Free Letter - District Court of Delaware - Delaware

Case 1:07-cv-00065-JJF

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David L. Finger, Resident, Wilmington Office: One Commerce Center, 1201 Orange St., Suite 725 Wilmington, Delaware 19801-1155 Ph: (302) 884-6766 I Fax: (302) 984-1294 E-mail: [email protected] February 20, 2008 www.delawgroup.com

Via E-Filing and Hand Delivery The Honorable Joseph J. Farnan, Jr. United States District Court 844 N. King Street, Lockbox 27 Wilmington, DE 19801
Re:

Chriss W. Street v. The End of the Road Trust, and American Trailer Industries, Inc., C.A. No. 07-00065-JJF

Dear Judge Farnan: I respectfully write in accordance with Local Rule 7.1.3 to bring to the Court's attention subsequent authority bearing on the issues raised in Plaintiff s Motion for Remand and Defendants' Opposition thereto (collectively the "Remand Motion"). Briefing on the Renland Motion was concluded on May 10, 2007. Since then the Third Circuit has spoken on the issues raised in the Remand Motion and the United States District Court for the Central District of California has addressed those issues in the context of another case between the parties. In that regard, enclosed for the Court's consideration and as a supplemental exhibit to Defendants Memorandum in Opposition, please find a copy of the Third Circuit's opinion in In re Seven Fields Dev. Corp., 505 F.3d 237 (3rd Cir. 2007), and the Honorable Alicemarie H. Stotler's Memorandum Opinion and Order in Chriss Street v. Daniel Harrow, et al., C.A. No. 07-829 (AHS) (C.D. Ca. Nov. 29, 2007). With respect to Plaintiffs February 15, 2008 letter to this Court (D.I. 32), Defendants do not intend to respond to that letter, but Defendants' silence on the factual and legal allegations contained therein should in no way be deemed as Defendants' agreement with or acquiescence to those allegations. Defendants intend to address those assertions at the appropriate time. Counsel is available at the convenience of the Court to discuss this matter further. Respectfully,

cc:

Charlene D. Davis, Esq. (via CM/ECF and e-mail)

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Page 1

In re Seven Fields Development Corp. C.A.3 (Pa.),2007. United States Court of Appeals,Third Circuit. In re SEVEN FIELDS DEVELOPMENT CORPORATION, Debtor. Mary Geruschat; Dolores Speney; Antoinette Morocco; and Donna M. Buxton, Appellants v. Ernst Young LLP; Charles Modispacher. No. 06-3658. Argued June 28, 2007. Filed: Oct. 24, 2007. Background: Creditors filed state court action against accountants that had represented debtors in Chapter 11 case for their alleged malpractice. After removal, the Bankruptcy Court, Warren W. Bentz, J., 331 B.R. 208, denied investors' motion to remand and dismissed complaint. Investors appealed. The United States District Court for the Western District of Pennsylvania, Gary L. Lancaster, J., 346 B.R. 123, affirmed, and investors appealed. Holdings: The Court of Appeals, Greenberg, Circuit Judge, held that: (1) Court of Appeals lacked jurisdiction to review decision not to remand; (2) statute in effect at time creditors filed action governed issue of whether Court of Appeals had authority to review bankruptcy court's decision not to abstain; and (3) creditors' malpractice action was core proceeding. Affirmed. West Headnotes [1] Bankruptcy 51 51 Bankruptcy 2091

51I In General 51I(D) Venue; Personal Jurisdiction 51k2086 Transfer or Removal of Proceedings 51k2091 k. Remand to State Court. Most Cited Cases Bankruptcy court's decision not to remand case to state court on basis of defendant's filing of notice of removal with bankruptcy clerk and not district court clerk and defendant's failure to seek to reopen bankruptcy case before filing its notice of removal addressed proposed remand on equitable grounds, and thus Court of Appeals lacked jurisdiction to review decision. 28 U.S.C.A. § 1452(b). [2] Bankruptcy 51 3444.50(2)

51 Bankruptcy 51XI Liquidation, Distribution, and Closing 51k3444 Reopening 51k3444.50 Proceedings 51k3444.50(2) k. Standing; Sua Sponte Determinations. Most Cited Cases It is within bankruptcy judge's discretion to reopen bankruptcy case sua sponte so that matters that have significant connection with case's administration can be addressed. 11 U.S.C.A. §§ 105(a), 350. [3] Bankruptcy 51 2091

51 Bankruptcy 51I In General 51I(D) Venue; Personal Jurisdiction 51k2086 Transfer or Removal of Proceedings 51k2091 k. Remand to State Court. Most Cited Cases Decisions of bankruptcy and district courts not to remand case to state court on basis that bankruptcy court lacked jurisdiction and argument that bankruptcy court did not have authority to exercise final adjudicative authority, while not per se reviewable under statute prohibiting review of decisions not to remand, nevertheless were subject to appellate review to ensure that court did not exceed their constitutional and statutory authority. 28 U.S.C.A. §§ 157(c), 158(a), 1452(b).

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[4] Bankruptcy 51

3765

51 Bankruptcy 51XIX Review 51XIX(B) Review of Bankruptcy Court 51k3762 Jurisdiction 51k3765 k. Court of Appeals. Most Cited Cases Statute in effect at time creditors filed state court action against accountants that represented debtor in bankruptcy case, rather than statute in effect when bankruptcy petition was filed, governed issue of whether Court of Appeals had authority to review bankruptcy court's decision not to abstain. 28 U.S.C.A. § 1334. [5] Statutes 361 278.1

Cases Court of Appeals' review of district court's ruling in its capacity as appellate court is plenary, and it reviews bankruptcy judge's legal determinations de novo, and its factual findings for clear error and its exercise of discretion for abuse thereof. [7] Bankruptcy 51 3570

51k3785 Findings of Fact 51k3786 k. Clear Error. Most Cited

361 Statutes 361VI Construction and Operation 361VI(D) Retroactivity 361k278.1 k. In General. Most Cited Cases (Formerly 51k3789.1) Court is to apply law in effect at time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to contrary. [6] Bankruptcy 51 3782

51 Bankruptcy 51XIV Reorganization 51XIV(B) The Plan 51k3570 k. Execution and Performance. Most Cited Cases Creditors' malpractice action against accounting firm for misconduct during Chapter 11 case on which bankruptcy judge relied in confirming plan of reorganization, and in reliance on which bankruptcy court approved fees to firm, and on which creditors' representatives relied to their detriment in selling assets to pay their claims, in manner contravening reorganization plan's terms, arose in bankruptcy, and thus constituted core proceeding, even though creditors did not discover firm's malpractice until after plan of reorganization had been confirmed, where claims of professional negligence were based on services provided before confirmation, under supervision of, and subject to approval of, bankruptcy court. 28 U.S.C.A. § 157(b). [8] Bankruptcy 51 2043(1)

51 Bankruptcy 51XIX Review 51XIX(B) Review of Bankruptcy Court 51k3782 k. Conclusions of Law; De Novo Review. Most Cited Cases Bankruptcy 51 3784

51 Bankruptcy 51XIX Review 51XIX(B) Review of Bankruptcy Court 51k3784 k. Discretion. Most Cited Cases Bankruptcy 51 3786

51 Bankruptcy 51I In General 51I(C) Jurisdiction 51k2043 Core, Non-Core, or Related Proceedings in General; Nexus 51k2043(1) k. In General. Most Cited Cases Claims that "arise in" bankruptcy case are claims that by their nature, not their particular factual circumstance, could only arise in context of bankruptcy case. 28 U.S.C.A. § 157. [9] Bankruptcy 51 3570

51 Bankruptcy 51XIX Review 51XIX(B) Review of Bankruptcy Court

51 Bankruptcy 51XIV Reorganization

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51XIV(B) The Plan 51k3570 k. Execution and Performance. Most Cited Cases "Close nexus" test is applicable to bankruptcy court's "related to" jurisdiction over any claim or cause of action filed post-confirmation, regardless of when conduct giving rise to claim or cause of action occurred. 28 U.S.C.A. § 157(b). *238Vincent A. Coppola (argued), Pribanic & Pribanic, Pittsburgh, PA, for Appellants. William H. Schorling (argued), Samuel W. BraverStanley J. Parker, Christopher P. Schueller, Buchanan Ingersoll & Rooney, Pittsburgh, PA, for Appellees. *239 Before: SMITH and GREENBERG, Circuit Judges, and POLLAK, District Judge.FN* FN* The Honorable Louis H. Pollak, Senior Judge of the United States District Court for the Eastern District of Pennsylvania, sitting by designation. OPINION OF THE COURT GREENBERG, Circuit Judge. I. INTRODUCTION This matter comes on before the court on an appeal by Mary Geruschat, Dolores Speney, Antoinette Morocco, and Donna M. Buxton ("appellants") from the district court's memorandum order dated July 14, 2006, which adopted as its own and affirmed the bankruptcy court's opinion and order dated September 2, 2005, in which the bankruptcy court (1) asserted its jurisdiction to resolve a statelaw malpractice, negligence, and fraud suit that appellants, creditors in a consolidated Chapter 11 bankruptcy proceeding, brought in a state court against the accountants who performed work during the bankruptcy, Ernst & Young LLP and its employee, Charles Modispacher (together "Ernst & Young"), (2) refused to remand appellants' case to the state court from which Ernst & Young removed it, and (3) dismissed the complaint on its merits. This appeal, however, primarily is about jurisdiction, both our jurisdiction to review the bankruptcy and district courts' decisions not to abstain from exercising

jurisdiction and not to remand the matter to the state court, and, depending on the extent, if any, that we have jurisdiction to review those courts' decisions, whether the district court properly found that the bankruptcy court had subject matter jurisdiction and the final adjudicative authority to resolve the statelaw actions. As we will discuss in detail later, appellants initially filed their suit in a state court, but Ernst & Young removed the case to a federal court, i.e., a bankruptcy court. Appellants then sought an order remanding the case to the state court on the grounds that (a) there were procedural irregularities in the removal process, (b) the bankruptcy court did not have subject matter jurisdiction over the dispute, and (c) even if the bankruptcy court did have jurisdiction, it should have abstained permissively or was required to abstain mandatorily from exercising its jurisdiction. The bankruptcy court disagreed with appellants, exercised jurisdiction, and dismissed the case on its merits. On appellants' appeal, the district court affirmed the bankruptcy court's order and, though to a degree writing separately, adopted the bankruptcy court's opinion and order as its own. This appeal followed. But appellants challenge only the decisions regarding the procedural irregularities in the removal process, the bankruptcy court's finding that it had jurisdiction and final adjudicative authority, and its decision not to abstain from exercising that jurisdiction. Thus, we are not reviewing the disposition of the malpractice, negligence, and fraud dispute on the merits. Inasmuch as we conclude that we lack jurisdiction to review a substantial portion of the issues appellants raise on this appeal, and that the bankruptcy and district courts did not err in the rulings over which we have appellate jurisdiction, we will affirm the July 14, 2006 memorandum order of the district court and, accordingly, in effect, will affirm the bankruptcy court's opinion and order dated September 2, 2005. II. FACTS AND PROCEDURAL HISTORY The case has grown out of the activities of Earned Capital Corporation, Managed *240 Properties, Inc., Canterbury Village, Inc., and Eastern Arabian, Inc. (collectively "Debtors"), corporations engaged in developing real property. To raise capital, the Debtors sold investment shares in the property,

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and, in return, promised the investors an annual return. The Debtors' plan involved the development of 600 acres in the Borough of Seven Fields, Butler County, Pennsylvania, with townhouses and recreational facilities. Unfortunately for the Debtors, however, their plan did not go as expected. Thus, they became delinquent in making the payments they promised to the investors, leading the Debtors to oversell shares to maintain the promised payments. The Debtors could not continue this Ponzi-type scheme indefinitely, and, consequently, on June 3, 1986, they filed separate voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Western District of Pennsylvania. That court consolidated the Chapter 11 proceedings on June 5, 1986, in a case entitled In re Earned Capital Corporation, No. 86-21474. Prior to the time that the Debtors filed their bankruptcy petitions, they had employed the accounting firm of Arthur Young & Company (a predecessor of Ernst & Young) to review their financial records and prepare the financial schedules needed for the bankruptcy. On June 12, 1986, the bankruptcy court approved the appointment of Ernst & Young.FN1 Ernst & Young determined that the Debtors were insolvent and that they owed the vast majority of their obligations (totaling over $60,000,000) to the approximately 2,500 investors. An Official Committee of Unsecured Creditors ("Committee"), selected from among the investors, represented the investors in the bankruptcy case. The Committee and the Debtors filed competing plans of reorganization, both calling for consolidation of the Debtors' assets and liabilities into one surviving reorganized corporation. FN1. As a matter of convenience we will use the name Ernst & Young when referring to Arthur Young & Company. The bankruptcy court found the Debtors to be insolvent and confirmed an Amended Plan of Reorganization ("Amended Plan") on October 21, 1987. According to appellants, the court based this disposition on information that Ernst & Young provided the court and the Debtors' creditors. Under the Amended Plan, the Debtors were merged into a successor entity, Seven Fields Development

Corporation ("Seven Fields"), and their assets, the principal one of which was the Butler County real estate, became assets of Seven Fields. Under the Amended Plan, all of the secured and trade creditors' claims were to be paid in full or in accordance with agreements otherwise negotiated, but the investor class of unsecured creditors was to receive common stock in Seven Fields at a par value equal to 5% of their allowed claims with the remaining 95% classified as unsecured, nondischargeable debt. Under the Amended Plan, "[a]ll activities of [Seven Fields] shall seek to achieve the goal of full payment to [the investors/stockholders]," app. at 33, and assets were to "be managed, improved, developed and sold, etc. where appropriate, to the end that all creditors will eventually achieve maximum returns,"id. at 22. The investors voted overwhelmingly in favor of the plan, 2,179 to 87, on an individual basis, and, in claims terms, $62,639,067 to $13,758,972. After confirmation, Seven Fields liquidated its assets, substantially through the sale of the Butler County real estate, and made distributions to the investors. Seven *241 Fields, however, did not pay the allowed claims of the investors in full through this liquidation. On September 29, 2004, appellants, on behalf of themselves and others similarly situated as shareholders of Seven Fields, filed a complaint against Ernst & Young in the Court of Common Pleas of Butler County, alleging professional negligence (Count I), fraud and deceit (Count II), and negligent misrepresentation (Count III). Because, as will be seen, the precise allegations in the complaint are significant in determining a central issue on appeal, i.e., the jurisdiction of the bankruptcy court over appellants' state-law causes of action, we recite the relevant allegations verbatim: 2. Prior to the formation of Seven Fields ..., the predecessor entities were involved in a bankruptcy in which [Ernst & Young] acted as accountants and performed services on behalf of, inter alia, the [appellants] and other members of the class-during and after the bankruptcy. 3. As a result of the work performed by [Ernst & Young], all of the predecessor entities were represented by [Ernst & Young] to be insolvent, the predecessor entities were consolidated and a successor corporation, Seven Fields ..., acceded to ownership of the assets of the predecessor entities which included a substantial tract of land in Butler County, Pennsylvania. 4. In addition to declaring the predecessor

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entities insolvent, [Ernst & Young] advised the United States Bankruptcy Court, the [appellant] class and others, that even after the reorganization and bankruptcy and in spite of the fact that Seven Fields ... owned a substantial tract of land in Butler County, Pennsylvania, [Ernst & Young] represented to the [appellant] class members and others that the new company had a debt of about $280 million to the group of investors. 5. The foregoing had been represented previously and throughout the bankruptcy by [Ernst & Young] to the United States Bankruptcy Court, the investor class and others. 6. [Appellants] and the remaining class members had all invested varying sums of money in one or more of the predecessor entities including Earned Capital, Inc. and upon being advised by [Ernst & Young] that the company was $280 million in debt, [appellants] and the remaining class members were horrified in that [Ernst & Young], in effect, represented that [appellants] and the remaining class members had either lost all of their money or were going to lose a substantial portion of the money. 7. As a result of the advice received by [FN2] [Ernst & Young], an effort to develop the property and other assets was made which included sales of assets at prices below their market value and a general development scheme was put together by the successor corporation and its officers, which instead of emphasizing the highest use of the properties to which the new corporation had title, was instead calculated to generate cash as quickly as possible in an effort to both `repay' [appellants] and other class members `their loss' and in a further effort to reassure [appellants] and other class members that some money would be returned. FN2. The complaint uses the words "received by" but we believe that appellants intended to mean "given by" or "received from." *242 8. As a result of the state of mind and perception on the part of the new corporation, [appellants] and other class members, the property was developed and/or sold in a manner which caused all of the investors to suffer losses on the investment previously made and to fail to realize even a return of the full amount of their investment. App. at 43-44.

On November 5, 2004, Ernst & Young filed a notice of removal of the Butler County case with the clerk of the bankruptcy court, removing the case to the United States Bankruptcy Court for the Western District of Pennsylvania under Rule 9027(a) of the Federal Rules of Bankruptcy Procedure and 28 U.S.C. §§ 1452 and 1334. Then, Ernst & Young filed a motion to dismiss appellants' complaint on November 11, 2004, arguing that even though their claims "are in the nature of a shareholder derivative suit," appellants failed to assert the claims on behalf of Seven Fields and had not made any demand on Seven Fields as required under Federal Rule of Civil Procedure 23.1. App. at 56-57. Additionally, Ernst & Young argued that the doctrines of res judicata, collateral estoppel, and judicial estoppel required dismissal of the complaint because the claims "necessarily require [the court] to disturb a valid, final and binding reorganization plan and confirmation order, as well as [the court's] order approving [its] fees." Id. at 57.FN3 FN3. Ernst & Young raised other defenses that we need not describe. Appellants responded with a motion requesting that the bankruptcy court remand the case to the Butler County Court of Common Pleas pursuant to 28 U.S.C. § 1452(b) and Federal Rule of Bankruptcy 9027(d), or, in the alternative, abstain from exercising jurisdiction under 28 U.S.C. §§ 1334(c)(1) and (c)(2). In this motion, appellants argued that the notice of removal was procedurally deficient in that Ernst & Young erroneously filed it with the clerk of the bankruptcy court and not the clerk of the district court, and that the bankruptcy court did not have subject matter jurisdiction. Appellants, in the alternative, also asserted that if the bankruptcy court did have jurisdiction, it should have abstained permissively or was required to abstain mandatorily from exercising its jurisdiction over the state-law causes of action. Moreover, appellants filed a "Motion to Strike Defendants' Notice of Removal," arguing that Ernst & Young was not permitted to remove the state-court case as the underlying bankruptcy case on which removal was predicated had been marked "closed" and Ernst & Young did not move to reopen the case before filing the notice of removal. On September 2, 2005, the bankruptcy court

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issued an opinion and order in which it sua sponte reopened the underlying bankruptcy case and denied appellants' motions to remand and strike the notice of removal, thus asserting its subject matter jurisdiction to rule on the merits of the case. In re Earned Capital Corp., 331 B.R. 208 (Bankr.W.D.Pa.2005). On the merits, the bankruptcy court granted Ernst & Young's motion to dismiss for failure to state a claim because "[appellants'] claims are shareholder derivative claims that can only be presented by [appellants] through a shareholder derivative suit," and appellants failed to make a demand on "the board of directors or comparable authority" under Federal Rule of Civil Procedure 23.1 for them to bring the action against Ernst & Young. Id. at 222-24. The court also found that it should dismiss the complaint on the grounds of res judicata, collateral estoppel, and judicial estoppel inasmuch as the bankruptcy *243 court already had declared the Debtors insolvent in the confirmation proceedings and had awarded fees to Ernst & Younglitigation in which the Committee, which represented the interests of the investors, fully participated. Id. at 224-28. Appellants appealed from the opinion and order of the bankruptcy court to the district court under 28 U.S.C. § 158(a), which, in turn, on July 14, 2006, affirmed the order of the bankruptcy court and adopted the bankruptcy court's opinion and order as its own. Geruschat v. Ernst & Young LLP, 346 B.R. 123 (W.D.Pa.2006). On August 7, 2006, appellants timely filed a notice of appeal, contesting the district court's affirmance of the bankruptcy court's order (1) granting Ernst & Young's motion to dismiss their case, (2) denying appellants' motion to strike Ernst & Young's notice of removal, (3) denying appellants' motion to remand the case to the state court, and (4) reopening the underlying bankruptcy case. However, when we examined appellants' brief, we observed that it was devoid of any discussion relating to the merits of the case insofar as the district court affirmed the bankruptcy court's opinion and order granting Ernst & Young's motion to dismiss. It thus appeared that between the time appellants filed their notice of appeal and the time that they filed their brief, they decided not to appeal the bankruptcy and district courts' disposition of the case on the merits and, instead, challenged only the resolution of jurisdictional issues in the bankruptcy proceedings. At oral argument, appellants confirmed that they had made a deliberate decision to forego their appeal insofar as it relates to the merits of the dispute.

Accordingly, the only issues appellants raise before us relate to removal procedure, subject matter jurisdiction, the bankruptcy court's adjudicative authority over the state-law claims, and abstention. In particular, appellants present the issues before us as follows: 1. Does a bankruptcy court have subject matter jurisdiction to adjudicate a case removed from state court where the underlying bankruptcy case on which removal is predicated was closed many years before removal and where the removing party did not seek to open the earlier bankruptcy case for cause pursuant to 11 U.S.C. § 350(b) prior to removal of the state court case? 2. May a party within this Circuit remove a case directly to the bankruptcy court under 28 U.S.C. § 1452(a) without a prior referral from the district court? 3. Did the requisite `close nexus' exist under Resorts Int'l, Inc. Litig. Trust v. Price Waterhouse [, 372 F.3d 154 (3d Cir.2004),] to confer subject matter jurisdiction in the district court over [appellants'] state law claims where such claims affected neither the bankruptcy estate nor the debtor, and where success on the merits of such claims would have no impact on the property of the estate or distribution to any creditor? 4. Did [appellants'] state law malpractice action constitute a `non-core' proceeding under 28 U.S.C. § 157 thus depriving the bankruptcy court of original jurisdiction to enter final orders and further requiring the district court to abstain from jurisdiction under 28 U.S.C. § 1334(c)(2)? 5. Did the bankruptcy court commit clear error of law when it assumed that the status of [appellants'] complaint as a `core proceeding' was dispositive of the issue of discretionary abstention under § 1334(c)(1)? Appellants' br. at 2. We have divided those issues into three categories: (1) removal *244 procedure errors (issues 1 and 2); (2) jurisdiction (issues 3 and 4); and (3) abstention (issues 4 and 5). III. JURISDICTION AND STANDARD OF REVIEW Appellants' central issue in this case implicates the question of whether the bankruptcy court had jurisdiction under 28 U.S.C. §§ 157 and 1334. There is no question that the district court had jurisdiction

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over the appeal of the bankruptcy court's September 2, 2005 opinion and order under 28 U.S.C. § 158(a). But before we reach the question of whether the bankruptcy court had jurisdiction and the other issues appellants raise, we first must ensure that we have jurisdiction to review this case under 28 U.S.C. §§ 1291 and 158(d). See Emerald Investors Trust v. Gaunt Parsippany Partners, 492 F.3d 192, 193-94 (3d Cir.2007) ("As always, after we are satisfied of our own jurisdiction, the threshold, and, indeed, as it turns out, the only issue on this appeal is whether the district court had subject matter jurisdiction.") (footnote omitted). The parties initially did not question our jurisdiction.FN4 Prior to argument, however, we observed that there might be a problem with respect to our jurisdiction. Thus, at our direction, our clerk sent a notice to the parties requesting that they "be prepared to briefly discuss whether 28 U.S.C. § 1334(d) precludes us from reviewing both the Bankruptcy Court's decision to abstain under § 1334(c)(1) and the District Court's affirmance of this decision, because discretionary abstention does not appear to be subject to appeal pursuant to § 1334(d)." FN5 At oral argument, we expressed an additional concern with respect to our jurisdiction to review certain aspects of the case under 28 U.S.C. § 1452(b), the bankruptcy removal statute, which bars a court of appeals' review of decisions to remand or not to remand made on the basis of "any equitable ground." Accordingly, we asked the parties to submit supplemental memoranda addressing jurisdictional issues. Having given the parties an opportunity to address the questions relating to our jurisdiction, and having received those memoranda and heard their oral arguments, the issues with respect to our jurisdiction are now ripe for our disposition. FN4. In appellants' opening brief they limit their discussion of our jurisdiction to the following sentence: "The United States Court of Appeals for the Third Circuit currently has jurisdiction over this matter pursuant to 28 U.S.C. § 1291 as an appeal from a final decision and order of the district court." Appellants' br. at 1. In Ernst & Young's brief it does not mention our jurisdiction, thus implying that it initially agreed with appellants on this point. Nevertheless, we have a "special obligation

to satisfy [ourselves] of [our] own jurisdiction" even if the parties agree that we have jurisdiction. Korytnyuk v. Ashcroft, 396 F.3d 272, 279-80 (3d Cir.2005). As will be seen, an inquiry into our jurisdiction is more complicated than the parties apparently originally believed. FN5. Unfortunately our letter was exactly wrong because the bankruptcy court did not abstain. As it happens we are confident that the attorneys realized that we had erred and were not misled. The essence of this appeal is that the bankruptcy or district court should have remanded the case to the state court because (1) Ernst & Young's notice of removal was procedurally defective, (2) the federal courts lacked subject matter jurisdiction over the state-law causes of action, (3) the bankruptcy court lacked final adjudicative authority, and (4) the federal courts should have abstained permissively or were required to abstain mandatorily *245 from asserting their jurisdiction.FN6 There are three statutory provisions potentially affecting our jurisdiction to review the orders in which the bankruptcy and district courts declined to remand the case, assumed jurisdiction, and did not abstain from asserting jurisdiction: 28 U.S.C. § 1447(d) (general removal/remand); 28 U.S.C. § 1452(b) (bankruptcy removal/remand); and 28 U.S.C. § 1334(c) and (d) (bankruptcy abstention and limitation of appeals of orders with respect to abstention). FN6. It is possible that we could grant relief to appellants without ordering that the bankruptcy and district courts remand the case to the state court but inasmuch as we do not find that they erred in any respect we need not set forth what that possible relief might be. Section 1447(d) is the general statutory provision governing the reviewability of orders remanding cases removed from state courts. Section 1447(d) states "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise [except in certain civil rights cases]." Though the Supreme Court has concluded that section 1447(d) applies regardless of whether a party has removed a case pursuant to the general

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removal provision, 28 U.S.C. § 1441(a), or the bankruptcy removal provision, 28 U.S.C. § 1452, see Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 128, 116 S.Ct. 494, 497, 133 L.Ed.2d 461 (1995), section 1447(d) is inapplicable here as in this case we are not dealing with an order remanding the case. After all, the bankruptcy court denied appellants' motions seeking to remand the case and the district court affirmed the denial. See City & County of San Francisco v. PG & E Corp., 433 F.3d 1115, 1122 (9th Cir.) (holding that section 1447(d) does not apply to decisions not to remand a case), cert. denied,--- U.S. ----, 127 S.Ct. 208, 166 L.Ed.2d 144 (2006); In re Bissonnet Invs. LLC, 320 F.3d 520, 525 (5th Cir.2003) (same). Indeed, we regularly entertain appeals following final judgments in which appellants contend that the district court erred in denying a motion to remand. In contrast, under the removal statute applicable specifically to bankruptcy cases, [t]he court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order entered under this subsection remanding a claim or cause of action, or a decision to not remand, is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title. 28 U.S.C. § 1452(b) (emphasis added). Thus, section 1452(b), in addition to barring review of decisions to remand, precludes appellate review of decisions "to not remand," the type of order involved in this case. But section 1452(b) makes clear that a decision to remand or not to remand a case is unreviewable by a court of appeals only when the district court relies on "any equitable ground" as the basis for its decision. While the statute does not define "equitable ground," we have recognized that "equitable" as used in section 1452(b) is not to be understood as distinguishing equitable from legal grounds in a traditional sense, but, instead, "equitable" "signals that which is reasonable, fair, or appropriate." Allied Signal Recovery Trust v. Allied Signal, Inc., 298 F.3d 263, 268 (3d Cir.2002) (quoting Things Remembered, 516 U.S. at 133, 116 S.Ct. at 499 (Ginsburg, J., concurring)).

Accordingly, we first must decide which, if any, of the categories of issues appellants*246 raise contesting the bankruptcy and district courts' decisions not to remand the state-law causes of action are insulated from appellate review by section 1452(b). Additionally, we also must determine whether 28 U.S.C. § 1334, the bankruptcy abstention provision, insulates from our review the decisions relating to abstention. A. Removal Procedure Errors We have no doubt that the bankruptcy court's "decision to not remand" the case in the face of appellants' procedural arguments that Ernst & Young did not seek to reopen the bankruptcy case before filing its notice of removal and that Ernst & Young improperly filed the notice of removal directly with the bankruptcy clerk was based on the bankruptcy court's determination that there were not "equitable ground[s]," i.e., "reasonable, fair, or appropriate" grounds, for the remand, a decision that we cannot review. The Supreme Court in Things Remembered faced very similar circumstances. In that case, the issue was "whether a federal court of appeals may review a district court order remanding a bankruptcy court case to state court on grounds of untimely removal." Things Remembered, 516 U.S. at 125, 116 S.Ct. at 496. The Court decided that the general statutory provision governing the reviewability of remand orders, 28 U.S.C. § 1447(d), barred appellate review of the remand order.FN7See Things Remembered, 516 U.S. at 127-28, 116 S.Ct. at 49697. While the majority opinion did not discuss the possibility that the bankruptcy remand provision of section 1452(b) similarly would bar review, Justice Ginsburg in her concurring opinion, joined by Justice Stevens, concluded that section 1452(b) independently would bar review of the order remanding the case by reason of untimely removal, finding that the basis for remand was on an "equitable ground." Id. at 131-34, 116 S.Ct. at 498500 (Ginsburg, J., concurring). FN7. As we discussed above, section 1447(d) is inapplicable here as it only bars review of orders to remand, not orders not to remand. [1] Surely, if a remand based on untimely

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removal is predicated on an "equitable ground," the decision not to remand based on the procedural defects raised here also addresses a proposed remand on equitable grounds, and thus we are precluded from reviewing it. We recognize that the issue in Things Remembered was whether a decision to remand was unreviewable and the issue here is whether a decision not to remand is unreviewable, and, although we can distinguish the cases on that basis, this difference is not material here as bankruptcy remand section 1452(b) tells us that appellate courts should treat decisions to remand or not remand alike in ascertaining their own jurisdiction. Appellants do not specifically discuss in their supplemental memorandum whether we are barred from reviewing the issue raised relating to Ernst & Young's filing of the notice of removal with the bankruptcy clerk and not the district court clerk. Nevertheless, we are treating appellants' discussion relating to our obligation to review their challenges to the bankruptcy court's subject matter jurisdiction as incorporating this aspect of their appeal. However, we do not categorize this filing issue as relating to the bankruptcy court's subject matter jurisdiction, a holding that would be very significant with respect to our jurisdiction for, as we next discuss, section 1452(b) does not preclude a court of appeals from reviewing a challenge to a bankruptcy or district court's subject matter jurisdiction. Rather, Ernst & Young's error, if there was an error, was merely an *247 error relating to removal procedure in the nature of a "claim-processing" issue as the Supreme Court used that term in Bowles v. Russell, --- U.S. ----, 127 S.Ct. 2360, 2364, 168 L.Ed.2d 96 (2007). It had nothing to do with the "delineat[ion of] the classes of cases (subject matter jurisdiction) ... falling within a court's adjudicatory authority." Kontrick v. Ryan, 540 U.S. 443, 455, 124 S.Ct. 906, 915, 157 L.Ed.2d 867 (2004). Thus, section 1452(b) precludes us from reviewing the alleged procedural error here.FN8 FN8. In any event, even if we had jurisdiction to consider the question of whether Ernst & Young filed the notice of removal with the appropriate clerk, appellants' argument would fail. Federal Rule of Bankruptcy Procedure 9027(a)(1) permits the filing of a notice of removal with the "clerk," a term that Rule 9001(3) defines as "bankruptcy clerk," and 28 U.S.C. §

1452(a) permits removal to the "district court," an entity of which the bankruptcy court is a unit. 28 U.S.C. § 151; see In re Gianakas, 56 B.R. 747, 750 (N.D.Ill.1985). We also point out that the Western District of Pennsylvania has a general order referring all bankruptcy cases and proceedings filed in the district to the bankruptcy judges. See Order of Reference of Bankruptcy Cases and Proceedings Nunc Pro Tunc (Oct. 16, 1984), available at http:// www. pawb. uscourts. gov/ pdfs/ OrderOfReference.pdf. Moreover, even if we concluded that the notice of removal should have been filed with the district court and that the filing error compels us to reverse, our ruling would be meaningless. In this regard we take note of 28 U.S.C. § 1631 which provides that when a civil action is filed with a district court (of which the bankruptcy court is a unit) with a want of jurisdiction the court shall in the interest of justice transfer the case to a court in which it could have been filed originally. Thus, if the bankruptcy clerk thought that the removal should have been to the district court, he almost certainly would have sent the removal notice to that court which then would have referred it back to the bankruptcy court pursuant to the general referral order. Accordingly, if we reversed on the filing point, vacated the bankruptcy and district courts' orders, and remanded the matter to the bankruptcy court to enter an order not inconsistent with our opinion, we do not doubt that rather than dismissing the case, the bankruptcy court would transfer it to the district court which then would refer it back to the bankruptcy court following which all the vacated orders of the bankruptcy court, and, if appellants again appealed, the district court's memorandum order of July 14, 2006, would be reinstated. [2] Appellants argue that section 1452(b) does not bar our review of issues attributable to Ernst & Young's failure to seek to reopen the bankruptcy case before filing its notice of removal, as they raised the issue with the bankruptcy judge "in a motion to strike defendant's notice of removal, and not by means of a motion to remand." Appellants' Suppl. Mem. at 2. We do not find this argument to be substantial. Inasmuch as section 1452 precludes our review of

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"decision[s] to not remand," we look to the substance of the bankruptcy court's decision and not the form of the party's motion in determining the applicability of section 1452.FN9 It is clear that the bankruptcy court's decision *248 in which it denied "Plaintiffs' Motion to Strike Defendants' Notice of Removal," and the district court's affirmance thereof, are "decision[s] to not remand" inasmuch as they deny appellants' request to remand the matter to the state court because of the alleged procedural defect. We add that appellants themselves acknowledge this point for they requested in their proposed order attached to their motion that the court order recite that "Defendants' Notice of Removal is hereby stricken, and this case is remanded to the Court of Common Pleas of Butler County, Pennsylvania." App. at 145.FN10 FN9. It is obvious why we look to the substance of the court's order and not the party's captioning of its motion in determining the applicability of section 1452. If we were to look at the form of the party's motion, we would encourage attempts to circumvent the broad bar precluding our review of remand orders under section 1452. This case provides a great example. Appellants caption their motion as a "Motion to Strike Defendants' Notice of Removal." However, ordinarily when a party files a motion to strike under the Federal Rules of Civil Procedure it files the motion under Federal Rule of Civil Procedure 12(f), which permits a party to seek to have "stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent or scandalous matter." But appellants did not file their motion to strike for any such purpose. In the circumstances the appropriate motion here would have been a "motion to remand" under 28 U.S.C. § 1447(c), which provides for "[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction," or a motion under 28 U.S.C. § 1452, which provides for remand of removed claims relating to bankruptcy cases on "any equitable ground." We also point out that we are not aware of any rule or other authority authorizing a motion to strike a notice of removal, though we are aware that parties sometimes characterize

motions seeking certain relief other than those under Rule 12(f) as motions to strike. FN10. Although we do not have jurisdiction to review this issue, we point out that it was within the bankruptcy judge's discretion to reopen the bankruptcy case sua sponte so that "matters that have a significant connection with the administration of the case can be addressed." Earned Capital, 331 B.R. at 217;see11 U.S.C. § 350 (providing for the reopening of a bankruptcy case "for other cause"); 11 U.S.C. § 105(a) (permitting court to act sua sponte); Donaldson v. Bernstein, 104 F.3d 547, 55152 (3d Cir.1997) (rejecting contention that the bankruptcy court lacked jurisdiction on the ground that it was acting in a closed case when the court sua sponte reopened the case "for other cause"). B. Bankruptcy Court Jurisdiction and Adjudicative Authority [3] We agree with appellants that the decisions of the bankruptcy and district courts not to remand the case on the basis that the bankruptcy court lacked jurisdiction and their argument that the bankruptcy court did not have the authority to exercise final adjudicative authority, while "not per se reviewable" under section 1452(b), nevertheless are subject to appellate review. See Things Remembered, 516 U.S. at 132 n. 1, 116 S.Ct. at 499 n. 1 (Ginsburg, J., concurring); see also City & County of San Francisco, 433 F.3d at 1121 ("This is a question of subject matter jurisdiction that does not implicate the jurisdictional limitations of section 1452(b)."); In re V & M Mgmt., Inc., 321 F.3d 6, 7 (1st Cir.2003) ("Because [appellant's] argument attacks the lower court's subject matter jurisdiction, we not only have jurisdiction to review but are obligated to do so."); Owens-Ill., Inc. v. Rapid Am. Corp. (In re Celotex Corp.), 124 F.3d 619, 625 (4th Cir.1997) ( "[W]e hold that § 1452(b)... does not preclude us from reviewing the district court's decision denying [the] motion to remand to the extent that [the] motion rested on the district court allegedly lacking subject matter jurisdiction."). We reach our conclusion because courts of appeals on appeals from bankruptcy and district courts must ensure that those courts do not exceed the authority that Article III of

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the Constitution and Congress has granted them. Section 1452 cannot detract from this obligation and we are of the view that a bankruptcy judge absent consent of the parties does not have jurisdiction to enter a final order in a non-core matter. 28 U.S.C. § 157(c). Of course, there is no question that the district court had jurisdiction to entertain the appeal from the bankruptcy court. See28 U.S.C. § 158(a). C. Abstention The question of whether we have jurisdiction to review the district court's affirmance of the bankruptcy court's decision not to abstain under 28 U.S.C. § 1334(c)(2) (mandatory abstention) and *249section 1334(c)(1) (permissive abstention) is a two-step process. First, we must decide which version of section 1334 we are to apply in this case. This selection is significant as Congress adopted amendments to section 1334 altering courts of appeals' jurisdiction in 1984 ("the 1984 Amendments"), 1990 ("the 1990 Amendments"), and 1994 ("the 1994 Amendments"). Congress enacted the current version of section 1334 in the 1994 Amendments, though it further amended section 1334 in technical non-substantive respects in 2005.FN11 Second, once we decide which version of section 1334 applies, we must construe the statute to determine the extent of and limitations on a court of appeals' jurisdiction over abstention decisions. FN11. The 2005 Amendments in Pub.L. 109-8, § 1219, struck out "made under this subsection" and inserted "made under subsection (c)" and substituted "Subsection (c) and this subsection" for "This subsection" in the last sentence of section 1334(d) dealing with stays. But we are satisfied that the 2005 Amendments did not make substantive changes in section 1334 material here. Under the current version of section 1334(d), [a]ny decision to abstain or not to abstain made under subsection (c) (other than a decision not to abstain in a proceeding described in subsection (c)(2) [mandatory abstention] ) is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title.... Subsection (c) and this subsection shall not be construed to limit the applicability of the stay....

Thus, we have recognized that, as section 1334(d) now stands, "appeals of decisions not to exercise mandatory abstention pursuant to § 1334(c)(2) are explicitly permitted,"Stoe v. Flaherty, 436 F.3d 209, 212 (3d Cir.2006), yet appeals of decisions involving permissive abstention, whether or not the court abstains, are barred, see Allied Signal, 298 F.3d at 269. Moreover, under section 1334(d) a decision mandatorily abstaining is not appealable. Inasmuch as appellants appeal the denial of their motion for mandatory abstention, it might be thought that they would contend that the current version of section 1334 is applicable here. Yet they contend that section 1334(d) in its current form does not control this case, a position they predicate on the circumstance that the Debtors filed their bankruptcy petitions in 1986, well before Congress enacted the current version of section 1334 through the 1994 Amendments and even well before Congress enacted the 1990 Amendments. Appellants' Suppl. Mem. at 34. Actually it is understandable that they take this position as they argue that the bankruptcy court should have abstained both mandatorily and permissively, and currently, as we have indicated, appeals of orders denying permissive abstention unquestionably are not allowed. The appellants rely on the 1984 Amendments, i.e., the version the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. No. 98-353, 98 Stat. 333, enacted on July 10, 1984, because that version provided that "[a]ny decision to abstain made under this subsection is not reviewable by appeal or otherwise." See Christo v. Padgett, 223 F.3d 1324, 1331 (11th Cir.2000). But the 1984 Amendments did not limit appeals of decisions not to abstain. Accordingly, if we were to look to the 1984 Amendments for our rule of decision, the bankruptcy court's decision not to abstain mandatorily or permissively would be subject to our review and we could review all of appellants' abstention arguments. Ernst & Young, on the other hand, urges us to look to the version of *250section 1334(c)(2) enacted in the Judicial Improvements Act of 1990, Pub.L. No. 101-650, 104 Stat. 5089, 5113, i.e., the 1990 Amendments, which provided that "[a]ny decision to abstain or not to abstain under this subsection is not reviewable by appeal or otherwise by the court of

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appeals...." Appellees' Suppl. Mem. at 3-4. Ernst & Young contends that under the 1990 Amendments we are prohibited from reviewing decisions not to abstain either mandatorily or permissively. Id. at 4-5. Thus, appellants and Ernst & Young take polar opposite approaches with respect to our jurisdiction to hear the appeal with respect to abstention. [4] We have examined the question of which version of section 1334 is applicable, and have concluded that section 1334(d), as amended in 1994, and which, with the minor non-substantive 2005 Amendments, i.e., the current law, controls this case even though neither party contends that the 1994 Amendments are applicable. We reach this conclusion because Congress enacted the 1994 Amendments long before appellants initiated their action in the state court. FN12 FN12. Ernst & Young does contend that "alternatively" to the 1990 Amendments being applicable "the 1994 Amendments apply" to appellants' case, Appellees' Suppl. Memo at 9, and that under "both the 1990 and 1994 amended versions of 28 U.S.C. § 1334, [we are] without jurisdiction to review [the bankruptcy judge's] decision not to remand and not to abstain." Id. at 10. We understand, however, that Ernst & Young primarily relies on the version of section 1334 as amended by the 1990 Amendments. In considering whether the 1994 Amendments, and thus current law, are applicable we point out that Congress made it clear that the 1994 Amendments, with certain exceptions not relevant here, "shall not apply with respect to cases commenced under title 11 of the United States Code before the date of the enactment of this Act [October 22, 1994]." Bankruptcy Reform Act of 1994, Pub.L. No. 103394, § 702(b) (Application of Amendments), 108 Stat. 4106, 4150; see also28 U.S.C. § 1334 (Historical and Statutory Notes, Effective and Applicability Provisions) (stating that the 1994 Amendments do "not apply with respect to cases commenced under Title 11 of the United States Code before Oct. 22, 1994"); In re Middlesex Power Equip. & Marine, Inc., 292 F.3d 61, 67 n. 5 (1st Cir.2000); Christo, 223 F.3d at 1332. While there has been some discussion in other courts of appeals as to whether a "case [ ] commenced under title 11" refers to the

bankruptcy case or the civil case which was removed, see id., a distinction that is critical here as the Debtors filed their petitions in 1986 and appellants instituted this action in 2004, we need not concern ourselves at length with this question regarding application of the 1994 Amendments for we already have determined that "cases under Title 11" as used in section 1334(a) refers "merely to the bankruptcy petition itself," as opposed to "proceeding[s]," which refers "to the steps within the `case' and to any subaction within the case that may raise a disputed or litigated matter." In re Combustion Eng'g, Inc., 391 F.3d 190, 226 n. 38 (3d Cir.2004). We do not see why "cases" should have a different meaning in the words "cases commenced under title 11" in Pub.L. No. 103-394 § 702(b), with respect to the effective date of the 1994 Amendments. Thus, as the 1994 Amendments do not apply to cases, i.e., the bankruptcy case itself, commenced under title 11 before October 22, 1994, they do apply in this proceeding which was instituted after October 22, 1994, and, rather than being a case within the meaning of Pub.L. No. 103-394, § 702(b), is a "subaction" within *251 the bankruptcy case initiated long after that date. It might be thought from the foregoing analysis that we would conclude that we do not have jurisdiction over this appeal with respect to the bankruptcy court's refusal to abstain permissively but do have jurisdiction over its refusal to abstain mandatorily as appeals of decisions not to abstain in proceedings commenced after October 22, 1994, are permitted when mandatory abstention has been refused. Indeed, at first glance it would seem that nothing could be clearer as section 1334(d) provides that only "a decision not to abstain in a proceeding described in subsection (c)(2)" i.e., mandatory abstention, is reviewable. Yet there is a special situation here. As we point out below in dealing with the distinction between "related to," i.e., non-core jurisdiction, and "arising under title 11 or arising in a case under title 11," i.e., core jurisdiction, in determining whether the bankruptcy court had final adjudicative power, in this case the bankruptcy court was applying "arising in" jurisdiction. Moreover, section 1334(c)(2) in providing for mandatory abstention applies only to "a proceeding based upon a State law cause of action related to a case under title 11 but not arising under

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title 11 or arising in a case under title 11." Consequently, it necessarily follows from our holding that this is an "arising in" case, that there was no possible basis for the bankruptcy and district courts to abstain mandatorily under the 1994 Amendments or at any time since their enactment. See In re Gober, 100 F.3d 1195, 1206 (5th Cir.1996) ("Mandatory abstention applies only to non-core proceedings-that is, proceedings `related to a case under title 11, but not arising under title 11, or arising in a case under title 11.' "). Thus, we are not dealing with a decision denying mandatory abstention as no matter how appellants entitled their application for abstention they did not make a motion for abstention coming within section 1334(c)(2).FN13 Consequently, notwithstanding appellants' efforts to characterize this case as involving mandatory abstention, it is only a permissive abstention case and we do not have jurisdiction over the appeal of the denial of abstention. FN13. Even though our opinion has the effect of rejecting appellants' mandatory abstention contentions on their merits, we are not assuming jurisdiction contrary to the holding in Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 93-102, 118 S.Ct. 1003, 1012-16, 140 L.Ed.2d 210 (1998), in determining that this is a core case. In this regard we point out that we have jurisdiction to decide whether this case is core or non-core as appellants challenge the bankruptcy court's exercise of final adjudicative power, and a resolution of that question requires that we determine if the case is core or non-core. The determination of that issue has an incidental effect on the jurisdictional question of whether we have authority to hear appellants' arguments with respect to mandatory abstention and thus has the collateral effect of rejecting appellants' mandatory abstention claims on their merits. We realize that our result differs from that of the Court of Appeals for the Fifth Circuit In re Southmark Corp., 163 F.3d 925 (5th Cir.1999), a case on which appellants rely. In that case, the court apparently believed that it should look to the filing date of the bankruptcy petition when determining which version of section 1334 applied. See id. at 929. Thus, the court applied the 1984 Amendments in a

case in which the Chapter 11 bankruptcy petition was filed in 1989, even though the civil action before the court of appeals was filed in a state court and removed to a federal court in 1995, after the enactment of both the 1990 Amendments and the 1994 Amendments and prior to the matter being before the court of appeals in 1999. *252Id. at 92729. The court did not discuss the implications of the 1990 Amendments but seemed to think that inasmuch as "Southmark's case," evidently meaning its Chapter 11 filing, "predates [the 1994] Amendments and was filed when decisions not to abstain were reviewable on appeal,"id. at 929, it had jurisdiction. The court's reference to the appealability of decisions not to abstain must have been to the 1984 Amendments as they precluded only appeals of decisions to abstain. [5] We cannot distinguish Southmark with respect to jurisdiction over abstention appeals but we will not follow it as we question whether Southmark in this respect is consistent with binding precedents.FN14 It is well-settled that "a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary." Bradley v. Sch. Bd. of Richmond, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974). We find no justification to disregard this longstanding legal principle and establish an exception wherein a court would look to the date that a debtor or creditor filed the bankruptcy case rather than the proceeding directly in issue in determining which version of section 1334 applies. Proceedings subject to the abstention provisions are causes of action initiated separately from the bankruptcy case itself and often arise well after the filing of bankruptcy petition, and sometimes, as in this case, even after the assets of the bankruptcy estate have been distributed and the bankruptcy case closed. Overall, we cannot justify applying the law that existed at the time the Debtors filed their bankruptcy petitions and not the law that existed at the time that appellants filed their separate civil action or the law as it currently stands which is materially the same. FN14. As we explain below we do follow Southmark in other respects. In sum, with respect to our jurisdiction we find that we only can review the bankruptcy and district

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courts' decisions relating to subject matter jurisdiction, including the authority of the bankruptcy court to issue final orders.FN15 We do not have jurisdiction to review their decisions relating to the alleged procedural defects in the removal process and mandatory or permissive abstention. Consequently, inasmuch as appellants do not challenge the order dismissing their case on the merits, now that we have set forth the scope of our *253 jurisdiction, the subject matter of our review is quite limited. FN15. Although we reject Ernst & Young's contention that the 1990 Amendments control this case we are satisfied that its contention that those amendments would bar, if applicable, any appeal of an abstention decision abstaining or not abstaining on mandatory or permissive grounds is correct. Moreover, we are satisfied that those amendments were in effect until Congress enacted the 1994 Amendments and if Congress had not adopted the 1994 Amendments the 1990 Amendments would control this case. The principal argument with respect to the 1990 Amendments centers on the point that their restriction on appealability of abstention decisions was contained in section 1334(c)(2) dealing with mandatory abstention rather than, as now, separately in section 1334(d) and thus the restriction might not apply to decisions with respect to permissive abstention. We believe, however, that Congress intended the restriction on appeals to apply to permissive abstention as authorized in section 1334(c)(1) both as a matter of what might be characterized as "mechanical" statutory construction and because we cannot understand why Congress would have wanted to preclude appeals of decisions denying mandatory abstention, as it undoubtedly did in the 1990 Amendments, but would have wanted to permit appeals of decisions denying permissive abstention. In fact, if anything, one would expect that Congress would have had the reverse intent, as it, in fact, did when it adopted the 1994 Amendments. D. Standard of Review

[6] "Our review of the District Court's ruling in its capacity as an appellate court is plenary, and we review the bankruptcy judge's legal determinations de novo,"In re O'Lexa, 476 F.3d 177, 178 (3d Cir.2007), and "its factual findings for clear error and its exercise of discretion for abuse thereof,"In re United Healthcare Sys., Inc., 396 F.3d 247, 249 (3d Cir.2005). Our review of the district court's order on jurisdiction and of the issue of whether the proceeding in the bankruptcy court was core or noncore is de novo. See Stoe, 436 F.3d at 212;In re Resorts Int'l, Inc., 372 F.3d 154, 160 (3d Cir.2004). IV. DISCUSSION A. The Statutory Framework of Federal Bankruptcy Jurisdiction As we have indicated in other litigation, "[b]ankruptcy courts fall outside of the constitutional authority of Article III and derive their authority from federal statutes." Resorts, 372 F.3d at 161. Congress, in turn, "has vested limited authority in bankruptcy courts" through 28 U.S.C. §§ 1334 and 157, sections within title 28 of the United States Code dealing with the judiciary and judicial procedure. Id. For the most part, however, title 11 of the United States Code governs bankruptcy proceedings. Section 1334 describes the jurisdictional boundaries of a district court over bankruptcy cases and proceedings but, by itself, does not vest any authority in the bankruptcy courts. Rather, section 1334(a) states that "the district courts shall have original and exclusive jurisdiction of all cases under title 11," and section 1334(b) states that "the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11." District courts, however, even though they have jurisdiction under subsections (a) or (b), are permitted, "in the interest of justice, or in the interest of comity with State courts or respect for State law[,] ... [to] abstain[ ] from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11." 28 U.S.C. § 1334(c)(1) (permissive abstention). Additionally, [u]pon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in