
USCA1 Opinion

	




          May 7, 1996                                [Not for Publication]                                [Not for Publication]                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                 ____________________        No. 95-1736                CHERYL ADAMS, RICHARD WAUGH, BRENT ADAMS, RONALD RING,             PATRICIA ADAMS, ROBERT RAVITZ, CARRIE BURKE, WELDON ADAMS,                ELIZABETH TARGEE, TINA LEVESQUE AND MELISSA SMITH RAPA,                               Plaintiffs - Appellants,                                          v.                               CUMBERLAND FARMS, INC.                               AND LANCE CURLEY, ET AL.,                               Defendants - Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Nathaniel M. Gorton, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                Torruella, Chief Judge,                                           ___________                            Bownes, Senior Circuit Judge,                                    ____________________                              and Stahl, Circuit Judge.                                         _____________                                 ____________________            Stanley R. Cohen for appellant.            ________________            Barbara  D. Gilmore,  with whom  Kathleen Provost  and Sullivan  &            ___________________              ________________      ___________        Worcester, were on brief for appellee.        _________                                 ____________________                                 ____________________                      STAHL,  Circuit  Judge.   This appeal  involves the                      STAHL,  Circuit  Judge.                              ______________            review of  an  order entered  by  the bankruptcy  court  that            effectively estimated and  discharged the appellants' claims.            The appellants,  Cheryl Adams and ten  other former employees            of  the  debtor  (collectively   "Adams"),  claim  that   the            bankruptcy court lacked authority  to enter the order because            the  claims constituted  "personal injury  tort claims."   We            affirm.                                          I.                                          I.                                          __                                      Background                                      Background                                      __________                      Cheryl  Adams  and ten  other  former employees  of            Cumberland Farms, Inc. ("CFI"), filed proofs of claim against            CFI   in   the  bankruptcy   court   for   the  District   of            Massachusetts.    The claims  stemmed  from  a pending  civil            action  in which Adams alleged that  various CFI officers and            supervisors  had  conspired  to  recoup  inventory losses  by            falsely accusing  Adams and other low-level  CFI employees of            stealing  money  and  merchandise  from CFI  stores.    Adams            further alleged  that these same CFI  officials had knowingly            coerced  Adams and  other  employees into  confessing to  the            alleged  thefts  notwithstanding  that Adams  and  the  other            employees  had not committed them.  The complaint in the case            asserted claims of false imprisonment,  wrongful termination,            malicious   prosecution,   abuse   of  process,   defamation,            intentional infliction of  emotional distress, and  violation                                         -2-                                          2            of Massachusetts civil  rights laws  (collectively the  "loss            prevention claims").                      In 1993,  CFI reached  a tentative settlement  in a            separate  class action suit involving similar loss prevention            claims (the "Curley suit").  The Curley suit had been brought            in  New Jersey federal district court by a different group of            former CFI employees that did not include Adams.  As part  of            the proposed Curley settlement, the parties to that agreement            filed a  joint motion  in the Massachusetts  bankruptcy court            requesting  the  creation of  a  mandatory  class that  would            include all loss prevention claimants who had filed proofs of            claim  in  the  Massachusetts  bankruptcy  proceeding  (e.g.,                                                                    ____            Adams).   Moreover,  the parties  further requested  that the            Massachusetts  bankruptcy  court  use  the  Curley settlement            agreement as a vehicle for estimating and discharging  all of            the  loss prevention  claims alleged  by individuals  in this            newly  created class.   Adams  objected to  this motion.   On            August  30, 1993,  the bankruptcy  court granted  the motion.            Adams appealed to the  Massachusetts federal district  court,            and  the  district court  affirmed.    Additionally, the  New            Jersey  district court  ultimately  approved,  and the  Third            Circuit affirmed, the  proposed settlement  agreement in  the            Curley suit.  See  Curley v. Cumberland Farms, Inc.,  27 F.3d                          ___  ______    ______________________            556 (3d Cir. 1994).                                         II.                                         II.                                         ___                                         -3-                                          3                                      Discussion                                      Discussion                                      __________                      On   appeal  to   this  court,   Adams's  principal            complaint is  that the bankruptcy court  lacked the authority            to  enter a final order  discharging her claims.   Adams also            raises several  additional arguments  including an attack  on            the  bankruptcy  court's  estimation  of her  claims  and  an            assertion  that the  bankruptcy  court's  order violated  her            Seventh Amendment right  to a  jury trial.   We begin with  a            brief overview of the  statutory framework and follow with  a            discussion of Adams's assignments of error.            A.  Statutory Overview            ______________________                      Title 28 U.S.C.   1334  vests in the district court            a  broad  grant  of   subject-matter  jurisdiction  over  all            bankruptcy-related  matters,  expressly  providing  that  the            "district   court   shall   have   original   and   exclusive            jurisdiction  of all cases under  title 11" and "original but            not exclusive  jurisdiction of all  civil proceedings arising            under title 11, or arising in or related to cases under title            11."  28  U.S.C.    1334(a), (b); see  also Celotex Corp.  v.                                              ___  ____ _____________            Edwards,  115   S.  Ct.  1493,  1498-99   (1995)  (discussing            _______            comprehensive  scope of    1334  jurisdictional grant).   The            bankruptcy court, in turn, is authorized to hear matters, not            as  an independent  entity, but  as "a  unit of  the district            court."    28  U.S.C.    151.    Subject-matter  jurisdiction            remains  in  the  district  court, which  is  authorized,  in                                         -4-                                          4            appropriate   circumstances,   to  refer   matters   "to  the            bankruptcy  judges  of th[at]  district."    Id.    157;  cf.                                                         ___          ___            Northern Pipeline Const.  Co. v. Marathon Pipe  Line Co., 458            _____________________________    _______________________            U.S. 50 (1982)  (holding unconstitutional previous  statutory            scheme   that  authorized   bankruptcy  courts   to  exercise            independently  all  jurisdiction  conferred to  the  district            courts  under the  bankruptcy  laws).   The district  court's            power of referral extends to any case or proceeding for which            it has  subject-matter jurisdiction  under    1334.   See  28                                                                  ___            U.S.C.    157.  The district court, however, may withdraw any            matter referred under  this provision for cause shown  on its            own motion or by the request of either party.  Id.   157(d).                                                           ___                      While the district court  may refer all matters for            which  it has  jurisdiction under    1334,  the power  of the            bankruptcy  judge  to  enter   final  orders  in  a  referred            proceeding  is limited.  See 28 U.S.C.    157.  In general, a                                     ___            bankruptcy  judge may  hear and  finally determine  only core            bankruptcy proceedings.  Id.    157(a).  Core proceedings are                                     ___            those that involve rights that are created by, and depend on,            the bankruptcy laws for their existence.  In re G.S.F. Corp.,                                                      __________________            938  F.2d 1467, 1475 (1st  Cir. 1991); see  also In re Arnold                                                   ___  ____ ____________            Print  Works,  Inc., 815  F.2d  165, 166-67  (1st  Cir. 1987)            ___________________            (reading  the  legislative  history  as  indicating   that  a            bankruptcy  court's  core  authority  should  be  interpreted            broadly).   Section 157  sets forth  a nonexhaustive list  of                                         -5-                                          5            "core  proceedings"  that includes  such  obvious  matters as            "allowance or disallowance of  claims against the estate," 28            U.S.C.    157(b)(2)(B),  as well  as a  final broadly-phrased            catchall  covering  most  "other  proceedings  affecting  the            liquidation of the assets of the estate," id.   157(b)(2)(O).                                                      ___                      A  bankruptcy  judge  may   also  hear  a  properly            referred non-core  proceeding  otherwise falling  within  the            district  court's bankruptcy  jurisdiction, but,  in general,            may  only issue  proposed  findings of  fact and  recommended            conclusions  of law subject  to the district  court's de novo                                                                  __ ____            review.  Id.   157(c)(1).  This non-core authority extends to                     ___            those  matters  that, while  not  directly  dependent on  the            bankruptcy   laws  for   their  existence,   are  nonetheless            sufficiently   connected   to   the  restructuring   of   the            debtor/creditor  relationship to  come  within  the  district            court's broad jurisdictional grant.   The bankruptcy court is            authorized, on its  own motion or on the  "timely motion of a            party," to  determine whether  a proceeding comes  within the            court's  core  or  non-core  authority.    Id.     157(b)(3).                                                       ___            Finally, with the consent of  the parties, a bankruptcy court            may hear and  finally determine  non-core proceedings  within            the   district  court's  bankruptcy   jurisdiction.    Id.                                                                      ___            157(c)(2).                                         -6-                                          6                      Significantly,  personal  injury tort  and wrongful            death claims are afforded special status under the bankruptcy            laws.    Several express  exceptions  address  and limit  the            authority  of the  bankruptcy court over  such claims.   See,                                                                     ___            e.g., 28 U.S.C.    157(b)(2)(B), (O), and   157(b)(5).1   For            ____            example,  the   estimation  of  unliquidated   or  contingent            personal injury tort claims  for the purposes of distribution                                            ____________________            1.    Subsection 157(b)(2)  provides, in relevant  part, that            core proceedings include:                       (B) allowance or  disallowance of  claims                      against  the  estate  or exemptions  from                      property of the estate, and estimation of                      claims  or interest  for the  purposes of                      confirming a plan under chapter 11, 12 or                      13 of title 11 but not the liquidation or                                     ___ ___                      estimation of  contingent or unliquidated                      personal  injury  tort or  wrongful death                      ________  ______  ____     ________ _____                      claims against the estate for purposes of                      distribution in a case under title 11                      . . .                       (O)   other  proceedings   affecting  the                      liquidation  of the assets  of the estate                      or the adjustment of  the debtor-creditor                      or    the    equity    security    holder                      relationship, except personal injury tort                                    ______ ________ ______ ____                      or wrongful death claims.                         ________ _____            28 U.S.C.   157(b)(2) (emphasis added).  Subsection 157(b)(5)            provides that:                       The  district  court  shall   order  that                      personal injury tort  and wrongful  death                      ________ ______ ____      ________  _____                      claims shall  be  tried in  the  district                      court  in  which the  bankruptcy  case is                      pending, or in the district  court in the                      district in  which  the claim  arose,  as                      determined by the district court in which                      the bankruptcy case is pending.            28 U.S.C.   157(b)(5) (emphasis added).                                         -7-                                          7            is explicitly excluded from   157's list of core proceedings.            Id.     157(b)(2)(B).     Moreover,  the  district  court  is            ___            instructed to  order that  personal injury tort  and wrongful            death  claims shall be tried  in the district  court in which            the  bankruptcy case is pending  or in the  district in which            the  claims arose.   Id.    157(b)(5).   This  special status                                 ___            apparently   stems  from  Congress's  recognition  that  most            personal  injury tort and  wrongful death victims  stand in a            somewhat  different relationship  with the  bankruptcy debtor            because they did not voluntarily enter into dealings with the            debtor (and  accept the risk  of loss)  in the same  sense as            traditional  bankruptcy  claimants.    See  Matter  of  Poole                                                   ___  _________________            Funeral Chapel,  Inc., 63  B.R.  527, 530  (Bankr. N.D.  Ala.            _____________________            1986) (quoting statements of Sen. DeConcini).            B.  Personal Injury Torts            _________________________                      Adams challenges the  bankruptcy court's  authority            to  enter  a  final  order   with  respect  to  her   claims.            Essentially,  she contests  the  bankruptcy court's  implicit            determination that her  claims constituted core  proceedings.            Adams argues that  her claims are non-core because  they fall            within at  least one of several  specific exceptions provided            for "personal  injury tort" claims.   Therefore, she contends            that, because  the  proceeding was  non-core, the  bankruptcy                                         -8-                                          8            court lacked the authority to enter a final order effectively            estimating and discharging her claims.2                      Whether or  not Adams's claims  constitute personal            injury tort claims is a close question.  Compare In  re Atron                                                     _______ ____________            Inc. of  Michigan, 172  B.R. 541,  542-45 (Bankr.  W.D. Mich.            _________________            1994)  ("personal injury  tort"  should be  read narrowly  to            exclude  emotional distress and other nontraditional personal            injury  claims), with  Poole,  63 B.R.  at 529-30  ("personal                             ____  _____            injury  tort" should  be read  broadly to include  claims for            emotional  and mental  distress).   We  decline, however,  to            reach the issue in this case.  Adams failed to argue that her            claims  constituted   personal  injury  tort  claims  in  her            objection  to the  joint motion  before the  bankruptcy court            and, again, in  her opening brief before  the district court.            Accordingly,  she has  waived consideration  of the  issue on            appeal to this court.   See, e.g., Fish Market  Nominee Corp.                                    ___  ____  __________________________                                            ____________________            2.  Adams does not contend that her claims against the estate            were  outside the  district court's  broad grant  of subject-            matter  jurisdiction under  28 U.S.C.    1334.   This  is not            surprising.  The  district court's "related  to" jurisdiction            under    1334(b) is expansive.  See Celotex Corp. v. Edwards,                                            ___ _____________    _______            115 S. Ct. 1493, 1499 (1995) ("Congress did not delineate the            scope of `related  to' jurisdiction, but its choice  of words            suggests   a  grant   of  some   breadth.").     "`The  usual            articulation  of the  test  for determining  whether a  civil            proceeding is related to bankruptcy is whether the outcome of            that  proceeding could  conceivably  have any  effect on  the            estate being administered in bankruptcy.'"  In re G.S.F., 938                                                        ____________            at  1475 (quoting Pacor, Inc.  v. Higgins, 743  F.2d 984, 994                              ___________     _______            (3d Cir. 1984)).  We have little doubt that proceedings, such            as this one, involving the estimation and discharge of proofs            of  claim filed against  the estate by  a bankruptcy creditor            come within this broad range.                                         -9-                                          9            v.  Pelofsky, 72  F.3d 4,  6 (1st  Cir. 1995)  (arguments not                ________            raised  in bankruptcy court are waived on appeal); In re Mark                                                               __________            Bell Furniture Warehouse, Inc., 992 F.2d 7, 9 (1st Cir. 1993)            ______________________________            (same).                      At bottom, Adams's claim is that she was denied her            right to an  Article III  judge.  That  right, which  derives            from the language of  Article III,    1, is a personal  right            and is subject to waiver upon a party's failure to assert it.            See Commodity Future Trading  Comm'n v. Schor, 478 U.S.  833,            ___ ________________________________    _____            848-50 (1986).  Schor, however, makes clear that Article III,                            _____              1, protects  other non-waivable institutional  interests by            barring "congressional attempts  to transfer jurisdiction [to            non-Article III  tribunals] for  the purpose  of emasculating            constitutional courts."  Id.  at 850 (citations and quotation                                     ___            marks omitted).  No such concerns are at issue in  this case.            The present appeal does not involve a challenge to Congress's            allocation of authority to a non-Article III bankruptcy judge            to   resolve  personal  injury  and  wrongful  death  claims.            Indeed, the specific provisions in question, viz 28 U.S.C.                                                            ___            157(b)(2)(B) and  157(b)(5), strictly limit the  authority of            bankruptcy  judges  with  respect   to  personal  injury  and            wrongful death claims.                      Though, in  extraordinary  cases, we  may  make  an            exception to the raise-or-waive rule where our failure  to do            so  would  result in  a gross  miscarriage  of justice,   see                                                                      ___                                         -10-                                          10            Credit Francais Int'l  v. Bio-Vita,  Ltd., 78  F.3d 698,  709            _____________________     _______________            (1st  Cir. 1996),  Adams has  not persuaded  us that  such an            exception  is  warranted in  this case.    The effect  of the            bankruptcy court's order did  not completely deprive Adams of            a  remedy for  her  alleged injuries.    Instead, the  ruling            simply  had  the  effect of    estimating  the  value of  her            unliquidated tort  claims by  ordering her to  participate in            the  Curley settlement  agreement.   Because,  as we  explain            infra,  Adams  has  failed to  persuade  us  that  the Curley            _____            settlement will  provide an unreasonable  estimation, we  are            likewise unpersuaded  that giving  effect  to the  bankruptcy            court's  order will  result in  a substantial  miscarriage of            justice.            C.  Other Matters             _________________                      In  her  reply brief,  Adams  directly  attacks the            bankruptcy court's use  of the class  action settlement as  a            vehicle for estimating her claims.  While title 11 authorizes            the  bankruptcy court to estimate unliquidated and contingent            claims when  necessary for  the prompt administration  of the            bankruptcy  estate,  see  11  U.S.C.   502(c),  it  does  not                                 ___            provide methods for conducting  such estimations.  Therefore,            in estimating claims, "bankruptcy courts  should use whatever            method  is  best  suited  to  the particular  circumstances."            Lawrence P. King, 3 Collier on Bankruptcy   502.03, at 502-76                                _____________________            (15th  ed.  1995).     The  bankruptcy  courts  are  afforded                                         -11-                                          11            substantial deference in this  area, and errors assigned both            to its estimates and its methods for achieving such estimates            generally will be  reviewed only for an  abuse of discretion.            Matter of Continental Airlines, 981 F.2d 1450, 1461 (5th Cir.            ______________________________            1993); Bittner v. Borne Chem. Co., 691 F.2d 134, 136 (3d Cir.                   _______    _______________            1982).   Moreover, in this case, because Adams did not attack            the  actual estimates in her opening brief, she has, in fact,            waived consideration of this issue absent a  showing that the            estimates  would result  in a  clear miscarriage  of justice.            See  Indian Motocycle  Assocs.  v. Massachusetts  Hous.  Fin.            ___  _________________________     __________________________            Agency, 66 F.3d 1246, 1253 n.12 (1st Cir. 1995).              ______                      On the  particulars of this case,  Adams has failed            to convince us that the bankruptcy court's decision to  order            her  participation in  the Curley  settlement constituted  an            abuse  of  discretion,  much  less  a  clear  miscarriage  of            justice.    The claims  asserted  in the  Curley  action were            brought by  employees similarly situated to  Adams, and arose            from essentially  the same  scheme that  Adams  alleges.   In            general, we find  no reason  to think  that a  court-approved            settlement in such a strikingly parallel proceeding would not            provide a  reasonable benchmark  for estimating the  value of            Adams's  claims.   Though there  may be  reasons that  such a            method  for  estimation would  not  be  appropriate in  other            cases,  Adams has not provided us  with any compelling reason            for finding it inappropriate here.                                         -12-                                          12                      Adams raises several additional issues, including a            claim that the  bankruptcy court's order deprived her  of her            Seventh  Amendment  right to  a jury  trial.   We  find these            additional claims either waived, substantially without merit,            or  both.   Specifically,  with  respect  to Adams's  Seventh            Amendment  argument, filing a proof of  claim in a bankruptcy            proceeding, as Adams  has done, generally waives any right to            a jury trial.   See  Langenkamp v. Culp,  490 U.S. 42,  44-45                            ___  __________    ____            (1990) (filing  proof  of claim  invokes  bankruptcy  court's            equitable   jurisdiction  and  generally  waives  jury  trial            right).  We  do note, however, that 28 U.S.C.    1411(a), may            restrict this  general rule  with respect to  personal injury            and  wrongful   death  claims.3     Nonetheless,   Adams  has            forfeited  the application  of this  provision by  failing to            argue that her claims constituted personal injury tort claims            to the courts below.  See, e.g., In re Mark Bell, 992 F.2d at                                  ___  ____  _______________            9.                                         III.                                         III.                                         ____                                      Conclusion                                      Conclusion                                      __________                      For the  foregoing reasons, we affirm  the decision            of the district court.                                            ____________________            3.  28 U.S.C.   1411(a) provides in relevant part that                       this chapter and title  11 do not  affect                      any  right  to  trial  by  jury  that  an                      individual  has   under  applicable  non-                      bankruptcy law with regard to  a personal                      injury or wrongful death tort claim.                                         -13-                                          13
