." Schor, supra, at 851.
I would return to the longstanding principle that the public rights doctrine requires, at a minimum, that the United States be a party to the adjudication. On that basis, I concur in the Court's conclusion in Part IV of its opinion that
JUSTICE WHITE, dissenting.
The Court's decision today calls into question several of our previous decisions,
I
Before I explore the Court's approach to analyzing the issues presented in this case, I first take up the question of the
In Katchen, the petitioner filed a claim in the bankruptcy proceeding to recover funds that he alleged were due to him from a bankrupt estate; respondent, the trustee, resisted paying the claims based on § 57g of the old Bankruptcy Act, which forbade payments to creditors holding "void or voidable" preferences. Petitioner claimed, much as petitioners here do, that the question whether prior payments to him were preferences was a matter that could not be adjudicated without the benefit of a jury trial. We rejected this claim, holding that "there is no Seventh Amendment right to a jury trial" on claims such as Katchen's. Katchen, 382 U. S., at 337. Not only could the issue of preference be tried without a jury for the purpose of denying the filed claim pursuant to § 57g, but a money judgment for the amount of the preference could be entered without a jury trial: "[I]t makes no difference, so far as petitioner's Seventh Amendment claim is concerned, whether the bankruptcy trustee urges only a § 57g objection or also seeks affirmative relief." Id., at 337-338. This holding dispositively settles the question before us today: like the petitioner in Katchen, petitioners in this case have no Seventh Amendment right to a jury trial when respondent trustee seeks to avoid the allegedly fraudulent transfers they received.
In order to escape the force of Katchen's holding, the Court exploits the circumstances under which that decision was made. Most notably, at the time Katchen was decided, the Bankruptcy Act then in force (the 1898 Act) did not include actions to set aside voidable preferences among those proceedings covered by the Act. Thus, the clause of our opinion in Katchen, supra, at 336, on which the Court today puts so
That entitlement, however, on which the Court so heavily relies, was solely the product of the statutory scheme in existence at the time. If it were not, the next phrase appearing in the Katchen decision would make little sense: "[W]hen the same issue [i. e., validity of a preference] arises as part of the process of allowance and disallowance of claims, it is triable in equity." Katchen, supra, at 336. Katchen makes it clear that when Congress does commit the issue and recovery of a preference to adjudication in a bankruptcy proceeding, the Seventh Amendment is inapplicable. Only the limits of the 1898 Act prevented this from being the case in all instances, and thereby, left Katchen with the possibility of a jury trial right.
Today's Bankruptcy Code is markedly different. Specifically, under the Bankruptcy Amendments and Federal Judgeship Act of 1984 (1984 Amendments), an action to recover fraudulently transferred property has been classified as a "core" bankruptcy proceeding. See 28 U. S. C. § 157(b)(2) (H) (1982 ed., Supp. V). While in Katchen's day, it was only in special circumstances that adjudicating a preference was committed to bankruptcy proceedings, today, Congress has expressly designated adjudication of a preference or a fraudulent transfer a "core" bankruptcy proceeding. The portion of Katchen on which the Court relies — " `petitioner might be entitled to a jury trial on the issue of preference if he presented no claim in the bankruptcy proceeding and awaited a federal plenary action by the trustee,' " see ante, at 58 — is therefore a relic of history. The same is true of the decision in Schoenthal
The Court recognizes the distinction between the earlier law and the present Code, but calls the change a "purely taxonomic" one that "cannot alter our Seventh Amendment analysis." Ante, at 61. I disagree for two reasons. First, the change is significant because it illustrates the state of the law at the time of Katchen, and explains why that case came out as it did. It is hypocritical for the Court to rely on Katchen's statement as to the existence of a jury trial entitlement for the petitioner's claim there, but then dismiss as "taxonomic" the change that wiped out that jury entitlement — or, at the very least, profoundly shifted the basis for it.
More fundamentally, the inclusion of actions to recover fraudulently conveyed property among core bankruptcy proceedings has meaning beyond the taxonomic. As I explain in more detail below, see Part II-A, infra, we have long recognized that the forum in which a claim is to be heard plays a substantial role in determining the extent to which a Seventh Amendment jury trial right exists. As we put it in Katchen:
The same is true here, and it counsels affirmance under our holding in Katchen.
Perhaps in this respect the Court means something more akin to its later restatement of its position; namely, that the 1984 Amendments simply "reclassified a pre-existing, common-law cause of action that was not integrally related to the reformation of debtor-creditor relations." Ante, at 60. The Court further indicates that it will pay little heed to the congressional inclusion of avoidance and recovery proceedings in core bankruptcy jurisdiction since that choice was not made "because [Congress found that] traditional rights and remedies were inadequate to cope with a manifest public problem."
How does the Court determine that an action to recover fraudulently conveyed property is not "integrally related" to the essence of bankruptcy proceedings? Certainly not by reference to a current statutory definition of the core of bankruptcy
Nor is the Court's conclusion about the nature of actions to recover fraudulently transferred property supportable either by reference to the state of American bankruptcy law prior to adoption of the 1978 Code, or by reference to the pre-1791 practice in the English courts. If the Court draws its conclusions based on the fact that these actions were not considered to be part of bankruptcy proceedings under the 1800 or 1898 Bankruptcy Acts (or, more generally, under federal bankruptcy statutes predating the 1978 Code), it has treated the power given Congress in Article I, § 8, cl. 4, as if it were a disposable battery, good for a limited period only — once the power in it has been consumed by use, it is to be discarded and considered to have no future value. The power of Congress under this Clause is plainly not so limited: merely because Congress once had a scheme where actions such as this one were solely heard in plenary proceedings in Article III courts — where the Seventh Amendment attached — does not impugn the legality of every other possible arrangement. See also Part II-B, infra.
One final observation with respect to Katchen. The Court attempts to distinguish Katchen by saying that a jury trial was not needed there because the funds in dispute were part of the "bankruptcy estate." Ante, at 57. "Our decision [in Katchen] turned . . . on the bankruptcy court's having `actual or constructive possession' of the bankruptcy estate," the Court writes. Ibid. (quoting 382 U. S., at 327). But obviously in this case, the Bankruptcy Court similarly had " `actual or constructive possession' of the bankruptcy estate"; certainly it had as much constructive possession of the property sought as it had of the preference recovered in Katchen. Thus, it is as true here as it was in Katchen that the funds in dispute are part of the "bankruptcy estate." The Bankruptcy Code defines that estate to be comprised of "all the following property, wherever located and by whomever held," including "[a]ny interest in property that the trustee recovers under" the provision authorizing actions to recover fraudulently transferred property. 11 U. S. C. §§ 541(a)(3), 550 (1982 ed., Supp. V). Consequently, even if the Court is accurate in pinpointing the dispositive fact in the Katchen decision, that fact equally points towards a ruling for the trustee here.
In sum, I find that our holding in Katchen, and its underlying logic, dictate affirmance. The Court's decision today amounts to nothing less than a sub silentio overruling of that precedent.
II
Even if the question before us were one of first impression, however, and we did not have the decision in Katchen to guide us, I would dissent from the Court's decision. Under our cases, the determination whether the Seventh Amendment guarantees a jury trial on petitioners' claims must turn
A
To read the Court's opinion, one might think that the Seventh Amendment is concerned only with the nature of a claim. If a claim is legal, the Court announces, then the Seventh Amendment guarantees a jury trial on that claim. Ante, at 42, n. 4. This is wrong. "[H]istory and our cases support the proposition that the right to a jury trial turns not solely on the nature of the issue to be resolved but also on the forum in which it is to be resolved," Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442, 460-461 (1977). Perhaps like Katchen, Atlas Roofing is no longer good law after today's decision. A further examination of the issue before us reveals, though, that it is the
In the most obvious case, it has been held that the Seventh Amendment does not apply when a "suit at common law" is heard in a state court. Minneapolis & St. L. R. Co. v. Bombolis, 241 U.S. 211, 217 (1916); Woods v. Holy Cross Hospital, 591 F.2d 1164, 1171, n. 12 (CA5 1979). Even with its exclusive focus on the claim at issue here, the Court does not purport to hold that a fraudulent conveyance action brought in state court would be covered by the Seventh Amendment, because that action was one at "common law" in the Court's view.
Nor does the Seventh Amendment apply in all federal forums. "[T]he Seventh Amendment is not applicable to administrative proceedings," for example. Tull v. United States, 481 U.S. 412, 418, n. 4 (1987). In these forums " `where jury trials would be incompatible with the whole concept of administrative adjudication,' " the Seventh Amendment has no application. Atlas Roofing Co., supra, at 454 (emphasis deleted) (quoting Pernell v. Southall Realty, 416 U.S. 363, 383 (1974)). Thus, we have often looked at the character of the federal forum in which the claim will be heard, asking if a jury has a place in that forum, when determining if the Seventh Amendment's guarantee of a jury trial will apply there.
Most specifically relevant for this case, we have indicated on several previous occasions that bankruptcy courts — by their very nature, courts of equity — are forums in which a jury would be out of place. "[A] bankruptcy court . . . [is] a specialized court of equity . . . a forum before which a jury would be out of place," Atlas Roofing, supra, at 454, n. 11; consequently, the Seventh Amendment has no application to these courts. "[T]he Court [has] recognized that a bankruptcy court has been traditionally viewed as a court of equity, and that jury trials would `dismember' the statutory scheme of the Bankruptcy Act." Curtis v. Loether, 415 U.S. 189,
Before today, this Court has never held that a party in a bankruptcy court has a Seventh Amendment right to a jury trial on its claims. Of course, the Court does not actually so hold today, preferring to be obtuse about just where petitioners are going to obtain the jury trial to which the Court deems them entitled. See ante, at 64. But in blithely ignoring the relevance of the forum Congress has designated to hear this action — focusing instead exclusively on the "legal" nature of petitioners' claim — the Court turns its back on a long line of cases that have rested, in varying degrees, on that point. The Court's decision today ignores our statement in Atlas Roofing that "even if the Seventh Amendment would have required a jury where the adjudication of [some types of] rights is assigned to a federal court of law instead of an administrative agency," this constitutional provision does not apply when Congress assigns the adjudication of these rights to specialized tribunals where juries have no place. Atlas Roofing, 430 U. S., at 455. Indeed, we observed in Atlas Roofing that it was even true in "English or American legal systems at the time of the adoption of the Seventh Amendment [that] the question whether a fact would be found by a jury turned to a considerable degree on the nature of the forum in which a litigant found himself." Id., at 458.
The Court's decision also substantially cuts back on Congress' power to assign selected causes of action to specialized forums and tribunals (such as bankruptcy courts), by holding
Finally, the Court's ruling today ignores several additional reasons why juries have no place in bankruptcy courts and other "specialized courts of equity" like them. First, two of the principal rationales for the existence of the Seventh Amendment guarantee — the notions of "jury equity" and of juries serving as popular checks on life-tenured judges — are inapt in bankruptcy courts. As one scholar noted:
Others have made this same observation. See, e. g., id., at 684-685 (statement of Prof. Rowe). Cf., e. g., In re Japanese Electronic Products Antitrust Litigation, 631 F.2d 1069, 1085 (CA3 1980). As respondent put it: "A jury in an equitable tribunal such as a bankruptcy court would in a sense be redundant." Brief for Respondent 22.
Beyond its redundancy, a requirement that juries be used in bankruptcy courts would be disruptive and would unravel the statutory scheme that Congress has created. The Court dismisses this prospect, and scoffs that it "can[not] seriously be argued that permitting jury trials" on this sort of claim would undermine the statutory bankruptcy scheme. Ante, at 61. Yet this argument has not only been "seriously" made, it was actually accepted by this Court in Curtis v. Loether, 415 U.S. 189 (1974). In Curtis, we observed that Katchen had rejected a Seventh Amendment claim (similar to the one before us today), due to our "recogni[tion] that a bankruptcy court has been traditionally viewed as a court of equity, and that jury trials would `dismember' the statutory scheme of the Bankruptcy Act." Curtis, supra, at 195; see also Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U. S., at 454, n. 11. I fear that the Court's decision today will have the desultory effect we feared when Curtis was decided.
The above is not to say that Congress can vitiate the Seventh Amendment by assigning any claim that it wishes to a specialized tribunal in which juries are not employed. Cf. Atlas Roofing, supra, at 461, n. 16. Our cases require a second inquiry — the one that the Court focuses exclusively upon — concerning the nature of the claim so assigned.
To resolve this query, the Court properly begins its analysis with a look at English practice of the 18th century. See ante, at 43-47. After conducting this review, the Court states with confidence that "in 18th-century England . . . a court of equity would not have adjudicated" respondent's suit. Ante, at 47. After conducting this review, the Court been brought at law — and perhaps even that it might have been so litigated in the most common case — my review of the English cases from the relevant period leaves me unconvinced that the chancery court would have refused to hear this action — the Court's conclusion today.
The Court itself confesses that "courts of equity sometimes provided relief in fraudulent conveyance actions." Ante, at 43. The Chancery Court put it stronger, though: "Courts of Equity have most certainly been in the habit of exercising a concurrent jurisdiction with the Courts of Law on the statutes of Elizabeth respecting fraudulent conveyances." Hobbs v. Hull, 1 Cox 445, 445-446, 29 Eng. Rep. 1242 (1788). Rarely has a more plain statement of the prevailing English practice at the time of ratification of the Seventh Amendment been discovered than this one; this alone should be enough to make respondent's case. Yet instead of accepting the pronouncement of the equity court about its own jurisdiction, this Court assumes the role of High Court of Historical Review, questioning the soundness of Hobbs' decision because it was issued without adequate supporting citations. Ante, at 45-46. A similar criticism is levied against another case from the same period, Ex parte Scudamore, 3 Ves. jun. 85,
In addition to nitpicking respondent's supporting case law into oblivion, the Court's more general rejection of respondent's claim rests on two sources: a passing citation to a wholly inapposite case, Buzard v. Houston, 119 U.S. 347 (1886); and a more lengthy quotation from Professor Glenn's treatise on fraudulent conveyances. See ante, at 44. I will not deny that Professor Glenn's work supports the historical view that the Court adopts today. But notwithstanding his scholarly eminence, Professor Glenn's view of what the 18th-century English equity courts would have done with an action such as this one is not dispositive. Other scholars have looked at the same history and come to a different conclusion.
Trying to read the ambiguous history concerning fraudulent conveyance actions in equity — a task which the Court finds simple today — has perplexed jurists in each era, who have come to conflicting decisions each time that the question has found relevance. Even in Schoenthal's time, and under
In sum, I do not think that a fair reading of the history — our understanding of which is inevitably obscured by the passage of time and the irretrievable loss of subtleties in interpretation — clearly proves or disproves that respondent's action would have sounded in equity in England in 1791.
The Court, however, finds that some (if not all) of these congressional judgments are constitutionally suspect. While acknowledging that "[t]o be sure, we owe some deference to Congress' judgment after it has given careful consideration to" such a legislative enactment, the Court declines to defer here because "respondent has adduced no evidence that Congress considered the constitutional implications of its designation of all fraudulent conveyance actions as core proceedings." Ante, at 61. See also ante, at 61-62, n. 16. This statement is remarkable, for it should not be assumed that Congress in enacting 28 U. S. C. § 157(b)(2)(H) (1982 ed., Supp. V) ignored its constitutional implications.
Moreover, the Court's cramped view of Congress' power under the Bankruptcy Clause to enlarge the scope of bankruptcy proceedings, ignoring that changing times dictate changes in these proceedings, stands in sharp contrast to a more generous view expressed some years ago:
See also Katchen v. Landy, 382 U. S., at 328-329.
One of that period's leading constitutional historians expressed the same view, saying that the Framers of the Bankruptcy Clause "clearly understood that they were not building a straight-jacket to restrain the growth and shackle the spirits of their descendents for all time to come," but rather, were attempting to devise a scheme "which, while firm, was nevertheless to be flexible enough to serve the varying social needs of changing generations." C. Warren, Bankruptcy in United States History 4 (1935). Today, the Court ignores these lessons and places a straitjacket on Congress' power under the Bankruptcy Clause: a straitjacket designed in an era, as any reader of Dickens is aware, that was not known for its enlightened thinking on debtor-creditor relations.
Indeed, the Court calls into question the longstanding assumption of our cases and the bankruptcy courts that the equitable proceedings of those courts, adjudicating creditor-debtor disputes, are adjudications concerning "public rights." See Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 71 (1982); id., at 91 (REHNQUIST, J., concurring in judgment); id., at 92 (Burger, C. J., dissenting); id., at 108-118 (WHITE, J., dissenting). The list of lower court opinions that have reasoned from this assumption is so lengthy that I cannot reasonably include it in the text; a mere sampling fills the margin.
III
Because I find the Court's decision at odds with our precedent, and peculiarly eager to embark on an unclear
JUSTICE BLACKMUN, with whom JUSTICE O'CONNOR joins, dissenting.
I agree generally with what JUSTICE WHITE has said, but write separately to clarify, particularly in my own mind, the nature of the relevant inquiry.
Once we determine that petitioners have no statutory right to a jury trial, we must embark on the Seventh Amendment inquiry set forth in Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442 (1977). First, we must determine whether the matter to be adjudicated is "legal" rather than "equitable" in nature, a determination which turns on the nature of the claim and of the relief sought. If the claim and the relief are deemed equitable, we need go no further: the Seventh Amendment's jury-trial right applies only to actions at law.
In this case, the historical inquiry is made difficult by the fact that, before the Federal Rules of Civil Procedure unified law and equity, parties might have been drawn to the equity side of the court because they needed its procedural tools and interim remedies: discovery, accounting, the power to clear title, and the like. In light of the frequency with which these tools were likely needed in fraud cases of any kind, it is no surprise that, as JUSTICE WHITE points out, fraudulent conveyance actions, even if cognizable at law, often would be found on the equity docket. See generally O. Bump, Conveyances Made by Debtors to Defraud Creditors § 532 (4th ed. 1896); F. Wait, Fraudulent Conveyances and Creditors' Bills §§ 59-60 (1884); W. Roberts, Voluntary and Fraudulent
The uncertainty in the historical record should lead us, for purposes of the present inquiry, to give the constitutional right to a jury trial the benefit of the doubt. Indeed, it is difficult to do otherwise after the Court's decision in Schoenthal v. Irving Trust Co., 287 U.S. 92 (1932). Schoenthal turned on the legal nature of the preference claim and of the relief sought, id., at 94-95, rather than upon the legal nature of the tribunal to which "plenary proceedings" were assigned under the 1898 Bankruptcy Act.
"With the historical evidence thus in equipoise," ante, at 87 (WHITE, J., dissenting), but with Schoenthal weighing on the "legal" side of the scale, I then would turn to the second stage of the Atlas Roofing inquiry: I would ask whether, assuming the claim here is of a "legal" nature, Congress has assigned it to be adjudicated in a special tribunal "with which the jury would be incompatible." Atlas Roofing, 430 U. S., at 450; see also Tull v. United States, 481 U.S. 412, 418, n. 4 (1987). Here, I agree with JUSTICE WHITE that Katchen v. Landy, 382 U.S. 323 (1966), as interpreted in Atlas Roofing, requires the conclusion that courts exercising core bankruptcy functions are equitable tribunals, in which "a jury would be out of place and would go far to dismantle the statutory scheme." Atlas Roofing, 430 U. S., at 454, n. 11.
Having identified the tribunal to which Congress has assigned respondent's fraudulent conveyance claim as equitable in nature, the question remains whether the assignment is one Congress may constitutionally make. Under Atlas Roofing, that question turns on whether the claim involves a "public right." Id., at 455. When Congress was faced with the task of divining the import of our fragmented decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), it gambled and predicted that a statutory right which is an integral part of a pervasive regulatory
I agree with JUSTICE WHITE, ante, at 88-89, that it would be improper for this Court to employ, in its Seventh Amendment analysis, a century-old conception of what is and is not central to the bankruptcy process, a conception that Congress has expressly rejected. To do so would, among other vices, trivialize the efforts Congress has engaged in for more than a decade to bring the bankruptcy system into the modern era.
There are, nonetheless, some limits to what Congress constitutionally may designate as a "core proceeding," if the designation has an impact on constitutional rights. Congress, for example, could not designate as "core bankruptcy proceedings" state-law contract actions brought by debtors against third parties. Otherwise, Northern Pipeline would be rendered a nullity. In this case, however, Congress has not exceeded these limits.
Although causes of action to recover fraudulent conveyances exist outside the federal bankruptcy laws, the problems created by fraudulent conveyances are of particular significance
The fact that the reorganization plan in this case provided that the creditor's representatives would bring fraudulent conveyance actions only after the plan was approved does not render the relationship between fraudulent conveyance actions and the bankruptcy process "adventitious." Ante, at 60, n. 15 (majority opinion). Creditors would be less likely to approve a plan which forced them to undertake the burden of collecting fraudulently transferred assets if they were not assured that their claims would receive expert and expedited treatment.
In sum, it must be acknowledged that Congress has legislated treacherously close to the constitutional line by denying a jury trial in a fraudulent conveyance action in which the defendant has no claim against the estate. Nonetheless, given the significant federal interests involved, and the importance of permitting Congress at long last to fashion a modern bankruptcy system which places the basic rudiments of the bankruptcy process in the hands of an expert equitable tribunal, I cannot say that Congress has crossed the constitutional line on the facts of this case. By holding otherwise, the Court
FootNotes
"The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement." (Emphasis added.)
Both of these holdings are questionable, moreover, to the extent that they are in tension with our decision in Whitehead v. Shattuck, 138 U.S. 146 (1891). Although there is scholarly support for the claim that actions to recover real property are quintessentially equitable actions, see 1 G. Glenn, Fraudulent Conveyances and Preferences § 98, pp. 183-184 (rev. ed. 1940), in Whitehead we stated:
"[W]here an action is simply for the recovery and possession of specific real or personal property, or for the recovery of a money judgment, the action is one at law. An action for the recovery of real property, including damages for withholding it, has always been of that class. The right which in this case the plaintiff wishes to assert is his title to certain real property; the remedy which he wishes to obtain is its possession and enjoyment; and in a contest over the title both parties have a constitutional right to call for a jury." 138 U. S., at 151.
See also Pernell v. Southall Realty, 416 U.S. 363, 370-374 (1974).
Finally, respondent misreads In re Harbour, 840 F.2d 1165, 1172-1173 (1988). The Fourth Circuit relied in that case on the same authorities to which we have referred, distinguishing between suits to recover fraudulent transfers and other bankruptcy proceedings. The court's holding that the Seventh Amendment right to a jury trial no longer extends to such actions was based not on its historical analysis, which accords with our own, but on its erroneous belief that Congress possesses the power to assign jurisdiction over all fraudulent conveyance actions to bankruptcy courts sitting without juries. The case therefore lends no support to respondent's historical argument.
"Congress is not required by the Seventh Amendment to choke the already crowded federal courts with new types of litigation or prevented from committing some new types of litigation to administrative agencies with special competence in the relevant field. This is the case even if the Seventh Amendment would have required a jury where the adjudication of those rights is assigned to a federal court of law instead of an administrative agency."
"[T]he restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power, must be distinguished from the adjudication of state-created private rights, such as the right to recover contract damages that is at issue in this case. The former may well be a `public right,' but the latter obviously is not."
" `By presenting their claims respondents subjected themselves to all the consequences that attach to an appearance . . . .
.....
" `Respondents' contention means that, while invoking the court's jurisdiction to establish their right to participate in the distribution, they may deny its power to require them to account for what they misappropriated. In behalf of creditors and stockholders, the receivers reasonably may insist that, before taking aught, respondents may by the receivership court be required to make restitution. That requirement is in harmony with the rule generally followed by courts of equity that having jurisdiction of the parties to controversies brought before them, they will decide all matters in dispute and decree complete relief.' "
It warrants emphasis that this rationale differs from the notion of waiver on which the Court relied in Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986). The Court ruled in Schor — where no Seventh Amendment claims were presented — that the Commodities Futures Trading Commission could adjudicate state-law counterclaims to a federal action by investors against their broker consistent with Article III. The Court reached this conclusion, however, not on the ground that the Commission had possession of a disputed res, to which the investors laid claim, but on the ground that Congress did not require investors to avail themselves of the remedial scheme over which the Commission presided. The investors could have pursued their claims, albeit less expeditiously, in federal court. By electing to use the speedier, alternative procedures Congress had created, the Court said, the investors waived their right to have the state-law counterclaims against them adjudicated by an Article III court. See id., at 847-850. Parallel reasoning is unavailable in the context of bankruptcy proceedings, because creditors lack an alternative forum to the bankruptcy court in which to pursue their claims. As Katchen makes clear, however, by submitting a claim against the bankruptcy estate, creditors subject themselves to the court's equitable power to disallow those claims, even though the debtor's opposing counterclaims are legal in nature and the Seventh Amendment would have entitled creditors to a jury trial had they not tendered claims against the estate.
It hardly needs pointing out that JUSTICE WHITE'S assertion, see post, at 71-72, that this case is controlled by the Court's statement in Katchen that "it makes no difference, so far as petitioner's Seventh Amendment claim is concerned, whether the bankruptcy trustee urges only a § 57g objection or also seeks affirmative relief," 382 U. S., at 337-338, is entirely unfounded. Read in context, the Court's statement merely means that once a creditor has filed a claim against the estate, the bankruptcy trustee may recover the full amount of any preference received by the creditor-claimant, even if that amount exceeds the amount of the creditor's claim. The Court's statement says nothing about a creditor's Seventh Amendment right to a jury trial on a trustee's preference action when the creditor has not entered a claim against the estate.
This is not to say, of course, contrary to JUSTICE WHITE's assertion, see post, at 75, n. 4, that we regard Congress' amendments to the bankruptcy statutes as an "act of whimsy." The sweeping changes Congress instituted in 1978 were clearly intended to make the reorganization process more efficient, as JUSTICE WHITE's quotation from a Senate Report indicates. But the radical reforms of 1978, on whose legislative history his dissent relies, did not work the slightest alteration in the right to a jury trial of alleged recipients of fraudulent conveyances. That change came in 1984. Although enhanced efficiency was likely Congress' aim once again, neither JUSTICE WHITE nor JUSTICE BLACKMUN points to any statement from the legislative history of the 1984 Amendments confirming this supposition with respect to preference actions in particular. More important, they offer no evidence that Congress considered the propriety of its action under the Seventh Amendment. The House Report cited by JUSTICE BLACKMUN, see post, at 93, advocated conferring Article III status on bankruptcy judges. Its favored approach would therefore have eliminated the problem before us by clearly entitling petitioners to a jury trial under the Seventh Amendment. See H. R. Rep. No. 98-9, pt. 1, pp. 7, 9, 16 (1983). This approach was rejected by the Senate. In defending an alternative proposal that ultimately prevailed, however, the Senate Report to which JUSTICE BLACKMUN refers neglects to discuss specifically the inclusion of preference actions in the class of core proceedings or potential difficulties under the Seventh Amendment to which that assignment might give rise. See S. Rep. No. 98-55, pp. 32-40 (1983). Apparently, the Senate Judiciary Committee overlooked this problem entirely. Thus, the 1984 Amendments' denial of the right to a jury trial in preference and fraudulent conveyance actions can hardly be said to represent Congress' considered judgment of the constitutionality of this change.
"[T]he interpretation of Katchen as a `delay and expense' exception to the seventh amendment is negated by the Court's rejection of the argument that delay, or even the more significant problem of jury prejudice, can override the seventh amendment. Katchen's reference to `delay and expense' must, therefore, be read as part of the Court's consideration of whether the legal remedy had become sufficiently adequate to result in a shifting of the boundaries of law and equity. At a minimum, the delay and expense language of Katchen must be read in light of the petitioner's demand for a stay of the bankruptcy action and the institution of a separate suit in a different court. That is a qualitatively different type of delay and expense from the delay and expense of providing a jury trial in the same action. The latter could never override Beacon [Theatres, Inc. v. West-over, 359 U.S. 500 (1959),] and Dairy Queen[, Inc. v. Wood, 369 U.S. 469 (1962)]." Warner 39 (footnotes omitted); see id., at 42, 48.
There is no way for Congress, or the lower Article III courts, or the bankruptcy courts — or creditors or debtors for that matter — to know how they are expected to respond to the Court's decision, even if they wish to be diligent in conforming their behavior to today's mandate. See especially Part V, ante, at 64. Though the Court denies that it is being "coy" or "obtuse," it steadfastly refuses to the end to disclose which statute it finds unconstitutional today. See ante, at 64, n. 19.
"A major impetus underlying this reform legislation has been the need to enlarge the jurisdiction of the bankruptcy court in order to eliminate the serious delays, expense and duplications associated with the current dichotomy between summary and plenary jurisdiction . . . . [T]he jurisdictional limitations presently imposed on the bankruptcy courts have embroiled the court and the parties in voluminous litigation . . . ." S. Rep. No. 95-989, p. 17 (1978).
This rather plain statement by Congress makes it clear that it found the system in place at the time grossly inadequate, and perceived a "manifest public" need for change. See also H. R. Rep. No. 95-595, p. 445 (1977).
In response to this legislative history, the Court makes two points. First, the Court observes that these Reports concerned the 1978 Code, and not the 1984 Amendments; it was the latter, the Court notes, that stripped petitioners of their jury trial right. Ante, at 61-62, n. 16. While the Court's analysis is technically correct, it ignores the fact that the 1978 Code undertook — to use the Court's own description — a "radical refor[m]" of bankruptcy law, ibid., including the absorption of fraudulent preference actions into what used to be the plenary jurisdiction of bankruptcy courts. It was this change which laid the groundwork for the post-Northern Pipeline Act at issue here.
Second, and more importantly, the Court acknowledges that when Congress adopted the 1984 Amendments, it was motivated by the same "efficiency" concerns that were the basis for the 1978 legislation. Ante, at 61-62, n. 16. Thus, the Court concedes the fundamental point that Congress modified the traditional jurisdictional scheme concerning fraudulent conveyance actions because Congress found that this traditional approach was "inadequate to cope with a manifest public problem"; under Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442 (1977) — even under the Court's own description of that case, ante at 60 — this should suffice to permit Congress to limit jury trial rights on such claims.
Instead of so concluding, however, the Court retreats from Atlas Roofing and its earlier analysis, and holds that Congress' enactments do not control here because, in adopting them, Congress failed to make a "considered judgment of the constitutionality of [these] change[s]." Ante, at 62, n. 16. As I observe below, infra, at 87-88, elevating this inquiry to bell-wether status is unprecedented in our Seventh Amendment cases — and unwise.
Whatever the shortcomings of this opinion for failing to resolve the difficult balancing question, it remains superior to the Court's method of "balancing" these concerns, which amounts to no balancing at all — and instead focuses solely on the nature of claim (i. e., whether it is legal, and whether it concerns a public right, see ante, at 42, n. 4) in determining if the Seventh Amendment applies.
This Court has not accepted the view that "any award of monetary relief must necessarily be `legal' relief." Curtis v. Loether, 415 U.S. 189, 196 (1974). We have previously recognized that actions to disgorge improperly gained profits, Tull v. United States, 481 U.S. 412, 424 (1987), to return funds rightfully belonging to another, Curtis, supra, at 197, or to submit specific funds wrongfully withheld, Bowen v. Massachusetts, 487 U.S. 879, 893-896 (1988), are all equitable actions — even though the relief they seek is monetary — because they are restitutionary in nature. Respondent's action against petitioners is of the same class, seeking a similar remedy.
Here the trustee is simply "ask[ing] the court to act in the public interest by restoring the status quo and ordering the return of that which rightfully belongs" to the estate; "[s]uch action is within . . . the highest tradition of a court of equity." Porter v. Warner Co., 328 U.S. 395, 402 (1946). It should not matter whether respondent is seeking to have returned the precise cashier's checks that petitioner Medex had in its possession at one time, or the funds yielded to Medex by cashing those checks. To turn the case on this distinction would only give entities in Medex's position an incentive to consummate fraudulent transfers as quickly as possible: hardly a desirable one. A host of Bankruptcy Courts have recognized as much. See, e. g., In re Wencl, 71 B.R. 879, 883-884, and n. 2 (DC Minn. 1987); In re Reda, Inc., 60 B.R. 178, 181 (ND Ill. 1986).
We learn today that, in retrospect, the Emergency Rule, too, was unconstitutional in its failure to include a jury trial right for actions to avoid fraudulent conveyances. It appears that it was not only Congress that failed in its duty to give adequate "consider[ation] [to] the constitutional implications of its" actions. Cf. ante, at 61.
In the past, we have been far more deferential to Congress' designations in this regard. See, e. g., Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 290-295 (1960); Porter v. Warner, supra, at 397-402.
Like the Court, I think the analysis of learned commentators is a useful tool to enhance our understanding of the law in a field such as bankruptcy. Unlike the Court, however, I would not use the views of these scholars as the basis for disposing of the case before us — particularly where those views counsel rejection of otherwise viable strains in our case law. See, e. g., Gibson, Jury Trials in Bankruptcy, 72 Minn. L. Rev. 967, 1040-1041, n. 347 (1988) (cited ante, at 56, n. 11).
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