Is Texas a Territory?

by Walter Kenaston
through the grace of IAUE Aleim

 

An annotation for 28 USCA § 153, at note 5, reads:

"Congress need not provide Article III court for adjudication of bankruptcy proceedings in United States' territories. In re Continental Air Lines, Inc., S.D.Tex.1986, 61 B.R. 758."

Notice this comes from a court in Texas. Does this imply that bankruptcy proceedings in a state of the union must be held in an Article III court? According to a case cited within Continental, Yes:

NORTHERN PIPELINE CO. v. MARATHON PIPE LINE CO., 458 U.S. 50 (1982)

   "In sum, Art. III bars Congress from establishing legislative courts to exercise jurisdiction over all matters related to those arising under the bankruptcy laws. The establishment of such courts does not fall within any of the historically recognized situations in which the general principle of independent adjudication commanded by Art. III does not apply. Nor can we discern any persuasive reason, in logic, history, or the Constitution, why the bankruptcy courts here established lie beyond the reach of Art. III."

But this requirement does not apply in U.S. territories; In re Continental, at 766:

   "The better reasoned position is that the "Code and the amendments to title 28 envisioned a national bankruptcy court system. Jurisdiction in one bankruptcy [district] court is jurisdiction in all." In re Coleman American, 6 B.R. at 253.
   "With the case is this posture, this Court takes note of the Supreme Court's conclusion in Marathon that the legislative, territorial courts were outside the pale of its holding. Thus, Congress need not provide Article III court for adjudication of bankruptcy proceedings in United States' territories."

At this point in the decision, the [USDC] Court was speaking of the bankrupcty court in the Northern Mariana Islands. But...

In re Continental was a dispute involving a bankrupcty court in Texas and the one in Northern Mariana Islands. The Texas bankruptcy court had injoined the NMI court and had held the defendants in contempt of court for their subsequent continued prosecutions of their case. However, on appeal of this contempt order, the USDC of Texas noted (among other things) that "the contempt power was an essential attribute of the judicial power vested by the Constitution solely in Article III courts" (at 774) so that the Texas bankruptcy court's contempt order was invalid, because the bankruptcy court is a non-Article III court.

   "Contempt order was inconsistent with constitutional limitations imposed upon authority of bankrupcty court to extent that order purported to be a final order. U.S.C.A. Const. Art. 3, § 1 et seq." In re Continental, hn 14.

So the bankruptcy court in Texas was/is not an Article III court either. Therefore, since Marathon requires any bankruptcy court in a state of the union (Texas) to be an Article III court, and being that the bankruptcy court in Texas is/was not an Article III court, this reveals that Texas is a United States' territory.

Additional notes in 28 USCA § 153 confirm that bankruptcy courts are not Article III:

Bankruptcy judges are not "judges" as that term is defined by Article III of the United States Constitution. In re Abernathy, Bkrtcy.N.D.Ill.1993, 150 B.R. 688.

Neither bankruptcy judges nor bankruptcy courts are courts within judicial power of United States; bankruptcy courts are merely current version of assistants for bankruptcy matters who were created for convenience of districts; whether they are called referees or judges, they are essentially masters in chancery. Centrust Sav. Bank v. Love, S.D.Tex.1991, 131 B.R. 64.

Since bankruptcy judges are appointed for terms of 14 years, and their salaries are subject to being diminished by Congress, they are not authorized by Article III of the United States Constitution to exercise the judicial power of the United States. In re Northwest Cinema Corp., Bkrtcy.D.Minn.1985, 49 B.R.479.

This shows that bankruptcy courts cannot be operating in the states of the union under Article III. They must be operating territorially. Likewise, being that it is "a national bankruptcy court system" (see Continental quote above), it presumes uniformity as to courts and as to jurisdictions - all territorial.

So the question becomes, are any of the remaining so-called "States" actually in the union as states? Or has the Union been lost and is the United States governing the country simply as a collection of territories?