throbber
(Slip Opinion)
`
`
`
` OCTOBER TERM, 2013
`
`
`Syllabus
`
`1
`
` NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
`
`
`
` being done in connection with this case, at the time the opinion is issued.
`
`
`
` The syllabus constitutes no part of the opinion of the Court but has been
`
` prepared by the Reporter of Decisions for the convenience of the reader.
`
` See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
`
`
`SUPREME COURT OF THE UNITED STATES
`
`
`
` Syllabus
`
`EXECUTIVE BENEFITS INSURANCE AGENCY v.
`
`ARKISON, CHAPTER 7 TRUSTEE OF ESTATE OF
`
`BELLINGHAM INSURANCE AGENCY, INC.
`
`
`CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
`
`THE NINTH CIRCUIT
` No. 12–1200. Argued January 14, 2014—Decided June 9, 2014
`
`Bellingham Insurance Agency, Inc. (BIA), filed a voluntary chapter 7
`bankruptcy petition. Respondent Peter Arkison, the bankruptcy
`trustee, filed a complaint in the Bankruptcy Court against petitioner
`Executive Benefits Insurance Agency (EBIA) and others alleging the
`fraudulent conveyance of assets from BIA to EBIA. The Bankruptcy
`
`
` Court granted summary judgment for the trustee. EBIA appealed to
`the District Court, which affirmed the Bankruptcy Court’s decision
`
`
`
` after de novo review and entered judgment for the trustee. While
`EBIA’s appeal to the Ninth Circuit was pending, this Court held that
`Article III did not permit a Bankruptcy Court to enter final judgment
`on a counterclaim for tortious interference, even though final
`
`adjudication of that claim by the Bankruptcy Court was authorized
`by statute. Stern v. Marshall, 564 U. S. ___, ___. In light of Stern,
`
`
`EBIA moved to dismiss its appeal for lack of jurisdiction. The Ninth
`
`
`Circuit rejected EBIA’s motion and affirmed. It acknowledged the
`
`trustee’s claims as “Stern claims,” i.e., claims designated for final
`adjudication in the bankruptcy court as a statutory matter, but
`
`prohibited from proceeding in that way as a constitutional matter.
`The Court of Appeals nevertheless concluded that EBIA had
`
`impliedly consented to jurisdiction. The Court of Appeals also
`observed that the Bankruptcy Court’s judgment could instead be
`treated as proposed findings of fact and conclusions of law, subject to
`de novo review by the District Court.
`Held:
`
`
`
`
`1. Under the Bankruptcy Amendments and Federal Judgeship Act
`
`
`
`
`
`
`
`
`
`

`
`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`
`Syllabus
`in
`jurisdiction
`of 1984, federal district courts have original
`
`bankruptcy cases and may refer to bankruptcy judges two statutory
`
`“core” proceedings and
`“non-core”
`categories of proceedings:
`proceedings. See generally 28 U. S. C. §157. In core proceedings, a
`
`judge “may hear and determine
`bankruptcy
`. . . and enter
`appropriate orders and judgments,” subject to the district court’s
`traditional appellate review. §157(b)(1). In non-core proceedings—
`those that are “not . . . core” but are “otherwise related to a case
`under title 11,” §157(c)(1)—final judgment must be entered by the
`district court after de novo review of the bankruptcy judge’s proposed
`findings of fact and conclusions of law, ibid., except that the
`bankruptcy judge may enter final judgment if the parties consent,
`
`§157(c)(2).
`
`In Stern, the Court confronted an underlying conflict between the
`
`1984 Act and the requirements of Article III. The Court held that
`Article III prohibits Congress from vesting a bankruptcy court with
`
`
`the authority to finally adjudicate the “core” claim of tortious
`interference. The Court did not, however, address how courts should
`proceed when they encounter a Stern claim. Pp. 4–8.
`2. Stern claims may proceed as non-core within the meaning of
`
`§157(c). Lower courts have described Stern claims as creating a
`statutory “gap,” since bankruptcy judges are not explicitly authorized
`to propose findings of fact and conclusions of law in a core proceeding.
`However, this so-called gap is closed by the Act’s severability
`provision, which instructs that where a “provision of the Act or [its]
`application . . . is held invalid, the remainder of th[e] Act . . . is not
`
`affected thereby.” 98 Stat. 344. As applicable here, when a court
`identifies a Stern claim, it has “held invalid” the “application” of
`§157(b), and the “remainder” not affected includes §157(c), which
`governs non-core proceedings. Accordingly, where a claim otherwise
`satisfies §157(c)(1), the bankruptcy court should simply treat the
`Stern claim as non-core. This conclusion accords with the Court’s
`
`general approach to severability, which is to give effect to the valid
`
`portion of a statute so long as it “remains ‘fully operative as a law,’ ”
`Free Enterprise Fund v. Public Company Accounting Oversight Bd.,
`
`561 U. S. 477, 509, and so long as the statutory text and context do
`not suggest that Congress would have preferred no statute at all,
`ibid. Pp. 8–10.
`
`the
`to
`3. Section 157(c)(1)’s procedures apply
`fraudulent
`
`
`conveyance claims here. This Court assumes without deciding that
`these claims are Stern claims, which Article III does not permit to be
`treated as “core” claims under §157(b). But because the claims assert
`that property of the bankruptcy estate was improperly removed, they
`are self-evidently “related to a case under title 11.” Accordingly, they
`
`
`
`
`
`
`
`
`
`
`
`2
`
`
`
`
`

`
`3
`
`
`Cite as: 573 U. S. ____ (2014)
`
`
`Syllabus
`
`fit comfortably within the category of claims governed by §157(c)(1).
`The Bankruptcy Court would have been permitted to follow that
`provision’s procedures, i.e., to submit proposed findings of fact and
`conclusions of law to the District Court for de novo review. Pp. 11–
`
`12.
`
`
`
`4. Here, the District Court’s de novo review of the Bankruptcy
`Court’s order and entry of its own valid final judgment cured any
`potential error in the Bankruptcy Court’s entry of judgment. EBIA
`contends that it was constitutionally entitled to review by an Article
`III court regardless of whether the parties consented to bankruptcy
`court adjudication. In the alternative, EBIA asserts that even if such
`
`consent were constitutionally permissible, it did not in fact consent.
`Neither contention need be addressed here, because EBIA received
`the same review from the District Court that it would have received
`
`had the Bankruptcy Court treated the claims as non-core proceedings
`
`under §157(c)(1). Pp. 12–13.
`702 F. 3d 553, affirmed.
`THOMAS, J., delivered the opinion for a unanimous Court.
`
`
`
`
`
`
`
`

`
`
`
`
`
` Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`
`1
`
`
` 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, Wash-
`
` ington, 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. 12–1200
`_________________
`EXECUTIVE BENEFITS INSURANCE AGENCY, PETI-
`
`TIONER v. PETER H. ARKISON, CHAPTER 7 TRUSTEE
`
`
` OF THE ESTATE OF BELLINGHAM INSURANCE
`
`
`AGENCY, INC.
`
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
`
`
`APPEALS FOR THE NINTH CIRCUIT
`
`
`[June 9, 2014]
`
` JUSTICE THOMAS delivered the opinion of the Court.
`In Stern v. Marshall, 564 U. S. ___ (2011), this Court
`
`
`held that even though bankruptcy courts are statutorily
`authorized to enter final judgment on a class of bankruptcy-
`related claims, Article III of the Constitution prohibits
`bankruptcy courts from finally adjudicating certain of
`
`those claims. Stern did not, however, decide how bank-
`ruptcy or district courts should proceed when a “Stern
`claim” is identified. We hold today that when, under
`Stern’s reasoning, the Constitution does not permit a
`bankruptcy court to enter final judgment on a bankruptcy-
`related claim, the relevant statute nevertheless permits a
`bankruptcy court to issue proposed findings of fact and
`conclusions of law to be reviewed de novo by the district
`court. Because the District Court in this case conducted
`the de novo review that petitioner demands, we affirm the
`judgment of the Court of Appeals upholding the District
`Court’s decision.
`
`
`
`
`
`
`

`
`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`Opinion of the Court
`
`I
`
`
`Nicolas Paleveda and his wife owned and operated two
`companies—Aegis Retirement
`Income Services,
`Inc.
`(ARIS), and Bellingham Insurance Agency, Inc. (BIA). By
`early 2006, BIA had become insolvent, and on January 31,
`2006, the company ceased operation. The next day,
`Paleveda used BIA funds to incorporate Executive Bene-
`fits Insurance Agency, Inc. (EBIA), petitioner in this case.
`Paleveda and others initiated a scheme to transfer assets
`from BIA to EBIA. The assets were deposited into an
`account held jointly by ARIS and EBIA and ultimately
`credited to EBIA at the end of the year.
`
`On June 1, 2006, BIA filed a voluntary Chapter 7 bank-
`
`ruptcy petition in the United States Bankruptcy Court for
`the Western District of Washington. Peter Arkison, the
`
`bankruptcy trustee and respondent in this case, filed a
`complaint in the same Bankruptcy Court against EBIA
`and others. As relevant here, the complaint alleged that
`Paleveda used various methods to fraudulently convey
`
`BIA assets to EBIA.1 EBIA filed an answer and denied
`
`many of the trustee’s allegations.
`
`After some disagreement as to whether the trustee’s
`claims should continue in the Bankruptcy Court or instead
`proceed before a jury in Federal District Court, the trustee
`filed a motion for summary judgment against EBIA in the
`Bankruptcy Court. The Bankruptcy Court granted sum-
`mary judgment for the trustee on all claims, including the
`fraudulent conveyance claims. EBIA then appealed that
`determination to the District Court. The District Court
`
`
`
`conducted de novo review, affirmed the Bankruptcy
`Court’s decision, and entered judgment for the trustee.
`
`EBIA appealed to the United States Court of Appeals for
`
`the Ninth Circuit. After EBIA filed its opening brief, this
`——————
` 1The trustee asserted claims of fraudulent conveyance under 11
`U. S. C. §544, and under state law, Wash. Rev. Code, ch. 19.40 (2012).
`
`
`
`
`
`
`
`
`
`
`
`2
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`
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`
`
`
`

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`
`
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`
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`
`
`
`Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`Court decided Stern, supra. In Stern, we held that Article
`III of the Constitution did not permit a bankruptcy court
`to enter final judgment on a counterclaim for tortious
`interference, id., at ___, even though final adjudication of
`that claim by the Bankruptcy Court was authorized by
`statute, see Part II–B, infra.2 In light of Stern, EBIA
`
`moved to dismiss its appeal in the Ninth Circuit for lack of
`jurisdiction, contending that Article III did not permit
`Congress to vest authority in a bankruptcy court to finally
`decide the trustee’s fraudulent conveyance claims.
`The Ninth Circuit rejected EBIA’s motion and affirmed
`
`the District Court. In re Bellingham Ins. Agency, Inc., 702
`F. 3d 553 (2012). As relevant here, the court held that
`Stern, supra, and Granfinanciera, S. A. v. Nordberg, 492
`U. S. 33 (1989),3 taken together, lead to the conclusion
`that Article III does not permit a bankruptcy court to
`enter final judgment on a fraudulent conveyance claim
`against a noncreditor unless the parties consent. 702
`F. 3d, at 565. The Ninth Circuit concluded that EBIA had
`impliedly consented to the Bankruptcy Court’s jurisdic-
`tion, and that the Bankruptcy Court’s adjudication of the
`
`fraudulent conveyance claim was therefore permissible.
`Id., at 566, 568. The Court of Appeals also observed that
`the Bankruptcy Court’s judgment could instead be treated
`
`as proposed findings of fact and conclusions of law, subject
`to de novo review by the District Court. Id., at 565–566.
`We granted certiorari, 570 U. S. ___ (2013).
`
`
`——————
` 2As we explain below, see Part II–B, infra, the statutory scheme
`
`
`
` at issue both in Stern and in this case grants bankruptcy courts the
`authority to “hear and determine” and “enter appropriate orders and
`judgments” in “core” proceedings. 28 U. S. C. §157(b)(1). The statute
`lists counterclaims like the one brought in Stern as “core” claims.
`
` §157(b)(2)(C).
`3 Granfinanciera held that a fraudulent conveyance claim under Title
`
`11 is not a matter of “public right” for purposes of Article III, 492 U. S.,
`
`
` at 55, and that the defendant to such a claim is entitled to a jury trial
`under the Seventh Amendment, id., at 64.
`
`
`
`3
`
`
`
`
`
`
`
`
`
`

`
`4
`
`
`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`Opinion of the Court
`
`
` II
`
` In Stern, we held that Article III prohibits Congress
`
`from vesting a bankruptcy court with the authority to
`finally adjudicate certain claims. 564 U. S., at ___. But
`we did not address how courts should proceed when they
`encounter one of these “Stern claims”—a claim designated
`
`for final adjudication in the bankruptcy court as a statu-
`tory matter, but prohibited from proceeding in that way as
`a constitutional matter.4
`
`As we explain in greater detail below, when a bankruptcy
`
`court is presented with such a claim, the proper course
`
`is to issue proposed findings of fact and conclusions of law.
`The district court will then review the claim de novo and
`enter judgment. This approach accords with the bank-
`ruptcy statute and does not implicate the constitutional
`defect identified by Stern.
`
`
`
`A
`We begin with an overview of modern bankruptcy legis-
`
`lation. Prior to 1978, federal district courts could refer
`matters within the traditional “summary jurisdiction” of
`bankruptcy courts to specialized bankruptcy referees.5
`
`See Northern Pipeline Constr. Co. v. Marathon Pipe Line
`Co., 458 U. S. 50, 53 (1982) (plurality opinion). Summary
`jurisdiction covered claims involving “property in the
`actual or constructive possession of the [bankruptcy]
`court,” ibid., i.e., claims regarding the apportionment of
`——————
`4Because we conclude that EBIA received the de novo review and
`entry of judgment to which it claims constitutional entitlement, see
`Part IV–B, infra, this case does not require us to address whether EBIA
`in fact consented to the Bankruptcy Court’s adjudication of a Stern
`claim and whether Article III permits a bankruptcy court, with the
`consent of the parties, to enter final judgment on a Stern claim. We
`
`reserve that question for another day.
`5Bankruptcy referees were designated “judges” in 1973. See North-
` ern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U. S. 50, 53,
`
`
`n. 2 (1982) (plurality opinion).
`
`
`
`
`
`
`
`
`
`
`
`

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`
`5
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`
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` Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`the existing bankruptcy estate among creditors. See
`Brubaker, A “Summary” Statutory and Constitutional
`Theory of Bankruptcy Judges’ Core Jurisdiction After
`Stern v. Marshall, 86 Am. Bankr. L. J. 121, 124 (2012).
`
`Proceedings to augment the bankruptcy estate, on the
`other hand, implicated the district court’s plenary jurisdic-
`tion and were not referred to the bankruptcy courts absent
`both parties’ consent. See MacDonald v. Plymouth County
`Trust Co., 286 U. S. 263, 266 (1932); see also Brubaker,
`supra, at 128.
`
`In 1978, Congress enacted sweeping changes to the
`
`federal bankruptcy laws. See 92 Stat. 2549. The Bank-
`ruptcy Reform Act eliminated the historical distinction
`between “‘summary’” jurisdiction belonging to bankruptcy
`courts and “‘plenary’” jurisdiction belonging to either a
`district court or an appropriate state court. Northern
`Pipeline, supra, at 54 (plurality opinion); see also 1 W.
`Norton & W. Norton Bankruptcy Law and Practice §4:12,
`p. 4–44 (3d ed. 2013). Instead, the 1978 Act mandated
`that bankruptcy judges “shall exercise” jurisdiction over
`“all civil proceedings arising under title 11 or arising in or
`related to cases under title 11.” 28 U. S. C. §§1471(b)–(c)
`(1976 ed., Supp. IV). Under the 1978 Act, bankruptcy
`judges were “vested with all of the ‘powers of a court of
`equity, law, and admiralty,’” with only a few limited ex-
`ceptions. Northern Pipeline, 458 U. S., at 55 (plurality
`opinion) (quoting §1481). Notwithstanding their expanded
`jurisdiction and authority, these bankruptcy judges were
`not afforded the protections of Article III—namely, life
`tenure and a salary that may not be diminished.
`Id.,
`at 53.
`In Northern Pipeline, this Court addressed whether
`bankruptcy judges under the 1978 Act could “constitution-
`ally be vested with jurisdiction to decide [a] state-law
`
`
`contract claim” against an entity not otherwise a party to
`the proceeding. Id., at 53, 87, n. 40. The Court concluded
`
`

`
`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`Opinion of the Court
`that assignment of that claim for resolution by the bank-
`ruptcy judge “violates Art. III of the Constitution.” Id., at
`52, 87 (plurality opinion); see id., at 91 (Rehnquist, J.,
`concurring in judgment). The Court distinguished be-
`tween cases involving so-called “public rights,” which may
`be removed from the jurisdiction of Article III courts, and
`cases involving “private rights,” which may not. See id., at
`69–71 (plurality opinion); id., at 91 (Rehnquist, J., concur-
`ring in judgment). Specifically, the plurality noted that
`“the restructuring of debtor-creditor relations, which is at
`the core of the federal bankruptcy power, must be distin-
`
`guished from the adjudication of state-created private
`rights,” which belong in an Article III court. Id., at 71–72,
`and n. 26.
`
`
`
`6
`
`
`B
`
`
`Against that historical backdrop, Congress enacted the
`Bankruptcy Amendments and Federal Judgeship Act of
`1984—the Act at issue in this case. See 28 U. S. C. §151
`
`et seq. Under the 1984 Act, federal district courts have
`
`“original and exclusive jurisdiction of all cases under title
`11,” §1334(a), and may refer to bankruptcy judges any
`“proceedings arising under title 11 or arising in or related
`to a case under title 11,” §157(a).6 Bankruptcy judges
`
`for cause,
`serve 14-year terms subject to removal
`§§152(a)(1), (e), and their salaries are set by Congress,
`§153(a).
`
`The 1984 Act largely restored the bifurcated jurisdic-
`tional scheme that existed prior to the 1978 Act. The 1984
`Act implements that bifurcated scheme by dividing all
`matters that may be referred to the bankruptcy court
`into two categories: “core” and “non-core” proceedings. See
`generally §157.7 It is the bankruptcy court’s responsibility
`——————
`6In addition, district courts may also withdraw such matters from the
`
` bankruptcy courts for “cause shown.” §157(d).
` 7In using the term “core,” Congress tracked the Northern Pipeline
`
`
`
`
`
`
`
`
`
`
`
`

`
`7
`
`
`Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`to determine whether each claim before it is core or non-
`core. §157(b)(3); cf. Fed. Rule Bkrtcy. Proc. 7012. For core
`proceedings, the statute contains a nonexhaustive list of
`examples, including—as relevant here—“proceedings to
`
`determine, avoid, or recover fraudulent conveyances.”
`§157(b)(2)(H). The statute authorizes bankruptcy judges
`to “hear and determine” such claims and “enter appropri-
`ate orders and judgments” on them. §157(b)(1). A final
`judgment entered in a core proceeding is appealable to the
`
`district court, §158(a)(1), which reviews the judgment
`under traditional appellate standards, Rule 8013.
`
`
`As for “non-core” proceedings—i.e., proceedings that are
`“not . . . core” but are “otherwise related to a case under
`title 11”—the statute authorizes a bankruptcy court to
`“hear [the] proceeding,” and then “submit proposed find-
`
`ings of fact and conclusions of law to the district court.”
`§157(c)(1). The district court must then review those
`proposed findings and conclusions de novo and enter any
`final orders or judgments. Ibid. There is one statutory
`exception to this rule: If all parties “consent,” the statute
`permits the bankruptcy judge “to hear and determine and
`to enter appropriate orders and judgments” as if the pro-
`ceeding were core. §157(c)(2).
`
`Put simply: If a matter is core, the statute empowers the
`bankruptcy judge to enter final judgment on the claim,
`subject to appellate review by the district court. If a mat-
`ter is non-core, and the parties have not consented to final
`adjudication by the bankruptcy court, the bankruptcy
`judge must propose findings of fact and conclusions of law.
`
`Then, the district court must review the proceeding
`
`de novo and enter final judgment.
`——————
`plurality’s use of the same term as a description of those claims that fell
`within the scope of the historical bankruptcy court’s power. See 458
`U. S., at 71 (“[T]he restructuring of debtor-creditor relations, which is
`at the core of the federal bankruptcy power, must be distinguished from
`the adjudication of state-created private rights . . .” (emphasis added)).
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`
`8
`
`
`
`
`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`Opinion of the Court
`
`C
`
`
` Stern v. Marshall, 564 U. S. ___, confronted an underly-
`
`
`ing conflict between the 1984 Act and the requirements of
`Article III. In particular, Stern considered a constitutional
`challenge to the statutory designation of a particular claim
`as “core.” The bankrupt in that case had filed a common-
`law counterclaim for tortious interference against a credi-
`tor to the estate. Id., at ___. Section 157(b)(2)(C), as
`added by the 1984 Act, lists “counterclaims by the estate
`against persons filing claims against the estate” as a core
`proceeding, thereby authorizing the bankruptcy court to
`adjudicate the claim to final judgment. See supra this
`page. The respondent in Stern objected that Congress had
`violated Article III by vesting the power to adjudicate the
`tortious interference counterclaim in bankruptcy court.
`Stern, 564 U. S., at ___.
`
`We agreed. Id., at ___. In that circumstance, we held,
`Congress had improperly vested the Bankruptcy Court
`
`with the “‘judicial Power of the United States,’” just as in
`Northern Pipeline. 564 U. S., at ___, ___ (slip op., at 21,
`
`
`38). Because “[n]o ‘public right’ exception excuse[d] the
`failure to comply with Article III,” we concluded that
`Congress could not confer on the Bankruptcy Court the
`authority to finally decide the claim. Id., at ___. (slip op.,
`at 21).
`
`
`
`
`
`
`
`
`III
`
`Stern made clear that some claims labeled by Congress
`as “core” may not be adjudicated by a bankruptcy court in
`the manner designated by §157(b). Stern did not, how-
`ever, address how the bankruptcy court should proceed
`under those circumstances. We turn to that question now.
`
`The Ninth Circuit held that the fraudulent conveyance
`claims at issue here are Stern claims—that is, proceedings
`that are defined as “core” under §157(b) but may not, as a
`constitutional matter, be adjudicated as such (at least in
`
`
`
`
`
`
`
`

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` Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`the absence of consent, see n. 4, supra. See 702 F. 3d, at
`
`562. Neither party contests that conclusion.
`
`The lower courts, including the Ninth Circuit in this
`case, have described Stern claims as creating a statutory
`
`
`“gap.” See, e.g., 702 F. 3d, at 565. By definition, a Stern
`claim may not be adjudicated to final judgment by the
`bankruptcy court, as in a typical core proceeding. But the
`alternative procedure, whereby the bankruptcy court
`submits proposed findings of fact and conclusions of law,
`applies only to non-core claims. See §157(c)(1). Because
`§157(b) does not explicitly authorize bankruptcy judges to
`submit proposed findings of fact and conclusions of law in
`a core proceeding, the argument goes, Stern created a
`
`“gap” in the bankruptcy statute. See 702 F. 3d, at 565.
`That gap purportedly renders the bankruptcy court power-
`less to act on Stern claims, see Brief for Petitioner 46–48,
`thus requiring the district court to hear all Stern claims in
`the first instance.
`
`We disagree. The statute permits Stern claims to pro-
`ceed as non-core within the meaning of §157(c). In partic-
`
`ular, the statute contains a severability provision that
`accounts for decisions, like Stern, that invalidate certain
`applications of the statute:
`“If any provision of this Act or the application thereof
`to any person or circumstance is held invalid, the re-
`mainder of this Act, or the application of that provi-
`sion to persons or circumstances other than those as
`to which it is held invalid, is not affected thereby.” 98
`
`Stat. 344, note following 28 U. S. C. §151.
`
`The plain text of this severability provision closes the
`
`so-called “gap” created by Stern claims. When a court
`
`identifies a claim as a Stern claim, it has necessarily “held
`invalid” the “application” of §157(b)—i.e., the “core” label
`and its attendant procedures—to the litigant’s claim.
`Note following §151. In that circumstance, the statute
`
`
`
`
`
`
`9
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`10
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`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`Opinion of the Court
` instructs that “the remainder of th[e] Act . . . is not affected
`
`
`thereby.” Ibid. That remainder includes §157(c), which
`governs non-core proceedings. With the “core” category no
`longer available for the Stern claim at issue, we look to
`§157(c)(1) to determine whether the claim may be adjudi-
`cated as a non-core claim—specifically, whether it is “not a
`core proceeding” but is “otherwise related to a case under
`title 11.” If the claim satisfies the criteria of §157(c)(1),
`the bankruptcy court simply treats the claims as non-core:
`The bankruptcy court should hear the proceeding and
`submit proposed findings of fact and conclusions of law
`to the district court for de novo review and entry of
`judgment.
`
`The conclusion that the remainder of the statute may
`
`continue to apply to Stern claims accords with our general
`approach to severability. We ordinarily give effect to the
`valid portion of a partially unconstitutional statute so long
`as it “remains ‘“fully operative as a law,”’” Free Enterprise
`
`Fund v. Public Company Accounting Oversight Bd., 561
`U. S. 477, 509 (2010) (quoting New York v. United States,
`505 U. S. 144, 186 (1992)), and so long as it is not “‘evi-
`dent’” from the statutory text and context that Congress
`would have preferred no statute at all, 561 U. S., at 509
`(quoting Alaska Airlines, Inc. v. Brock, 480 U. S. 678, 684
`(1987)). Neither of those concerns applies here. Thus,
`
`§157(c) may be applied naturally to Stern claims. And,
`EBIA has identified “nothing in the statute’s text or his-
`
`torical context” that makes it “evident” that Congress
`would prefer to suspend Stern claims in limbo. 561 U. S.,
`
`at 509.8
`——————
` 8To the contrary, we noted in Stern that removal of claims from core
`
`bankruptcy jurisdiction does not “meaningfully chang[e] the division of
`labor in the current statute.” 564 U. S., at ___ (slip op., at 37). Accept-
`ing EBIA’s contention that district courts are required to hear all Stern
`
`
` claims in the first instance, see Brief for Petitioner 46–48, would
` dramatically alter the division of responsibility set by Congress.
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` Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`IV
`
`A
`
`Now we must determine whether the procedures set
`
`forth in §157(c)(1) apply to the fraudulent conveyance
`claims at issue in this case. The Court of Appeals held,
`and we assume without deciding, that the fraudulent
`conveyance claims in this case are Stern claims. See Part
`III, supra. For purposes of this opinion, the “application”
`of both the “core” label and the procedures of §157(b) to
`the trustee’s claims has therefore been “held invalid.”
`Note following §151. Accordingly, we must decide whether
`
`the fraudulent conveyance claims brought by the trustee
`are within the scope of §157(c)(1)—that is, “not . . . core”
`proceedings but “otherwise related to a case under title
`
`11.” We hold that this language encompasses the trustee’s
`claims of fraudulent conveyance.
`First, the fraudulent conveyance claims in this case are
`
`“not . . . core.” The Ninth Circuit held—and no party
`disputes—that Article III does not permit these claims to
`be treated as “core.” See Part III, supra. Second, the
`fraudulent conveyance claims are self-evidently “related to
`a case under title 11.” At bottom, a fraudulent conveyance
`claim asserts that property that should have been part of
`
`the bankruptcy estate and therefore available for distribu-
`tion to creditors pursuant to Title 11 was improperly
`removed. That sort of claim is “related to a case under
`
`title 11” under any plausible construction of the statutory
`text, and no party contends otherwise. See, e.g., Celotex
`Corp. v. Edwards, 514 U. S. 300, 307, n. 5, 308 (1995)
`(“Proceedings ‘related to’ the bankruptcy include . . . suits
`between third parties which have an effect on the bank-
`ruptcy estate”). Accordingly, because these Stern claims
`fit comfortably within the category of claims governed by
`§157(c)(1), the Bankruptcy Court would have been permit-
`ted to follow the procedures required by that provision,
`i.e., to submit proposed findings of fact and conclusions of
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`EXECUTIVE BENEFITS INS. AGENCY v. ARKISON
`
`Opinion of the Court
`law to the District Court to be reviewed de novo.
`B
`Although this case did not proceed in precisely that
`fashion, we affirm nonetheless. A brief procedural history
`of the case helps explain why.
`As noted, §157 permits a bankruptcy court to adjudicate
`a claim to final judgment in two circumstances—in core
`proceedings, see §157(b), and in non-core proceedings
`“with the consent of all the parties,” §157(c)(2). In this
`case, the Bankruptcy Court entered judgment in favor of
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`the bankruptcy trustee without specifying in its order
`whether it was acting pursuant to §157(b) (core) or
`§157(c)(2) (non-core with consent). EBIA immediately
`appealed to the District Court, see §158, but it did not
`argue that the Bankruptcy Court lacked constitutional
`authority to grant summary judgment. As a result, the
`District Court did not analyze whether there was a Stern
`
`
`problem and did not, as some district courts have done,
`
`relabel the bankruptcy order as mere proposed findings of
`fact and conclusions of law. See, e.g., In re Parco Merged
`Media Corp., 489 B. R. 323, 326 (Me. 2013) (collecting
`cases). The District Court did, however, review de novo
`the Bankruptcy Court’s grant of summary judgment for
`the trustee—a legal question—and issued a reasoned
`opinion affirming the Bankruptcy Court. The District
`Court then separately entered judgment in favor of the
`trustee. See 28 U. S. C. §1334(b) (“[T]he district courts
`shall have original but not exclusive jurisdiction of all civil
`proceedings . . . related to cases under title 11”).
`EBIA now objects on constitutional grounds to the
`
`Bankruptcy Court’s disposition of the fraudulent convey-
`ance claims. EBIA contends that it was constitutionally
`entitled to review of its fraudulent conveyance claims by
`an Article III court regardless of whether the parties
`consented to adjudication by a bankruptcy court. Brief for
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`It is so ordered.
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` Cite as: 573 U. S. ____ (2014)
`
`Opinion of the Court
`In an alternative argument, EBIA
`Petitioner 25–27.
`asserts that even if the Constitution permitted the Bank-
`ruptcy Court to adjudicate its claim with the consent of
`the parties, it did not in fact consent. Id., at 38.
`
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`In light of the procedural posture of this case, however,
`
`we need not decide whether EBIA’s contentions are correct
`on either score. At bottom, EBIA argues that it was enti-
`tled to have an Article III court review de novo and enter
`judgment on the fraudulent conveyance claims asserted by
`the trustee. In effect, EBIA received exactly that. The
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`District Court conducted de novo review of the summary
`judgment claims, concluding in a written opinion that
`there were no disputed issues of material fact and that the
`trustee was entitled to judgment as a matter of law. In
`accordance with its statutory authority over matters
`related to the bankruptcy, see §1334(b), the District Court
`then separately entered judgment in favor of the trustee.
`EBIA thus received the same review from the District
`Court that it would have received if the Bankruptcy Court
`had treated the fraudulent conveyance cla

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