Executive Benefits Ins. Agency v. Arkison (In re Bellingham Ins. Agency, Inc.): United States Supreme Court Defines the Statutory Boundaries of Article I Bankruptcy Judges after Stern v. Marshall

Donna Parkinson

Donna Parkinson is the managing partner of Parkinson Phinney where she focuses on complex bankruptcy and commercial insolvency law issues. She served as Chair of the Business Law Section of the California State Bar (2011-2012) and as Chair of the Insolvency Law Committee, and has been an adjunct professor at the University of the Pacific’s McGeorge School of Law teaching bankruptcy law.

I. Introduction

The United States Supreme Court decided Stern v. Marshall¹ in 2011, causing a tsunami of comments on the scope and import of the Supreme Court’s opinion. In Stern, the Supreme Court held that an Article I bankruptcy judge did not have Constitutional authority to hear and make a final ruling on a counterclaim filed by a debtor against a third party for tortious interference, even though the Bankruptcy Code described this type of counterclaim as a core claim for which bankruptcy judges could make a final ruling.² These issues were aptly discussed in a previous Business Law News article printed in 2012.³