Preferences are Public Rights

51 Pages Posted: 9 Aug 2013 Last revised: 10 Jan 2014

See all articles by Brook Gotberg

Brook Gotberg

University of Missouri School of Law

Date Written: December 21, 2013

Abstract

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

Suggested Citation

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)

University of Missouri School of Law ( email )

Missouri Avenue & Conley Avenue
Columbia, MO MO 65211
United States

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