supplemental jurisdiction

In October 1953 Francisco Romero, a Spanish subject, signed on as a crew member of the S.S. Guadalupe, a vessel of Spanish registry owned by the Spanish corporation Compania Trasatlantica. Romero continued to serve on the Guadalupe after the initial voyage, so that under Spanish law the original contract of hire remained in force. The ship sailed from Bilbao, touched other Spanish ports, proceeded to New York and Hoboken, made a brief trip to Vera Cruz and Havana, and returned to Hoboken. On May 12, 1954, while the vessel lay in Hoboken, Romero was struck by a cable on deck and seriously injured. Romero filed suit on the law side of the United States District Court for the Southern District of New York against four corporate defendants. He asserted Jones Act and general maritime claims for unseaworthiness, maintenance and cure, and maritime tort against Compania Trasatlantica and its New York husbanding agent Garcia & Diaz, Inc. He asserted maritime-tort claims against stevedore International Terminal Operating Co. and carpenter Quin Lumber Co., both of which were performing work aboard the Guadalupe under oral contracts with Garcia & Diaz. Jurisdiction was invoked under the Jones Act and under 28 U.S.C. §§ 1331 and 1332. After a pre-trial hearing the district court dismissed the entire complaint. It held that the Jones Act supplied no right of action against the foreign shipowner, that § 1331 did not confer jurisdiction over general maritime claims, that Garcia & Diaz was not Romero's employer, and that complete diversity was lacking under Strawbridge v. Curtiss. The court also declined to exercise discretionary admiralty jurisdiction after examining Spanish law, which provided Romero a lifetime pension of 35 to 55 percent of his wages plus maintenance and cure enforceable through the Spanish consul. The Court of Appeals affirmed. The Supreme Court granted certiorari because of conflicts among the circuits concerning the construction of § 1331 and the applicability of Lauritzen v. Larsen to the facts presented.

In 1978 Congress enacted the Bankruptcy Reform Act after nearly ten years of study. The statute established a United States bankruptcy court in each judicial district as an adjunct to the district court. It granted those courts jurisdiction over all civil proceedings arising under title 11 or arising in or related to cases under title 11. Bankruptcy judges appointed under the Act served fourteen-year terms. They were subject to removal by the judicial council of the circuit for incompetence, misconduct, neglect of duty, or disability. They received salaries subject to congressional adjustment. In January 1980 Northern Pipeline Construction Co. filed a petition for reorganization under the Act in the United States Bankruptcy Court for the District of Minnesota. In March 1980 Northern filed a separate suit in the same court against Marathon Pipe Line Co. seeking damages for alleged breaches of contract and warranty as well as for misrepresentation, coercion, and duress. Marathon moved to dismiss the suit on the ground that the Act unconstitutionally conferred Article III judicial power on bankruptcy judges who lacked life tenure and salary protection. The United States intervened to defend the statute. The Bankruptcy Court denied the motion to dismiss. On appeal the District Court reversed and dismissed the suit. Northern and the United States filed notices of appeal, and the Supreme Court noted probable jurisdiction.