Bankruptcy Amendments and Federal Judgeship Act of 1984

The primary controversy surrounding how to fix the constitutional infirmity of the 1978 Act was whether to make bankruptcy judges Article III judges. During the ensuing battles fought in Congress, Hal J. Bonney, Jr. (E.D. Va. Ret.) served as the NCBJ’s president. Two bills were introduced in the House: one (the Rodino-Fish bill) would make bankruptcy judges Article III judges, and the other (H.R. 3257) would vest bankruptcy jurisdiction in the district courts and allow the district courts to refer exercise of that jurisdiction to bankruptcy judges. H.R. 3257 also removed the requirement that two bankruptcy judges would serve on the Judicial Conference.

Hal and others in the NCBJ worked tirelessly and fearlessly to promote passage of the Rodino-Fish bill. The Judicial Conference, AO, and even the Chief Justice of the United States Supreme Court lobbied hard to defeat the Rodino-Fish bill. Chief Justice Warren E. Burger personally lobbied Congress not to grant bankruptcy judges Article III status, reportedly out of a concern, in part, that doing so “would dilute the prestige and quality of the Federal judiciary.” In a letter to Senate majority leader Howard H. Baker Jr. and other members of Congress, “the Chief Justice said the legislation [the Rodino-Fish bill] would be ‘a gross misallocation of judicial resources and public funds.’” The AO supported inclusion of provisions in H.R. 3257 under which incumbent bankruptcy judges could be replaced immediately, and the Federal Judiciary, not Congress, would fix bankruptcy judges’ pay.

Those who fought for Article III status for bankruptcy judges lost. In Hal’s words:
Your Conference labored faithfully and hard for an Article III court in the belief, above self, that the importance of the system to the national economy and the necessity to once and for all solve constitutional challenges required no less. They will tell you on Capitol Hill that only the National Conference of Bankruptcy Judges labored for this legislation in full and complete measure and devotion. (emphasis in the original).

Although the NCBJ and the bankruptcy judges lost their battle for Article III status, they won other victories. Bankruptcy judges were given a better retirement package, albeit not nearly as generous as the one in effect today. In addition, under the Bankruptcy Amendment and Federal Judgeship Act of 1984 (“BAFJA”), the court of appeals, not district courts, “may” appoint bankruptcy judges to fill vacancies; the circuit judicial council may remove a bankruptcy judge during the judge’s 14-year term only for incompetence, misconduct, neglect of duty, or physical or mental disability; each bankruptcy judge has the right to appoint a law clerk and a secretary and other staff as the AO determines to be necessary; upon certification by the circuit judicial council that the number of cases and proceedings so warrants, bankruptcy judges in a district may appoint a clerk of court; and the clerk of court may appoint and remove necessary deputies, with the approval of the bankruptcy judges in the district, in such number as the AO approves.