here is Moses versus Cash calling Mr. Silver. Thank you and may I please the court. I'm Jay Silver. I'm here for the aptly cash call suffice it to say that we believe the district court and bank of the court opinions in this case were seriously flawed. If allowed to stay, this circuit will be an outlier and this whole nexus of what bankruptcy court should or should not do where there's an arbitration clause. And in this case, the district court opinion in particular, it really didn't follow White Mountain, which is the key precedent in the four circuit. It ignored a third circuit precedent, the men's case that we cite in our briefs and we kept sort of saying, pick me, pick me to both the bankruptcy and the district court to say, follow this case because it says, and all the immense, it was a core claim and issue, it said that in that case, this kind of claim were a debtor alleges, usually where it alleges a violation of debt collection practices where it's filed in response and part to a proof of claim. The third circuit says that should go to bankruptcy
. I mean, excuse me, that should go to arbitration. And the issue in this case is that our claim will have no impact in the debtor's re-organization. She's already had her plan confirmed. It doesn't impact really any of the creditor claims in the case. She will receive her discharge. It doesn't delay anything or impact anything. Neither the bankruptcy court nor the district court apply the man analysis, which is the key here. What McNann says is that when you've got this conflict between two statutory schemes, in this case, the bankruptcy code and the FAA, what you have to do is find, unless there's some textual or just leave the history, if the claim is within the scope of the Arbitration Act
. Let me ask you, what would happen if you were permitted to withdraw the claim, proof of claim? Could you in that circumstance have enforced it under Cheyenne law in some other place? Enforced the debt? Yes. By withdrawing the claim, not in this case, because we said both in our own way. No, I said, if you were allowed to withdraw, then you wouldn't be in the bankruptcy case at all. And the question is, would you still have a claim against her under the note that she signed in the case? No, because we affirmatively said that we were abandoning and releasing that claim in our fleet. Well, you were withdrawing your proof of claim. But we did more than that. I mean, we answered affirmatively both in the answer and response, the adversary procedure in Cheyenne filed. We also in connection with our motion to withdraw
. Well, she also asked for a declaration that it was illegal. And you wouldn't agree to that. And my question is, I guess maybe I'll ask in a different way, does the tribe, if she were to file a declared lawsuit in state court seeking to declare that that's an illegal debt under the North Carolina law? Would she have faced an immunity defense? Under the Cheyenne River, yes, or she would have. But she also would have, we also would have filed face a motion to stay and to compel arbitration. And there is litigation again. I'm not here, did they really talk about that? But we're talking about the discretion of the bankruptcy judge, why he refused to let you get out and to keep the case even though you wanted to get out and because she had filed a cross claim. And I'm suggesting to her, suggesting that by you're filing a proof of claim, you waived that immunity. And that seems to be maybe another reason why it's beneficial to have all these issues resolved in one place, which is one of the purposes of bankruptcy
. And with all respect, where there is a claim that's asserted that's within, particularly non-core claim, that's within the scope of arbitration clause. The core claim was to, and they were very closely dependent, the core claim was that she says your proof of claim is unjustified because of an illegal debt. Correct. And that determination, that was illegal debt, also leads to the possibility of awarding damages. But that is not a waiver. It wasn't in men? No, the waiver of your immunity was filing a proof of claim. But that's not a waiver of our right to arbitration. Well, that's the different issue
. That question is whether enforcing the arbitration in this context where there is a core claim and a non-core claim closely related, implicated. A lot of the cases you cited were simply non-core claims. But here we have clearly a core claim and a non-core claim very closely linked. And whether awarding arbitration would frustrate the purposes of the bankruptcy. And actually what we have, the cases that we cited were also core claims. Where it said that actually in the courts of the field is a fairly lengthy extensive body of law in the courts of appeal that say even as to a core claim, where there's an arbitration clause that bears on us to that claim, it in fact. It may. There's a lot of discretion, but this case has a lot of baggage attached to it
. I mean, we have allegations that there really is no arbitration under the shy end law, that there aren't any rules. Other courts have made those findings. That's not the position we've taken here. Well, you wouldn't take that position, but the frustration is that when a debtor is confronted with debts that they can't handle, they can go into bankruptcy and have all the claims threw out the nation through nationwide service, a process pulled into one form resolved efficiently to give the debtor a new start. And it seems to me that the debtor could claim in this case, and the bankruptcy court seemed to think so, that if we allowed the arbitration to go out, and now that she's going to be fighting in immunities and not even know where the arbitration can take place, whether there is arbitration at all, that the fragmentation really undermines the effort of this person to get a new start. I hear two points to your question. I want to address the second person, that's as to this validity of the arbitration, which was not raised below, which was not addressed by the District for Bankruptcy Court, and where we've consistently said she has the right to go to AAA or to Jams. For free
. Well, it doesn't say that. It says it will be administered, used the word administered by AAA or Jams, but it still says the right is under Cheyenne law before Cheyenne arbitration. And actually says the procedure, though, is with respect to under the consumer rules. The procedure administered, it will be administered by the AAA or Jams, right? That's true, but it also makes clear, though, that again, it's not just, it says, but it's an accordance with the rules of that receipt, that our arbitral panel. So where is there a Cheyenne arbitrator? Is there somebody who serves as a Cheyenne arbitrator? No, and I want to, that's the court in health when it was looking at this full range of a number of different arbitration agreements, it said that the problem it had with this specific language, which is different from other language my client has used in the past, it just said that it read it as requiring that there be a Cheyenne reverts to tribe individual who is actually an arbitrator. We think that's a misreading. And it ultimately, in that case, health said, I'm not going to reach these issues today. I'm going to stay this proceeding to exalt for the tribal exhaustion
. I'm going to defer all rulings at this time with respect to the arbitration clauses. In this proceeding, the debtor hasn't come forward until this appeal and said, oh, we have questions about this particular arbitration clause. What we've said throughout is, is you get to go and pick a triple A or JAMS administrator and decider an arbitrator. You get to have this within 30 miles of your house. You get to do it for free. The difference in this case, and going back to your question about centralization and convening everything. How is articulating what courts have recognized to be one of the benefits and purposes of bankruptcy, which is, of course, constitutionally established? But what courts have also said is that does not trump the right to arbitrate. And in particular, it doesn't say that category
. No, it depends. It does depend. And that's my point. Is here you have to find, before you even get to the discretion point, there's a key that unlocks the right for the bankruptcy court to invoke some kind of discretion to keep a case like this. And usually that's a core case, not a non-core case, but we can talk about that. And that key, though, it has to find there's actually an inherent conflict with respect to the debtor's ability to reorganize. That's raised with respect to the claim that's being asserted. Here, there is no such conflict
. They can't really articulate a conflict that existed at the time we moved to say or in connection with a year ago when this was all being hashed out. She already has her plan confirmed. She already has said unsurcrue creditors aren't going to get anything. There's no inherent conflict here. Like in White Mountain, however, there the court said, this is a core proceeding. And we're going to find that the bankruptcy court properly declined the motion to stay where in a commercial context, the dispute was about whether a particular creditors claimed whether they were debt or equity. And they said, look, this is our analysis is that this debtor is a chapter 11 debtor trying to reorganize. If we allow to go forward in arbitration, creditors going to have an issue doing business management is going to be distracted. They're going to be extraordinary additional cost has going to be extremely difficult for this data to reorganize. That's not this case and like men's, for instance, where there was a proof of claim file, where in fact, there was claims that the debt at issue was userious and predatory and all that baggage, so called went with it. The third circuit said, no, what you look at is this is just about money damages. That's not in here. It doesn't arise from the bankruptcy. It's not a, even though the party stipulated as a core claim, the third circuit sort of said, we're not sure how you got there, but even accepting that unless you can show that by asserting this non core claim. There's a conflict. There's a serious interference with the debtor's ability reorganize
. They're going to be extraordinary additional cost has going to be extremely difficult for this data to reorganize. That's not this case and like men's, for instance, where there was a proof of claim file, where in fact, there was claims that the debt at issue was userious and predatory and all that baggage, so called went with it. The third circuit said, no, what you look at is this is just about money damages. That's not in here. It doesn't arise from the bankruptcy. It's not a, even though the party stipulated as a core claim, the third circuit sort of said, we're not sure how you got there, but even accepting that unless you can show that by asserting this non core claim. There's a conflict. There's a serious interference with the debtor's ability reorganize. That's not what this is about. The debtor's reorganized. She's on her way performing under her chapter 13 plan. And in fact, that's why men and another other cases have said in that case, particularly as to a non core claim, which are her debt collection claims under the her comment debt collection act. She says that's to a non core claim that doesn't get you anywhere. Now, I do want to, I want to point out that again, the district court said, well, wait a minute here is I've got an objection or a DJ as to the proof of claim that you found Mr. Silva. And I've also got the where the debtor is alleging that you breached chapter 7554 51 with respect to trying to collect on this step
. That's not what this is about. The debtor's reorganized. She's on her way performing under her chapter 13 plan. And in fact, that's why men and another other cases have said in that case, particularly as to a non core claim, which are her debt collection claims under the her comment debt collection act. She says that's to a non core claim that doesn't get you anywhere. Now, I do want to, I want to point out that again, the district court said, well, wait a minute here is I've got an objection or a DJ as to the proof of claim that you found Mr. Silva. And I've also got the where the debtor is alleging that you breached chapter 7554 51 with respect to trying to collect on this step. And because those claims are overlapping actually the court said it would rise and fall based on the determination is to claim with all respect to the district court. It was wrong. Now, words, what the debtor is claiming here is that if you read the statute, it says that you've got to make threats. You've got to make right misrepresentations. You got to engage in a rassing conduct. It's not all about just whether or not there's a valid proof of claim with a valid line. She's claimed emotional stress. She claimed damages
. And because those claims are overlapping actually the court said it would rise and fall based on the determination is to claim with all respect to the district court. It was wrong. Now, words, what the debtor is claiming here is that if you read the statute, it says that you've got to make threats. You've got to make right misrepresentations. You got to engage in a rassing conduct. It's not all about just whether or not there's a valid proof of claim with a valid line. She's claimed emotional stress. She claimed damages. It's not co extensive. The question again is, is is the claim that she has a certain district court was concerned also about the inconsistent results because the opposition to the proof of claim could determine a reach one result as to the legality of the loan. Where is a North Carolina state board and arbitration could reach a different. And the Supreme Court has said that just the possibility of inconsistent results when you're trying to parse out different claims doesn't get you anywhere. And that was the holding and KPMG it says what we require when the district court or bankruptcy court is parsing through what claims are archer but art arbitral should be arbitrated and shouldn't be. It said what you do you do that on a claim by claim analysis and the fact that it's inefficient to do it that way or that there's more cost or in fact that it could lead to inconsistent results doesn't make a difference. For sure does it frustrates the bankruptcy at frustrates that all of all the proceedings that you delay and fragments not in this case, your honor. Well, I mean not that that's that's where the showing has to be what is the inherent conflict there's a lot of the only I'm sorry go ahead
. It's not co extensive. The question again is, is is the claim that she has a certain district court was concerned also about the inconsistent results because the opposition to the proof of claim could determine a reach one result as to the legality of the loan. Where is a North Carolina state board and arbitration could reach a different. And the Supreme Court has said that just the possibility of inconsistent results when you're trying to parse out different claims doesn't get you anywhere. And that was the holding and KPMG it says what we require when the district court or bankruptcy court is parsing through what claims are archer but art arbitral should be arbitrated and shouldn't be. It said what you do you do that on a claim by claim analysis and the fact that it's inefficient to do it that way or that there's more cost or in fact that it could lead to inconsistent results doesn't make a difference. For sure does it frustrates the bankruptcy at frustrates that all of all the proceedings that you delay and fragments not in this case, your honor. Well, I mean not that that's that's where the showing has to be what is the inherent conflict there's a lot of the only I'm sorry go ahead. I'm say there's a lot of distrust in this case about the processes of cash call and the munities and I fully understand that baggage and I'm not here today to defend my clients business model. I am here to say that that the district court decision is in error and that if allowed if if the law is in the fourth circuit because it would be contrary to every other circuit if the law is is that the mere overlap of claims between core and non core claims means the bankruptcy court has discretion whether to send something arbitration. Then you're going to see a lot more confusion and beauty and that doesn't happen the only time actually it's happened for instance it would be the gandy decision which is a fifth circuit decision that that's the only time I can recall where a court of appeals said we're not going to send a north non core claim. Tarotation and the reason why white mountain wouldn't provide the district court with hard to what it did. First of all white mountain said that this is a core claim to there were significant findings where the court said it would seriously interfere with the debtors bankruptcy. Thirdly, it was not addressing a core claim that was ancillary or after the fact of the debtors reorganization. The law and other circuits that fills in in the words might mountain really get you to the point of you've got to look seriously as what is the inherent conflict between the debtors ability to reorganize and the claim that's been asserted and said here there's a serious interference and that's what judge Michael said to lead off the opinion. He bears we're here to say that this case will not get a arbitration because it in fact seriously interferes with the debtors ability to reorganize that is not this case sometimes you better off not take it to the appeal
. I'm say there's a lot of distrust in this case about the processes of cash call and the munities and I fully understand that baggage and I'm not here today to defend my clients business model. I am here to say that that the district court decision is in error and that if allowed if if the law is in the fourth circuit because it would be contrary to every other circuit if the law is is that the mere overlap of claims between core and non core claims means the bankruptcy court has discretion whether to send something arbitration. Then you're going to see a lot more confusion and beauty and that doesn't happen the only time actually it's happened for instance it would be the gandy decision which is a fifth circuit decision that that's the only time I can recall where a court of appeals said we're not going to send a north non core claim. Tarotation and the reason why white mountain wouldn't provide the district court with hard to what it did. First of all white mountain said that this is a core claim to there were significant findings where the court said it would seriously interfere with the debtors bankruptcy. Thirdly, it was not addressing a core claim that was ancillary or after the fact of the debtors reorganization. The law and other circuits that fills in in the words might mountain really get you to the point of you've got to look seriously as what is the inherent conflict between the debtors ability to reorganize and the claim that's been asserted and said here there's a serious interference and that's what judge Michael said to lead off the opinion. He bears we're here to say that this case will not get a arbitration because it in fact seriously interferes with the debtors ability to reorganize that is not this case sometimes you better off not take it to the appeal. Perhaps perhaps the problem if I may respond to that one question you know the problem is really wasn't a question. Thank you all right over you have some rebuttal will hear from Mr. Wesler. Thank you all our may please the court Matt Wesler for the appele otarium Moses. This case begins and largely ends with this court's decision in white mountain there this court looked at the interplay between the FAA and the bankruptcy code and it determined that there is an inherent conflict between the two statues. I think what's really important about that conclusion are the reasons why the two statues conflict. In white mountain this court explained that the very purpose of bankruptcy is to modify the rights of debtors and creditors by centralizing this case. The categorical ruling or did it depend on circumstances
. Perhaps perhaps the problem if I may respond to that one question you know the problem is really wasn't a question. Thank you all right over you have some rebuttal will hear from Mr. Wesler. Thank you all our may please the court Matt Wesler for the appele otarium Moses. This case begins and largely ends with this court's decision in white mountain there this court looked at the interplay between the FAA and the bankruptcy code and it determined that there is an inherent conflict between the two statues. I think what's really important about that conclusion are the reasons why the two statues conflict. In white mountain this court explained that the very purpose of bankruptcy is to modify the rights of debtors and creditors by centralizing this case. The categorical ruling or did it depend on circumstances. I'm sorry, Your Honor. Was the holding in white mountain a categorical ruling that there is an inherent conflict in every case or is it dependent on circumstances. The latter you are to be really clear there is no categorical rule about whether there is an inherent conflict when a bankruptcy court is faced with a motion to compel arbitration. It is back specific and it depends very much on the nature of the claims that are an issue in the case. But what the court said in white mountain I think is worth reiterating the court said that arbitration in a particular case where there is this conflict is inconsistent with centralized decision making because permitting an arbitrator to decide a core issue would make debtor creditors. The court said that the perpetrator rights contingent upon an arbitrator's ruling rather than the ruling of a bankruptcy judge. And I think that inconsistency is front and center in this case as both the bankruptcy judge and the district court below made clear at the center of this adversary proceeding is cash calls effort to recover its loan out of mismoses state. In mismoses objection to that claim against her estate because the loan agreement upon which cash calls proof of claim is based is illegal
. I'm sorry, Your Honor. Was the holding in white mountain a categorical ruling that there is an inherent conflict in every case or is it dependent on circumstances. The latter you are to be really clear there is no categorical rule about whether there is an inherent conflict when a bankruptcy court is faced with a motion to compel arbitration. It is back specific and it depends very much on the nature of the claims that are an issue in the case. But what the court said in white mountain I think is worth reiterating the court said that arbitration in a particular case where there is this conflict is inconsistent with centralized decision making because permitting an arbitrator to decide a core issue would make debtor creditors. The court said that the perpetrator rights contingent upon an arbitrator's ruling rather than the ruling of a bankruptcy judge. And I think that inconsistency is front and center in this case as both the bankruptcy judge and the district court below made clear at the center of this adversary proceeding is cash calls effort to recover its loan out of mismoses state. In mismoses objection to that claim against her estate because the loan agreement upon which cash calls proof of claim is based is illegal. Sending that matter to arbitration would unequivocally permit an arbitrator to decide a core bankruptcy issue which is the validity of cash calls claim under section 157 B2B of the bankruptcy code and just to just to link this up with white mountain that is exactly the core issue that was at stake in white mountain. It was a claim for allowance or disallowance of a proof of claim under section 157 B2B. And so as in white mountain where this court made very clear that sending that claim to bankruptcy to arbitration would be inconsistent with the bankruptcy codes objectives of centralized decision making and efficiency. So to hear the bankruptcy court was well within its discretion to keep the core claims in this case in bankruptcy. And that result is also no different with respect to the stern claim at issue in this case having an arbitrator resolve that claim would also run a foul of the bankruptcy code because it too would have an arbitrator decide a core bankruptcy issue which is the validity of cash calls loan agreement. And so it would also in the words of this court and white mountain have made debtor creditor rights contingent upon an arbitrator's ruling rather than that of a bankruptcy. But the result of that decision would only have an impact is whether or not it would increase the state of the bankrupt only in this case. Even though an arbitrator would be deciding that issue the only question would be whether or not it's going to be an additional money going to her and that certainly can't be the discretion you could use for a non core claim not to go to arbitration is it? Your honor to be really clear that's not the only outcome if this if that particular claim were sent to arbitration if an arbitrator even if you could get to arbitration let's assume you can
. Sending that matter to arbitration would unequivocally permit an arbitrator to decide a core bankruptcy issue which is the validity of cash calls claim under section 157 B2B of the bankruptcy code and just to just to link this up with white mountain that is exactly the core issue that was at stake in white mountain. It was a claim for allowance or disallowance of a proof of claim under section 157 B2B. And so as in white mountain where this court made very clear that sending that claim to bankruptcy to arbitration would be inconsistent with the bankruptcy codes objectives of centralized decision making and efficiency. So to hear the bankruptcy court was well within its discretion to keep the core claims in this case in bankruptcy. And that result is also no different with respect to the stern claim at issue in this case having an arbitrator resolve that claim would also run a foul of the bankruptcy code because it too would have an arbitrator decide a core bankruptcy issue which is the validity of cash calls loan agreement. And so it would also in the words of this court and white mountain have made debtor creditor rights contingent upon an arbitrator's ruling rather than that of a bankruptcy. But the result of that decision would only have an impact is whether or not it would increase the state of the bankrupt only in this case. Even though an arbitrator would be deciding that issue the only question would be whether or not it's going to be an additional money going to her and that certainly can't be the discretion you could use for a non core claim not to go to arbitration is it? Your honor to be really clear that's not the only outcome if this if that particular claim were sent to arbitration if an arbitrator even if you could get to arbitration let's assume you can. Arbitrator were to decide that the underlying loan was valid was not illegal. Then what you have is exactly what has happened in in in in in national gypsum in in Gandhi and in labor out of the ninth circuit you have the potential for collateral a stop all that could bind a bankruptcy judge who's trying to decide whether the proof of claim is enforceable against the state. They have never abandoned that bankruptcy court can't make a mood case live just which is not before us but I can't understand how you just make someone stay in a case there they're abandon their claim they say we don't we're not going to enforce this against. But with respect to your they have not abandoned their claim they certainly tried to abandon their claim. They did the best they could. No but your honor but but your honor you're right they could because the judge wouldn't allow but that that's correct your honor and the but the only reason they sought to abandon their claim was to avoid the possibility that they would have a core claim with still within the bankruptcy court to keep them out of the they're preferred they're newly preferred form of arbitration the point that the bankruptcy judge and the district court who affirmed the bankruptcy judges denial of their effort to withdraw the point that those lower courts made about this this withdrawal effort is that it is essentially a a a a a a a a a a a a a a a a a a a a a a a bankruptcy unlike in the civil and like if you were in district court has different rules associated with when you can abandon a proof of claim because as the fifth circuit and the night circuit have said the filing of a proof of claim under the bankruptcy code invokes special rules of bankruptcy you can't once you file that claim simply dismiss it when it suits you because it potentially prejudiced prejudices the debtor and the trustee who has to administer the estate and so wall what's the prejudice here. the prejudice is exactly what cash call wants which is to get what's the prejudice here from an allowing allowing them to withdraw their abandon their claim i'm not the the following this the prejudice your honor the claim the core claim then goes away and all that's left is the stern claim and it makes their effort to compel arbitration stronger but but how was that prejudice that i'm not following this at all i'm sorry your honor the reason that's prejudice so the prejudice is having the arbitrary that that's correct your honor the potential delay associate without any effect on the bankruptcy other than the positive effect the judge Gregory just described this this is beginning to sound like Allison wonderland i'm sorry i'm sorry we we won't let we won't let the claim it go because if we let the claim it go we'll have to let the claim go and order everybody to arbitration for what's left which can't possibly have an adverse impact on the on the bankruptcy. yeah that's that's a little much for me what am i missing let me let me step back and make one let me let me step back and try to clarify remember you represent one debtor one litigant here you don't represent the whole world of potential debtor right that's correct you're okay so your your arguments i would assume have to be based on this case not the thousands of other possible scenarios
. what my client mismozis wants is for the bankruptcy judge to resolve this section 157 b2 b claim about whether cash calls claim can be a for enforced against the estate with stable band and with respect your honor that that that is not the record in this case the record in this case is that that proof of claim remains pending in the bank because the bankruptcy judge won't permit them to abandon it yes your honor in a different you see why I use Allison wonderland I understand your honor but as this case comes to the this you want to deal this could this is you isn't the record it is not your honor the at this case comes to this court the record in this case is that this proof of claim remains pending against the estate and it is a core claim that is viable and enforceable and if even if the if a if this case came here but there was no core 157 b2 b claim in this case we might have a very different kind of case if cash call is ultimately successful and withdrawing the core claim in bankruptcy then if all that's left is that stern claim then then the discretion that the bankruptcy judge exercises might look very different okay so perhaps I am missing something you're saying that the question of the propriety of the denial of the withdrawal of the claim is not before us that's that's correct your honor it is absolutely not before this court that that issue didn't how how would it have been before us had had cash call appealed the denial of the proof of the with of their motion to withdraw the proof of claim that's correct you your argument I see your argument is that they're trying to hold that back what pending the outcome of this appeal no your honor I don't take a second appeal I you're on I'm not in position to say what the strategic decision is some some idea your honor I they were didn't they I don't I honestly don't know what their their strategy is with respect to the proof of claim if you hear counsel say a few minutes ago that we've abandoned that claim I understand that that's the representation your honor is it just the representation or is that a binding judicial judicial you stopped representation your your honor they have you actually think they can go back and revive that claim after counsel stood here and said that claims that abandoned what whether or not they can revive it your honor the district court made its decision in this case keeping the claims in bankruptcy based on the existence of that proof of claim that the abandonment if that if we took his statement here in court that it's abandoned as abandoned and then we would be overruling the bankruptcy court in the district court on that issue you would your honor and without an appeal your would your honor that but that issue has not been presented in this appeal I understand this is it do you have to look at in some context and sometimes the law has to have some common sense you we're looking at whether or not it was appropriate not to not for claim the arbitration and that's in the context of what impact it would have on the case so you're saying we can ignore counsel as an officer of course representation that they're abandoned which I think you have a hard time drawing now and on the record I'm sure you would bring that to their attention in the court and so we ignore the facts of the case and then so we're going to do that in a vacuum how do we not analyze that in the context of impact on the bankruptcy it's almost like the bankruptcy court is like it's a solution in search of a problem let me let me suggest that it's in fact in fact the solution and that the bankruptcy judge properly exercised its discretion and it's and it's for the reason judge Gregory that you initially suggest it it can resolve the underlying claims whether it whether it disallows the proof of claim or finds that it's abandoned it can then turn to the stern claim in the case and easily resolve that claim as well and then whatever recovery is made in that in under that claim can be properly applied to the bankruptcy estate and can be a properly applied to modify the plan that that Ms. Moses has to play hey now you asked initially and I just want to return to this what's the problem with sending if they if they've just abandoned their claim for money out of the estate and all we have left is this counter claim what's the problem with sending that to arbitration and that is and courts have dealt with this problem the fifth circuit has dealt with this problem let's just I want to just be really clear let's just take the proof of claim question out of this case for one minute let's just talk about the stern claim that is technically now a non core claim but it arose in a proceeding in which there was a core claim and that there is a meaningful impact that res resolving that claim efficiently without delay has on this case this case is not over it is not the credit it will absolute that's correct your honor this is a case is not like a chapter seven proceeding which is a snapshot proceeding that begins and ends with plan confirmation the second circuit in the NBA versus hill case reverse a bankruptcy courts decision to keep even core claims in bankruptcy where that where the proceeding was a chapter seven proceeding and where the plan had been confirmed in the bankruptcy case was closed because nothing that happened in resolving that claim could affect the debtor or the creditors or the estate that is not the case here well how would you write the opinion because I think you agree white mountain doesn't resolve this case as it stands that is as mount as I understand white mountain as it's written it doesn't the outcome here is not in your favor so for you to win some tweaking of mount white mountain would would be required you agree with that I assume your honor I actually don't agree with that you think we could just say see mount what my white mountain and affirm the district court yes because what in your fate that you really do I really do your honor and I think that's what the bankruptcy court said I think that's what the district court who reviewed the bankers they say very much at all frankly well I think they don't really explore the meaning of white mountain I think I think the meaning of my view on white mountain your honor and I think the fifth circuit and the ninth circuit have have looked at white mountain and interpreted this way is that is that there is there is an inherent conflict between the two statutes where the claims in the case involve core bankruptcy issues and we're sending the claims to arbitration would undermine the objectives of the bankruptcy code and I think I thought we were still in that minute when you said okay let's assume the core claims that here I thought we were still in that minute I understand your honor now if this court believes in fact I'm sorry your honor I don't believe that this case presents that minute on the record but if we step back and we assume that it does and that all that exists is the stern claim yes it is a much I think you're right it is white mountain does not square with a non-core claim the exclusively in okay that's not missing how would you tweak white mountain to I think to achieve that I think well I think the principle that white mountain stands for is that where a claim and let me be clear I do not think that the core non-core distinction I don't think white as I said at the very beginning in response to the judge me Meyer does not establish a categorical rule right core claims non core claims stay non core claims go and I think what what the principle that white mountain stands for is that where a claim and implicates a core bankruptcy issue a bankruptcy court has discretion to decide what to do with it and we're sending it to arbitration would conflict with certain key bankruptcy code objectives like delay like the potential for duplicate proceedings for inconsistent results then the bankruptcy court is entitled to exercise his discretion to decide what to do and let me be clear an affirmance here does not change the law in the for circuit there are plenty of cases that will will still come up and have come up where bankruptcy courts will send these claims to arbitration there are several that are cited in the briefs in Ray freeze in Ray T P Inc. in both of those cases courts were faced with with either just non core claims or even core claims and said it's better if we send these to arbitration one of the one of the key points that those that those courts look to was had there been a pre existing arbitration on some of these issues in fact in white mountain itself there was a pre existing arbitration and yet the court said we still think it's within the bankruptcy judges discretion to decide what to do but but that discretion authorizes and allows bankruptcy judges to send claims to arbitration where appropriate but we've got to be able to tell bankruptcy judges how to exercise that discretion or what what the outer boundaries of that discretion are and I think that there are certain key objectives that this court identified in white mountain broadly they are the goal of centralizing all disputes surrounding a debtors estate as well as maintaining an efficiency of the administration and my my challenge thinking about this is how do we say all of that on this record I think I think the key is that it's an abuse of discretion I think if the bankruptcy judge had the discretion there was nothing arbitrary or precious that's a topology there if you start with that count you're going to the end bottom line what is the limiting aspect of it in this case you'd be saying you would agree you can't refuse arbitration solely because that claim might add to the estate of the bankrupt you agree with that that can't be the sole reason I'm sorry I'm sorry I just grab a can't be the sole reason for not sending to arbitration is that the claim outcome might increase the bank rups the state that can't be the sole reason you agree with that or agree with that okay that came to sole reason all right it seems to me the stern type of defense that's the sole result of that what is going to increase all right all right now in this case since that can't be the sole reason what is the reason for using the discretion not sending this to arbitration in this case tell me that you're on the delay the delay in doing what the delay in associated with having this claim go someplace else that we don't even know exists but that delay only is the result of we is delay knowing what the increase in the bankruptcy state would be you're back to where you're on earth for the proof of claim but the proof of claim that's that's that's really a red herring I mean that's kind of almost ridiculously you're going to keep something in the case just to keep you not sending arbitration there'll be a dangerous precedent to send you say they're all people we want a ban and if not we can't abandon this because this is the only linchpin to keep this on arbitration I mean that case would be falling but what I'm saying what what what what do you have in this case that would be an impact other than the delay in knowing what the increase might be in the bankruptcy state go ahead what's the next the possibility of piecemeal litigation the possibility that you're having to litigate bankruptcy claims associated with your state in bankruptcy court and then also at the same time having to litigate this separate claim in a different forum you agreed to arbitration that's the whole idea the fear I believe me for certain is the most I just say the fourth circuit never saw an arbitration agreement didn't like otherwise this is one of the strongest circuits on that's the whole concept you agreed that you didn't want courts and judges to fool with your case you want somebody else to mess with your case she agreed to that that agreement is still in place that's why we're looking at FAA talks about that you know so any piecemeal is brought by the fact that she agreed to that now what's the next what's the next point about why we should the ability the ability to have a bankruptcy judge could have control over the administration of all issues related to the estate you didn't want that as to that claim she did want that she agreed in writing that she wanted to be arbitrator that's that's not true she's not true she she she she wants these all of her estate I'm not telling her now I'm talking about what she signed agreement here on her all of these cases that involve this question all involve the same broad issue of there's an art there's a otherwise enforceable arbitration agreement but what the majority of circuits including this one have said is that the the FAA yields this might be one of the only examples frankly in in in in the the landscape of federal law but the FAA yields to the the interest I've just identified in the bankruptcy code because the bankruptcy code has these core objectives of trying to centralize all disputes related to a debtor's date it's not a categorical matter you agree it's not a categorical rule I agree and that's that's where the discretion of a bankruptcy judge comes in is already in place but your the plan is already in play and you write this continuous jurisdiction to tell that works out it also the assets aren't fixed I mean it seems to me if the claims are kept in the bankruptcy court and adjudicated in the bankruptcy court the proof of claim in the uh stern claim uh it could well be that the uh creditors and the debtor at debtors are benefited that's that's absolutely correct that's the whole interest of the trustee is to have the uh and to have this woman get a new start is uh is to have this all of you decated in one place that's correct you're right that's no limitation at all because then the right to have a state is never fixed in that sense because there are many claims that might have an impact on increasing the bankruptcy of the state then you basically will have no rule may I may I respond please go ahead you have no rule would you you honor that's that's that's not correct the cases end they have a fixed duration in this case for instance there's a 60-month repayment plan at the end of that 60 months the case is closed it's exactly like the mbna versus hill case at that point the case is over the trustee has no interest in the case the other creditors have no interest in the case all we're talking about for a chapter 13 proceeding is this specific window during which a bankruptcy court should have the ability to control decisions about what gets paid into the estate and who gets money coming out of the estate and the claims in this case invoke both of those questions thank you your owners thank you mr. silver thank you your honor judge david i thank you entirely correct in this case it's not about headlines about the benefits or the purposes in general behind the bankruptcy law it's where and what the court of appeals have repeatedly said in looking at whether there's an inherent conflict and whether you send a claim to arbitrate bankruptcy court sees these things sees hundreds of these cases and in this case we have a woman who doesn't have very many assets she has this note where she's being forced to pay 233% she says the proof of claim is invalid because i shouldn't have to pay 233% on the proof of claim you guys then try to withdraw the proof of claim so it's not to be exposed to giving the bankruptcy state more money in the bankruptcy she has a claim under north carolina law the stern claim that maybe she's entitled to some statutory damage because of usury and all that now what you'd like to do is to withdraw the claim bankruptcy judge denied that you'd like to now send the stern claim and maybe the proof of claim i guess you have to because the proof of claim is still there somehow to bank to arbitration in a procedure which totally undefined and very unclear how it's going to work under this language and this woman who doesn't have any money she's going to have to pursue that and the bankruptcy trustees going to have to wait and so the bankruptcy judge says look it's more efficient take care of it here and this is a discretionary decision and the district court looked at it isn't a pretty high bar to reverse or abuse a discretion no your honor it's not an abuse of discretion standard you have to find instead and there are we cite all the courts of the pills and I respectfully suggest that I think our standard is abuse of discretion it okay and with respect your honor and the other circuits that have addressed that issue well we have white white mountain and and it depends on the circumstances it's not categorical we have a court claim here and what the Supreme Court says however when you're considering whether or not to enforce an arbitration clause is the rare possibility of inconsistent results or the mere possibility that their commoner shared issues or a deficiency or frustration of the bankruptcy process but this woman is trying to resolve her life in one place and to have her go to the Cheyenne tribe or to some jams or to bring a tribal member to jams it's just unclear and she has to hire a lawyer to go do that she had the bankruptcy trustee says look this is not this is a straightforward claim we can resolve that here and it'll help the creditors one way of that it'll help you efficiency wise that's always true with respect to a non-corro claim that seeks additional damages except you ignore the fact that the court claim is here number one and number two the court claim is essential to the non-corro claim they are so inexplicably tied in other words the only defense to the proof of claim is that it's an illegal loan and once you determine that statutory damages follow automatically now they don't your honor but with all respect they don't the statute if you read the statute and what's required it doesn't depend merely on the lawyer's own mother she has to prove she has a number of elements of proof but again but she still has to determine whether it's illegal claim which is the very same thing she has to do in opposing the proof of claim that's one that's one potential element but not necessarily the statute says and in fact requires a showing that there's been harassment threats or things like that we also point a different type of day playing also point out well she claims emotional distress I don't know she does but she she also claims the effort to collect and the illegal debt which is court to the stern claim that is one that is one thing she says you're on that's correct I see my time is up yeah okay one last question yes thank you're on let's clear clear for clarified we can't I understand you straddle the line on your way to this court but as I understand your argument today you have abandoned your claim answers yes and with respect to straddle it's been our position of day one that we've abandoned that claim the only one but you didn't brief it that way no because what we did brief it that both the core and non-clang claim right and the we're not we there's not a right of an allocritory appeal with respect to the withdrawal which is treated like a dismissal with prejudice or without prejudice and judge boiled denied our ability for leave to appeal that order okay so that okay but you're you're right by if we gave effect to your judicial admission at this point we would in essence be overruling the bankruptcy judge and the disc judge who would not accept that with all respect judge demon I disagree that position stands regardless that's what sort of the absurdity of it is no it isn't she wants a declaration more she wants a declaration that your proof of claim is illegal she doesn't want you to shop around and she's entitled to have her day in court and she wants it in the bankruptcy court and that is a constitutionally and it helps her it helps her a lot no that constitutionally a move but as you didn't agree to the declaratory judgment that your loans illegal that was her first point of relief in her claim I think I think standard answers and standard standards whether or not we're not here to decide whether or not what's good to help her I mean if that's the law then the law is there's no law that's right and yeah you would never send an arbitration you'd never say one because they help them I mean that's not the best decision that's why I said again I got back to where I started if this decision is affirmed this circuit with all respect would be an ally in comparison the other circuit thank you thank you will a adjourn court signing die and come down to greet counci