Granfinanciera, S.A. v. Nordberg

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.

Facts.

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.

Issue.

Under the Seventh Amendment, is a party entitled to a jury trial when responding to a claim of fraudulent transfers by a bankruptcy trustee?

Held.

Yes, the Defendants are entitled to a jury trial. The lower courts’ decisions are reversed and remanded.

Discussion.

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 .