Res Judicata Effect of Bankruptcy Court Judgments: The Procedural and Constitutional Concerns, The

Should a bankruptcy court's judgment bar further litigation of claims arising out of the series of events at issue in the bankruptcy proceeding based on the doctrine of res judicata? Or should res judicata apply only where the subsequent action would constitute a core,' as opposed to non-core, but related proceeding? These questions raise important procedural and constitutional issues about which the courts of appeals are currently split. In 1984, Congress responded to Northern Pipeline by enacting 28 U.S.C. § 157, which authorizes bankruptcy judges to hear all core proceedings arising under the bankruptcy code.

The 1984 Act provides that as to non-core proceedings, bankruptcy judges may hear such proceedings but that they may not enter a final order or judgment absent consent of the parties.8 Despite this, the distinction between core and none-core proceedings has generated a significant problem in the area of res judicata. As mentioned above, the courts of appeals are currently split over the question of whether a bankruptcy court's judgment bars further litigation of any claim that arises out of the series of events at issue in the bankruptcy proceeding, including non-core claims.