Tracking the Decision’s Impact by Looking at a Recent Bankruptcy Court Opinion on Enforcing the Automatic Stay Without a Jury Trial
A recent Supreme Court case has brought a long-standing question in bankruptcy practice back to the fore: When do parties have the right to a jury trial? In the summer of 2024, the Supreme Court decided Securities and Exchange Commission v. Jarkesy, 603 U.S. 109 (2024). There was no shortage of coverage or analysis about the decision’s possible impact. The Court had held that when the SEC seeks to impose civil penalties, defendants are entitled to a jury trial. This foreclosed in-house adjudication, which had become a primary way the SEC enforced rules against securities fraud. In the broader context, Jarkesy was seen as another in a series of important cases reflecting the Court’s evolving jurisprudence on the so-called administrative state (see, e.g., Charlie Savage and Adam Liptak, Again Curbing Regulatory Agencies, Supreme Court Rejects S.E.C.’s Tribunals, N.Y. Times (June 27, 2024)). Indeed, the very next day the Court overruled the long-standing Chevron doctrine (see Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024)), further suggesting a sea change in the trajectory of modern administrative law. But what did Jarkesy mean for bankruptcy courts?
While much ink was spilled about federal agencies, civil penalties, and the like, the potential impact of Jarkesy on bankruptcy proceedings has been less widely discussed — even though the principal precedent on which the Court relied was Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, a 1989 opinion holding it unconstitutional for bankruptcy courts to decide certain fraudulent conveyance claims without a jury. Bankruptcy courts, like in-house administrative law judges, are Article I tribunals, too. So, the constitutional rulings of Jarkesy, its predecessors and progeny apply. The only question is how.
It should come as no surprise that bankruptcy courts and litigants are starting to grapple with that question as they address Jarkesy in their proceedings. Anyone who finds themselves in bankruptcy court must monitor these cases closely. Courts applying Jarkesy across the country have not always taken the same interpretive approaches or come to the same conclusions. So, until the dust settles, understanding the state of the law in your specific jurisdiction will be critical.
In one recent case, the Bankruptcy Court for the Eastern District of Pennsylvania had occasion to address Jarkesy head on. The court determined whether it still had the power post-Jarkesy to award punitive damages against creditors who violated the Bankruptcy Code’s automatic stay. As the November 2025 opinion shows, powers long exercised and taken for granted may no longer be so certain.
Jarkesy and the Automatic Stay
The facts were not in dispute when the bankruptcy court decided In re Minarik, No. 25-10193, 2025 WL 3208785 (Bankr. E.D. Pa. Nov. 17, 2025). A Chapter 7 debtor had been hounded by a utilities company for unpaid electric bills. The debtor was a disabled veteran who suffered from physical and mental health issues. One of his children had chronic lung disease, which required him to regulate their home’s temperature and possibly provide her with oxygen. These things required electricity, so the company’s payment demands caused stress. And the company continued to contact the debtor even after he filed for bankruptcy, at which point the automatic stay in 11 U.S.C. § 362 had gone into effect.
In response, the debtor moved for sanctions and sought compensatory and punitive damages. For willful violations of the stay, the Bankruptcy Code authorizes awards of actual damages, costs, attorneys’ fees, and, “in appropriate circumstances,” punitive damages. 11 U.S.C. § 362(k)(1).
Before turning to the merits of the motion, however, the bankruptcy court faced a threshold constitutional question: After Jarkesy, could the bankruptcy court, an Article I tribunal, still provide the relief sought on the claim — or instead, did the company have a Seventh Amendment right to a jury trial before an Article III court?
To answer this question, the court engaged in the two-part analysis used by Jarkesy and followed by the Third Circuit(see In re Minarik, 2025 WL 3208785, at *4 (quoting Jarkesy, 603 U.S. at 120); Axalta Coating Sys. LLC v. Fed. Aviation Admin., 144 F.4th 467, 475 (3d Cir. 2025)). The court determined (1) whether the Seventh Amendment was implicated and (2) if so, whether the “public rights” exception applied. For the bankruptcy court to adjudicate the case, either the answer to the first question had to be no or the answer to the second question had to be yes.
The court swiftly answered the first question yes. The claim implicated the Seventh Amendment. In so holding, the court relied on the fact that the debtor sought only money damages, which it ruled were “a common law civil remedy.” The court also cited language from Jarkesy holding that civil penalties were designed to “punish and deter” and therefore were a “remedy at common law that could only be enforced in courts of law.” After highlighting this language, the bankruptcy court concluded that “the common law nature of punitive damages implicates the Seventh Amendment.”
Proceeding to the second question, the court answered this too in the affirmative: “the public rights exception applies and excuses the need for a jury trial.”
To get there, the court found at the outset that there was no “common law claim” presented by the motion. The court explained that Congress created the statutory cause of action in Section 362(k) to ensure compliance with the automatic stay — calling it “a foundational bankruptcy right,” a “central” provision, “a core bankruptcy protection,” and “fundamental” to the Bankruptcy Code. Further, “[p]roviding a Bankruptcy Court with a mechanism to enforce the automatic stay,” the court explained, was “an integral part of the statutory scheme” — and was “not merely a streamlined approach for the sake of efficiency.” For these reasons, the court held that, though the Seventh Amendment was implicated, there was no right to a jury trial because the matter “fall[s] squarely within the public rights exception to the Seventh Amendment.”
What to Take Away from In re Minarik
To resolve In re Minarik, Judge Patricia M. Mayer dutifully surveyed Supreme Court cases that led to Jarkesy, Third Circuit cases following Jarkesy, and Jarkesy itself. As many have pointed out, however, synthesizing this precedent is no small feat in many cases. Indeed, to reach the conclusion that the public rights exception applied, a significant part of the bankruptcy court’s analysis asked essentially whether the automatic stay motion was “more like” the action in Atlas Roofing Co. v. Occupational Safety and Health Review Commission, 430 U.S. 441 (1977), which upheld the administrative adjudication of occupational health and safety rules, or whether it was more like Granfinanciera, which struck down a bankruptcy court’s adjudication of certain fraudulent conveyances (see In re Minarik, 2025 WL 3208785, at *7–8 (citing Axalta, 144 F.4th at 477)). Facing such analogical inquiries, we should expect that courts will engage in different analyses and possibly reach different conclusions.
What is certain, though, is that Jarkesy will continue to raise thorny questions for courts and litigants. What are the defining elements of public rights? In Jarkesy, the Supreme Court acknowledged it had never “definitively explained the distinction between public and private rights” — and cautioned that it was “not claim[ing] to do so today” (603 U.S. at 131 (cleaned up)). Would access to a jury through an Article I proceeding, if itself constitutional, satisfy the Court’s Seventh Amendment concerns? The Court did not take on this question in Jarkesy. But interestingly, the Court did at one point reference precedent noting that Congress had authorized jury trials for certain bankruptcy matters (id. at 134 (citing Granfinanciera, 492 U.S. at 61–62 (“[O]ne cannot easily say that ‘the jury would be incompatible’ with bankruptcy proceedings, in view of Congress’ express provision for jury trials in certain actions arising out of bankruptcy litigation.”))).
Identifying and analyzing all these questions is beyond this post’s scope. But as a practical matter, litigants must be prepared to identify and address these issues in their proceedings. As the fallout from Jarkesy continues, it will be critical to understand the state of the law in your jurisdiction. In re Minarik was just one in what is sure to be a series of bankruptcy cases dealing with Jarkesy. It is likely that these jury-trial questions are in the earliest stages of being resolved.