While the high court is known for issuing rulings on great constitutional issues, its routine business often ventures into the mundane interpretation of somewhat obscure laws passed by Congress. In this instance, it's a dispute over a provision in the 1984 Bankruptcy Act.
Over the years the case has worked its way through various federal bankruptcy courts and Texas probate proceedings and a much-publicized stop at the Supreme Court in 2006. Then, camera crews surrounded the court to get a look at Smith, who died nine months after the justices ruled unanimously in her favor.
In short, Stern's lawyers contend a federal bankruptcy judge is legally empowered to address all of the core claims and counterclaims brought by the parties. "Lower courts across the country have uniformly held for decades that bankruptcy courts can enter final orders on debtors' compulsory counterclaims to proofs of claim. Until now," lawyer Kent Richland wrote in his brief to the court.
Lawyers for Elaine Marshall, Pierce Marshall's widow, say Congress didn't empower the bankruptcy court with such broad authority and that rulings made by the Texas probate court should carry the day. "Congress intentionally limited (bankruptcy judges') ability to resolve state law causes of action that the debtor may hold against others," Eric Brunstad told the court.
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