Goldin

We must decide difficult questions regarding the bankruptcy court’s post-confirmation subject matter jurisdiction and the scope of a state’s waiver of Eleventh Amendment immunity. We conclude that even though a bankruptcy court’s post-confirmation “related to” jurisdiction is substantially more limited than its pre-confirmation jurisdiction, there is a sufficiently close nexus in this case between the current action and the original bankruptcy proceeding to confer subject matter jurisdiction on the bankruptcy court. Nonetheless, because the current adversarial action is not “logically related” to the original proofs of claims that the State of Montana filed in the underlying bankruptcy action, the State has not waived its Eleventh Amendment immunity with respect to the current action and the claims against it must be dismissed.

FACTS AND PROCEDURAL HISTORY

In 1998, Pegasus Gold Corporation and eighteen of its affiliates (collectively, the “Debtors”) commenced voluntary Chapter 11 proceedings in the United States Bankruptcy Court in Nevada. The Debtors operated two mines in Montana (the “Zort-man Sites”). The State of Montana and its Department, of Environmental Quality (“DEQ”)…