A decision of the Federal Circuit Court of Appeals takes the extraordinary step of issuing a mandamus order to the U.S. Court of Claims, holding that that court erred by exercising jurisdiction over the legal challenge of a bankruptcy court judge who was not reappointed to his position, and directing that court to dismiss the case. The decision also offers interesting insight into the reappointment process for federal bankruptcy judges. (In Re United States, C.A.F.C. Miscellaneous No. 806, 9/11/06)
David Scholl was a bankruptcy judge in the U.S. District Court for the Eastern District of Pennsylvania. When the U.S. Court of Appeals for the Third Circuit decided not to reappoint Scholl to the bankruptcy judge position, he filed suit in the U.S. Court of Claims. The government moved to dismiss for lack of jurisdiction. But the claims court denied this motion and forged ahead in handling the suit. The government then went to the federal circuit and successfully argued that the claims court did not have jurisdiction and should be ordered to dismiss the Scholl suit.
As the Federal Circuit explains in its opinion, bankruptcy judges are appointed for a 14-year term by a majority of the active judges of the circuit court of appeals in which the district is located. If the majority by preliminary vote plans to reappoint a bankruptcy judge following expiration of this term, there is a procedure for public notice and comment before they finalize their decision.
In Scholl’s case, notice was published in the local newspapers and questionnaires were sent to interested parties who had appeared before Scholl. After some 300 comments were received, Scholl was given copies and afforded an opportunity to respond. The appeals court judges then reviewed the record, including Scholl’s responses, and voted 11-to-1 not to reappoint him. (Opinion p. 4)
Once his term expired, Scholl filed his suit. He challenged the judges’ decision under the Tucker Act (28 U.S.C. § 1491(a)(1), arguing that he was denied due process under the 5th Amendment to the Constitution and in violation of regulations of the Judicial Conference of the United States governing reappointment of bankruptcy judges.
The appeals court was not persuaded by Scholl’s claim that he was discharged: “…[I]t is simply incorrect to say that non-reappointment is a form of discharge. Non-reappointment and discharge are two entirely different things.” (p. 12) Nor did the court agree that he had a property interest in reappointment. (p. 16) In short, the appeals court concluded that the claims court “clearly erred by not dismissing this case.” The court goes on to say, “…we see no point in subjecting the judges and employees of the Third Circuit to discovery into the court’s decision-making process in the setting of a case that clearly, as a matter of law, should be dismissed.” (p. 18)
The appeals court granted the government’s motion and issued a writ of mandamus, exercising that “’drastic and extraordinary’ remedy ‘reserved for really extraordinary causes.’” (p. 8)
