Certification of State-Law Questions by Bankruptcy Courts

Abstract

Bankruptcy courts must often decide questions of state law. Sometimes the law is settled, but other times the highest state court has never addressed the question. This Article examines when bankruptcy courts certify such open questions of state law to state court, a mechanism generally overlooked in the bankruptcy context. The lack of information about bankruptcy certification has contributed to its underuse. This Article remedies this problem by identifying existing language in state statutes and rules that permits certification from bankruptcy courts. Moreover, drawing on an original study of certification of state-law questions in bankruptcy proceedings, the Article demonstrates that the mechanism has been used over more than forty years across judicial districts, in a wide range of subject areas and types of bankruptcy. This Article not only provides this broad range of precedent for the use of certification by bankruptcy courts, but also proposes model language for a local rule and makes recommendations for efficient use of the process. Finally, tables in the Article’s appendix provide readers with easy access to state enabling language and to information about states’ and bankruptcy courts’ past practices.