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September 01, 2012

Federal Circuit hears judicial pay case appeal

The ABA urged the U.S. Court of Appeals for the Federal Circuit this month to hold that Congress’s repeated blocking of cost-of-living adjustments (COLAs) for Article III judges in 1995, 1996, 1997, 1999, 2007 and 2010 violates the U.S. Constitution’s compensation clause guaranteeing undiminished compensation.

According to an amicus brief submitted by the ABA in the case of Beer v. United States, Congress has eroded judicial compensation to “dangerously low levels” by systematically depriving federal judges of COLAs that were to be provided under the Ethics Reform Act of 1989.

That act established automatic annual COLAs for judges and other senior government officials that were to take effect whenever a  COLA was conferred on federal workers paid according to the General Schedule.

During the past 18 years, however, judges have not received        COLAs six times even when federal workers received their pay increases. In 1995, 1996, 1997 and 1999, Congress passed “blocking legislation” that denied judges, members of Congress and certain executive branch officials their scheduled     COLAs. In 2007 and 2010, Congress failed to enact any authorizing legislation to allow federal judges to receive salary adjustments as required under Section 140 of P.L. 97-92. Section 140 is a provision originally enacted temporarily in 1981 and made permanent in 2001 that bars funds each year from being expended to increase federal judicial salaries unless Congress specifically enacts legislation to authorize the increase.

Appellants in the case, which was heard Sept. 7 in a rare en banc hearing before the Federal Circuit Court, are six current and former federal judges who were part of a group that first brought action in the Court of Federal Claims in 2009. The Claims Court summarily dismissed their complaint based on a precedent set in the case of Williams v. United States, 240 F.3d. 1019 (Fed. Cir. 2001), a decision that a panel of the Federal Circuit  Court issued in 2001 that ruled that Congress did not violate the compensation clause when it withheld judicial salary increases because the clause protects only pay that has already taken effect.

A panel of the Court of Appeals for the Federal Circuit affirmed that judgment in 2010, and the appellants appealed to the Supreme Court, which vacated the panel decision and sent the case back to the Federal Circuit to resolve procedural questions regarding preclusion.  After a Federal Circuit panel dismissed the case, the appellants petitioned for an en banc rehearing, which was granted in May.

The appellants maintain that the Ethics Reform Act of 1989 established a regime of self-executing, non-discretionary judicial salary adjustments in return for drastic limitations on outside income, and resulted in a reasonable expectation that the promised amount would be paid and that promised future adjustments would become part of the compensation protected from diminishment by Article III. Congress violated Article III by withholding the promised adjustments, they stated in their brief.     

The government is arguing that nothing in the compensation clause prohibits Congress from changing the rate of a future increase or from preventing an increase at all before judges have performed services for which compensation is due and payable.

In its amicus brief, the ABA pointed out that Congress’s departure from the statutory mandate has exacerbated judicial attrition by compelling some judges to leave the bench prematurely for financial reasons. A federal district court judge’s salary of $40,000 in 1969 would have a value of $250,480 in 2012. In contrast, that judge’s 2012 salary is $174,000. In real terms, a federal district judge’s salary declined approximately 31 percent from 1969 to 2012.

Furthermore, the declining value of judicial compensation “threatens to shrink the pool of prospective judges to a small segment of the profession that can afford to make the financial sacrifice that federal judicial service now requires,” according to the ABA.

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