Wellness International Network v. Sharif (2014)
- Docket
- 13-935
- Decided
- 2014-01-01
Summary
Question: (1) Does the presence of a subsidiary state law issue to determine whether property in a debtor's possession is part of the bankruptcy estate mean that the issue does not stem from the bankruptcy itself and therefore that the bankruptcy court does not have jurisdiction to issue a final ruling? (2) Can bankruptcy courts exercise the judicial power of the United States by litigant consent, and if so, can that consent be implied? Conclusion: No, and Yes. Justice Sonia Sotomayor delivered the opinion for the 6-3 majority. The Court held that, as long as the parties knowingly and voluntarily consent, Article III of the Constitution allows bankruptcy courts (which Congress created pursuant to Article I) to adjudicate claims that would normally be heard by an Article III court. Because Congress created the bankruptcy courts for a limited purpose and gave them limited power subject to the control of the judiciary, there is no separation of powers problem with the bankruptcy courts exercising the powers Congress delegated to them, which include the ability to adjudicate non-bankruptcy claims when the parties consent. The Court also held that judicial history regarding the right to an Article III judge clearly states that the right can be waived; therefore a bankruptcy judge can adjudicate the type of state law claim at issue in this case as long as Article III courts retain supervision. Additionally, nothing in the Constitution requires that the waiver of the right to an Article III judge be express. As long as the litigant is aware of the right to an Article III judge, voluntarily trying the case before a non-Article III judge constitutes a waiver. In his opinion concurring in part and dissenting in part, Justice Samuel A. Alito, Jr. wrote that the majority opinion did not need to decide the issue of whether consent to non-Article III adjudication may be implied by actions. Chief Justice John G. Roberts, Jr. wrote a dissent in which he argued that the majority opinion should have decided this case solely based on the fact that a bankruptcy court has the authority to adjudicate the state law claims at issue here because they deal with determining what assets constitute the bankruptcy estate, which is the necessary starting point of any bankruptcy case. Chief Justice Roberts also argued that a litigant cannot consent to adjudication outside of what Article III allows because to do so would violate the constitutional separation of powers. Despite the practicality of allowing more issues to be adjudicated outside of Article III courts, the constitutional protections of the power of the judiciary must be respected. Justice Antonin Scalia and Justice Clarence Thomas joined in the dissent. In his separate dissent, Justice Thomas wrote that, while an individual can waive constitutional rights, an individual cannot consent to violations of the Constitution. Therefore, an individual can waive the right to have a claim heard before an Article III court only if the claim in question is within the jurisdiction of a non-Article III court. Because the state law claims in this case do not fall within the jurisdiction of the bankruptcy court, an individual cannot consent to have them adjudicated outside of an Article III court.