Without conducting an official poll, it can safely be said that a majority of lawyers, judges, and scholars agree the nature and scope of bankruptcy jurisdiction is quite confusing and at times uncertain. There has always been—and perhaps always will be—a tug-of-war between the legislative and judicial branches of government over the proper scope of bankruptcy jurisdiction, with one side expanding the reach of bankruptcy jurisdiction legislatively and the other side limiting that reach judicially. This poses a classic separation of powers struggle between the two branches, which has certainly played out in recent bankruptcy jurisprudence.
When Congress created the bankruptcy court system, it gave bankruptcy judges (formerly called referees) many of the powers of Article III courts, but without the Article III protections such as life tenure and protection against salary diminution. The scope of bankruptcy jurisdiction has seen several iterations, from the first bankruptcy laws enacted in 1800 to the current jurisdictional scheme established by the 1984 Amendments but further limited by jurisprudence. Regardless of these various iterations, the legislature’s broad conferral of power to bankruptcy judges, without providing corresponding Article III safeguards, has raised and continues to raise serious constitutional questions regarding the proper scope of bankruptcy jurisdiction.
Ishaq Kundawala, Wellness International Network v. Sharif: Minimizing the Jurisdictional Impact of Stern through Consent of Bankruptcy Litigants, 44 Cap. Univ. L. Rev. 67 (2018).