In his latest article for The Bankruptcy Strategist, “Third Circuit Sides With Magistrates On Bankruptcy Appeals,” Schulte Roth & Zabel of counsel Michael L. Cook explains the Third Circuit’s recent MTE decision, 2025 WL 5682927 (3d Cir. May 7, 2025) (on consent of parties and referral by district court, “a Magistrate Judge may enter a final judgment in a bankruptcy appeal”). The court overruled its previous 1983 decision that had been relied upon by the Seventh and Fifth Circuits (district courts lacked authority to refer a bankruptcy appeal to a magistrate).

The bankruptcy court in MTE had granted summary judgment for the defendant. When the plaintiff appealed to the district court, the parties “consented to proceed before a magistrate judge for all proceedings, including final judgment.” Relying on 28 U.S.C. §636(c), the magistrate affirmed the bankruptcy court’s judgment, and the Third Circuit affirmed the magistrate’s jurisdiction, creating a split with the Fifth and Seventh Circuits.

Read the article.