A couple of years ago I co-authored a law review article on the soap opera bankruptcy case of the late Anna Nicole Smith that led to the Supreme Court’s decision in Stern v. Marshall, which memorably opened with Chief Justice Roberts quoting from Bleak House. In that case, the Supreme Court held that certain powers granted to Bankruptcy Courts, while falling within Congress’s statutory grant of authority, were unconstitutional when applied to the facts of that case. In particular, the court held that with respect to certain types of legal actions a party could not be required to have his claim adjudicated by a Bankruptcy Judge but could demand that the claim be heard by a federal district judge vested with the authority and protection of Article III of the Constitution.
Lat month, the Supreme Court heard oral argument in the case of Executive Benefits Insurance Agency v. Arkison. That case takes up an issue previewed in Stern, which has divided lower courts since then: namely, whether parties who are not required to accept having certain claims adjudicated by a Bankruptcy Judge nevertheless can consent to having their claims adjudicated by a Bankruptcy Judge. The issue ends up being quite an interesting and complex one.
I have a long essay today that I contributed to the Law and Liberty blog analyzing Executive Benefits Insurance Agency in light of Stern and the oral arguments in the case, “The Connection Between Individual Liberty and Article III Courts.” My short answer: Yes, parties can consent to have their case adjudicated by a Bankruptcy Judge.