Co-authored by Kyle J. Ortiz and Doron P. Kenter.
As we’ve previously noted, the Ninth Circuit’s decision in Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency) created a circuit split with the Sixth Circuit’s decision in Waldman v. Stone. Yesterday, two years and one day after Stern v. Marshall was decided, the Supreme Court granted certiorari in Bellingham.
It seems that finally, some of the questions that we’ve been asking over the past two years will be answered. Among the issues that the Court could address are:
- Can parties consent to entry of a final judgment in matters as to which bankruptcy courts otherwise lack final constitutional authority?
- Can such consent be implied (from a party’s course of conduct or otherwise), or must it be explicitly granted?
- Is there a “statutory gap” in statutorily “core” matters, where bankruptcy courts are not explicitly empowered to issue proposed findings of fact and conclusions of law, as they are with respect to “non-core” matters?
- Are fraudulent transfer actions within the bankruptcy court’s final adjudicatory authority? Preference actions?
- Just what did the Court mean when it first issued Stern? What is the intended effect on the division of authority between Article III judges and non-Article III judges?
The Court’s decision to take up Bellingham was a bit unexpected considering the Court’s recent denial of certiorari in the Waldman case, but we welcome the insight that the Court may yet provide. We will continue to cover further developments as they emerge. Please continue to visit the Stern Files for up-to-date information on all things Stern, as we await further guidance.
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