Stern v. Marshall, No. 10–179.

CourtU.S. Supreme Court
Writing for the CourtCHIEF JUSTICE ROBERTS delivered the opinion of the Court.
Citation131 S.Ct. 2594,180 L.Ed.2d 475,564 U.S. 462
Decision Date23 June 2011
Docket NumberNo. 10–179.
Parties Howard K. STERN, Executor of the Estate of Vickie Lynn Marshall, Petitioner, v. Elaine T. MARSHALL, Executrix of the Estate of E. Pierce Marshall.

564 U.S. 462
131 S.Ct.
2594
180 L.Ed.2d 475

Howard K. STERN, Executor of the Estate of Vickie Lynn Marshall, Petitioner,
v.
Elaine T. MARSHALL, Executrix of the Estate of E. Pierce Marshall.

No. 10–179.

Supreme Court of the United States

Argued Jan. 18, 2011.
Decided June 23, 2011.


Kent L. Richland, Los Angeles, CA, for Petitioner.

Malcolm L. Stewart, for United States as amicus curiae, by special leave of the Court, supporting the Petitioner.

Roy T. Engler, Jr., Washington, DC, for Respondent.

Roy T. Englert, Jr., Robbins, Russell, Englert, Orseck, Untreiner & Sauber LLP, Washington, DC,

131 S.Ct. 2600

G. Eric Brunstad, Jr., Collin O'Connor Udell, Matthew J. Delude, Dechert LLP, Hartford, CT, Seth P. Waxman, Craig Goldblatt, Danielle Spinelli, Wilmer Cutler Pickering Hale and Dorr, LLP, Washington, DC, Kenneth N. Klee, Daniel J. Bussel, Whitman L. Holt, Klee, Tuchin, Bogdanoff & Stern LLP, Los Angeles, CA, Don Jackson, Ware, Jackson, Lee & Chambers, LLP, Houston, TX, Sanford Svetcov, Robbins Geller Rudman & Dowd LLP, San Francisco, CA, Joseph A. Eisenberg, Julia J. Rider, Jeffer, Mangels, Butler & Marmaro LLP, Los Angeles, CA, for Respondent.

Philip W. Boesch, Jr., The Boesch Law Group, Santa Monica, California, Bruce S. Ross, Vivian L. Thoreen, Holland & Knight LLP, Los Angeles, California, Kent L. Richland, Alan Diamond, Edward L. Xanders, Greines, Martin, Stein & Richland LLP, Los Angeles, California, for Petitioner Howard K. Stern, Executor of the Estate of Vickie Lynn Marshall.

CHIEF JUSTICE ROBERTS delivered the opinion of the Court.

564 U.S. 468

This "suit has, in course of time, become so complicated, that ... no two ... lawyers can talk about it for five minutes, without coming to a total disagreement as to all the premises. Innumerable children have been born into the cause: innumerable young people have married into it;" and, sadly, the original parties "have died out of it." A "long procession of [judges] has come in and gone out" during that time, and still the suit "drags its weary length before the Court."

Those words were not written about this case, see C. Dickens, Bleak House, in 1 Works of Charles Dickens 4–5 (1891), but they could have been. This is the second time we have had occasion to weigh in on this long-running dispute between Vickie Lynn Marshall and E. Pierce Marshall over the fortune of J. Howard Marshall II, a man believed to have been one of the richest people in Texas. The Marshalls' litigation has worked its way through state and federal courts in Louisiana, Texas, and California, and two of those courts—a Texas state probate court and the Bankruptcy Court for the Central District of California—have reached contrary decisions on its merits. The Court of Appeals below held that the Texas state decision controlled, after concluding that the Bankruptcy Court lacked the authority to enter final judgment on a counterclaim that Vickie brought against

564 U.S. 469

Pierce in her bankruptcy proceeding.1 To determine whether the Court of Appeals was correct in that regard, we must resolve two issues: (1) whether the Bankruptcy Court had the statutory authority under 28 U.S.C. § 157(b) to issue a final judgment on Vickie's counterclaim; and (2) if so, whether conferring that authority on the Bankruptcy Court is constitutional.

Although the history of this litigation is complicated, its resolution ultimately turns on very basic principles. Article III, § 1, of the Constitution commands that "[t]he judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." That Article further provides that the judges of those courts shall hold their offices during good behavior, without diminution of salary. Ibid. Those requirements

131 S.Ct. 2601

of Article III were not honored here. The Bankruptcy Court in this case exercised the judicial power of the United States by entering final judgment on a common law tort claim, even though the judges of such courts enjoy neither tenure during good behavior nor salary protection. We conclude that, although the Bankruptcy Court had the statutory authority to enter judgment on Vickie's counterclaim, it lacked the constitutional authority to do so.

I

Because we have already recounted the facts and procedural history of this case in detail, see Marshall v. Marshall, 547 U.S. 293, 300–305, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006), we do not repeat them in full here. Of current relevance are two claims Vickie filed in an attempt to secure half of J. Howard's fortune. Known to the public as Anna Nicole Smith, Vickie was J. Howard's third wife and married him about a year before his death.

564 U.S. 470

Id., at 300, 126 S.Ct. 1735; see In reMarshall, 392 F.3d 1118, 1122 (C.A.9 2004). Although J. Howard bestowed on Vickie many monetary and other gifts during their courtship and marriage, he did not include her in his will. 547 U.S., at 300, 126 S.Ct. 1735. Before J. Howard passed away, Vickie filed suit in Texas state probate court, asserting that Pierce—J. Howard's younger son—fraudulently induced J. Howard to sign a living trust that did not include her, even though J. Howard meant to give her half his property. Pierce denied any fraudulent activity and defended the validity of J. Howard's trust and, eventually, his will. 392 F.3d, at 1122–1123, 1125.

After J. Howard's death, Vickie filed a petition for bankruptcy in the Central District of California. Pierce filed a complaint in that bankruptcy proceeding, contending that Vickie had defamed him by inducing her lawyers to tell members of the press that he had engaged in fraud to gain control of his father's assets. 547 U.S., at 300–301, 126 S.Ct. 1735; In re Marshall, 600 F.3d 1037, 1043–1044 (C.A.9 2010). The complaint sought a declaration that Pierce's defamation claim was not dischargeable in the bankruptcy proceedings. Ibid. ; see 11 U.S.C. § 523(a). Pierce subsequently filed a proof of claim for the defamation action, meaning that he sought to recover damages for it from Vickie's bankruptcy estate. See § 501(a). Vickie responded to Pierce's initial complaint by asserting truth as a defense to the alleged defamation and by filing a counterclaim for tortious interference with the gift she expected from J. Howard. As she had in state court, Vickie alleged that Pierce had wrongfully prevented J. Howard from taking the legal steps necessary to provide her with half his property. 547 U.S., at 301, 126 S.Ct. 1735.

On November 5, 1999, the Bankruptcy Court issued an order granting Vickie summary judgment on Pierce's claim for defamation. On September 27, 2000, after a bench trial, the Bankruptcy Court issued a judgment on Vickie's counterclaim in her favor. The court later awarded Vickie over $400 million in compensatory damages and $25 million in punitive

564 U.S. 471

damages. 600 F.3d, at 1045; see 253 B.R. 550, 561–562 (Bkrtcy.Ct.C.D.Cal.2000) ; 257 B.R. 35, 39–40 (Bkrtcy.Ct.C.D.Cal.2000).

In post-trial proceedings, Pierce argued that the Bankruptcy Court lacked jurisdiction over Vickie's counterclaim. In particular, Pierce renewed a claim he had made earlier in the litigation, asserting that the Bankruptcy Court's authority over the counterclaim was limited because Vickie's counterclaim was not a "core proceeding" under 28 U.S.C. § 157(b)(2)(C). See 257 B.R., at 39. As explained below, bankruptcy courts may hear and enter final

131 S.Ct. 2602

judgments in "core proceedings" in a bankruptcy case. In non-core proceedings, the bankruptcy courts instead submit proposed findings of fact and conclusions of law to the district court, for that court's review and issuance of final judgment. The Bankruptcy Court in this case concluded that Vickie's counterclaim was "a core proceeding" under § 157(b)(2)(C), and the court therefore had the "power to enter judgment" on the counterclaim under § 157(b)(1). Id., at 40.

The District Court disagreed. It recognized that "Vickie's counterclaim for tortious interference falls within the literal language" of the statute designating certain proceedings as "core," see § 157(b)(2)(C), but understood this Court's precedent to "suggest[ ] that it would be unconstitutional to hold that any and all counterclaims are core." 264 B.R. 609, 629–630 (C.D.Cal.2001) (citing Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 79, n. 31, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982) (plurality opinion)). The District Court accordingly concluded that a "counterclaim should not be characterized as core" when it "is only somewhat related to the claim against which it is asserted, and when the unique characteristics and context of the counterclaim place it outside of the normal type of set-off or other counterclaims that customarily arise." 264 B.R., at 632.

Because the District Court concluded that Vickie's counterclaim was not core, the court determined that it was required

564 U.S. 472...

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3954 practice notes
  • Day v. Persels, No. 12–11887.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • September 10, 2013
    ...1364, 1369 (11th Cir.1993)). The consumer advocates suggest that the decision of the Supreme Court in Stern v. Marshall, 560 U.S. 474, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), abrogated our decision in Sinclair, but we disagree. In Stern, the Court held that, under Article III, a “Bankruptcy......
  • Deitz v. Ford (In re Deitz), No. 12–60036.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 28, 2014
    ...judgment against him in the adversary proceeding, relying upon the Supreme Court's recent decision in Stern v. Marshall, ––– U.S. ––––, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). We discuss this contention below. Finally, the Panel has jurisdiction over this appeal under 28 U.S.C. § 158.ISSUES......
  • Scott v. Am. Sec. Ins. Co. (In re Scott), Case No. 16-12045 (JLG)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Northern District of New York
    • June 13, 2017
    ..."[t]he manner in which a bankruptcy judge may act . . . depends on the type of proceeding involved." Stern v. Marshall, 564 U.S. 462, 473 (2011). In that regard, and "[t]o satisfy constitutional limitations on the subject matterPage 21 jurisdiction of the Article I bankruptcy......
  • Allen v. Scott (In re Scott), Bankruptcy No. 05–10595–BGC–7.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • September 27, 2012
    ...Court, has raised the issue of the Court's jurisdiction to hear these state law causes of action. See Stern v. Marshall, ––– U.S. ––––, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). 17. The court in Umsted was persuaded more that undue influence was a set of circumstances giving rise to an equita......
  • Request a trial to view additional results
3958 cases
  • Day v. Persels, No. 12–11887.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • September 10, 2013
    ...1364, 1369 (11th Cir.1993)). The consumer advocates suggest that the decision of the Supreme Court in Stern v. Marshall, 560 U.S. 474, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), abrogated our decision in Sinclair, but we disagree. In Stern, the Court held that, under Article III, a “Bankruptcy......
  • Deitz v. Ford (In re Deitz), No. 12–60036.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 28, 2014
    ...judgment against him in the adversary proceeding, relying upon the Supreme Court's recent decision in Stern v. Marshall, ––– U.S. ––––, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). We discuss this contention below. Finally, the Panel has jurisdiction over this appeal under 28 U.S.C. § 158.ISSUES......
  • Scott v. Am. Sec. Ins. Co. (In re Scott), Case No. 16-12045 (JLG)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Northern District of New York
    • June 13, 2017
    ..."[t]he manner in which a bankruptcy judge may act . . . depends on the type of proceeding involved." Stern v. Marshall, 564 U.S. 462, 473 (2011). In that regard, and "[t]o satisfy constitutional limitations on the subject matterPage 21 jurisdiction of the Article I bankruptcy......
  • Allen v. Scott (In re Scott), Bankruptcy No. 05–10595–BGC–7.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • September 27, 2012
    ...Court, has raised the issue of the Court's jurisdiction to hear these state law causes of action. See Stern v. Marshall, ––– U.S. ––––, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). 17. The court in Umsted was persuaded more that undue influence was a set of circumstances giving rise to an equita......
  • Request a trial to view additional results
7 firm's commentaries
2 books & journal articles
  • HORIZONTAL CHOICE OF LAW IN FEDERAL COURT.
    • United States
    • University of Pennsylvania Law Review Vol. 169 Nbr. 8, August 2021
    • August 1, 2021
    ...jurisdiction over non-core claims may not be exercised by federal bankruptcy judges consistent with Article III. See Stern v. Marshall, 564 U.S. 462 (61) Rodriguez v. FDIC, 140 S. Ct. 713 (2020). (62) Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982). (63) See gene......
  • Getting Public Rights Wrong: The Lost History of the Private Land Claims.
    • United States
    • Stanford Law Review Vol. 74 Nbr. 2, February 2022
    • February 1, 2022
    ...distinction includes Oil States Energy Services, LLC v. Greene's Energy Group, LLC, 138 S. Ct. 1365,1372-73 (2018); Stern v. Marshall, 564 U.S. 462, 499, 502-03 (2011); Commodity Futures Trading Commission v. Schor, 478 U.S. 833, 852-57 (1986); Thomas v. Union Carbide Agricultural Products ......

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