Important Ruling Upcoming on Issue Left Unsettled in Anna Nicole Smith’s Case

One of the most important cases on the U.S. Supreme Court’sdocket in October Term 2013 is ExecutiveBenefits Insurance Agency v. Arkison. The Court will have to decide whether bankruptcy courts can issue finaljudgments in matters outside of their authority if it has the consent of theparties.

The Supreme Court ruled two years ago in the Anna NicoleSmith case Stern v. Marshall thatbankruptcy courts cannot constitutionally issue final judgments over state lawclaims.  The court rejected Breyer’sargument in the dissent that this result would create a practical nightmare forfederal district courts.

Erwin Chemerinsky predicted the significance of this casewould turn on whether consent could cure the problem.  If consent is not sufficient, bankruptcycourts will have to make reports and recommendations to federal district courts,which could mean a dramatic workload increase.

See Erwin Chemerinsky,Anna Nicole Smith Lives On in the U.S.Supreme Court’s Latest Term, The National Law Journal, Oct. 21 , 2013.