Call Number:

NBA.027

Repository:

University of Pennsylvania: Biddle Law Library

Extent:

4.5 linear feet (about 930 items.)

Language:

English

Preferred Citation:

[Identification of item], in the Kronish, Lieb, Weiner, and Hellman LLP Bankruptcy Judges Lawsuit Files, National Bankruptcy Archives Collection, NBA.027, Biddle Law Library, University of Pennsylvania Law School, Philadelphia, PA.

Date:

1984-1994 (inclusive)

Creator:

Kronish, Lieb, Weiner, and Hellman LLP and National Bankruptcy Archives

Form:

Legal files

Abstract:

On July 11, 1984, William Foley, Legislative Affairs Officer of the Administrative Office of the United States Courts ("Administrative Office"), issued a memorandum stating that the Administrative Office would not pay bankruptcy judges because, in its opinion, Congress had acted unlawfully by awarding retroactive terms of office to the normally presidentially-appointed bankruptcy judges. In response, on July 13, 1984, four bankruptcy judges sued Foley and the Administrative Office for abuse of power. The case became commonly known as Lundin v. Foley. The law firm of Kronish, Lieb, Shainswit, Weiner and Hellman (later, Kronish, Lieb, Weiner and Hellman) represented the bankruptcy judges. Richard Lieb served as the primary attorney on the case. In 1988 the court issued a summary judgment on the grounds that the explicit reason for the suit (i.e. the refusal of Foley to pay the judges) had been resolved. However, when Foley issued his original memorandum, parties with an interest in other bankruptcy cases called for a dismissal of their cases or rulings on the grounds that the judges were not lawfully appointed. The bankruptcy judges in the original suit intervened in these cases on behalf of the presiding bankruptcy judges and, more importantly, the constituionality of the bankruptcy judge system as a whole. In each case, all of the motions were denied, thereby securing the bankruptcy judges a clear, unqualified victory. Following the court's decision, the judges sought reimbursement for its attorney fees under the Equal Access to Justice Act, which allows for plaintiffs who win a case against the government to be compensated for court costs. The Administrative Office refused to reimburse the judges, arguing that the Equal Access to Justice Act only covers suits against the Executive Branch, an argument which was upheld by the courts in the original ruling. The judges appealed and in 1992, the court ruled in favor of them for Lundin v. Foley. However, the judges were denied their request to recover fees for the related cases. The collection, 1984-1994, includes correspondence, clippings, photocopies of cases compiled in the course of research, notes, court documents, and other materials regarding the cases for which Kronish, Lieb represented bankruptcy judges in their lawsuit against the Administrative Office of the United States Courts.

In 1976, Congress passed the Bankruptcy Reform Act of 1976, the most comprehensive overhaul of bankruptcy law since the 1930s. Among its provisions, the Bankruptcy Reform Act declared that bankruptcy judges were to be presidential appointees and given permanent terms of office. In 1982, the Supreme Court ruled in Northern Pipleline Construction Co. v. Marathon Piple Line Co. that this news status was unconstitutional.

The Supreme Court ordered Congress to rewrite the status of bankruptcy judges before the judges' term expired on March 31, 1984. Congress failed to meet the Supreme Court's deadline. To keep bankruptcy judges from losing their jobs while Congress drafted the new legislation, Congress issued a number of term extensions, the last of which ended on June 27, 1984. Two days later, Congress passed the Bankruptcy Amendments and Federal Judge Act of 1984. Part of the act reinstated the bankruptcy judges' terms retroactively to make up for the gap in time between the point at which their terms officially ended and when Congress passed the new legislation. President Reagan signed the act into law on July 10, 1984.

On July 11, 1984, William Foley, Legislative Affairs Officer of the Administrative Office of the United States Courts ("Administrative Office"), issued a memorandum stating that the Adiministrative Office would not pay bankruptcy judges because, in its opinion, Congress had acted unlawfully by awarding retroactive terms of office to the normally presidentially-appointed bankruptcy judges.

In response, on July 13, 1984, four bankruptcy judges--Keith M. Lundin, George C. Paine II, William N. Norton Jr., and Hugh Robinson--sued Foley and the Administrative Office for abuse of power. The case became commonly known as Lundin v. Foley. The law firm of Kronish, Lieb, Shainswit, Weiner and Hellman (later, Kronish, Lieb, Weiner and Hellman) represented the bankruptcy judges. Richard Lieb served as the primary attorney on the case.

The same day the judges filed suit, Foley, under pressure from not only the bankruptcy judge community but also members of Congress, rescinded his order and said he would pay the bankruptcy judges. The plaintiffs pressed on with the case, however, because they felt that the larger matter of the constitutional rights of bankruptcy judges was still at issue. However, in 1988 the court issued a summary judgment on the grounds that the explicit reason for the suit (i.e. the refusal of Foley to pay the judges) had been resolved.

However, the litigation did not end there. When Foley issued his original memorandum, parties with an interest in other bankruptcy cases called for a dismissal of their cases or rulings on the grounds that the judges were not lawfully appointed. The bankruptcy judges in the original suit intervened in these cases on behalf of the presiding bankruptcy judges and, more importantly, the constitutionality of the bankruptcy judge system as a whole. The cases included In re Benny, In re Tom Carter Enterprises, In re Production Steel, In re Moens, and In re Louis R. Koerner. Pleadings by Lieb began in August 1984 and extended well into 1986. In each case, all of the motions were denied, thereby securing the bankruptcy judges a clear, unqualified victory.

Filing suit against the government can result in costly litigation. For this reason, the judges sought reimbursement for its attorney fees under the Equal Access to Justice Act, which allows for plaintiffs who win a case against the government to be compensated for court costs. The Administrative Office refused to reimburse the judges, arguing that the Equal Access to Justice Act only covers suits against the Executive Branch, an argument which was upheld by the courts in the original ruling in Lundin V. Foley. The judges appealed (by this time, the case had become known as Lundin v. Mecham), and in 1992, the court ruled in favor of them for Lundin v. Foley. However, the judges were denied their request to recover fees for the related "In re" cases.

As the history suggests, the implications of this case extended beyond a mere salary dispute. Rather, it questioned the very status of bankruptcy judges under the Judiciary.

The Kronish, Lieb, Weiner, and Hellman LLP Bankruptcy Judges Lawsuit Files, 1984-1994, include correspondence, clippings, photocopies of cases compiled in the course of research, notes, court documents, and other materials regarding the cases for which Kronish, Lieb represented bankruptcy judges in their lawsuit against the Administrative Office of the United States Courts.