36 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 37 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C Complex Commercial Litigation C C L Article III’s “case or controversy” requirement beyond mootness, such as ripeness and injury-in-fact. They may find support in dicta from Kiviti that “bankruptcy courts … are essentially unencumbered by Article III’s case-or-controversy requirement.” We can also expect parties to litigate the possible constitutional implications of empowering bankruptcy courts to issue orders that may not be subject to review by an Article III court. For instance, the Pettine court observed that under Kiviti, when the bankruptcy court enters an order on an issue that has become constitutionally moot, Article III courts would not be able to review such orders on appeal, enter final orders where bankruptcy courts submit proposed findings of fact and conclusions of law in noncore proceedings under Section 157(c), or withdraw the reference of a proceeding under Section 157(d) except to dismiss the proceeding. The Pettine court stated, “[t]hese components of § 157 … are essential to the statutory structure of § 157 that was designed to pass constitutional muster.” And while the litigants in Kiviti and Pettine did not seek Supreme Court review, it is possible that litigants facing a similar issue in the circuit courts may do so. The question then becomes whether the Supreme Court will step in to resolve this circuit split. ARE BANKRUPTCY COURTS SUBJECT TO ARTICLE III’S “CASE OR CONTROVERSY REQUIREMENT”? CIRCUITS DIFFER, INCREASINGLY Precedential Decision In re Global Indus. Techs., 645 F.3d 201, 210 (3d Cir. 2011) Kiviti v. Bhatt, 80 F.4th 520 (4th Cir. 2023) Furlough v. Cage (In re Technicool Sys.), 896 F.3d 382, 385 (5th Cir. 2018) Rosenfeld v. Rosenfeld (In re Rosenfeld), 698 F. App’x 300, 303 (6th Cir. 2017) GAF Holdings, LLC v. Rinaldi (In re Farmland Indus.), 639 F.3d 402, 405 (8th Cir. 2011) Pettine v. Direct Biologist, LLC (In re Pettine), 2023 Bankr. LEXIS 2763 (10th Cir. B.A.P. Nov. 15, 2023) Circuit Third Fourth Fifth Sixth Eighth Tenth Holding Subject to Article III Mootness Not Subject to Article III Mootness Not Subject to Article III Mootness Subject to Article III Mootness Subject to Article III Mootness Subject to Article III Mootness
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