492 U.S.

33
109 S.Ct. 2782
106 L.Ed.2d 26

GRANFINANCIERA, S.A., et al., Petitioners

v.
Paul C. NORDBERG, Creditor Trustee for the Estate of Chase
& Sanborn Corporation, etc.
No. 87-1716.
Argued Jan. 9, 1989.
Decided June 23, 1989.

Syllabus
Respondent, the bankruptcy trustee for a corporation undergoing Chapter
11 reorganization, filed suit in the District Court against petitioners,
seeking to avoid allegedly fraudulent monetary transfers to them by the
bankrupt corporation's predecessor and to recover damages, costs,
expenses, and interest. The court referred the proceedings to the
Bankruptcy Court. Shortly after the Colombian Government nationalized
petitioner Granfinanciera, S.A., petitioners requested a jury trial. The
Bankruptcy Judge denied the request, deeming a suit to recover a
fraudulent transfer a "core action" which, under his understanding of
English common law, "was a non-jury issue." The District Court affirmed
the Bankruptcy Court's judgment for respondent, without discussing
petitioners' jury trial request. The Court of Appeals also affirmed, ruling,
inter alia, that the Seventh Amendment supplied no right to a jury trial,
because fraudulent conveyance actions are equitable in nature, even when
a plaintiff seeks only monetary relief; because bankruptcy proceedings
themselves are inherently equitable in nature; and because Congress has
displaced any right to a jury trial by designating, in 28 U.S.C. 157(b)(2)
(H), fraudulent conveyance actions as "core proceedings" triable by
bankruptcy judges sitting without juries.
Held:
1. This Court will not address respondent's contention that the judgment
below should be affirmed as to petitioner Granfinanciera because it was a

commercial instrumentality of the Colombian Government when it made

its request for a jury trial and was therefore not entitled to such a trial
under the Seventh Amendment or applicable statutory provisions. This
difficult question was neither raised below nor adequately briefed and
argued here, and this is not an "exceptional case" as to which the Court
will consider arguments not raised below. Moreover, petitioners' claim is
uncontradicted that an affirmance on the ground respondent now urges
would enlarge respondent's rights under the judgment below and decrease
those of Granfinanciera. Pp. 38-40.
2. Provided that Congress has not permissibly assigned resolution of the
claim to a non-Article III adjudicative body that does not use a jury as
factfinder, the Seventh Amendment entitles a person who has not
submitted a claim against a bankruptcy estate to a jury trial when sued by
the bankruptcy trustee to recover an allegedly fraudulent monetary
transfer. Pp. 40-49.
(a) Since this Court's decisions, early English cases, and scholarly
authority all demonstrate that respondent would have had to bring his
action at law in 18th-century England, and that a court of equity would not
have adjudicated it, it must be concluded preliminarily that the action is a
"Sui[t] at common law" for which a jury trial is required by the Seventh
Amendment. Pp. 43-47.
(b) More importantly, the nature of the relief respondent seeksthe
recovery of money payments of ascertained and definite amounts
conclusively demonstrates that his cause of action should be characterized
as legal rather than equitable, such that petit oners are prima facie entitled
to a jury trial under the Amendment. Schoenthal v. Irving Trust Co., 287
U.S. 92, 53 S.Ct. 50, 77 L.Ed. 185. Pp. 47-49.
3. The Seventh Amendment entitles petitioners to their requested jury trial
notwithstanding 157(b)(2)(H)'s designation of fraudulent conveyance
actions as "core proceedings" which non-Article III bankruptcy judges
may adjudicate. Pp. 49-65.
(a) Although the Seventh Amendment does not prohibit Congress from
assigning resolution of a statutory claim that is legal in nature to a nonArticle III tribunal that does not use a jury as a factfinder so long as the
claim asserts a "public right," Congress lacks the power to strip parties
who are contesting matters of private right of their constitutional right to a
jury trial. See, e.g., Atlas Roofing Co. v. Occupational Safety and Health
Review Comm'n, 430 U.S. 442, 97 S.Ct. 1261, 51 L.Ed.2d 464; Northern

Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102
S.Ct. 2858, 73 L.Ed.2d 598. For these purposes, a "public right" is not
limited to a matter arising between the Government and others, but
extends to a seemingly "private" right that is closely intertwined with a
federal regulatory program that Congress has power to enact. Thomas v.
Union Carbide Agricultural Products Co., 473 U.S. 568, 586, 593-594,
105 S.Ct. 3325, 3335, 3339-3340, 87 L.Ed.2d 409. Pp. 51-55.
(b) A bankruptcy trustee's right to recover a fraudulent conveyance is
more accurately characterized as a private rather than a public right.
Although the plurality in Northern Pipeline Construction Co., supra, 458
U.S., at 71, 102 S.Ct., at 2871, noted that the restructuring of debtorcreditor relations in bankruptcy may well be a "public right," it also
emphasized that state-law causes of action for breach of contract are
paradigmatic private rights, even when asserted by an insolvent
corporation in the midst of Chapter 11 reorganization proceedings.
Trustees' fraudulent conveyance actions are quintessentially common-law
suits that more nearly resemble state-law contract claims by a bankrupt
corporation to augment the bankruptcy estate than they do creditors'
claims to a pro rata share of the bankruptcy res. This analysis is confirmed
by Katchen v. Landy, 382 U.S. 323, 327-328, 86 S.Ct. 467, 471-472, 15
L.Ed.2d 391, which must be read to hold that a creditor's Seventh
Amendment right to a jury trial on a bankruptcy trustee's preference claim
depends upon whether the creditor submitted a claim against the estate.
Since petitioners here have not filed such claims, respondent's suit is
neither part of the claims adjudication process nor integral to the
restructuring of debtor-creditor relations. Congress therefore cannot divest
petitioners of their Seventh Amendment right merely by relabeling a preexisting, common-law cause of action to which that right attaches and
assigning it to a specialized court of equity, particularly where there is no
evidence that Congress considered the constitutional implications of its
designation of all fraudulent conveyance actions as core proceedings. Pp.
55-61.
(c) Permitting jury trials in fraudulent conveyance actions will not
significantly impair the functioning of the legislative scheme. It cannot
seriously be argued that allowing such actions in a trustee's suit against a
person who has not entered a claim against the estate would "go far to
dismantle the statutory scheme," as that phrase was used in Atlas Roofing,
supra, 430 U.S., at 454, n. 11, 97 S.Ct., at 1268, n. 11, since Atlas plainly
assumed that such claims carried with them a right to a jury trial. In
addition, it cannot easily be said that a jury would be incompatible with
bankruptcy proceedings, since Congress has expressly provided for jury

trials in certain other actions arising out of bankruptcy litigation. The

claim that juries may serve usefully as checks only on life-tenured judges'
decisions overlooks the potential for juries to exercise beneficial restraint
on the decisions of fixed-term judges, who may be beholden to Congress
or the Executive. Moreover, although providing jury trials in some
fraudulent conveyance actions might impede swift resolution of
bankruptcy proceedings and increase the expense of Chapter 11
reorganizations, these considerations are insufficient to overcome the
Seventh Amendment's clear command. Pp. 61-63.
835 F.2d 1341 (CA11 1988), reversed and remanded.
BRENNAN, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and MARSHALL, STEVENS, and KENNEDY, JJ.,
joined, and in Parts I, II, III, and V, of which SCALIA, J., joined.
SCALIA, J., filed an opinion concurring in part and concurring in the
judgment, post, p. 65, WHITE, J., filed a dissenting opinion, post, p. 71.
BLACKMUN, J., filed a dissenting opinion, in which O'CONNOR, J.,
joined, post, p. 91.
Adam Lawrence, Miami, Fla., for petitioners.
Laurence Tribe, Cambridge, Mass., for respondent.
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).

* 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.
3

The District Court referred the proceedings to the Bankruptcy Court. Over five
months later, and shortly before the Colombian Government nationalized
Granfinanciera, respondent served a summons on petitioners in Bogota,
Colombia. In their answer to the complaint following Granfinanciera's
nationalization, both petitioners requested a "trial by jury on all issues so
triable." App. 7. The Bankruptcy Judge denied petitioners' request for a jury
trial, deeming a suit to recover a fraudulent transfer "a core action that
originally, under the English common law, as I understand it, was a non-jury
issue." App. to Pet. for Cert. 34. Following a bench trial, the court dismissed
with prejudice respondent's actual fraud claim but entered judgment for
respondent on the constructive fraud claim in the amount of $1,500,000 against
Granfinanciera and $180,000 against Medex. Id., at 24-30. The District Court
affirmed without discussing petitioners' claim that they were entitled to a jury
trial. Id., at 18-23.

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 brought11
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 sui s." 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, 86 S.Ct. 467, 15 L.Ed.2d 391 (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.

We granted certiorari to decide whether petitioners were entitled to a jury trial,

486 U.S. 1054, 108 S.Ct. 2818, 100 L.Ed.2d 920 (1988), and now reverse.

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 Granfinancierathough not Medexbecause
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, 16021611, and respondent reads 1330(a)1 to prohibit trial by jury of a case against
a foreign state. Respondent concludes that Granfinanciera has no right to a jury
trial, regardless of the merits of Medex's Seventh Amendment claim.

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,
476, n. 20, 99 S.Ct. 740, 749, n. 20, 58 L.Ed.2d 740 (1979), provided that an
affirmance on the alternative ground would neither expand nor contract the
rights of either party established by the judgment below. See, e.g., Blum v.
Bacon, 457 U.S. 132, 137, n. 5, 102 S.Ct. 2355, 2359, n. 5, 72 L.Ed.2d 728
(1982); United States v. New York Telephone Co., 434 U.S. 159, 166, n. 8, 98
S.Ct. 364, 369, n. 8, 54 L.Ed.2d 376 (1977). Respondent's present defense of
the judgment, however, is not one he advanced below.2 Although "we could
consider grounds supporting [the] judgment different from those on which the
Court of Appeals rested its decision," "where the ground presented here has not
been raised below we exercise this authority 'only in exceptional cases.' "
Heckler v. Campbell, 461 U.S. 458, 468-469, n. 12, 103 S.Ct. 1952, 1958, n.
12, 76 L.Ed.2d 66 (1983), quoting McGoldrick v. Compagnie Generale
Transatlantique, 309 U.S. 430, 434, 60 S.Ct. 670, 672, 84 L.Ed. 849 (1940).

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 Ugine Kuhlmann, 853 F.2d 445, 450 (CA6
1988) (jurisdiction under 28 U.S.C. 1330 determined by party's status when
act complained of occurred); Morgan Guaranty Trust Co. of N.Y. v. Republic of

Palau, 639 F.Supp. 706, 712-716 (S.D.N.Y.1986) (status at time complaint was
filed is decisive for 1330 jurisdiction), with Callejo v. Bancomer, S.A., 764
F.2d 1101, 1106-1107 (CA5 1985) (FSIA applies even though bank was
nationalized after suit was filed); Wolf v. Banco National de Mexico, S.A., 739
F.2d 1458, 1460 (CA9 1984) (same), cert. denied, 469 U.S. 1108, 105 S.Ct.
784, 83 L.Ed.2d 778 (1985). Moreover, petitioners alleged in their reply brief,
without contradiction by respondent at oral argument, that affirmance on the
ground that respondent now urges would "unquestionably enlarge the
respondent's rights under the circuit court's decision and concomitantly decrease
those of the petitioner" by "open[ing] up new areas of discovery in aid of
execution" and by allowing respondent, for the first time, to recover any
judgment he wins against Granfinanciera from Colombia's central banking
institutions and possibly those of other Colombian governmental
instrumentalities. Reply Brief for Petitioners 19. Whatever the merits of these
claims, their plausibility, coupled with respondent's failure to offer rebuttal,
furnishes an additional reason not to consider respondent's novel argument in
support of the judgment at this late stage in the litigation. We therefore leave
for another day the questions respondent's argument raises under the FSIA.
III
9

Petitioners rest their claim to a jury trial on the Seventh Amendment alone. 3
The Seventh Amendment provides: "In Suits at common law, where the value
in controversy shall exceed twenty dollars, the right of trial by jury shall be
preserved. . . ." We have consistently interpreted the phrase "Suits at common
law" to refer to "suits in which legal rights were to be ascertained and
determined, in contradistinction to those where equitable rights alone were
recognized, and equitable remedies were administered." Parsons v. Bedford, 3
Pet. 433, 447, 7 L.Ed. 732 (1830). Although "the thrust of the Amendment was
to preserve the right to jury trial as it existed in 1791," the Seventh Amendment
also applies to actions brought to enforce statutory rights that are analogous to
common-law causes of action ordinarily decided in English law courts in the
late 18th century, as opposed to hose customarily heard by courts of equity or
admiralty. Curtis v. Loether, 415 U.S. 189, 193, 94 S.Ct. 1005, 1007, 39
L.Ed.2d 260 (1974).

10

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, 107 S.Ct. 1831, 1835, 95 L.Ed.2d 365 (1987) (citations omitted). The
second stage of this analysis is more important than the first. Id., at 421, 107

S.Ct., at 1837. 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 nonArticle III adjudicative body that does not use a jury as factfinder.4
11

* 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, 53 S.Ct. 50, 51, 77 L.Ed. 185
(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.

12

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, 3 Pet., 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 trial applies to all but the latter
actions. Respondent adduces no authority to buttress the claim that suits to
recover an allegedly fraudulent transfer of money, of the sort that he has
brought, were typically or indeed ever entertained by English courts of equity
when the Seventh Amendment was adopted. In fact, prior decisions of this
Court, see, e.g., Buzard v. Houston, 119 U.S. 347, 352-353, 7 S.Ct. 249, 252253, 30 L.Ed. 451 (1886), and scholarly authority compel the contrary
conclusion:

13

"[W]hether the trustee's suit should be at law or in equity is to be judged by the

same standards that are applied to any other owner of property which is
wrongfully withheld. If the subject matter is a chatte , and is still in the
grantee's possession, an action in trover or replevin would be the trustee's
remedy; and if the fraudulent transfer was of cash, the trustee's action would be
for money had and received. Such actions at law are as available to the trustee
to-day as they were in the English courts of long ago. If, on the other hand, the
subject matter is land or an intangible, or the trustee needs equitable aid for an
accounting or the like, he may invoke the equitable process, and that also is
beyond dispute." 1 G. Glenn, Fraudulent Conveyances and Preferences 98,
pp. 183-184 (rev. ed. 1940) (footnotes omitted).

14

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 to relief. Although this case demonstrates that
fraudulent conveyance actions could be brought in equity, it does not show that
suits to recover a definite sum of money would be decided by a court of equity
when a petitioner did not seek distinctively equitable remedies. The creditors in
Ex parte Scudamore asked the Chancellor to provide injunctive relief by
ordering the debtor's former law partner to convey to them the debtor's share of
the partnership's receivables that came into his possession in the future, along
with receivables he then held in trust for the debtor. To the extent that they
asked the court to order relinquishment of a specific preferential transfer rather
than ongoing equitable relief, the Chancellor dismissed their suit and noted that
the proper means of recovery would be an action at law against the transferee.
Respondent's own cause of action is of precisely that sort.

15

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 other
equitable relief. Nor has respondent repaired this deficit.5 We therefore
conclude that respondent would have had to bring his action to recover an
alleged fraudulent conveyance of a determinate sum of money at law in 18thcentury England, and that a court of equity would not have adjudicated it.6
B
16

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 damages, when the like amount can be recovered
at law in an action sounding in tort or for money had and received." Buzard v.
Houston, 119 U.S., at 352, 7 S.Ct., at 252, citing Parkersburg v. Brown, 106
U.S. 487, 500, 1 S.Ct. 442, 452, 27 L.Ed. 238 (1883); Ambler v. Choteau, 107
U.S. 586, 1 S.Ct. 556, 27 L.Ed. 322 (1883); Litchfield v. Ballou, 114 U.S. 190,
5 S.Ct. 820, 29 L.Ed. 132 (1885). See also Atlas Roofing Co. v. Occupational
Safety and Health Review Comm'n, 430 U.S. 442, 454, n. 11, 97 S.Ct. 1261,
1268, n. 11, 51 L.Ed.2d 464 (1977) ("the otherwise legal issues of voidable
preferences"); Pernell v. Southall Realty, 416 U.S. 363, 370, 94 S.Ct. 1723,
1727, 40 L.Ed.2d 198 (1974) (" '[W]here an action is simply for the recovery . .
. of a money judgment, the action is one at law' "), quoting Whitehead v.
Shattuck, 138 U.S. 146, 151, 11 S.Ct. 276, 277, 34 L.Ed. 873 (1891); Dairy
Queen, Inc. v. Wood, 369 U.S. 469, 476, 82 S.Ct. 894, 899, 8 L.Ed.2d 44
(1962) ("Petitioner's contention . . . is that insofar as the complaint requests a
money judgment it presents a claim which is unquestionably legal. We agree
with that contention"); Gaines v. Miller, 111 U.S. 395, 397-398, 4 S.Ct. 426,
427, 28 L.Ed. 466 (1884) ("Whenever one person has in his hands money
equitably belonging to another, that other person may recover it by assumpsit
for money had and received. The remedy at law is adequate and complete")
(citations omitted).

17

Indeed, in our view Schoenthal v. Irving Trust Co., 287 U.S. 92, 53 S.Ct. 50, 77
L.Ed. 185 (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 he 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, 53 S.Ct., at 51. 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 was available at law. There, as
here, "[t]he preferences sued for were money payments of ascertained and
definite amounts," and "[t]he bill discloses no facts that call for an accounting
or other equitable relief." Id., at 95, 53 S.Ct., at 51. Respondent's fraudulent
conveyance action plainly seeks relief traditionally provided by law courts or
on the law side of courts having both legal and equitable dockets.7 Unless
Congress may and has permissibly withdrawn juri diction over that action by
courts of law and assigned it exclusively to non-Article III tribunals sitting
without juries, the Seventh Amendment guarantees petitioners a jury trial upon
request.
IV
18

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." Schoenthal v. Irving Trust Co., supra, at 94-95, 53
S.Ct., at 51. Although related to bankruptcy proceedings, fraudulent
conveyance and preference actions brought by a trustee in bankruptcy were
deemed separate, plenary suits to which the Seventh Amendment applied.
While the 1978 Act brought those actions within the jurisdiction of the
bankruptcy courts, it preserved parties' rights to trial by jury as they existed
prior to the effective date of the 1978 Act. 28 U.S.C. 1480(a) (repealed). The
1984 Amendments, however, designated fraudulent conveyance actions "core
proceedings," 28 U.S.C. 157(b)(2)(H) (1982 ed., Supp. V), which bankruptcy
judges may adjudicate and in which they may issue final judgments, 157(b)
(1), if a district court has referred the matter to them, 157(a). We are not
obliged to decide today whether bankruptcy courts may conduct jury trials in
fraudulent conveyance suits brought by a trustee against a person who has not
entered a claim against the estate, either in the rare procedural posture of this
case, see supra, at 41, n. 3, or under the current statutory scheme, see 28 U.S.C.
1411 (1982 ed., Supp. V). Nor need we decide whether, if Congress has
authorized bankruptcy courts to hold jury trials in such actions, that

authorization comports with Article III when non-Article III judges preside over
the actions subject to review in, or withdrawal by, the district courts. We also
need not consider whether jury trials conducted by a bankruptcy court would
satisfy the Seventh Amendment's command that "no fact tried by a jury, shall
be otherwise re-examined in any Court of the United States, than according to
the rules of the common law," given that district courts may presently set aside
clearly erroneous factual findings by bankruptcy courts. Bkrtcy. Rule 8013. The
sole issue before us is whether the Seventh Ame dment confers on petitioners a
right to a jury trial in the face of Congress' decision to allow a non-Article III
tribunal to adjudicate the claims against them.
19

* 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, 97 S.Ct., at 1269 (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, 97 S.Ct., at 1270. 8

20

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., 430 U.S., at 450, n.
7, 97 S.Ct., at 1266, n. 7, quoting Crowell v. Benson, 285 U.S. 22, 51, 52 S.Ct.
285, 292, 76 L.Ed. 598 (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.9 But it lacks the power to strip parties contesting matters
of private right of their constitutional right to a trial by jury. As we recognized
in Atlas Roofing, to hold otherwise would be to permit Congress to eviscerate
the Seventh Amendment's guarantee by assigning to administrative agencies or
courts of equity all causes of action not grounded in state law, whether they
originate in a newly fashioned regulatory scheme or possess a long line of
common-law forebears. 430 U.S., at 457-458, 97 S.Ct., at 1270-1271. The
Constitution nowhere grants Congress such puissant authority. "[L]egal claims
are not magically converted into equitable issues by their presentation to a court
of equity," Ross v. Bernhard, 396 U.S. 531, 538, 90 S.Ct. 733, 738, 24 L.Ed.2d

729 (1970), nor can Congress conjure away the Seventh Amendment by
mandating that traditional legal claims be brought there or taken to an
administrative tribunal.
21

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, 430 U.S., at 450-461, 97
S.Ct., at 1266-1272 (workplace safety regulations); Block v. Hirsh, 256 U.S.
135, 158, 41 S.Ct. 458, 460, 65 L.Ed. 865 (1921) (temporary emergency
regulation of rental real estate). See also Pernell v. Southall Realty, 416 U.S., at
382-383, 94 S.Ct., at 1733 (discussing cases); Murray's Lessee v. Hoboken
Land & Improvement Co., 18 How. 272, 284, 15 L.Ed. 372 (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 nonArticle III tribunals is circumscribed. See Thomas v. Union Carbide
Agricultural Products Co., 473 U.S. 568, 589, 593-594, 105 S.Ct. 3325, 3337,
3339-3340, 87 L.Ed.2d 409 (1985); id., at 598-600, 105 S.Ct., at 3342-3343
(BRENNAN, J., concurring in judgment); Northern Pipeline Construction Co.
v. Marathon Pipe Line Co., 458 U.S. 50, 73-76, 102 S.Ct. 2858, 2872-2874, 73
L.Ed.2d 598 (1982) (opinion of BRENNAN, J.); id., at 91, 102 S.Ct., at 2881
(REHNQUIST, J., concurring in judgment). Unless a legal cause of action
involves "public rights," Congress may not deprive parties litigating over such
a right of the Seventh Amendment's guarantee to a jury trial.

22

In Atlas Roofing, supra, 430 U.S., at 458, 97 S.Ct., at 1270, 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, 285 U.S., at 51, 52 S.Ct., at 292. 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 Seventh Amendment
poses no independent bar to the adjudication of that action by a nonjury
factfinder. See, e.g., Atlas Roofing, supra, 430 U.S., at 453-455, 460, 97 S.Ct.,
at 1268-1269, 1271; Pernell v. Southall Realty, supra, 416 U.S., at 383, 94
S.Ct., at 1733; Block v. Hirsh, supra, 256 U.S., at 158, 41 S.Ct., at 460. In
addition to our Seventh Amendment precedents, we therefore rely on our
decisions exploring the restrictions Article III places on Congress' choice of
adjudicative bodies to resolve disputes over statutory rights to determine
whether petitioners are entitled to a jury trial.
23

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 nonArticle 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, 458 U.S., at 69, 102 S.Ct., at 2870 (opinion of
BRENNAN, J.), quoting Ex parte Bakelite Corp., 279 U.S. 438, 451, 49 S.Ct.
411, 413, 73 L.Ed. 789 (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, 105 S.Ct., at 3335;
id., at 596-599, 105 S.Ct., at 3341-3343 (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, 105 S.Ct., at 3339-3340. See id., at 600,
105 S.Ct., at 3343 (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, then it must be adjudicated by an Article III court. 10 If the right is
legal in nature, then it carries with it the Seventh Amendment's guarantee of a
jury trial.

B
24

Although the issue admits of some debate, a bankruptcy trustee's right to

24

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
these terms in our Article III decisions. In Northern Pipeline Construction Co.,
458 U.S., at 71, 102 S.Ct., at 2871, the plurality noted that the restructuring of
debtor-creditor relations in bankruptcy "may well be a 'public right.' " 11 But the
plurality also emphasized that state-law causes of action for breach of contract
or warranty are paradigmatic private rights, even when asserted by an insolvent
corporation in the midst of Chapter 11 reorganization proceedings. The
plurality further said that "matters from their nature subject to 'a suit at common
law or in equity or admiralty' " lie at the "protected core" of Article III judicial
power, id., at 71, n. 25, 102 S.Ct., at 2871, n. 25; see id., at 90, 102 S.Ct., at
2881 (REHNQUIST, J., concurring in judgment)a point we reaffirmed in
Thomas, supra, 473 U.S., at 587, 105 S.Ct., at 3336. There can be little doubt
that fraudulent conveyance actions by bankruptcy trusteessuits which, we
said in Schoenthal v. Irving Trust Co., 287 U.S., at 94-95, 53 S.Ct., at 51
(citation omitted), "constitute no part of the proceedings in bankruptcy but
concern controversies arising out of it"are quintessentially suits at common
law that more nearly resemble state-law contract claims brought by a bankrupt
corporation to augment the bankruptcy estate than they do creditors'
hierarchically ordered claims to a pro rata share of the bankruptcy res. See
Gibson 1022-1025. They therefore appear matters of private rather than public
right.12

25

Our decision in Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391
(1966), under the Seventh Amendment rather than Article III, confirms this
analysis. Petitioner, an officer of a bankrupt corporation, made payments from
corporate funds within four months of bankruptcy on corporate notes on which
he was an accommodation maker. When petitioner later filed claims against the
bankruptcy estate, the trustee counterclaimed, arguing that the payments
petitioner made constituted voidable preferences because they reduced his
potential personal liability on the notes. We held that the bankruptcy court had
jurisdiction to order petitioner to surrender the preferences and that it could rule
on the trustee's claim without according petitioner a jury trial. Our holding did
not depend, however, on the fact that "[bankruptcy] courts are essentially courts
of equity" because "they characteristically proceed in summary fashion to deal
with the assets of the bankrupt they are administering." Id., at 327, 86 S.Ct., at
471. Notwithstanding the fact that bankruptcy courts "characteristically"
supervised summary proceedings, they were statutorily invested with
jurisdiction at law as well, and could also oversee plenary proceedings. See
Atlas Roofing, 430 U.S., at 454, n. 11, 97 S.Ct., at 1268, n. 11 (Katchen rested
"on the ground that a bankruptcy court, exercising its summary jurisdi tion, was
a specialized court of equity") (emphasis added); Pepper v. Litton, 308 U.S.

295, 304, 60 S.Ct. 238, 244, 84 L.Ed. 281 (1939) ("[F]or many purposes
'courts of bankruptcy are essentially courts of equity' ") (emphasis added). Our
decision turned, rather, on the bankruptcy court's having "actual or constructive
possession" of the bankruptcy estate, 382 U.S., at 327, 86 S.Ct., at 471, and its
power and obligation to consider objections by the trustee in deciding whether
to allow claims against the estate. Id., at 329-331, 86 S.Ct., at 472-474. Citing
Schoenthal v. Irving Trust Co., supra, approvingly, we expressly stated that, if
petitioner had not submitted a claim to the bankruptcy court, the trustee could
have recovered the preference only by a plenary action, and that petitioner
would have been entitled to a jury trial if the trustee had brought a plenary
action in federal court. See 382 U.S., at 327-328, 86 S.Ct., at 471-472. We
could not have made plainer that our holding in Schoenthal retained its vitality:
"[A]lthough 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, Schoenthal v. Irving Trust Co., 287 U.S. 92, 53
S.Ct. 50, when the same issue arises as part of the process of allowance and
disallowance of claims, it is triable in equity." Id., at 336, 86 S.Ct., at 476. 13
26

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 their Seventh Amendment right to a trial by jury. Katchen thus
supports the result we reach today; it certainly does not compel its opposite.14

27

The 1978 Act abolished the statutory distinction between plenary and summary
bankruptcy proceedings, on which the Court relied in Schoenthal and Katchen.
Although the 1978 Act preserved parties' rights to jury trials as they existed
prior to the day it took effect, 28 U.S.C. 1480(a) (repealed), in the 1984
Amendments Congress drew a new distinction between "core" and "non-core"
proceedings and classified fraudulent conveyance actions as core proceedings
triable by bankruptcy judges. 28 U.S.C. 157(b)(2)(H) (1982 ed., Supp. V).
Whether 28 U.S.C. 1411 (1982 ed., Supp. V) purports to abolish jury trial
rights in what were formerly plenary actions is unclear, and at any rate is not a

question we need decide here. See supra, at 40-41, n. 3. The decisive point is
that in neither the 1978 Act nor the 1984 Amendments did Congress "creat[e] a
new cause of action, and remedies therefor, unknown to the common law,"
because traditional rights and remedies were inadequate to cope with a manifest
public problem. Atlas Roofing, 430 U.S., at 461, 97 S.Ct., at 1272. Rather,
Congress simply reclassified a pre-existing, common-law cause of action that
was not integrally related to the reformation of debtor-creditor relations15 and
that apparently did not suffer from any grave deficiencies. This purely
taxonomic change cannot alter our Seventh Amendment analysis. Congress
cannot eliminate a party's Seventh Amendment right to a jury trial merely by
relabeling the cause of action to which it attaches and placing exclusive
jurisdiction in an administrative agency or a specialized court of equity. See
Gibson 1022-1025.
28

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, 97 S.Ct., at 1268, n. 11, or that
bankruptcy proceedings have been placed in "an administrative forum with
which the jury would be incompatible." Id., at 450, 97 S.Ct., at 1266. 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, 102 S.Ct., at 2866 (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.16 In addition, one cannot easily
say that "the jury would be incompatible" with bankruptcy proceedings, in view
of Congress' express provision for jury trials in certain actions arising out of
bankruptcy litigation. See 28 U.S.C. 1411 (1982 ed., Supp. V); Gibson 10241025; Warner, Katchen Up in Bankruptcy: The New Jury Trial Right, 63
Am.Bankr.L.J. 1, 48 (1989) (hereinafter Warner). And Justice WHITE's claim
that juries may serve usefully as checks only on the decisions of judges who
enjoy life tenure, see post, at 82-83, overlooks the extent to which judges who
are appointed for fixed terms may be beholden to Congress or Executive
officials, and thus ignores the potential for juries to exercise beneficial restraint
on their decisions.

29

It may be that providing jury trials in some fraudulent conveyance actionsif

not in this particular case, because respondent's suit was commenced after the
Bankruptcy Court approved the debtor's plan of reorganizationwould impede
swift resolution of bankruptcy proceedings and increase the expense of Chapter
11 reorganizations.17 But "these considerations are insufficient to overcome the
clear command of the Seventh Amendment." Curtis v. Loether, 415 U.S., at
198, 94 S.Ct., at 1010. See also Bowsher v. Synar, 478 U.S. 714, 736, 106 S.Ct.
3181, 3193, 92 L.Ed.2d 583 (1986) (" '[T]he fact that a given law or procedure
is efficient, convenient, and useful in facilitating functions of government,
standing alone, will not save it if it is contrary to the Constitution' "), quoting
INS v. Chadha, 462 U.S. 919, 944, 103 S.Ct. 2764, 2780, 77 L.Ed.2d 317
(1983); Pernell v. Southall Realty, 416 U.S., at 383-384, 94 S.Ct., at 1733-1734
(discounting arguments that jury trials would be unduly burdensome and
rejecting "the notion that there is some necessary inconsistency between the
desire for speedy justice and the right to jury trial").18
V
30

We do not decide today whether the current jury trial provision28 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.19 We do hold,
however, that whatever the answers to these questions, the Seventh
Amendment entitles petitioners to the jury trial they requested. Accordingly,
the judgment of the Court of Appeals is reversed, and the case is remanded for
further proceedings consistent with this opinion.

31

It is so ordered.

32

Justice SCALIA, concurring in part and concurring in the judgment.

33

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, 105
S.Ct. 3325, 3335, 87 L.Ed.2d 409 (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, 102 S.Ct. 2858, 2870, 73 L.Ed.2d 598 (1982)

(plurality opinion), quoting Ex parte Bakelite Corp., 279 U.S. 438, 451, 49
S.Ct. 411, 413, 73 L.Ed. 789 (1929). Until quite recently this has also been the
consistent vi w of the Court. See 458 U.S., at 69, n. 23, 102 S.Ct., at 2870 ("
[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, 97 S.Ct. 1261, 1266, 51 L.Ed.2d 464 (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, 97 S.Ct., at 1270 (noting "distinction between
cases of private right and those which arise between the Government and
persons subject to its authority"); id., at 458, 97 S.Ct., at 1270 (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, 52 S.Ct. 285, 292, 76 L.Ed.
598 (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"); Ex parte
Bakelite Corp., supra, at 451, 49 S.Ct., at 413 (public rights are those "arising
between the government and others, which from their nature do not require
judicial determination and yet are susceptible of it"); Murray's Lessee v.
Hoboken Land & Improvement Co., 18 How. 272, 283, 15 L.Ed. 372 (1856)
(plaintiff's argument that a controversy susceptible of judicial determination
must be a "judicial controversy" heard in an Article III court "leaves out of view
the fact that the United States is a party").
34

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," 18 How., at 284. Murray's
Lessee involved a dispute over title to lands that had been owned by a former
collector of customs whom the Treasury auditor had adjudged to be deficient in
his remittances. The defendant had purchased the land in the marshal's sale
pursuant to a duly issued distress warrant (which had apparently not been
contested by the collector in any district court proceeding). The plaintiff, who
had acquired the same land pursuant to the execution of a judgment against the
collector, which execution occurred before the marshal's sale, but after the
marshal's filing of the distress warrant to establish the lien, brought an action
for ejectment to try tit e. He argued, inter alia, that the process by which the
defendant had obtained title violated Article III because adjudication of the
collector's indebtedness to the United States was inherently a judicial act, and
could not lawfully have been performed by a Treasury auditor, but only by an
Article III court. We rejected this contention by observing that although "the
auditing of the accounts of a receiver of public moneys may be, in an enlarged
sense, a judicial act," id., at 280, the English and American traditions
established that it did not, without consent of Congress, give rise to a judicial
"controversy" within the meaning of Article III.
35

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 be made
responsible in a judicial tribunal for obeying the lawful command of the
government; and the government itself, which gave the command, cannot be
sued without its own consent," even though the issue in question is an
appropriate matter for a judicial controversy. Ibid. Congress could, however,
waive this immunity, so as to permit challenges to the factual bases of officers'
actions in Article III courts; and this waiver did not have to place the
proceeding in the courts unconditionally or ab initio, for the "United States may
consent to be sued, and may yield this consent upon such terms and under such
restrictions as it may think just." Ibid. Thus, we summed up, in the oft-quoted
passage establishing the doctrine at issue here:

36

[T]here are matters, involving public rights, which may be presented in such
form that the judicial power is capable of acting on them, and which are
susceptible of judicial determination, but which Congress may or may not bring
within the cognizance of the courts of the United States, as it may deem
proper." Id., at 284 (emphasis added).

37

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 publicthat 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, 102 S.Ct., at 2870, quoting Ex parte
Bakelite Corp., 279 U.S., at 451, 49 S.Ct., at 413. See also, in addition to the
cases cited supra, at 65-66, Williams v. United States, 289 U.S. 553, 581, 53
S.Ct. 751, 760, 77 L.Ed. 1372 (1933) (noting sovereign immunity origins of
legislative courts); Ex parte Bakelite, supra, 279 U.S., at 453-454, 49 S.Ct., at
414 (same). Cf. McElrath v. United States, 102 U.S. 426, 440, 26 L.Ed. 189
(1880).

38

In Thomas v. Union Carbide Agricultura Products Co., 473 U.S. 568, 105 S.Ct.
3325, 87 L.Ed.2d 409 (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, 105
S.Ct., at 3339 (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, 105 S.Ct., at 3337, quoting Northern Pipeline, supra, 458
U.S., at 68, 102 S.Ct., at 2869without 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.

39

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 countedin a case-by-case
evaluation of whether the danger of "encroaching" on the "judicial powers" (a
phrase now drained of constant content) is too much. The Term after Thomas,
in Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 106 S.Ct.
3245, 92 L.Ed.2d 675 (1986), we reconfirmed our error, embracing the analysis
of Thomas and describing at greater length the new Article III standard it
established, which seems to me no standard at all:

40

"[I]n reviewing Article III challenges, we have weighed a number of factors,

none of which has been deemed determinative, with an eye to the practical
effect that the congressional action will have on the constitutionally assigned
role of the federal judiciary. . . . Among the factors upon which we have
focused are the extent to which the 'essential attributes of judicial power' are
reserved to Article III courts, and, conversely, the extent to which the nonArticle III forum exercises the range of jurisdiction and powers normally vested
only in Article III courts, the origins and importance of the right to be
adjudicated, and the concerns that drove Congress to depart from the
requirements of Article III." 478 U.S., at 851, 106 S.Ct., at 3264 citing Thomas,
supra, 473 U.S., at 587, 589-593, 105 S.Ct., at 3336, 3337-39.

41

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, 109 S.Ct. 647, 682-683, 102 L.Ed.2d 714 (1989) (SCALIA, J.,
dissenting), than with regard to the assigned functions of the Executive, see
Morrison v. Olson, 487 U.S. 654, 708-712, 108 S.Ct. 2597, 2629, 101 L.Ed.2d
569 (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, 478 U.S., at 851, 106 S.Ct., a 3257.

42

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
the Article III concomitant of a jury trial could not be eliminated here. Since I
join the remainder of the Court's opinion, I concur in its judgment as well.
43

Justice WHITE, dissenting.

44

The Court's decision today calls into question several of our previous
decisions, 1 strikes down at least one federal statute, 2 and potentially concludes
for the first time that the Seventh Amendment3 guarantees litigants in a
specialized non-Article III forum the right to a jury trial. Because I cannot
accept these departures from established law, I respectfully dissent.

45

* Before I explore the Court's approach to analyzing the issues presented in this
case, I first take up the question of the precedent that the Court most directly
disregards today, Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d
391 (1966). Though the Court professes not to overrule this decision, and
curiously, to be acting in reliance on it, see ante, at 57-59, there is simply no
way to reconcile our decision in Katchen with what the Court holds today.

46

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 57(g) 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, 86 S.Ct., at 476. Not only could the issue of
preference be tried without a jury for the purpose of denying the filed claim
pursuant to 57(g), but a money judgment for the amount of the pre erence
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 57(g) objection or also seeks affirmative relief." Id., at
337-338, 86 S.Ct., at 477. 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.

47

In order to escape the force of Katchen 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,
86 S.Ct., at 476, on which the Court today puts so much weight"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 58simply stated the truism that, under the 1898 Act in
force at that time, if petitioner had not presented his claim to the bankruptcy
court, that court would have had no jurisdiction to perform a summary
adjudication of the preference.
48

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, 86 S.Ct., at 476. 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.

49

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 Schoen- thal
v. Irving Trust Co., 287 U.S. 92, 94-95, 53 S.Ct. 50, 51, 77 L.Ed. 185 (1932),
which, in holding that "[s]uits to recover preferences constitute no part of the
proceedings in bankruptcy," merely reflected the then-existing statutory
scheme.

50

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 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 entitlementor, at the very least, profoun ly
shifted the basis for it.
51

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:

52

" '[I]n cases of bankruptcy, many incidental questions arise in the course of
administering the bankrupt estate, which would ordinarily be pure cases at law,
and in respect of their facts triable by jury, but, as belonging to bankruptcy
proceedings, they become cases over which the bankruptcy court, which acts as
a court of equity, exercises exclusive control. Thus a claim of debt or damages
against the bankrupt is investigated by chancery methods.' " Katchen, supra, at
337, 86 S.Ct., at 477 (quoting Barton v. Barbour, 104 U.S. 126, 133-134, 26
L.Ed. 672 (1881)).

53

The same is true here, and it counsels affirmance under our holding in Katchen.
In essence, the Court's rejection of Katchenand its classification of the
change effected by the 1984 Act as "taxonomic"comes from its conclusion
that the fraudulent conveyance action at issue here is not " 'part of the process
of allowance and disallowance of claims.' " Ante, at 58 (quoting Katchen, 382
U.S., at 336, 86 S.Ct., at 476). The Court misses Katchen point, however: it
was the fact that Congress had committed the determination and recovery of
preferences to bankruptcy proceedings that was determinative in that case, not
just the bare fact that the action "happened" to take place in the process of
adjudicating claims. And the same determinative element is present here, for
under the 1984 Amendments, Congress unmistakably intended to have
fraudulent conveyances adjudicated and recovered in the bankruptcy court in
accordance with that court's usual procedures.

54

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."4 Ibid. This
misguided view of the congressional enactment is the crux of the problem with
the Court's approach.
55

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 proceedingsenacted by Congress under its plenary constitutional
power, see U.S. Const., Art. I, 8, cl. 4, to establish bankruptcy laws. As
discussed in the preceding paragraph, this vision of what is "integrally related"
to the resolution of creditor-debtor conflicts includes the sort of action before us
today. See 28 U.S.C. 157(b)(2)(H) (1982 ed., Supp. V). Nor does the Court
find support for its contrary understanding in petitioners' submission, which
concedes that the action in question here is brought to "recover monies that are
properly part of the debtor's estate and should be ratably distributed among
creditors," and that fraudulent transfers put at risk "the basic policy of nondiscriminatory distribution that underlies the bankruptcy law." Brief for
Petitioners 12. This, too, seems to belie the Court's view that actions to set aside
fraudulent conveyances are not "integrally related" to reforming creditor-debtor
relations.

56

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 pre1791 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 onlyonce 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 p enary
proceedings in Article III courtswhere the Seventh Amendment attached
does not impugn the legality of every other possible arrangement. See also Part
II-B, infra. Perhaps instead the Court rests its conclusion on the practice of the
18th-century English courts. I take issue with this view of the old English law,
below. But even if this were correct, I do not see why the Article I, 8, power
should be so restricted. See ibid.

57

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, 86 S.Ct., at 471). 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.
58

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
59

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 on two
questions: first, in what forum will those claims be heard; and second, what is
the nature of those claims. A weighing of both of these factors must point
toward application of the Seventh Amendment before that guarantee will
attach.5

60

To read the Court's opinion, one might think that the Seventh Amendment is
concerned only with the nature of a claim. If a laim 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, 97 S.Ct. 1261, 1272, 51 L.Ed.2d 464 (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 Court's decision

today, and not our prior rulings, that is in error.

61

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, 36 S.Ct. 595, 596, 60 L.Ed. 961
(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.

62

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, 107 S.Ct. 1831, 1835, n. 4, 95
L.Ed.2d 365 (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, 430 U.S., at 454, 97
S.Ct., at 1268 (emphasis deleted) (quoting Pernell v. Southall Realty, 416 U.S.
363, 383, 94 S.Ct. 1723, 1733, 40 L.Ed.2d 198 (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.

63

Most specifically relevant for this case, we have indicated on several previous
occasions that bankruptcy courtsby their very nature, courts of equityare
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, 430 U.S., at 454, n. 11, 97 S.Ct., at 1268;
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, 195, 94 S.Ct.
1005, 1009, 39 L.Ed.2d 260 (1974). Atlas Roofing, Curtis, and countless other
cases have recognized that Congress has the power to "entrust enforcement of
statutory rights to [a] . . . specialized court of equity free from the strictures of
the Seventh Amendment." Curtis, supra, at 195, 94 S.Ct., at 1009. Prior cases
emphatically hold that bankruptcy courts are such specialized courts of equity.
Indeed, we have stated that "bankruptcy courts are inherently proceedings in
equity." Katchen v. Landy, 382 U.S., at 336, 86 S.Ct., at 476; see also Local
Loan Co. v. Hunt, 292 U.S. 234, 240, 54 S.Ct. 695, 697, 78 L.Ed. 1230 (1934).

64

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 actionfocusing 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, 97 S.Ct., at 1269. 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, 97 S.Ct., at 1270.
65

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 that these forums will have to employ juries
when hearing claims like the one before us todaya requirement that subverts
in large part Congress' decision to create such forums in the first place. Past
decisions have accorded Congress far more discretion in making these
assignments. Thus, Block v. Hirsh, 256 U.S. 135, 158, 41 S.Ct. 458, 460, 65
L.Ed. 865 (1921), found that a Seventh Amendment "objection amount[ed] to
little" when Congress assigned what was, in essence, a common-law action for
ejectment to a specialized administrative tribunal. We reiterated the vitality of
Block v. Hirsh as recently as our decision in Pernell v. Southall Realty, supra,
416 U.S., at 383, 94 S.Ct., at 1733, and the principle was reaffirmed in several
cases between these two decisions. See n. 10, infra. In Pernell, referring to
Block v. Hirsh, we stated that "the Seventh Amendment would not be a bar to a
congressional effort to entrust landlord-tenant disputes, including those over the
right to possession, to an administrative agency." Pernell, supra, at 383, 94
S.Ct., at 1733. Yet to the extent that such disputes involve matters that are
"legal" in natureas they clearly dothe Court's decision today means that
Congress cannot do what we said in Block and Pernell that it could. 6

66

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 guaranteethe notions of "jury equity" and of juries serving as

popular checks on life-tenured judgesare inapt in bankruptcy courts. As one

scholar noted:
67

"We have kept the civil jury . . . as a check on the federal judge whose life
tenure makes [him] suspect [under]

68

. . . the Populist traditions of this country. The function of the civil jury is to
diffuse the otherwise autocratic power and authority of the judge.

69

"This . . . function . . . has little application to non-traditional civil proceedings

such as those which occur in bankruptcy. . . . The condition of autocracy which
would bring the underlying values of the Seventh Amendment [into force] is
not present; the right to jury trial therefore has no application." Hearings on S.
558 before the Subcommittee on the Constitution of the Senate Committee on
the Judiciary, 100th Cong., 1st Sess., 5 2-573 (1987) (statement of Paul
Carrington).

70

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.

71

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, 94 S.Ct. 1005, 39 L.Ed.2d 260 (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, 415 U.S., at 195,
94 S.Ct., at 1009; see also Atlas Roofing Co. v. Occupational Safety and Health
Review Comm'n, 430 U.S., at 454, n. 11, 97 S.Ct., at 1268, n. 11. I fear that the
Court's decision today will have the desultory effect we feared when Curtis
was decided.

B
72

The above is not to say that Congress can vitiate the Seventh Amendment by

72

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, 97 S.Ct., at 1272, n. 16.
Our cases require a second inquirythe one that the Court focuses exclusively
upon concerning the nature of the claim so assigned.

73

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.
While I agree that this action could have been brought at lawand perhaps
even that it might have been so litigated in the most common casemy review
of the English cases from the relevant period leaves me unconvinced that the
chancery court would have refused to hear this actionthe Court's conclusion
today.

74

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, 445446, 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, 30 Eng.Rep. 907 (Ch. 1796), which, as even the
Court concedes, "demonstrates that fraudulent conveyance actions could be
brought in equity." Ante at 45.

75

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, 7
S. t. 249, 30 L.Ed. 451 (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.7 Still others have questioned the soundness of the

distinction that Professor Glenn drewbetween suits to set aside monetary
conveyances and suits to avoid the conveyances of landas unwise or
unsupported. See, e.g., In re Wencl, 71 B.R. 879, 883, n. 2 (Bkrtcy. Ct., DC
Minn.1987). Indeed, just a few pages after it rests its analysis of the 18thcentury case law on Professor Glenn's writing, the Court itself dismisses this
aspect of Professor Glenn's historical conclusions. See ante, at 46, n. 5. The
Court embraces Professor Glenn's treatise where it agrees with it and calls it
authoritative, while rejecting the portions it finds troublesome.
76

Trying to read the ambiguous history concerning fraudulent conveyance actions

in equitya task which the Court finds simple todayhas perplexed jurists in
each era, who have come to conflicting decisions each time that the question
has found relevance. Even in Schoenthal time, and under the statutory regime
applicable when that case was decided, many courts reviewing the same
historical sources considered by us today had concluded that actions such as
this one sounded in equity. See Schoenthal v. Irving Trust Co., 287 U.S., at 96,
n. 3, 53 S.Ct., at 52, n. 3; Note, 42 Yale L.J. 450, 450-452 (1933). In more
recent times, an impressive collection of courts have come to a similar
conclusion, finding that actions to avoid fraudulent conveyances were
historically considered equitable in nature.8

77

In sum, I do not think that a fair reading of the historyour 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 1791.9

78

With the historical evidence thus in equipoiseand with the nature of the relief
sought here not dispositive either, see n. 8, suprawe should not hesitate to
defer to Congress' exercise of its power under the express constitutional grant
found in Article I, 8, cl. 4, authorizing Congress "[t]o establish . . . uniform
Laws on the subject of Bankruptcies." Congress has exercised that power,
defining actions such as the one before us to be among the "core" of bankruptcy
proceedings, triable in a bankruptcy court before a bankruptcy judge and
without a jury. I would defer to these decisions.

79

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.10 The Court does not say from where it draws its requirement that
the Congress must provide us with some indication that it considered the
constitutional dimensions of its decision before acting, as a prerequisite for
obtaining our deference to those enactments.11
80

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:

81

"The fundamental and radically progressive nature of [congressional]

extensions [in the scope of bankruptcy laws] becomes apparent upon their mere
statement. . . . Taken altogether, they demonstrate in a very striking way the
capacity of the bankruptcy clause to meet new conditions as they have been
disclosed as a result of the tremendous growth of business and development of
human activities from 1800 to the present day. And these acts, far-reaching
though they may be, have not gone beyond the limit of congressional power;
but rather have constituted extensions into a field whose boundaries may not
yet be fully revealed." Continental Illinois National Bank v. Chicago, R.I. &
P.R. Co., 294 U.S. 648, 671, 55 S.Ct. 595, 604, 79 L.Ed. 1110 (1935).

82

See also Katchen v. Landy, 382 U.S., at 328-329, 86 S.Ct., at 472.

83

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 descendants 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.

84

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, 102 S.Ct. 2858, 2871, 73 L.Ed.2d 598 (1982); id., at 91, 102
S.Ct., at 2881 (REHNQUIST, J., concurring in judgment); id., at 92, 102 S.Ct.,
at 2882 (Burger, C.J., dissenting); id., at 108-118, 102 S.Ct., at 2890-95
(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.12 Yet today the Court calls all of this into
doubt merely because these cases have been subjected to "substantial scholarly
criticism." Ante, at 56, n. 11. 13 If no part of bankruptcy proceedings involve the
adjudication of public rights, as the Court implies today, then all bankruptcy
proceedings are saved from the strictures of the Seventh Amendment only to
the extent that such proceedings are the descendants of earlier analogue heard
in equity in 18th-century England. Because, as almost every historian has
observed, this period was marked by a far more restrictive notion of equitable
jurisdiction in bankruptcies, see, e.g., Warren, supra, at 3-5, the Court's
decision today may threaten the efficacy of bankruptcy courts as they are now
constituted. I see no reason to use the Seventh Amendment as a tool to achieve
this dubious result.
III
85

Because I find the Court's decision at odds with our precedent, and peculiarly
eager to embark on an unclear course in Seventh Amendment jurisprudence, I
respectfully dissent.14

86

Justice BLACKMUN, with whom Justice O'CONNOR joins, dissenting.

87

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.

88

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, 97 S.Ct.
1261, 51 L.Ed.2d 464 (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.

89

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 itle, 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
Conveyances 525-526 (3d Am. ed. 1845). This procedural dimension of the
choice between law and equity lends a tentative quality to any lessons we may
draw from history.
90

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, 53 S.Ct. 50, 77 L.Ed. 185 (1932).
Schoenthal turned on the legal nature of the preference claim and of the relief
sought, id., at 94-95, 53 S.Ct., at 51, rather than upon the legal nature of the
tribunal to which "plenary proceedings" were assigned under the 1898
Bankruptcy Act.

91

"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, 97 S.Ct., at 1266; see also Tull
v. United States, 481 U.S. 412, 418, n. 4, 107 S.Ct. 1831, 1835, n. 4, 95
L.Ed.2d 365 (1987). Here, I agree with Justice WHITE that Katchen v. Landy,
382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (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, 97 S.Ct., at 1268, n. 11.

92

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, 97 S.Ct., at 1269. 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, 102 S.Ct. 2858, 73
L.Ed.2d 598 (1982), it gambled and predicted that a statutory right which is an

integral part of a pervasive regulatory scheme may qualify as a "public right."

Compare H.R.Rep. No. 98-9, pt. 1, pp. 6, 13 (1983) (House Report), with
S.Rep. No. 98-55, pp. 32-40 (1983) (Senate Report); see Thomas v. Union
Carbide Agricultural Products Co., 473 U.S. 568, 586, 594, 105 S.Ct. 3325,
3335, 3339, 87 L.Ed.2d 409 (1985); see also id., at 599, 105 S.Ct., at 3342
(BRENNAN, J., concurring in judgment) ("[A] bankruptcy adjudication,
though technically a dispute among private parties, may well be properly
characterized as a matter of public rights"). Doing its best to observe the
constraints of Northern Pipeline while at the same time preserving as much as
it could of the policy goals of the major program of bankruptcy reform the
decision in Northern Pipeline dismantled, see House Report, at 7, Senate
Report, at 6-7, Congress struck a compromise. It identified those proceedings
which it viewed as integral to the bankruptcy scheme as "core" (doing its best
to exclude "Marathon-type State law cases"), and assigned them to a
specialized equitable tribunal. Id., at 2.
93

I agree with Justice WHITE, ante, at 88-89, that it would be mproper 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.

94

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.

95

Although causes of action to recover fraudulent conveyances exist outside the

federal bankruptcy laws, the problems created by fraudulent conveyances are of
particular significance to the bankruptcy process. Indeed, for this reason, the
Bankruptcy Code long has included substantive legislation regarding fraudulent
conveyances and preferences. And the cause of action respondent brought in
this case arises under federal law. See 11 U.S.C. 548(a)(2) and 550(a). This
substantive legislation is not a jurisdictional artifice. It reflects, instead,
Congress' longstanding view that fraudulent conveyances and preferences on
the eve of bankruptcy are common methods through which debtors and
creditors act to undermine one of the central goals of the bankruptcy process:
the fair distribution of assets among creditors. Congress' conclusion that the
proper functioning of the bankruptcy system requires that expert judges handle

these claims, and that the claims be given higher priority than they would
receive on a crowded district court's civil jury docket (see Senate Report, at 3;
House Report, at 7-8), is entitled to our respect.
96

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.

97

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
today throws Congress into still another round of bankruptcy court reform,
without compelling reason. There was no need for us to rock the boat in this
case. Accordingly, I dissent.

Section 1330(a) provides:

"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 16051607 of this title or under any applicable international agreement." (Emphasis
added.)

Indeed, respondent strenuously supported the Court of Appeals' conclusion,

which echoed that of the District Court, see A p. to Pet. for Cert. 22, that the
"FSIA is inapplicable to the case at bar," 835 F.2d 1341, 1347 (CA11 1988),
not only on the court's rationale that "the transfers in question and the suit to
recover those transfers occurred before Granfinanciera was nationalized," ibid.,
but on the more sweeping rationale that Granfinanciera never proved that it was
an instrumentality of a foreign state because it had never really been
nationalized. See Brief for Appellee in No. 86-5738 (CA11), pp. 21-30; Brief

for Appellee in No. 86-1292 (SD Fla.), pp. 32-36. Admittedly, respondent's
present position that the FSIA does not confer immunity on Granfinanciera
because it was not an instrumentality of a foreign state when the alleged wrongs
occurred or when respondent filed suit is not necessarily incompatible with his
claim that Granfinanciera cannot qualify for a jury trial under the FSIA because
it requested a jury trial after it was nationalized. Respondent has not attempted,
however, to reconcile these views and did not make the second claim until he
filed his merits brief in this Court.
3

The current statutory provision for jury trials in bankruptcy proceedings28

U.S.C. 1411 (1982 ed., Supp. V), enacted as part of the Bankruptcy
Amendments and Federal Judgeship Act of 1984 (1984 Amendments), Pub.L.
98-353, 98 Stat. 333is notoriously ambiguous. Section 1411(a) provides: "
[T]his chapter and title 11 do not affect any right to trial by jury that an
individual has under applicable nonbankruptcy law with regard to a personal
injury or wrongful death tort claim." Although this
section might suggest that jury trials are available only in personal injury and
wrongful death actions, that conclusion is debatable. Section 1411(b) provides
that "[t]he district court may order the issues arising [in connection with
involuntary bankruptcy petitions] to be tried without a jury," suggesting that the
court lacks similar discretion to deny jury trials on at least some issues
presented in connection with voluntary petitions. The confused legislative
history of these provisions has further puzzled commentators. See, e.g., Gibson,
Jury Trials in Bankruptcy: Obeying the Commands of Article III and the
Seventh Amendment, 72 Minn.L.Rev. 967, 989-996 (1988) (hereinafter
Gibson); Note, the Bankruptcy Amendments and Federal Judgeship Act of
1984: The Impact on the Right of Jury Trial in Bankruptcy Court, 16
Tex.Tech.L.Rev. 535, 543-546 (1985). Whatever the proper construction of
1411, petitioners concede that this section does not entitle them to a jury trial.
Section 122(b) of the 1984 Amendments, 98 Stat. 346, bars application of
1411 to "cases under title 11 of the United States Code that are pending on the
date of enactment of this Act or to proceedings arising in or related to such
cases," and Chase & Sanborn's petition for reorganization was pending on that
date. Nor does 1411's predecessor28 U.S.C. 1480(a), which stated that
"this chapter and title 11 do not affect any right to trial by jury, in a case under
title 11 or in a proceeding arising under title 11 or arising in or related to a case
under title 11, that is provided by any statute in effect on September 30,
1979"seem to afford petitioners a statutory basis for their claim. As they
recognize, 1480 was apparently repealed by the 1984 Amendments. See
Gibson 989, and n. 96; King, Jurisdiction and Procedure Under the Bankruptcy
Amendments of 1984, 38 Vand.L.Rev. 675, 703, and n. 79 (1985); Brief for
Respondent 5, n. 11. Petitioners therefore appear correct in concluding that,

"absent any specific legislation in force providing jury trials for cases filed
before July 10, 1984, but tried afterwards, [their] right to jury trial in this
proceeding must necessarily be predicated entirely on the Seventh
Amendment." Brief for Petitioners 33, n. 7. See also Brief for Respondent 10,
and n. 15.
4

This quite distinct inquiry into whether Congress has permissibly entrusted the
resolution of certain disputes to an administrative agency or specialized court of
equity, and whether jury trials would impair the functioning of the legislative
scheme, appears to be what the Court contemplated when in Ross v. Bernhard,
396 U.S. 531, 538, n. 10, 90 S.Ct. 733, 738, n. 10, 24 L.Ed.2d 729 (1970), it
identified "the practical abilities and limitations of juries" as an additional factor
to be consulted in determining whether the Seventh Amendment confers a jury
trial right. See Tull v. United States, 481 U.S., at 418, n. 4, 107 S.Ct., at 1835,
n. 4; Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430
U.S. 442, 454-455, 97 S.Ct. 1261, 1268-1269, 51 L.Ed.2d 464 (1977). We
consider this issue in Part IV, infra. Contrary to Justice WHITE'S contention,
see post, at 79-80, we do not declare that the Seventh Amendment provides a
right to a jury trial on all legal rather than equitable claims. If a claim that is
legal in nature asserts a "public right," as we define that term in Part IV, then
the Seventh Amendment does not entitle the parties to a jury trial if Congress
assigns its adjudication to an administrative agency or specialized court of
equity. See infra, at 51-53. The Seventh Amendment protects a litigant's right
to a jury trial only if a cause of action is legal in nature and it involves a matter
of "private right."

Rather than list 18th-century English cases to support the contention that
fraudulent monetary transfers were traditionally cognizable in equity,
respondent cites three recent cases from the Courts of Appea s. These cases,
however, weaken rather than bolster respondent's argument. In re Graham, 747
F.2d 1383 (CA11 1984), held that there was no Seventh Amendment jury trial
right in a suit for the equitable remedy of setting aside an alleged fraudulent
conveyance of real estate by a bankrupt. With respect to suits like respondent's,
the court expressly noted that "an action by a creditor or trustee-in-bankruptcy
seeking money damages is an action at law." Id., at 1387 (citations omitted).
Damsky v. Zavatt, 289 F.2d 46 (CA2 1961), also involved a conveyance of real
estate. And there, too, the court acknowledged that jury trials are ordinarily
available with respect to monetary claims. See id., at 54.
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, 11 S.Ct. 276,
34 L.Ed. 873 (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,
11 S.Ct., at 277.
See also Pernell v. Southall Realty, 416 U.S. 363, 370-374, 94 S.Ct. 1723,
1727-1729, 40 L.Ed.2d 198 (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.
6

Citing several authorities, Justice WHITE contends that "[o]ther scholars have
looked at the same history and come to a different conclusion." Post, at 85, and
n. 7. This assertion, however, lacks the support it claims. With the exception of
Justice Gray's opinion in Drake v. Rice, 130 Mass. 410, 412 (1881), and
Roberts' treatise, none of the authorities cited so much as mentions 18thcentury English practice. Although Collier offers as its opinion that actions to
set aside fraudulent transfers are equitable in nature, 4 Collier on Bankruptcy
548.10, p. 548-125 (15th ed. 1989), it refers only to recent cases in defending its
opinion, while acknowledging that some courts have disagreed. Bump and Wait
both limit their citations to state-court decisions, refusing to analyze earlier
English cases. See O. Bump, Conveyances Made by Debtors to Defraud
Creditors 532 (4th ed. 1896); F. Wait, Fraudulent Conveyances and Creditors'
Bills 56-60 (1884). To be sure, in Drake v. Rice, 130 Mass., at 412, Justice
Gray says that, "[b]y the law of England before the American Revolution, . . .
fraudulent conveyances of choses in action, though not specified in the statute
[of Elizabeth], were equally void, but from the nature of the subject the remedy
of the creditor must be sought in equity." But the reason why suits to recover
fraudulent transfers of choses in action had to be brought in equity, Justice Gray

points out, is that they could not be attached or levied upon. Id., at 413. See also
O. Bump, supra, 531 ("[T]here is no remedy at law when the property can not
be taken on execution or by attachment"). Justice Gray's summary of 18thcentury English practice does not extend to cases, such as those involving
monetary transfers, where an adequate remedy existed at law. The passage
Justice WHITE cites from Roberts' treatise is obscure, and does not speak
squarely to the question whether 18th-century English courts of equity would
hear cases where legal remedies were sufficient. See W. Roberts, Voluntary
and Fraudulent Conveyances 526-527 (3d Am. ed. 1845).
7

Respondent claims to seek "avoidance" of the allegedly fraudulent transfers and

restitution of the funds that were actually transferred, but maintains that
petitioners have made restitution impossible because the transferred funds
cannot be distinguished from the other dollars in petitioners' bank accounts. See
Brief for Respondent 39-44. Because avoidance and restitution are classical
equitable remedies, he says, petitioners are not entitled to a trial by jury. We
find this strained attempt to circumvent precedent unpersuasive. Because
dollars are fungible, and respondent has not requested an accounting or other
specifically equitable form of relief, a complete remedy is available at law, and
equity will not countenance an action when complete relief may be obtained at
law. See, e.g., Schoenthal v. Irving Trust Co., 287 U.S., at 94-95, 53 S.Ct., at
51-52. Moreover, because a plaintiff is entitled to return of any funds
transferred in violation of 11 U.S.C. 548 (1982 ed., Supp. V), and because a
judge lacks equitable discretion to refuse to enter an award for less than the
amount of the transfer, any distinction that might exist between "damages" and
monetary relief under a different label is purely semantic, with no relevance to
the adjudication of petitioners' Seventh Amendment claim. Cf. Albemarle
Paper Co. v. Moody, 422 U.S. 405, 442-443, 95 S.Ct. 2362, 2384-2385, 45
L.Ed.2d 280 (1975) (REHNQUIST, J., concurring). Indeed, even if the checks
respondent seeks to recover lay untouched in petitioners' offices, legal remedies
would apparently have sufficed. See, e.g., Adams v. Champion, 294 U.S. 231,
234, 55 S.Ct. 399, 400, 79 L.Ed. 880 (1935); Whitehead v. Shattuck, supra, 138
U.S., at 151, 11 S.Ct., at 277.

Although we left the term "public rights" undefined in Atlas Roofing Co. v.
Occupational Safety and Health Review Comm'n, 430 U.S., at 450, 458, 97
S.Ct., at 1266, 1270, we cited Crowell v. Benson, 285 U.S. 22, 52 S.Ct. 285, 76
L.Ed. 598 (1932), approvingly. In Crowell, we defined "private right" as "the
liability of one individual to another under the law as defined," id., at 51, 52
S.Ct., at 292, in contrast to cases that "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." Id., at 50,
52 S.Ct., at 292.

This proposition was firmly established in Atlas Roofing, supra, at 455, 97

S.Ct., at 1269 (footnote omitted):
"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."

10

In Atlas Roofing, 430 U.S., at 442, 450, n. 7, 97 S.Ct., at 1261, 1266, n. 7, we

stated that "[i]n cases which do involve only 'private rights,' this Court has
accepted factfinding by an administrative agency, without intervention by a
jury, only as an adjunct to an Art. III court, analogizing the agency to a jury or a
special master and permitting it in admiralty cases to perform the function of
the special master." That statement, however, must be read in context. First, we
referred explicitly only to Congress' power, where disputes concern private
rights, to provide administrative factfinding instead of jury trials in admiralty
cases. Civil causes of action in admiralty, however, are not suits at common law
for Seventh Amendment purposes, and thus no constitutional right to a jury
trial attaches. Waring v. Clarke, 5 How. 441, 460, 12 L.Ed. 226 (1847).
Second, our statement should not be taken to mean that Congress may assign at
least the initial factfinding in all cases involving controversies entirely between
private parties to administrative agencies or other tribunals not involving juries,
so long as they are established as adjuncts to Article III courts. If that were so,
Congress could render the Seventh Amendment a nullity. Rather, that
statement, citing Crowell v. Benson, 285 U.S., at 51-65, 52 S.Ct., at 292-298,
means only that in some cases involving "private rights" as that term was
defined in Crowell and used in Atlas Roofing namely, as encompassing all
disputes to which the Federal Government is not a party in its sovereign
capacitymay Congress dispense with juries as factfinders through its choice
of an adjudicative forum. Those cases in which Congress may decline to
provide jury trials are ones involving statutory rights that are integral parts of a
public regulatory scheme and whose adjudication Congress has assigned to an
administrative agency or specialized court of equity. Whatever terminological
distinctions Atlas Roofing may have suggested, we now refer to those rights as
"public" rather than "private."

11

We do not suggest that the restructuring of debtor-creditor relations is in fact a

public right. This thesis has met with substantial scholarly criticism, see, e.g.,
Gibson 1041, n. 347; Currie, Bankruptcy Judges and the Independent Judiciary,
16 Creighton L.Rev. 441, 452 (1983); Baird, Bankruptcy Procedure and StateCreated Rights: The Lessons of Gibbons and Marathon, 1982 Sup.Ct.Rev. 25,

44, and we need not and do not seek to defend it here. Our point is that even if
one accepts this thesis, the Seventh Amendment entitles petitioners to a jury
trial.
12

See Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S.
50, 71, 102 S.Ct. 2858, 2871, 73 L.Ed.2d 598 (1982) (opinion of BRENNAN,
J.):
"[T]he restructuring of debtor-creditor relations, which is at the core of the
federal bankruptcy power, must be distinguished from the adjudication of statecreated 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."

13

Although we said in Katchen v. Landy, 382 U.S., at 336, 86 S.Ct., at 476, that
the petitioner might have been entitled to a jury trial had he presented no claim
against the bankruptcy estate, our approving references not only to Schoenthal
but also to Adams v. Champion, 294 U.S., at 234, 55 S.Ct. 399, 400, 79 L.Ed.
880, and Buffum v. Barceloux Co., 289 U.S. 227, 235-236, 53 S.Ct. 539, 542543, 77 L.Ed. 1140 (1933), see 382 U.S., at 327-328, 86 S.Ct., at 471-472,
demonstrate that we did not intend to cast doubt on the proposition that the
petitioner in Katchen would have been entitled to a jury trial had he not entered
a claim against the estate and had the bankruptcy trustee requested solely legal
relief. We merely left open the possibility that a jury trial might not be required
because in some cases preference avoidance actions are equitable in character.

14

In Katchen, supra, 382 U.S., at 335, 86 S.Ct., at 475, we adopted a rationale

articulated in Alexander v. Hillman, 296 U.S. 222, 241-242, 56 S.Ct. 204, 210211, 80 L.Ed. 192 (1935) (citations omitted):
" '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 pow r 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, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986). The Court ruled in Schor
where no Seventh Amendment claims were presentedthat 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, 106 S.Ct.,
at 3255-3257. 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, 86 S.Ct., at 476-477, 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.
15

The adventitious relation of a trustee's fraudulent conveyance actions to the

reorganization proceedings themselves which we recognized in Schoenthal and
Katchen, which federal bankruptcy legislation acknowledged until 1978 by
treating them as plenary actions when the defendant had not made a claim
against the estate, and for which Congress expressly provided jury trial rights
until 1984is further evidenced by the events in this case. Respondent's
fraudulent conveyance action was not filed until well after the Bankruptcy
Court had approved the plan of reorganization and Chase & Sanborn's tangible

assets and business had been liquidated. Reply Brief for Petitioner 9.
16

Of course, the 1984 Amendments altered the statutory scheme that formed the
backdrop to our discussion in Atlas Roofing. But in this connection they did so
only by depriving persons who have not filed claims against the estate of a
statutory right to a jury trial when the trustee sues them to recover an alleged
fraudulent conveyance or preferential transfer. The 1984 Amendments did not
alter the nature of the trustee's claim or the
relief to which he was entitled. To say that our failure to respect Congress'
reclassification of these causes of action would "go far to dismantle the
statutory scheme" simply because they partly define the new statutory scheme
would be to rende this test an empty tautology.
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, 93, at 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.

17

Respondent argues, for example, that the prompt resolution of fraudulent

transfer claims brought by bankruptcy trustees is often crucial to the

reorganization process and that if, by demanding a jury trial, a party could
delay those proceedings, it could alter the negotiating framework and unfairly
extract more favorable terms for itself. Brief for Respondent 35. It warrants
notice, however, that the provision of jury trials in fraudulent conveyance
actions has apparently not been attended by substantial difficulties under
previous bankruptcy statutes; that respondent has not pointed to any discussion
of this allegedly serious problem in the legislative history of the 1978 Act or the
1984 Amendments; that in many cases defendants would likely not request jury
trials; that causes of action to re over preferences may be assigned pursuant to
the plan of reorganization rather than pursued prior to the plan's approval, as
was done in this very case; and that Congress itself, in enacting 28 U.S.C.
1411 (1982 ed., Supp. V), explicitly provided for jury trials of personal injury
and wrongful-death claims, which would likely take much longer to try than
most preference actions and which often involve large sums of money.
18

One commentator has noted:

"[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 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. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959),] and Dairy
Queen [, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962) ]."
Warner 39 (footnotes omitted); see id., at 42, 48.

19

Justice WHITE accuses us of being "rather coy" about which statute we are
invalidating, post, at 71, n. 2, and of "preferring to be obtuse" about which court
must preside over the jury trial to which petitioners are entitled. Post, at 81. But
however helpful it might be for us to adjudge every pertinent statutory and
constitutional issue presented by the 1978 Act and the 1984 Amendments, we
cannot properly reach out and decide matters not before us. The only question
we have been called upon to answer in this case is whether the Seventh
Amendment grants petitioners a right to a jury trial. We hold unequivocally that
it does.

As I will discuss more fully below, the Court's opinion can be read as
overruling or severely limiting the relevant portions of the following cases:
Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S.
442, 97 S.Ct. 1261, 51 L.Ed.2d 464 (1977); Katchen v. Landy, 382 U.S. 323, 86
S.Ct. 467, 15 L.Ed.2d 391 (1966); Block v. Hirsh, 256 U.S. 135, 41 S.Ct. 458,
65 L.Ed. 865 (1921); and Barton v. Barbour, 104 U.S. 126, 26 L.Ed. 672
(1881), plus perhaps some others.

Like much else about its opinion, the Court is rather coy about disclosing
which federal statute it is invalidating today. Perhaps it is 28 U.S.C. 157(b)
(2)(H) (1982 ed., Supp. V), the statute which includes actions to avoid or
recover fraudulent conveyances among core bankruptcy proceedings; or
157(b)(1), which permits bankruptcy judges to enter final judgments in core
proceedings (given the inclusion of fraudulent conveyance actions among these
proceedings); or perhaps it is 28 U.S.C. 1411(b) (1982 ed., Supp. V), limiting
jury trial rights in bankruptcy; or perhaps some part of Title 11 itselfor some
combination of the above.
There is no way for Congress, or the lower Article III courts, or the bankruptcy
courtsor creditors or debtors for that matterto 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.

The Seventh Amendment provides that "[i]n Suits at common law, where the
value in controversy shall exceed twenty dollars, the right of trial by jury shall
be preserved."

In addition to the points I make below, I disagree with the Court's portrayal of
Congress' expansion of bankruptcy jurisdiction to include actions such as this
one as an act of whimsy. In fact, when (in 1978) Congress first swept
proceedings like the fraudulent conveyance suit before us into the jurisdiction
of the bankruptcy courts, it was legislating out of a sense that "traditional rights
and remedies were inadequate to cope with a manifest public problem":
"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), U.S.Code Cong. & Admin.News 1978, pp. 5787, 5803.

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 undertookto use the Court's
own descriptiona "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, 97 S.Ct. 1261, 51 L.Ed.2d
464 (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 bellwether status is
unprecedented in our Seventh Amendment casesand unwise.
5

Since both of the relevant factors point against application of the Seventh
Amendment here, resolving this case does not require offering some
comprehensive view of how these factors are to be balanced. The ambiguity,
however, is not of my creation, but rather, comes from the apparent
inconsistency of our case law. For example, cases brought in state courts are
never subject to the Seventh Amendment, no matter the nature of the claim;
conversely, under the Court's decision in Northern Pipeline Construction Co. v.
Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982),
the sort of state-law contract claim at issue there could never be assigned by

Congress to anything other than an Article III tribunal, in which the Seventh
Amendment would apply. See also post, at 93 (BLACKMUN, J., dissenting).
Other cases look at both factors, without being altogether clear on their relative
import.
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 alland 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.
6

Our decision in Katchen, 382 U.S., at 336, 86 S.Ct., at 476which described

the 1898 Act as "convert[ing] [a] legal claim into an equitable claim"is often
cited for the same principle; i.e., as upholding "the power of Congress to take
some causes of action outside the scope of the Seventh Amendment by
providing for their enforcement . . . in a specialized court." See J. Friedenthal,
M. Kane, & A. Miller, Civil Procedure 498 (1985).

See, e.g., 4 Collier on Bankruptcy 548.10, p. 548-125 (15th ed. 1989); O.

Bump, Conveyances Made by Debtors to Defraud Creditors 532 (4th ed.
1896); F. Wait, Fraudulent Conveyances and Creditors' Bills 56-60 (1884);
Drake v. Rice, 130 Mass. 410, 412 (1881) (Gray, C.J.); W. Roberts, Voluntary
and Fraudulent Conveyances 525-526 (3d Am. ed. 1845).

See, e.g., In re Graham, 747 F.2d 1383, 1387 (CA7 1984); Damsky v. Zavatt,
289 F.2d 46, 53 (CA2 1961) (Friendly, J.) (an action by a bankruptcy trustee to
"set aside a fraudulent conveyance has long been cognizable in equity");
Johnson v. Gardner, 179 F.2d 114, 116-117 (CA9 1949). See also In re
Harbour, 840 F.2d 1165, 1172-1178 (CA4 1988); In re I.A. Durbin, Inc., 62
B.R. 139, 145 (SD Fla.1986); In re Hendon Pools of Michigan, Inc., 57 B.R.
801, 802-803 (ED Mich.1986); In re Southern Industrial Banking Corp., 66
B.R. 370, 372-375 (Bkrtcy Ct., ED Tenn.1986).

Nor do I think it clear, as the Court seems to, that simply because the remedy
sought by respondent can be expressed in monetary terms, the relief he seeks is
therefore "legal" in nature, and not equitable. Ante, at 47-49.
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, 94 S.Ct.
1005, 1009, 39 L.Ed.2d 260 (1974). We have previously recognized that
actions to disgorge improperly gained profits, Tull v. United States, 481 U.S.
412, 424, 107 S.Ct. 1831, 1839, 95 L.Ed.2d 365 (1987), to return funds
rightfully belonging to another, Curtis, supra, 415 U.S., at 197, 94 S.Ct., at

1010, or to submit specific funds wrongfully withheld, Bowen v.

Massachusetts, 487 U.S. 879, 893-896, 108 S.Ct. 2722, 2731-2733, 101
L.Ed.2d 749 (1988), are all equitable actions even though the relief they seek is
monetarybecause 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, 66 S.Ct. 1086, 1091, 90
L.Ed. 1332 (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).
10

An irony of the Court's rebuke of Congress is that Congress' decision to include

actions to avoid or recover fraudulent conveyances among "core" bankruptcy
proceedings found its inspiration in the "Emergency Rule" drafted and issued
by the Administrative Office of the United States Courts on December 3, 1982,
to govern practice in the bankruptcy courts following our decision in Northern
Pipeline. See Emergency Rule d(3)(A) ("Related proceedings do not include .
. . proceedings to set aside preferences and fraudulent conveyances"); see also
Addison v. O'Leary, 68 B.R. 487, 491 (ED Va.1986) ("[T]he jurisdictional
provisions of the 1984 Bankruptcy Amendments closely parallel the
Emergency Reference Rule"); G. Treister, J. Trost, L. Forman, K. Klee, & R.
Levin, Fundamentals of Bankruptcy Law 2.01(a), p. 31 (2d ed. 1988)
(describing this portion of the Emergency Rule as the "forerunner" of the 1984
Amendments).
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 gave adequate "consider[ation] [to] the constitutional implications of
its" actions. Cf. ante, at 61.

11

This is particularly unfortunate because today's ruling may be the first time
ever that the Court has struck down a congressional designation of a particular
cause of action as "equitable" in nature. See Note, Congressional Provision for
Nonjury Trials, 83 Yale L.J. 401, 414-415 (1973) ("[T]he Court has never

rejected a congressional indication that an action is equitable in nature"); but cf.

Curtis v. Loether, supra ("re-interpreting" congressional enactment to respond
to Seventh Amendment "concerns").
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, 290295, 80 S.Ct. 332, 334-337, 4 L.Ed.2d 323 (1960); Porter v. Warner, supra,
328 U.S., at 397-402, 66 S.Ct., at 1088-91.
12

Such cases decided since Northern Pipeline, from the Court of Appeals alone,
include In re Harbour, 840 F.2d, at 1177-1178; In re Wood, 825 F.2d 90, 95-98
(CA5 1987); In re Mankin, 823 F.2d 1296, 1307-1308 (CA9 1987), cert. denied
sub nom. Munn v. Duck, 485 U.S. 1006, 108 S.Ct. 1468, 99 L.Ed.2d 698
(1988); In re Arnold Print Works, 815 F.2d 165, 168-170 (CA1 1987); Briden
v. Foley, 776 F.2d 379, 381 (CA1 1985); and In re Kaiser, 722 F.2d 1574,
1580, and n. 2 (CA2 1983). Many more such cases are found in the reports of
the decisions of the District Courts and the Bankruptcy Courts.

13

This is indicative of the Court's approach throughout its opinion: virtually every
key holding announced today rests on a citation to scholarly authority, and not
to any precedent of the Court. This includes the Court's holdings that the action
at issue here was cognizable only at law in 18th-century England, ante, at 44;
that fraudulent conveyance actions "more nearly resemble state-law contract
claims . . . than they do creditors' hierarchically ordered claims to a pro rata
share of the bankruptcy res," ante, at 56; and that Congress could not eliminate
a jury trial right in this sort of action by placing it in "a specialized court of
equity," ante, at 61in short, the three critical holdings issued by the Court in
its opinion.
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 usparticularly 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).

14

Because I do not believe that either petitioner is entitled to a jury trial under the
Seventh Amendment, I do not reach the question whether petitioner
Granfinanciera is deprived of any Seventh Amendment rights it might
otherwise have due to its status as an instrument of a foreign sovereign. Like the
Court, I would "leave for another day" the resolution of this difficult question.
Ante, at 40.