Magistrate jurisdiction after Stern, in “eight corners” insurance case

In Technical Automation Services Corp. v. Liberty Surplus Ins. Corp. the Court addressed, sua sponte, an issue about the jurisdiction of a U.S. magistrate judge after the Supreme Court’s recent opinion limiting bankruptcy court jurisdiction, Stern v. Marshall, 131 S. Ct. 2594 (2011).  No. 10-20640 (March 5, 2012).  The Court concluded that Stern did not directly overrule the prior Circuit precedent of Puryear v. Ede’s, Ltd., 731 F.2d 1153 (5th Cir. 1984) and held: “[W]e will follow our precedent and continue to hold, until such time as the Supreme Court or our court en banc overrules our precedent, that federal magistrate judges have the constitutional authority to enter final judgments on state-law counterclaims.”  Op. at 12.  On the merits, the Court reversed the lower court’s ruling that an “eight corners” analysis of an insurance coverage issue precluded consideration of a claim of mutual mistake.  Op. at 15.