Supreme Court Approves Procedure to Consider Certain "Stern" Claims, While Failing to Address Other Issues Raised by Stern Decision
On June 9, 2014, in Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency, Inc.), a much-anticipated decision, the Supreme Court addressed how bankruptcy courts should adjudicate so-called Stern claims. Stern claims are "core" claims over which bankruptcy courts have statutory authority to enter orders and judgments, but which authority the Supreme Court previously held in Stern v. Marshall was not permitted (at least with respect to certain issues) under Article III of the United States Constitution. The Bellingham Court unanimously agreed that bankruptcy courts are permitted to issue decisions on such Stern claims to be reviewed de novo by the applicable district courts. The Court did not, however, provide much additional guidance regarding what constitute Stern claims or whether the parties can agree to different procedures.