NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–935
_________________
WELLNESS INTERNATIONAL NETWORK, LIMITED, et
al, PETITIONERS
v. RICHARD SHARIF
on writ of certiorari to the united states
court of appeals for the seventh circuit
[May 26, 2015]
Justice Sotomayor delivered the opinion of the
Court.
Article III, §1, of the Constitution provides
that “[t]he 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.” Congress has in turn
established 94 District Courts and 13 Courts of Appeals, composed
of judges who enjoy the protections of Article III: life tenure and
pay that cannot be diminished. Because these protections help to
ensure the integrity and independence of the Judiciary, “we have
long recognized that, in general, Congress may not withdraw from”
the Article III courts “any matter which, from its nature, is the
subject of a suit at the common law, or in equity, or in
admiralty.”
Stern v.
Marshall, 564 U. S. ___,
___ (2011) (slip op., at 18) (internal quotation marksomitted).
Congress has also authorized the appointment of
bankruptcy and magistrate judges, who do not enjoy the protections
of Article III, to assist Article III courts in their work. The
number of magistrate and bankruptcy judgeships exceeds the number
of circuit and district judgeships.[
1] And it is no exaggeration to say that without the
distinguished service of these judicial colleagues, the work of the
federal court system would grind nearly to a halt.[
2]
Congress’ efforts to align the responsibilities
of non-Article III judges with the boundaries set by the
Constitution have not always been successful. In
Northern
Pipeline Constr. Co. v.
Marathon Pipe Line Co., 458
U. S. 50 (1982) (plurality opinion), and more recently in
Stern, this Court held that Congress violated Article III by
authorizing bankruptcy judges to decide certain claims for which
litigants are constitutionally entitled to an Article III
adjudication. This case presents the question whether Article III
allows bankruptcy judges to adjudicate such claims with the
parties’ consent. We hold that Article III is not violated when the
parties knowingly and voluntarily consent to adjudication by a
bankruptcy judge.
I
A
Before 1978, district courts typically
delegated bankruptcy proceedings to “referees.”
Executive
Benefits Ins. Agency v.
Arkison, 573 U. S. ___, ___
(2014) (slip op., at 4). Under the Bankruptcy Act of 1898,
bankruptcy referees had “[s]ummary jurisdiction” over “claims
involving ‘property in the actual or constructive possession of the
bankruptcy court’ ”—that is, over the apportionment of the
bankruptcy estate among creditors.
Ibid. (alteration
omitted)
. They could preside over other proceedings—matters
implicating the court’s “plenary jurisdiction”—by consent.
Id., at ___ (slip op., at 5); see also
MacDonald v.
Plymouth County Trust Co., 286 U. S. 263 –267
(1932).
In 1978, Congress enacted the Bankruptcy Reform
Act, which repealed the 1898 Act and gave the newly created
bankruptcy courts power “much broader than that exercised under the
former referee system.”
Northern Pipeline, 458 U. S.,
at 54. The Act “[e]liminat[ed] the distinction between ‘summary’
and ‘plenary’ jurisdiction” and enabled bankruptcy courts to decide
“all ‘civil proceedings arising under title 11 [the Bankruptcy
title] or arisingin or related to cases under title 11.’ ”
Ibid. (emphasis de-leted)
. Congress thus vested
bankruptcy judges with most of the “ ‘powers of a court of
equity, law, and admiralty,’ ”
id., at 55, without
affording them the benefits of Article III. This Court therefore
held parts of the system unconstitutional in
Northern
Pipeline.
Congress responded by enacting the Bankruptcy
Amendments and Federal Judgeship Act of 1984. Under that Act,
district courts have original jurisdiction over bankruptcy cases
and related proceedings. 28 U. S. C. §§1334(a), (b). But
“[e]ach district court may provide that any or all” bankruptcy
cases and related proceedings “shall be referred to the bankruptcy
judges for the district.” §157(a). Bankruptcy judges are “judicial
officers of the United States district court,” appointed to 14-year
terms by the courts of appeals, and subject to removal for cause.
§§152(a)(1), (e). “The district court may withdraw” a reference to
the bankruptcy court “on its own motion or on timely motion of any
party, for cause shown.” §157(d).
When a district court refers a case to a
bankruptcy judge, that judge’s statutory authority depends on
whether Congress has classified the matter as a “[c]ore
proceed-in[g]” or a “[n]on-core proceedin[g],” §§157(b)(2),
(4)—much as the authority of bankruptcy referees, before the 1978
Act, depended on whether the proceeding was “summary” or “plenary.”
Congress identified as “[c]ore” a nonexclusive list of 16 types of
proceedings, §157(b)(2), in which it thought bankruptcy courts
could constitutionally enter judgment.[
3] Congress gave bankruptcy courts the power to “hear and
determine” core proceedings and to “enter appropriate orders and
judgments,” subject to appellate review by the district court.
§157(b)(1); see §158. But it gave bankruptcy courts more limited
author-ity in non-core proceedings: They may “hear and determine”
such proceedings, and “enter appropriate orders and judgments,”
only “with the consent of all the parties to the proceeding.”
§157(c)(2). Absent consent, bankruptcy courts in non-core
proceedings may only “submit proposed findings of fact and
conclusions of law,” which the district courts review
de novo. §157(c)(1).
B
Petitioner Wellness International Network is a
manufacturer of health and nutrition products.[
4] Wellness and respondent Sharif entered into a
contract under which Sharif would distribute Wellness’ products.
The relationship quickly soured, and in 2005, Sharif sued Wellness
in the United States District Court for the Northern District of
Texas. Sharif repeatedly ignored Wellness’ discovery requests and
other litigation obligations, resulting in an entry of default
judgment for Wellness. The District Court eventually sanctioned
Sharif by awarding Wellness over $650,000 in attorney’s fees. This
case arises from Wellness’ long-running—and so far
unsuccessful—efforts to collect on that judgment.
In February 2009, Sharif filed for Chapter 7
bankruptcy in the Northern District of Illinois. The bankruptcy
petition listed Wellness as a creditor. Wellness requested
documents concerning Sharif’s assets, which Sharif did not provide.
Wellness later obtained a loan application Sharif had filed in
2002, listing more than $5 million in assets. When confronted,
Sharif informed Wellness and the Chapter 7 trustee that he had lied
on the loan application. The listed assets, Sharif claimed, were
actually owned by the Soad Wattar Living Trust (Trust), an entity
Sharif said he administered on behalf of his mother, and for the
benefit of his sister. Wellness pressed Shariffor information on
the Trust, but Sharif again failed to respond.
Wellness filed a five-count adversary complaint
against Sharif in the Bankruptcy Court. See App. 5–22. Counts I–IV
of the complaint objected to the discharge of Sharif’s debts
because, among other reasons, Sharif had concealed property by
claiming that it was owned by the Trust. Count V of the complaint
sought a declaratory judgment that the Trust was Sharif’s alter ego
and that its assets should therefore be treated as part of Sharif’s
bankruptcy estate.
Id., at 21. In his answer, Sharif
admitted that the adversary proceeding was a “core proceeding”
under 28 U. S. C. §157(b)—
i.e., a proceeding in
which the Bankruptcy Court could enter final judgment subject to
appeal. See §§157(b)(1), (2)(J); App. 24. Indeed, Sharif requested
judgment in his favor on all counts of Wellness’ complaint and
urged the Bankruptcy Court to “find that the Soad Wattar Living
Trust is not property of the [bankruptcy] estate.”
Id., at
44.
A familiar pattern of discovery evasion ensued.
Wellness responded by filing a motion for sanctions, or, in the
alternative, to compel discovery. Granting the motion to compel,
the Bankruptcy Court warned Sharif that if he did not respond to
Wellness’ discovery requests a default judgment would be entered
against him. Sharif eventu-ally complied with some discovery
obligations, but did not produce any documents related to the
Trust.
In July 2010, the Bankruptcy Court issued a
ruling finding that Sharif had violated the court’s discovery
order. See App. to Pet. for Cert. 92a–120a. It accordingly denied
Sharif’s request to discharge his debts and entered a default
judgment against him in the adversary proceeding. And it declared,
as requested by count V of Wellness’ complaint, that the assets
supposedly held by the Trust were in fact property of Sharif’s
bankruptcy estate because Sharif “treats [the Trust’s] assets as
his own prop-erty.”
Id., at 119a.
Sharif appealed to the District Court. Six weeks
before Sharif filed his opening brief in the District Court, this
Court decided
Stern. In
Stern, the Court held that
Article III prevents bankruptcy courts from entering final judgment
on claims that seek only to “augment” the bankruptcy estate and
would otherwise “exis[t] without regard toany bankruptcy
proceeding.” 564 U. S., at ___, ___ (slip op., at 27, 34).
Sharif did not cite
Stern in his opening brief. Rather,
after the close of briefing, Sharif moved for leave to file a
supplemental brief, arguing that in light of
In re
Ortiz, 665 F. 3d 906 (CA7 2011)—a recently issued decision
interpreting
Stern—“the bankruptcy court’s order should only
be treated as a report and recommendation.” App. 145. The District
Court denied Sharif's motion for supplemental briefing as untimely
and affirmed the Bankruptcy Court’s judgment.
The Court of Appeals for the Seventh Circuit
affirmed in part and reversed in part. 727 F. 3d 751 (2013).
The Seventh Circuit acknowledged that ordinarily Sharif’s
Stern objection would “not [be] preserved because he waited
too long to assert it.” 727 F. 3d, at 767.[
5] But the court determined that the ordinary rule
did not apply because Sharif’s argument concerned “the allocation
of authority between bankruptcy courts and district courts” under
Article III, and thus “implicate[d] structural interests.”
Id., at 771. Based on those separation-of-powers
considerations, the court held that “a litigant may not waive” a
Stern objection.
Id., at 773. Turning to the merits
of Sharif’s contentions, the Seventh Circuit agreed with the
Bankruptcy Court’s resolution of counts I–IV of Wellness’ adversary
complaint. It further concluded, however, that count V of the
complaint alleged a so-called “
Stern claim,” that is, “a
claim designated for final adjudication in the bankruptcy court as
a statutory matter, but prohibited from proceeding in that way as a
constitutional matter.”
Executive Benefits, 573 U. S.,
at ___ (slip op., at 4). The Seventh Circuit therefore ruled that
the Bankruptcy Court lacked constitutional authority to enter final
judgment on count V.[
6]
We granted certiorari, 573 U. S. ___
(2014), and now reverse the judgment of the Seventh
Circuit.[
7]
II
Our precedents make clear that litigants may
validly consent to adjudication by bankruptcy courts.
A
Adjudication by consent is nothing new.
Indeed, “[d]uring the early years of the Republic, federal courts,
with the consent of the litigants, regularly referred adjudication
of entire disputes to non-Article III referees, masters, or
arbitrators, for entry of final judgment in accordance with the
referee’s report.” Brubaker, The Constitutionality of Litigant
Consent to Non-Article III Bankruptcy Adjudications, 32 Bkrtcy. L.
Letter No. 12, p. 6 (Dec. 2012); see,
e.g.,
Thornton v.
Carson, 7 Cranch 596, 597 (1813)
(affirming damages awards in two actions that “were referred, by
consent under a rule of Court to arbitrators”);
Heckers v.
Fowler, 2 Wall. 123, 131 (1865) (observing that the
“[p]ractice of referring pending actions under a rule of court, by
consent of parties, was well known at common law,” and “is now
universally regarded . . . as the proper foundation of
judgment”);
Newcomb v.
Wood, 97 U. S. 581, 583
(1878) (recognizing “[t]he power of a court of justice, with the
consent of the parties, to appoint arbitrators and refer a case
pending before it”).
The foundational case in the modern era is
Commodity Futures Trading Comm’n v.
Schor, 478
U. S. 833 (1986) . The Commodity Futures Trading Commission
(CFTC), which Congress had authorized to hear customer complaints
against commodities brokers, issued a regulation allowing itself to
hear state-law counterclaims as well. William Schor filed a
complaint with the CFTC against his broker, and the broker, which
had previously filed claims against Schor in federal court, refiled
them as counterclaims in the CFTC proceeding. The CFTC ruled
against Schor on the counterclaims. This Court upheld that ruling
against both statutory and constitutional challenges.
On the constitutional question (the one relevant
here) the Court began by holding that Schor had “waived any right
he may have possessed to the full trial of [the broker’s]
counterclaim before an Article III court.”
Id., at 849. The
Court then explained why this waiver legitimated the CFTC’s
exercise of authority: “[A]s a personal right, Article III’s
guarantee of an impartial and independent federal adjudication is
subject to waiver, just as are other per-sonal constitutional
rights”—such as the right to a jury—“that dictate the procedures by
which civil and criminal matters must be tried.”
Id., at
848–849.
The Court went on to state that a litigant’s
waiver of his “personal right” to an Article III court is not
always dispositive because Article III “not only preserves to
litigants their interest in an impartial and independent federal
adjudication of claims . . . , but also serves as ‘an
inseparable element of the constitutional system of checks and
balances.’ . . . To the extent that this structural
principle is implicated in a given case”—but only to that
extent—“the parties cannot by consent cure the constitutional
difficulty . . . .”
Id., at 850–851.
Leaning heavily on the importance of Schor’s
consent, the Court found no structural concern implicated by the
CFTC’s adjudication of the counterclaims against him. While
“Congress gave the CFTC the authority to adjudicate such matters,”
the Court wrote,
“the decision to invoke this forum is left
entirely to the parties and the power of the federal judiciary to
take jurisdiction of these matters is unaffected. In such
circumstances, separation of powers concerns are diminished, for it
seems self-evident that just as Congress may encourage parties to
settle a dispute out of court or resort to arbitration without
impermissible incursions on the separation of powers, Congress may
make available a quasi-judicial mechanism through which willing
parties may, at their option, elect to resolve their differences.”
Id., at 855.
The option for parties to submit their disputes
to a non-Article III adjudicator was at most a “
de minimis”
infringement on the prerogative of the federal courts.
Id.,
at 856.
A few years after
Schor, the Court
decided a pair of cases—
Gomez v.
United States, 490
U. S. 858 (1989) , and
Peretz v.
United States,
501 U. S. 923 (1991) —that reiterated the importance of
consent to the constitutional analysis. Both cases concerned
whether the Federal Magistrates Act authorized magistrate judges to
preside over jury selection in a felony trial;[
8] the difference was that Peretz consented to the
practice while Gomez did not. That difference was dispositive.
In
Gomez, the Court interpreted the
statute as not allowing magistrate judges to supervise
voir dire without consent, emphasizing the
constitutional concerns that might otherwise arise. See 490
U. S., at 864. In
Peretz, the Court upheld the
Magistrate Judge’s action, stating that “the defendant’s consent
significantly changes the constitutional analysis.” 501 U. S.,
at 932. The Court concluded that allowing a magistrate judge to
supervise jury selection—with consent—does not violate Article III,
explaining that “litigants may waive their personal right to have
an Article III judge preside over a civil trial,”
id., at
936 (citing
Schor, 478 U. S., at 848), and that “[t]he
most basic rights of criminal defendants are similarly subject to
waiver,” 501 U. S., at 936. And “[e]ven assuming that a
litigant may not waive structural protections provided by Article
III,” the Court found “no such structural protections
. . . implicated by” a magistrate judge’s supervision of
voir dire:
“Magistrates are appointed and subject to
removal by Article III judges. The ‘ultimate decision’ whether to
invoke the magistrate’s assistance is made by the district court,
subject to veto by the parties. The decision whether to empanel the
jury whose selection a magistrate has supervised also remains
entirely with the district court. Because ‘the entire process takes
place under the district court’s total control and jurisdiction,’
there is no danger that use of the magistrate involves a
‘congressional attemp[t] “to transfer jurisdiction [to non-Article
III tribunals] for the purpose of emasculating” constitutional
courts.’ ”
Id., at 937 (citations omitted; alteration
in original).[
9]
The lesson of
Schor,
Peretz, and
the history that preceded them is plain: The entitlement to an
Article III adjudicator is “a personal right” and thus ordinarily
“subject to waiver,”
Schor, 478 U. S., at 848. Article
III also serves a structural purpose, “barring congressional
attempts ‘to transfer jurisdiction [to non-Article III tribunals]
for the purpose of emasculating’ constitutional courts and thereby
prevent[ing] ‘the encroachment or aggrandizement of one branch at
the expense of the other.’ ”
Id., at 850 (citations
omitted). But allowing Article I adjudicators to decide claims
submitted to them by consent does not offend the separation of
powers so long as Article III courts retain supervisory authority
over the process.
B
The question here, then, is whether allowing
bankruptcy courts to decide
Stern claims by consent would
“imper-missibly threate[n] the institutional integrity of the
Judicial Branch.”
Schor, 478 U. S., at 851. And that
question must be decided not by “formalistic and unbending rules,”
but “with an eye to the practical effect that the” practice “will
have on the constitutionally assigned role of the federal
judiciary.”
Ibid.; see
Thomas v.
Union Carbide
Agricultural Products Co., 473 U. S. 568, 587 (1985)
(“[P]ractical attention to substance rather than doctrinaire
reliance on formal categories should inform application of Article
III”). The Court must weigh
“the extent to which the essential
attributes of judicial power are reserved to Article III courts,
and, con-versely, the extent to which the non-Article III forum
exer-cises 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.”
Schor, 478
U. S., at 851 (internal quotation marks omitted).
Applying these factors, we conclude that
allowing bankruptcy litigants to waive the right to Article III
adjudication of
Stern claims does not usurp the
constitutional prerogatives of Article III courts. Bankruptcy
judges, like magistrate judges, “are appointed and subject to
removal by Article III judges,”
Peretz, 501 U. S., at
937; see 28 U. S. C. §§152(a)(1), (e). They “serve as
judicial officers of the United States district court,” §151, and
collectively “constitute a unit of the district court” for that
district, §152(a)(1). Just as “[t]he ‘ultimate decision’ whether to
invoke [a] magistrate [judge]’s assistance is made by the district
court,”
Peretz, 501 U. S., at 937, bankruptcy courts
hear matters solely on a district court’s reference, §157(a), which
the district court may withdraw
sua sponte or at the
request of a party, §157(d). “[S]eparation of powers concerns are
diminished” when, as here, “the decision to invoke [a non-Article
III] forum is left entirely to the parties and the power of the
federal judiciary to take jurisdiction” remains in place.
Schor, 478 U. S., at 855.
Furthermore, like the CFTC in
Schor,
bankruptcy courts possess no free-floating authority to decide
claims traditionally heard by Article III courts. Their ability to
resolve such matters is limited to “a narrow class of common law
claims as an incident to the [bankruptcy courts’] primary, and
unchallenged, adjudicative function.”
Id., at 854. “In such
circumstances, the magnitude of any intrusion on the Judicial
Branch can only be termed
de minimis.”
Id., at
856.
Finally, there is no indication that Congress
gave bankruptcy courts the ability to decide
Stern claims in
an effort to aggrandize itself or humble the Judiciary. As in
Peretz, “[b]ecause ‘the entire process takes place under the
district court’s total control and jurisdiction,’ there is no
danger that use of the [bankruptcy court] involves a
‘congres-sional attemp[t] “to transfer jurisdiction [to non-Article
III tribunals] for the purpose of emasculating” constitutional
courts.’ ” 501 U. S.
, at 937 (citation omitted);
see also
Schor, 478 U. S., at 855 (allowing CFTC’s
adjudication of counterclaims because of “the degree of judicial
control saved to the federal courts, as well as the congressional
purpose behind the jurisdictional delegation, the demonstrated need
for the delegation, and the limited nature of the delegation”
(citation omitted));
Pacemaker Diagnostic Clinic of America,
Inc. v.
Instromedix, Inc., 725 F. 2d 537, 544 (CA9 1984)
(en banc) (Kennedy, J.) (magistrate judges may adjudicate civil
cases by consent because the Federal Magistrates Act “invests the
Article III judiciary with extensive administrative control over
the management, composition, and operation of the magistrate
system”).[
10]
Congress could choose to rest the full share of
the Judiciary’s labor on the shoulders of Article III judges. But
doing so would require a substantial increase in the number of
district judgeships. Instead, Congress has supplemented the
capacity of district courts through the able assistance of
bankruptcy judges. So long as those judges are subject to control
by the Article III courts, their work poses no threat to the
separation of powers.
C
Our recent decision in
Stern, on which
Sharif and the principal dissent rely heavily, does not compel a
different result. That is because
Stern—like its
predecessor,
Northern Pipeline—turned on the fact that the
litigant “did not truly consent to” resolution of the claim against
it in a non-Article III forum. 564 U. S., at ___ (slip op., at
27).
To understand
Stern, it is necessary to
first understand
Northern Pipeline. There, the Court
considered whether bankruptcy judges “could ‘constitutionally be
vested with jurisdiction to decide [a] state-law contract claim’
against an entity that was not otherwise part of the bankruptcy
proceedings.” 564 U. S., at ___ (slip op., at 19). In
answering that question in the negative, both the plurality and
then-Justice Rehnquist, concurring in the judgment, noted that the
entity in question did not consent to the bankruptcy court’s
adjudication of the claim. See 458 U. S., at 80, n. 31
(plurality opinion);
id., at 91 (opinion of Rehnquist, J.).
The Court confirmed in two later cases that
Northern
Pipeline turned on the lack of consent. See
Schor, 478
U. S., at 849 (“[I]n
Northern Pipeline, . . .
the absence of consent to an initial adjudication before a
non-Article III tribunal was relied on as a significant factor in
determining that Article III forbade such adjudication”);
Thomas, 473 U. S., at 584.
Stern presented the same scenario. The
majority cited the dissent’s observation that
Northern
Pipeline “establish[ed] only that Congress may not vest in a
non-Article III court the power to adjudicate, render final
judgment, and issue binding orders in a traditional contract action
arising under state law,
without consent of the litigants,
and subject only to ordinary appellate review,” 564 U. S., at
___ (slip op., at 28–29) (emphasis added; internal quotation marks
omitted). To which the majority responded, “Just so: Substitute
‘tort’ for ‘contract,’ and that statement directly covers this
case.”
Id., at ___ (slip op., at 29); see also
id.,
at ___ (slip op., at 27) (defendant litigated in the Bankruptcy
Court because he “had nowhere else to go” to pursue his claim).
Because
Stern was premised on nonconsent to adjudication by
the Bankruptcy Court, the “constitutional bar” it announced, see
post, at 14 (Roberts, C. J., dissenting), simply does
not govern the question whether litigants may validly consent to
adjudication by a bankruptcy court.
An expansive reading of
Stern, moreover,
would be inconsistent with the opinion’s own description of its
holding. The Court in
Stern took pains to note that the
question before it was “a ‘narrow’ one,” and that its answer did
“not change all that much” about the division of labor between
district courts and bankruptcy courts.
Id., at ___ (slip
op., at 37); see also
id., at ___ (slip op., at 38) (stating
that Congress had exceeded the limitations of Article III “in one
isolated respect”). That could not have been a fair
characterization of the decision if it meant that bank-ruptcy
judges could no longer exercise their longstanding authority to
resolve claims submitted to them by consent. Interpreting
Stern to bar consensual adjudications by bankruptcy courts
would “meaningfully chang[e] the division of labor” in our judicial
system, contra,
id., at ___ (slip op., at 37).[
11]
In sum, the cases in which this Court has found
a violation of a litigant’s right to an Article III decisionmaker
have involved an objecting defendant forced to litigate
involuntarily before a non-Article III court. The Court has never
done what Sharif and the principal dissent would have us do—hold
that a litigant who has the right to an Article III court may not
waive that right through his consent.
D
The principal dissent warns darkly of the
consequences of today’s decision. See
post, at 17–20. To
hear the principal dissent tell it, the world will end not in fire,
or ice, but in a bankruptcy court. The response to these ominous
predictions is the same now as it was when Justice Brennan,
dissenting in
Schor, first made them nearly 30 years
ago:
“This is not to say, of course, that if
Congress created a phalanx of non-Article III tribunals equipped to
handle the entire business of the Article III courts without any
Article III supervision or control and without evidence of valid
and specific legislative necessities, the fact that the parties had
the election to proceed in their forum of choice would necessarily
save the scheme from constitutional attack. But this case obviously
bears no resemblance to such a
sce-nario . . . .” 478 U. S., at 855
(citations omitted).
Adjudication based on litigant consent has been
a consistent feature of the federal court system since its
inception. Reaffirming that unremarkable fact, we are confident,
poses no great threat to anyone’s birthrights, constitutional or
otherwise.
III
Sharif contends that to the extent litigants
may validly consent to adjudication by a bankruptcy court, such
consent must be express. We disagree.
Nothing in the Constitution requires that
consent to adjudication by a bankruptcy court be express. Nor does
the relevant statute, 28 U. S. C. §157, mandate express
consent; it states only that a bankruptcy court must obtain “the
consent”—consent
simpliciter—“of all parties to the
proceeding” before hearing and determining a non-core claim.
§157(c)(2). And a requirement of express consent would be in great
tension with our decision in
Roell v.
Withrow, 538
U. S. 580 (2003) . That case concerned the interpretation of
§636(c), which authorizes magistrate judges to “conduct any or all
proceedings in a jury or nonjury civil matter and order the entry
of judgment in the case,” with “the consent of the
parties.”[
12] The specific
question in
Roell was whether, as a statutory matter, the
“consent” required by §636(c) had to be express. The dissent argued
that “[r]eading §636(c)(1) to require express consent not only is
more consistent with the text of the statute, but also” avoids
constitutional concerns by “ensur[ing] that the parties knowingly
and voluntarily waive their right to an Article III judge.” 538
U. S., at 595 (opinion of Thomas, J.). But the majority—thus
placed on notice of the constitutional concern—was untroubled by
it, opining that “the Article III right is substantially honored”
by permitting waiver based on “actions rather than words.”
Id., at 589, 590.
The implied consent standard articulated in
Roell supplies the appropriate rule for adjudications by
bankruptcy courts under §157. Applied in the bankruptcy context,
that standard possesses the same pragmatic virtues—increasing
judicial efficiency and checking gamesmanship—that motivated our
adoption of it for consent-based adjudications by magistrate
judges. See
id., at 590. It bears emphasizing, however, that
a litigant’s consent—whether express or implied—must still be
knowing and voluntary.
Roell makes clear that the key
inquiry is whether “the litigant or counsel was made aware of the
need for consent and the right to refuse it, and still voluntarily
appeared to try the case” before the non-Article III adjudicator.
Ibid.; see also
id., at 588, n. 5 (“notification
of the right to refuse” adjudication by a non-Article III court “is
a prerequisite to any inference of consent”).[
13]
IV
It would be possible to resolve this case by
determining whether Sharif in fact consented to the Bankruptcy
Court’s adjudication of count V of Wellness’ adversary complaint.
But reaching that determination would require a deeply factbound
analysis of the procedural history unique to this protracted
litigation. Our resolution of the consent question—unlike the
antecedent constitutional question—would provide little guidance to
litigants or the lower courts. Thus, consistent with our role as “a
court of review, not of first view,”
Nautilus, Inc. v.
Biosig Instruments, Inc., 572 U. S. ___, ___ (2014)
(slip op., at 14) (internal quotation marks omitted), we leave it
to the Seventh Circuit to decide on remand whether Sharif’s actions
evinced the requisite knowing and voluntary consent, and also
whether, as Wellness contends, Sharif forfeited his
Stern
argument below.
* * *
The Court holds that Article III permits
bankruptcy courts to decide
Stern claims submitted to them
by consent. The judgment of the United States Court of Appeals for
the Seventh Circuit is therefore reversed, and the case is remanded
for further proceedings consistent with this opinion.
It is so ordered.