50:4 Through a Glass, Darkly: Predicting Bankruptcy Jurisdiction Post-Stern

Abstract

While bankruptcy jurisdiction prior to the Court’s decision in Stern v. Marshall was a straightforward process of following the Bankruptcy Code, the Court’s decision muddied that roadmap.  Instead of clarifying the lens through which bankruptcy jurisdiction is decided, the Court blurred the distinction between different courts’ jurisdictions, creating a new line of questions where lawyers once found certainty.

This Note explores the Court’s specific holdings and rationale regarding the primary question of whether a bankruptcy court could constitutionally enter a final judgment on a non-core tort cause of action.  This Note then explores the far-reaching implications of the Court’s decision, specifically addressing jurisdiction over fraudulent transfer and preference avoidance actions.

In determining the future of bankruptcy jurisdiction, this note interprets the nuances of the Court’s majority and concurring opinions.  Additionally, by analyzing the body of case law following Stern and the legislative history surrounding the enactment of the Bankruptcy Amendments and Federal Judgeship Act of 1984, this note predicts that bankruptcy courts will maintain final jurisdiction over the ubiquitous fraudulent transfer and preference avoidance actions.