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Can a Party Consent to the Bankruptcy Court Entering a Final Order in a Core Matter Otherwise Barred by Stern v. Marshall? — Circuit Split

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In re Morris (Silagy v. Morris), 2013 Bankr. LEXIS 4369 (Bankr. N.D. Ohio Oct. 18, 2013):

The last jurisdictional issue is whether a party can consent, either expressly or impliedly, to the bankruptcy court entering a final order in a core matter that would normally be prohibited by Stern. There is currently a circuit split on this issue. The Ninth Circuit decided that a party can waive a constitutional Stern problem, because if a bankruptcy judge can decide a non-core proceeding with the necessary consent, "then it surely permits the same judge to decide a core proceeding" with the same consent. In re Bellingham, 702 F.3d at 567. The Sixth and Seventh Circuits have also reached the issue and determined that a party cannot consent to a constitutional Stern limitation because of the structural role of separation of powers in the United States government. Waldman, 698 F.3d 910; Wellness Int'l Network, Ltd. v. Sharif, 2013 WL 4441926 (7th Cir. 2013). As the Sixth Circuit is binding on this court, a party may not consent to allow a bankruptcy court to enter a final order in a core action where the bankruptcy court would otherwise be prohibited by Stern. Waldman, 695 F.3d 910.

 

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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