Sunday, September 7, 2014

Constitutional for Bankruptcy Judges to Issue "Findings of Fact and Conclusions of Law" in Stern Type Cases

On  January 9, 2014, the U.S. Supreme Court delivered its decision in the case of  Executive Benefits Insurance Agency v. Arkison (In re: Bellingham Ins. Agency, Inc.)  573 U.S. ___ (2014)  in which it held that bankruptcy judges do have the authority under the Constitution in Stern type cases, to submit "findings of fact and conclusions of law" to the district court for its de novo review even though the bankruptcy court is constitutionally barred from entering a final judgment on such a claim that is only "related" to a bankruptcy case.  This was a question left unanswered in the Supreme Court's prior decision in Stern v. Marshall. The claim in Stern was a counterclaim for tortious interference that arose under state law. 

The Court though left Bellingham  unanswered the question  the question of whether the Constitution permits bankruptcy judges to, despite its holding, enter a final judgment based on the actual or implied consent of the parties in a Sterm claim. A more lengthly review of the case is available here.