Appellate Review of a Bankruptcy Court’s Preliminary Injunction
by | posted in: Bankruptcy, Bankruptcy Administration and Jurisdiction, Jurisprudence | 0

Note: Last week the Roundtable concluded its series on crypto bankruptcies.  We will resume our regular posts beginning with this week’s post, featuring an article by attorney Michael L. Cook.

By Michael L. Cook (Schulte Roth & Zabel LLP)

Michael L. Cook

This essay shows why a bankruptcy court preliminary injunction should be reviewable on appeal by an Article III court.  District courts are split on the issue, often declining to review these rulings on the grounds that they are not “final” and that review is unwarranted.  Although the Third, Seventh and Eighth Circuits hold that the Judicial Code authorizes appellate review, only the Second Circuit disagrees, based on a blinkered reading of the Judicial Code and U.S. Supreme Court precedent.

A district court’s preliminary injunction ruling (granting or denying) is concededly subject to review by a court of appeals under the explicit terms of the Judicial Code.  Sound policy reasons, common sense and the obligation of the federal courts to hear cases within their statutory jurisdiction also show that bankruptcy court injunction rulings should not be insulated from appellate review.  No sound reason exists for treating these bankruptcy court rulings differently from an identical district court ruling.

The full article is available here.

Non-Article III Adjudication: Bankruptcy and Nonbankruptcy, With and Without Litigant Consent
by | posted in: Bankruptcy Administration and Jurisdiction | 0

By Ralph Brubaker (University of Illinois College of Law)

This article explores the diverse and intriguing implications of the Supreme Court’s recent decision in Wellness International Network, Ltd. v. Sharif, both from an “internal” bankruptcy perspective and as a very important and revealing component of the Court’s still-evolving general jurisprudence of non-Article III adjudications.

In that larger jurisprudence, the contrast between Wellness and the Stern v. Marshall decision prominently highlights a seemingly schizophrenic admixture of formal (Stern) and functional (Wellness) analytical methods. This article maintains, however, that what Stern and Wellness reveal and confirm is a coherent and consistent jurisprudence of non-Article III adjudications with a bifurcated analytical methodology that is a logical corollary of (and that facilitates a complex interaction between) the dual interests protected by Article III, § 1 — both nonwaivable structural separation-of-powers values and the waivable personal right of individual litigants to an Article III adjudication.

In the bankruptcy context, Wellness provides further evidence that the Supreme Court is, over a long run of decisions, simply confirming the constitutional significance of its extensive summary-plenary jurisprudence (taken from established English bankruptcy practice prevailing at the time of the Founding) as the operative constitutional boundary for the adjudicatory powers of non-Article III bankruptcy judges. This article uses the Wellness litigation to demonstrate how that summary-plenary jurisprudence can directly inform the core-noncore distinction drawn by the current jurisdictional statute (which codifies constitutional constraints). The Court’s existing and extensive summary-plenary jurisprudence provides a highly developed analytical framework for resolving even the most nuanced and difficult core-noncore determinations.

The full article is available here.

The Article III Problem in Bankruptcy
by | posted in: Bankruptcy Administration and Jurisdiction | 0

By Anthony J. Casey and Aziz Z. Huq, University of Chicago Law School

Casey, Anthony_0Huq Aziz 2009-06-18

The Supreme Court has struggled for the last three decades in defining the permissible scope of bankruptcy courts’ power. This question poses difficult federalism and separations-of-powers problems under Article III of the Constitution. Divided opinions in Northern Pipeline Construction v. Marathon Pipe Line, and more recently, in Stern v. Marshall, have produced confusion and litigation for practitioners and lower courts. This is true in large part because the Court’s Article III decisions lack any foundational account of why bankruptcy judges implicate a constitutional problem. As the Court prepares to confront the issue once again later this term, Aziz Huq and I provide such an account in a new article. This account more concretely identifies the precise stakes in this debate. We argue that a tractable, economically sophisticated constraint on delegations to the bankruptcy courts can be derived from what should be an obvious source: the well-tested creditors’ bargain theory of bankruptcy. Working from this account of bankruptcy’s necessary domain minimizes Article III and federalism harms while also enabling bankruptcy’s core operations to continue unhindered. To illustrate its utility, we then apply our framework to a range of common bankruptcy disputes, demonstrating that many of the Court’s existing jurisprudence is sound in result, if not in reasoning.

The article is forthcoming in the University of Chicago Law Review, and is available here.