Anna Nicole Smith’s Surprising Impact on the Bankruptcy Court System

The U.S. Supreme Court ruled (again) in the complicated case regarding claims against the estate of Pierce Marshall, late husband of the now-deceased Anna Nicole Smith. And while the world may have tired of hearing about Smith and her monetary claims, the paternity of her child and other drama that long filled the news media, Stern v. Marshall deserves some attention.

Boot Camper Thad Bartholow blogged about the case today, and his analysis doesn’t bode well for those of us routinely resolving issues like FDCPA claims and contract claims in the bankruptcy courts.

The whole post is worth a read, but here’s the nutshell version:

Similarly, in Stern v. Marshall, it would appear that the Supreme Court has effectively limited the role of Bankruptcy Judges (at least when considering non-bankruptcy claims) to the equivalent of a specialized magistrate judge.  So, that means (I think) that any “ruling” by a bankruptcy judge on a non-bankruptcy claim now becomes a non-final, non-binding “recommendation” subject to review and approval by the District Judge. In practical terms, that likely means a lot more work for attorneys, bankruptcy judges, and federal district court judges.