November 2012

As the nation prepared to go to the polls, the political campaigns dominated national attention during the past month.  News concerning the judiciary and the federal courts captured scant attention, and the future of the Supreme Court even as a campaign issue was secondary.

 Nonetheless, the Federal Circuit Court of Appeals in early October issued a notable decision upending prior Congressional actions blocking annual pay adjustments for members of the Article III judiciary. 

 Congress will return on November 12 to begin a post-election lame duck session that likely will stretch to the holidays.  National attention will shift quickly after the election to the threat of America falling off the “fiscal cliff” due to automatic budget cuts and tax increases set to take effect in January.  FBA has increasingly broadened its efforts to raise awareness about the impact of these budget cuts on the federal courts, as explained below.

Federal Courts Brace for Budget Cuts

On October 11, FBA National launched a grassroots advocacy campaign to urge Congress to reach a deficit reduction package that avoids the automatic budget cuts set to take effect in January 2013.  The advocacy effort involves national and circuit leaders, chapters, sections and members-at-large.  A “Call to Action” package of materials was sent to chapters and sections in October to assist in messaging to their lawmakers, expressing concern about the damage inflicted by automatic cuts (called “sequestration”) on the federal courts and the administration of justice.  

Chapters, circuit vice presidents and others have already sent letters to their Congressional lawmakers and media.  Coverage in the Los Angeles Daily Record (October 18) about the budget cuts and their impact was triggered by our Los Angeles chapter’s efforts.  A conference call with all FBA Circuit Vice Presidents and chapter presidents on the sequestration campaign is scheduled for November 15.  

Right now federal court chief judges and administrators across the country are putting contingency plans in place should Congress fail to derail the deep, government-wide budget cuts due to take effect in January.  Those cuts, amounting to roughly 8 percent of the federal courts' overall budget, could considerably cripple court operations in a number of ways.

Congress, during its lame duck session will have the chance to avoid those cuts through adoption of a thus-far elusive deficit reduction package.  The chances of Congress reaching a major budget deal during the lame duck session are slight, given the shortness of the session.  Congress is more likely to partially kick the can down the road and adopt a "framework" for reaching a comprehensive spending and revenues package in 2013.  Reaching agreement on even a framework during the lame duck session will not be easy, assuming compromises on both spending and taxes are involved.  Political control coming out of the November elections will influence the dynamic and content of how that evolves.

For the federal courts, the direct consequences of sequestration could be deadly, with cutbacks in court personnel and court operations that will vary from court to court.  Because so much of court spending involves personnel costs, sequestration would force the Judiciary to reduce its overall workforce by 5,400 court staff – roughly one-quarter of its total workforce – through layoffs and/or furloughs.  That would come on top of 1,100 positions already eliminated over the past year due to prior funding cuts.

The budget for the federal judiciary is about $7 billion a year, a figure that has remained relatively constant for the last three years, even as the caseload of the federal courts has increased. Under the sequester, the federal judiciary’s budget would be cut by $555 million, or roughly 8 percent, in fiscal 2013. A cut of that magnitude would bring court spending down to what it was in fiscal 2009, according to the Administrative Office of the U.S. Courts. 

In some courts, sequestration could reduce the hours of operation in their clerk of court offices, and some courts may even be forced to close for one or two days each week.  This could lead to delays in court proceedings, particularly in civil and bankruptcy cases.  Public safety also could be endangered.  "The federal courts would be unable to properly supervise thousands of persons under pretrial release and convicted felons released from federal prisons, thus compromising public safety in the community," House Appropriations top-Democrat Norm Dicks predicted in an October letter to lawmakers.  In addition, the cuts could translate into staffing cuts for U.S. Marshals and court security officers, potentially creating security vulnerabilities and requiring new limits on public entrance into courthouses.  

As a last resort, the courts could be forced to suspend civil jury trials because of insufficient money to pay jurors.  In criminal cases, payments to private panel attorneys in Criminal Justice Act cases could be suspended and federal defender organization staff furloughed.  This would severely disrupt the provision of Constitutionally mandated representation and the ability of the federal courts to resolve criminal matters in a just, expeditious manner.   And because many criminal defendants are detained, this would result in extended pretrial detention, creating additional costs.  

The Federal Bar Association over the past several months has been warning Congress, the public and the legal community about the danger of these automatic budget cuts and urging Congress to adopt a comprehensive deficit reduction package.  FBA leaders at the national, chapter and section levels, through a coordinated grassroots advocacy campaign, have been contacting their Senate and House lawmakers to highlight the danger of sequestration upon the federal courts, pointing to the numerous impacts.  It’s one more way that FBA continues to serve its important role as the foremost constituency of the federal courts. 

Beer Decision on Judicial Pay

The Federal Circuit Court of Appeals on October 5 ruled that Congress is prohibited from suspending a system of automatic pay increases designed to protect Article III judges from inflation.  The appeals court said the Congress violated the Compensation Clause of the Constitution in blocking automatic cost-of-living salary adjustments for judges that were intended by a 1989 law governing how judges would be paid.  The court said that its decision was warranted by the Rule of Necessity, the common-law rule under which a judge, even though possessing an interest in the case, has a duty to hear and decide the case if it cannot otherwise be heard.

The FBA earlier had joined in the filing of amicus briefs at three key points in the Beer case over the last decade. The appeals court’s decision in Beer is a historic reaffirmation of judicial independence. 

The en banc decision of the Federal Circuit Court of Appeals in Beer v. United States, decided October 5 by a 10-2 vote, ruled that federal judges were entitled to automatic salary adjustments intended by a 1989 law and that Congress violated the Constitution when it blocked those adjustments from taking effect.  The underlying lawsuit, brought by six current and former Article III judges, contested the way Congress reneged on pay adjustments that had been promised to judges six times during the past two decades.  The judges claimed those actions violated the Compensation Clause of the Constitution, which prohibits Congress from diminishing the compensation of federal judges.

The appeals court ruling, written by Chief Judge Randall Rader, is a sweet victory for federal judges and the preservation of judicial independence. The Federal Bar Association filed joint amicus curiae briefs at three key points in the Beer case, in collaboration with four other bar associations.  It is likely that the government will seek further review of the circuit court decision in a petition for certiorari to the United States Supreme Court.

The Federal Circuit’s decision, if allowed to stand, will provide roughly a $25,000 pay raise to the underlying judges.  Though that amount will not be enough to wipe out the cumulative 17 percent loss to inflation that judicial paychecks have suffered over the past two decades, the ruling will bar Congress from blocking future judicial raises, unless Congress changes the law.   It is expected that a class action suit filed by Article III judges will seek to secure the same relief.

Substantively, the key to the court’s decision, aside from its constitutional underpinnings, was the Ethics Reform Act of 1989, which set a strict process for paying judges.  Under the 1989 law, judges are to receive annual cost-of-living adjustments in a fashion similar to federal employees that helps to assure salaries keep up with inflation.  Such raises could be blocked only in limited circumstances, and then only by the President, the law said.  Despite those limitations, Congress blocked the salary adjustments four times during the 1990’s, as well as in 2007 and 2010.  Each time the blocking legislation was passed by Congress just prior to the effective date of the adjustment.

Until Beer, the Federal Circuit had regarded such blocking actions by Congress as valid, based on the theory that until a salary adjustment actually vests, Congress is free to withhold it.  In 2001, the Federal Circuit cemented that approach in its decision in Williams v. U.S., striking down a lawsuit brought by an earlier group of federal judges based on facts similar to those in Beer.   The legitimacy of the application of vesting to the salary adjustments originated in the Supreme Court’s 1980 earlier decision in Will v. United States., which vindicated judicial pay withholding actions by Congress undertaken before they became effective.

But the Federal Circuit in Beer swept aside the precedent of Williams and its predicate in Will.  The court achieved that result by distinguishing the Ethics Reform Act of 1989 from the 1975 statute that governed judicial pay raises when a split Supreme Court handed down Will.  The 1975 statute, the Federal Circuit said, did not create expectations on the judges’ part and thus was different from the 1989 law that did create such expectations.  The 1989 law involved “a mechanical, automatic process” that judges would have seen as protecting their rights under the Compensation Clause,” Chief Judge Rader wrote in the majority opinion.  And, the Constitution’s Compensation Clause creates “basic expectations and protections” for judges in the pay they receive.  Thus, “in the unique context of the 1989 act, the Constitution prevents Congress from abrogating that statute’s precise and definite commitment to automatic yearly cost of living adjustments for sitting members of the judiciary.”

The architecture of Judge Rader’s opinion in Beer hued closely to the reasoning laid out by Justice Stephen Breyer in the extensive dissent he filed when the Supreme Court denied certiorari review of the Williams decision in 2001.  Breyer was joined by Justices Antonin Scalia and William Kennedy in that dissent.  Looking ahead to the prospect of Supreme Court review of the Beer decision, if Justices Breyer, Scalia and Kennedy stand by their reasoning, only two more justices would need to join them to deny certiorari and permit the Federal Circuit’s decision to stand.

The decision is available here.

Judicial Nominations and Vacancies

As of this date, there are 77 vacancies in the federal courts. They are as follows:

  Vacancies Nominees Pending

Courts of Appeal

15   7
District Courts 65   26
US Ct of International Trade 2   1
Total 82   34

Senate confirmation of some of the pending district court nominees awaiting a floor vote (there are 14) may occur during the lame duck session. 

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