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Ousted Bankruptcy Judge Loses His Bid to Win Reinstatement By Shannon P. Duffy A federal appeals court in Washington has dismissed a suit filed by former Philadelphia Bankruptcy Judge David A. Scholl - who in 2000 was denied an appointment to a second 14-year term - finding that Scholl may not sue to win his job back because such a case would improperly intrude on the deliberations of the judges of the 3rd U.S. Circuit Court of Appeals. Scholl, who is now in private practice, had won the first two rounds in the litigation when Judge Lawrence M. Baskir of the U.S. Court of Federal Claims refused to dismiss the case. But now a unanimous three-judge panel of the U.S. Court of Appeals for the Federal Circuit has issued a writ of mandamus ordering Baskir to dismiss the case, finding that he never had jurisdiction to hear such a claim. "We see no point in subjecting the judges and employees of the 3rd Circuit to discovery into the court's decision-making process in . . . a case that clearly, as a matter of law, should be dismissed," the panel said. Although mandamus petitions are rarely granted, the court said it was appropriate in Scholl's case because "without ordering dismissal of Mr. Scholl's case through our mandamus power, the internal deliberations of the 3rd Circuit could be subject to discovery. The government is correct that this would cause a concrete and imminent harm that cannot be remedied after the fact." The court's 20-page opinion in Scholl v. United States was authored by Judge Alvin Anthony Schall and joined by Judges Arthur J. Gajarsa and Sharon Prost. Scholl filed the suit in August 2000, claiming that the process used by the 3rd Circuit in denying him a second term had violated his constitutional right to due process. The suit sought compensation and reinstatement. In 2002 and again in 2004, Scholl won significant rulings in his favor when Baskir rejected the government's motions for dismissal. In his first opinion in Scholl, Baskir ruled that Scholl had "a firm right to be reappointed" unless the 3rd Circuit judges who refused to reappoint him could state reasons that the judge failed to perform up to the standards of federal bankruptcy judges. Scholl claimed in the suit that, under the reappointment regulations set forth by the Judicial Conference of the United States, he was entitled to be renamed to the bench by the 3rd Circuit judges. His lawyer, Cletus P. Lyman, cited the procedures established in 1984 by the Judicial Conference of the United States - the governing body of the federal courts - that apply to the selection, appointment and reappointment of federal bankruptcy judges. Under those regulations, Lyman said, reappointment "should not be denied unless the incumbent has failed to perform the duties of a bankruptcy judge according to the high standards of performance regularly met by United States bankruptcy judges." Baskir found that Scholl had a valid claim, noting that the key phrase in the regulations imposes on the 3rd Circuit judges the duty to explain how Scholl fell short of "high standards of performance" before they refused to reappoint him. "The appeals court's authority to reappoint is specifically limited in this regulation by the inclusion of a negative limitation and a condition subsequent," Baskir wrote. "We believe that, read together, this language, 'not be denied unless' - had the effect of converting what might otherwise be read as a directory suggestion - 'should,' standing alone - into a mandatory legal requirement." When Scholl's lawyers demanded discovery - including the notes of the 3rd Circuit judges in their deliberations - Baskir granted the motion. At that point, Deputy Assistant Attorney General Gregory G. Katsas asked Baskir to certify an immediate appeal, arguing that Scholl's case presented questions of first impression and that the discovery he was seeking "would involve a sensitive and potentially burdensome inquiry into the basis for the decision of the 3rd Circuit judges." Baskir refused to certify an interlocutory appeal and ordered Katsas to file all of the 3rd Circuit's documents under seal for an in camera review. Katsas then filed a petition for writ of mandamus, urging the Federal Circuit to reverse all of Baskir's rulings. In his brief, Katsas argued that Congress vested the power to appoint bankruptcy judges exclusively in the courts of appeals, and declined to provide would-be judicial officers with a private right of action. Allowing the Article I judges of Court of Federal Claims to review those decisions by Article III judges "would raise serious Appointments Clause and separation-of-powers problems," Katsas argued. And Baskir's decision to grant Scholl's motion to compel discovery "has now imposed an additional, concrete and imminent harm on the 3rd Circuit, by requiring it to turn over for in-camera review documents containing circuit judges' internal deliberations and other privileged and confidential communications," Katsas wrote. Scholl's lawyers argued that the government had failed to satisfy the rigorous test for winning a writ of mandamus since it cannot show that Baskir's rulings are "clearly and indisputably incorrect." The Federal Circuit disagreed, finding that Baskir never should have entertained jurisdiction over Scholl's case because it fails to state a valid claim. Under the Tucker Act, the court said, the Court of Federal Claims has jurisdiction over claims for money damages, but the plaintiff must also "point to a substantive right to money damages." Scholl's lawyers pointed to the pay statute for bankruptcy judges, and argued that the judges of the 3rd Circuit deprived him of the pay he was entitled to when they violated his right to due process in the reappointment process. But the Federal Circuit panel found that when Scholl's term as a bankruptcy judge ended, "he no longer was entitled to the pay mandated by [the statute]." Scholl's lawyers insisted that his nonreappointment was "a form of discharge." The court disagreed, saying "it is simply incorrect to say that nonreappointment is a form of discharge. Nonreappointment and discharge are two entirely different things." The panel also explicitly rejected Baskir's ruling that the regulations of the Judicial Conference provided Scholl with a "firm right" to be reappointed unless "he had failed to perform according to high standards." Instead, the court said, the regulations "simply provided circuit courts with guidance in the process for the reappointment of incumbent bankruptcy judges. There is nothing in the language of [the regulations] that indicates the provision was intended to provide incumbent bankruptcy judges with the benefit of a firm right to reappointment."
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A Feast
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