Brief Fact Summary.
Plaintiff sued Defendant for fraudulent transfers and the case was brought in a bankruptcy court. Defendant requested a jury trial.
Synopsis of Rule of Law.
Under the Seventh Amendment, a party is entitled to a jury trial when the nature of the claim and the relief are private, legal matters.
In the context of bankruptcy proceedings creditors lack an alternative forum to the bankruptcy court in which to pursue their claims.View Full Point of Law
Nordberg (Plaintiff) was appointed bankruptcy trustee after Chase & Sanborn Corporation filed for bankruptcy. Plaintiff brought suit against Granfinanciera (Defendant) for fraudulent transfers made to Chase & Sanborn Corporation. The case was heard by the Bankruptcy Court. Defendant requested a jury trial.
Under the Seventh Amendment, is a party entitled to a jury trial when responding to a claim of fraudulent transfers by a bankruptcy trustee?
Yes, the Defendants are entitled to a jury trial. The lower courts’ decisions are reversed and remanded.
The Court first determined that the nature of the claims and the relief sought were legal relief, creating a statutory and constitutional entitlement to a jury trial. The Court further determined that Congress could only take away the right to a jury trial in cases involving public rights, whereas this case involved the private right of a bank trustee to recover lost money from a fraudulent transfer. The Court further declined to decide if bankruptcy courts can conduct jury trials for cases involving fraudulent transfers, but concluded that the Defendant was entitled to a jury trial under the Seventh Amendment .