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ArtIII.S1.9.9 Consent to Article I Court Jurisdiction

Article III, Section 1:

The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.

Congress has from time to time enacted legislation allowing non-Article III courts to adjudicate matters that would ordinarily proceed in Article III court based on the parties’ consent.1 The Supreme Court has upheld some such arrangements, but at times has invalidated them on separation of powers grounds.

The Supreme Court has identified two distinct rationales for the constitutional limitations on the creation of non-Article III tribunals. First, the Court has noted that Article III provides a personal right to individual litigants, preserving “their interest in an impartial and independent federal adjudication of claims.” 2 Second, the Court has held that Article III safeguards structural principles, preserving the “role of the Judicial Branch” in our system of government by preventing Congress from transferring jurisdiction to non-Article III tribunals en-masse.3 The Court has explained that, while individual rights can be waived, “notions of consent and waiver cannot be dispositive” with respect to Article III’s structural protections because those “limitations serve institutional interests that the parties cannot be expected to protect” —separation of powers principles protecting the Judicial Branch from encroachment by the political branches.4 When examining the structural component of Article III protections in consent cases, the Court has assessed the constitutionality of different judicial schemes using ad hoc balancing tests that rely on seemingly disparate principles, leaving open questions about when Congress can provide an alternative forum to an Article III court in which consenting parties can resolve their disputes.5

For example, in Commodities Futures Trading Commission (CFTC) v. Schor, the Supreme Court, in assessing the structural component of Article III’s constitutional protections, rested its decision primarily on the breadth of matters adjudicated by the non-Article III tribunal at issue in that case.6 Specifically, the Court upheld a law that allowed the CFTC to adjudicate common law claims that were “incidental to” and “completely dependent upon adjudication by the Commission of [public rights] claims created by federal law” and arose “out of the same transaction or occurrence” as the federal law claim.7 For the Court, allowing an administrative agency to adjudicate such a “narrow class of common law claims” amounted to only a de minimis intrusion on the Judicial Branch.8 Nonetheless, in noting the narrow nature of its holding, the Schor Court emphasized that Congress could not “create[ ] a phalanx of non-Article III tribunals equipped to handle the entire business of the Article III courts without any Article III supervision or control and without evidence of valid and specific legislative necessities,” even if parties consented to adjudicate before such a forum.9

Five years later, in Peretz v. United States, the Court approached the issue of Article III’s structural protections in a slightly different manner.10 In Peretz, a criminal defendant who had failed to demand the presence of an Article III judge during the selection of his jury argued that having a magistrate judge oversee voir dire proceedings implicated the structural protections provided by Article III.11 As in Schor, the Court rejected the idea that a judicial scheme granting a legislative court responsibilities traditionally exercised by a constitutional court ran counter to the institutional interests preserved by Article III.12 But, while the Court in Schor focused on the narrow nature of the claims adjudicated by administrative agency in that case, the Court in Peretz focused on the degree of control exercised by a constitutional court over the non-Article III court’s work. The Court held that, “[b]ecause ‘the entire [jury selection] process takes place under the district court’s total control and jurisdiction,’ there is no danger that use of the magistrate involves a ‘congressional attempt’” to undermine the power of constitutional courts.13

In Stern v, Marshall, the Supreme Court held that the Bankruptcy Court lacked authority to enter judgment on a common law tort counterclaim.14 The Court held that the parties had consented to having the Bankruptcy Court hear the counterclaim, but while such consent satisfied the requirements of the relevant statute, it could not overcome applicable constitutional limits.15 In the wake of Stern, questions arose about the constitutionality of allowing consenting parties to proceed before a non-Article III court. In the 2015 case Wellness International v. Sharif, the Court held that Article III permits bankruptcy courts to adjudicate with finality Stern claims—claims designated for final adjudication in the bankruptcy court as a statutory matter, but prohibited from proceeding in that way as a constitutional matter—if the parties have provided knowing and voluntary consent.16 In so holding, the Court used the ad hoc balancing test from Schor and Peretz to conclude that allowing bankruptcy courts to decide Stern claims by consent would not “impermissibly threaten the institutional integrity of the Judicial Branch.” 17 Following Wellness International, questions remain about the exact scope of Congress’s power to authorize non-Article III adjudication by litigant consent, but it appears that legislation that allows a relatively narrow class of claims to be adjudicated before a non-Article III tribunal with the parties’ consent and provides Article III courts with some oversight of the legislative court’s activities is likely to pass constitutional muster.

For example, under the Federal Magistrates Act, upon the consent of the parties, a magistrate judge “may conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case.” See 28 U.S.C. § 636(c)(1). Pursuant to the Bankruptcy Amendments and Federal Judgeship Act of 1984, a district court, with the “consent of all parties to the proceeding,” is permitted to refer a “proceeding related to a case under title 11 to a bankruptcy judge to hear and determine and to enter appropriate orders and judgments.” See 28 U.S.C. § 157(c)(2). Other federal laws may provide for arbitration over discrete legal issues to occur based on the consent of the parties involved. See, e.g., 42 U.S.C. § 4083(a). back
Commodities Future Trading Comm’n v. Schor, 478 U.S. 833, 850 (1986). back
Id. (quoting Nat’l Ins. Co. v. Tidewater Co., 337 U.S. 582, 644 (1949) (Vinson, C.J., dissenting)). back
Id. at 851. Indeed, the Supreme Court has likened the structural protections provided by Article III, §1 to the limits on the subject-matter jurisdiction of a federal court imposed by Section 2 of Article III, which cannot be waived through consent. Id. at 850–51 back
Id. at 848–49; see also Peretz v. United States, 501 U.S. at 930 (1991). back
478 U.S. 833. back
Id. at 856. back
Id. back
Id. at 855. back
501 U.S. at 930. back
Id. at 937. back
Id. back
Id. back
564 U.S. 462 (2011). back
Id. at 481–82. back
575 U.S. 665 (2015). back
Id. at 678–79 (alterations omitted). back