Sheridan v. Michels (In Re Sheridan)

United States Court of Appeals
For the First Circuit

No. 02-9007 Volume I of II

IN RE WILLIAM C. SHERIDAN,

WILLIAM C. SHERIDAN,

Defendant, Appellant,

v.

NANCY MICHELS,

Plaintiff, Appellee.

APPEAL FROM THE BANKRUPTCY APPELLATE PANEL

OF THE FIRST CIRCUIT

Before

Selya, Circuit Judge,

Cyr, Senior Circuit Judge,

and Lynch, Circuit Judge.

William C. Sheridan, pro se.
Nancy H. Michels, with whom the Law Offices of Michels &
Michels and Carole A. Mansur were on the brief for appellee.

March 29, 2004
 CYR, Senior Circuit Judge. William C. Sheridan, Esquire,

appeals from a bankruptcy court order which suspended him from the

practice of law before the United States Bankruptcy Court for the

District of New Hampshire and directed him to remit the fees due

the special counsel appointed to investigate the various violations

of the District of New Hampshire Rules of Professional Conduct for

which Sheridan allegedly is responsible. We now vacate the

bankruptcy court order, and remand for further proceedings.

I.

BACKGROUND

In June 2000, the bankruptcy judge appointed Attorney

Nancy Michels as Special Counsel to investigate the ethical

violations alleged against Sheridan, an attorney and member of the

bankruptcy court bar. Following an extensive investigation into

Sheridan’s representation of various clients between 1999 and 2000,

Special Counsel lodged a complaint charging Sheridan with rendering

incompetent representation in violation of N.H. Rule of

Professional Conduct 1.1(a).

Although Sheridan, acting pro se, eventually stipulated

to most of the allegations in the complaint, he contended that his

conduct had been due either to a dopamine deficiency resulting in

severe attention deficit disorder or to the uncooperativeness and

obstinacy of the affected clients. Following a disciplinary

hearing in June 2001, the bankruptcy court determined that Sheridan

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had committed eighty-eight ethical violations, most involving the

failure to comply with such basic requirements as the timely filing

of chapter 13 plans and motions for continuance.

In due course, Sheridan was suspended from practice

before the bankruptcy court for one year; readmission contingent

upon satisfactory proof that he was competent to represent clients

before the bankruptcy court. Subsequently, the bankruptcy court

approved an application for a $30,377.50 attorney fee to Special

Counsel, then directed that Sheridan – as a precondition to his

readmission to the bankruptcy bar – reimburse the bankruptcy court

in that amount. Sheridan then appealed to the Bankruptcy Appellate

Panel ("BAP"), which affirmed. Sheridan v. Michels (In re

Disciplinary Proceedings), 282 B.R. 79 (B.A.P. 1st Cir. 2002).

II.

DISCUSSION

Sheridan contends that (i) the bankruptcy court, unlike

Article III courts, lacks either the inherent or statutory power to

suspend or discipline counsel who practice before it, see Northern

Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 86-87

(1982); (ii) moreover, even assuming the bankruptcy court possesses

such disciplinary power, it cannot exercise it absent an explicit

local court rule, but see U.S. Dist. Ct. Local Rule (D.N.H.) 83.5,

and then only if the bankruptcy court were to determine that

counsel acted in “bad faith,” see Chambers v. NASCO, Inc., 501 U.S.

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32, 45 (1991); (iii) Bankruptcy Code § 105 applies exclusively to

such disciplinary proceedings against an attorney as arise in a

particular, ongoing bankruptcy case, not to the instant type of

omnibus investigation into alleged attorney misconduct spanning

multiple bankruptcy cases no longer pending before the court;1 (iv)

Administrative Order 2090-2, issued by the bankruptcy court below,

explicitly authorizing such disciplinary hearings, is invalid due

to the fact that it was promulgated without either advance notice

or an opportunity for public comment, notwithstanding the rule-

making provisions enunciated in Federal Rule of Civil Procedure 83,

cf. U.S. Dist. Ct. Local Rule (D.N.H.) 77.4(b) (“Pursuant to [Fed.

R. Bankr. P] 9029, the bankruptcy judges of this district are

authorized to make such rules of practice and procedure as they may

deem appropriate, subject to the requirements of Fed. R. Civ. P.

83.”); (v) in all events, Administrative Order 2090-2, which was

not in effect at the time the bankruptcy court initiated the

Sheridan investigation, cannot be applied retroactively; and (vi)

the disciplinary power wielded by the bankruptcy court in the

instant case offends the doctrine of separation of powers, in that

the bankruptcy court itself thereby assumes the inherently

conflicting roles of accuser, investigator, prosecutor, and judge.

1
Bankruptcy Code § 105(a) provides, in pertinent part: “The
court may issue any order, process, or judgment that is necessary
or appropriate to carry out the provisions of this title.” 11
U.S.C. § 105(a).

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 In the particular circumstances of the instant case, due

to the fact that the BAP lacked appellate jurisdiction to address

Sheridan’s claims on the merits, the case must be remanded to the

bankruptcy court for further proceedings. We explain.

The BAPs are authorized to review only the “final

judgments, orders and decrees” issued by the bankruptcy courts. 28

U.S.C. § 158(b)(1), (a)(1). Consequently, in the instant context

the dispositive jurisdictional issue is whether the disciplinary

orders issued by the bankruptcy court against Sheridan were

“final.” See Stanley v. S.S. Retail Shoes Corp. (In re S.S. Retail

Shoes Corp.), 162 F.3d 1230, 1232 (9th Cir. 1998) (“In making the

[jurisdictional] determination, we must focus on the nature of the

bankruptcy court's order. If that decision was not a final order,

then the BAP's order also lacks finality.”).

The finality of a bankruptcy court order depends, inter

alia, upon whether the proceeding in which it was entered

constitutes a “core” or “non-core” proceeding. Although the

district court, as a tribunal established under Article III of the

United States Constitution, possesses broad jurisdiction to

adjudicate all proceedings which even tangentially “aris[e] under,”

or are “related to,” a bankruptcy case [hereinafter: “related to”

proceedings], the district court may opt to refer such cases or

proceedings to the bankruptcy courts for hearing or adjudication.

See 28 U.S.C. § 157(a). Of course, unlike the district court, the

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bankruptcy court is established pursuant to Article I, rather than

Article III, and its jurisdiction is delimited accordingly.

Although the bankruptcy court may hear all “related-to” proceedings

which have been referred to it, whether core or non-core, it may

enter a final appealable judgment only if (i) the proceeding itself

is core, viz., closely intertwined with and integral to the

bankruptcy court’s mandate to administer a bankruptcy case; or (ii)

the case or proceeding is non-core, but the litigants nonetheless

have consented to the entry of a final disposition by the

bankruptcy court, rather than by the district court. See Northern

Pipeline, 458 U.S. at 86-87.

If the proceeding is core, the bankruptcy court’s final

judgment is immediately appealable either to the district court or,

with the consent of the parties, to the BAP. 28 U.S.C. §

158(b)(1); § 157(b)(1). In either instance, the appellate tribunal

applies a deferential standard of review to the bankruptcy court’s

findings of fact, and will upset those findings only if clearly

erroneous. See In re Spadoni, 316 F.3d 56, 58 (1st Cir. 2003).

In a non-core proceeding, however, the bankruptcy court

is not empowered to enter final, appealable orders without the

parties’ consent. Instead, after it has conducted the required

proceedings, it must submit its proposed findings of fact and

conclusions of law for consideration by the district court. See 28

U.S.C. § 157(c)(1); Cong. Credit Corp. v. AJC Int’l, Inc., 42 F.3d

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686, 690 (1st Cir. 1994). The role of the district court in turn

is to conduct de novo review of the findings of fact and the

conclusions of law submitted by the bankruptcy court. In so doing,

the district court may receive further evidence, modify the

findings proposed by the bankruptcy court, and/or remand to the

bankruptcy court with instructions. See Fed. R. Bankr. P. 9033(d).

At that stage, any appeal from the “final” district court order may

be taken only to the court of appeals, which applies a deferential

standard of review. Id. § 158(d).

In the instant case, the BAP did not address the

core/non-core distinction in its decision, Sheridan, 282 B.R. at

86-89, perhaps because Sheridan’s reference to it – included

amongst other objections, in his appellate briefs, to the

bankruptcy court’s authority to impose sanctions – simply was not

prominently advanced or distinguished. Unlike the issue of subject

matter jurisdiction, which may neither be waived nor forfeited by

the parties, see Quinn v. City of Boston, 325 F.3d 18, 26 (1st Cir.

2003), and into which the courts are duty-bound to inquire, sua

sponte, even absent objection by any party, see Hicks, Muse & Co.

v. Brandt (In re Healthco Int'l, Inc.), 136 F.3d 45, 50 n.4 (1st

Cir. 1998), the protections afforded by the Northern Pipeline

core/non-core distinction may be waived or forfeited, either by (i)

consenting to the bankruptcy court's treatment of an otherwise non-

core proceeding as core, or (ii) failing to raise or pursue the

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issue adequately on appeal. See Commodity Futures Trading Comm’n

v. Schor, 478 U.S. 833, 848-49 (1986).

Although normally the proper designation of a proceeding

as either core or non-core presents a pure question of law, subject

to plenary review on appeal, see In re V & M Mgmt., Inc., 321 F.3d

6, 7 (1st Cir. 2003); In re Graves, 279 B.R. 266, 270 (B.A.P. 9th

Cir. 2002), if Sheridan failed to preserve his contention before

the bankruptcy court or on appeal, we would review for plain error

only, see Rivera-Torres v. Ortiz Velez, 341 F.3d 86, 102 (1st Cir.

2003) ("[C]laims ‘forfeit[ed] through ignorance or neglect’ are

subject to plain error review.”) (citation omitted). We now turn

to these threshold issues.

A. Consent

Before the bankruptcy court, Sheridan did not expressly

consent, either orally or in writing, to the treatment of his

omnibus disciplinary proceeding as core.2 In In re G.S.F. Corp.,

2
The advisory committee note to Federal Rule of Bankruptcy
Procedure 7008, which implements the statutory core/non-core
dichotomy, provides:

Proceedings before a bankruptcy judge are either core or
non-core. 28 U.S.C. § 157. A bankruptcy judge may enter
a final order or judgment in a core proceeding. In a
non-core proceeding, absent consent of the parties, the
bankruptcy judge may not enter a final order or judgment
but may only submit proposed findings of fact and
conclusions of law to the district judge who will enter
the final order or judgment. 28 U.S.C. § 157(c)(1). The
amendment to subdivision (a) of this rule requires an
allegation as to whether a proceeding is core or
non-core. A party who alleges that the proceeding is

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938 F.2d 1467 (1st Cir. 1991), we decided that in certain

circumstances, at least where the parties’ actions appear to speak

as clearly as words, consent may be implied. The actions deemed to

have evidenced “implied consent” in G.S.F. consisted of (i) the

filing of stipulations and releases by the parties “for entry as a

final judgment” in the bankruptcy court, which stipulations and

releases subsequently were incorporated into the final order

whereby the bankruptcy court dismissed the proceeding, and (ii) the

decision by the parties not to appeal from that “final” order. Id.

at 1477. Thus, it was their affirmative and unambiguous conduct

before the bankruptcy court – rather than their mere failure to

request prior to judgment that the proceeding be declared non-core

– which constituted the functional equivalent of the parties'

express consent. See infra note 5.

In contrast, Sheridan’s conduct did not unambiguously

connote consent, either to the bankruptcy court’s characterization

of the proceeding as core or to its final adjudication of the

non-core shall state whether the party does or does not
consent to the entry of a final order or judgment by the
bankruptcy judge. Failure to include the statement of
consent does not constitute consent. Only express
consent in the pleadings or otherwise is effective to
authorize entry of a final order or judgment by the
bankruptcy judge in a non-core proceeding. Amendments to
Rule 7012 require that the defendant admit or deny the
allegation as to whether the proceeding is core or
non-core.

Fed. R. Bankr. P. 7008 advisory committee’s note (1987) (emphasis
added).

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proceeding as non-core. It is true that Sheridan did not suggest

that the proceeding was non-core until he submitted the post-

judgment motion for reconsideration, cf. Santiago v. Canon U.S.A.,

Inc., 138 F.3d 1, 4 (1st Cir. 1998) (noting that party normally may

not raise new issues in post-judgment motion for reconsideration),

but the entry of the judgment was the first procedural juncture in

the bankruptcy proceeding in relation to which the core/none-core

issue was broached. Until then, it remained unclear how the

bankruptcy court viewed its own jurisdiction.

To be sure, Sheridan could have elected to place the

issue in contention sooner, but the failure to do so can bear no

inference of consent. When the district court refers a “related

to” proceeding to the bankruptcy court, no presumption attaches

that the proceeding is core. Indeed, the Rules of Bankruptcy

Procedure, which serve to implement the statute itself, mandate

that the complaint contain a statement or allegation regarding

whether the proceeding is core or non-core, and if the latter,

whether the plaintiff consents to the entry of a final judgment by

the bankruptcy court. See Fed. R. Bankr. P. 7008(a). The

complaint filed by Special Counsel failed to place the issue in

contention by alleging that the proceeding was core. In cases

where the plaintiff (e.g., Special Counsel Michels) has the burden

to plead the core/non-core issue, and has chosen the bankruptcy

court as her forum, her silence might connote consent. See, e.g.,

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Horwitz v. Alloy Auto. Co., 992 F.2d 100, 103 (7th Cir. 1993)

(“Silence does not imply consent, but affirmatively invoking the

bankruptcy court’s jurisdiction most assuredly supplies whatever

consent is necessary.”) (citations omitted). As Michels is not the

appellant, and appellant Sheridan did not initiate the disciplinary

proceeding, we need not address this issue.3

Similarly, Bankruptcy Rule 7012(b) prescribes that the

defendant’s answer “shall admit or deny an allegation that the

proceeding is core or non-core,” and that “[i]n non-core

proceedings[,] final orders and judgments shall not be entered on

the bankruptcy judge’s order except with the express consent of the

parties.” By implication, therefore, there was no need for the

Sheridan answer to challenge the core nature of the proceedings

3
The dissent relies upon various cases, some cited with
approval in In re G.S.F., in which the specific issue involved
consent by a party – unlike Sheridan – who had invoked the
bankruptcy court’s jurisdiction. See Canal Corp. v. Finnman (In re
Johnson), 960 F.2d 396, 398 (4th Cir. 1992) (noting that appellant
was plaintiff in adversary proceeding); Mann v. Alexander Dawson,
Inc. (In re Mann), 907 F.2d 923, 925-26 (9th Cir. 1990) (same);
Daniels-Head & Assocs. v. William M. Mercer, Inc. (In re Daniels-
Head & Assocs.), 819 F.2d 914, 919 (9th Cir. 1987) (same); Pisgah
Contractors, Inc. v. Rosen (In re Pisgah Contractors, Inc.), 215
B.R. 679, 682 (W.D.N.C. 1995) (“[B]y asserting a counterclaim
against the debtor in the adversary proceeding, the Rosens
subjected themselves to the equitable power of the Bankruptcy
Court.”); Jefferson Nat’l Bank v. I.A. Durbin, Inc. (In re I.A.
Durbin, Inc.), 62 B.R. 139, 143 (S.D. Fla. 1986) (finding implied
consent where counterclaimant-appellant had joined in a third
party’s counterclaim, knowing that her co-complainant already had
admitted that her counterclaim involved a core proceeding); cf.,
e.g., Marshall v. Mich. Dep’t of Agric. (In re Marshall), 118 B.R.
954, 960 (W.D. Mich. 1990) (refusing to find implied consent where
appellant’s counterclaim was compulsory).

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due to the fact that the complaint made no such allegation.4

Moreover, absent the parties’ allegations, the bankruptcy

court is required in all cases to make a sua sponte determination

as to whether or not a proceeding is core, 28 U.S.C. § 157(b)(3)

(“The bankruptcy judge shall determine, on the judge’s own motion

or on timely motion of a party, whether a proceeding is a core

proceeding.”) (emphasis added), and it seems quite clear that this

provision would have been phrased very differently were the

Congress to have intended that all “related to” proceedings

referred to the bankruptcy court were to be deemed presumptively

core.

Of course, whether the Sheridan proceeding was core or

non-core, the bankruptcy court was empowered to hear the case and

receive evidence. See 28 U.S.C. § 157(c)(1) (“A bankruptcy judge

may hear a proceeding that is not a core proceeding but that is

otherwise related to a case under title 11.”). Thus, the core/non-

core distinction would have significance primarily at the time of

judgment, when it would become necessary to characterize the

bankruptcy court order either as a final judgment (viz., enabling

4
Again, the dissent relies upon inapposite case law and
authorities wherein the defendant-appellant’s answer had failed to
deny an express allegation of core jurisdiction. See Pisgah
Contractors, 215 B.R. at 682; Aero-Fastener, Inc. v. Sierracin (In
re Aero-Fastener, Inc.), 177 B.R. 120, 132 (Bankr. D. Mass. 1994);
1 Lawrence P. King, Collier on Bankruptcy § 3.02[6][b] (“The effect
of failure to interpose an objection at the pleading stage should
be consent to the final order being entered by the bankruptcy
judge.”) (emphasis added).

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an immediate appeal either to the district court or the BAP), or as

a recommended decision (viz., necessitating its referral back to

the district court for entry of a final, appealable judgment).5

Thus, in the instant case, until the bankruptcy court

entered its “final” judgment characterizing the disciplinary

proceeding as core, Sheridan was not placed on notice, either by

the bankruptcy court or Special Counsel, that the hearing would be

so characterized. Finally, Sheridan objected at the earliest

available opportunity by submitting a timely postjudgment motion

for reconsideration.6 Accordingly, in these circumstances we

5
In contrast to our limited holding in G.S.F., other courts
have split on the issue as to whether Bankruptcy Code § 157(c)
consent may be implied merely from the party’s failure to object,
in a timely manner, to the hearing of the proceeding by the
bankruptcy court. Compare, e.g., In re Hatfield, 117 B.R. 387, 388
n.1 (Bankr. C.D. Ill. 1990) (drawing such inference), with Cont’l
Airlines, Inc. v. First Sec. Bank of Utah, N.A. (In re Cont’l
Airlines, Inc.), 146 B.R. 534, 536 (Bankr. D. Del. 1992) (“Implied
consent is not sufficient to waive constitutional [core/non-core]
jurisdiction.”). The rationale for those former cases, propounding
the broad rule now embraced by our dissenting colleague, is not
consonant with either the provisions in or the commentary to
Federal Rule of Bankruptcy Procedure 7008, which plainly require
“express consent.” See supra note 2. Moreover, that rationale
ignores the important reality that the bankruptcy court is
empowered to conduct hearings in both core and non-core
proceedings. See 28 U.S.C. § 157(c)(1). Thus, a party which
acquiesces in the bankruptcy court’s decision to hear the case
would not necessarily presume that the court intended its post-
hearing decision to be final, as distinguished from recommendatory.
6
The primary authority the dissent cites for its expansive
interpretation of consent involved proceedings in which the courts
determined that the appellants (unlike Sheridan) failed to object
even after the bankruptcy court had entered a “final” judgment.
See McFarland v. Leyh (In re Tex. Gen. Petroleum Corp.), 52 F.3d
1330, 1337 (5th Cir. 1995) (finding an implied waiver because

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conclude that the actions taken by Sheridan did not sufficiently

connote consent to the final adjudication of the omnibus

disciplinary proceeding by the bankruptcy court.

B. Waiver/Forfeiture

In light of the BAP’s failure to address the core/non-

core issue, however, see Sheridan, 282 B.R. at 86-89, we now must

determine whether Sheridan’s argumentation on the core/non-core

issue, as set forth both in his postjudgment motion for

reconsideration and his appellate briefs before the BAP and this

court, is sufficiently clear and developed to focus appellate

defendant-appellant “fail[ed] to object in the bankruptcy court,”
appealed to the district court instead of seeking de novo review,
and “his objection to jurisdiction at this stage [viz., on appeal
to the court of appeals] ‘more closely resembles an afterthought’”)
(citation omitted); Abramowitz v. Palmer, 999 F.2d 1274, 1276 (8th
Cir. 1983) (implied consent found where defendant-appellant did not
raise her non-core argument before the bankruptcy court, she
appealed the bankruptcy court’s dischargeability decision to the
district court, rather than seeking its de novo review, and she
raised her non-core argument “for the first time” before the court
of appeals); Canal Corp. v. Finnman (In re Johnson), 960 F.2d 396,
403 (4th Cir. 1992) (implied consent found because plaintiff-
appellants were “apparently content” when bankruptcy court entered
its “final” judgment to distribute monies to appellants, and
objected only after the bankruptcy court had modified its judgment
so as to reallocate the monies among various members of the
plaintiff class); Men’s Sportswear, Inc. v. Sasson Jeans, Inc. (In
re Men’s Sportswear, Inc.), 834 F.2d 1134, 1138 (2d Cir. 1987)
(noting that appellant failed to raise non-core issue even after
bankruptcy court issued its judgment explicitly declaring the
proceeding core, and even on appellant's appeal to the district
court); DuVoisin v. Foster (In re S. Indus. Banking Corp.), 809
F.2d 329, 331 (6th Cir. 1987) (finding implied consent where
defendant-appellant's answer (i) stated without qualification that
bankruptcy court had “jurisdiction,” (ii) raised no jurisdictional
challenge before judgment, and (iii) marked the bankruptcy court
order as “agreed for entry”).

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attention upon the merits of the core/non-core issue. See

Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 27 (1st Cir. 2003)

(noting that issues raised in perfunctory manner on appeal are

deemed waived). Our review reveals that Sheridan lumped together

a host of jurisdictional and non-jurisdictional challenges

predicated upon the central premise that the bankruptcy court

lacked any “authority” whatsoever to impose monetary sanctions as

a condition precedent to his reinstatement to the bar. Given this

circumstance, therefore, we understand how the issue may have

eluded the BAP's attention.

Although it may be that Sheridan, had he been represented

by counsel,7 would have advanced his argument more prominently and

distinctly than was done in his pro se submissions, we cannot

fairly conclude that Sheridan failed either to raise the argument,

or to discuss the criteria most pertinent to the core/non-core

analysis. For instance, in his motion for reconsideration Sheridan

plainly contended: “As such the Bankruptcy [C]ourt does not share

all the powers of the district court. Thus in [Northern Pipeline],

the United States Supreme Court held that it was unconstitutional

for the Bankruptcy Courts to exercise the ‘essential attributes of

7
By way of bolstering its inference that Sheridan consented,
the dissenting opinion adverts to Sheridan as “an experienced
bankruptcy attorney,” while failing to acknowledge that these
disciplinary proceedings arose, at least in part, from Sheridan’s
numerous physical ailments and mental impairments. The district
court has yet to be accorded the opportunity to make the requisite
findings of fact on this issue.

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the judicial power of the Article III district court,’ and that the

bankruptcy court’s power was limited to ‘core proceedings’ of the

administration of the bankruptcy estate under the bankruptcy code,

28 U.S.C. § 157(b)(1).” (Emphasis added; citations omitted.)

Not only is Northern Pipeline the seminal case on the

constitutional limitations which undergird the pivotal core/non-

core distinction, but the utter absence of a close nexus between

the Sheridan disciplinary proceeding and the administration of any

particular pending bankruptcy proceeding is a crucial consideration

in resolving the core/non-core issue. See 28 U.S.C. § 157(b)(2)(A)

(noting that core proceedings involve, inter alia, “matters

concerning the administration of the estate”) (emphasis added);

infra Section II.C. Moreover, Sheridan reiterated the same

argument verbatim, both before the BAP and in the instant appeal,

by relying upon the same citation to, and paraphrase of, the

Northern Pipeline holding, then adding: “The disciplinary order in

each of the cases cited by the [BAP] arose out of and during the

administration of a single bankruptcy estate.” (Emphasis added.)

Thus, though Sheridan might have asserted the issue with somewhat

more prominence and clarity, we are hard-pressed to find, on these

submissions, that the argument was conclusively forfeited. “[A]

court should not lightly infer from a litigant's conduct consent to

have private state-created rights adjudicated by a non-Article III

bankruptcy judge. Indeed, to do so would violate the spirit of

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[Northern Pipeline].” In re Men's Sportswear, Inc., 834 F.2d 1134,

1138 (2d Cir. 1987).8

No less importantly, even in the event we were to

conclude that Sheridan forfeited the instant issue below, see

8
Nor can the Sheridan decision to appeal to the BAP, rather
than the district court, be deemed implied consent. Normally, a
bankruptcy court decision in a non-core proceeding is not
appealable to the BAP, but must be taken to the district court.
Here, however, the bankruptcy court purportedly entered a decision
on the merits in what it termed a core proceeding, thereby
rendering its judgment (unless vacated on appeal) final and
appealable. See In re M.A. Baheth Constr. Co., 118 F.3d 1082, 1084
(5th Cir. 1997) (“Until and unless the determination of bankruptcy
court jurisdiction is overturned, Baheth was bound to comply with
the court's judgment – and the procedural consequences thereof.”).
Appeals from such a judgment lie either with the BAP or the
district court, sitting in its appellate capacity. See 28 U.S.C.
§ 158(c)(1). Thus, either the BAP or the district court would have
jurisdiction to determine whether the bankruptcy court’s
designation of the proceeding as core constituted reversible error.
We find equally enigmatic the related suggestion in the
dissenting opinion that Sheridan expressly abandoned his objection
to the bankruptcy court’s core treatment of the proceeding. In his
15-page supplemental brief Sheridan vehemently disputes that he
ever consented, asserting instead that he promptly raised the
core/non-core issue in his motion for reconsideration before the
bankruptcy court. Michels, the party whose burden it was to allege
that the proceeding was core, declined our invitation to submit
supplemental briefing. Sheridan did note that he would “take[] no
position” on the non-core issue, but not because he conceded that
it lacked merit, nor that it was not in his interest to pursue it.
Instead, he noted that it was supported by “ample authority.” He
believed (albeit incorrectly) that the jurisdictional issue became
relevant only if we were to find that the bankruptcy court had
issued the sanction under Administrative Order 2090-2 only, and not
pursuant to Bankruptcy Code § 105. This is a far cry from
abandonment. Assuming that further evidence that Sheridan had not
abandoned this claim was needed, however, his supplemental brief,
in its final citation, points to In re BNI Telecommuns., 246 B.R.
845, 849 (B.A.P. 6th Cir. 2000), a case in which the Sixth Circuit
reversed a bankruptcy court for improperly entering a final
judgment in a non-core proceeding without appellant’s consent.

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Mulvihill, 335 F.3d at 27, it is within our discretion to address

an issue de novo, in those rare instances where the issue poses

“purely a question of law; where addressing the merits promotes

judicial economy as the same issue will likely be raised in other

cases; and the claim raises an issue of constitutional magnitude,

which if meritorious, could substantially affect the rights of

creditors and debtors in this and future bankruptcy proceedings.”

In re Weinstein, 164 F.3d 677, 685 (1st Cir.) (reaching unpreserved

Fifth Amendment Takings Clause issue), cert. denied, 527 U.S. 1036

(1999); United States v. La Guardia, 902 F.2d 1010, 1013 (1st Cir.

1990) (reaching unpreserved due process challenge to sentencing

guidelines).

The core/non-core argument advanced by Sheridan suits the

bill on all three criteria. The question as to whether the

proceeding is core or non-core poses a pure question of law,

subject to plenary appellate review. See In re Graves, 279 B.R. at

270. As the extended procedural travel of this case amply

demonstrates, the proper characterization, ab initio, of this type

of omnibus disciplinary proceeding – as either core or non-core –

is likely to minimize substantially the waste of judicial resources

in future cases. For example, had this proceeding been considered

non-core from the outset, the Sheridan appeals to the BAP and to

this court could not have occurred, the case would have proceeded

directly to the district court to decide whether to adopt or reject

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the recommended findings of fact and legal conclusions made by the

bankruptcy court, and Sheridan may well have averted almost two

years of suspension from his professional livelihood.9

Finally, the core/non-core distinction advanced in

Northern Pipeline unquestionably is one of constitutional import,

in that it concerns the authority of an Article I court to enter a

final judgment in a non-core proceeding absent the consent of the

parties. Thus, even assuming we were to conclude that Sheridan’s

presentation of the core/non-core contention before the bankruptcy

court and the BAP was inadequate, we would consider this case an

appropriate one in which to conduct de novo review, rather than

plain error review.10

9
The consequences of the core/non-core determination cannot
fairly be understated. Thus, if the bankruptcy court decision were
not a final judgment, but merely a recommendation for entry of
judgment, the Sheridan suspension from law practice would be
premature, and could never have taken effect unless and until the
district court adopted the recommended decision entered by the
bankruptcy court. Similarly, had the district court adopted the
bankruptcy court recommendation, the issues upon which Sheridan
might base his appeal would be drastically altered. That is to
say, in that event the question would not be whether the bankruptcy
court rules or administrative orders authorized this type of
sanction, but whether the district court’s rules and orders
authorized such a sanction. See U.S. Dist. Ct. Local Rule (D.N.H.)
83.5.
10
With respect, we must note that our dissenting colleague's
disapproval of our recourse to the La Guardia exception flows from
several faulty premises. The dissent insists that Sheridan did not
raise the core/non-core issue on appeal or if he did, inexplicably
abandoned it after devoting several pages of supplemental briefing
to a denial that he consented to core treatment. See supra note 8.
The dissent further states that the non-core issue is not one of
constitutional dimension. To the contrary, even the authorities

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C. Core vs. Non-core

Notwithstanding the jurisdictional issues raised by

Sheridan, see supra, the bankruptcy court failed to elaborate upon

its rationale for ruling that the instant omnibus disciplinary

action constitutes a core proceeding. See 28 U.S.C. § 157(b)(3).

Generally speaking, a proceeding which “arises under” the

bankruptcy laws is considered core. See 28 U.S.C. § 157(b)(1);

cited by the dissent acknowledge that Northern Pipeline, which §
157 purports to implement, involved a litigant’s constitutional
right to have his case heard by an Article III court. See, e.g.,
In re Tex. Gen. Petroleum Corp., 52 F.3d at 1336 (“[Appellant’s
core/non-core] argument, however, is a constitutional one based on
Article III. We must undertake the constitutional analysis.”).
The dissent then mischaracterizes our delineation of the factors
which render this particular type of omnibus disciplinary
proceeding non-core as involving a factual determination, whereas
it is a purely legal determination as to what essential attributes
of this proceeding satisfy the legal criteria set forth in §
157(b)(2). See, e.g., In re Graves, 279 B.R. at 270 (noting that
the core/noncore determination is a question of law). The dissent
further contends that the legal argument for characterizing the
Sheridan disciplinary proceeding as non-core is not compelling,
even though the dissent cites no contrary authority directly on
point, and the Sheridan disciplinary proceeding meets none of the
criteria set forth in Bankruptcy Code § 157(b)(2). See infra
Section II.C.; Eleccion v. Sogge (In re Hessinger & Assocs.), 192
B.R. 211, 219-20 (N.D. Cal. 1996) (holding that omnibus
disciplinary proceedings are non-core). Finally, despite its
admission that these types of omnibus proceedings have occurred in
the past, the dissent rejects our resort to the La Guardia
exception based on its surmise that the bankruptcy courts are not
likely to resort to such omnibus disciplinary proceedings in the
future. One readily can envision, however, that an Article I court
– once reassured that it is exercising its core authority – would
be hard put to resist the streamlined disciplinary procedures and
finality afforded by these proceedings.

-20-
Boroff v. Tully (In re Tully), 818 F.2d 106, 108 (1st Cir. 1987).11

This statutory provision prescribes a non-exhaustive exemplar of

core proceedings, 28 U.S.C. § 157(b)(2)(A)-(O), including the

allowance and disallowance of proofs of claim, orders to turn over

property to the estate, proceedings to avoid preferences or

fraudulent conveyances, motions to lift automatic stays, and the

adjudication of objections to discharge. Importantly, each of the

enumerated matters relates to a function essential to the

administration of the bankruptcy case.

In addition to these more particular functions, there are

two broadly phrased categories which relate more generally to other

11
The dissent advances but two arguments premised upon
authority which predates the enactment of § 157(b). First, it
proposes the following syllogism: (1) all non-core proceedings
involve state contract claims, see Thomas v. Union Carbide Agric.
Prods. Co., 473 U.S. 584 (1985); (2) the Sheridan disciplinary
proceeding involved no such claim; and (3) consequently, the
Sheridan disciplinary proceeding is not a non-core proceeding. The
initial premise is flawed, however. Thomas simply describes its
Northern Pipeline holding, but does not announce that the Court
would forbear in future cases from extending the Northern Pipeline
rationale to other types of analogous claims. Second, the dissent
cites our decision in In re Arnold Print Works, Inc., 815 F.2d 165
(1st Cir. 1987), for the proposition that attorney disciplinary
actions against attorneys do not involve private contract-based
rights, but “public rights” which non-Article III courts have
always been permitted to adjudicate. However, Arnold addresses the
somewhat arcane public rights doctrine, which describes a very
narrow category of claims of a sort which Article III courts are
institutionally capable of adjudicating, but which historically
were resolved instead by legislative or administrative courts. See
Northern Pipeline, 458 U.S. at 67-68. Obviously, attorney
disciplinary actions, long within the province of the federal
courts, do not comport with this specialized “public rights”
definition.

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“matters concerning the administration of the estate,” id. §

157(b)(2)(A), and “other proceedings affecting the liquidation of

the assets of the estate or the adjustment of the debtor-creditor

or the equity security holder relationship, except personal injury

tort or wrongful death claims,” id. § 157(b)(2)(O). It is

important to note that the matters adumbrated in Bankruptcy Code §

157(b)(2)(A) and (O) likewise typically arise within the context of

a particular bankruptcy case, and are essential to the efficient

administration of the bankruptcy case.12 Thus, to the extent that

attorney misconduct may have thwarted the efforts of the bankruptcy

court to bring a particular bankruptcy proceeding efficiently to

conclusion, it is at least arguable that attorney disciplinary

proceedings occurring during such a case can be classified as core.

On the other hand, the omnibus disciplinary proceeding

initiated against Sheridan is essentially different, in that the

ethical violations in which Sheridan allegedly engaged, for the

12
The dissenting opinion suggests, incorrectly, that we rely
upon the expressio unius principle to interpret § 157(b), thereby
ignoring the explicit nonexclusivity of the § 157(b)(2) listing.
See Lohnes v. Level 3 Communications, Inc., 272 F.3d 49, 61 (1st
Cir. 2001) (“[T]he maxim expressio unius est exclusio alterius
instructs that, ‘when parties list specific items in a document,
any item not so listed is typically thought to be excluded.’”)
(citation omitted). On the contrary, any attempted extrapolation
of the § 157(b)(2) listing must be guided by reference to those
essential characteristics which the listed proceedings share in
common, see Aceros Prefabricados, S.A. v. TradeArbed, Inc., 282
F.3d 92, 101-02 (2d Cir. 2002); Collier v. Gray, 167 F.3d 977, 981
(6th Cir. 1999), and unlike the Sheridan omnibus disciplinary
proceeding, all of the proceedings in the § 157(b) listing arise as
part of the ongoing administration of “the” bankruptcy estate.

-22-
most part, occurred during the course of numerous bankruptcy cases

previously closed, rather than in a pending bankruptcy proceeding,

thus cannot be said to have involved the sort of routine case

“administration” described in § 157(b)(2). Unlike disciplinary

actions brought against counsel in the course of an ongoing

bankruptcy case,13 the Sheridan disciplinary proceedings did not

purport to adjust the legal relationships among the parties in

these closed bankruptcy cases, but consisted largely of the

bankruptcy court’s exercise of its supervisory responsibility to

oversee and regulate its bar so as to safeguard public confidence

in the integrity and functionality of the bankruptcy court. See,

e.g., Eleccion v. Sogge (In re Hessinger & Assocs.), 192 B.R. 211,

219-20 (N.D. Cal. 1996) (noting that disciplinary action conducted

outside particular bankruptcy proceeding is non-core, “concerned

solely with the issue of the [law] firm’s professional misconduct

[as defined by the California Rules of Professional Conduct] and

addressed neither the assets of any bankruptcy estate nor the

adjustment of debtor-creditor relations”).14 Indeed, no present or

13
All the cases the dissent cites in support of the so-called
“core comes from core” principle involved discipline imposed for
attorney misconduct in a single, ongoing bankruptcy case. See,
e.g., In re Mem’l Estates, Inc., 950 F.2d 1364, 1370 (7th Cir.
1991) (finding that sanction “affect[ed] the liquidation of the
assets of the estate”).
14
In advancing its contention that this court cites no
authority for the proposition that the § 157(b) listing restricts
core proceedings to those which arise as part of the administration
of a single bankruptcy case, the dissent fails to acknowledge

-23-
former client ever lodged a complaint against Sheridan.

Although a determination that Sheridan breached ethical

canons could conceivably enable these closed cases to be reopened,

possibly with a view to recovering attorney fees paid to him by the

respective estates, cf., e.g., id. at 220 (distinguishing non-core

omnibus disciplinary action from two other cases under review where

attorney sanctions were “pursued in the course of processing a

bankruptcy petition,” and where “finding that a law firm violated

the Rules [of Professional Conduct] could lead to that firm

forfeiting its fees . . . and such forfeiture would ‘affect the

liquidation of the assets of the estate’”),15 the disciplinary

action against Sheridan had no such purpose or effect, since its

remedial goal focused exclusively upon Sheridan’s fitness to

represent clients in future bankruptcy cases, rather than upon any

Hessinger, the one and only extant case directly on point. In
response, the dissent cites a string of cases involving omnibus
disciplinary proceedings, while conceding that the parties in all
those cases (unlike in Hessinger) never raised the core/non-core
issue for resolution by those courts. See, e.g., Household Credit
Servs., Inc. v. Dragoo (In re Dragoo), 219 B.R. 460 (Bankr. N.D.
Tex. 1998).

15
Similarly, some courts have held that the bankruptcy court
may issue “final” contempt orders in an ongoing case to discipline
counsel for noncompliance with court orders, since noncompliance
obviously hampers the efficacy of liquidation and reorganization
proceedings. See In re Woodward, 229 B.R. 468, 477 (Bankr. N.D.
Okla. 1999); cf. Volpert v. Volpert (In re Volpert), 186 B.R. 240,
245 (N.D. Ill. 1995) (noting that sanctions imposed under Fed. R.
Bankr. P. 9001 for dilatory conduct by counsel in an ongoing
bankruptcy case are core matters), aff’d, 110 F.3d 494 (7th Cir.
1997).

-24-
recoupment of estate funds attributable to Sheridan’s misconduct.

Thus, no matter what the outcome of the disciplinary proceeding

against Sheridan, no pending or closed bankruptcy case would be

affected unless further independent proceedings were instituted in

the future. At the present juncture, however, any prediction of

such an eventuality would be pure speculative. See, e.g., Warren

v. Calania Corp., 178 B.R. 279, 281 (M.D. Fla. 1995) (holding that

attorney disciplinary proceedings were not core, since “[t]he fact

that potential proceeds of the action may be distributed by the

[bankruptcy] court if an award is received is not enough”).

Omnibus disciplinary proceedings predicated upon alleged

violations of ethical rules are further distinguishable in that the

rights protected thereby do not derive from the Bankruptcy Code,

but from state law, viz., in this instance, the New Hampshire Rules

of Professional Conduct. See In re G.S.F. Corp., 938 F.2d at 1475

(noting that core proceedings normally involve rights derived from

bankruptcy law, and “depend on the Bankruptcy [Code] for their

existence”); Bethlahmy v. Kuhlman (In re ACI-HDT Supply Co.), 205

B.R. 231, 236 (B.A.P. 9th Cir. 1997) ("[A] proceeding ‘will not be

considered a core matter, even if it falls within the literal

language of § 157(b)(2)(A) or 157(b)(2)(O), if it is a state law

claim that could exist outside of bankruptcy and is not

inextricably bound to the claims allowance process or a right

created by the Bankruptcy Code.’”) (citation omitted); Jackson v.

-25-
Wessel (In re Jackson), 90 B.R. 126, 129 (Bankr. E.D. Pa. 1988)

(“‘[C]ontroversies that do not depend on the bankruptcy laws for

their existence – suits that could proceed in another court even in

the absence of bankruptcy – are not core proceedings.’”) (citation

omitted), aff’d, 118 B.R. 243 (E.D. Pa. 1990). Indeed, the

standards for admission to the bar of the United States District

Court for the District of New Hampshire essentially “piggyback”

upon the state’s rules of professional conduct (albeit that state

law is expressly adopted by the federal court in the particular

jurisdiction). See U.S. Dist. Ct. Local Rule (D.N.H.) 83.1(a)

(“Any member in good standing of the bar of the Supreme Court of

New Hampshire is eligible for admission.”). Although the

predominance of state-law issues, standing alone, cannot be

determinative, see 28 U.S.C. § 157(b)(3) (“A determination that a

proceeding is not a core proceeding shall not be made solely on the

basis that its resolution may be affected by state law.”) (emphasis

added), undoubtedly it is one relevant factor in the core/non-core

inquiry.16

16
The dissent contends that rules regulating attorney conduct
in federal court are strictly a matter of federal law, not state
law. We do not disagree. Our point is simply that the source of
the rules governing Sheridan’s case is the state rules, which in
this instance were adopted wholesale as the federal district
court's own rules. Cf. In re Snyder, 472 U.S. 634, 645 n.6 (1985)
(noting that state rules were not applicable in federal court
because “[t]he state code of professional responsibility [did] not
by its terms apply to sanctions in federal court”). Nor does our
case involve the wholly distinct question as to whether to apply a
federal rule or a state rule which proscribes the identical

-26-
 Moving beyond the explicit constraints in the statute

itself, sound policy concerns likewise compel such distinctions.

Where, as here, the attorney misconduct occurred neither in the

context of an ongoing bankruptcy case, nor in the presence of the

bankruptcy court, the bankruptcy court may have no better vantage

from which to make final findings of fact than would the district

court. See Fed. R. Bankr. P. 9033(d) (empowering district court to

receive further evidence before deciding whether to adopt

bankruptcy court’s recommended decision). Consequently, this sort

of omnibus disciplinary proceeding is far different from the

johnny-on-the-spot disciplinary proceedings relating to errant

attorney conduct occurring during an ongoing bankruptcy case, which

may be essential to the fair and efficient administration of the

conduct. See In re Larry’s Apartment, L.L.C., 249 F.3d 832, 838-39
(9th Cir. 2001) (undertaking analysis under Eerie doctrine, and
holding that a state law imposing sanctions for an attorney’s
filing of a lawsuit for an improper purpose was inapplicable in
federal court, given the existence of federal rules – viz., Federal
Civil Rule of Procedure 11 or 28 U.S.C. § 1927 – proscribing the
same misconduct). In attempting to demonstrate that our reference
to the state ethical rules is wholly “beside the point,” the
dissent quotes Arnold Print Works, 815 F.2d at 169, where we
stated that “[i]t is the nature of the proceeding – its relation to
a basic function of the bankruptcy court – not the federal or state
basis for the claim, that makes the difference here.” (Emphasis
added.) The quoted statement plainly does not support the
dissent’s contention that the primacy of state law can never be
weighed as a factor in the core/non-core analysis; and were there
to be any doubt, we further observed that “the fact that a
bankruptcy matter raises issues of state, rather than federal, law
does not by itself determine that it is non-core, rather than
core.” Id. (emphasis added).

-27-
bankrupt estate.17

In this type of omnibus disciplinary proceeding, which

relates to multiple bankruptcy cases extending over a considerable

17
The dissent further suggests that our holding will undermine
the bankruptcy courts’ ability to administer cases with efficiency
and dispatch. Although we need not resolve the issue today, a
strong argument could be made that § 157(b) contemplates that
attorney discipline imposed in the midst of an ongoing case
administration would be a core proceeding, even if the attorney’s
conduct itself occurred during a non-core proceeding, precisely
because the discipline concerns the administration of the estate
and the prospects that the bankruptcy court will be able to bring
the case to successful conclusion. In those circumstances,
immediate discipline serves the purpose of expedition, rather than
thwarting it.
Throughout, the dissent inexplicably describes our non-core
treatment of an omnibus disciplinary proceeding as a “penalty,”
which the bankruptcy courts will scurry to avoid at all costs, even
if it means the tedious reopening of each constituent case, or the
manipulation of the form of a disciplinary proceeding in a single
bankruptcy case so as to introduce in evidence attorney misconduct
arising in the other unrelated cases. In re Ludwick, 185 B.R. 238
(Bankr. S.D. Mich. 1995), however, clearly was not an attempt to
manipulate the form of a disciplinary proceeding to avoid a non-
core designation. The bankruptcy attorney was accused of forging
one client’s (i.e., Ludwick’s) signature. During disciplinary
hearings, a second client of the attorney in an unrelated
bankruptcy case testified that the attorney had also forged his
signature. The court sanctioned the attorney only to compensate
Ludwick for the Ludwick forgery, not the other forgery. Id. at 244
(noting that court used evidence of second forgery only on the
issue of the attorney’s credibility in denying the Ludwick
forgery).
We can perceive no sound basis for the curious conclusion that
the bankruptcy courts would be unreasonably covetous of the power
to issue a final disciplinary order, rather than a recommendatory
decision subject to de novo review by the district court. The
mutual goal of the bankruptcy courts and the district courts alike
is the deterrence of attorney misconduct. Thus, omnibus
proceedings are – and will remain – an efficient means to
investigate attorney conduct spanning dozens of bankruptcy cases,
as well as a viable option for the bankruptcy courts following our
decision.

-28-
period of time, the alleged misconduct may have occurred either

before multiple bankruptcy judges in a multi-judge district, or

entirely or partially outside the presence of the bankruptcy judge

who hears the disciplinary case. Here, for instance, the

bankruptcy court appointed Michels to investigate Sheridan’s

conduct, much of which allegedly occurred outside the courtroom. In

such cases, the bankruptcy judge would seem to have no greater

expertise as a factfinder than the district court.

We do not question that the case law overwhelmingly

suggests that the bankruptcy court possesses the requisite

authority, either inherent or statutory, to regulate its bar as

necessary and appropriate. See supra note 1. Nor do we hold

otherwise. In the instant case, however, the bankruptcy court

exercised its authority to take disciplinary action against

Sheridan, and we simply hold that — in these particular

circumstances — the bankruptcy court was not empowered to arrive at

a final resolution of the disciplinary matter absent further

district court participation and oversight.

The requirement that the district court arrive at a

final, plenary disciplinary disposition further recognizes that

disbarment and suspension plainly are among the more grievous

sanctions which can be imposed. Thus, the imposition of a

$30,377.50 fine, as a condition precedent to readmission to the

bar, is onerous indeed; the more so in the present circumstances

-29-
where numerous ethical violations spanning numerous bankruptcy

cases were conglomerated into a single disciplinary proceeding

after the fact. Cf., e.g., Bone v. Judah (In re Josey), 195 B.R.

511, 516 (Bankr. N.D. Ga. 1996) (noting that imposition of sanction

of suspension pursuant to bankruptcy court’s inherent powers is

“very serious,” and under local district court rule is to be

referred for investigation to standing district court disciplinary

committee). The consolidated nature of this type of omnibus

disciplinary proceeding threatens to expose attorneys to much

steeper sanctions than might otherwise have been incurred as a

result of piece-meal disciplinary proceedings conducted at the time

the misconduct arose in each constituent bankruptcy case. Thus,

the de novo review conducted by the district court accords counsel

additional procedural protections when confronting potentially

harsh penalties. See Cunningham v. Ayers (In re Johnson), 921 F.2d

585, 586 (5th Cir. 1991) (noting that district court undertook de

novo review).18

Finally, these disciplinary proceedings inevitably place

the bankruptcy court itself in an extremely awkward posture,

18
As suspensions and disbarments are “extreme” sanctions, the
courts frequently require heightened procedural protections, such
as a showing of “bad faith” and “clear and convincing” evidence.
See, e.g., Fellheimer, Eichen & Braverman, P.C., 57 F.3d at 1224;
In re Cowboy Roofing, Inc., 193 B.R. at 446. In that vein,
Sheridan argues on appeal that the bankruptcy court imposed a
sanction unsupported by any evidence of bad faith on his part. We
do not evaluate this argument, as it is more appropriately
presented to the district court following remand.

-30-
vulnerable to the public perception (if not charge) that the

bankruptcy court is inappropriately acting as accuser,

investigator, prosecutor, and judge. See Peugeot v. U.S. Tr. (In

re Crayton), 192 B.R. 970, 978 (B.A.P. 9th Cir. 1996). Any such

perception can be further allayed through recourse to the de novo

review conducted before the district court. After all, attorneys

are admitted to practice before the district court, which admission

accords counsel the derivative right to practice before the

bankruptcy court within the district, by virtue of the fact that

the bankruptcy courts function as organizational units of the

district court.

We close with a final admonition: our opinion is not to

be construed as holding that all attorney disciplinary proceedings

before the bankruptcy court are to be presumptively considered non-

core. Thus, had the Sheridan ethical violations occurred either

during the course of a bankruptcy case or within the immediate

presence of the bankruptcy judge, or otherwise directly affected

the administration, liquidation, or reorganization efforts, a

stronger demonstration might be made for characterizing the

disciplinary proceeding as a core matter. See, e.g., In re

Hessinger, 192 B.R. at 220 (noting that within an individual

bankruptcy case a suspension or disbarment of counsel may more

readily be regarded as “affecting” asset liquidation, inasmuch as

disqualification of counsel normally affects entitlement to

-31-
attorney fees recoverable from the bankrupt estate, or requires

reimbursement of attorney fees previously received, hence

increasing the assets available for distribution). As the instant

case implicates no such considerations, however, we reserve that

matter for another day.

In summary, the case at bar is distinguishable due

principally to the following factors: (i) the omnibus nature of

the disciplinary proceeding; (ii) the case did not arise in the

context of an ongoing bankruptcy case, cf. In re Desilets, 247 B.R.

660, 663 (Bankr. W.D. Mich. 2000) (holding that such an attorney

suspension constitutes core proceeding), aff’d, 255 B.R. 294 (W.D.

Mich. 2000), rev’d on other grounds, 291 F.3d 925 (6th Cir. 2002);

(iii) these disciplinary charges were predicated upon alleged

ethical-rule violations proscribed by state law, rather than by the

Bankruptcy Code; and (iv) any potential effect the bankruptcy court

order may have had upon a closed bankruptcy case is both remote and

overly speculative, see Warren, 178 B.R. at 281.

As the BAP lacked subject matter jurisdiction in the

instant case, it is unnecessary to reach the merits of the Sheridan

contentions that the sanction imposed by the bankruptcy court was

unwarranted in law or fact. Accordingly, the case must be remanded

to the bankruptcy court for entry of its recommended findings of

fact and conclusions of law, pursuant to 28 U.S.C. § 157(c)(1).

The instant dismissal is not to be interpreted as reflecting our

-32-
views on the underlying merits of the Sheridan appeal or the

authority of the district court, vel non, to impose monetary

sanctions as a condition precedent to Sheridan's readmission to the

bar following the type of omnibus disciplinary proceeding conducted

here.

Accordingly, pending the entry of a final judgment by the

district court, based upon the recommended findings of fact and

conclusions of law entered by the bankruptcy court, Sheridan is

reinstated to the bankruptcy court bar immediately. See supra note

9. Our decision shall be without prejudice to the right of a party

to appeal from any district court order that finally disposes of

the recommended findings of fact and conclusions of law entered by

the bankruptcy court.

The BAP decision and the bankruptcy court decision are

hereby vacated for want of jurisdiction. Sheridan is hereby

reinstated to the bankruptcy court bar, and the case is remanded to

the bankruptcy court for further proceedings consistent with this

opinion. The parties are to bear their own costs. SO ORDERED.

- Concurring Opinion Follows -

-33-
 SELYA, Circuit Judge (concurring in the judgment). I

recognize that the appellant did not make his jurisdictional

argument with crystalline clarity, either to the BAP or in this

court. There are, however, extenuating circumstances, and in my

view the LaGuardia/Weinstein exception is available here. I am

comfortable in joining in the affirmative exercise of discretion

needed to invoke that exception, and, thus, reaching the important

issue of classification (core versus non-core) that permeates this

proceeding. While that issue is not free from doubt, my resolution

of it tracks Judge Cyr's: this omnibus disciplinary proceeding,

which did not arise out of any matter(s) directly affecting the

bankruptcy court's ability to administer one or more ongoing cases,

is a non-core proceeding. Consequently, the bankruptcy court

lacked the authority to enter a final judgment.

I therefore concur in the vacation of the improvidently

entered judgment and the concomitant remand. If the appellant's

conduct is deserving of discipline beyond the period of enforced

suspension that he already has experienced — a matter on which I

take no view — it is the district court which, in the circumstances

of this proceeding, must impose it.

- Dissenting Opinion Follows -

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