Supreme Court To Hear Argument in Executive Benefits Insurance Agency v. Arkison

Contributed by: Doron P. Kenter and Kyle J. Ortiz

The Supreme Court will be hearing argument today (January 14, 2014) in Executive Benefits Insurance Agency v. Arkison, in which the Court will revisit at least some of the questions that bankruptcy courts have been grappling with in the wake of the Supreme Court’s Stern v. Marshall decision.  It should be no surprise that we at the Bankruptcy Blog are tremendously interested in the outcome of this case and particularly how the Justices will respond to oral arguments.
As we’ve already noted, the primary questions that the Supreme Court will entertain will be (a) whether bankruptcy courts may enter final judgments on “core” matters as to which they lack final constitutional authority, so long as they have the parties’ consent and (b) whether bankruptcy courts may submit proposed findings of fact and conclusions of law in connection with such matters, notwithstanding the fact that Congress has not specifically conveyed that right upon them.
Although we are curious to see what the Supreme Court will decide on these issues, perhaps more interesting will be what the Supreme Court has to say about Stern and the role of bankruptcy courts in the wake of the Stern decision.  Bankruptcy courts occupy a distinct role as specialized courts, with particular expertise in bankruptcy cases and the issues arising from them, yet because bankruptcy judges do not derive their authority from Article III of the Constitution and therefore do not enjoy lifetime tenure; their role in the judiciary necessarily is limited.  Even though the Supreme Court observed in Stern that it did not intend to change the division of labor between bankruptcy and district courts, hindsight has shown that it most certainly has shaken that division of labor, perhaps to its core (no pun intended).
We at the Bankruptcy Blog welcome any guidance that the Supreme Court may be able to offer regarding Stern’s scope.  We imagine that district court judges – whose dockets promise to be even more burdened by any additional limitations on bankruptcy courts’ authority – would similarly welcome the clarity.
We will report back as we learn more.  Keep following the Stern Files for all things Stern/Arkison!