Stern v. Marshall: A Jurisdictional Game Changer?

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During her lifetime, Vickie Lynn Marshall, publicly known as Anna Nicole Smith (“Vickie”), was hardly a stranger to the prying eyes of the media. Today, the late Vickie is again the subject of media coverage, this time in the context of a fifteen-year legal saga that has twice reached the United States Supreme Court.

On June 23, 2011, the Court, in a 5-4 decision, held unconstitutional a provision of a bankruptcy jurisdiction statute that authorizes bankruptcy judges to hear and decide counterclaims by the estate against persons filing claims against the estate. Because bankruptcy judges, as judges created under Article I of the Constitution, do not have the protections of life tenure guaranteed by Article III of the Constitution, the Court affirmed the holding of the Ninth Circuit Court of Appeals and ruled that the bankruptcy court “lacked the constitutional authority to enter a final judgment on a state law counterclaim that is not resolved in the process of ruling on a creditor’s proof of claim.”

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