December 2012: Keep Your Promises to Pay Us, Appeals Court Tells Congress

Washington Watch | December 2012
By Bruce Moyer

Politicians sometimes think they can play fast and loose on the promises they've made. But promises made by lawmakers, made concrete through the laws they've passed, create a more steadfast obligation. A federal appeals court proved that point recently when it held Congress accountable for the promises made to federal judges on how and when Article III judges would be paid. The appeals court ruled that Congress violated the Constitution in blocking automatic cost-of-living salary adjustments for judges that were intended by a 1989 law governing judicial pay.

The en banc decision of the Federal Circuit Court of Appeals in Beer v. United States, decided Oct. 5, 2012, 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 U.S. 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 help 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 1990s, 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 three more justices would need to join them to deny certiorari and permit the Federal Circuit’s decision to stand.

Bruce Moyer is government relations counsel for the FBA. © 2012 Bruce Moyer. All rights reserved.

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