This is a paper that I did for the Austin Bar Association
summarizing the Texas cases applying Stern v. Marshall to date. Please note that
where the holding is indented, I am directly quoting the opinion. I
also used the following key for highlighting certain decisions:
*--If you only read a few cases, read these ones.
#--Cases where the Court found that Bankruptcy Judge
lacked authority to enter a final order.
Fifth Circuit Court of Appeals:
Technical
Automation Services Corp. v. Liberty Surplus Insurance Corporation,
673 F.3d 399 (5th Cir. 3/5/12)(E. Grady Jolly)
Facts: Magistrate Judge granted summary
judgment on an insurance coverage dispute.
Fifth Circuit sua sponte requested briefing on whether Stern v. Marshall affected the
Magistrate Judge's ability to enter a final judgment.
Holding: Stern
v. Marshall did not overrule prior precedent on constitutionality of U.S.
Magistrate's authority to enter a final judgment.
U.S.
District Courts:
Feuerbacher
v. Moser, 2012 U.S. Dist. LEXIS 44396 (E.D. Tex. 3/29/12)(Marcia
A. Crone)
Facts: Trustee sued debtor's husband under TUFTA to
recover fraudulent transfers.
Bankruptcy Court ruled in favor of Trustee. On appeal, husband raised a Stern issue.
Holding:
Application of the aforementioned rationales to the case
at bar reveals that Stern does not preclude the bankruptcy court from
issuing a final judgment on claims where, as here, the Trustee seeks to recover
fraudulent transfers.
Mahanna
v. Bynum, 465 B.R. 436 (W.D. Tex. 11/28/11)(Sam Sparks)
Facts: Debtors filed chapter 13 bankruptcy. Court directed debtors to convert to chapter
7 or chapter 11. Debtors converted to
chapter 11. After debtors failed to
comply with obligations of debtors-in-possession, U.S. Trustee filed Motion to
Dismiss or Convert. Debtors requested
conversion. Court dismissed the case
over debtors' objection. Debtors
appealed.
Holding: Court rejected argument that Bankruptcy
Court lacked authority to enter a final order on motion to dismiss or convert.
Stern did not destroy all
finality in bankruptcy courts, it simply held § 157(b)(2)(C) was
unconstitutional to the extent it swept counterclaims not arising in or under
Title 11 into the category of "core" proceedings.
Bushman
v. Moore, 2011 U.S. Dist. LEXIS 154776 (S.D. Tex. 9/14/11)(Vanessa
D. Gilmore)
Facts: Bankruptcy Court entered judgment finding
debt to be non-dischargeable and finding that property was not homestead.
Holding: Debtors argued that Stern v. Marshall prevented Bankruptcy Court from entering final
judgment.
Here, in contrast to Stern
v. Marshall, the Bankruptcy Court was not ruling on a state law
counterclaim, but on a determination as to the dischargeability of particular
debts under 28 U.S.C. § 157(b)(2)(I). These types of claims remain under the
bankruptcy judge's core proceedings jurisdiction following Stern v. Marshall.
#In
re AIH Acquisitions, LLC, 2011 U.S. Dist. LEXIS 101190 (N.D.
Tex. 9/7/11)(John McBryde)
Facts: Individuals filed plea in intervention in
adversary proceeding involving Textron.
Bankruptcy Court dismissed claims with prejudice for failure to plead
with specificity under Rule 9(b)).
Holding: Bankruptcy Court lacked authority to
enter a final order on claims. Claims
asserted in plea in intervention were state law claims similar to the
counterclaim in Stern v. Marshall. The District Court reversed the dismissal
order and withdrew the reference.
Bankruptcy
Courts:
Burchik
v. Butler, Adv. No. 11-1220 (Bankr. W.D. Tex. 5/10/12)(Craig A.
Gargotta)(oral ruling)
Facts: Chapter 7 Debtor brought suit against former counsel for
malpractice.
Holding: In announcing oral ruling, Court noted that absent
consent, it would not have had authority to enter a final ruling under Stern.
Because parties expressly consented, Court could enter a final order.
In
re Ruth, 2012 Bankr. LEXIS 1857 (Bankr. S.D. Tex. 4/26/12)(Jeff
Bohm)
Facts: Debtors filed adversary proceeding against
creditor seeking to deny claim and recover sanctions for abuse of the proof of
claim process and for vexatious litigation.
Holding: Court had authority to enter a final order on
counterclaim to proof of claim because counterclaim arose out of Bankruptcy
Code and Bankruptcy Rules. Additionally,
it was necessary to resolve the dispute to determine the claim.
In
re Bechuck, 2012 Bankr. LEXIS 1459 (Bankr. S.D. Tex. 4/4/12)(Jeff
Bohm)
Facts: Trustee filed an application to employ
special counsel.
Holding: Because Court denied application to employ
special counsel, authority to enter a final order was not implicated. However, Bankruptcy Court would
nevertheless have authority because employment of counsel is governed by
Bankruptcy Code and Bankruptcy Rules.
In
re Laughlin, 2012 Bankr. LEXIS 1268 (Bankr. S.D. Tex.
3/23/12)(Jeff Bohm)
Facts: Creditor filed complaint to determine
dischargeability of debt.
Holding:
This suit is therefore based on an express bankruptcy
statute; indeed, the requested relief is unique to the Code and could never be
obtained under state law. For these reasons alone, this Court concludes that Stern
is inapposite, and therefore it has constitutional authority to enter a final judgment
in this dispute.
In
re Thalmann, 2012 Bankr. LEXIS 1066 (Bankr. S.D. Tex.
3/13/12)(Jeff Bohm)
Facts: Creditor moved to dismiss case as having been
filed in bad faith and Debtor objected to proof of claim filed by State Court
Receiver.
Holding:
State law has no equivalent to (sections 1307(c) and
1325(a)(3) and (a)(7)); they are purely a creature of the Bankruptcy Code.
Accordingly, because the resolution of this dispute is based on express
bankruptcy statutes, not state law, Stern is inapplicable, and this
Court has the constitutional authority to enter a final judgment on the Motion
pursuant to 28 U.S.C. §§ 157(a) and (b)(1).
In
re Carlew, 2012 Bankr. LEXIS 1006 (Bankr. S.D. Tex.
3/9/12)(Jeff Bohm)
Facts: Chapter 7 trustee objected to debtor's
exemptions.
Holding:
In the dispute at bar, the Chapter 7 Trustee has objected
to the Debtor's exemption of the Insurance Proceeds pursuant to Section
522(l) and Fed. Bankr. R. 4003(b). State law has no equivalent to
this statute and rule; therefore, the facts in this case are distinguishable from those in Stern,
which involved solely state law. Granted, the resolution of the dispute at bar
does hinge on Texas state law regarding homestead exemption. But, unlike Stern,
where the resolution of the debtor's counterclaim did not necessarily
adjudicate the creditor's claim, here, the resolution will certainly determine
whether the Debtor has a claim to the Insurance Proceeds. If he does--i.e. if
these proceeds are exempt--there will necessarily be less funds available for
distribution for creditors. If the Debtor does not have a claim to the
Insurance Proceeds--i.e. the proceeds are not exempt--then the Trustee will
have more funds to distribute the proceeds to pay creditors. For these reasons,
the dispute at bar is sufficiently distinguishable from the dispute in Stern
for this Court to sign a final order.
In
re Frazer, 466 B.R. 107 (Bankr. S.D. Tex. 107 (Bankr. S.D. Tex.
3/5/12)(Jeff Bohm)
Facts: Debtors filed adversary proceeding to strip lien of homeowners
association from their homestead.
Holding: While validity of lien depends on state law,
determination of dispute is necessary to resolve claim and therefore Court has
authority to enter a final order.
In
re Crescent Resources, LLC, 2012 Bankr. LEXIS 843 (Bankr. W.D.
Tex. 3/2/12)(Craig A. Gargotta)
Facts: Plan Trustee filed a Complaint to Avoid and Recover Improper "Bonus" Payments. Defendants filed a Motion to Dismiss. Court granted motion in part and denied in
part. Specifically, Court ruled that plan of
reorganization did not adequately preserve causes of action under 11 U.S.C.
§544 under state fraudulent conveyance law.
Trustee requested that Court certify a direct appeal to the Fifth
Circuit Court of Appeals. One issue
that the Trust requested the Court to certify was whether the Court had
authority to enter a final order dismissing the claims with prejudice.
Holding: Court disagreed that case was "squarely within the
category of state law proceedings" implicated by Stern. Although case
involved a fraudulent transfer action brought under state law by virtue of
strong arm powers under section 544, Court's ruling was based upon
interpretation of the Plan.
Furthermore, order was interlocutory and therefore was not a "final"
order governed by Stern.
*In
re American Housing Foundation, 2012 Bankr. LEXIS 449
(Bankr. N.D. Tex. 2/10/12)(Robert Jones)
Facts: Trustee brought actions under 11 U.S.C. §§544, 547 and 548. 96 defendants in 20 adversary proceedings
filed motions to dismiss based on Stern
v. Marshall. Motions were filed
under Rule 7012(b)(1) based on lack of subject matter jurisdiction.
Holding: Court assumed that it did not have authority to enter
final orders in proceedings because defendants did not file claims and causes
of action did not fit within public rights doctrine. Court considered whether it could hear
cases and issue proposed findings of fact and conclusions of law to the U.S.
District Court. "(I)t makes little sense
to suggest that a bankruptcy judge has authority to hear a matter and issue
proposed findings of fact and conclusions of law on "related to"
matters but does not have authority to do the same with respect to
"core" matters." Court
concluded that it could enter non-binding findings of fact and conclusions of
law. Case contains a very thoughtful
and extensive discussion of Stern.
In
re Franceschini, 2012 Bankr. LEXIS 156 (Bankr. S.D. Tex.
1/12/12)(Marvin Isgur)
Facts: Creditor brought action to determine dischargeability
under 11 U.S.C. §523(a)(6).
Holding:
The right to a discharge is established by the Bankruptcy
Code and is central to the public bankruptcy scheme. (citations omitted). Determinations of whether a debtor meets the
conditions for a discharge are integral to the bankruptcy scheme, and
bankruptcy courts have the authority to make such determinations pursuant to
its in rem jurisdiction. (citation omitted)." Court had authority to enter final order on determination
of dischargeability.
In
re Hereford Biofuels, LP, 2012 Bankr. LEXIS 22 (Bankr. N.D. Tex.
1/3/12)(Stacey C.G. Jernigan)
Facts: Non-debtor brought action against another
non-debtor over interpretation of section 363 order.
Holding:
While the Adversary Proceeding has arisen in a
post-confirmation context, and is between two non-debtor parties, the disputes
herein ultimately concern: (a) the interpretation and enforcement of a prior
sale order of the bankruptcy court, under section 363 of the Bankruptcy Code
(and the asset purchase agreement that the bankruptcy court approved); and (b)
the definition of what was or was not property of the bankruptcy estate in the
underlying bankruptcy case, pursuant to section 541 of the Bankruptcy Code.
In fact, the asset purchase agreement, the bankruptcy court sale order, and
what was "property of the estate," are undoubtedly at the crux of the
parties' disputes. The only place that one would find a bankruptcy court sale
order and these post-sale issues is in the context of a bankruptcy case. Thus,
the court determines that this is a core "arising in" proceeding, pursuant to 28 U.S.C.
§§ 157(b)(2)(A), (O) & 1334(b). It is a proceeding in
which the bankruptcy court may enter final orders.
In
re Hill, 2011 Bankr. LEXIS 5186 (Bankr. S.D. Tex. 12/30/11)(Jeff
Bohm)
Facts: Chapter 13 trustee filed objection to
exemptions and motion to modify confirmed plan.
Holding: Because proceeding arose under Bankruptcy Code and Rules,
Court could enter a final order. Public
rights doctrine applied as well.
*In
re Apex Long Term Acute Care-Katy, LP, 465 B.R. 452 (Bankr. S.D.
Tex. 12/28/11)(Marvin Isgur)
Facts: Trustee brought four preference suits. Trustee compromised three of the cases and
sought to dismiss them with prejudice.
Trustee sought a default judgment on the fourth case.
Holding: Court raised issue of its ability to enter
the orders sua sponte. Because
dismissal with prejudice and default judgment constitute final orders, Court had
to examine its authority. After
extensive analysis, Court concluded that it could enter final orders in cases
where defendants filed claims because preference action was part of the claims
adjudication process. As to defendants
who did not file claims, Court could enter final orders based on the public
rights doctrine." Thia is a very
scholarly opinion and should be the "go to" opinion for defending the
ability of the bankruptcy court to enter final orders in a preference case.
In
re Carroll, 464 B.R. 293 (Bankr. N.D. Tex. 12/13/11)(Barbara J.
Houser)
Facts: Debtor filed for chapter 13 relief. Creditor sought to liquidate claims and have
them declared to be nondischargeable.
Debtor argued that court did not have jurisdiction.
Holding: Court had authority to enter final orders. Stern clarifies "bankruptcy courts'
constitutional power, not their subject matter jurisdiction." "(T)here can be little doubt that this
Court, as an Article I tribunal, has the Constitutional authority to hear and
finally determine what claims are non-dischargeable in a bankruptcy case.
Determining the scope of the debtor's discharge is a fundamental part of the
bankruptcy process." Because Stern left intact Court's ability to
adjudicate a creditor's claim, Court may liquidate amount of non-dischargeable
debt.
*#In
re Soporex, Inc., 463 B.R. 344 (Bankr. N.D. Tex.
11/28/11)(Barbara J. Houser)
Facts: Trustee filed complaint against officers and directors for breach
of fiduciary duty and objections to claim.
Defendants filed motion to dismiss which did not raise a Stern issue.
Holding: Court raised Stern
issue sua sponte. Court concluded that
it could not enter a final order on trustee's counterclaims against insiders
filing claims. Court ruled that it
could issue proposed findings and conclusions to the district court on
statutory core proceedings where it lacked constitutional authority to enter a
final order. In dicta, Court noted
whether parties could "remove the constitutional impediment identified by Stern by consent is unclear."
Many are debating the breadth of the Supreme Court's
decision in Stern. The arguments are interesting and, in some instances,
mind-numbing. For today, I leave those arguments to others because I believe
that the issue before me can be more simply, and practically, decided. It would
be incredibly ironic for this Court to lack constitutional authority to finally
determine the Trustee's breach of fiduciary duty and corporate waste claims
against Smith and Sabolik (when they actually inserted themselves into Inc.'s
bankruptcy case by filing a proof of claim) as the Supreme Court has clearly
held in Stern, but to have constitutional authority to finally determine
the Trustee's breach of fiduciary duty claims (arising from substantially the
same acts or failures to act) against Linehan, the Outside Directors, and
Letson, who chose not to involve themselves in the Debtors' bankruptcy cases at
all until they were forced to do so by the Trustee's decision to sue them here.
As a practical matter, this Court concludes that such a result is
irreconcilable with the Supreme Court's analysis in Stern. If this Court
lacks constitutional authority to finally determine one set of breach of fiduciary duty claims
against two former officers of certain of the Debtors, surely it lacks
constitutional authority to finally determine substantially identical sets of
breach of fiduciary duty claims against other former officers and/or directors
of certain of the Debtors.
As a
result, the Court submitted proposed findings of fact and conclusions of law
with regard to the motions to dismiss.
In
re Whitley, 2011 Bankr. LEXIS 4545 (Bankr. S.D. Tex.
11/21/11)(Jeff Bohm)
Facts: Court issued order to show cause regarding compensation of attorney
in chapter 13 proceedings.
Holding:
The dispute at bar is not a counterclaim of the Debtor,
nor does it arise out of state law; therefore, Stern does not apply.
This suit arises out of alleged violations of the disclosure requirements
imposed by an express Bankruptcy Code provision--i.e. § 329. Moreover,
the Trustee also seeks relief based upon another express Bankruptcy Code
provision--i.e. § 330, which allows the Court to award or deny
compensation to attorneys that represent the debtor and the debtor's estate.
State law has no equivalent to these statutes; they are purely creatures of the
Bankruptcy Code. Accordingly, the resolution of this dispute is not based on
state common law, Stern does not apply, and this Court has the
constitutional authority to enter a final judgment in this dispute pursuant to 28
U.S.C. §§ 157(a) and (b)(1).
In
re Chao, 2011 Bankr. LEXIS 4543 (Bankr. S.D. Tex. 11/21/11)(Jeff
Bohm)
Facts: Court issued Memorandum Opinion Regarding Sua Sponte Conversion of
Case from Chapter 11 to Chapter 7.
Holding: Court found that it had authority to enter a final order
converting the case from chapter 11 to chapter 7.
#In
re Special Value Continuation Partners, LP, 2011 Bankr. LEXIS 4475 (Bankr. S.D. Tex. 11/15/11)(Marvin
Isgur)
Facts: Lenders filed a state court action against officers and directors
alleging that they provided misleading financial projections and made
misrepresentations to obtain financing for company which filed bankruptcy. Defendants removed case and requested that
venue be transferred to Delaware.
Plaintiffs moved to abstain and remand.
Holding: One factor that court considered in denying motion to
transfer venue and granting motions to abstain and remand was that court could
not enter a final order under Stern. "These are state law causes of action by
nondebtors against nondebtors. The causes of action neither derive from nor
depend upon any agency regulatory scheme."
In
re Noram Resources, Inc., 2011 Bankr. LEXIS 4268 (Bankr. S.D. Tex.
11/7/11)(Marvin Isgur)
Facts: Chapter 7 trustee brought suit against officers and directors
asserting that they had breached their fiduciary duties under Canadian
law. Directors moved to dismiss.
Holding:
"After Stern, the Court's authority over state-law
matters (or, in this case, foreign-law matters) is particularly
questionable." However, Court still had
authority to enter interlocutory orders, such as ruling on a motion to dismiss.
#In
re Yazoo Pipeline Co., LP, 459 B.R. 636 (Bankr. S.D. Tex.
10/14/11)(Marvin Isgur)
Facts: Trustee filed suit to recover damages for misconduct occurring
while debtor was in chapter 11. Trustee
filed motion for leave to file second amended complaint.
Holding:
Although the claims in this proceeding involve conduct that took place within the context of
a bankruptcy case, bankruptcy law does not alter the state-law character of the
claims. The claims would not necessarily be resolved through the claims
adjudication process or through the resolution of any other essential
bankruptcy matter. This Court does not have authority to enter a final judgment
in this matter. On this Court's Recommendation, the District Court has ordered
that the reference will be withdrawn after all pretrial matters are concluded.
In
re The Heritage Organization, LLC, 459 B.R. 911 (Bankr. N.D.
Tex. 10/3/11)(Barbara J. Houser)
Facts: Several years after an adverse judgment, defendants moved to
vacate the judgment under Rule 60(b)(4) based on the Stern decision.
Holding: Judgment is not void for want of jurisdiction unless nor
arguable basis for jurisdiction existed in the first place. Court had statutory jurisdiction. Because Stern
case was not decided for two years after judgment, court "declines to conclude
that it lacked any arguable basis for jurisdiction."
#In
re Heights Melrose Group, LLC, 2011 Bankr. LEXIS 153073
(Bankr. S.D. Tex. 9/29/11)(Marvin Isgur)
Facts: Debtor filed suit to determine that defendants did not have a
claim to certain condominiums.
Defendants claimed that foreclosure sale at which debtor purchased
properties was invalid. Both parties
moved for summary judgment.
Holding: Court could not enter final orders on parties' state law
claims. As a result, Court submitted
proposed findings and conclusions to the District Court.
*In
re Bigler, LP, 458 B.R. 345 (Bankr. S.D. Tex. 8/19/11)(Jeff
Bohm)
Facts: Bank brought declaratory judgment complaint against other
creditors to determine extent, priority and validity of liens.
Holding:
The broader applicability of the Supreme Court's
decision remains unclear. Other types of
disputes frequently decided by bankruptcy courts may now also require final
adjudication by Article III courts. A bankruptcy court's authority over matters
involving state law causes of action is particularly questionable. Indeed, just
as the debtor's counterclaim in Stern was based entirely upon state law,
the law governing the dispute in this adversary proceeding is based entirely
upon state law. Accordingly, at first blush, it would appear that the
undersigned Article I judge does not have the constitutional authority to enter
a final judgment in this adversary proceeding. However, for the reasons set
forth below, this Court concludes that it does have such authority.
This Court may exercise authority over matters integral
to the bankruptcy scheme under the "public rights" exception
articulated in Stern. Under Thomas v. Union Carbide Agric. Prods. Co.,
a right closely integrated into a public regulatory scheme may be resolved by a
non-Article III judge. (citation
omitted). The Bankruptcy Code is a public scheme for restructuring
debtor-creditor relations, necessarily including "the exercise of
exclusive jurisdiction over all of the debtor's property, the equitable
distribution of that property among the debtor's creditors, and the
ultimate discharge that gives the debtor a 'fresh start' by releasing him, her,
or it from further liability for old debts." (citation omitted).
Here, this suit concerns a dispute that must be resolved
in order to determine the appropriate distribution among the Debtors'
creditors. The determination of lien priority on assets that were once property
of the bankruptcy estate are part of the "public rights" exception,
as it involves the exercise of the Bankruptcy Court's in rem
jurisdiction over the estate. (citation omitted).
Hence, resolution of the lawsuit pending in this Court
arises from an express provision of the Plan, the very purpose of which is to
distribute cash to the prevailing party or parties--thereby accomplishing the
very objective of the public right known as the bankruptcy process (i.e. paying claims of creditors). (citation
omitted). Therefore, not only does this lawsuit involve a right integral
to the bankruptcy scheme--the determination of lien priority--but it also
involves a right created by the Bankruptcy Code--distribution of property of
the estate to creditors pursuant to the Plan. Accordingly, this dispute falls
within the undersigned judge's constitutional authority to enter a final
judgment.
In
re Ritz, 459 B.R. 623 (Bankr. S.D. Tex. 8/4/11)(Jeff Bohm)
Facts: Creditor of a corporation asserted that debtor drained corporation
of funds. Creditor asserted claim
against the debtor and sought determination of nondischargeability.
Holding: Court could enter a final order under the public rights
doctrine.
In
re Okwonna-Felix, 2011 Bankr. LEXIS 3028 (Bankr. S.D. Tex.
8/3/11)(Jeff Bohm)
Facts: Debtor sought approval of compromise of claims against insurance
companies.
Holding:
Accordingly, because the resolution of the Motion is not
based on state common law, but entirely on federal bankruptcy law (both the
Rule and the case law instructing how to apply the Rule), the holding in Stern
is inapplicable, and this Court has the constitutional authority to enter a
final order in this contested matter pursuant to 28 U.S.C. §§ 157(a) and
(b)(1).
In
re Muhs, 2011 Bankr. LEXIS 3032 (Bankr. S.D. Tex. 8/2/11)(Marvin
Isgur)
Facts: Creditor filed complaint to determine
dischargeability.
Holding:
When a bankruptcy court determines the extent of a
creditor's nondischargeable claim, the court simply decides that a particular
creditor is entitled to something more than the creditor would otherwise get
out of the bankruptcy bargain. Such
determinations are inextricably tied to the bankruptcy scheme and involve the
adjudication of rights created by the Bankruptcy Code. This case therefore
falls within the Bankruptcy Court's authority, and the Bankruptcy Court's
judgment is final.
*In
re Turner, 462 B.R. 214 (Bankr. S.D. Tex. 7/11/11)(Jeff Bohm)
Facts: Chapter 13 debtors filed Complaint for Turnover and Damages
against Bank that froze account.
Holding: Complaint for turnover was based on automatic stay and
not upon state law.
The automatic stay is one of the most important--if not
the most important--features of the Bankruptcy Code, and it is integral to the
public bankruptcy scheme. Its purpose is to enjoin all creditors from taking
action against the debtor and the estate so that the debtor may have some
breathing room to propose and obtain confirmation of a plan of reorganization
which will pay creditors. (citation
omitted). A debtor has a fiduciary duty to his creditors to take the action
necessary to pay their claims. (citation omitted). Given the central role of
the automatic stay in the bankruptcy scheme, the broad effect of the automatic
stay, and the fiduciary duty imposed upon debtors, this Court concludes that
enforcement of the automatic stay fits within the "public rights"
exception. The automatic stay protects not just one person or entity, but
rather protects all of those persons and entities affected by the filing of a
bankruptcy petition. (citation omitted). The debtor and the estate benefit
because the stay is an injunction that enjoins creditors from unilaterally
attempting to collect their respective claims against the estate. (citation
omitted). Each of the creditors benefits because no other creditor may
unilaterally take action against the estate--which means that the debtor has
time to deliberately and carefully file a plan and then obtain confirmation so
that all claims can be paid. (citation omitted). Stated differently, the
existence of, and the benefits provided by, the automatic stay do not
constitute a private right of any one
specific person or entity, but rather comprise a public right that inures to
the benefit of all those persons involved in a bankruptcy. Without the
enforcement of the automatic stay, reorganization of consumer debtors and
business debtors throughout the country would be impossible and would undermine
the public policy of allowing honest debtors to obtain a fresh start.
Accordingly, because the undersigned judge concludes that the dispute at bar
involves a "public right," the undersigned judge concludes that he
has the constitutional authority to sign a final judgment in this adversary
proceeding.
This is the first Texas opinion that I could find
applying Stern v. Marshall. Since this opinion, Judge Bohm
has included a discussion of Stern v. Marshall in virtually every
opinion he has written.
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