Document Type

Article

Publication Date

5-2017

Abstract

It is of course too early to tell whether we are in a new era of bankruptcy judge (dis)respectability. Only time will tell. But this Article performs a specific case study, on one discrete area of bankruptcy court authority, based upon a particular assumption in that regard. The assumption is this: certain high-salience judicial events-here, the recent Supreme Court bankruptcy judge decisions, coupled with earlier constitutional precedents involving the limits of Article III-can trigger overreaction and hysteria. Lower courts may read these Supreme Court decisions as calling into question the permissibility of certain bankruptcy court practices under the Constitution, and justifying a wholesale scale-back of all bankruptcy court power. One need go no further than Stern v. Marshall, which induced such shock waves it required the Court to revisit the matter twice in barely as many years while the ink was still drying. And Law, close on Stern's heels, made some comments in dictum casting at least some doubt on the strength of the Court's support for bankruptcy judges exercising inherent equitable power, sending off further ripples of anxiety. This backlash motivated us to reconsider one especially thorny area of bankruptcy court authority, namely, the propriety of issuing criminal contempt citations. While the issue has been brewing in the federal courts for years, the Supreme Court's recent skepticism over the authority of bankruptcy courts makes renewed analysis of the debate timely. Perhaps perversely, we want to go in the opposite direction from where our assumption of a hysteria bubble might lead. That is, post Stern and Law, we might expect many lower courts to be even more anxious about the power of bankruptcy courts to award such sanctions, i.e., that these judges should learn to stay in their place and not overstep their authority, which has once again attracted the watchful eye of the Court. But we decided to go another way-why not go back to first principles and, instead of having to defend the propriety of bankruptcy courts issuing criminal contempt orders, ask whether there is anything wrong with bankruptcy judges so doing, i.e., to start with a presumption that such relief is just fine until convinced otherwise. As we dug through the case law, it will surprise few readers to learn that there were firmly established circuit precedents prohibiting bankruptcy courts from imposing criminal contempt sanctions in no uncertain terms. But the more we went through the cases, especially against the backdrop of historical practice in the bankruptcy courts and their predecessors, the more we became convinced that these opinions were flawed-the result of overreadings of Supreme Court precedents and unfounded policy concerns. They lacked solid constitutional foundation. In other words, to invoke once again our intentionally provocative image, these decisions appeared to be based upon, and aimed to increase, bankruptcy hysteria. This Article concludes that there is nothing intrinsically problematic from a constitutional, statutory, or policy perspective with bankruptcy courts issuing criminal contempt orders. To reach this conclusion requires more than a few steps. This Article begins with a lay of the land, assaying current judicial treatment of bankruptcy courts' contempt power. It then examines the historical context of bankruptcy judges, paying particular attention to the sui generis role bankruptcy courts have played in the judiciary's evolution. Next, it considers the various statutory concerns in light of the complex legislative innovations regarding bankruptcy courts in the United States. After that, the Article considers constitutional jurisprudence regarding Article III and other provisions. Finally, the Article discusses pertinent collateral policy concerns that we deem to have played a significant role in the evolution of criminal contempt powers in the bankruptcy courts.

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