Emory Bankruptcy Developments Journal


Stern v. Marshall is the most recent decision in a series of cases decided by the Supreme Court that involves the doctrine of public rights. The Court found that although 28 U.S.C. § 157(b)(2)(C) permits a bankruptcy court to enter final judgments on all counterclaims, Article III of the Constitution does not. The Court reiterated that Article III, Section 1 of the Constitution mandates the judicial power of the United States "be vested in one Supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." The judges for these courts must have constitutionally protected salaries and tenure. Bankruptcy judges do not enjoy these protections, and so, may not hear matters that must come before Article III courts. The Supreme Court applied the relevant case law to its analysis in Stern, including American Insurance Co., Murray's Lessee, Ex parte Bakelite Corp., Crowell, Thomas, Northern Pipeline Construction Co., Commodity Futures Trading Commission, and Granfinanciera. Chief Justice Roberts, writing for the majority, relied heavily on Murray's Lessee and Northern Pipeline despite more recent precedent. The Court glossed over the most important issue for bankruptcy courts in a footnote of its decision: "Because neither party asks us to reconsider the public rights framework for bankruptcy, we follow the same approach here . . . ." By declining to discuss further the public rights framework for bankruptcy, the Court left bankruptcy judges and practitioners to rely on precedent that is not dispositive-some of it very shaky. This Comment proposes a seven-factor analysis to help guide bankruptcy judges and practitioners, and to help shed some light on how to determine whether a matter is a public right and so may be heard and decided by a bankruptcy court.