Supreme Court preview: Recess appointments and Anna Nicole Smith’s legacy

January is shaping up to be an interesting month at the Supreme Court, as the nine Justices will ponder Barack Obama’s presidential powers, and try to settle issues left open from the Anna Nicole Smith inheritance case from 2011.

350px-Supreme_Court_US_2010The Justices will return from a winter break for a conference on January 10 and then hear what could be the month’s highest-profile case on January 13: National Labor Relations Board v. Noel Canning.

The Noel Canning case is an important test of the President’s powers to make appointments while the Senate is technically in recess.

To make a very long story short, Noel Canning is a bottling company in Washington state that got into a dispute with a local union about how to implement a pay raise for employees that both sides had accepted in a union contract.

The union asked the National Labor Relations Board to settle the dispute. A version of the Board did just that, ruling in favor of the union. But the Board had three of its five members appointed during a Senate recess by President Obama.

One big question in the case is what constitutes a Senate recess. Each Senate sits for two sessions during a two-year period, but the Senators take considerable breaks for holidays and to travel back home to see constituents.

So can President Obama appoint someone to a recess appointment, during these intermittent breaks, without Senate approval? In the case of Noel Canning, the Justices will be considering three issues about the timing of the appointments and presidential powers.

The case also received an unexpected twist in November when Senate Democrats killed the filibuster as a way to block appointments to agencies like the National Labor Relations Board.

The second case seems dry on the surface, but it may resolve some important questions left in the wake of the historic Anna Nicole Smith case.

The new case is called Executive Benefits Insurance Agency v. Arkison, and it involves a definition of the ruling in Stern v. Marshall (2011), which blocked the late Anna Nicole Smith’s heirs from collecting on a tortious interference claim.

The issue in the Arkison case is if bankruptcy courts can decide matters outside of their constitutional authority without violating Article III of the Constitution.

Bankruptcy courts could find their power limited in an adverse decision by the Court.

In the original case, Smith (whose married name was Vickie Lynn Marshall), sued in Texas probate court over the will of her 89-year-old husband, J. Howard Marshall II.  In 2006, the U.S. Supreme Court decided that a federal district court should hear Smith’s case.

The case eventually wound up in a federal bankruptcy court, but another federal appeals court said in 2010 that the decision was beyond the powers of non-Article III court, and Smith’s estate lost an $88 million judgment. The Supreme Court affirmed that decision in 2011 by a 5-4 vote, saying that Congress couldn’t empower a bankruptcy court to rule on a core proceeding involving private state law rights.

In Arkison, the Supreme Court will consider a bankruptcy court’s power to rule against a non-creditor in a case involving the fraudulent transfer of financial assets.

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