Face of Akron bankruptcy practice changes with retirements
Benjamin White
Associate Editor
Published: March 28, 2014
Associate Editor
Published: March 28, 2014
After two decades and a docket spanning roughly 90,000 bankruptcy cases, Judge Marilyn Shea-Stonum of the United States Bankruptcy Court, Northern District of Ohio will retire at the end of April as her subfield continues its turbulent time of change.
What’s next? Climbing Mount Kilimanjaro, among other things, she said.
Alan Koschik, partner at Brouse McDowell, will take over her duties in May when he starts his 14-year term.
On the evening of April 3, the Akron Bar Association will honor Judge Shea-Stonum at a reception from 5 to 8 pm at its downtown headquarters.
Judge Shea-Stonum’s exit combined with the retirement of veteran Assistant U.S. Attorney James Bickett will change the face of Akron bankruptcy practice.
“There’s an element of grace in knowing when it’s time to move on,” Judge Shea-Stonum said. “It’s a hard job.”
“There needs to be a transition,” said
Bickett, who served as the coordinator of bankruptcy matters in the Northern District throughout his 23 years as an AUSA. “Lawyers have been off-and-on good about transitioning to the next generation and mentoring the next generation.”
“We both have been very fortunate in our careers,” Judge Shea-Stonum said. “If we retire, there will be some pressure taken off the top and other people can move up, and I hope it works that way.”
Since taking the bench as Akron’s second bankruptcy judge in 1994, Judge Shea-Stonum witnessed fundamental changes in bankruptcy law made more complex by the wave of bankruptcies following the financial collapse of 2008.
Throughout her tenure, the veteran judge said that approximately 20 percent of the population of her jurisdiction – Summit, Portage and Medina counties – has been directly affected by a bankruptcy filing.
“There have been huge changes in the economic profile of the area,” she said. “The only constant we’ve seen is change.”
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) brought significant changes to the largely statutory field of bankruptcy law. As a result of the changes to the Code, Bickett said the number of filed bankruptcies skyrocketed that year, adding to the myriad filings wrought by the housing crisis and ensuing recession.
A more important change, according to Bickett, may be last year’s hike of Ohio’s homestead exemption to $132,900 per person, which will allow more Ohioans to keep their houses in bankruptcy. He said this may contribute to another spike in bankruptcy filings for Korschik’s court.
Both Bickett and Judge Shea-Stonum agreed that the most fundamental question facing bankruptcy practice remains the uncertain jurisdiction and role of bankruptcy judges.
The jurisdictional angst that began in 1982 with the Supreme Court’s Northern Pipeline Construction Company v. Marathon Pipe Line Company and continued through 2010’s Stern v. Marshall stems from the fact that bankruptcy judges derive their power from Article I of the Constitution instead of Article III. Though the core duties of bankruptcy judges stand undisputed, other “non-core” jurisdictional gray areas (like a divorce proceeding intimately married to a bankruptcy) created a hot potato of complex separation-of-powers arguments that has been passed for over three decades.
“The way things have played out, at least in my opinion, the role that was envisioned for bankruptcy judges to deal with newly emerging economic situations - the discretion that I think the drafters envisioned - has been significantly curtailed,” said Judge Shea-Stonum.
Though the Supreme Court’s 5-4 judgment in Stern curtailed bankruptcy judges’ jurisdiction only narrowly, the high court is revisiting the jurisdictional question in Executive Benefits Insurance Agency v. Arkinson, a similar case argued in January. The court’s decision is expected in June.
Eventually, Bickett said he expects bankruptcy judges to again become referees (similar to magistrates) under the district courts, as they were before the Bankruptcy Reform Act of 1978.
“It’s a bold new world,” he said. “Even if they’re reduced to the rank of magistrate judges, so to speak, they will still make decisions. The difference is that they can be appealed to the district court versus the 6th Circuit.”
Judge Shea-Stonum said she will be excited to watch the Supreme Court’s decision and potential ramifications from retirement instead of the bench.
“Since June of 2010 we’ve been again scratching our heads figuring out what we can and can’t do,” said Judge Shea-Stonum. “I don’t know what’s going to happen.”
The daughter of an Air Force officer, Judge Shea-Stonum eventually settled in California in her youth and graduated with the inaugural class of The University of California, Santa Cruz. She met her future husband, recently retired Case Western Reserve University professor Gary Stonum, while writing for the Riverside Press Enterprise.
Eventually, she found herself in Baltimore working for acclaimed attorney Eugene Feinblatt at an urban renewal center.
“He was just this magnificent problem solver. As much as any single human being, he really helped Baltimore reinvent itself.”
Inspired, she attended law school at Case Western while her husband taught literature. Though she initially planned to enter urban redevelopment, she clerked for Judge Frank Battisti of the Northern District of Ohio and accepted an offer from Jones Day.
Though she hadn’t taken a bankruptcy class in law school, she audited one after she received her clerkship offer. At Jones Day, she said she wanted to practice litigation but stumbled upon one of the firm’s first bankruptcy cases as a young associate. A decade later, Jones Day blossomed into one of the nation’s premier bankruptcy firms.
“There wasn’t anybody there to take the tablets down from the mountains to us,” she said. “We had to sit there and figure it out.”
It wasn’t until her appointment to the bench that she worked extensively with the emotional and individual subset of consumer bankruptcy and its challenges.
“For many people bankruptcy is a shock, an embarrassment, a once-in-a-lifetime thing they hope their neighbors don’t know about, so you hope the system deals with them as individuals,” said Bickett, who worked with Judge Shea-Stonum throughout her entire judicial career.
“She cared a lot about the people in front of her,” he said.
Because bankruptcy law remains a largely statutory field, such courts morphed into “courts of practicality,” according to Bickett. Judge Shea-Stonum’s docket maintained an average of 7,000 to 8,000 cases at a time, and she faced a balancing act each day on the bench.
“It looks overwhelming until you realize that the system has developed in a way for people to address these things efficiently,” Bickett said.
“We can be very efficient, but Judge Shea-Stonum has been very good at balancing the efficiency with the people.”
Bickett, who grew up in Akron and graduated from the University of Akron and the University of Michigan Law School, took a long and interesting road to the U.S. Attorney’s Office.
After passing the bar at 22, he worked as a solo practitioner, assistant prosecutor, police legal advisor, civil-side city attorney, county attorney and litigator at several area firms before moving to the federal building in 1990.
Bickett, who split his time between bankruptcy and healthcare litigation as an AUSA, served as an office evaluator for other district offices from Florida to Iowa.
“I came back after Michigan Law because I love the area, love the people. I couldn’t actually imagine myself practicing anywhere else,” he said.
“Because there is that tight-knit community, we get things done.”
Judge Shea-Stonum, now in the market for a small recreational vehicle, said she plans to visit every national park with her husband, volunteer, climb Mount Kilamajor with a friend and perhaps rest.
“I’m a little past my midlife crisis, but not too much past it,” she said. “If I want to do something, I want to do it well and I want to train myself in the best way to do it.”
Bickett said his plans include only relaxation for the indefinite future.
“It’s almost been 40 years. I enjoyed the heck out of it. The Akron legal community has been great,” he said.
Judge Shea-Stonum agreed. “It’s been a privilege to serve in the midst of the Akron legal community. There are a lot of very decent people, a lot of publicly-spirited people,” she said.
“I feel lucky to have landed in Akron.”
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