Supreme Court Backs Power of Bankruptcy Judges in Wellness Decision
On 5/26/15, the U.S. Supreme Court ruled, in Wellness International Network Ltd v. Sharif, that bankruptcy judges have the power to make final judgments in certain disputes if everyone involved consents to the arrangement, the Wall Street Journal reported today. In a 6-3 ruling, the Court reversed a Seventh Circuit finding that the bankruptcy court didn’t have the constitutional authority to decide whether certain property belonged to the bankruptcy estate because the dispute also involved state law issues. Justice Sonia Sotomayor, writing for the court, said that bankruptcy courts can be the final arbiter of disputes so long as those involved consent to the arrangement. “Adjudication based on litigant consent has been a consistent feature of the federal court system since its inception,” she said in the 19-page ruling. “Reaffirming that unremarkable fact, we are confident, poses no great threat to anyone’s birthrights, constitutional or otherwise.” It was the third time in the last four years that the Court has faced the question of the power of the bankruptcy court. Four justices joined Justice Sotomayor’s opinion in full, with Justice Samuel Alito joining in part. Justices John Roberts, Antonin Scalia and Clarence Thomas dissented.