Executive Benefits Insurance Agency v. Arkison
134 S. Ct. 2165
| SCOTUS | 2014Background
- Bellingham Insurance Agency, Inc. (BIA) files Chapter 7; trustee Arkison sues EBIA for fraudulent conveyance of BIA assets.
- Bankruptcy Court grants summary judgment for the trustee; District Court affirms after de novo review and enters judgment for the trustee.
- EBIA appeals after Stern v. Marshall raised constitutional limits on bankruptcy court final adjudication of certain claims.
- Ninth Circuit holds Stern claims can be treated as non-core under §157(c)(1) due to severability; claims may be reviewed de novo.
- Supreme Court grants certiorari to resolve whether Stern claims may proceed under §157(c)(1) and whether the District Court de novo review cures potential error.
- Court holds that Stern claims may proceed as non-core under §157(c)(1); fraudulent conveyance claims are related to the bankruptcy case and proper procedures apply; de novo review by the District Court cures any error.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Stern claims may proceed as non-core under §157(c)(1). | EBIA contends the Stern label prevents final bankruptcy court adjudication. | Arkison argues severability allows non-core treatment under §157(c)(1). | Yes; Stern claims may proceed as non-core under §157(c)(1). |
| Whether fraudulent conveyance claims fit §157(c)(1) (non-core and related to title 11). | EBIA asserts limitations on core designation and consent requirements. | Arkison asserts claims are related to the bankruptcy estate and not core. | Yes; they are not core and are related to a case under title 11. |
| Whether §157(c)(1) procedures apply to the trustee’s claims here. | EBIA argues the bankruptcy court lacked appropriate non-core procedures. | Arkison contends proposed findings of fact and de novo review are applicable. | Yes; the bankruptcy court could submit proposed findings for de novo review and judgment by the district court. |
| Whether district court de novo review cured any constitutional error. | EBIA contends it was entitled to Article III review regardless of bankruptcy consent. | Arkison asserts de novo district court review yields constitutionally permissible outcome. | Yes; de novo review by the district court cured potential error. |
Key Cases Cited
- Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982) (distinguishes public vs private rights in bankruptcy jurisdiction)
- Granfinanciera, S. A. v. Nordberg, 492 U.S. 33 (1989) (jury trial right for fraudulent-conveyance-like claims)
- Celotex Corp. v. Edwards, 514 U.S. 300 (1995) (related-to test for bankruptcy proceedings)
- Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477 (2010) (severability and operation of valid portions of statutes)