Supreme Court Oral Arguments Today in Wellness International Ltd. v. Sharif

Today, January 14, 2015, the Supreme Court is scheduled to hear oral arguments in the latest case before the Court regarding the bankruptcy court’s jurisdictional powers — Wellness International Network, Limited v. Sharif.  The Court was not too interested in delving into this issue since the case was on the list of cases to be considered by the Justices at five separate conferences.  Regardless, the Court finally granted certiorari to the Seventh Circuit’s decision on July 1, 2014.

The Court will address the following two issues:

(1) Whether the presence of a subsidiary state property law issue in an 11 U.S.C. § 541 action brought against a debtor to determine whether property in the debtor’s possession is property of the bankruptcy estate means that such action does not “stem[] from the bankruptcy itself” and therefore, that a bankruptcy court does not have the constitutional authority to enter a final order deciding that action; and

(2) whether Article III permits the exercise of the judicial powers of the U.S. by the bankruptcy courts on the basis of litigant consent, and if so, whether implied consent based on a litigant’s conduct is sufficient to satisfy Article III.

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