MARGARET A. MAHONEY, CHIEF BANKRUPTCY JUDGE.
This matter is before the Court on the motion of Conseco Finance Corp.-Alabama, f/d/b/a/ Green Tree Financial Corporation ("Conseco") to stay proceedings and to compel arbitration. The Court has jurisdiction to hear this matter pursuant to 28 U.S.C. § 157 and 1334 and the Order of Reference of the District Court. At least to the extent indicated below, these motions are core proceedings pursuant to 28 U.S.C. § 157(b) and the Court has the authority to enter a final order. For the reasons indicated below, the motion of Conseco to stay proceedings and to compel arbitration is GRANTED as to the portion of the complaint that pertains to violations of the Racketeer Influenced and Corrupt Organizations Act to the extent the claims are separate from violation of §§ 362 and 524. Concomitantly, the Court in its sua sponte review of preemption concludes that the Bankruptcy Code does not preempt arbitration of the RICO claims of plaintiff to the extent the claims are separate from the claims of violation of §§ 302 and 524.
FACTS
On July 15, 1997, Debtor purchased a manufactured home from Southern Lifestyle Manufacturing, Inc. and executed a promissory note which included an arbitration provision. The promissory note and security agreement were then assigned to Conseco. On November 9, 1999, Debtor filed for relief under Chapter 7 of the United States Bankruptcy Code. On July 5, 2000, Debtor filed an adversary proceeding asserting that Conseco violated the automatic stay provided by § 362(a) of the Bankruptcy Code and the discharge injunction in § 524(a) of the Bankruptcy Code and seeking compensatory and punitive damages, injunctive relief, and attorney's fees and costs. Debtor later filed an amended complaint alleging civil RICO allegations against Conseco in addition to the allegations of the original complaint. Conseco then filed a motion to stay proceedings including discovery and to compel arbitration of all of Debtor's claims. Debtor filed a motion to determine that all causes of action in this adversary are core proceedings. This Court denied the motion to stay proceedings as to the portion of the complaint that pertains to contempt for violating the automatic stay (§ 362), and discharge injunction (§ 524), and ruled that those matters were core proceedings. As to the RICO violations, the Court deferred ruling and stated it would address the motions after the United States Supreme Court ruled in a case involving a similar arbitration clause — Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). The Supreme Court ruled that the arbitration clause was enforceable even though the clause failed to protect a party from potentially steep arbitration costs.
The arbitration agreement did not mention arbitration costs or fees and the plaintiff presented no evidence as to the likelihood that she would incur prohibitive costs in arbitration. The Green Tree Court stated that the enforceability of an arbitration clause depends on whether the parties agreed to submit their claims to arbitration and whether Congress has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue. Green Tree, 121 S.Ct. at 521.
On remand the Eleventh Circuit Court of Appeals held that the contractual provision to arbitrate is enforceable even if it precludes a plaintiff from utilizing class action procedures in vindicating statutory rights under the Truth in Lending Act. Randolph v. Green Tree Financial Corp.-Alabama, ___ F.3d ___, 2001 WL 245727 (11th Cir. March 13, 2001 ).
LAW
The issue remaining in this case is whether the claims asserted by Plaintiff under the Racketeer Influenced and Corrupt Organizations Act (" RICO") are preempted by the United States Bankruptcy Code or whether the RICO claims are viable and should be arbitrated under the parties' arbitration agreement. Bankruptcy judges have authority to hear and determine core proceedings arising under title 11 U.S.C. or arising in a case under title 11, and have limited authority to hear and recommend disposition as to noncore proceedings otherwise related to a case under title 11. In re Knox, 237 B.R. 687 (Bankr.N.D.Ill. 1999). This Court has already ruled that the portion of the complaint pertaining to contempt for the violation of the stay and the discharge injunction is a core proceeding and will be tried by this Court. The claims of violation of §§ 362 and 524 are intimately tied to the existence of Grant's bankruptcy and necessarily implicate the Bankruptcy Code. Prosecution of violation of court orders is a contempt proceeding. Contempt actions should be heard in the court that issued the order since contempt is to punish an affront to the court or the system. The question is whether Grant may seek remedies provided under RICO in addition to those sought pursuant to the Bankruptcy Code.
"The deliberately expansive reach of the Bankruptcy Code preempts virtually all claims which allege misconduct in the Bankruptcy proceedings." Cox v. Zale Delaware, Inc., 242 B.R. 444, 449-50 (N.D.Ill. 1999), aff'd, 239 F.3d 910 (7th Cir. 2001 ). This premise would seemingly preclude other actions. Conseco contends that Congress did provide a comprehensive remedy for violations of the discharge injunction in § 105(a) which empowers the court to "issue any order, process or judgment that is necessary or appropriate to carry out the provisions of this title." Grant argues that the Code does not provide a private remedy for violation of § 524 and thus, Congress could not have intended for other remedies to be preempted. Courts disagree as to whether § 105(a) provides a private right of action for violations of § 524. This Court has ruled in another case, Noletto v. Nationsbanc Mortgage Corp. (In re Noletto), Case No. 98-13813, Adv. No. 99-1120, (Bankr.S.D.Ala. December 29, 2000), that § 105(a) does provide a private right of action for such violations. Violation of the § 524 discharge injunction ordered by this Court is an affront to this Court for which the Code provides a remedy. The Code also provides a specific remedy for violation of § 362 at § 362(h). Therefore, to the extent Grant's claims are that Conseco wronged him by violating his bankruptcy rights, those wrongs are remedied under §§ 362 and 524.
However, to the extent Grant alleges actions that are not an affront to this Court's orders, or the bankruptcy system, the actions are not preempted and are arbitrable. The RICO claims are not stayed to the extent they involve allegations that are separate from the stay and discharge violations.
The amended complaint, for example, alleges mail fraud.
Defendants may compel those claims to be arbitrated pursuant to the contract between the parties. Plaintiff will have to prove in the arbitration the elements of any claims he has and that they are different from the violations of the stay and discharge injunction to be tried in this Court.
The RICO claims may involve some of the same facts and issues to be adjudicated in this Court for violation of the stay and discharge injunction. Just as a prior arbitral award may have binding res judicata effect on this Court, In re O'Neill, ___ B.R. ___, 2001 WL 293631 (Bankr. E.D. Tex. 2001 ); see also Stone v. Kirk, 8 F.3d 1079, 1090 (6th Cir. 1993) (jury verdict binds bankruptcy court in later dischargeability trial); Spilman v. Harley, 656 F.2d 224, 227 (6th Cir. 1981) (state court judgment had collateral estoppel effect), so too the necessary findings and conclusions of this Court may be binding on arbitration. See generally Christo v. Padgett, 223 F.3d 1324 (11th Cir. 2000); In re O'Neill, ___ B.R. ___, 2001 WL 293631 (Bankr.E.D.Tex. 2001 ); In re Jenkins, 258 B.R. 251 (Bankr.N.D.Ala. 2001 ).
As to those matters tried by this Court, defendants will have a defense of prior adjudication.
THEREFORE, IT IS ORDERED AND ADJUDGED:
1. The motion of Conseco Finance Corp. — Alabama to stay proceedings and to compel arbitration is GRANTED as to the portion of the complaint that pertains to violations of the Racketeer Influenced and Corrupt Organizations Act to the extent the claims are separate from violation of §§ 362 and 524 and Conseco and Grant must proceed as required by their agreement.
2. The RICO claims are dismissed without prejudice to arbitration.