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Understanding Anna Nicole Smith (or, at least, Stern v. Marshall): A Must-Read Analysis

posted by Melissa Jacoby

Led by my colleague Elizabeth Gibson, four members of the National Bankruptcy Conference have produced a fantastic analysis of the Stern v. Marshall U.S. Supreme Court decision (that most recently has been mentioned on Credit Slips here and here). I strongly recommend it for judges, lawyers, academics and others interested in the bankruptcy system and/or federal court jurisdictional questions.    


Great analysis of Stern v Marshall by the four members of the National Bankruptcy Conference.
I really appreciated the “compare” footnotes on page 11 tracking the less than predictable mind of the Supreme Court regarding Article III Court jurisdiction relative to bankruptcy.
However, the Report fails to measure the impact of the boldest passage in Stern, 131 S. Ct. at 2620:

A statute may no more lawfully chip away at the authority of the Judicial Branch than it may eliminate it entirely. Slight encroachments create new boundaries from which legions of power can seek new territory to capture. Although it may be that it is the obnoxious thing in its mildest and least repulsive form, we cannot overlook the intrusion: illegitimate and unconstitutional practices get their first footing in that way, namely, by silent approaches and slight deviations from legal modes of procedure. We cannot compromise the integrity of the system of separated powers and the role of the Judiciary in that system, even with respect to challenges that may seem innocuous at first blush.
(internal quotation marks and citations omitted).

Without that passage the Stern holding was “isolated and narrow”.
With the passage the holding is much broader.
And what about the retroactive effect of the “unconstitutionally core” nullification of final orders that Stern supports according to a recent 7th circuit opinion in Ortiz v Aurora Health Care?
Aren’t unconstitutional orders void, whereas orders lacking subject matter jurisdiction are merely erroneous and are not subject to collateral attack.
Isn’t that the very reason Pierce Marshall’s ruling in Texas State Court had preclusive effect over any subseuent final ruling by the bankruptcy court, ie. the bankruptcy court's initial ruling was not final. If there was no preclusive Texas ruling the Supreme Court could have remanded a second time to let the district court try to get it right - finally.
Didn't Stern v Marshall effectively re-classify a legion of once final order into non-final orders.

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