Stern v. Marshall
131 S. Ct. 2594
| SCOTUS | 2011Background
- Long-running dispute between Vickie Marshall and Pierce Marshall over J. Howard Marshall II's fortune; case traversed Louisiana, Texas, and California courts.
- Bankruptcy Court for the Central District of California entered a final judgment on Vickie's counterclaim for tortious interference.
- Texas probate judgment and Bankruptcy Court judgment reached opposite merits; appeals court favored the Texas judgment as controlling.
- Key legal questions: (i) whether §157(b)(1) authorizes final judgment on Vickie's counterclaim, and (ii) whether such authority is constitutional under Article III.
- Court held the Bankruptcy Court had statutory authority under §157(b)(2)(C) to enter a final judgment on the counterclaim but lacked constitutional authority under Article III to do so.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §157(b)(2)(C) authorize a bankruptcy judge to enter final judgment on Vickie's counterclaim? | Vickie argues §157(b)(2)(C) permits final judgment on the counterclaim. | Pierce contends core status depends on arisings under/in Title 11 and that not all counterclaims are core. | Yes; §157(b)(2)(C) permits final judgment on the counterclaim. |
| Is that authority constitutional under Article III? | Vickie argues constitutional authority exists through Congress's Article III power. | Pierce argues delegation to a non-Article III court is unconstitutional and violates separation of powers. | No; the authority is unconstitutional as exercised by the Bankruptcy Court. |
| Does §157(b)(5) affect jurisdiction over the defamation claim and consent to bankruptcy adjudication? | Vickie argues §157(b)(5) is jurisdictional and Pierce did not consent to bankruptcy adjudication. | Pierce contends consent and that §157(b)(5) is jurisdictional. | §157(b)(5) is non-jurisdictional; Pierce consented to bankruptcy adjudication; jurisdiction not lacking. |
| Should the case be analyzed under the public-rights doctrine to justify non-Article III adjudication? | Vickie argues public-rights exception could permit non-Article III adjudication. | Pierce argues public-rights doctrine does not apply to state-law counterclaims between private parties. | No; the counterclaim does not fall within the public-rights exception. |
Key Cases Cited
- Granfinanciera, S. A. v. Nordberg, 492 U. S. 33 (1989) (core vs private-rights distinction in bankruptcy cases)
- Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U. S. 50 (1982) (non-Article III bankruptcy judges; public rights discussion)
- Katchen v. Landy, 382 U. S. 323 (1966) (claims allowance integrated with adjudication; summary jurisdiction)
- Langenkamp v. Culp, 498 U. S. 42 (1990) (consent to adjudication via filing a claim; claims-allowance process)
- Crowell v. Benson, 285 U. S. 22 (1932) (administrative adjudication; narrow factual determinations)
- Thomas v. Union Carbide Agricultural Products Co., 473 U. S. 568 (1985) (pragmatic approach to Article III delegation; private rights context)
- Schor, Commodity Futures Trading Comm’n v. Schor, 478 U. S. 833 (1986) (multi-factor analysis for non-Article III adjudication; private vs public rights)
- Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272 (1856) (public rights vs private rights; limits on congressional power)