Posted: Friday, June 28, 2013
The District Court issued Standing Order 13-1 on June 24, 2013, to address the Supreme Court’s holding in Stern v. Marshall, 131 S.Ct. 2594 (2011), that although the bankruptcy court had statutory authority to enter judgment on a common law tort matter under 28 U.S.C. § 157(b)(2)(C), the bankruptcy court did not have constitutional authority to enter final judgment. The Supreme Court reasoned that Section 157(a) authorizes bankruptcy judges to adjudicate cases that arise under, arise in, or are related to a case under Title 11, but Article III requires final judgments in some types of matters (such as a counterclaim for tortious interference) to be issued by an Article III district court judge. In a bankruptcy case where final judgment in a particular matter must be entered by a district court judge, Standing Order 13-1 provides that a bankruptcy judge may hear the matter and issue proposed findings of fact and conclusions of law for the district court to review and enter a final order or judgment. In a case where the bankruptcy court issues a decision in the form of an order but the Constitution requires final judgment to be entered by the district court, Standing Order 13-1 resolves the issue by stating that the bankruptcy court order will be construed as proposed findings of fact and conclusions of law for the district court to review and enter a final order or judgment.