June 23 marked the first anniversary of the U.S. Supreme Court’s decision in Stern v. Marshall, 131 S. Ct. 2594 (2011), which many practitioners foresaw as the beginning of epic change in the battle for jurisdiction over claims that had routinely been handled by bankruptcy courts. This article examines whether the case provides sweeping change or minor disruption in how practitioners and courts handle disputes.
With the 1978 Bankruptcy Reform Act (Act), Congress replaced referees, who oversaw bankruptcy cases, with judges with power over bankruptcy estate administration, including adjudication of all controversies involving the debtor. Unlike Article III judges with salary protection and lifetime tenure, bankruptcy judges were to be appointed by the president for 14- year terms but could be removed by their circuit’s judicial council.
