Stern v. Marshall
Supreme Court of the United States
January 18, 2011, Argued; June 23, 2011, Decided
Respondent creditor brought an adversary proceeding against petitioner bankruptcy debtor for defamation and the debtor obtained a judgment on a counterclaim for tortious interference with an intended gift from the debtor's deceased spouse. Upon the grant of a writ of certiorari, the debtor challenged the judgment of the U.S. Court of Appeals for the Ninth Circuit which held that the bankruptcy court lacked jurisdiction to enter the judgment.
The debtor contended that 28 U.S.C.S. § 157(b)(2)(C) expressly granted the bankruptcy court jurisdiction over the debtor's counterclaim to the creditor's claim, but the creditor argued that the counterclaim was not within core bankruptcy jurisdiction and was excluded as a personal injury claim. The U.S. Supreme Court held that, although the bankruptcy court had the statutory authority to enter judgment on the core counterclaim, it lacked the constitutional authority to do so under U.S. Const. art. III. While § 157 purported to extend bankruptcy jurisdiction to any counterclaim by the debtor, the bankruptcy court was not established under U.S. Const. art. III and was not subject to the constitutional assurances of independence which would allow adjudication of the debtor's state common law claim. Further, resolving the creditor's claim would not necessarily resolve the debtor's counterclaim, and the debtor's claim was otherwise unrelated to the claim-allowance process. Also, the debtor's claim did not involve public rights to allow the congressional extension of bankruptcy jurisdiction, since the debtor's claim flowed from state law rather than the federal bankruptcy scheme.
The Court affirmed the judgment of the Court of Appeals that the bankruptcy court lacked jurisdiction to enter the judgment was affirmed. 5-4 Decision; 1 Concurrence; 1 Dissent.
Constitutional Law > The Judiciary > Jurisdiction > General Overview
Constitutional Law > The Judiciary > General Overview
HN1 U.S. Const. art. III, § 1, commands that the judicial power of the United States shall be vested in one Supreme Court, and in such inferior Courts as Congress may from time to time ordain and establish. That article further provides that the judges of those courts shall hold their offices during good behavior, without diminution of salary.
Bankruptcy Law > Procedural Matters > Jurisdiction > Core Proceedings
Bankruptcy Law > Procedural Matters > Jurisdiction > Noncore Proceedings
HN2 Core Proceedings
Bankruptcy courts may hear and enter final judgments in core proceedings in a bankruptcy case. In non-core proceedings, the bankruptcy courts instead submits proposed findings of fact and conclusions of law to the district court for that court's review and issuance of final judgment.
Bankruptcy Law > Procedural Matters > Jurisdiction > Federal District Courts
HN3 Federal District Courts
With certain exceptions, the district courts of the United States have original and exclusive jurisdiction of all bankruptcy cases under Title 11 of the U.S. Code. 28 U.S.C.S. § 1334(a). Congress divides bankruptcy proceedings into three categories: those that arise under Title 11, those that arise in a Title 11 case, and those that are related to a case under Title 11. 28 U.S.C.S. § 157(a). District courts may refer any or all such proceedings to the bankruptcy judges of their district. District courts also may withdraw a case or proceeding referred to the bankruptcy court for cause shown. § 157(d).Access the full text caseNot a Lexis Advance subscriber? Try it out for free.
564 U.S. 462 ; 131 S. Ct. 2594 ; 180 L. Ed. 2d 475 ; 2011 U.S. LEXIS 4791 ; 79 U.S.L.W. 4564; 65 Collier Bankr. Cas. 2d (MB) 827; Bankr. L. Rep. (CCH) P82,032; 55 Bankr. Ct. Dec. 1; 22 Fla. L. Weekly Fed. S 1232
HOWARD K. STERN, executor of the ESTATE OF VICKIE LYNN MARSHALL, Petitioner v. ELAINE T. MARSHALL, executrix of the ESTATE OF E. PIERCE MARSHALL
Subsequent History: US Supreme Court rehearing denied by Stern v. Marshall, 564 U.S. 1058, 132 S. Ct. 56, 180 L. Ed. 2d 924, 2011 U.S. LEXIS 5143 (U.S., 2011)
Related proceeding at Marshall v. Marshall (In re Marshall), 721 F.3d 1032, 2013 U.S. App. LEXIS 13398 (9th Cir. Cal., 2013)
Prior History:  ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Marshall v. Stern (In re Marshall), 600 F.3d 1037, 2010 U.S. App. LEXIS 5692 (9th Cir. Cal., 2010)