Two federal bankruptcy courts move to combat forum shopping

Mayer Brown’s blog, Real Bankruptcy Intel, explains:

Following the controversy surrounding Purdue[‘s careful filing of a bankruptcy petition designed to land specifically with Judge Robert Drain], as well as a lull in filings nationwide, in November, the SDNY elected to adopt a random case assignment system. Specifically, subdivision (f) of Local Bankruptcy Rule 1073-1 now states:

    1. Mega Chapter 11 Cases. Notwithstanding subdivision (a) of this rule, the Clerk shall assign a mega chapter 11 case to a Judge in the District by random selection irrespective of the courthouse in which the case is filed. A chapter 11 case qualifies as a mega chapter 11 case if the assets or liabilities of the debtor are equal to or greater than $100 million. A multi-debtor chapter 11 case qualifies as a mega chapter 11 case if the cumulative assets or cumulative liabilities of the filing debtors are equal to or greater than $100 million.[5]

Therefore, as of December 1, cases filed in the SDNY are to be assigned on a random basis to judges irrespective of the courthouse in which they are filed. As part of this rule, any SDNY judge can preside over a case in a courthouse where he or she is not usually assigned. Chief Judge Cecelia G. Morris explained that she hopes the adoption of this system will result in a more balanced utilization of judicial resources.[6] Judge Drain himself also commented that he “supported the change unanimously.”[7] Such adaptation now places the SDNY on par with the District of Delaware—another longstanding hotspot for mega chapter 11 cases—which already had a random assignment system in place. This move is likely to prevent debtors from “judge shopping” within the district.

Within a month of the SDNY’s announcement, the Bankruptcy Court for the Eastern District of Virginia (the district that contains Richmond and Alexandria) also implemented a similar rule.[8]

GAO questions judiciary’s system for prioritizing courthouse construction

Here is a very interesting example of the federal judiciary’s interdependence with the rest of the federal government. The responsibility for maintaining and operating the 420 federal courthouses across the country is shared by the judiciary, the U.S. Marshals Service, the General Services Administration, and the Federal Protective Service. And construction or maintenance of courthouses but also be authorized and funded by Congress, with oversight assistance from the General Accounting Office (GAO).

The upshot of this entanglement is that significant changes or improvements to federal courthouses must work their way through multiple layers of bureaucracy before anything gets done.

And so it is here. In 2008, after one significant wave of courthouse construction had been completed, the federal judiciary implemented an Asset Management Process (AMP) to prioritize courthouses most desperately in need of upgrades or new construction. Five years later, the GAO signed off on the process. The Administrative Office of the U.S. Courts (AO) then began the laborious task of assessing the condition of every federal courthouse in the country. By 2020, it had completed assessments of 385 courthouses, or 92 percent, with respect to security, space standards, functionality, the condition of judges’ workspaces, and the general condition of courtrooms and facilities. The judiciary assured the GAO that its assessments were accurate as of the time they were completed.

But the GAO was not satisfied. Asked to review the AO’s courthouse assessments, it concluded that several had become outdated and were therefore over- or under-prioritized for improvements. (For example, two courthouses were destroyed by recent hurricanes, yet their condition was not updated by the AO.) Yesterday the GAO issued a 62-page report outlining its concerns, as well as specific steps that the AO must take to improve the assessment process.

Some might look at the GAO as a necessary watchdog to make sure that the government does not spend money in the wrong places. Others might see this as wasteful bureaucracy run amok. The point here is simply that the business of operating courts is inextricably, and often invisibly to the public, tied to the demands, whims, and queries of many other actors. And that is interdependence in a nutshell.

Roberts to Congress: Thanks, but we’ve got it all under control

For 2022, the Chief Justice leans into an alternative view of judicial independence. Will it be enough to keep Congress at bay?

Chief Justice Roberts’s 2021 Year-End Report on the Federal Judiciary, dropped (as always) on New Years Eve, struck a more substantive and somewhat edgier tone than in years past. The Chief Justice identified three particular areas of focus for the Judicial Conference of the United States in the coming year: addressing financial disclosure and recusal obligations for federal judges, monitoring new mechanisms for reporting and stopping workplace harrassment, and preventing undue forum shopping in patent cases.

All three of these issues have been the subject of regular, and sometimes intense, Congressional scrutiny in recent years. But the Chief Justice’s report largely rejects the prospect of legislative fixes. Rather, consistent with the federal courts’ approach to the workplace harrassment scandal when it first broke in 2017, Roberts assures his readers that the Judicial Conference is willing and able to handle each of these issues internally. 

It’s not to see why the Chief Justice would go this route. As this blog has routinely described, the federal courts (like all courts, and indeed all organizations) operate under constant pressure from their external environments. Neoinstitutional theory identifies three types of pressure: coercive (the need to comply with legislation and other government mandates), mimetic (the need to be in line with similar institutions in order to maintain legitimacy), and normative (the need to adhere to social and professional norms). The federal courts face all three types of pressure, but are particularly susceptible to coercive and normative pressures. If the federal judiciary is not seen as ethical and apolitical, it will face Congressional action and lose legitimacy with the bar, the media, and the public. 

There is no question that the pressure has been turned up in recent weeks. The Wall Street Journal‘s expose on federal judges who failed to recuse from cases in which they held a financial stake was a significant blow to the judiciary, and has invited Congressional hearings. Some in Congress have used the scandal as an opportunity to resurrect additional transparency proposals, including courtroom cameras and free PACER access. And, of course, the progressive effort to pack the Supreme Court looms in the background, along with the ongoing politicization of judicial confirmation hearings and the Supreme Court’s forthcoming decisions on abortion and gun rights. It is fair to say that the federal courts are currently facing more external pressure and scrutiny than at any time since the 1960s. Continue reading “Roberts to Congress: Thanks, but we’ve got it all under control”

The best of 2021

With the turn of another calendar page, it’s time again to look back on my favorite posts of the past year. I’m thrilled to have had more unique page views in 2021 that any at time in this blog’s history. Thanks, as always, to my readers both new and old, and please come back frequently for more in 2022.

Enough. (January)

What should we expect of Biden when it comes to the judiciary? (February)

About that cat video… (February)

State courts come under legislative assault (March)

Portland’s federal courthouse attacked again (March)

Biden tips his hand on the next Supreme Court nominee (March)

Montana Republicans increase political pressure on state supreme court (May)

Two ways of pursuing justice (August)

Should judicial compensation be tied to performance evaluation results? (August)

What is fueling the federal courts’ response to the judicial recusal crisis? (October)

In Memoriam: Gregory J. Hobbs, Jr. (December)

Here is the best of 2020, 2019, 2018, and 2017.

In Memoriam: Gregory J. Hobbs, Jr.

Thoughts on the loss of a mentor and friend.

Hobbs and JMS 7-22-15

This is a tough one.

Former Colorado Supreme Court Justice Greg Hobbs passed away last week, just a few days short of his 76th birthday. I was privileged to clerk for Justice Hobbs during the court’s 2000-01 Term, and he remained a professional mentor and personal friend for twenty years thereafter. Justice Hobbs showed me how a good judge conducts himself. More importantly, he showed me how a good person conducts himself, day in and day out.

Coming out of law school, I was very fortunate to have several clerkship offers to choose from, both at the state and federal level. But I instantly gravitated to Justice Hobbs. Although he did not move to Colorado until after he had graduated law school, he effortlessly exuded a Western passion and a Western sensibility that clicked with my deep Colorado roots. He embodied almost every Western stereotype you can imagine — outdoorsman, water lawyer, connoisseur of huevos rancheros, Bronco fan, relentless fan of bolo ties — but his deep knowledge of the state and its people made all of it seem so natural. (He could look out the window of his office in downtown Denver and rattle off the names of all the visible Front Range mountains, working from south to north.) Greg Hobbs was Colorado, and he always had the best interests of Coloradans at heart.

Continue reading “In Memoriam: Gregory J. Hobbs, Jr.”

When senior status becomes political

Josh Blackman has some interesting comments on two federal appellate judges — one a Reagan appointee, the other a Clinton appointee —  who  rescinded their decisions to take senior status after learning, to their dissatisfaction, the identity of the nominees who would replace them. (Note the excellent reporting by David Lat.)

There is something deeply unseemly about this. Two rescissions do not necessarily represent a trend, but as Professor Blackman points out, conditioning senior status on the appointment of a chosen successor would effectively give judges a veto power over presidential nominations. This poses obvious problems for both the general balance of power in the federal government and our Constitutional fabric. 

The question is what to do about it. I see nothing in the governing statute that expressly forbids this type of gamesmanship. But there are certainly some opportunities for soft power responses. For one thing, the President need not kowtow to a judge’s demand for a specific nominee; if President Biden and his successors simply refuse to allow sitting judges to influence the nomination process, the likelihood of particularized conditional declarations of senior status will probably just dry up. 

It’s also possible for powers within the federal court system to respond. Neither the Chief Justice nor the Judicial Conference has coercive power to prevent judges from declaring conditional senior status. But they do have other forms of influence. It is hard to believe that a call from the Chief Justice, or a sternly worded communique from one’s peers about preserving the legitimacy and apolitical culture of the judiciary, wouldn’t make a difference to many on the bench.

To be sure, the federal court system needs judges to take senior status periodically. It is an important means of bringing in new blood and coping with voluminous dockets (since senior judges do not count against each district and circuit’s statutory allocation of active judges). But the internal culture also has to be preserved, and slowing some judges from taking senior status in order to maintain legitimacy is surely the right call.

 

A roundup of interesting state court developments

Several interesting and important developments have taken place in state courts this past week. Among them:

  • The Chief Judge of the Hennepin County (Minnesota) District Court announced that the court has a backlog of 3,000 cases that must be resolved by 2023. Nearly 90 percent of those cases are criminal matters. Meanwhile, the COVID-19 pandemic has led to 89 percent of all court hearings being held remotely. 
  • New Hampshire has a new state court administrator. Dianne Martin was most recently the Chair of the state’s Public Utilities Commission, and has worked in and with the state colurt system for nearly twenty years.
  • And Idaho’s state court administrator has been named in a federal lawsuit filed by Courthouse News Service, alleging that the state’s practice of posting new case filings impermissibly delays public and media access to new case information. Courthouse News Service has filed similar lawsuits against other court administrators in the past, each time alleging that the court’s default position should be to provide immediate electronic access once a matter is filed.

Death threats made against children of judge in Rittenhouse trial

Wisconsin judge Bruce Schroeder has drawn considerable attention for his handling of the trial of Kyle Rittenhouse, who is accused of killing two Antifa activists and wounding another during a riot in Kenosha, Wisconsin in August 2020. 

For better or worse, judges in high-profile trials always come under the microscope. And some of Judge Schroeder’s behaviors during the trial have not inspire enormous confidence in his personal and professional discretion. But fair and reasonable scrunity is quickly being replaced by physical threats, and the threats here are extremely serious.

Judge Schroeder has received thousands of vile messages, many of them including explicit death threats. Some of those threats are targeted at his children, who are now receiving round-the-clock protection. However you feel about the substance of the Rittenhouse trial, these types of actions are completely unacceptable in civilized society. Let’s hope that each and every one of these goons faces his or her own day in court in the very near future.

A tentative settlement in the PACER fee lawsuit?

Reuters reports that a settlement is brewing in the class action lawsuit alleging that the federal judiciary overcharged users for PACER access. Terms of the deal were not disclosed, but after several years of litigation, including a trip to the Court of Appeals, it appears that the case may be coming to a private resolution in the next few months.

I shared thoughts on the PACER lawsuit, and the larger questions it poses for the court system, here.

Joe Biden buries the lead on his own judicial nominees

Joe Biden’s Very Bad Week continues with this unnecessarily tone-deaf press release about his latest round of federal judicial nominees. The nominees themselves are outstanding and highly qualified, and most have judicial experience at the state or federal level. Indeed, several of the nominees have been federal magistrate judges, which gives them special insight into the nuts and bolts of common procedures like arraignments (on the criminal side) and discovery disputes (on the civil side). 

But that evidently matters less to the President (and his advisors) than the nominees’ race and gender. The primary focus of the press release is on the number of Latina and Black nominees in this slate. Nothing is said up front about any of their accomplishments (except in very vague and broad language) or (in several cases) their relative youth, assuring the potential for a multi-decade career on the bench. It’s an insult to the nominees, at what should be a great moment in their legal careers, to reduce them to demographic avatars for the purpose of promoting a political agenda.

Let’s give the nominees some of the credit they deserve. Buried deep in the press release, we learn about this slate’s extraordinary diversity of legal experience: on the bench, as both prosecutors and public defenders, in the legal academy, and in private practice in areas ranging from family law to intellectual property. Some even have experience with social work and public education. That range of experience, and the different perspectives is must inculcate, will help the entire federal judicary — both in the courtroom and behind the scenes.

Congratulations to all the nominees.