Bankruptcy Experts Discuss Supreme Court's Ruling in Executive Benefits Insurance Agency v. Peter Arkison

Date: 
June 13, 2014
Issue: 

Under its reasoning in its 2011 Stern v. Marshall decision, the Court unanimously held on June 9 in Executive Benefits Insurance Agency v. Peter Arkison that when the Constitution does not permit a bankruptcy court to enter final judgment on a bankruptcy-related claim, the relevant statute nevertheless permits a bankruptcy court to issue proposed findings of fact and conclusions of law to be reviewed de novo by the district court.

Speakers: 

Prof. John Pottow of the University of Michigan School of Law argued on behalf of Peter Arkison before the Supreme Court. He has been published in prominent legal journals in the United States and Canada and has testified before Congress. He has presented his works at academic conferences around the world and he frequently provides commentary for such national and international media outlets, such as NPR, CNBC, CNN, C-SPAN, Al Jazeera America, and the BBC.

Speakers: 

Danielle Spinelli is a partner in the Appellate and Supreme Court Litigation group of WilmerHale in Washington, D.C. She has represented parties and amici in numerous cases before the Supreme Court and courts of appeals, and has raised complex and novel bankruptcy issues in both the business and consumer arenas. Spinelli was the counsel of record for the amicus brief filed on behalf of Law Professors S. Todd Brown, G. Marcus Cole and Ronald Rotunda in Executive Benefits Insurance Agency v. Arkison.

Moderator: 

Prof. Ralph Brubaker, the Carl L. Vacketta Professor of Law at the University of Illinois.

Background: 

Under its reasoning in the 20011 Stern decision, the Court unanimously (9-0) held in In re Bellingham Ins. Agency, 702 F.3d 553 (9th Cir. 2012) that when the Constitution does not permit a bankruptcy court to enter final judgment on a bankruptcy-related claim, the relevant statute nevertheless permits a bankruptcy court to issue proposed findings of fact and conclusions of law to be reviewed de novo by the district court. The Court's ruling in Bellingham effectively limits bankruptcy judges’ powers but left a number of questions unanswered:

Is the Court signaling a future rejection of jurisdiction by consent? Will the resolution of "Stern claims" be delayed by requiring district courts to weigh in? Will bankruptcy judges expedite Stern claims so that those that aren't settled are quickly ruled upon, then packaged together with other Stern rulings for their respective district court? Will local rules be amended with the new reality that consent won't fly, and that Stern claims must be fast-tracked? What is left for the BAPs? How will bankruptcy courts - and those practicing before them — find new and innovative ways to identify and process Stern claims quickly to avoid having them be bottlenecks to case resolution?

ABI's media teleconference on the Supreme Court's ruling in Bellingham presented experts involved in the case discussing the effect of the Court’s ruling, and they took questions from the call participants.

Audio: 
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