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Case Nos. 02-56002, 02-56067
Date of Decision: March 19, 2010
Date rehearing denied: May 5, 2010
Before Hon. Beezer, Kleinfeld, Paez
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: VICKIE LYNN MARSHALL,
Debtor.
ELAINE T. MARSHALL, EXECUTRIX
OF THE ESTATE OF E. PIERCE MARSHALL,
Appellant and Cross-Appellee,
v.
HOWARD K. STERN, EXECUTOR OF THE ESTATE OF
VICKIE LYNN MARSHALL,
Appellee and Cross-Appellant.
____________________________
Appeal from Decision of the United States District Court
Central District of California
Case No. Case No. SA CV-01-00097
(Honorable David O. Carter, Judge)
_________________________________
MOTION FOR STAY
OF MANDATE PENDING PETITION FOR CERTIORARI
_________________________________________________
Philip W. Boesch, Jr. Bruce S. Ross
THE BOESCH LAW GROUP Vivian L. Thoreen
225 Santa Monica Boulevard, 11th Fl. HOLLAND & KNIGHT LLP
Santa Monica, California 90401 633 West 5th Street, Ste. 2100
(310) 578-7880 // (310) 310-578-7880 fax Los Angeles, California 90071
(213) 896-2400 // (213) 896-2450 fax
Kent L. Richland
Alan Diamond
Edward L. Xanders
GREINES, MARTIN, STEIN & RICHLAND LLP
5900 Wilshire Boulevard, 12th Floor
Los Angeles, California 90036
(310) 859-7811 // (310) 276-5261 fax
Attorneys for Appellee and Cross-Appellant Howard K. Stern,
Executor of the Estate of Vickie Lynn Marshall

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MOTION FOR STAY OF MANDATE
PENDING PETITION FOR CERTIORARI
Under Federal Rule of Appellate Procedure 41(d)(2) and Circuit Rule 41-1,
Appellee and Cross-Appellant Howard K. Stern, Executor of the Estate of Vickie
Lynn Marshall (referred to in this Motion and the attached Declaration as
“Vickie”), respectfully moves to stay the mandate following this Court’s denial of
Vickie’s petition for hearing and rehearing en banc on May 5, 2010, pending the
filing and final disposition of Vickie’s petition for writ of certiorari to the United
States Supreme Court.1 As set forth in the attached declaration of Alan Diamond,
the petition for certiorari will present substantial questions and good cause exists
for a stay.
Dated: May 6, 2010 Respectfully submitted,
THE BOESCH LAW GROUP
Philip W. Boesch, Jr.
HOLLAND & KNIGHT, LLP
Bruce S. Ross
Vivian L. Thoreen
GREINES, MARTIN, STEIN & RICHLAND LLP
Kent L. Richland
Alan Diamond
Edward L. Xanders
By: /s/ Alan Diamond
Attorneys for Appellee and Cross-Appellant
Howard K. Stern, Executor of the Estate of Vickie
Lynn Marshall
1
Both original parties are now deceased, but for the sake of readability
Vickie and Pierce Marshall are sometimes referred to as though still the current
parties, as was done in the Opinion.
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DECLARATION OF ALAN DIAMOND
I, Alan Diamond, declare as follows:
1. I am an attorney licensed to practice in the State of California and am
admitted to practice before this Court. I am an attorney in the law firm of Greines,
Martin, Stein & Richland LLP, counsel for Appellee and Cross-Appellant Howard
K. Stern, Executor of the Estate of Vickie Lynn Marshall (“Vickie”), in this appeal.
I make this declaration of my personal, firsthand knowledge and, if called as a
witness, I could and would testify competently thereto.
2. In 2006, the United States Supreme Court reversed this Court’s
holding in this case that the probate exception barred the federal courts from
hearing Vickie’s counterclaim for tortious interference with gift filed to Pierce
Marshall’s proof of claim for defamation. Marshall v. Marshall, 547 U.S. 293,
314-15 (2006).
3. On remand, in a published opinion filed on March 19, 2010, the Ninth
Circuit panel has again reversed the district court’s decision in Vickie’s favor.
Opn:4534-35. The Opinion holds that Vickie’s tortious interference counterclaim
was not a core proceeding under 28 U.S.C. § 157(b)(2)(C), and therefore the
bankruptcy court’s judgment was not final. Opn:4520-28. Relying on Northern
Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982) (plurality
opinion) (Marathon), the Opinion holds that bankruptcy courts can enter final
judgments on compulsory counterclaims under 28 U.S.C. § 157(b)(2)(C) only if
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“‘the resolution of the counterclaim is necessary to resolve the allowance or
disallowance of the claim itself,’” supposedly because any broader construction
would run afoul of Article III of the United States Constitution. Opn:4510-11,
4520-28 (citation omitted).
4. This is the first court to adopt that standard. Applying this newly-
minted test, the Opinion holds that Vickie’s compulsory counterclaim “was not a
necessary predicate to the bankruptcy court’s decision to allow or disallow
[Pierce’s] defamation claim” because even if Vickie showed the statements
underlying the defamation claim were true (which would defeat Pierce’s creditor’s
claim), she would have to prove additional factual elements to establish her
counterclaim. Opn:4524-27.
5. After concluding that the bankruptcy court did not have the power
under 28 U.S.C. § 157(b)(2)(C) to enter final judgment, the Opinion holds that a
later judgment in a Texas probate court entered while the district court was
reviewing the bankruptcy court ruling precludes Vickie from establishing her
tortious interference counterclaim. Opn:4528, 4534.
6. An order denying Vickie’s petition for rehearing and rehearing en
banc was filed on May 5, 2010.
7. Vickie will be filing a petition for a writ of certiorari in the United
States Supreme Court within the time prescribed by law.
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8. Vickie’s petition for a writ of certiorari will present substantial
constitutional and statutory questions regarding the scope of bankruptcy courts’
power to enter final judgments on compulsory counterclaims filed to creditors’
claims. It will contend, among other things, that the Opinion:
(a) Conflicts with the uniform rule of every Circuit that has applied
28 U.S.C. §157 (b)(2)(C) that core jurisdiction exists over any compulsory
counterclaim to a creditors’ claim. In re CBI Holding Co., 529 F.3d 432, 461-63 &
n.12 (2d Cir. 2008); In re Am. Bridge Prods. Inc., 599 F.3d 1, 4 (1st Cir. 2010); In
re Baudoin, 981 F.2d 736, 741-44 (5th Cir. 1993).
(b) Mistakenly relied on Marathon as compelling its new standard,
even though Marathon did not involve a compulsory counterclaim to a proof of
claim or the revamped post-Marathon bankruptcy scheme;
(c) Ignores and contravenes a key post-Marathon Supreme Court
decision upholding the constitutionality of a statutory scheme allowing non-Article
III judges to decide compulsory counterclaims. Commodity Futures Trading
Comm’n v. Schor, 478 U.S. 833, 837, 850 (1986).
(d) Ignores that Congress enacted the present statutory scheme “for
the specific purpose of curing the constitutional problems of the scheme under
which [Marathon] arose.” In re Mankin, 823 F.2d 1296, 1306 (9th Cir. 1987);
28 U.S.C. §§ 1334(a), (b), 157(a), (d), 151-152.
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(e) Contravenes Congress’ intent in enacting the present statutory
scheme and makes 28 U.S.C. § 157(b)(2)(C) superfluous. See In re Arnold Print
Works, Inc., 815 F.2d 165, 168-69 (1st Cir. 1987) (Congress believed that almost
all proceedings before bankruptcy judges—the sponsors said 95%—would be
core); 28 U.S.C. § 157(b)(2)(B).
(f) Drastically alters everyday bankruptcy practice and undermines
efficient bankruptcy administration by saddling courts with jurisdictional battles
and splintering inextricably-linked claims between bankruptcy and district courts.
10. Marathon involved a debtor’s state law claim against a third party that
was a complete stranger to the debtor’s bankruptcy, not a debtor’s counterclaim to
a creditor’s claim; it held unconstitutional certain statutes that have since been
repealed and replaced by the current bankruptcy law. In re CBI Holding Co., 529
F.3d at 459; In re Mankin, 823 F.2d at 1306, 1309. The Supreme Court has never
considered the constitutionality of 28 U.S.C. § 157(b)(2)(C) or the scope of
bankruptcy courts’ power to enter final judgments on compulsory counterclaims to
creditors’ claims. We will explain that the Opinion’s new and restrictive test for
core jurisdiction over compulsory counterclaims raises compelling reasons for the
Supreme Court to grant certiorari and settle these significant questions of federal
law, and that these questions entail an overriding need for national uniformity, as
they implicate bankruptcy practice throughout the United States.
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11. This motion is made in good faith for the reasons stated and not for
purposes of delay.
I declare under penalty of perjury under the laws of the United States of
America that the foregoing is true and correct.
Executed this 6th day of May, 2010, at Los Angeles, California.
/s/ Alan Diamond
Alan Diamond
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CERTIFICATE OF SERVICE
I am employed in the County of Los Angeles, State of California, am over
the age of 18, and am not a party to the within action.
I certify that on May 10, 2010, I electronically filed the foregoing
APPELLEE’S/CROSS-APPELLANT’S MOTION FOR STAY OF
MANDATE PENDING PETITION FOR CERTIORARI with the Clerk of the
Court for the United States Court of Appeals for the Ninth Circuit by using the
appellate CM/ECF system.
Participants in the case who are registered CM/ECF users will be served by
the appellate CM/ECF system.
I further certify that some of the participants in the case are not registered
CM/ECF users. I have mailed the foregoing document by First-Class mail, postage
prepaid, to the following non-CM/ECF participants:
N/A
I enclosed a copy of the document in a sealed, addressed envelope and
placed the envelope for collection and mailing in the United States mail at Los
Angeles, California, following our ordinary business practices on the aforesaid
date.
/s/ Leanna Sun Borys
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