1980s − Marathon and its Aftermath

The span from 1980 to 1990 was a tumultuous time for the bankruptcy system in the United States and for bankruptcy judges. In 1978 Congress enacted the Bankruptcy Reform Act of 1978 (“1978 Act”). It established bankruptcy courts in each judicial district, and vested bankruptcy jurisdiction in the bankruptcy courts. The statute provided that after a transition period, bankruptcy judges would be appointed by the President and confirmed by the Senate for 14-year terms, and two bankruptcy judges would serve on the Judicial Conference of the United States. On June 28, 1982, less than three years after the 1978 Act became effective, the United States Supreme Court issued Northern Pipeline Co. v. Marathon Pipeline Co., 459 U.S. 813
(1982), holding that part of the jurisdictional grant to bankruptcy judges was unconstitutional because bankruptcy judges were not Article III judges. The Supreme Court delayed the effective date of its decision to give Congress time to fix the problem.