Nov 17, 2013

Posted in Uncategorized

Should The Court DIG Executive Benefits Insurance Agency v. Arkison?

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A new amicus, filed on behalf of a trustee of the Madoff Estate argues that this case should be dismissed. While I generally do not follow bankruptcy cases closely, this case presents several Article III questions lingering in the wake of Stern v. Marshall.

In this case, the 9th Circuit panel (including Judge Kozinski) issued a briefing order asking the parties to address Stern v. Marshall.

The brief contends that the 9th Circuit improperly reached to resolve these Article III issues, and this case presents a bad vehicle:

The Court presumably granted certiorari in this case because it was the first to raise several issues left open in the wake of its decision in Stern v. Mar- shall, 131 S. Ct. 2594 (2011). But timing isn’t every- thing. Those issues, due to the way that they are raised in this case, are not susceptible to judgment at this point under Article III’s “case” or “controver- sy” requirement. The Petitioner here, Executive Benefits Insurance Agency (“EBIA”), already re- ceived any relief to which it might be entitled in mounting its defense under Stern, depriving it of standing to argue those issues here.

From what I’ve gleaned, it seems that Judge Kozinski reached out to decide an issue that was not properly before the court, creating several circuit splits. Not the first time it has happened. After the Court’s early DIG of Madigan, this case may join the list.

This brief was filed by David Rivkin and Andrew Grossman, a friend and former classmate at GMU.

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  • closereader

    Looks like a Paez opinion to me.

  • merguez

    Nope, this amicus is wrong. The bankruptcy court did the heavy lifting. To pretend that the district court’s review of the bankruptcy judge’s decision was substantively and procedurally identical to the hypothetical alternative in which the district judge withdrew the reference and decided the case ab initio is ridiculous. The injury is slight, in this case, since EBIA was going to lose regardless, but it’s still an injury. Precisely 0% chance they DIG this.

    The amicus is also wrong, for what it’s worth, when it argues that fraudulent transfer claims actually are constitutionally core (or at least, it’s probably right as a matter of theory–fraudulent conveyances probably *should* be constitutionally core–but it’s clearly wrong as a matter of law after Granfinanciera and Stern). That said, the amicus is at least right that the Court should affirm the decision below.

  • Insurance Newark

    Informative post thanks fro share………