The American Bar Association adopted a resolution yesterday supporting the position that bankruptcy judges can, in certain circumstances, adjudicate core proceedings that go beyond a court's constitutional authority, in a response to confusion over the U.S. Supreme Court's landmark Stern v. Marshall decision, Law360 reported today. The ABA resolution says that bankruptcy judges should be allowed to rule on matters in a “core” proceeding even if the matters underlying the proceeding are beyond the court's constitutional authority, provided the parties in the proceeding consent to the bankruptcy court's jurisdiction. “The statute is best construed to authorize a bankruptcy judge to adjudicate…a core proceeding requiring the judicial power of the United States in the same manner as the judge already may adjudicate a noncore proceeding—upon the express consent of the parties,” the proposal said. The proposal addresses statutory confusion in light of the 2011 Stern ruling, which found that a non-Article III bankruptcy judge lacked constitutional authority to enter final judgment on a debtor's common law counterclaim against a creditor, even though the court had authority to rule on the core proceeding under the federal judicial code.
