In Re Gaildeen Industries, Inc.

This preference action, brought under 11 U.S.C. § 547 , was initially filed in the bankruptcy court. Defendant moved to transfer the action to district court, arguing that it has a constitutional right to a jury trial and that the bankruptcy court can not conduct a jury trial. Plaintiff conceded that defendant has a right to a jury trial in this action, but argued that transfer was unnecessary because a jury trial could proceed in the bankruptcy court.

On June 25, 1985 Judge King granted defendant’s motion and ordered the action transferred to this court. In his memorandum opinion, Judge King indicated that he was transferring the action because the power to conduct jury trials had not been expressly granted to bankruptcy judges by any statute and because, in the wake of the Supreme Court’s decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 , 102 S.Ct. 2858 , 73 L.Ed.2d 598 (1982), “there is some doubt about whether a non-Article III bankruptcy court can constitutionally hold jury trials even when the power is expressly granted by statute.” No. 3-84-0493, slip op. at 2 (June 25, 1985).

After the action was transferred here, the parties were…