Issue link: https://mbozikis.ufcontent.com/i/1422521
22 D. Right to Jury Trial The Seventh Amendment to the United States Constitution provides for the right to a jury trial for "suits at common law." As bankruptcy courts are courts of equity, and not of law, there has been some disagreement over whether the right to a jury trial applies in bankruptcy. In the case of Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), the U.S. Supreme Court held that the right to a jury trial applies in bankruptcy, at least in the context of an action to recover a fraudulent conveyance, which the Court characterized as a legal, and not an equitable, action. 5 In addition, subsequent to the U.S. Supreme Court decision in N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), there was also some doubt regarding the extent to which bankruptcy judges, as Article I judges, have the power to conduct jury trials. In order to address this confusion, the 1994 Amendments specifically authorized bankruptcy judges to conduct jury trials of matters which may be determined by the bankruptcy court and where the bankruptcy judge is specially designated to exercise such jurisdiction by the district court and all parties to the matter expressly consent. 28 U.S.C. § 157(e). Notwithstanding that the right to a jury trial vests pursuant to the United States Constitution, there are certain ways in which such right can be lost. The U.S. Supreme Court has held that the filing of a proof of claim in a bankruptcy proceeding effects a waiver of a creditor's right to a jury trial (if any) on matters within the core jurisdiction of the bankruptcy courts. See Langenkamp v. Culp, 498 U.S. 42 (1990). 6 In addition, the district court can direct that issues that relate to a contested involuntary bankruptcy petition be tried without a jury. 28 U.S.C. § 1411(b). Other than 5 In general, a legal action is one in which money damages are sought, whereas an equitable action is one in which a direction that a party act or refrain from acting in a particular fashion is sought. This question is sometimes determined by reference to whether the relief sought was historically heard by the English courts of law or the English courts of equity. 6 There is some dispute as to whether the estate's counterclaims against the creditor must relate to the claims asserted.