Cir. 2006); Mintze v. American General Financial Services, Inc. (In re Mintze), 434 F.3d 222 (3d Cir. 2006); Phillips v. Congelton, L.L.C. (In re White Mountain Mining Co.), 403 F.3d 164 (4th Cir. 2005); Ins. Co. of N. Am. v. NGC Settlement Trust & Asbestos Claims Mgmt. Corp. (In re Nat'l Gypsum Co.), 118 F.3d 1056 (5th Cir. 1997).Therefore, although once hostile to arbitration, bankruptcy courts have for the most part embraced the process as a means of resolving certain disputes. See Collier at ¶ 9019.05[2] ("All in all, the bankruptcy system seems to have, if not embraced arbitration, at least dropped the overall hostility that once characterized its view of that alternative dispute resolution device, and adopted theories recognizing its place in the bankruptcy world.").Core v. Non-Core ProceedingsA matter falls within a bankruptcy court's "core" jurisdiction if it either invokes a substantive right created by federal bankruptcy law or could not exist outside a bankruptcy case. See 28 U.S.C. § 157(b)(2) (setting forth a non-exclusive list of "core" proceedings). In contrast, "non-core" matters generally involve disputes that have only a tenuous relationship to a bankruptcy case and would in all likelihood have been litigated elsewhere but for the debtor's bankruptcy filing. See In re Seven Fields Dev. Corp., 505 F.3d 237, 256 (3d Cir. 2007) (claims or causes of action arising under state law are not "core proceedings" because they do not invoke "a substantive right provided by title 11 or a proceeding that, by its nature, could arise only in the context of a bankruptcy case").A bankruptcy court may enter a final judgment in a core proceeding (a proceeding "arising under" or "arising in a case under" the Bankruptcy Code). 28 U.S.C. § 157(b)(1). The court "may also hear a proceeding that is not a core proceeding but that is otherwise related to" a bankruptcy case, but may not render a decision in such a proceeding without the consent of all the parties. 28 U.S.C. §§ 157(b)(1), (c). Unl

onferred Article III judicial power upon bankruptcy judges who lacked life tenure and protection against salary diminution. Two years later, Congress enacted the Bankruptcy Amendments and Federal Judgeship Act of 1984 to fix the Marathon issue. The 1984 jurisdictional scheme for bankruptcy courts continues in force today.That scheme vests bankruptcy jurisdiction in the first instance in the U.S. federal district courts.Federal district courts have "original and exclusive jurisdiction" of all "cases" under the Bankruptcy Code. 28 U.S.C. § 1334(a). District courts also have "original but not exclusive jurisdiction of all civil proceedings arising under" the Bankruptcy Code, "or arising in or related to cases under" the Bankruptcy Code. 28 U.S.C. § 1334(b).District courts may and routinely do, however, refer these cases and proceedings by standing orders of reference to the bankruptcy courts in their districts, which are constituted as "units" of the district courts. 28 U.S.C. §§ 151 and 157(a). That reference may be withdrawn by the district court "for cause shown," and must be withdrawn "if the [district] court determines that resolution of the proceeding requires consideration of both [the Bankruptcy Code] and other laws of the United States regulating organizations or activities effecting interstate commerce." 28 U.S.C. § 157(d).Under 28 U.S.C. § 152(a)(1), "Bankruptcy judges shall serve as judicial officers of the United States district court established under Article III of the Constitution."A bankruptcy court may enter a "final" judgment in "all core proceedings arising under the [Bankruptcy Code] or arising in a case under [the Bankruptcy Code]." 28 U.S.C. § 157(b)(1). Core proceedings include, but are not limited to, among other things, matters concerning the administration of the estate; the allowance or disallowance of claims; orders authorizing postpetition financing; proceedings to avoid and recover preferential or fraudulent transfers; determinations as to the

This refrain was viewed skeptically by bankruptcy judges and practitioners in the immediate wake of Stern, but it now has far greater legitimacy in the wake of Wellness. ___________________1 575 U.S. ___ (2015), No. 13-9352 564 U.S. ___ (2011), 131 S.Ct. 25943 28 U.S.C. §§ 157(a), 1334(a)4 28 U.S.C. §§ 157(b)(1), 1334(b)5In re Fairfield Sentry Ltd., 2011 WL 4359937 at *4 (S.D.N.Y. Sept. 19, 2011)6 28 U.S.C. § 157(b)(2)7 28 U.S.C. § 157(b)(2)(L)8 28 U.S.C. § 157(b)(2)(F) and (J)9Stern, at [11] (“The terms ‘non-core’ and ‘related’ are synonymous”) (quoting Collier on Bankruptcy para. 3.

Therefore the district court was provided jurisdiction over all civil proceedings that impact the outcome of the bankruptcy case. Further, 28 U.S.C. §157 allowed the district court to refer all civil actions, whether arising in, arising under, or related thereto, to the bankruptcy court. However, bankruptcy courts were not authorized to issue final judgments with respect to all types of referred cases.

Bankruptcy courts have jurisdiction over "core" and "non-core" proceedings. See 28 U.S.C. § 157. In "core" proceedings, bankruptcy courts can enter final judgments.

Nevertheless, the Ninth Circuit affirmed on two alternative grounds: (i) the bankruptcy court’s adjudication of the fraudulent conveyance claim was permissible because EBIA had impliedly consented to the bankruptcy court’s jurisdiction, and (ii) the bankruptcy court’s judgment could be treated as proposed findings of fact and conclusions of law that were reviewed de novo by the district court, whose affirmance was sufficient to constitute the final judgment for Article III purposes.Stern held that Article III prohibits Congress from vesting a bankruptcy court with the authority to finally adjudicate certain claims listed as “core” claims under 28 U.S.C. §157(b), but the Supreme Court did not address how the courts should proceed when ruling on such a claim. Stern therefore left a “statutory gap” because a Stern claim cannot be adjudicated to final judgment by the bankruptcy court, as in a typical core proceeding, but the alternative procedure, whereby the bankruptcy court submits proposed findings of fact and conclusions of law, statutorily applies only to non-core claims under 28 U.S.C. §157(c).

In its 2011 decision in Stern v. Marshall, decided by a 5-4 vote, the U.S. Supreme Court held that even though Congress designated certain state law counterclaims as “core” proceedings, Article III of the U.S. Constitution prohibits bankruptcy courts from finally adjudicating those claims. Stern v. Marshall left a number of questions unanswered, including the following:Is a fraudulent conveyance claim under state law or the Bankruptcy Code a “Stern claim” for which a bankruptcy court is constitutionally prohibited from entering final judgment?;Can a bankruptcy court enter a final judgment on “Stern claims” with the parties’ consent?; andCan a bankruptcy court treat a “core” Stern claim as “non-core” under 28 U.S.C. Section 157 and follow the statutory procedures for submitting proposed findings of fact and conclusions of law to the district court for de novo review, even though there appears to be a gap in the statute and it does not expressly provide for that approach?The Decision And Appeals Below.

On June 9, 2014, while the Bankruptcy Bar waited with bated breath, Justice Thomas delivered the long-anticipated opinion of the unanimous Court in Executive Benefits Insurance Agency v. Arkinson. While the Supreme Court answered the question of how to proceed when confronted with a Stern claim, it left the question of consent “for another day.”The Statutory Gap Identified in SternUnder 28 U.S.C. § 157(b)(1), Congress allocated to bankruptcy judges the power to hear and determine the bankruptcy case itself and all “core” matters arising under the Bankruptcy Code or arising in a bankruptcy case. However, under 28 U.S.C. § 157(c)(1), if the matter is “non-core” (meaning it is only related to the bankruptcy case), and the parties have not consented to final adjudication by the bankruptcy court, the bankruptcy court must submit proposed findings of fact and conclusions of law to the district court.

Anna Nicole denied the allegations and filed a counterclaim for tortious interference arising out of Pierce allegedly tortiously inducing J. Howard to write Anna Nicole out of his will. The bankruptcy court granted judgment in favor of Anna Nicole on Pierce's claim and later awarded her over $425 million in damages on her counterclaim, which the bankruptcy court treated as a "core proceeding" under 28 U.S.C. § 157(b)(2)(C). Pierce appealed, despite consenting to the bankruptcy court hearing the dispute.

The Northern Pipeline Court held that assigning bankruptcy courts the jurisdiction of the district courts violated Article III of the Constitution because it removed “essential attributes of the judicial power” from the Article III courts.[4]In response, Congress enacted a new statutory scheme, embodied in 28 U.S.C. §§ 157 and 1334, which was based on the so-called “Emergency Rule” developed by the district courts after Northern Pipeline. Under this scheme, United States District Courts have original jurisdiction over matters arising under, arising in or related to cases under the Bankruptcy Code, but district courts can refer these matters to the bankruptcy courts (a referral that is now automatic in all districts).