US Supreme Court Bankruptcy Watch: Readying for Stern v. Marshall -- A Bombshell or a Dud?

6/24/11 Update:  Here's my blog post providing an early analysis of the Court's decision, entitled US Supreme Court's Bombshell Opinion in Stern v. Marshall Draws the Line Against Incremental Erosion of Article III Judicial Power.

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6/23/11 Update:  5-4 decision delivered affirming 9th Circuit's ruling and handing Pierce Marshall's estate a complete and final victory.  Justice Roberts with an extremely well written opinion; Justice Breyer dissenting. Opinion here.  Nice summary here.

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Three or four more opinion days before the United States Supreme Court's term closes.  Sixteen opinions have yet to be delivered.  But if a lifelong, diehard, Bronx-born Yankee fan, Justice Sotomayor (who some say saved baseball), is willing to sport a CUBS jersey while throwing out the ceremonial first pitch in Saturday's Yankee-Cubs game (I can't imagine a White Sox fan ever doing that!), then I think it's fair to say the remaining cases of this term on which she's working are confusing to the core.

For bankruptcy lawyers, the Court's forthcoming opinion in Stern v. Marshall represents either the most important decision on bankruptcy court jurisdiction since 1982 (Northern Pipeline v. Marathon) or the biggest dud in bankruptcy history (with the Court avoiding tackling the tough constitutional questions in favor of a finding that Anna's counterclaim against Pierce was a tort claim covered by 28 U.S.C. § 157(b)(5) that all concede the bankruptcy court could not decide with finality).

As we await the ruling, and assuming it's not a big dud, here are key background materials you need to be armed with to better understand the opinion once it's delivered and the issues and cases it will navigate through:

  • First, it's always good to understand the factual background to the case.  And, as in all cases, there's the record, and the far more interesting stuff off the record (as reported early this month in the New York Magazine article, Paw Paw and Lady Love, by far the best I've read on the personal dynamics that drove the parties to act as they did).
  • Second, there's the Supreme Court's decision on May 1, 2006, which I blogged about extensively both before and after (including here and here).
  • Third, there's the Ninth Circuit opinion of March 19, 2010, which is the opinion being appealed to the Supreme Court.  The Ninth Circuit held that Anna Nicole Smith's counterclaim against Pierce Marshall is not a "core" proceeding but, at most, "related to" her bankruptcy case.  As a result, the earlier judgment entered in her favor by the bankruptcy court was not final at the time that the Texas Probate Court entered its judgment in favor of Pierce, and so the Texas Probate Court judgment was the earliest final judgment that precludes all of Anna's claims.  Marshall v. Stern (In re Marshall), 600 F.3d 1037 (9th Cir. 2010) (pdf).
  • Fourth, there's the briefs submitted to the Court:

The Merits Briefs

Brief for Petitioner Howard K. Stern, Executor of the Estate of Vicki Lynn Marshall

Brief for Respondent Elaine T. Marshall, Executrix of the Estate of E. Pierce Marshall

Reply Brief for Petitioner Howard K. Stern, Executor of the Estate of Vicki Lynn Marshall

The Amicus Briefs:

Brief for the United States in Support of Petitioner

Brief for National Association of Bankruptcy Trustees in Support of Petitioner

Brief for Professors Richard Aaron, Laura Bartell, Jagdeep S. Bhandari, Susan Block-Lieb, Robert D’Agostino, Jackie Gardina, Ingrid Hillinger, George W. Kuney, Lois Lupica, C. Scott Pryor, Keith Sharfman, Michael D. Sousa, and Robert M. Zinman in Support of Petitioner

Brief for Law Professors S. Todd Brown, G. Marcus Cole, Ronald D. Rotunda, and Todd J. Zywicki in Support of Respondent

Brief for the Washington Legal Foundation in Support of Respondent

Brief for the National Black Chamber of Commerce and the American Board of Trial Advocates in Support of Respondent

Brief for the Center for the Rule of Law in Support of Respondent

  • Fifth, there's the oral argument.  Listen to it on Oyez, and pay particular attention to the argument of Roy T. Englert, Jr., which is about as good as oral advocacy gets at this level.  (Transcript PDF)
  • Finally, the key precedential decisions that provide the legal backdrop to the case:

One can't predict on which of the next two Mondays and Thursdays the Court will issue the opinion, but I sure hope it's not next Monday when I'll be traveling!

Thanks for reading!

© Steve Jakubowski 2011

Written By:Robert On June 23, 2011 10:22 AM

I guess depending on where one is coming from, today's decision could both be a bombshell and a dud. Bombshell for the B'cy bar and dud for the Constitutional bar.