Background - Anderson opened a credit‑card account (predecessor to Credit One) and became delinquent; Credit One charged off the account in March 2012, sold the debt, and reported the charge‑off to credit bureaus. - Anderson filed Chapter 7 in January 2014; the bankruptcy court entered a discharge and closed the case in May 2014. - After discharge, Anderson asked Credit One to remove the charge‑off from his credit reports; Credit One refused, prompting Anderson to reopen his bankruptcy and sue for violation of the discharge injunction (11 U.S.C. § 524(a)(2)) as a putative class action. - Credit One moved to compel arbitration under the cardholder agreement; the bankruptcy court denied the motion, holding the claim non‑arbitrable as a core bankruptcy matter. The district court affirmed; Credit One appealed. - The Second Circuit retained jurisdiction despite Credit One’s later stipulation to update reports and affirmed, holding arbitration would create an inherent conflict with the Bankruptcy Code because enforcement of the discharge injunction lies at the heart of bankruptcy courts’ powers. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---:|---:|---:| | Whether Anderson’s § 524(a)(2) claim is arbitrable | Anderson: claim enforces bankruptcy discharge; inherently a core bankruptcy matter that must be decided by the bankruptcy court | Credit One: arbitration clause in cardholder agreement requires arbitration of disputes; FAA’s strong policy favoring arbitration | Court: claim is non‑arbitrable — arbitration would create an inherent conflict with the Bankruptcy Code | | Whether congressional intent precludes arbitration here | Anderson: enforcement of discharge is central to Code; Congress intended courts to protect discharge injunctions | Credit One: FAA preference and contractual arbitration should govern; statutory text/legislative history arguments (not raised below) | Court: limited inquiry to inherent conflict; found inherent conflict without reaching text/history arguments | | Whether the bankruptcy court properly exercised discretion in refusing to compel arbitration | Anderson: bankruptcy court has discretion to refuse arbitration where arbitration would severely conflict with core bankruptcy objectives | Credit One: bankruptcy court should have stayed proceedings and compelled arbitration under settled law | Court: bankruptcy court did not abuse discretion; properly balanced policies and declined to compel arbitration | | Effect of putative class action posture on arbitrability | Anderson: classwide enforcement of discharge injunction still implicates core bankruptcy powers | Credit One: class posture may reduce close connection to individual bankruptcy proceedings | Court: class nature does not alter result; class members allege ongoing violations of discharge that impair fresh start | ### Key Cases Cited Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987) (party opposing arbitration bears burden to show Congress intended to preclude arbitration of statutory claims) In re U.S. Lines, Inc., 197 F.3d 631 (2d Cir. 1999) (arbitration may be refused if it would seriously jeopardize a core bankruptcy proceeding) MBNA America Bank, N.A. v. Hill, 436 F.3d 104 (2d Cir. 2006) (particularized inquiry into core/non‑core and inherent conflict with Bankruptcy Code) In re Manville Forest Products Corp., 896 F.2d 1384 (2d Cir. 1990) (standard for appellate review of bankruptcy decisions) In re DeTrano, 326 F.3d 319 (2d Cir. 2003) (discharge provides the debtor a fresh start; central purpose of the Bankruptcy Code) In re Bogdanovich, 292 F.3d 104 (2d Cir. 2002) (describing discharge as enabling a fresh start) In re Kalikow, 602 F.3d 82 (2d Cir. 2010) (bankruptcy courts’ contempt and § 105(a) enforcement powers complement inherent powers) GTE Sylvania v. Consumers Union of U.S., Inc., 445 U.S. 375 (1980) (respect for judicial process requires obedience to injunctions)