Publication

Legal Alert – The U.S. Supreme Court Clarifies the Procedure for Unconstitutional “Core” Matters Under Stern v. Marshall in Executive Benefits Ins. Agency v. Arkinson (Bellingham)

Jun 12, 2014

By Bob L. Olson and Nathan G. Kanute

In 2011, the U.S. Supreme Court decided Stern v. Marshall, 131 S.Ct. 2594. In Stern, the Court was faced with the question of whether the Bankruptcy Court had statutory and Constitutional authority to decide a counterclaim that arose out of common law. Stern involved a defamation suit filed against Vickie Lynn Marshall (a k a Anna Nicole Smith) in her bankruptcy proceedings, and her counterclaim for tortious interference. Marshall won summary judgment on the defamation action and was awarded hundreds of millions of dollars on her counterclaim. The creditor challenged the damage award on the grounds that the Bankruptcy Court did not have jurisdiction to enter a final judgment. While the Supreme Court initially determined that the Bankruptcy Court had statutory authority to determine Marshall’s counterclaim because it was “core” within the meaning of 28 U.S.C. § 157(b), it later held that the Bankruptcy Court lacked Constitutional authority to adjudicate the tortious interference claim because it was a private claim at common law that was required to be decided by Article III judges in Article III Courts. Thus, the Bankruptcy Court was constitutionally prohibited from entering final judgment on this state law claim even though it had statutory authority to do so.

[Read the full alert.]

 

About Snell & Wilmer

Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 16 locations throughout the United States and in Mexico, including Los Angeles, Orange County and San Diego, California; Phoenix and Tucson, Arizona; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.

©2025 Snell & Wilmer L.L.P. All rights reserved. The purpose of this publication is to provide readers with information on current topics of general interest and nothing herein shall be construed to create, offer, or memorialize the existence of an attorney-client relationship. The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. As guidance in areas is constantly changing and evolving, you should consider checking for updated guidance, or consult with legal counsel, before making any decisions.
Media Contact

Olivia Nguyen-Quang

Associate Director of Communications
media@swlaw.com 714.427.7490