# Petition for Writ of Certiorari — Air Line Pilots Ass'n International v. Shugrue, 111 S. Ct. 2006 (1991) (No. 90-1482) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1836%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1991 ## Text IN THE — Supreme Court of the United States OCTOBER TERM, 1990 IN RE: IONOSPHERE CLUBS, INC. and EASTERN AIRLINES, INC., Debtors. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, AFL-CIO, ‘ Petitioner, MARTIN R. SHUGRUE, JR., as Chapter 11 Trustee for EASTERN AIR LINES, INC., Respondent. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit PETITION FOR A WRIT OF CERTIORARI RICHARD M. SELTZER Counsel of Record BABETTE A. CECCOTTI RUSSELL S. HOLLANDER THOMAS N. CIANTRA PETER D. DECHIARA TAMIR W. ROSENBLUM COHEN, WEISS AND SIMON 330 West 42nd Street New York, New York 10936 (212) 563-4100 Attorneys for Petitioner Air Line Pilots Association, International, AFL-CIO oo ean WILSON - EPgs PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 ® EE 00 QUESTIONS PRESENTED FOR REVIEW 1. Whether a bankruptcy court can enjoin and fully adjudicate the merits of a district court lawsuit alleging that a carrier has violated a collective bargaining agree- ment and the Railway Labor Act where that collective bargaining agreement has not been modified or rejected pursuant to Bankruptcy Code Section 1113? 2. Whether a lawsuit alleging that a carrier has vio- lated a collective bargaining agreement and the Railway Labor Act—a lawsuit which could exist independently of a bankruptcy case—is a “core” proceeding in which a bankruptcy court can issue a final order or judgment pursuant to 28 U.S.C. § 157(b)? 3. Whether a bankruptcy court can enjoin and fully adjudicate the merits of a district court lawsuit alleging that a carrier has violated a collective bargaining agree- ment and the Railway Labor Act where resolution of the lawsuit requires consideration of laws of the United States other than title 11 regulating organizations or ac- tivities affecting interstate commerce, and where the law- suit would be subject to mandatory withdrawal to the district court pursuant to 28 U.S.C. §157/d) had it originally been brought in the bankruptcy court? (i) ii LIST OF PARTIES TO THE PROCEEDINGS The Air Line Pilots Association, International, AFL- CIO was the defendant in the bankruptcy court, appellant in the district court, appellee in the court of appeals and is petitioner in this Court. Eastern Air Lines, Inc. was the plaintiff in the bank- ruptey court and the appellee in the district court. Martin R. Shugrue, Jr., as Chapter 11 Trustee for East- ern Air Lines, Inc., was the appellant in the court of ap- peals and is the respondent in this Court. TABLE OF CONTENTS QUESTIONS PRESENTED FOR REVIEW ................ LIST OF PARTIES TO THE PROCEEDINGS ............. Ee sae | OPINIONS BELOW ...................... » Sa ak 1. ii. iii. ccc cnc scaccccensenccecens ; District Court ......... ON ES Se Pree REASONS FOR GRANTING THE WRIT... I. A BANKRUPTCY COURT DECISION ORDER- ING DISMISSAL OF A DISTRICT COURT CAUSE OF ACTION WHICH ALLEGES VIO- LATIONS OF A COLLECTIVE BARGAINING AGREEMENT AND THE RAILWAY LABOR ACT, WHERE THE COLLECTIVE BARGAIN- ING AGREEMENT HAS NOT BEEN MODI- FIED OR REJECTED PURSUANT TO BANK- RUPTCY CODE SECTION 1118, DIRECTLY CONFLICTS WITH THE REQUIREMENTS OF SECTION 1113 AND PRESENTS AN ISSUE OF COMPELLING IMPORTANCE WARRANTING THIS COURT’S REVIEW ...... (iii) I om oO OF W iv TABLE OF CONTENTS—Continued Page A. Section 1113 is the Exclusive Provision of the Bankruptcy Code Governing Rejection or Modification of a Collective Bargaining RRC NES eed Ae mee A et 12 B. Section 1118 Bars the Application of the Automatic Stay to a District Court Lawsuit Seeking Enforcement of a Collective Bar- COTES TIS sinccttaccnc eeesenieneniesteorsinneinotaan 14 1. The Automatic Stay is not Intended to Centralize the Resolution of Lawsuits in the Bankruptcy Court ........ SEE Se 15 2. Application of the Automatic Stay to a District Court Lawsuit Seeking Enforce- ment of a Collective Bargaining Agree- ment in Order to Effect a Centralization of Disputes in the Bankruptcy Court is Inconsistent with the Exclusive Require- matin GE TRRUIII TI os aniscsnincecscneseeensrsess. 18 Il. THE RULING BY 1HE COURT OF APPEALS THAT THE WET-LEASE DISPUTE IS A CORE PROCEEDING CONFLICTS WITH THE JURISDICTIONAL PROVISION OF 28 U.S.C. § 157(b) AND DECISIONS OF OTHER CIRCUITS AND PRESENTS AN ISSUE OF COMPELLING IMPORTANCE WARRANT- ING THIS COURT'S REVIEW ........................... 20 Ill. ADJUDICATION IN THE BANKRUPTCY COURT OF A CAUSE OF ACTION UNDER THE RAILWAY LABOR ACT IS INCON- SISTENT WITH 28 U.S.C. § 157(d) AND PRE- SENTS AN ISSUE OF CONFLICT IN THE LOWER COURTS AND OF COMPELLING IM- PORTANCE WARRANTING THIS COURT'S 3k _,_ RURIREN ONE DEE TEN Cen Detar maine 25 eke nee speadebelnidesiin ideestiin ienabbiislaios 30 Vv TABLE OF CONTENTS—Continued APPENDICES Appendix A: Appendix B: Appendix C: Appendix D: Appendix E: Appendix F: Opinion of the Court of Appeals, dated December 21, 1990 Mandate of the Court of Appeals, dated January 11,1991 Opinion of the District Court, dated April 9, 1990 Findings of Fact and Conclusions of Law of the Bankruptcy Court, dated October 4, 1989 Order of the Bankruptcy Court, dated October 4, 1989 Text of Pertinent Statutory Pro- visions Page la 87a vi TABL DF AUTHORITIES CASES Page Accurate Die Casting Co., 292 N.L.R.B. No. 106 (1989) . LEE no ee ROT 19 Ahrens Aircraft, Ine. v. NLRB, 703 F.2d 23 (1st Cir. 1008)... 19 In re Arnold Print Works, 815 F.2d 165. (st Cir. 1QBT) .............cccressascassessernssseasnsenssonsntonsesnnsrnnnsssensseces 22, 23 In re Asinelli, Ine., 93 Bankr. 433 (M. D.N.C. | ) EE yn See 27 Barnett v. Stern, 909 F.2d 973 (7th Cir. 1990) ... 22, 24 Begier v. IRS, 110 8. Ct. 2258 (1990) ................. ; 10 In re Ben Cooper, 896 F.2d 1394 (2d Cir.), vacated, 122 8. CO. GB GD etettsccetrentnerere nner cscccnsss 9, 11, 22, 23 Brotherhood ef Ry. Clerks Vv. Florida East Coast Ry., 384 U.S. 288 (1966)................................: _... 8-4, 28 Brotherhood of Ry. Trainmen, Enterprise Lodge No. 27 Vv. Toledo, P. & W. R.R., 321 U.S. 50 (1@GA) .......<00cnccsscesseieebeneseeuneeabansennennnnsasastsensaceccoses ; 27 Burger King Corp. v. B-K Of Kansas, Inc., Bankr. 728 (D. Kan. 1986) ......... Sa PR Sa IR 29 In re Carolina Produce Distrib., Inc., 110 Bankr. DOT (WW DBE.C. TD hciciacms teers cssttacericesscrrisicsvneee 27 In re Cassidy Land & Cattle Co., Inc., 836 F.2d 1130 (8th Cir.), cert. denied, 486 U.S. 1033 C1DBB) ..........c::ascssescnasnatecrechetsassuevunsssstaasesensnvsntesevess 24 In re Castlerock Properties, 781 F.2d 159 “(9th Chr. 2DCBD .ececccssnssrenccelinaindebertanssteteaptanennstetsssccsss: 24 In re Century Brass Prods., Inc., 795 F.2d 265 (2d Cir.), cert. denied, 479 U.S. 949 (1986) ... 12,18 In re Chadbourne Indus., Ltd., 100 Bankr. 663 CE.D.OU. 7. BOGE ciccesicesesctensnerterescserneriren cress. 27 In re Chateaugay Corp., 826 F.2d 1177 (2d Cir. 1987) ...... I URE Sp IE 29 In re Continental Airlines, Inc., 50 Bankr. 351 (S.D. Tex. 1985), aff’d, 790 F.2d 35 (5th Cir. BOOB). .nncccccsscesiieeussseilianenienenaselapsiabeasinniemesersnnsonss 19 In re Dalton, 733 F.2d 710 (10th Cir. 1984), cert. dismissed, 469 U.S. 1185 (1985) .......... 29 In re Davis, 899 F.2d 1136 (11th Cir.), cert. de nied, 111 S. Ce. GIO CLGBO) .......ccecccrccrrcescccecccccesecees we 22 vii TABLE OF AUTHORITIES—Continued Page Eastern Air Lines, Inc. v. Air Line Pilots Ass’n, Int’l, 920 F.2d 722 (11th Cir. 1990) 4,19 Eastern Air Lines, Inc. vy. Air Line Pilots Ass'n, Int’l, 670 F. Supp. 947 (S.D. Fla.), aff'd, 861 F.2d 1546 (11th Cir. 1988) 4 Eastern Air Lines, Inc. v. Air Line Pilots Ass’? n, int'l, 710 F. Supp. 1342 (S.D. Fia.), aff'd, No. 89-5229 (llth Cir. June 7, 1989) ue 3,4 Eastern Air Lines, Inc. v. Air Line Pilots Ass’n, Int'l, 744 F. Supp. 1140 (S.D. Fla.), aff’d, 920 F.2d 722 (11th Cir. 1990) 4 Eastern Air Lines, Inc. v. International Ass’ n of Machinists, 121 Bankr. 428 (S.D.N.Y. 1990), aff'd, 923 F.2d 26 (2d Cir. 1991) | 18, 27 GaTX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711 (5th Cir. 1985) . aes 17 In re Hartley, 55 Bankr. 781 (Bankr. N. D. Ohic 1985) ...... Oe Fl EEO 29 Hays & Co. Vv. Merrill, Lynch, ‘Pierce, Fenner & Smith, Inc., 885 F.2d 1149 (3d Cir. 1989) 22 Howell Hydrocarbons, Inc. V. Adams, 897 F.2d 183 (5th Cir. 1990) 22 In re lonosphere Clubs, Inc., 922 F.2d 984 (2a Cir. eA eI SAL te te SE es ne rete 1 In re lonosphere Clubs, Inc., 103 Bankr. 416 (S.D.N.Y. 1989) ......... 15 ETO —* In re lonosphere Clubs, Inc., 108 Bankr. 901 (Bankr. S.D.N.Y. 1989), rev’d, 121 Bankr. 429 (S.D.N.Y. 1990), aff'd, 923 F.2d (2d Cir. 1991) . 27 In re Johns-Manville Corp., 68 Bankr. 600 I 27 In re K&B Mounting, Inc., 50 Bankr. 460 (Bankr. i cmemmseunens 12 In re Kemble, 776 F.2d 802 (9th Cir. 1985) . . 29 In re King Mem. Hosp., Inc., 767 F.2d 1508 (11th ts a Oe A 29 Land Vv. Dollar, 330 U.S. ‘731 (1947) Fo Tbe 10 In re Lieb, 915 F.2d 180 (5th Cir. 1990) 29 Se viii TABLE OF AUTHORITIES—Continued In re Maislin Indus., Inc., 59 Bankr. 9438 (Bankr. BRINIG cae cer oe Ae a eee TO Martin-Trigona Vv. Champion Fed. Sav. & Loan Ass’n, 892 F.2d 575 (7th Cir. 1989) 0.0... In re Meyertech Corp., 831 F.2d 410 (3d Cir. a i iaiaieeneninnne Michigan Milk Producers Ass’n V. Hunter, 46 Bankr. 214 (N.D. Ohio 1985), appeal dismissed, 786 F.2d 1165 (6th Cir. 1986) ...............000000...... In re Moens, 800 F.2d 173 (7th Cir. 1986) —........ Page 29 29 NLRB V. Bildisco & Biidisco, 465 U.S. 513 (1984) .. 10, 13, 19 NLRB Vv. Edward Cooper Painting, Inc., 804 F.2d EES Ee ee ee 19 NLRB vy. Evans Plumbing Co., 639 F.2d 291 (5th fe ESSE 9's Oem 19 In re Nicholas, Inc., 55 Bankr. 212 (Bankr. D.N.J. alae aid dibees 19 North Haven Bd. of Educ. v. Bell, 456 U.S. 512 pr RO SR Sey en a A ee 14 Northern Pipeline Construction Co. Vv. Marathon Pipeline Co., 458 U.S. 50 (1982) —.............. 10, 21, 23, 26 Norwest Bank Worthington v. Ahlers, 485 U.S. Be IY chsh sp teh cdalegncessictdiceccniindlblaehcdinisdbalndibaalindiitebeisbcanpebicten 20 In re Parr Meadows Racing Ass'n, Inc., 880 F.2d 1540 (2d Cir. 1989), cert. denied, 110 S. Ct. I ee ke cesstabens 17 Price v. Craddock, 85 Bankr. 570 (D. Colo. 1988) _.. 29 In re Pruitt, 910 F.2d 1160 (8d Cir. 1990) —........... 29 Radzanower V. Touche Ross & Co., 426 U.S. 148 EE ERs EERE PO Ro et PS eI ea 17 Railway Labor Executives Ass'n V. Boston & Maine Corp., 689 F. Supp. 1092 (D. Me.), modi- fied, 808 F.2d 150 (1st Cir. 1986), cert. denied, en ssseenabeininens 28 Sheet Metal Workers’ Int'l Ass’n Vv. Mile Hi Metal Sys., 899 F.2d 887 (10th Cir. 1990) 00000000... 14 Tringali v. Hathaway Mach. Co., 796 F.2d 553 I i s eetaninabibiass 29 Truck Drivers Local 807 v. Carey Transp., Inc., go gf Fg _— , Se eeee encore 14 ix TABLE OF AUTHORITIES—Continued Page United States vy. ILCO, Inc., 48 Bankr. 1010 (N.D. Sie MII. cidasidesublceii uit btatcogteebeanannalininbsnscboaaiecmencs 29 United Steelworkers v. Unimet Corp., 842 F.2d 879 (6th Cir.), ceri. denied, 488 U.S. 828 (1988) ...... sceiedldsaibabiaasaseteiteiseptabainccisiealinmendancmbsheniecis 12, 13, 14 Watts v. Pennsylvania Housing Financing Co., S76 F.2d 1000 (Sd Cir. 1969) ............................... 15 Wheeling-Pittsburgh Steel Corp. v. United Steel- workers, 791 F.2d 1074 (3d Cir. 1986) —............ 14 In re White Motor Corp., 42 Bankr. 693 (N.D. I a e isienineiinins 28 In re Wood, 825 F.2d 90 (5th Cir. 1987)... 21, 22, 23, 24 Worldwide Detective Bureau, 296 N.L.R.B. No. 20 I al cl a i 19 STATUTES Bankruptcy Reform Act of 1978, 92 Stat. 2549 I caneatemeibuniiniols 3,5 11 U.S.C. § 362 ........... LE Ta AEA Re ON passim Bankruptcy Amendments and Federal Judgeship Act of 1984, 98 Stat. 333 eR Se a eee SAID ee passim ic exe a passim 28 U.S.C. § 1334 .. SPAT SLE Se CE Me Pd 26 Norris-Laguardia Act, 47 Stat. 70 I 10 Railway Labor Act, 44 Stat. 577 (as emended) 45 U.S.C. § 151 .......... sieunaaueabaalaeiaiaiaasaaseiaaasasiabelatei 3 EEE ETO re : 2 8 ER en abuse dann 2 LEGISLATIVE MATERIALS Sen. Amendment No. 3112, to H.R. 5.74, 94th Cong., 2d Sess. (1984) ....... PT ae LO EO OTT 14 130 Cong. Rec. H1849 (daily ed., March 21, 1984). 26 Sen. R. Rep. No. 95-989, 95th Cong., 2d Sess. 49 I sot cX anti ceiea ene a ee a re eae 17 xX TABLE OF AUTHORITIES—Continued H.R. Rep. No. 95-595, 95th Cong., 2d Sess. 340 IID nnseconedsnssevsnentonsatansite A ee eae MISCELLANEOUS AUTHORITY Gibson, The New Law on Rejection of Collective Bargaining Agreements in Chapter 11, 58 Am. Bankr. L.J. 325 (1984) ; Fatsis, As Economy Staggers, Bankruptcy Becomes 8 Field for the 1990s, Associated Press, Dec. 20, 1990 (NEXIS) Annual Report of the Director of the Administra- tive Office of the United States Courts (1989) L. King, Collier On Bankruptcy (15th ed. 1989) Moore’s Federal Practice (2d ed. 19990) Page 17 20 21) 17, 24 10 IN THE Supreme Cowt of the United States OCTOBER TERM, 1990 No, -—— IN RE: IONOSPHERE CLuBS, INC. and [EASTERN AIRLINES, INC., Debtors. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, AFL-CIO, ‘ Petitioner, MARTIN R. SHUGRUE, JR., as Chapter 11 Trustee for E;ASTERN AIR LINES, INC., Respondent. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit PETITION FOR A WRIT OF CERTIORARI The Air Line Pilots Association, International, AFL- CIO petitions this Court to issue a writ of certiorari to the United States Court of Appeals for the Second Cir- cuit to review the judgment in In re Ionosphere Clubs, Inc., 922 F.2d 984 (2d Cir. 1990). OPINIONS BELOW The opinion of the court of appeals is reported at 922 M.2d 984 (2d Cir. 1990), and is reproduced at App. A. The mandate of the court of appeals is reproduced at 1 (“App ") refers to the appendix annexed to this petition. “J.A. ———") refers to the Joint Appendix on appeal. eee 2 App. B. The opinion of the district court is reported at 114 Bankr. 379 (S.D.N.Y. 1990), and is reproduced at App. C. The findings of fact and conclusions of law of the bankruptey court are reported at 105 Bankr. 773 (Bankr. S.D.N.Y. 1989), and are reproduced at App. D. The order of the bankruptcy court is reproduced App. E. JURISDICTION The judgment of the court of appeals was entered on December 21, 1990. This Court’s jurisdiction is invoked pursuant to 28 U.S.C. § 1254(1). STATUTES INVOLVED The statutes involved in the case are relevant portions of the Bankruptcy Cede, 11 U.S.C. §§ 105, 362, 1113; the Bankruptcy Amendments and Federal Judgeship Act of 1984 (“BAFJA”), 28 U.S.C. §$ 157(b), (d), 1334; and the Railway Labor Act (“RLA”), 45 U.S.C. §§ 152, 156. The pertinent text of these statutes is set forth in App. F. STATEMENT OF THE CASE The underlying dispute at issue in this case arises out of the decision of Eastern Air Lines, Ine. (‘“Eastern’’) to lease aircraft from its corporate affiliate Continental Air- lines, Ine. (“Continental’’?) and to crew the aircraft with Continental pilots rather than pilots on the Eastern Sys- tem Seniority List.* Because the wet-leasing violated the collective bargaining agreement between Eastern and the Air Line -Pilots Association, International (“ALPA’’), ALPA filed a lawsuit in the United States District Court for the Southern District of Florida seeking to enjoin the leasing arrangement and/or to compel Eastern to sub- 2In the airline industry, this practice is re’erred to as a “wet- lease.” Under a “wet-lease,” one carrier leases aircraft and crews from another company for the purpose of performing the car- rier’s flying. App. A, 89a. Prior to 1989, Eastern had never wet- leased from another carrier. App. D, 89a. 3 mit to expedited arbitration. Eastern then commenced an action in the United States Bankruptcy Court for the Southern District of New York, where its Chapter 11 bankrptey case was pending, and filed a motion for a preliminary injunction to enjoin ALPA’s lawsuit. Desnite Eastern’s failure to comply with the exclusive provisions of Bankruptcy Code Section 1113, 11 U.S.C. § 1113, gov- erning the modification of collective bargaining agree- ments, the bankruptcy court ordered ALPA to dismiss its lawsuit as a violation of the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a) (3), and en- joined the lawsuit pursuant to Bankruptcy Code Section 105, 11 U.S.C. § 105. The Facts At all times relevant to this dispute, ALPA and East- ern were bound by a collective bargaining agreement (the “Agreement’’) entered into pursuant to the Railway Labor Act (“RLA”), 45 U.S.C. § 151 et seg. App. A, 3a. The “scope” clause found in Section 1 of the Agreement pro- vides that Eastern is obligated to crew all aircraft used in or for the service of Eastern with pilots whose names appear on the Eastern System Seniority List, and it ex- pressly prohibits wet-leasing. App. A, 23a-24a. On March 4, 1989, Eastern’s aircraft mechanics and ground service personnel represented by the International Association of Machinists (“IAM”) commenced a pri- mary strike against Eastern. App. C, 35a. That same day, ALPA decided that its members should engage in a lawful sympathy strike in support of Eastern’s machin- ists. See Eastern Air Lines, Inc. v. Atr Line Pilots Ass’n, Intl, 710 F. Supp. 1342 (S.D. Fla.), aff'd, No. 89-5229 (11th Cir. June 7, 1989) .* % At the commencement of ALPA’s sympathy strike, Eastern filed a complaint in the United States District Court for the Southern District of Florida seeking judicial approval] to alter certain terms contained in the Agreement pursuant to Brotherhood of Ry. Clerks 4 On March 9, 1989, Eastern filed a petition in the United States Bankruptcy Court for the Southern District of New York pursuant to Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101 et seg. App. A, 4a. Eastern filed a motion in the bankruptcy court on June 21, 1989 to reject the Agreement pursuant to Bankruptcy Code Sec- tion 1113. On July 26, 1989 Eastern withdrew its sec- tion 1113 motion before the court considered it. App. A, 4a. Immediately thereafter, Eastern wet-leased aircraft and crews from Continental to be used to operate a por- tion of Eastern’s regularly scheduled service. App. A, 5a-6a. Eastern apparently commenced only limited wet- leasing in August 1989. In late August, however, East- ern announced its plans to greatly increase its wet- leasing to include at least 16 aircraft and hundreds of Continental pilots for the duration of i989 and the in- definite future. J.A. 596. ALPA commenced a lawsuit in the United States District Court for the Southern Dis- trict of Florida* seeking damages and an _ injunction Vv. Florida East Coast Ry., 384 U.S. 238 (1966). App. C, 39a. In Florida East Coast, this Court held that a carrier faced with a primary strike may “depart from the terms and conditions of the collective bargaining agreement,” id. at 246, under extremely limited circumstances where the carrier can demonstrate that such changes are “truly necessary” to allow the carrier to continue operations. Id. at 248. In its complaint, Eastern sought a declaratory judgment that would have allowed Eastern to expand the number of hours that pilots would be permitted to fly. App. C, 39a. Eastern did not seek any judicial relief to permit wet-leasing. See J.A. 562-574. Eastern never pursued its Florida East Coast action, and it was dismissed swa sponte on July 17, 1989. App. C, 39a. 4The United States District Court for the Southern District of Florida, the site of Eastern’s headquarters, has been the forum for a multitude of debto.-initiated litigation against ALPA both pre-petition and post-petition. See, e.g., Eastern Air Lines, Ine. V. Air Line Pilots Ass'n, Int'l, 670 F.Supp. 947 (S.D. Fla.), aff'd, 861 F.2d 1546 (11th Cir. 1988); Eastern Air Lines, supra, 710 F.Supp. 1342; Eastern Air Lines, Inc. v. Air Line Pilots Ass’n, Int'l, 744 F.Supp. 1140 (S.D. Fla.), aff'd, 920 F.2d 722 (11th Cir. 1990). 5 against the wet-leasing arrangement as an abrogation of the parties’ Agreement and a violation of Eastern’s obli- gations under the RLA or, in the alternative, an injunc- tion pending expedited arbitration.” App. C, 40a-41a. On September 25, 1989, Eastern filed a complaint and motions for a temporary restraining order and prelimi- nary injunction in the United States Bankruptcy Court for the Southern District of New York to enjoin ALPA’s lawsuit as burdensome to the Chapter 11 estate and as a violation of the automatic stay. 11 U.S.C. § 362. App. C, 41a. In the alternative, Eastern sought an injunction pursuant to section 105 of the Bankruptcy Code, 11 U.S.C. § 105. See id. Proceedings Below i. Bankruptcy Court The bankruptcy court ordered ALPA to dismiss the wet-lease lawsuit as a violation of the automatic stay under Code Section 362(a) (3), and enjoined ALPA from prosecuting the wet-lease lawsuit pursuant to Code Sec- tion 105. App. D, 101a-102a. The bankruptcy court held, without explanation, that Eastern’s complaint constituted a core proceeding and that the bankruptcy court had jurisdiction pursuant to 28 U.S.C. $$ 157(b) (1) and (2). App. D, 94a. The bankruptcy court stated that the purpose of the protec- tion provided by Chapter 11 “is to give the debtor a breathing spell, an opportunity to rehabilitate its business and to enable the debtor to generate revenue.” App. D, 95a. The bankruptcy court then concluded that ALPA’s lawsuit was filed in violation of the automatic stay provi- sions of the Bankruptcy Code because the lawsuit “im- pedes Eastern’s reorganization efforts and obstructs East- 5 ALPA’s complaint raises only issues of federal labor law aris- ing under the RLA. The complaint does not allege any cause of action under the Bankruptcy Code. J.A. 431-440, 6 ern in its rebuilding efforts by controlling the manner in which it uses its assets.” App. D, 100a.° The bankruptcy court ordered ALPA to dismiss the wet-lease lawsuit. The bankruptcy court reached this conclusion without directly addressing ALPA’s claim that section 1113 of the Bankruptcy Code modified the automatic stay provi- sions of the Code as applied to actions against a debtor to enforce a collective bargaining agreement. See App. C, 42a.? ii. District Court ALPA appealed the bankruptcy court’s decision to the United States District Court for the Southern District of New York. The district court consolidated the wet-lease appeal with another appeal by ALPA arising out of a dis- pute concerning the labor protective provisions (“LPPs”’) contained in the Agreement. App. A, 30a-31a.* The district court reversed both the Bankruptcy Court’s wet-lease and LPP decisions. The district court held that section 1113 prohibits the application of the automatic stay to any proceeding brought by a union to enforce a collective bargaining agreement against a debtor unless ‘The bankruptcy court also ruled that it had authority under section 105 to enjoin any action which could potentially interfere with the rehabilitation process. App. D, 97a-98a. 7 Although Eastern did not request the bankruptcy court to de- termine the underlying merits of the wet-lease action, J.A. 419-426, the bankruptcy court, without any notice, discovery or briefing, reached the merits and ruled in Eastern’s favor. See App. D, 101a- 102a. %In the LPP dispute, ALPA contended that Eastern had uni- fied, consolidated, merged or pooled certain of its operations, serv- ices and/or facilities with Continental and, therefore, Eastern was required to make arrangements for the integration of the Eastern and Continental pilot seniority lists according to the Agreement. When Eastern refused to discuss the issue, ALPA sought bank- ruptey court approval to arbitrate the LPP dispute. App. C, 36a- 37a. The bankruptcy court denied ALPA’s motion, concluding that the requested arbitration would violate the automatic stay provisions of the Code. App. C, 37a-39a. 7 and until the debtor complies with the provisions of sec- tion 1113 of the Code. App. C, 85a."° The district court agreed with the bankruptcy court that the automatic stay contained in section 362 is intended to provide a “‘breath- ing spell.” App. C, 49a (citation omitted). The district court concluded, however, that the enactment of section 1113 rendered the automatic stay inapplicable to actions brought to enforce rights and obligations contained in a collective baa gaining agreement: Judicial construction of the automatic stay, post- Bildisco and post-section 1113, so as to disable work- ers from commencing or continuing suits or pro- ceedings avainst the debtor-in-possession arising under collective bargaining agreements (suspending all such actions temporarily and in some cases, in- definitely), would debilitate the recognized Congres- sional purpose of making collective bargaining agreements enforceable against debtors until and “unless the court approves the application for rejec- tion pursuant to section 1113(c) or grants interim relief under section 1113(e).” 5 Collier on Bank- ruptcy, § 1118.01 at 1113-11 (15th ed. 1989). App. C, 63a.'° iii. Court of Appeals The Second Circuit unanimously affirmed the district court’s decision with respect to the LPP dispute. A divided panel, however, reversed and remanded the por- ® The court also held that, because equitable powers under sec- tion 105 can be used only in a manner consistent with the provisions of the Bankruptcy Code, the bankruptcy court could not provide relief pursuant to section 105 that, pursuant to the terms of section 1113, is only available to debtors who have satisfied the require- ments of section 1113. App. C, 76a-83a. 10 The district court noted that the application of the stay by the bankruptey court may have mooted ALPA’s request for injunctive relief, as opposed to damages, because of the apparent termination of the wet-leasing. App. C, 75a. The question of damages remains a live controversy despite Eastern’s termination of wet-leasing and recent termination of operations. 8 tion of the district court’s decision which related to the wet-lease dispute. The court of appeals first noted that in enacting section 1113, Congress intended that ‘a col- lective bargaining agreement remains in effect and that the collective bargaining agreement process continue|s] after the filing of a bankruptcy petition unless and until the debtor complies with the provisions of § 1113.” App. A, lla (‘citation omitted). The majority determined, however, that it was “preferable” to balance the purpose of section 1113 against certain stated purposes of section 362 on a case-by-case basis. App. A, 138a-14a. The majority concluded that Code Section 362 has two distinct purposes: (1) to provide the debtor with a “breathing spell’ from its creditors; and (2) ‘to central- ize” disputes in the bankruptcy court so that the reor- ganization can proceed “efficiently, unimpeded by un- coordinated proceedings in other arenas,” App. A, 8a, and so that the bankruptcy court can rule on the appro- priate “manner and forum” in which disputes should be resolved. App. A, 13a. The court of appeals recognized that the first purpose could “not be reconciled with $1113” and accordingly, stated “{wlere that the only purpose of the automatic stay, we would be inclined to affirm the district court’s thorough opinion in its en- tiretv.” App. A, 13a. In light of the second stated pur- pose of the automatic stay, the court of appeals con- cluded, however, that it could not adopt a “bright line rule precluding the application of the automatic stay to any situation involving a collective bargaining agree- ment.” /d. Instead, the court of appeals held that “a case by case adjudication” is “preferable.” App. A, 13a-14a. The court of appeals concluded that “application of the automatic stay provisions of § 362 of the Bankruptcy Code is precluded by $ 1113(f) only to the extent that they permit a debtor unilaterally to terminate or alter a collective bargaining agreement.” App. A, 22a. 9 With respect to the LPP dispute, the court of appeals found that the application of the automatic stay would allow Eastern to avoid its contractual obligation to arbi- trate the dispute. Thus, it affirmed that portion of the district court’s decision. App. A, 16a. With respect to the wet-lease dispute, the court of appeals determined that the application of the automatic stay would not allow Eastern to avoid its contractual obligations.'' The court of appeals reasoned that “application of § 362 to a non-bankruptcy judicial proceeding only forecloses en- forcement of the collective bargaining agreement if it cannot be enforced in the bankruptcy court.” App. A, 17a. The court of appeals held that unless there was a jurisdictional limitation on the bankruptcy court’s ability to hear and decide the wet-lease dispute, the application of the automatic stay to ALPA’s lawsuit would not con- flict with section 1113. App. A, 18a. Relying upon its decision in In re Ben Cooper, 896 F.2d 1394 (2d Cir.), vacated, 111 S. Ct. 425 (1990), the court concluded that the wet-lease dispute was a core proceeding that could be determined by the bankruptcy court because the dispute involved the effect of a post-petition contract on the col- lective bargaining agreement. App. A, 19a-20a. Nar- rowly construing 28 U.S.C. § 157(d), the court found no impediment to bankruptcy court jurisdiction because the wet-lease dispute involved merely a routine application of the RLA. App. A, 20a-2la. Accordingly, the court reversed the wet-lease portion of the district court’s deci- sion. App. A, 20a." '! Judge Miner dissented from this portion of the decision, stating that, “{by] obtaining relief in the Bankruptcy Court in the context of an action to enforce an automatic stay, Eastern is able to avoid compliance with a carefully-drawn statute enacted by Congress to govern labor-management relations in a bankruptcy reorganization.” App. A, 25a. '2 The court also held that the bankruptcy court’s exercise of its equitable power to enjoin the lawsuit under section 105 is subject to the same considerations as the court set forth for application of the automatic stay. App. A, 2la-22a. The court of appeals remanded 10 REASONS FOR GRANTING THE WRIT This case presents issues of major significance to the litigation of labor and other non-bankruptcy federal causes of action during a Chapter 11 bankruptcy case which merit this Court’s review. The issues involve three statutory sections enacted as part of BAFJA in response to this Court’s decisions in NLRB v. Bildisco & Bildisco, 465 U.S. 513 (1984), and Northern Pipeline Construc- tion Co. Vv. Marathon Pipeline Co., 458 U.S. 50 (1982). The first issue posed is whether a bankruptcy court can enjoin and determine a pure labor law action seeking en- forcement of a collective bargaining agreement and the RLA where the collective bargaining agreement has not been modified or rejected under section 1113. Section 1113 establishes significant procedural and substantive standards for modification of a collective bargaining agreement and contains an extraordinary provision un- equivocally enacting Congress’ intention that ‘“‘no” other provision of the Bankruptcy Code “be construed” to per- mit alteration or modification of a collective bergaining agreement “prior to compliance” with the provisions of section 1113. 11 U.S.C. §1113(f). By permitting the bankruptcy court to utilize other Code provisions to truncate a federal district court lawsuit seeking to en- force a collective bargaining agreement, the court of ap- to the district court ALPA’s claim that the Norris-LaGuardia Act removed jurisdiction from the bankruptcy court to issue its injunc- tion and various issues concerning the merits of the wet-lease de- cision. App. A, 22a. Granting certiorari is appropriate because the decision of the court below is “fundamental to the further conduct of the case.” Land v. Dollar, 330 U.S. 731, 734 n.2 (1947) (quoting United States v. General Motors Corp., 323 U.S. 373, 377 (1945)); see 12 Moore’s Federal Practice © 434.01, 6-42-6-43 (2d Ed. 1990) (“ ‘finality’ of an order or judgment is not a prerequisite to peti- tioning the Supreme Court for a writ of certiorari ... .") (foot- note omitted); see, e.g., Begier v. IRS, 110 S. Ct. 2258 (1990) (affirming 878 F.2d 762 (3d Cir. 1989) ). 11 peals permitted a modification of that agreement in direct contravention of the requirements of section 1113 and Congress’ clear command. Second, by holding that the bankruptcy court could hear and determine as a “core” matter pure federal labor law issues, the court of appeals misinterpreted the provi- sions of 28 U.S.C. §157(b) and placed itself in direct conflict with other courts of appeal. This Court has rec- ognized the importance of resolving a conflict within the circuits in defining “core” proceedings. Jn re Ben Cooper, 896 F.2d 1394 (2d Cir. 1990), cert. granted, 110 S.Ct. 3236, vacated, 111 S.Ct. 425 (1990). Finally, section 157(d) provides that a district court “shall” withdraw a proceeding from the bankruptcy court if resolution of the proceeding requires consideration of bankruptcy and other federal laws. Pursuant to the clear dictates of the statute, a federal labor law cause of action originally brought in the bankruptcy court must be re- moved to a federal district court. It is violative of that statutory scheme for a bankruptcy court to enjoin and determine the merits of such a non-bankruptcy cause of action when the cause of action originates in a federal district court. The court of appeals in the instant case placed its imprimatur on a line of district court cases that have ignored the plain meaning of section 157(d) and have permitted withdrawal to the district court only when stringent, judicially-created requirements are met —requirements that have gone so far as to require the presence of a legal question of first impression. In so doing, the Second Circuit placed itself in conflict with numerous other lower courts. This case presents a unique opportunity for the Court to review the application of section 157/d). 12 I. A BANKRUPTCY COURT DECISION ORDERING DISMISSAL OF A DISTRICT COURT CAUSE OF ACTION WHICH ALLEGES VIOLATIONS OF .A COLLECTIVE BARGAINING AGREEMENT AND THE RAILWAY LABOR ACT, WHERE THE COL- LECTIVE BARGAINING AGREEMENT HAS NOT BEEN MODIFIED OR REJECTED PURSUANT TO BANKRUPTCY CODE SECTION 1113, DIRECTLY CONFLICTS WITH THE REQUIREMENTS OF SEC- TION 11183 AND PRESENTS AN ISSUE OF COM- PELLING IMPORTANCE WARRANTING THIS COURT’S REVIEW A. Section 1113 is the Exclusive Provision of the Bank- ruptcy Code Governing Rejection or Modification of a Collective Bargaining Agreement Congress enacted section 1113 of the Bankruptey Code, 11 U.S.C. §$ 1113, in 1984 as “an elaborate and thorough- going revision of the rejection process for union con- tracts.” In re K&B Mounting, Inc., 50 Bankr. 460, 462 n.3 (Bankr. N.D. Ind. 1985) (quoting Gibson, The New Law on Rejection of Collective Bargaining Agreements in Chapter 11, 58 Am. Bankr. L.J. 325, 327 n.1 (1984) ). The section sets forth strict, detailed requirements that a debtor must follow before a bankruptcy court may ap- prove the debtor’s modification or rejection of a collective bargaining agreement. Specifically, section 1113 provides that a dehtor, before seeking to modify or reject a collective bargaining agree- ment, must propose to the union the modifications it seeks, provide the union with the information needed to evaluate its proposal, and confer in good faith with the union in an attempt to reach accord on the proposal. 11 U.S.C. $1113(b): see United Steelworkers v. Unimet Corp., 842 F.2d 879, 882 (6th Cir.), cert. denied, 488 U.S. 828 (1988); In ve Century Brass Prods., Inc., 795 F.2d 265, 273 (2d Cir.), cert. denied, 479 U.S. 949 (1986). Refore a bankruptey court may approve an ap- plication to reject a collective bargaining agreement, the 13 court must be satisfied that the debtor has proposed only those “necessary modifications” to the agreement which are “necessary” to a successfui reorganization, that the proposed modifications fairly and equitably spread the economic sacrifice, that the union rejected the employer's proposed modifications without good cause, and that the balance of equities favors rejecting the agreement. 11 U.S.C. § 1113(¢); see Unimet Corp., 842 F.2d at 882; Century Brass, 795 F.2d at 273. Section 1113 provides in two different subsections that its provisions are the exclusive remedy in the Code for a debtor to modify a collective bargaining agreement. First, section 1113(a) provides that a debtor may reject 2 collective bargaining agreement “only in accordance with the provisions of this section.” Second, section 1113(f) contains an all-embracing and unique limitation on judicical construction of any other Code section to permit alteration of a collective bargaining agreement: [njo provision of |the Code] shall be construed to permit a trustee to unilaterally terminate or alter any provisions of a collective bargaining agreement prior to compliance with the provisions of this section. 11 U.S.C. § 1113(f). Thus, Congress made clear its com- mand that a debtor not achieve modification or rejection of a labor contract by means of section 362, 105 or any section of the Code other than section 1113. As the dis- trict court concluded, absent a debtor’s compliance with all the requirements of section 1113, “labor contract en- forceability is unaffected by the bankruptcy laws, includ- ing the automatic stay.” App. C, 65a. The clear meaning of the languacve of section 1113 is buttressed by its legislative history. Congress enacted section 1113 in response to Bildisco. In Bildisco, this Court, relying upon several provisions of the Bankruptcy Code, including the automatic stay, held that a debtor, SS 14 after filing a bankruptcy petition, could unilaterally abrogate a collective bargaining agreement. 465 U.S. at 529-30. As the court of appeals noted, Congress enacted section 1113 as a legislative response to Bildisco in order to ensure that collective bargaining agreements remain enforceable in bankruptcy absent compliance with section 1113. App. A, 10a; see also Sheet Metal Workers’ Int’l Ass’n V. Mile Hi Metal Sys., 899 F.2d 887, 889-90 (10th Cir. 1990); Unimet Corp., 842 F.2d at 882; Truck Drivers Local 807 v. Carey Transp., Inc., 816 F.2d 82, 88 (2d Cir. 1987); Wheeling-Pitisburgh Steel Corp. v. United Steelworkers, 791 F.2d 1074, 1081-83 (3d Cir. 1986). Indeed, Senator Packwood, one of the sponsors of the legislation and the draftsman of the language that was later enacted as section 1113/f),'’* stated: The amendments also prohibit the trustee from uni- laterally altering or terminating the labor agree- ment prior to compliance with the provisions of the section . . . th{is] provision overrules the 5-4 por- tion of the Supreme Court’s Bildisco decision and means that the labor contract is enforceable and © binding on both parties until a court approved re- jection or modification. 130 Cong. Rec. S8898 (daily ed., June 29, 1984) (em- phasis added) ."4 B. Section 1113 Bars the Application of the Automatic Stay te a District Court Lawsuit Seeking Enforce- ment of a Collective Bargaining Agreement Although stating that it was construing section 1113(f) “quite literally,” App. A, lla, the court of appeals inter- preted that section to be “circumstance” specific rather 13 Sen. Amendment No. 3112, to H.R. 5.74, 94 Cong., 2d Sess. (1984); 130 Cong. Rec. S6181 (daily ed., May 22, 1984). 14 Since there was no Senate or House report on section 1113, the statements made by individual sponsors of the legislation con- stitute the “only authoritative indications of Congressional intent.” North Haven Bd. of Educ. Vv. Bell, 456 U.S. 512, 527 (1982); see also App. A, 10a. a 15 than section specific. App. A, 12a. The court of appeals concluded that “Congress did not choose to direct $1113'f) at any specific [Bankruptcy Code] provision .. id., thereby ignoring that Congress, fearful of judi- cial interpretation of other Bankruptcy Code provisions to nullify the exclusive provisions of section 1113, expressly provided that the statute vitiated every other Bankruptcy Code provision to the extent that such provisions could be interpreted in any way to alter collective bargaining agreements.’® Venturing forth precisely where Congress feared the judiciary would tread, the court of appeals ignored sec- tion 1113(f)’s exclusive provision, rejected a “bright line rule,” App. A, 13a, and opined that a “case by case ad- judication” of the continuing application of the auto- matie stay to collective bargaining agreements was “pref- erable.” App. A, 13a-14a (emphasis added). The court went on to apply its judicia'ly “preferred” interpretation of the statute in a manner which enjoined ALPA’s district court lawsuit and violated the plain requirements of the statute. 1. The Automatic Stay is not Intended to Cen- tralize the Resolution of Lawsuits in the Bank- ruptcy Court . The court of appeals concluded that the automatic stay reflected two allegedly unrelated policies: First, providing a debtor with a “breathing spell’? from cred- 15 As the district court correctly concluded: Congress, although it did not amend the language of section 362, effectuated the same end in the language of section 1113(f) —only there it expressed its purpose in a more thoroughgoing fashion that would prevent not only the automatic stay but any other lurking provision of Title 11 from interfering with enforcement of collective labor agreements. App. C, 69a; cf. Watts v. Pennsylvania Housing Financing Co., 876 F.2d 1090, 1096 (3d Cir. 1989) (holding that a specific excep- tion to section 362 was unnecessary when the “[contrary] intent of Congress appears clear” in section 365, which “unequivocally and without qualification” governs the dispute at issue). 16 itors and lawsuits, and second, permitting the bankruptcy court “to centralize’ disputes in order that “the re- organization can proceed efficiently, unimpeded by un- coordinated proceedings in other arenas.”’ App. A, 8a ‘emphasis added). The court of appeals correctly con- cluded that “to the extent the purpose of the automatic stay is to give the debtor a ‘breathing spell,’ it cannot be reconciled with $1113, which provides the sole method by which a debtor may obtain a ‘breathing spell’ from its obligations under a collective bargaining agreement.” Id..° However, the court of appeals concluded that the “importance” of the centralization policy precluded the “bright line” application of section 1113 to permit col- lective bargaining agreement enforcement outside the bankruptey court. App. A, 13a. Contrary to the assertion of the court of appeals, cen- tralization of lawsuits in the bankruptey court per se is not one of the purposes of the automatic stay.” '’ The court of appeals concluded, in the alternative, that either the automatic stay did not stay the prosecution of lawsuits in the bankruptcy court, or that the court would interpret the auto- matic stay not to bar such lawsuits. App. A, 17a-18a. The former conclusion is highly questionable in light of this Court’s statement in Bildisco that, pursuant to the automatic stay, recovery on a labor law cause of action could “be had only through, the adminis- tration of the claim in bankruptcy,” 465 U.S. at 529-30 (emphasis added), and the precedent in lower courts cited by the court of appeals holding that the automatic stay bars lawsuits in the bank- ruptcy court. App. A, 17a. The court of appeals’ alternative de- termination deflects the question of congressional intent. As the district court concluded, “the evident legal uncertainty as to the availability of the bankruptcy court as a forum in which workers automatically could obtain a hearing on claims brought to enforce labor rights forcefully undercuts the contention that Congress had understood bankruptcy courts to be the forum of first resort.” App. C, 69a. 7 Coneress certainly did not intend in enacting section 1113 to centralize in the bankruptey court collective bargaining agree- 17 Rather, the generally enunciated purpose of the auto- matic stay, in addition to giving the debtor a “breathing spell,” is to protect creditors by ensuring that creditors’ rights are adjudicated at the same time. The House and Senate reports on section 562(a) make no mention of an intention to centralize disputes; they make clear that the purposes of the automatic stay are to give the debtor a “breathing spell” and to make possible a _ procedure whereby “all creditors are treated equally.” Sen. Rep. No. 95-989, 95th Cong., 2d Sess. 49, 54 (1978), reprinted in 1978 U.S. Code Cong. & Admin. News 5787, 5835, 5840; H.R. Rep. No. 95-595, 95th Cong., 2d Sess. 340 (1978); reprinted in 1978 U.S. Code Cong. & Admin. News 5963, 6296-97. Courts have routinely agreed with these statements of the purposes of the automatic stay." To the extent the purpose of the automatic stay is to prevent one creditor from having its rights adjudicated before another creditor, the stay cannot be reconciled with section 1113. Since the automatic stay and section 1113 thereby conflict, the more recently enacted provision must prevail. Radzanower v. Touche Ross & Co., 426 U.S. 148, 155 (1976) ; see App. A, 13a. ment enforcement actions. Section 1113(f), on its face, applies only to debtor-initiated actions. As the district court concluded, “‘[a|bsent the debtor’s request for modification, the statute reveals no purpose to chanrel all actions to enforce or arbitrate existing, unmodified agreements into the single forum of the bankruptcy court.” App. C, 66a. See also App. A, 27a (Miner, J., dissenting). 18 See Martin-Trigona Vv. Champion Fed. Sav. & Loan Ass'n, 892 F.2d 575, 577 (7th Cir. 1989); In re Parr Meadows Racing Ass'n, Inc., 880 F.2d 1540, 1545 (2d Cir. 1989), cert. denied, 110 S. Ct. 869 (1990); GATN Aircraft Corp. Vv. M’V Courtney Leigh, T68 F.2d 711, 71€ (Sth Cir. 1985): see also 2 Collier on Bankruptey © 362.01, 362-19 (15th ed. 1999) (automatic stay serves “‘the twin goals of bankrupteyv—-a fvesh start for the debtor and equality of distribu- tion to creditors’) (emphasis added). 18 2. Application of the Automatic Stay to a District Court Lawsuit Seeking Enforcement of a Collec- tive Bargaining Agreement in Order to Effect a Centralization of Disputes in the Bankruptcy Court is Inconsistent with the Exclusive Require- ments of Section 1113 To the extent the automatic stay is intended, as viewed by the court of appeals, to implement a “centralization” of litigation in the bankruptcy court, and thereby a re- organization “unimpeded” by uncoordinated proceedings and controlled in “manner” by the bankruptcy court, the effect of the stay can only be to block or delay indefinitely the resolution of a lawsuit to enforce a collective bargain- ing agreement—in effect, a “breathing spell’ under a dif- ferent name. Congress has made a specific determina- tion in section 1113 that, absent compliance with its ex- clusive requirements, bankruptcy cases are required to bear the potential burden of being “impeded” by enforce- able collective bargaining agreements. The automatic stay is clearly being utilized to defeat the exclusive pro- visions of section 1113 if construed to permit a bank- ruptey court to control its calendar and the course of litigation so that the bankruptcy case remains “unim- peded” by the lawsuit. Neither, as the district court noted, can the special expertise of the bankruptcy court provide a basis for en- forcing an alleged centralization policy of the automatic stay in this context.'’® The question in a collective bar- gaining agreement enforcement action is simply “what the contract or labor laws require.” App. C. 67a n.9. As this court concluded even before the enactment of sec- tion 1113, such questions are “outside the field of [the 19 Indeed, by statutory design the bankruptcy courts were not created as neutral tribunals for such issues as arise under labor law, “[u]nder [the bankruptcy] statutory scheme the federal courts are directed to protect employers and in the [labor law statutory scheme] they are required to be neutral.” Eastern Air Lines, Inc. v. International Ass’n of Machinists, 121 Bankr. 428, 433 (S.D.N-.Y. 1990), aff'd, 923 F.2d 23 (2d Cir. 1991) (per curiam). 19 bankruptcy court’s] expertise.” Bildisco, 465 U.S. at 526-27. Accordingly, there is no basis to enforce the automatic stay for centralization of labor law actions in order to obtain bankruptcy court “expertise.” Finally, application of the automatic stay to lawsuits to enforce collective bargaining agreements and labor law would not centralize labor law disputes in the bankruptcy court. The court of appeals properly held that the bank- ruptcy court must permit grievance and arbitration pro- ceedings to go forward outside the bankruptcy court. Proceedings to enforce a collective bargaining agreement and labor law rights before the National Labor Relations Board * or proceedings before the National Mediation Board *' are not stayed by application of section 362. Thus, the import of the court of appeals’ ruling, rather than centralizing labor disputes in the bankruptcy court, has the anomalous effect of establishing an exception to the norm of the resolution of labor disputes outside the bankruptcy court.” In sum, while the court of appeals correctly rejected the application of the automatic stay to a labor arbitra- tion, the court of appeals erred in failing to apply the same plain meaning of the statute to reject the applica- tion of the automatic stay to a lawsuit to compel arbitra- 20 See NLRB v. Edward Cooper Painting, Inc., 804 F.2d 934, 941 (6th Cir. 1986); Ahrens Aircraft, Inc. V. NLRB, 703 F.2d 23, 24 (1st Cir. 1983); NLRB vy. Evans Plumbing Co., 639 F.2d 291, 293 (5th Cir. Unit B 1981); Jn re Nicholas, Inc., 55 Bankr. 212, 214 (Bankr. D.N.J. 1985); Worldwide Detective Bureau, 296 N.L.R.B. No. 20 (1989), ALJ’s op. at 2 n.2, 22; Accurate Die Casting Co., 292 N.L.R.B. No. 106 (1989), ALJ’s op. at 7. “1 Jn re Continental Airlines, Inc., 50 Bankr. 342, 351 (S.D. Tex. 1985), aff'd, 790 F.2d 35 (5th Cir. 1986). *2 Further, a debtor may file labor lawsuits outside the bank- ruptcy court on issues of its choosing. See e.g., Kastern Air Lines, Inc. Vv. Air Line Pilots Ass’n, Int’l, 920 F.2d 722 (11th Cir. 1990). 20 tion and enforce a collective bargaining agreement.** Particularly in light of ever-increasing bankruptcy fil- ings,*" review by this Court is necessary to enforce clear congressional intent on this issue of overwhelming im- portance to the adjudication of labor disputes during a Chapter 11 bankruptcy proceeding. II. THE RULING BY THE COURT OF APPEALS THAT THE WET-LEASE DISPUTE IS A CORE PROCEED- ING CONFLICTS WITH THE JURISDICTIONAL PROVISION OF 28 U.S.C. § 157(b) AND DECISIONS OF OTHER CIRCUITS AND PRESENTS AN ISSUE OF COMPELLING IMPORTANCE WARRANTING THIS COURT’S REVIEW Pursuant to 28 U.S.C. § 157(b) (1), the bankruptcy court may hear, determine, and issue final orders and judgments in a “core’’ proceeding, subject to appellate review in the district court. See 28 U.S.C. § 158(a). ff a matter is not a core proceeding, then, absent the con- sent of the parties, the bankruptcy court may only issue proposed findings of fact and conclusions of law subject to de novo review in the district court. 28 U.S.C. §$ 157(¢) (1). 23 This Court has held that a bankruptcy court’s equitable powers under section 105(a) “must and can only be exercised within the confines of the Bankruptcy Code.” Norwest Bank Worthington V. Ahlers, 108 S. Ct. 963, 968-69 (1988) (emphasis added). 11 U.S.C. $ 105(a). Thus, section 105 may not be invoked to permit a debtor to alter its collective bargaining agreement where the Code otherwise explicitly provides exclusive procedures for such relief. *4See Annual Report of the Director of the Administrative Office of the United States Courts 26-27 (1989) (in 1989, pending bankruptcy caseload rose to an all-time high of 879,340 petitions) ; Fatsis, As Economy Staggers, Bankruptcy Becomes Field for the 1990s, Associated Press, Dec. 20, 1990 (NEXIS) (bankruptcy filings for year ended June 30, 1990 are double the 1981 figure; 10 of the 25 biggest bankruptcies in history occurred in the prior eighteen months). 21 In the view of the court of appeals, the bankruptcy court had jurisdiction to determine the wet-lease lawsuit as a “core” proceeding under 28 U.S.C. § 157(b) (2) because: (a) a post-petition contract with the debtor was involved, and (b) the dispute affected the administration of the estate. App. A, 19a-20a. The court’s conclusion that the bankruptcy court could fully adjudicate the wet- lease lawsuit, which arises solely under the RLA, is con- trary to the statutory language and legislative intent of section 157(b). Section 157(b) was enacted in response to this Court’s decision in Marathon in order to limit the full adjudicatory power of the bankruptcy court to those matters central to the federal bankruptcy power. The decision of the court of appeals, while consistent with its prior decision in Ben Cooper, improperly expands the statutory limits on the bankruptcy court’s jurisdiction and conflicts with decisions of other circuits. In In re Wood, 825 F.2d 90 (5th Cir. 1987), the Fifth Circuit held that “core” matters consist of substantive rights created by bankruptcy law, while “none-core” mat- ters consist of actions which could exist independent of the bankruptcy. Because the statute itself gives no defi- nition of “core” and “non-core” proceedings——-providing only a non-inclusive list of core proceedings, 28 U.S.C. § 157(b) (2)—the Fifth Circuit derived its formulation from this Court’s decision in Marathon, and Justice Brennan’s use of the word “core” in describing the fed- eral bankrupcety power as “the restructuring of debtor- creditor relations, which is at the core of the federal bankruptcy power. ...” Wood, 825 F.2d at 95 (quoting Marathon, 458 U.S. at 71). With respect to the state law rights at issue in Marathon, Justice Brennan wrote that the relationship of the state law claim to the bank- ruptey did not change the essential nature of that non- bankruptey claim, because “the plaintiff would be able to proceed against the defendant on the state law contractual claim.” Jd. at 95-96 ‘quoting Marathon, 458 U.S. at 72 n.26). The Fifth Circuit concluded that: 22 If the proceeding does not invoke a substantive right created by federal bankruptcy law and is one that could exist outside of bankruptcy, it is not a core proceeding; it may be related to the bankruptcy be- cause of its potential effect, but under Section 157 (ec) (1), it is an “otherwise related” or non-core proceeding. Id. at 97. Even though Wood involved a state law claim, the Wood formulation has been followed by other courts of appeal which have held that non-bankruptcy claims arising under state law or federal law are not “core” proceedings. See Barnett v. Stern, 909 F.2d 973, 981 (7th Cir. 1990) (action brought under RICO); Jn re Davis, 899 F.2d 1136, 1140-41 (11th Cir.) (Equal Ac- cess to Justice Act), cert. denied, 111 S.Ct. 510 (1990); Howell Hydrocarbons, Inc. v. Adams, 897 F.2d 183, 190 (5th Cir. 1990) (RICO action); Hays & Co. v. Merrill, Lynch, Pierce, Fenner & Smith, Ine., 885 F.2d 1149, 1156-57, n.9 (3d Cir. 1989) (federal and state securities law). In direct contrast to Wood and its progeny, the court of appeals, relying upon its decision in Ben Cooper, con- cluded that the bankruptcy court had jurisdiction over the wet-lease lawsuit.**> Ben Cooper presents, in part, the issue raised here by petitioner, an issue which is the subject of a conflict between the courts of appeals—-the standard for defining “core” versus “non-core” proceed- ings. In Ben Cooper, the court of appeals determined that the insurance dispute at issue was a core proceeding based upon the post-petition timing of the contract, not on the underlying nature of the agreement. See also In re Arnold Print Works, 815 F.2d 165 (1st Cir. 1987). That “5 This Court has previously granted a writ of certiorari in Ben Cooper, 110 8S. Ct. 3236, vacated, 111 S. Ct. 425 (1990), and after a subsequent ruling by the court of appeals, has pending a new petition for certiorari, 23 determination conflicts with the appropriate interpreta- tion of “core” advanced by the Fifth Circuit in Wood.** The conclusion of the court of appeals that the “rami- fications” of the wet lease dispute ‘‘on the administration of the estate are of sufficient importance to justify bank- ruptcy court jurisdiction,” App. A, 20a, misreads the scope of “core” proceedings. Congress enumerated spe- cific “core” matters in section 157(b) (2), all of which, consistent with the Marathon decision, describe traditional debtor-creditor proceedings. The court of appeals relied upon the so-called “catchall” provision found in section 157(b) (2)(A). That subsection provides that ‘matters concerning the administration of the estate” are “core” proceedings. Instead of interpreting this provision in a manner consistent with the limited framework of a core proceeding affecting the restructuring of the debtor- creditor relationship, the court of appeals has in effect *6 Additionally, the court of appeals’ application of Ben Cooper here has the effect of drawing the bankruptcy court even farther afield from traditional bankruptcy matters. The court of appeals determined that the federal labor law questions at issue in this case can be finally adjudicated by the bankruptcy court based upon the mere presence of a post-petition wet-lease agreement, even if the dispute in question is not between the parties to the wet-lease agreement. In Ben Cooper and Arnold Print Works, disputes under post-petition contracts were determined to be “core” matters be- cause the contracting parties were, in effect, dealing with officers of the bankruptcy court and the subject of such contracts was estate property. See Ben Cooper, 896 F.2d at 1399; Arnold Print Works, 815 F.2d at 169-70. Here, ALPA is not a party to the post-petition contract that gave rise to the dispute. Moreover, ALPA’s dispute with the debtor arises under a pre-petition collec- tive bargaining agreement. Further, collective bargaining repre- sentatives like ALPA do not enter into a particular new post- petition business transaction with a debtor. Rather, they continue carrying out their obligations as representatives of a class or craft of the carrier’s employees under collective bargaining agree- ments that, pursuant to the RLA, do not expire but become “amend- able,” and that, pursuant to the Bankruptcy Code, can only be modified consistent with the exclusive provisions of section 1113. 24 eliminated non-core matters by reading this provision to include matters which affect, rather than concern, the administration of the estate. The distinction between “concern” and “affect” is critical because the latter is similar to the broad grant of jurisdiction eliminated un- der BAFJA.*" While Congress did not change the range of matters subject to the bankruptcy jurisdiction of the federal courts in BAFJA, Congress restricted the types of matters that could be fully adjudicated in the bankruptcy courts. Wood, 825 F.2d at 93. Other circuits construing the enumerated matters in section 157(b), including the catchall provision, have cau- tioned that these provisions should be given restricted meaning consistent with the statutory language and in- tent.** Thus, “matters concerning the administration of the estate” are, by definition, matters unique to bank- ruptey cases. 1 Collier on Bankruptcy { 3.01, 3-39-3-40 (15th ed. 1989). The effect of the interpretation of the court of appeals is to render meaningless the statutory limitations on bank- ruptcy court jurisdiction. Here, as in Ben Cooper, the court of appeals has charted a path in derogation of the statutory scheme, a path creating a conflict with other courts of appeal. That conflict on this important juris- dictional question merits review by this Court. *7 Prior to BAFJA, bankruptcy court jurisdiction extended to all civil proceedings arising under title 11 or arising in or related to cases under title 11. 28 U.S.C. §§ 1471(b), (c) (repealed). *8 See Barnett, 909 F.2d at 979; In re Meyertech Corp., 831 F.2d 410, 416 (3d Cir. 1987) ; In re Castlerock Properties, 781 F.2d 159, 162 (9th Cir. 1986); see also In re Cassidy Land & Cattle Co., Inc., 836 F.2d 1130, 1132 (8th Cir.), cert. denied, 486 U.S. 1033 (1988). | 25 Ill. ADJUDICATION IN THE BANKRUPTCY COURT OF A CAUSE OF ACTION UNDER THE RAILWAY LABOR ACT IS INCONSISTENT WITH 28 U.S.C. § 157(d) AND PRESENTS AN ISSUE OF CONFLICT IN THE LOWER COURTS AND OF COMPELLING IMPORTANCE WARRANTING THIS COURT'S RE- VIEW In determining whether ALPA’s challenge under the RLA to Eastern’s wet-leasing ‘“‘was properly presented to the bankruptcy court, or could have been,” App. A, 18a, the Second Circuit properly determined that it was necessary to confront the application of the mandatory withdrawal provision of the BAFJA, 28 U.S.C. § 157(d). That provision states that: [tlhe district court shall . . . withdraw a proceed- ing if the court determines that resolution of the proceeding requires consideration of both Title 11 and other laws of the United States regulating or- ganizations or activities affecting interstate com- merce. 28 U.S.C. § 157(d) (emphasis added). The court of ap- peals determined that dismissal of a lawsuit brought in the district court was proper because mandatory with- drawal of the lawsuit to the district court would not have been required if the lawsuit had originated in the bank- ruptey court. App. A, 20a. This conclusion is contrary to the specific, mandatory language of section 157/(d), and raises an issue of importance concerning which the lower courts have offered conflicting interpretations. The command of section 157/d) is clear. Where, at a minimum, non-bankruptcy federal law provides the rule of decision governing a proceeding in bankruptcy, the case must be heard by an Article III tribunal. Section 157(d) represents a congressional judgment to limit the jurisdiction of the Article | bankruptcy courts by requir- ing the adjudication of non-bankruptcy federal law claims in the Article III courts. 26 To justify its conclusion that ALPA’s wet-leasing ac- tion could have been brought and conclusively adjudicated by the bankruptcy court, the court below approved a stringent, judicially-created precondition to withdrawal which is at odds with the clear language of the statute. In conjunction with its conclusion that ALPA’s wet- leasing action is a core proceeding within the meaning of section 157(b) (2)(A), App. A, 19a-20a, the court of appeals has returned to the bankruptcy courts a broad grant of independent judicial authority which Congress plainly intended to curtail in light of this Court’s de- cision in Marathon. Bankruptcy jurisdiction prior to Marathon violated the requirements of Article III by granting essential judicial functions to tribunals lacking constitutional assurances necessary to an independent judiciary. See supra at 24. In this regard, the Marathon Court rejected the conten- tion that the bankruptcy courts were a constitutionally permissible adjunct of the district court. 458 U.S. at 87. In response to Marathon, Congress sought to constitute the bankruptcy court as a true adjunct of the district courts, specifically concerned with the administration of the Bankruptcy Code. It assigned plenary bankruptcy jurisdiction to the district court, see 28 U.S.C. § 1334/a), subject to a power to return bankruptcy matters to the bankruptcy courts. 28 U.S.C. §157(a). In Section 157, Congress also limited the universe of proceedings in which bankruptcy courts could issue final orders. See 28 U.S.C. $$ 157(b)}, (ce). The mandatory withdrawal provision complements the scheme by ensuring that the bankruptcy court functions as a specialized adjunct of the district court and not as a cognate tribunal on questions of gen- eral federal law.*’ By requiring the district courts to withdraw the reference of an adversary proceeding re- 2° Indeed, it is clear Congress intended that the mandatory with- drawal provision extend to questions of federal laber law. See 130 Cong. Rec. H1849-50 (daily ed., March 21, 1984) (remarks of Rep. Kastenmeier). 27 quiring consideration of non-bankruptcy federal law, sec- tion 157(d) furthers Congress’ intent by insuring that the jurisdiction of the bankruptcy courts is limited to its narrow area of expertise, Title 11. The decision below requires causes of action brought solely under the RLA to be adjudicated in the bankruptcy court. The court below followed the lead of district court cases in the Second Circuit, App. A, 20a, and in the Fourth Circuit limiting mandatory withdrawal to cases of “first impression” under federal law. In these cases the bank- ruptcy court has been permitted to hear and decide all cases governed by non-bankruptcy federal law judged to “merely involve a routine application of established | fed- eral| legal standards.” Jn re Ionosphere Clubs, Inc., 103 Bankr. 416, 420 (S.D.N.Y. 1989).*%" By adopting this standard, the court of appeals has effectively engrafted a judicially-created requirement onto the statute. No- where does the mandatory withdrawal provision require that the federal issue necessary to resolution of the pro- ceeding present a “difficult” question—as opposed to the 3® Accord In re Carolina Produce Distrib., Inc., 110 Bankr. 207, 209 (W.D.N.C. 1990); In re Chadbourne Indus., Ltd., 100 Bankr. 663, 667 (S.D.N.Y. 1989); Jn re Asinelli, Inc., 93 Bankr. 433 (M.D.N.C. 1988); In re Johns-Manville Corp., 63 Bankr. 600, 602 (S.D.N.Y. 1986). In Ionosphere Clubs, for example, the district court denied a section 157(d) motion in an adversary proceeding brought by Eastern to enjoin alleged acts of strike misconduct, even though the district court recognized the necessity for the trial court to review the jurisdictional prerequisites of the Norris- LaGuardia Act, 29 U.S.C. $101 et seq., which the district court viewed as a “routine” application of law. 103 Bankr. at 420. The bankruptcy court proceeded to issue an injunction in clear conflict with this Court’s decision in Brotherhood of Ry. Trainmen, Enter- prise Lodge No. 27 v. Toledo, P. & W. R.R., 321 U.S. 50 (1944). See In re lonosphere Clubs, Inc., 108 Bankr 901, 943-45 (Bankr. S.D.N.Y. 1989). This failure to properly apply settled law was eventually corrected many months later on appeal. Eastern Air Lines, Inc. V. International Ass’n of Machinists, 121 Bankr. 428 (S.D.N.Y. 1990), aff'd, 923 F.2d 26 (2d Cir. 1991) (per curiam). 28 “routine” judicial task of declaring what the law is and applying that law to a set of facts." The court of appeals’ determination concerning section 157(d) also merits review because it creates a conflict with the approach taken by other courts which have applied the standard articulated in the leading decision under section 157(d), In re White Motor Corp., 42 Bankr. 693 (N.D. Ohio 1984). In White Motor, the court held that section 157 (d) required that a proceeding be withdrawn only when consideration of federal law “is necessary for the resolu- tion of a case or proceeding,” 7.e., when the case “can- not be resolved without substantial and material consid- eration of non-bankruptcy federal law.” Jd. at 703, 704. Applying this standard, numerous courts have held, with- out more, that bankruptcy-related claims must be heard 31 As demonstrated in this case, the court of appeals’ approach is incompatible with the plain thrust of the mandatory withdrawal provision. Contrary to the court of appeals’ conclusion, this case does require the bankruptcy court to “engage itself in the intri- cacies of the RLA,” App. A, 2la, because ALPA’s claims require detailed consideration of this Court’s decision in Florida East Coast, which limits a carrier’s ability to alter the terms and condi- tions of a collective bargaining agreement during a strike. A decision on the merits will require consideration of a number of unsettled issues under Florida East Coast. In particular, the court will have to examine whether the carrier properly altered status quo working conditions prior to obtaining court approval. The district court’s opinion in Florida East Coast, affirmed by this Court, held that the carrier had to adhere to the collective bar- gaining agreement “except upon specific authorization of this Court after a finding of reasonable necessity.” 384 U.S. at 242. But cf. Railway Labor Executives Ass'n V. Boston & Maine Corp., 639 F.Supp. 1092, 1106 n.10 (D.Me.) (prior approval not required), modified on other grounds, 808 F.2d 150 (1st Cir. 1986), cert. denied, 484 U.S. 830 (1987). Second, this case raises the question of whether and to what extent Florida East Coast relief can be afforded in the case of a sympathy, as opposed to a primary, strike —an issue of first impression. 29 in an Article III court whenever federal law provides the rule of decision.* Review of this case would clarify a central component of the bankruptcy jurisdiction scheme whose interpreta- tion has divided the lower federal courts. Because deci- sions on motions to withdraw the reference under section 157(d) have been held to be not directly appealable,** the construction of that provision has yet to be—and is un- likely to be—fully developed by the circuit courts of ap- peal. Review of this case will afford guidance to the lower federal courts in an area of central importance to the scheme of bankruptcy jurisdiction. 32 See, e.g., Price Vv. Craddock, 85 Bankr. 570 (D. Colo. 1988) (debtor’s counterclaim under securities laws warrants withdrawal) ; Burger King Corp. v. B-K Of Kansas, Inc., 64 Bankr. 728 (D. Kan. 1986) (action against the debtor alleging violation of federal trademark law must be withdrawn) ; United States v. ILCO, Inc., 48 Bankr. 1016, 1021 (N.D. Ala. 1985) (claims against debtor under federal environmental statutes); Michigan Milk Producers Ass’n V. Hunter, 46 Bankr. 214, 216 (N.D. Ohio 1985) (antitrust counter- claim brought by bankruptcy trustee in action to determine status of claim), appeal dismissed, 786 F.2d 1165 (6th Cir. 1986); In re Hartley, 55 Bankr. 781, 785 (Bankr. N.D. Ohio 1985) (bankruptcy trustee’s RICO claim); In re Maislin Indus., Inc., 50 Bankr. 943, 950 (Bankr. E.D. Mich. 1985) (recommending withdrawal of action to recover alleged under payments under federal tariff schedule). 33 In re Lieb, 915 F.2d 180 (5th Cir. 1990); In re Pruitt, 910 F.2d 1160 (3d Cir. 1990); In re Chateaugay Corp., 826 F.2d 1177 (2d Cir. 1987); In re Moens, 800 F.2d 173 (7th Cir. 1986); In re Kemble, 776 F.2d 802 (9th Cir. 1985); In re King Mem. Hosp., Inc., 767 F.2d 1508 (1ith Cir. 1985) (per curiam); In re Dalton, 733 F.2d 710 (10th Cir. 1984), cert. dismissed, 469 U.S. 1185 (1985); see also Tringali v. Hathaway Mach. Co., 796 F.2d 553 (1st Cir. 1986) (withdrawal decision is interlocutory) (dicta). 30 CONCLUSION For the foregoing reasons, a writ of certiorari should be granted. Respectfully submitted, RICHARD M. SELTZER Counsel of Record BABETTE A. CECCOTTI RUSSELL S. HOLLANDER THOMAS N. CIANTRA PETER D. DECHIARA TAMIR W. ROSENBLUM COHEN, WEISS AND SIMON 330 West 42nd Street New York, New York 10036 (212) 563-4100 Attorneys for Petitioner Air Line Pilots Association, March 21, 1991 International, AFL-CIO APPENDICES la APPENDIX A UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Nos. 580, 581—August Term 1990 (Argued November 14,1990 Decided December 21, 1990) Docket Nos. 90-5033, 90-5035 IN RE: IONOSPHERE CLUBS, INC. and EASTERN AIRLINES, INC., Debtors. MARTIN R. SHUGRUE, JR., AS CHAPTER 11 TRUSTEE FOR EASTERN AIRLINES, INC., nn Appellant, AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Appellee. Before: MINER and TIMBERS, Circuit Judges, and SPRIZZO, District Judge, for the Southern District of New York, sitting by designation Appeal from an order entered April 10, 1990, in the -Southern District of New York, Robert W. Sweet, Dis- trict Judge, reversing two orders of the bankruptcy court that stayed appellee’s attempts to arbitrate a dispute arising from its collective bargaining agreement with appellant and to bring an action to enjoin a practice of appellant as violative of the collective bargaining agree- ment. 114 B.R. 379 (S.D.N.Y. 1990). Affirmed in part, reversed in part and remanded. Judge Miner concurs in part and dissents in part in a separate opinion. 2a TIMBERS, Circuit Judge: Appellant Martin R. Shugrue, Jr., Chapter 11 Trustee for Eastern Airlines, Inc. (Eastern), appeals from an order entered April 10, 1990 in the Southern District of New York, Robert W. Sweet, District Judge, reversing two orders of the bankruptcy court that stayed attempts by the Air Line Pilots Association, International (ALPA) to arbitrate a dispute arising out of their col- lective bargaining agreement with Eastern and to prose- cute a lawsuit seeking to enjoin Eastern’s practice of wet-leasing aircraft and crews as violative of the collec- tive bargaining agreement. On March 9, 1989, Eastern filed a petition for reor- ganization under Chapter 11 of the Bankruptcy Code. Subsequently, ALPA, which was engaged in a sympathy strike against Eastern, sought relief from the automatic stay to initiate an arbitration to determine whether labor protective provisions |LPPs) in the collective bargaining agreement had been triggered by Eastern’s merger with Continental. The bankruptcy court, Burton R. Lifland, Chief Bankruptcy Judge, denied that petition. Jn re Ionosphere Clubs, Inc., 105 B.R. 765 (Bankr. S.D.N.Y. 1989) (the LPP-decision). After the strike began and after Eastern filed its petition for reorganization, Eastern entered into wet- lease contracts with Continental. Wet-leasing is a prac- tice hy which one airline leases aircraft and crews from another airline. ALPA commenced an action in the Southern District of Florida, seeking to enjoin this prac- tice as violative of its collective bargaining agreement with Eastern. In response, Eastern commenced an ad- versary proceeding in the bankruptcy court to enjoin ALPA from prosecuting the Florida action. The bank- ruptev court, Burton R. Lifland, Chief Bankruptcy Judge, held that ALPA’s action was violative of the automatic stay and enjoined its prosecution pursuant to its powers under 11 U.S.C. §105(a) (1988). In re Ionosphere 3a Clubs, Inc., 105 B.R. 773 (Bankr. S.D.N.Y. 1989) (the wet-lease decision). ALPA appealed both bankruptcy court orders to the district court pursuant to 28 U.S.C. §158(a) (1988). The district court reversed them both. The court held that 11 U.S.C. §1113(f) (1988) precludes the applica- tion of the automatic stay and the bankruptcy court’s equitable powers to any proceeding brought by a union to enforce a collective bargaining agreement against a debtor, unless and until the debtor complies with the provisions of § 1113, which regulates the. termination or modification of collective bargaining agreements by a debtor in bankruptcy. Jn re Ionosphere Clubs, Inc., 114 B.R. 379 (S.D.N.Y. 1990). On appeal, Eastern contends that (1) § 1113(f) of the Bankruptcy Code does not preclude application of the automatic stay provisions of § 362 or of the bankruptcy court’s equitable powers under § 105 to ALPA’s attempts to enforce the collective bargaining agreement outside the bankruptcy court; and (2) the bankruptcy court decisions should be reinstated. For the reasons that follow, we affirm the district court’s order as to the LPP-decision and reverse its order as to the wet-lease decision. We remand the case to the district court for further consideration. I. We shall summarize only those facts and prior pro- ceedings believed necessary to an understanding of the issues raised on appeal. This appeal involves two issues in a labor dispute be- tween Eastern and ALPA. At all times relevant to this appeal, the relationship between the two parties was governed by a collective bargaining agreement dated Feb- ruary 23, 1986 and entered into pursuant to the Railway Labor Act (RLA), 45 U.S.C. § 151 et seg. (1988). da On March 4, 1989, the International Association of Machinists and Aerospace Workers (IAM) began a pri- mary strike against Eastern. Soon thereafter, ALPA and the Transportation Workers Union of America struck Eastern in sympathy with the IAM. On March 9, 1989, Eastern filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in the Southern Dis- trict of New York. On June 21, 1989, Eastern filed a motion in the bankruptcy court to reject the collective bargaining agreement pursuant to § 1113. Eastern with- drew that motion on July 26, 1989. At the time the bank- ruptey court reached the decisions under review on the instant appeai, no application under $1113 to terminate or modify the collective bargaining agreement was pend- ing before it. Martin R. Shugrue, Jr. was appointed Trustee for - .stern on April 19, 1990. (A) The collective bargaining agreement contained LPPs designed to protect ALPA members in the event of a merger. The collective bargaining agreement provided that disputes arising from it would be submitted to arbi- tration and it set forth a procedure governing that proc- ess. Eastern was sold to Texas Air Corporation (Texas Air) within days after the collective bargaining agree- ment became operative. After Eastern’s acquisition by Texas Air, a dispute arose as to the operation of the LPPs. On June 10, 1986, Eastern commenced an action in the Southern District of Florida, seeking a declara- tion that the collective bargaining agreement was invalid. That contention was rejected and Eastern was ordered to arbitrate the dispute. Eastern Air Lines, Inc. v. Air Line Pilots Ass’n, Int’l, 670 F. Supp. 947 (S.D. Fla. 1987), aff'd, 861 F.2d 1546 (11 Cir. 1988). On August 6, 1986, pursuant to the provisions of the collective bargaining agreement, ALPA filed a grievance with the System Board of Adjustments, the body estab- lished to hear and determine grievances based on dis- - 5a putes concerning the collective bargaining agreement. On March &, 1989, the arbitration panel ruled in favor of ALPA. It concluded that the LPPs provided that, in the event of a merger, seniority lists were to be merged. The panel did not decide whether a merger had taken place that would have triggered the LPPs. The decision was not signed by all the panel members until the next day, approximately seven minutes after Eastern filed its bankruptcy petition. On July 21, 1989, ALPA filed a motion in the bank- ruptcy court, seeking a determination that the arbitra- tion decision became effective prior to Eastern’s Chapter 11 filing and, thus, was not affected by the automatic stay, or, in the alternative, it sought relief from the automatic stay to implement the arbitration decision. ALPA supplemented its motion requesting relief from the automatic stay with a request to commence a second arbitration to determine whether Eastern and Continen- tal had merged, thus triggering the LPPs. Eastern did not oppose the request for relief from the stay to imple- ment the first arbitration decision, but did oppose the supplemental request to commence a second arbitration. The bankruptcy court lifted the stay for the limited purpose of formally issuing the arbitration decision in- terpreting the LPPs, but declined to lift the stay for the purpose of allowing ALPA to initiate an arbitration to determine whether a merger had taken place. /n re Ionosphere Clubs, Inc., supra, 105 B.R. 765. The court reasoned that issues raised in the arbitration would duplicate efforts being made by the examiner it had appointed. /a. at 771. (B) Wet-leasing refers to the practice of one airline leas- ing aircraft and crews from another airline. The collec- tive bargaining agreement prohibited Eastern from en- gaging in this practice. It required Eastern to employ ALPA pilots on the Eastern pilot’s system seniority list to perform its flying. In August 1989, since its pilots 6a were on strike and replacement pilots were still being trained, Eastern entered into wet-lease contracts with Continental. On September 1, 1989, ALPA commenced an action in the Southern District of Florida (the Florida action), seeking to enjoin the wet-leasing as violative of the collective bargaining agreement and of the RLA. The district court set the case on an expedited discovery schedule. On September 25, 1989, Eastern commenced an adversary proceeding in the bankruptcy court, seek- ing to enjoin ALPA from prosecuting the Florida action. In its complaint, Eastern alleged that its wet-lease con- tracts were reasonably necessary to its continued opera- tion during the strike. The bankruptcy court held that the Florida action vio- lated the provisions of the automatic stay, specifically, 11 U.S.C. § 362(a) (3) (1988), which provides for a stay of “any act ... to exercise control over property of the estate.” Jn re lonosphere Clubs, supra, 105 B.R. at 779. The court determined that Eastern’s actions were “rea- sonably necessary” to its continued operation during the strike and were protected under the doctrine announced in Brotherhood of Ry. & S.S. Clerks v. Florida East Coast Ry., 384 U.S. 238, 248 (1966). In re Ionosphere Clubs, supra, 105 B.R. at 780. Finally, the bankruptcy court enjoined further prosecution of the Florida action pursuant to its powers under § 105(a). Jd. (C) ALPA appealed both bankruptcy court orders to the district court pursuant to 28 U.S.C. $158ia) (1988). The appeal frora the LPP decision was assigned to Judge Sweet. The appeal from the wet-lease decision was as- signed to Judge Leval. Subsequently, the two appeals were consolidated before Judge Sweet. On April 10, 1990, the district court entered its opin- ion and order, reversing the orders of the bankruptcy ————————— Ta court in both cases. Jn re lonosphere Clubs, Ine., 114 B.R. 379 (S.D.N.Y. 1990). The district court reasoned that $1113 of the Bankruptcy Code was intended to be the “exclusive . . . means in the Bankruptcy Code by which a debtor could modify or reject its collective bar- gaining contract obligations.” /d. at 396. The court con- ciuded that application of the automatic stay to bar en- forcement of a collective bargaining agreement outside the bankruptcy court was precluded by § 1113(f), which provides that no provision of the Bankruptcy Code other than $1113 should be construed to permit a_ trustee unilaterally to alter or terminate a collective bargaining agreement. Jd. at 400. This appeal followed. Il. Initially, we set forth our standard of review. The district court order is subject to plenary review. Jn re Hanratty, 907 F.2d 1418, 1423 (3 Cir. 1990) ; In re John- son, 901 F.2d 513, 516 (6 Cir. 1990); Zn re Manville Forest Prods. Corp., 896 F.2d 1384, 1388 (2 Cir. 1990). “This court exercises the same review over the district court’s decision that the district court may exercise [over the bankruptcy court’s decision].” Brown v. Pennsyl- vania State Employees Credit Union, 851 F.2d 81, 84 (3 Cir. 1988). Accordingly, we review conclusions of law de novo, and findings of fact under a clearly erron- eous standard. Jn re Manville, supra, 896 F.2d at 1388; Brown, supra, 851 F.2d at 84. IIT. | This appeal raises the question of the effect of § 1113 | of the Bankrupicy Code on the application of the auto- matie stay provisions of § 362 of the Bankruptcy Code to non-bankruptey proceedings to enforce a _ collective bargaining agreement. Resolution of this dispute re- quires us to consider the intent of Congress in enacting these sections. ES ———————— 8a (A) Section 362 of the Bankruptcy Code provides that the filing of a petition in bankruptcy automatically stays certain actions directed against the debtor or against the debtor’s property. 11 U.S.C. § 362(a) (1988). The auto- matie stay provisions promote two principal purposes of the Bankruptcy Code. First, the automatic stay “provides the debtor with ‘a breathing spell from his creditors.’ ” Teachers Ins. & Annuity Ass’n of America Vv. Butler, 803 F.2d 61, 64 (2 Cir. 1986) (quoting legislative history) ; In re Petrusch, 667 F.2d 297, 299 (2 Cir. 1981) (same), cert. denied, 456 U.S. 974 (1982). In addition, the auto- matic stay allows the bankruptcy court to centralize all disputes concerning property of the debtor’s estate in the bankruptcy court so that reorganization can proceed efficiently, unimpeded by uncoordinated proceedings in other arenas. The Bankruptcy Code “provide[s] for cen- tralized jurisdiction and administration of the debtor, its estate and its reorganization in the Bankruptcy Court, and [this policy| is effectuated by Sections 362 and 105 of the Code.” In re Chateaugay Corp., 109 B.R. 613, 621 (S.D.N.Y. 1990); see also Hunt v. Bankers Trust Co., 799 F.2d 1060, 1069 (5 Cir. 1986); Holland America Ins. Co. Vv. Succession of Roy, 777 F.2d 992, 995 (5 Cir. 1985). (B) We turn next to $1113 of the Bankruptcy Code. Our discussion of that section must begin with the Supreme Court’s decision in National Labor Relations Bd. vV. Bildisco & Bildisco, 465 U.S. 513 (1984). In Bildisco, the Court held, in part, that the filing of a petition in bank- ruptey rendered collective bargaining agreements unen- forceable. Id. at 532. The debtor, therefore, could termi- nate unilaterally the collective bargaining agreement or alter its provisions prior to seeking bankruptcy court ap- proval for rejection of an executory contract under §365(a). Id. at 533-34, 9a In response to Bildisco, Congress enacted § 1113 of the Bankruptey Code as part of the Bankruptcy Amendments and Federal Judgeship Act of 1984 (“BAFJA’’), Pub. L. No. 98-353, 98 Stat. 333, 390-91 (1984). Section 1113 governs the means by which a debtor may assume, reject or modify its collective bargaining agreement. 11 U.S.C. $1113(a), (b) and (e) (1988). It ensures that the debtor attempt to negotiate with the union prior to seek- ing to terminate a collective bargaining agreement. § 1113(b). In the event such negotiations fail, it deline- ates the standard by which an application by the debtor to terminate the collective bargaining agreement is to be judged by the bankruptcy court and establishes a time frame in which this determination is to be made. 11 U.S.C. §1113(¢c), (d) (1988). Subsection (f) provides: “No provision of {the Bankruptcy Code] shall be construed to permit a trustee to unilaterally termi- nate or alter any provisions of a collective bargain- ing agreement prior to compliance with the provi- sions of [section 1113].” 11 U.S.C. § 1113 (f) (1988). In discerning Congress’ intent in enacting § 1113, we look first to the language of the statute. United States v. Bonanno Organized Crime Family of La Cosa Nostra, 879 F.2d 20, 21 (2 Cir. 1989). Subsection 1113/a) pro- vides that a debtor “may assume or reject a collective bargaining agreement only in accordance with the provi- sions of [section 1113].” Subsection 1113(f) evinces an intent that other previsions of the Bankruptcy Code are inoperable to the extent that they allow a debto~ to by- pass the requirements of § 1113. The language of the statute indicates that Congress intended § 1113 to be the sole method by which a debtor could terminate or modify a collective bargaining agreement and that application of other provisions of the Bankruptey Code that allow a debtor to bypass the requirements of § 1113 are pro- hibited. 10a This conclusion is supported by the legislative history of § 1113. There are no committee reports accompanying the enactment of § 1113. We look therefore to statements made by sponsors of the legislation on the floor of Con- gress for an expression of legislative intent. E.g., Regents of the University of California v. Public Employment Re- lations Bd., 485 U.S. 589, 595-97 (1988); North Haven Bd. of Educ. v. Bell, 456 U.S. 512, 527 (1982). In sup- port of the legislation, Senator Packwood, one of its sponsors, stated: “The amendments also prohibit the trustee from uni- laterally altering or terminating the labor agreement prior to compliance with the provisions of the section. This provision encourages the collective bargaining process, so basic to federal labor policy. The provi- sion overrules the 5-4 portion of the Supreme Court’s Bildisco decision and means that the 'abor contract is enforceable and binding on both parties until a court approved rejection or modification.” 130 Cong. Rec. S8898 (daily ed. June 29, 1984). Finally, the context in which § 1113 was enacted sup- ports our conclusion. It is not disputed that § 1113 was enacted as the legislative response to the Supreme Court’s decision in Bildisco. In re Unimet Corp., 842 F.2d 879, 882 (6 Cir.), cert. denied, 488 U.S. 828 (1988); Truck Drivers Local 807 v. Carey Transp., Inc., 816 F.2d 82, 88 (2 Cir. 1987); In re Century Brass Prods., Ilvc., 795 F.2d 265, 272 (2 Cir. 1986). It stands to reason, there- fore, that the events that took place in Bildisco are repre- sentative of the ill that Congress sought to cure in enact- ing § 1113. In Bildisco, a debtor ignored “‘its obligations under the collective-bargaining agreement, including the payment of health and pension benefits and the remittance to the Union of dues collected under the agreement ... [and] refused to pay wage increases called for in the collective- bargaining agreement.” Bildisco, supra, 465 U.S. at 518. Those alterations were made prior to seeking relief from ————————— ee ee — lla those obligations in the bankruptcy court and absent nego- tiation with the union. “Section 1113(f) reverses that part of Bildisco & Bildisco which held that a trustee or debtor in pos- session was not legally bound to a collective bargain- ing agreement subsequent to the filing date and prior to the court determination of the application for au- thority to reject such agreement. The trustee or debtor in possession must adhere to the terms of the collective bargaining agreement unless the court ap- proves the application for rejection pursuant to sec- tion 1113(¢c) or grants interim relief under section 1113/e).” 5 Collier on Bankruptcy, 1113.01 at 1113-14 (15th ed. 1990). We conclude, from the language of the statute, state- ments made by the sponsors of the legislation, and the context in which it was enacted, that Congress intended that a collective bargaining agreement remain in effect and that the collective bargaining process continue after the filing of a bankruptey petition unless and until the debtor complies with the provisions of $1113. E.g., In re Unimet Corp., supra, 842 F.2d at 884 (“section 1113 unequivocally prohibits the employer from wnilaterally modifying any provision of the collective bargaining agreement”); In ve Century Brass Prods., supra, 795 F.2d at 272 ($1113 “created an expedited form of col- lective bargaining with several safeguards desi. xed to insure that employers did not use Chapter 11 as medi- cine to rid themselves of corpcrate indigestion”); In re Mile High Metal Sys., Inc., 51 B.R. 509, 510 (Bankr. D. Colo. 1985) (“[o]ne of the primary purposes of [section 1113] was to emphasize the private collective bargaining process in an effort to avoid recourse to the bankruptcy court”). We construe subsection 1113(f) quite literally. We hold that it was meant to prohibit the applicaetion of any other provision of the Bankruptcy Code when such ap- EE 12a plication would permit a debtor to achieve a unilateral termination or modification of a collective bargaining agreement without meeting the requirements of § 1113. (C) We consider, on the instant appeal, a very specific question, i.e., whether Congress intended in enacting § 1113(f) to preclude the application of the automatic stay provisions of § 362 to any dispute concerning a col- lective bargaining agreement absent compliance with the provisions of § 1113. We find no evidence that Congress had that specific intent. Section 1113(f) is circumstance specific rather than section specific. Congress did not choose to direct § 1113 (f) at any specific provision whose application it deemed would always permit a debtor vnilaterally to alter a col- lective bargaining agreement. Rather, § 1113(f) pre- sumes a particularized determination in any circum- stance as to whether the application of another provision of the Bankruptcy Code will permit a debtor unilaterally to terminate or alter a collective bargaining agreement. If Congress had intended to preclude application of the automatic stay to any dispute involving a collective bar- gaining agreement, it could have excepted explicitly pro- ceedings to enforce a collective bargaining agreement from the automatic stay provisions. 11 U.S.C. § 362(b) (1988). Indeed, in enacting the legislation that included § 1113, Congress added two exceptions to the automatic stay. BAFJA, Pub. L. No. 98-353, 98 Stat. 333, 365, 371 (1984) (11 U.S.C. § 362(b) (7), (10) (1988)). More- over, other sections of the Bankruptcy Code explicitly state that § 362 is inapplicable. F.g., 11 U.S.C. § 1110 (a) (1988) (right of secured creditor with purchase money security interest in aircraft or its parts not sub- ject to § 362); 11 U.S.C. § 1168 (1988) (right of secured creditor with purchase money security interest in rolling stock equipment or accessories used on such equipment not subject to § 362). m 1 13a Since we discern no congressional intent on the spe- cific issue before us, our analysis is governed by two rules of statutory construction. The first encourages consistent interpretations of statutes so as to give the fullest effect to congressional intent. United States v. Lopez-Cavasos, 915 F.2d 474, 479 (9 Cir. 1990); Strobl v. New York Mercantile Exchange, 768 F.2d 22, 30 (2 Cir.), cert. denied, 474 U.S. 1006 (1985). “‘|WJIhen two statutes are capable of co-existence, it is the duty of the courts ... to regard each as effective.’” Radzan- ower V. Touche Ross & Co., 426 U.S. 148, 155 (1976) (citation omitted). The second instructs us that, when two statutes are in irreconcilable conflict, we must give effect to the most recently enacted statute since it is the most recent indication of congressional intent. /d. at 154. We agree with the district court’s conclusion that, to the extent the purpose of the automatic stay is to give the debtor a “breathing spell,” it cannot be reconciled with £ 1113, which provides the sole method by which a debtor may obtain a “breathing spell” from its obliga- tions under a collective bargaining agreement. Jn re Ionosphere Clubs, supra, 114 B.R. at 397. Were that the only purpose of the automatic stay, we would be inclined to affirm the district court’s thorough opinion in its entirety. The automatic stay, however, also allows the bank- ruptey court to protect its jurisdiction over property of the debtor’s estate by ruling on the appropriate manner and forum in which such disputes should be resolved. We previously have recognized the importance of that policy in the reorganization proceedings. Bohack Corp. V. Borden, Inc., 599 F.2d 1160, 1165 (2 Cir. 1979). In view of the importance of that policy, we conclude that a bright line rule precluding the application of the auto- matic stay to any situation involving a collective bar- gaining agreement was not intended by Congress. Rather, we believe that a case by case adjudication is l4a preferable. We will give effect to the automatic stay to the extent that its application is not in irreconcilable * conflict with § 1113. We hold, therefore, that § 1113(f) precludes applica- tion of the automatic stay to disputes involving a collec- tive bargaining agreement only when its application allows a debtor unilaterally to terminate or alter any provision of a collective bargaining agreement. IV. We turn now to the application of the foregoing prin- ciples to the disputes at issue in the instant case. We consider the LPP decision first. Eastern contends that the district court erred in determining that § 1113(f) precluded application of the automatic stay to the arbi- tration that ALPA sought to commence to determine whether the LPPs in the collective bargaining agreement had been triggered. We disagree. Eastern contends that a stay of arbitration does not deprive a union of a forum in which to enforce the col- lective bargaining agreement. That srgument ignores the fact that adjudication of this dispute in the bank- ruptey court would nullify effectively the arbitration clause in the collective bargaining agreement and would substitute the court’s judgment for that of the arbitrator. The collective bargaining agreement expressly provides for arbitration as the method of dispute resolution. “!Slection 1113 unequivocally prohibits the employer from unilaterally modifying any provision of the collec- tive bargaining agreement.” i/n re Unimet, supra, 841 F.2d at 884 (emphasis in original). This prohibition applies to arbitration clauses. “Tt would be anomaious to find that Congress en- acted a mandatory procedure for rejecting a collec- tive bargaining agreement without which the agree- ment stays in full force and effect, and then to hold that a previously enacted section of the same statute 15a —11 U.S.C. § 362, providing for a stay of claims against a debtor’s estate—automatically invalidates the arbitration clause of a collective bargaining agreement... .” In re Marine Pollution Serv., 88 B.R. 588, 595 (S.D. N.Y.), rev'd on other grounds, 857 F.2d 91 (2 Cir. 1988). Application of the automatic stay to ALPA’s attempt to invoke that provision of the collective bargaining agreement would allow Eastern unilaterally to alter the collective bargaining agreement by avoiding its obliga- tion to arbitrate. Jn re Bob’s Supermarket’s, Inc., 118 B.R. 783, 785-86 (Bankr. D. Mont. 1990); In re Marine Pollution Serv., Inc., supra, 88 B.R. at 595 (dicta); see also Haggard, Labor Arbitration and Bankruptcy: A Trek wmto the Serbonian Bog, 17 Loy. U. Chi. L.J. 171, 187-88 (1986) (“Under section 1113 of the Bankruptcy Code, a collective bargaining agreement remains in full force and effect until its rejection is approved by the bankruptcy judge or other interim relief is allowed. Thus, the debtor in possession or trustee has the con- tractual duty to adhere to the substantive provisions of the agreement and the duty to arbitrate any alleged breaches of those provisions.”). In this context, applica- tion of the automatic stay is in irreconcilable conflict with $ 1113/f), which requires that Eastern seek relief under the provisions of § 1113 if it wishes to avoid its obligation to arbitrate labor disputes. Cf. In. re Marine Pollution Serv., Inc., 89 B.R. 344, 346 (S.D.N.Y. 1988) (“if the Trustee believes that the threat of slowdowns or other disturbance is such that he wishes to undo the arbitration award, he has open to him either a return to the arbitrator or a rejection of the contract in the man- ner Congress prescribed in 11 U.S.C. § 1113”). We must give effect to § 1113(f) as the later expression of con- gressional intent. Our holding is consistent with the purpose underlying : 1113 to the extent that it ensures that the collective a id l6a bargaining process continue unless and until the bank- ruptey court grants the debtor relief under § 1113. The federal judiciary and Congress both have recognized the importance to the collective bargaining process of arbi- tration. E.g., United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578 (1960) (“arbitra- tion of labor disputes under collective bargaining agree- ments is part and parcel of the collective bargaining process itself”); 29 U.S.C. $173(d) (1988) (favoring method of labor dispute resolution agreed to by parties). We hold that an arbitration brought pursuant to a provision in a collective bargaining agreement is not subject to the automatic stay since its application would allow a debtor unilaterally to avoid its obligation to arbitrate. The district court properly reversed the bank- ruptcy court’s LPP decision. 7 This brings us to the wet-lease decision. Eastern con- tends that the district court erred in reversing the bank- ruptecy court’s determination that the Florida action was subject to the automatic stay. We agree. (A) Unlike the LPP decision, application of the automatic stay to the action commenced by ALPA in the Southern District of Florida did not relieve Eastern of the obliga- tion to participate in the method of dispute resolution provided for in the collective bargaining agreement. Ad- judication in the bankruptcy court itself does not vio- late § 1113(f). When a union seeks judicial enforcement of a collective bargaining agreement, the purposes behind $§ 362 and 1113(f) both can be promoted if the dispute can be adjudicated in the bankruptcy court. We agree with ALPA’s contention that precluding it from enforcing the collective bargaining agreement would render § 1113 illusory since a debtor would have no need to invoke it. If enforcement is foreclosed, then a union l7a has no recourse against unilateral modifications imposed by a debtor. The application of $ 362 to a non-bankruptcy judicial proceeding only forecloses enforcement of the collective bargaining agreement if it cannot be enforced in the bankruptcy court. Accordingly, if a union has a proce- dural mechanism to place the dispute before the bank- ruptcy court and the bankruptcy court has jurisdiction to resolve the dispute, enforcement of the collective bar- gaining agreement is not foreclosed and application of the automatic siay does not permit a debtor unilaterally to alter its collective bargaining agreement. We are not persuaded by ALPA’s fear that the auto- matic stay may be interpreted to stay all proceedings against the debtor, even those commenced in the bank- ruptey court. E.g., In re Coastal Group, Inc., 100 B.R. 177, 178 (Bankr. D. Del. 1989) (pre-petition breach of contract claim brought as adversary proceeding subject to automatic stay); Jn re Penney, 76 B.R. 160, 161 (Bankr. N.D. Cal. 1987) (creditor cannot commence adversary proceeding against debtor in bankruptcy court for a cause of action that, if commenced in state court. would violate automatic stay); In re Lessig Constr., Inc., 67 B.R. 436, 443-44 (Bankr. E.D. Pa. 1986) (auto- matic stay applies to bankruptcy proceedings). But see In re Vylene Enters., Inc., 63 B.R. 900, 905-07 (Bankr. C.D. Cal. 1986) (automatic stay not applicable to pro- ceedings seeking injunctive relief commenced in bank- ruptey court); In re American Spinning Mills, Inc., 43 B.R. 365, 367 (Bankr. E.D. Pa. 1984) (“stay implicitly does not bar a party from commencing an adversary or contested proceeding against the debtor under the cap- tion of the bankruptcy case in the court where the peti- tion is pending”). The only appropriate purpose that the stay promotes with respect to collective bargaining agree- ments is allowing the bankruptcy court to protect its jurisdiction so that it can proceed efficiently with reor- ganization. Therefore, § 1113(f) compels the bankruptcy court to provide relief from the stay pursuant to § 362 184 (d) to hear the dispute itself, to the extent that is nec- essary, or, in the event that the bankruptcy court deter- mines that it is not the appropriate forum for the resolu- tion of such a dispute, to allow the resolution of the dis- pute to proceed in a non-bankruptcy forum. Moreover, the fact that the bankruptcy court may not have jurisdiction to hear every conceivable claim that might arise from the collective bargaining agreement does not invalidate our analysis. The relevant inquiry is whether the bankruptcy court has jurisdiction to hear the particular dispute at issue. If the bankruptcy court does have jurisdiction to hear a dispute, it has the power to take the necessary steps to enforce its resolution. 11 U.S.C. § 105 (1988). Finally, our concern with a procedural mechanism by which the union can present the dispute to the bank- ruptcy court does not foreclose debtor-initiated resolu- tions of disputes. A situation in which the union could not bring the dispute before the bankruptcy court and the debtor chose not to, however, would render the col- lective bargaining agreement unenforceable. That result is prohibited by § 1113(f). (B) It follows from our preceding analysis that, if the wet- lease dispute was properly presented to the bankruptcy court, or could have been, and the bankruptcy court could exercise jurisdiction over it, application of the automatic stay was not precluded by § 1113(f). In mak- ing this determination, we need not decide whether the bankruptcy court would have jurisdiction to resolve any dispute arising from the collective bargaining agreement, but only whether it had jurisdiction to decide this partic- ular dispute. Initially, since Eastern brought the merits of the dis- pute before the bankruptcy court, we need not consider whether ALPA had a procedural mechanism with which to place the dispute before the bankruptcy court. We turn, therefore, to the jurisdiction issue. 19a In Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), the Supreme Court con- sidered constitutional restraints on bankruptcy court jurisdiction. The plurality distinguished those issues “at the core of the federal bankruptcy power . . . from the adjudication of state-created private rights.” /d. at 71. The bankruptcy court can exercise jurisdiction over the former, but cannot exercise jurisdiction over a state law contract claim that arose pre-petition. Such a claim can be adjudicated only in an Article III court. In response to Marathon, as part of the BAFJA, Con- gress amended the jurisdictional grant to bankruptcy courts. Bankruptcy courts may enter “appropriate orders and judgments” in “core” proceedings. 28 U.S.C. $ 157(b) (1) (1988). Congress provided a nonexclusive list of proceedings it deemed to be core. 28 U.S.C. §$ 157(b) (2) (1988). In addition, a bankruptcy court can hear non-core proceedings if they are related to the bankruptcy case and the bankruptcy court submits pro- posed findings of fact and conclusions of law for review by the district court. 28 U.S.C. § 157(e) (1) (1988). “|Blankruptcy jurisdiction [is] to be construed as broadly as possible within the constitutional constraints of Marathon.” In re Ben Cooper, Inc., 896 F.2d 1394, 1398 (2 Cir. 1990), vacated on other grounds, 59 U.S.L.W. 3357 (U.S. Nov. 13, 1990); see also In re Chateaugay Corp., supra, 109 B.R. at 621 (“{t}]he reach of bankruptcy jurisdiction encompasses all matters the outcome of which would affect the debtor or its reor- ganization”). With the foregoing in mind, we consider whether the wet-lease dispute is a matter concerning the administration of the estate, justifying bankruptcy juris- diction. 28 U.S.C. § 157(b) (2) (A) (1988). The instant dispute involves the effect of the collective bargaining agreement on a contract entered into post- petition. ‘“Post-petition contracts with the debtor-in- possession , . . are integral to the estate administraiion from the date they are entered into.” In re Ben Cooper, supra, 896 F.2d at 1399. Although this dispute involves 20a an alleged breach of the collective bargaining agreement, rather than an alleged breach of the post-petition con- tract, the ramifications of the dispute on the administra- tion of the estate are of sufficient importance to justify bankruptcy court jurisdiction. F.g., Elsinore Shore Assocs. V. Local 54 Hotel Employees, 820 F.2d 62, 66 (3 Cir. 1987) (determination of whether underlying cause of strike was arbitrable justifying Boys Market injunction against strike was matter concerning admin- istration of the estate); /nternational Ass’n of Machin- ists and Aerospace Workers v. Eastern Air Lines, Inc., No. 90 Civ. 1204, slip op. at 3-4 (S.D.N.Y. Nov. 7, 1990) (labor dispute involving union’s conduct during strike was matter concerning the adminisration of the estate). We are aware that Congress has expressbed an intent that district courts, rather than bankruptcy courts, hear disputes that involve “consideration of both title 11 and other laws of the United States regulating organizations or activities affecting interstate commerce.” 28 U.S.C. §$157(d) (1988). Our holding is net inconsistent with congressional intent as expressed in that provision, which provides for mandatory withdrawal of such cases from the bankruptcy court to the district court. It has been construed narrowly. “Withdrawal under 28 U.S.C. $157(d) is not available merely whenever non-Bank- ruptey Code federal statutes will be considered in the Bankruptcy Court proceeding, but is reserved for cases where substantial and material consideration of non- Bankruptcy Code federal statutes is necessary for the resolution of the proceeding.” Jn re Ionosphere Clubs, Inc, 103 B.R. 416, 418-19 (S.D.N.Y. 1989) (footnote omitted) ; see also In re White Motor Corp., 42 B.R. 693, 700 (N.D. Ohio-1984) (“‘[t]he district court should. . . not allow a party to use this provision to require with- drawal where such laws are not material to resolution of the proceeding’” (quoting legislative history) ). Eastern’s rights in this dispute are governed by Flor- ida East Coast, supra. In that case, the Court held that, een ese 2la during a strike, a carrier could make unilateral changes in a collective bargaining agreement without complying with the terms of the RLA that were reasonably neces- sary to its continued operation. Florida East Coast, supra, 384 U.S. at 246-48. Application of that doctrine does not require the bankruptcy court to engage itself in the intricacies of the RLA. Resolution of the dispute in the instant case, therefore, does not demand substantial consideration of the RLA, but, rather “involves the rou- tine application of [a] non-Bankruptcy Code federal statute|].” Zn re lonosphere Clubs, supra, 103 B.R. at 420. We hold that the bankruptcy court had jurisdiction to resolve the issues presented by the Florida action. VI. We turn next to the propriety of the bankruptcy court’s exercise of its powers under § 105 to enjoin ALPA from prosecuting the wet-lease action. Eastern contends that the district court erred in holding that the bankruptcy court was precluded by § 1113(f) from issu- ing an injunction against prosecution of the Florida law- suit. We agree. Section 105(a) of the Bankruptcy Code provides that: “The court may issue any order, process or judgment that is necessary or appropriate to carry out the provi- sions of this title.” This power “must and can only be exercised within the confines of the Bankruptcy Code.” Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988); see also In re Johns-Manville Corp., 801 F.2d 60, 63 (2 Cir. 1986) (“Section 105(a) . . . does not broaden the bankruptcy court’s jurisdiction”). The bankruptey court’s equitable powers cannot be exercised in derogation of other sections of the Bankruptcy Code. In re Morristown & Erie R.R. Co., 885 F.2d 98, 100 (3-Cir. 1989); In re NWFX, Inc., 864 F.2d 593, 595 (8 Cir. 1989). The district court reasoned that an injune- 22a tion issued to bar enforcement of a collective bargaining agreement outside the bankruptcy court would violate § 1113. It followed, from the district court’s analysis, that the bankruptcy court’s equitable powers could not be used to that end. In re Ionosphere Clubs, supra, 114 B.R. at 404-05. Since § 105, like § 362, is a means by which the bank- ruptey court can protect its jurisdiction, Jn re Chateau- gay Corp., supra, 109 B.R. at 621, we hold that its application is not always inconsistent with § 1113. We hold that the bankruptcy court’s exercise of its equitable powers pursuant to § 105 to enjoin enforcement of a collective bargaining agreement is subject to the same considerations set forth above for the application of § 362. VIL. ALPA contends that the Norris-LaGuardia Act pro- hibited the bankruptcy court from enjoining the Florida action and raises several issues concerning the merits of the wet-lease decision. The district court did not reach these issues since it decided that application of the auto- matic stay violated §1113(f). In light of our contrary holding, we remand the case to the district court for consideration of ALPA’s claims. VIII. To summarize: We hold that application of the automatic stay provi- sions of § 362 of the Bankruptcy Code is precluded by §1113(f) only to the extent that they permit a debtor unilaterally to terminate or alter a collective bargaining agreement. With respect to the LPP decision, we hold that application of the automatic stay to the arbitration brought pursuant to the collective bargaining agreement violated § 1113(f}-since it allowed Eastern unilaterally to avoid its obligation to arbitrate. We hold that the hankruptcy court may stay a non-bankruptcy judicial 23a proceeding to enforce a collective bargaining agreement if the union can bring the dispute before the bankruptcy court and the bankruptcy court has jurisdiction to re- solve it. With respect to the wet-lease decision, we hold that the bankruptcy court had jurisdiction to resolve the issues raised by the Florida action and, therefore, the stay of that action was not precluded by § 1113/f). Finally, we hold that section 1113(f) did not prohibit the bankruptcy court from issuing an injunction against prosecution of the Florida action. We remand the case to the district court for further consideration of the wet- lease decision. Affirmed in part, reversed in part and remanded. MINER, Circuit Judge, concurring in part and dissenting in part: I agree with my colleagues insofar as they conclude that application of the automatic stay provided by § 362 of the Bankruptcy Code to the arbitration of the labor protective provisions of the collective bargaining agree- ment is violative of $1113(f) of the Code. I respect- fully disagree with my colleagues insofar as they con- clude that $1113(f) does not bar an automatic stay of the Florida action, the injunction issued by the Bank- ruptecy Court against further prosecution of that action, and the Bankruptcy Court’s resolution of the wet-leasing dispute. Section 1 of the Collective Bargaining Agreement be- tween Eastern and ALPA provides: that all present or future flying including flight training (‘except for initial factory-conducted train- ing in newly purchased equipment), revenue flying, ferry flights, charters and wet-leases performed in or for the service of Eastern Air Lines, Inc., shall 24a be performed by pilots whose names appear on the then-current Eastern Air Lines’ System Seniority List. + In apparent violation of the foregoing provision, East- ern entered into wet-leasing agreements whereby it leased aircraft with crews from Continental while East- ern pilots were on strike. As a debtor in a Chapter 11 reorganization, however, Eastern may not “unilaterally . alter any provisions of a collective bargaining agree- ment” prior to court approval in the manner specified by £ 1113 of the Code. 11 U.S.C. § 1113(f). Rather than first seeking the requisite court approval authorizing rejection of the collective bargaining agree- ment upon a showing that modifications in the agree- ment “are necessary to permit the reorganization of the debtor,” 11 U.S.C. § 1113(b) (1) (A), Eastern proceeded to lease aircraft and crews for its normal business opera- tions. Eastern made no effort to negotiate with ALPA before making its arrangements with Continental. As a consequence, ALPA sought in the district court in Flor- ida to compel expedited arbitration of its wet-leasing grievance, to procure the issuance of an injunction in aid of arbitration and to obtain other relief as well. Arbitration of the wet-leasing grievance is required by the labor agreement, which also requires arbitration of the labor protective provisions issue and of any other dispute that may arise out of the performance or non- performance of the agreement. My colleagues “hold that application of the automatic stay to the arbitration brought pursuant to the collective bargaining agreement violated § 1113(f) since it allowed Eastern unilaterally to avoid the obligation to arbitrate.” In their opinion, this holding serves only to bar the application of the stay to the labor protective provi- sions arbitration proceeding. To the extent that § 1113(f) is implicated, however, it seems to me that there is no difference between rejecting the automatic stay as a bar 25a to that arbitration proceeding and rejecting it as a bar to an action to compel arbitration of the wet-leasing issue. See In re Marine Pollution Serv., Inc., 88 Bankr. 588 (S.D.N.Y. 1988). In holding the automatic stay of § 362 applicable, and in enjoining further prosecution in the Florida District Court under the authority of £105, the Bankruptcy Court proceeded to resolve the wet-lease issue by deter- mining that “[t|hese wet-leases were, and are, reason- ably necessary to Eastern’s efforts to rebuild its opera- tions.” In re lonosphere Clubs, Inc., 105 Bankr. 773, 775 (S.D.N.Y. 1989). The Bankruptcy Court also found that “|bly proceeding to enjoin Eastern from continu- ing with those [wet-lease] operations, ALPA would dis- rupt Eastern’s planned flight operations causing the es- tate to suffer irreparably by the substantial erosion of Eastern’s operations.” Jd. While these determinations may be taken as a finding that elimination of the wet- leasing prohibition is a modification “necessary to per- mit the reorganization of the debtor,” 11 U.S.C. § 1113 (b)(1)(A), there was no compliance with the statu- tory scheme for rejection of the collective bargaining agreement, and the Bankruptcy Court therefore was without jurisdiction to excuse violation of the wet- leasing prohibition clause. See generally Note, Nobody Likes Rejection Unless Yowre a Debtor in Chapter 11: Rejection of Collective Bargaining Agreements Under 11 U.S.C. § 1113, 34 N.Y.L. Sch. L. Rev. 169, 171-74 (1989). By obtaining its relief in the Bankruptcy Court in the context of an action to enforce an automatic stay, East- ern is able to avoid compliance with a carefully-drawn statute enacted by Congress to govern labor-manage- ment relations in a bankruptcy reorganization. As noted by my colleagues, the statute was designed to overcome the Supreme Court’s decision in National Labor Rela- tions Board v, Bildisco & Bildisco, 465 U.S. 513, 528-29 26a (1984), which allowed a debtor unilaterally to terminate or alter a collective bargaining agreement prior to seek- ing bankruptcy court approval under § 365(a) for re- jection of an executory contract. The statute specifically forbids termination in the manner permitted by Bildisco and promotes the long-established national labor policy of encouraging collective bargaining. See In re Century Brass Prods., Inc., 795 F.2d 265, 266, 272 (2d Cir.), cert. denied, 479 S. Ct. 949 (1986). astern simply cannot be relieved of its obligation to avoid wet-leasing unless it follows the step-by-step pro- cedure established by Congress. Since it contends that the modification in employee benefits and protection it seeks is necessary to permit its reorganization, it first must make a proposal to ALPA. 11 U.S.C. § 1113(b) (1) (A). Kastern must provide ALPA with information relevant to an evaluation of the proposal. /d. § 1113 (by (1)(B). It must hold meetings with ALPA in a good faith effort to reach a mutually satisfactory mo [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1836%3A1. Public record. Not legal advice.