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December 26, 2013 Articles

An Interview with the Honorable Gregory R. Schaaf

The committee is pleased to present an interview with a bankruptcy judge for the Eastern District of Kentucky.

By Jay Geller

The Bankruptcy & Insolvency Litigation Committee hopes to introduce new judges periodically to practitioners, particularly new attorneys. The following interview is with the Honorable Gregory R. Schaaf, U.S. bankruptcy judge for the Eastern District of Kentucky. The interview was conducted by Jay Geller, the cochair of the committee's Business Bankruptcy Litigation Subcommittee.

Q: Why did you want to become a bankruptcy judge?
A: I consider myself a practical person, and I think that making practical decisions is particularly important in the bankruptcy context. I am willing to make decisions, and I think that is an important skill for a bankruptcy judge. In addition, I wanted to focus more on pure bankruptcy issues. There are limitations in private practice. Sometimes one only has time to brush the surface of an issue because of limitations imposed by time or the availability of funds.

Q: What was your legal experience before you were appointed to the bench? Private practice? Judicial experience? Bankruptcy? Business/Consumer?
A: Before law school, I spent four years as a CPA. I then spent 21 years practicing law, 2 years of which were in England as a solicitor. Other than those 2 years, I spent my entire career at the Greenebaum firm as a transactional lawyer with a concentration in bankruptcy.

Q: Where did you go to Law School?
A: University of Kentucky College of Law.

Q: Do (did) you have a mentor? Is there another judge on whom you’ve tried to model yourself or who has had a significant impact on how you run your courtroom and treat attorneys and parties?
A: I would not say that I had a mentor in terms of my practice, but there were three more senior attorneys who impacted me positively in terms of negotiations, problem solving, and marketing. Prior to taking the bench, I appreciated the way bankruptcy judges in the Eastern District of Kentucky handled their cases. I would not say that I model myself on any of those judges now, as I think it's important to be yourself. However, I do try to incorporate the positive aspects I saw in the way they handled hearings and decisions.

Q: Do you think it was/would have been an advantage to have practiced bankruptcy law before becoming a judge? How about having been a litigator?
A: It is an advantage to practice bankruptcy law before taking the bench. I have some litigation experience, but being in a larger firm, I often relied on attorneys with more litigation experience than I had. Although I never conducted a jury trial, the litigation experience I did have has proved helpful to me on the bench.

Q: After you were appointed, but before you took the bench, what were you most worried/concerned about?
A: Learning as much consumer bankruptcy law as I could. As I stated previously, my practice focused primarily on business bankruptcy issues. Before I took the bench, I did a lot of reading on consumer bankruptcy issues and on bankruptcy law generally.

Q: How did you know what to do in your first days, weeks, and months on the bench? What was “Baby Judge School” like?
A: There are currently two judges in the Eastern District of Kentucky, and I am fortunate that my colleague, who was appointed about two and half years before I took the bench, kept notes of the information that proved helpful to her. She shared those notes and I read them carefully. I also observed each judge's docket (the other current judge and the now-retired judge) and watched how each of them handled their cases. "Baby judge school" is similar to private practice seminars; there certainly is good information to be gleaned from the seminars, but as important are the relationships that develop with the other new judges.

Q: Is being a judge more isolating than what you did previously? How do you handle that isolation?
A: Yes, it is more isolating, and that is required. Eating lunch alone more often is a necessary evil, and I anticipated it going in. There is a good working relationship among members of the bankruptcy bar in Lexington and, more broadly, in the Eastern District of Kentucky. For example, much of what we did occurred just prior to court or out in the hallway. I used to arrive at court early for that very reason. It sometimes feels strange that I do not need to leave for court 15 or more minutes before the hearing time.

It also makes it easier that I have friends who are attorneys but not bankruptcy lawyers, and friends who are non-attorneys.

Q: In that same vein, where do you draw the line on the “appearance of impropriety”? Have you maintained friendships with attorneys and other professionals? In what circumstances do you believe that recusal is appropriate? Would it be easier or harder to become a judge outside the district where you previously practiced? Would it be easier to be a judge in a multi-judge district?
A: The appearance of impropriety as a judge is not that different from the rules that preclude conflicting representation in private law firms. Hypothetically, I may well have believed that I could represent one party zealously despite the fact that one of my partners represented an opposing party. But it would not have looked right to have the firm on both sides of a transaction or litigation, and the ethical rules prohibit that. Similarly, I do not think having lunch with someone who actively practices before me or has an active case would impact my decision, but it would not look right to parties that do not know the other party or me.

It helps to have a second judge in this district. We get along well and deal with many of the same issues and problems. When I am in situations where I am around members of the bankruptcy bar, I stay away from conversations about cases.

Q: Do you have a demeanor that you try to project from the bench?
A: I always want to appear (and be) prepared, and I want people to feel that they are getting a fair shake. I want to appear reasonable and to be seeking practical results within the letter of the law. I also hope to be perceived as open and willing to listen; I do not want to intimidate the people who appear before me. At all times I try to respect the bench. One of the things we were told at baby judge school is that judges are not as funny as they think they are. There is the risk that someone will feel ridiculed, and people may feel compelled to laugh. That is an uncomfortable situation for everyone.

Q: How do you prefer to be addressed, by first name or as judge? Does it vary based on the circumstances?
A: It does vary based on the circumstances. Typically, Judge or Judge Schaaf is fine, and that is how the bankruptcy court staff refers to me. If people do not know me as a judge, then Greg is fine as well. In fact, that is often suggested for security reasons. Even in situations where I tell a lawyer that “Greg” is fine, the lawyer tends to call me “Judge” anyway.

Q: Do you wear formal clothes under the robe, or is your chambers casual dress?
A: My former firm was formal, not business casual; Friday was usually sport coat day for me. Now I am less formal, but I generally wear a suit on court days. And if I do not have court on Friday, I usually do not wear a tie. My staff dresses ready for court, as they may need to be in the courtroom without warning and cannot cover casual clothes with a robe.

Q: What do you look for in a law clerk? How do you allocate responsibility between you and the clerk?
A: I look for an ability to apply the law practically, and for strong research and writing skills. I hired one of the other judges’ clerks as a career clerk, in part because of her strong litigation background. I typically assign matters to her, and then she allocates assignments among the staff. She also serves as the liaison between the clerk’s office and me.

Q: How active a role do you play in settlement negotiations? Do you refer matters to other bankruptcy judges for mediation? Do you prefer to use other bankruptcy judges, private practitioners, or professional mediators to serve as bankruptcy mediators?
A: What I miss most about private practice is the problem-solving aspect. That said, I do not miss it to the point of wanting to infuse myself into the parties’ negotiations. In this district, bankruptcy judges have historically used other bankruptcy judges as mediators. I have not had an occasion to do that yet, although I have mediated three cases for my colleague. My sense is that litigants tend to give more weight to what is said by a sitting judge, but I would not hesitate to use a private mediator if the parties felt that would be useful.

Q: How, if at all, does the national political climate affect you in your capacity as a bankruptcy judge? Solely by way of example, many judges have been critical of BAPCPA, and some have felt compelled to rule in ways that they believe is inequitable. How do you deal with these types of issues (if at all)?
A: Sequestration is having an impact on the court system. The clerk’s office hours have been shortened by a half hour per day, but I think that the system as a whole is making do.

In terms of inequitable results, if the statute or a higher court ruling requires a certain decision, then I have to render it. I do not feel that is inequitable. If the law permits me to apply the equities, then I include that in my decision making. One factor that I must consider more now than I did when I was practicing is the precedential impact of a decision. As a practitioner, your job is to represent your client zealously in a given matter, without necessarily considering the precedential impact of a decision. The same is not true when writing something as a sitting judge.

Q: Have you had to deal with out-of-town professionals who want to charge significantly higher rates than prevailing local rates? Do you have any policies that you follow in this area?
A: I have not. I will deal with it on a case-by-case basis, based on whether out-of-town or national counsel is warranted.

Q: How difficult has it been to manage electronic discovery? How actively do you become involved in managing electronic discovery?

A: This is not an issue I have dealt with yet in my cases.

Q: How do/will you handle:

1. Counsel who doesn’t appear to know what he or she is doing? One counsel is more knowledgeable about trial technique and the Federal Rules of Evidence. He or she is in a position to exclude potentially important evidence or introduce potentially damaging evidence. How do you view your role as evidentiary gatekeeper in equitable proceedings? Do you intervene or do you let the prepared counsel win the case?

A: My sense is that judges differ on this issue. My personal inclination is to rule on the facts presented, so I suppose that I lean toward a less active approach. It is similar to my attitude about settlement negotiations; I do not seek to infuse myself into that process.

2. Neither counsel is asking the question(s) you want answered. Do you ask the question or do you rule without the information?

A: I will ask a question if I need an answer or issue clarified. If there are no adversaries, then I might try to create a record. For example, in the context of a critical vendor motion, if there is no opposition, I may still ask if any of the vendors to be paid are related to the debtor in any way.

3. One or both counsel is being uncivil. What will you do?

A: If I perceive a true lack of civility, then I would put a stop to it immediately. A judge raising his or her voice tends to stop lawyers in their tracks. Most lawyers in Kentucky know each other and work things out. It is what one lawyer has called the “Lexington way.” If lawyers do not do not conduct themselves in the Lexington way, then they tend to get scolded.

Q: What advantages and disadvantages do you perceive about being a bankruptcy judge versus, for example, a federal district court judge?

A: There is a real difference between Article I judges and Article III judges, such as life tenure, pay, and types of cases. Now, on top of that, we have questions raised by Stern v. Marshall. But even Stern has its primary impact in adversary proceedings, not on day-to-day bankruptcy matters. For me, I like being able to focus and become expert in one area of the law.

Q: How would you compare the stress level of being a judge versus what you did previously?

A: There’s a different kind of stress associated with being a bankruptcy judge. I did not really mind billing and collecting, but there was stress to bring in business and to justify your role as a partner in a firm. That pressure does not exist anymore, which is nice. As a judge, you trade that stress for the pressure of always being the center of attention in the courtroom. You do not just have one or two cases on the docket, but rather dozens, and you are always watched. A judge wants to be perceived as intelligent and well prepared, and sensitive to the parties’ concerns. I certainly am not oblivious to the fact that my decisions affect peoples’ lives, but if I decide something based on the evidence and the law, I do not dwell after the fact on whether I made the right decision.

Keywords: bankruptcy and insolvency litigation, interview, Judge Schaaf, Eastern District of Kentucky, business bankruptcy, consumer bankruptcy

Jay Geller – December 26, 2013