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Dispelling (Some) of the Darkness of Stern v. Marshall's Bleak House
The Amended Standing Order of Reference (the Amended Standing Order) issued on Jan. 31, 2012 by the Chief United States District Judge for the Southern District of New York, Judge Loretta Preska has significantly reduced the procedural quagmire and uncertainty faced by attorneys and the courts as a result of Stern v. Marshall, 131 S.Ct. 2594 (2011).
The Supreme Court decision in Stern begins with a quote from Charles Dickens' Bleak House describing the saga of the late Anna Nicole Smith and her counterclaim against the son of her deceased billionaire husband for tortious interference with her rights to the estate of her husband. A divided Supreme Court found Congress' authorization for the bankruptcy judge to hear and determine her counterclaim was unconstitutional, even though the counterclaim was deemed a “core” proceeding by 28 U.S.C. ' 157(b)(2)(c). As a result, the bankruptcy judge lacked the authority to enter a final judgment that awarded nearly half a billion dollars on her counter claim for tortious interference. While the decision resolved the saga of the Marshall estate, it has created a new Bleak House.
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