Lundin v. Mecham

• Decision Date: 03 February 1993
• Docket Number: No. 91-5314,91-5314
• Citation: 980 F.2d 1450
• Parties: , Bankr. L. Rep. P 75,023 The Honorable Keith M. LUNDIN, et al., Appellants, v. L. Ralph MECHAM, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1450

980 F.2d 1450

299 U.S.App.D.C. 7, Bankr. L. Rep. P 75,023

The Honorable Keith M. LUNDIN, et al., Appellants, v. L. Ralph MECHAM, Appellee.

No. 91-5314.

United States Court of Appeals,

District of Columbia Circuit.

Argued Oct. 14, 1992.

Decided Dec. 1, 1992.

Rehearing Denied Feb. 3, 1993.

On Appeal from the United States District Court for the District of Columbia.

Adam Walinsky, New York City, with whom Bernard E. Goodman, Vienna, Va., was on the brief, for appellants.

Irene M. Solet, Atty., U.S. Dept. of Justice, with whom Stuart M. Gerson, Asst. Atty. Gen., Jay B. Stephens, U.S. Atty., Douglas N. Letter, Atty., U.S. Dept. of Justice, Washington, D.C., were on the brief, for appellee. Lowell V. Sturgill and Michael J. Singer, Attys., U.S. Dept. of Justice, Washington, D.C., entered an appearance for appellee.

Before: MIKVA, Chief Judge, WALD and EDWARDS, Circuit Judges.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

On July 20, 1984, six federal bankruptcy judges (the "Six Judges") filed suit in District Court against the Director of the Administrative Office of the United States Courts (the "Director"), challenging the Director's declaration that the Bankruptcy Amendments and Federal Judgeship Act of 1984 (the "Bankruptcy Act") violated the Appointments Clause of the Constitution. Over four years later, on November 29, 1988, the case was finally dismissed as moot. In the interim, a number of other cases involving the same or related issues were pursued by other parties in other federal courts across the country. The present appeal arises out of the Six Judges' request for attorney's fees under the Equal Access to Justice Act ("EAJA") incurred in prosecuting the suit that they filed in this District Court in 1984, and also for their efforts as intervenors and amicus curiae in the "related cases." ¹

The District Court denied the request for fees, holding that the Director's position was substantially justified and that, alternatively, the Six Judges did not prevail in their suit below. Moreover, the District Court concluded that the Six Judges could not, under any circumstances, recover fees in this District Court for litigation expenses incurred in the related cases. While we agree that this court may not award fees under EAJA for work done in the related cases, we hold that the District Court erred in concluding that the Six Judges are not entitled to relief for their litigation expenses below. Thus, we affirm in part, reverse in part, and remand to the District Court for determination of the sum due the Six Judges for their work in this case.

I. BACKGROUND

A. Legislative Framework

On June 28, 1982, the Supreme Court held the Bankruptcy Reform Act of 1978 (the "1978 Act") unconstitutional. Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). Under prior legislation, federal district courts were empowered to appoint referees for six years or until a successor to the referee was appointed and qualified. 11 U.S.C. § 62 (repealed). The 1978 Act, Pub.L. No. 95-598, 92 Stat. 2549, completely revamped this scheme. Under the 1978 Act, bankruptcy "judges" replaced the former bankruptcy referees. The new judges were to be appointed by the President, with the advice and consent of the Senate, for fourteen-year terms, and were removable by the Judicial Council of the circuit for incompetency, misconduct, neglect of duty, or physical or mental disability. 28 U.S.C. §§ 151(a), 152, 153 (1978) (repealed). The 1978 Act broadened the jurisdiction of the new bankruptcy courts to include all claims by or against the bankrupt debtor. Id. at § 1471(b). Moreover, the new "bankruptcy courts" were given many of the powers associated with Article III Courts. For instance, the new bankruptcy judges could hold jury trials and issue declaratory judgments and writs of habeas corpus. Id. at §§ 1480, 2201, 2256.

The 1978 Act also provided for a transition period until March 31, 1984, during which time the existing courts of bankruptcy were continued. Pub.L. No. 95-598, § 404, 92 Stat. 2549, 2683 (1978). The terms of the bankruptcy judges were concomitantly extended. Specifically, the 1978 Act contained two holdover provisions. The first, section 404(b), provided: "[t]he term of a referee in bankruptcy who is serving on the date of enactment of this Act is extended to and expires on March 31, 1984 or when his successor takes office." The second, section 404(d), incorporated the language of the prior bankruptcy statute that provided: "[u]pon the expiration of his term, a referee in bankruptcy shall continue to perform the duties of his office until his successor is appointed and qualifies." The Supreme Court, in a plurality opinion by Justice Brennan, struck down the statute, concluding that the 1978 Act unconstitutionally conferred the essential attributes of judicial power on non-Article III tribunals. Northern Pipeline, 458 U.S. at 87, 102 S.Ct. at 2880.

The instant case is one of many that followed in the wake of Northern Pipeline. The problem here arose because of the Supreme Court's decision to stay the judgment in Northern Pipeline for approximately three months, i.e., until October 4, 1982. See id. at 88, 102 S.Ct. at 2880. The Court's stay was in response to the practical problems that flowed from the invalidation of the 1978 Act. As Justice Brennan explained, "[t]his limited stay will afford Congress an opportunity to reconstitute the bankruptcy courts or to adopt other valid means of adjudication, without impairing the interim administration of the bankruptcy laws." Id. Unfortunately, Congress failed to draft new legislation by the fourth of October, 1982. The Supreme Court responded by entering a further stay of its judgment, until December 24, 1982. Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 459 U.S. 813, 103 S.Ct. 200, 74 L.Ed.2d 160 (1982) (mem.). Nonetheless, that date passed as well without the enactment of any new bankruptcy legislation.

In order to deal with the continuing influx of cases, the district courts promulgated temporary emergency rules ("temporary rules") based on model rules recommended by the Judicial Conference of the United States and the Circuit Judicial Councils, which essentially reinstated the bankruptcy scheme that existed prior to the 1978 Act. See, Benny, 44 B.R. at 585 n. 1. ² The transition provisions of the 1978 Act operated as continuing authority for the bankruptcy courts under the temporary rules.

The underlying problem persisted, however, because Congress could not agree on any new substantive bankruptcy legislation. On March 31, 1984, Congress extended the transition period through April 30, 1984. See Pub.L. No. 98-249, 98 Stat. 116 (March 31, 1984). Congress failed to meet this deadline, though, and the next and the next; on each occasion, additional extensions were tacked onto the transition period. See Pub.L. No. 98-271, 98 Stat. 163 (April 30, 1984); Pub.L. No. 98-299, 98 Stat. 214 (May 25, 1984); Pub.L. No. 98-325, 98 Stat. 268 (June 20, 1984). The last of these extensions expired on June 27, 1984, by which time Congress anticipated completion of the Bankruptcy Amendments and Federal Judgeship Act of 1984 (the "Bankruptcy Act"). See 130 CONG.REC. 17,228 (1984). Yet, like the others, Congress missed this deadline as well and it was not until July 10, 1984, that the Bankruptcy Act finally became law. Pub.L. No. 98-353, 98 Stat. 333 (July 10, 1984). In order to account for the period between the expiration of the final statutory extension and the enactment of the new law, Congress included a provision in the Bankruptcy Act, section 121(e), that bankruptcy judges who were holding office on June 27, 1984 would continue in that capacity until "the end of the day of enactment of this Act." 98 Stat. 346. It is this provision that prompted the dispute giving rise to the instant litigation.

B. Procedural History

The day after President Reagan signed the Bankruptcy Act, the Director issued a memorandum in which he indicated that he intended to withhold the salaries of sitting bankruptcy judges because he doubted the constitutionality of the new law. See Memorandum of William E. Foley, Director of the Administrative Office of the United States Courts, to Judges of the United States Courts of Appeals, Judges of the United States District Courts, and Former Bankruptcy Judges (July 11, 1984) [hereinafter "July 11 Memorandum"], reprinted in Joint Appendix ("J.A.") at Tab C. The Director stated that the lack of bankruptcy courts after June 27, 1984 precluded the existence of bankruptcy judges, regardless of any holdover provisions. Thus, under the Director's view, the Bankruptcy Act violated the Appointments Clause of the Constitution because it purported to reappoint the newly divested bankruptcy judges. See U.S. CONST. art. II, § 2; Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (holding unconstitutional congressional appointment of members of the Federal Election Commission). Citing his responsibility as "paymaster" of the federal judiciary and noting the adverse consequences that would follow from a judicial determination that the Bankruptcy Act was invalid, the Director decided to withhold the salaries of sitting bankruptcy judges. See July 11 Memorandum.

On July 14, 1984, the National Conference of Bankruptcy Judges wrote the Director, outlining arguments in support of the constitutionality of the judges' commissions and requesting a response by July 20, 1984. See Letter from Joe Lee, Secretary of the National Conference of Bankruptcy Judges, to William E. Foley (July 14, 1984) [hereinafter "National Conference Letter"], reprinted in J.A. at Tab D. Before any response was forthcoming, the Six Judges brought their suit in the District Court seeking declaratory and injunctive relief. See Lundin v. Foley, No. 84-2237 (D.D.C. ...