In defense of direct appeals: A further reply to professor chemerinsky

American Bankruptcy Law Journal

Volumn 71, Issue 2, 1997, Pages 137-147

  Crabb, Barbara B ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0347743560     PISSN: 00279048     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (50)

1. See Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 91 (1982) (Rehnquist, J., concurring) (finding it unnecessary to decide whether cases dealing with the authority of Congress to create courts other than by use of its power under Article III can be synthesized easily or whether "they are but landmarks on a judicial 'darkling plain' where ignorant armies have clashed by night").
2. Erwin Chemerinsky, Decision-Makers: In Defense of Courts, 71 AM. BANKR. L.J. 109 (1997).
3. 458 U.S. 50 (1982).
4. In this respect, I agree with the position expressed in Paul M. Baisier & David G. Epstein, Resolving Still Unresolved Issues of Bankruptcy Law: A Fence or An Ambulance, 69 AM. BANKR. L.J. 525 (1995), and disagree with those expressed by Professor Broome in her response, Lissa Lamkin Broome, Bankruptcy Appeals: The Wheel is Come Full Circle, 69 AM. BANKR. L.J. 541 (1995).
5. In this respect, I agree with the position expressed in Paul M. Baisier & David G. Epstein, Resolving Still Unresolved Issues of Bankruptcy Law: A Fence or An Ambulance, 69 AM. BANKR. L.J. 525 (1995), and disagree with those expressed by Professor Broome in her response, Lissa Lamkin Broome, Bankruptcy Appeals: The Wheel is Come Full Circle, 69 AM. BANKR. L.J. 541 (1995).
6. Chemerinsky, supra note 2, at 130.
7. Others have reached the same conclusion. See, e.g., Honorable Steven W. Rhodes, Eight Statutory Causes of Delay and Expense in Chapter 11 Bankruptcy Cases, 67 AM. BANKR. L.J. 287, 298 (1993); Memorandum from Timothy P. Branigan to the American Bar Association Joint Ad Hoc Committee on Bankruptcy Court Structure and Insolvency Processes (July 12, 1996); Memorandum from Lawrence P. King and Elizabeth I. Holland to the National Bankruptcy Review Commission 6-13 (July 15, 1996); National Bankruptcy Review Commission Appellate Structure Proposal (adopted June 21, 1996) (proposing that current system of appeal should be changed to eliminate district court and bankruptcy appellate panel review).
8. Chemerinsky, supra note 2, at 128.
9. FRANK M. COFFIN, THE WAYS OF A JUDGE: REFLECTIONS FROM THE FEDERAL APPELLATE BENCH 33 (1980).
10. LAWRENCE M. FRIEDMAN, A HISTORY OF AMERICAN LAW 34-35 (1973).
11. COFFIN, supra note 8, at 33.
12. 28 U.S.C. § 158(a) (1994).
13. Id. § 158(b)(1). As of February 1997, six circuits have implemented bankruptcy appellate panels (First, Second, Sixth, Eighth, Ninth and Tenth); five have indicated they do not intend to do so (D.C., Third, Fourth, Fifth and Eleventh); and the Seventh Circuit has deferred a decision. See BAPS Are Coming To Five New Circuits, 5 Consumer Bankr. News (LRP) No. 21, at 7 (August 1, 1996).
14. 28 U.S.C. § 158(b)(6) (1994). As of February 1997, all the districts in the First and Ninth Circuits participate in the bankruptcy appellate panel service, but only three districts in the Second Circuit participate (New York Northern, Connecticut and Vermont); in the Sixth Circuit only Ohio Northern and Ohio Southern participate; in the Eighth Circuit neither North Dakota nor South Dakota participates; and in the Tenth Circuit Colorado does not participate. See BAPS Are Coming To Five New Circuits, supra note 12, at 7.
15. 28 U.S.C. § 158(c)(1) (1994). Since the institution of the United States Bankruptcy Appellate Panel for the Ninth Circuit in 1979, approximately forty percent of the parties to bankruptcy appeals have refused to consent to have their appeals heard by the BAP. Telephone Interview with Nancy Dickerson, Clerk of Court, United States Bankruptcy Appellate Panel for the Ninth Circuit (Mar. 3, 1997).
16. 28 U.S.C. § 158(d) (1994) ("The courts of appeals shall have jurisdiction of appeals from all final decisions, judgments, orders, and decrees . . . ."); FED. R. APP. P. 6(a)-(b).
17. 28 U.S.C. § 158(b)(1), (3), (5) (1994).
18. Id. § 158(b)(5).
19. Baisier and Epstein address the lack of a coherent body of bankruptcy law caused by the nonprecedential value given both district court decisions in bankruptcy appeals cases, Baisier & Epstein, supra note 4, at 528-29 & nn.17-19, and decisions of bankruptcy appellate panels, id. at 531 & nn.23-24. The authors note the nonbinding effect of: (i) district court decisions on other districts and other district judges within the same district; (ii) district court decisions on bankruptcy courts other than the one appealed from; and (iii) bankruptcy appellate panel decisions on any district court within a circuit or on any bankruptcy court other than the one appealed from. Id. at 528-31. The authors add that, "there are reported cases holding that a bankruptcy judge is not even bound by the bankruptcy appeals decision of one of the district judges in his or her own district, if that district is a multi-judge district." Id. at 529 (citing In re Shattuc Cable Corp., 138 B.R. 557, 565 (Bankr. N.D. Ill. 1992)). See also Rhodes, supra note 6, at 296-97.
20. See Baisier & Epstein, supra note 4, at 526-27 & n.9 (discussing the number of conflicting decisions on classifying an undersecured secured creditor's deficiency claim separately from other general unsecured claims in a reorganization).
21. See Chemerinsky, supra note 2, at 129.
22. Id. at 128-29.
23. Report of the National Bankruptcy Review Commission Liaison Committee of the National Conference of Bankruptcy Judges Before the National Bankruptcy Review Commission 35 (Feb. 23, 1996).
24. This is not the place to do more than lament the existing proliferation of duplicative administrative services in the federal courts. Splitting probation offices into probation and pretrial services functions, for example, has added significant administrative costs that in my opinion are not offset by any benefits to the judicial system or to the taxpayers; each of these two offices as well as the bankruptcy clerk and district court clerk has redundant administrative functions: personnel, automation support, procurement, space, equipment maintenance and financial operations. It would be fiscally irresponsible to add to this redundancy of administrative services without a strong showing that it will produce extra efficiencies for the system and for the litigants. I do not mean to suggest that the present bankruptcy appellate panels have not made efforts to keep costs down. I only note the inevitability of increased costs that accompany the addition of any new institutional entity.
25. In fiscal year 1996, only 4,457 bankruptcy appeals were filed in all the federal district courts. ADMIN. OFFICE OF THE U.S. COURTS, ANNUAL REPORT OF THE DIRECTOR OF THE ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS, tbl. C-2 (1996). In the Western District of Wisconsin, which has two judges, only eleven bankruptcy appeals were filed in fiscal year 1996. Interview with Joseph W. Skupniewitz, Clerk of Court, United States District Court for the Western District of Wisconsin (Feb. 28, 1997).
26. See Corinne Ball, A Review of Jurisdiction, Finality, Stare Decisis and Appellate Structure to Support a Legislative Proposal to Eliminate the Intermediate Layer of Appeal 15 (Oct. 18, 1996) (presented to the National Conference of Bankruptcy Judges, San Diego, California) (suggesting that the objectives of a layer of appeal between the bankruptcy court and the courts of appeals might have included: (i) providing a screening process to refine issues for appeal; (ii) providing bankruptcy judges with guidance in bankruptcy law; (iii) screening out excess appeals and encouraging settlement by making appeal to courts of appeals time-consuming and expensive; and (iv) avoiding constitutional attack; and concluding that the first three objectives are policy driven and largely ineffective, with the exception that they do serve to pare down the number of appeals taken to the courts of appeals).
27. Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, 98 Stat. 333.
28. 458 U.S. 50, 87 (1982).
29. See Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, § 104(a), 98 Stat. 333, 340 (codified at 28 U.S.C. § 157 (1994)).
30. 28 U.S.C. § 157(c), (e) (1994).
31. Id. § 157(d).
32. 458 U.S. at 64-70 (discussing the few instances where Congress can grant Article III authority to Article I courts).
33. Id. at 71. See 28 U.S.C. § 1471 (1978) (amended 1984) (stating that bankruptcy court jurisdiction encompasses "all civil proceedings arising under title 11 or arising in or related to cases under title 11").
34. 458 U.S. at 87.
35. See Thomas v. Union Carbide Agric. Prod. Co., 473 U.S. 568, 583 (1985) ("Congress is not barred from acting pursuant to its powers under Article I to vest decisionmaking authority in tribunals that lack the attributes of Article III courts."). In Thomas, the Court characterized its holding in Marathon as limited to establishing "only that Congress may not vest in a non-Article III court the power to adjudicate, render final judgment, and issue binding orders in a traditional contract action arising under state law, without consent of the litigants, and subject only to ordinary appellate review." Id. at 584. See also Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986). In Schor, the Court upheld the constitutionality of a Commission regulation that allowed the Commission to adjudicate counterclaims arising out of the transactions or occurrences set forth in a securities complaint, even if the counterclaims involved state law claims. Id. In so holding, the Court reasoned that a party waived his right to have an Article III court hear the counterclaim by seeking relief before the Commission instead of in state or federal court. Id. at 848-50. In addition, the Court held that, to the extent that the Commission regulation implicates separation of powers concerns, it did not entrench on the powers of the judiciary because it concerns only a specialized area of the law and left available the option of going to federal court. Id. at 850-57.
36. 478 U.S at 854-55 (stating that, in allowing parties to consent to adjudication by an administrative agency, Congress has not withdrawn any matters from the federal courts because the decision to invoke a different forum belongs to the parties and "the power of the federal judiciary to take jurisdiction of these matters is unaffected"). In Wharton-Thomas v. United States, 721 F.2d 922 (3d Cir. 1983), the Court of Appeals for the Third Circuit addressed the constitutionality of 28 U.S.C. § 636(c)(3), which allows federal magistrate judges to try civil cases with or without a jury and enter final judgments by consent of the parties. The court emphasized the long legal tradition of allowing parties to agree to the appointment of special masters or other officers to hear and decide issues in dispute. Id. at 928-29. The court cited Heckers v. Fowler, 69 U.S. (2 Wall.) 123 (1864), for the proposition that a consensual reference to a referee "does not directly involve the question of jurisdiction, but has respect to the mode of trial as substituting the report of a referee for the verdict of the jury." Wharton-Thomas, 721 F.2d at 928 (quoting Heckers, 69 U.S. at 128).
37. As stated by Justice Rehnquist: I am likewise of the opinion that the extent of review by Art. III courts provided on appeal from a decision of the bankruptcy court in a case such as Northern's does not save the grant of authority to the latter under the rule espoused in Crowell v. Benson, 285 U.S. 22 (1932). All matters of fact and law in whatever domains of the law to which the parties' dispute may lead are to be resolved by the bankruptcy court in the first instance, with only traditional appellate review by Art. III courts apparently contemplated. Acting in this manner the bankruptcy court is not an "adjunct" of either the district court or the court of appeals. Marathon, 458 U.S. at 91. (Rehnquist, J., concurring). Some commentators take a different view of the effect of the availability of Article III appellate review. See, e.g., Richard H. Fallon, Jr., Of Legislative Courts, Administrative Agencies, and Article III, 101 HARV. L. REV. 915 (1988) (arguing that the availability of review by an Article III court meets constitutional requirements; when such review is available, the federal review power can be said to reside in an Article III court).
38. Chemerinsky, supra note 2, at 128-30.
39. See Baisier & Epstein, supra note 4, at 539 n.62.
40. 26 U.S.C. § 7482(a) (1994).
41. 29 U.S.C. § 160(f) (1994).
42. TEX. CONST. art. V, § 5.
43. This does not mean that the law is fully defined at this time or that it would not benefit from greater clarification. Indeed, that is the point of this response: how best to structure the system so as to obtain that needed resolution of conflicting interpretations of the law.
44. National Bankruptcy Review Commission Appellate Structure Proposal, supra note 6; Commission Moves Forward on Limiting Venue/Appeal, 29 Bankr. Ct. Dec. (LRP) No. 3, at A1 (July 2, 1996).
45. For a discussion of some of the existing problems and questions about finality and appealability, see 16 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE §§ 3926, 3926.1, 3926.2 (2d ed. 1996).
46. For a discussion of the "final order" requirement, see John P. Hennigan, Jr., Toward Regularizing Appealability In Bankruptcy, 12 BANKR. DEV. J. 583 (1996); LAWRENCE P. KING ET AL., COLLIER ON BANKRUPTCY ¶ 5.07 (15th ed. rev. 1996).
47. For a discussion of the "final order" requirement, see John P. Hennigan, Jr., Toward Regularizing Appealability In Bankruptcy, 12 BANKR. DEV. J. 583 (1996); LAWRENCE P. KING ET AL., COLLIER ON BANKRUPTCY ¶ 5.07 (15th ed. rev. 1996).
48. See 28 U.S.C. §§ 1291-1292 (1994) (describing the ability to appeal from final and interlocutory decisions of district courts); FED. R. CIV. P. 54 (judgments).
49. Chemerinsky, supra note 2, at 128-30.
50. It is possible that any increase in the appellate workload would be offset by the decrease in prisoner civil rights litigation resulting from the passage of the Prison Litigation Reform Act of 1996, Pub. L. No. 104-134, Title VIII, 110 Stat. 1321 (codified at 18 U.S.C. § 3626 (Supp. II 1996)), which imposes onerous economic and procedural requirements upon prisoners wishing to sue in federal court for violations of their constitutional rights.