Summary: Bankruptcy cases are different in purpose and scope from most other debtor-creditor matters and two-party disputes in general. Bankruptcy law is collectivist in nature, impacting a debtor and potentially many of her creditors. Its purpose protects the debtor’s fresh start while equitably adjusting and enforcing creditor payment rights. Bankruptcy law is a uniform federal law and its prophylactic treatment of the debtor-creditor relationship would be significantly impaired were the contours of discharge dependent upon the source of enforcement of the discharge injunction. Uniform application of the law of discharge and how its entry is enforced should not depend upon whether the issue is before a judicial officer or an arbitrator and should not vary depending upon whether a creditor has contracted for arbitration or not. To the extent that the bankruptcy clause in the United States Constitution was intended to ensure uniformity in application of the law to sovereign states,likewise it requires uniformity of the law of discharge to all debtors and creditors. Inherent conflicts between the FAA and the Bankruptcy Code exist with respect to Plaintiff’s causes of action. Accordingly, Plaintiff is not required to submit these claims to arbitration.Because Defendants’ motion asserts no other basis for dismissal of Plaintiff’s adversary proceeding, the Motion to Dismiss is denied.
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