Preferences are Public Rights
2013 Wisconsin Law Review 1355
51 Pages Posted: 9 Aug 2013 Last revised: 10 Jan 2014
See all articles by Brook Gotberg
Brook Gotberg
BYU Law School; University of Missouri School of Law
Date Written: December 21, 2013
In the wake of the Supreme Court's decision in Stern v. Marshall, there is widespread uncertainty as to what other proceedings may constitutionally fall within a bankruptcy court's core jurisdiction. Supreme Court jurisprudence has been cryptic regarding the constitutional limitations of non-Article III courts, but the Court has identified a "public rights exception" to the general rule that the judicial power must be exercised only by judges with life tenure and salary protection. This public rights exception has not yet been explicitly extended to a bankruptcy proceeding, but the reasoning of the Court strongly suggests that a trustee's motion to avoid preferences would fall under the public rights exception, as a proceeding stemming exclusively from bankruptcy law and necessary to resolve claims against the estate. Accordingly, and contrary to what most scholars have suggested, preference proceedings fit comfortably within the jurisdiction of bankruptcy courts, even after the Supreme Court's ruling in Stern.
Keywords: bankruptcy law, federal courts, constitutional law
Gotberg, Brook, Preferences are Public Rights (December 21, 2013). 2013 Wisconsin Law Review 1355, Available at SSRN: https://ssrn.com/abstract=2307186 or http://dx.doi.org/10.2139/ssrn.2307186
Brook Gotberg (Contact Author)
BYU Law School ( email )
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University of Missouri School of Law ( email )
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