SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOCALTERNATIVE DISPUTE RESOLUTION AND SETTLEMENT ENCOURAGEMENT ACT; FEDERAL COURTS IMPROVEMENT ACT, AND OVERSIGHT HEARING ON THE NEED FOR ADDITIONAL FEDERAL DISTRICT COURT JUDGES
THURSDAY, OCTOBER 9, 1997
House of Representatives,
Subcommittee on Courts and Intellectual Property,
Committee on the Judiciary,
The subcommittee met, pursuant to notice, at 9:56 a.m., in room 2237, Rayburn House Office Building, Hon. Howard Coble (chairman of the subcommittee) presiding.
Present: Representatives Howard Coble, Bob Goodlatte, Charles T. Canady, Edward A. Pease, Bill McCollum, and William D. Delahunt.
Also present: S. Mitch Glazier, chief counsel; Vincent Garlock, counsel; Debbie Laman, counsel; Robert Raben, minority counsel; Veronica Eligan, staff assistant.
OPENING STATEMENT OF CHAIRMAN COBLE
Mr. COBLE. [presiding] Good morning, ladies and gentleman. I am a believer in starting meetings on time. I don't like to penalize those of you have come at the announced time, so we will get moving. Others on the subcommittee do not object to that.
Page 2 PREV PAGE TOP OF DOC Let me think aloud with you for a minute. We have four panels today. I am not certain about what type of a voting schedule is going today, but I fear it may well be chaotic. We may be interrupted. I would say to the witnesses, if you canwe're not going to keel-haul you if you violate itbut if you can stay within the 5 minute rule, we will be appreciative. When the red light illuminates, your 5 minutes have elapsed. Your written testimony, I assure you, will not be casually discarded. It will be read by all of us.
I dislike lengthy, detailed opening statements, but I'm going to have to violate that, to some extent today. Because of the subject matter, I think I need to visit with you in some detail.
We will hear testimony today concerning an issue upon which we all may agree that there's a problem; that is the need to improve the Federal court system. As chairman of this subcommittee, I hear the complaints and concerns of legislators, litigants, citizens, and members of the bench that Federal litigation is too slow, too complicated, and too expensive. The bills that we will discuss today seek to tackle those problems.
The first bill, H.R. 2603, the Alternative Dispute Resolution and Settlement Encouragement Act, will provide concrete steps to restore accountability, efficiency, and fairness to our Federal civil justice system. The effect of these changes will be to provide for a quicker, more efficient way to resolve some Federal cases when the parties so choose, and to lessen the incentive to litigate and, consequently, the caseload burdens faced by the Federal judiciary.
H.R. 2603 contains basically the same provisions as H.R. 903, introduced earlier this year. H.R. 903, you all will recall, contains an additional provision regarding the admissibility of scientific evidence. I've decided the products liability legislation may be the more appropriate vehicle for that provision, and I look forward to our addressing that, probably, next year.
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Additionally, I've been asked by the Judicial Conference to delay consideration on that provision as they will be addressing it as part of their fall meetings. In the same way, the Conference's Rules Advisory Committee has delayed consideration of the relationship between civil rule 81 and the copyright enforcement pending the conclusion of copyright legislation for this subcommittee, another example of the judiciary and the Congress working favorably together.
First, H.R. 2603 would require all Federal district courts to establish an arbitration program which, in the discretion of the court, could be either voluntary or mandatory. Based upon a study, the Federal judicial center recommended to Congress that it enact a provision authorizing all Federal courts to adopt, in their discretion, local rules for arbitration to be mandatory or voluntary in the discretion of various courts. This bill does precisely that. The goal of court annexed arbitration is to provide more options for litigants while reducing cost, delay, and court burden.
The bill will also encourage parties to settle their cases by offering an incentive to accept good offers of settlement. This section of the legislation, developed in the last Congress by Representative Bob Goodlatte of Virginia, would amend 28 USC 1332 by creating an incentive triggered by an offer of settlement. The offer of settlement procedure would allow a party to make, by filing with the court in writing and serving it on an adverse party at any time up to 10 days prior to trial, a formal offer to settle any or all claims in a suit for a specified amount. If the offer of settlement is accepted, the claim or claims are resolved pursuant to the terms of the agreement. If the offer is rejected, however, and the offeree does not obtain a judgment order or verdict more favorable than that offer on the applicable claims, the offeree is liable for costs and attorneys' fees of the offerer for those claims from the date the last offer was made by the adverse party, regardless of whether he wins or loses the case. Usually, this will be for an amount including costs of up to 10 days prior to trial.
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The bill was developed, in part, based upon recommendations by the American Bar Association in reaction to the ''loser pays'' bill introduced last Congress. Unlike ''loser pays,'' this bill contains provisions modeled after rule 68 of the Federal rules of civil procedure which addresses offers of judgment.
The subcommittee will also consider H.R. 2294, the Federal Courts Improvement Act. We introduced 2294 at the request of the administrative office of the courts. This bill is comprised of numerous proposals that the judiciary believes will improve the Federal judicial system. These proposals cover judicial financial administration, judicial process improvements, judiciary personnel administration, benefits, and protection and criminal justice act amendments. This hearing will no doubt provide valuable discussions on these proposals which will enable me and the ranking member, working with other interested members of the subcommittee to hopefully introduce a bill which will contain those proposals that we believe will be successful in improving the Federal judicial system.
At this hearing, at the request of the subcommittee members, Canady and McCollum, we will also explore the need for additional Federal district court judges. Nationwide, Federal courts are backlogged with cases. Some would argue that a possible solution to the problem is to add more Federal district court judges. We will hear testimony in regard to this situation in the Middle District of Florida as well as the general need for additional Federal district court judges throughout the country.
We're happy to have Mr. Canady and Mr. Pease here. Do either of you have a brief opening statementwith emphasis on brief?
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Mr. PEASE. I have no opening statement, Mr. Chairman.
Mr. COBLE. All right, Mr. Canady, the gentleman from Florida.
Mr. CANADY. Thank you, Mr. Chairman. I will keep the statement brief. I want to thank you for holding this hearing today, especially for conducting the oversight hearing concerning the need for additional Federal district court judges.
We are acutely aware of this particular issue in Florida, and we are fortunate to have with us today, JudgeChief Judge Elizabeth Kovachevich, from the Middle District of Florida. Judge Kovachevich will give us a first hand description of how the shortage of judges is impacting the Middle District of Florida, but we are particularly grateful to Judge Kovachevich for rearranging her court schedule on short notice to be with us here today. I understand we will also hear from Judge Julia Gibbons about the status of judgeships in all of the U.S. District Courts. The Judicial Conference is recommending that an additional 24 permanent and 12 temporary district court judgeships be created.
My immediate concern is about what I am hearing from my constituents regarding the dire need for more judges in the Middle District of Florida. Our district has been struggling with this shortage for years, and the problem continues to intensify as our population growth rate escalates. I have received numerous accounts from judges and lawyers in my district about their severe frustrations with the serious backlog of cases which is choking the process of justice. In addition to the frustration with the current overload is the fear that the situation will only worsen in coming months if more judgeships are not created for the Middle District.
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The Middle District, which includes Jacksonville, Orlando, Tampa, St. Petersburg, and Ft. Myers, as well as my area including the Lakeland and Winter Haven metropolitan areas, has experienced unprecedented population growth in recent years. The Middle District's population grew by 52 percent between 1980 and 1995. The population is expected to increase an additional 21 percent in the next 10 years. The Ft. Myers metro area was the fourth fastest growing area in the Nation in the past two decades. The region will benefit from a new courthouse which is currently being built in Ft. Myers, but, unfortunately, there will be no new judges to hear cases when the courthouse opens in April 1998. So, we will have a courthouse, but no judges.
It is not surprising that the area's tremendous population growth is reflected in the number of court cases filed. For the past 4 years, the Middle District has ranked in the top 10 nationally for the number of cases filed. The civil case load increased 31 percent between 1991 and 1996. The number of criminal defendants per judge in the district is currently approximately 50 percent higher than the national average.
Since 1994, the Judicial Conference has recommended four additional judgeships for the Middle District. Providing additional judges for the Middle District will ease the bottleneck which has resulted from dramatically increased population, stepped up efforts in prosecution, and truth in sentencing efforts. And I, again, want to thank the chairman for giving us the opportunity to focus on matters related to the needs of the Federal judiciary, including the need for additional judgeships throughout the country as well as in the Middle District of Florida
Thank you, Mr. Chairman.
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Mr. COBLE. The gentleman from Indiana.
Mr. PEASE. I have no opening statement.
Mr. COBLE. Thank you, Mr. Pease. Mr. Canady, the gentleman from Florida, literally, entrapped me yesterday, and would not permit me to leave until he gave me his sermon, so I know he is more than casually interested.
Our first witness today, addressing primarily the arbitration components of H.R. 2603, will be Peter Steenland, Jr. He is the Senior Counsel for the Alternative Dispute Resolution, ADR, in the Associate Attorney General's office at the United States Department of Justice. Since his appointment in July 1995, he has provided advice and guidance to the Department on all ADR activities. Mr. Steenland also serves as DOJ's Dispute Resolution Specialist under the Administrative Dispute Resolution Act. Prior to his current appointment, he served for 17 years as Chief of the Appellate Section in the Environmental and Natural Resources Division of the Department of Justice. We have copies of your written statement which will be submitted in the record in its entirety, without objection, and we're pleased to have you with us, Mr. Steenland.
STATEMENT OF PETER R. STEENLAND, JR., SENIOR COUNSEL FOR ALTERNATIVE DISPUTE RESOLUTION
Mr. STEENLAND. Thank you very much. Good morning, Mr. Chairman and members of the committee. We appreciate the opportunity to present our views this morning on the arbitration portion of H.R. 2603.
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In our judgment, H.R. 2603 represents a very sound concept. It addresses concerns that the Attorney General and the Department of Justice share with the committee with respect to court congestion, delay and cost of litigation, and, therefore, it fosters a goal that we support very enthusiastically.
In our judgment, this measure could be improved significantly if we were to enlarge its scope by promoting and encouraging district courts, not only to use arbitration but to use other forms of alternative dispute resolution as well, and, in particular, mediation. Let me use the balance of my time to explain why.
Arbitration is a very useful tool. It's been around for a long time, and it has continued popularity. Arbitration also has its limits. It is a win-lose situation, right and wrong. Just as one would go before a judge, the arbitrator says someone prevails and someone loses. There are other ways to deal with litigation. Interestingly enough, of the 10 districts in the pilot program where arbitration was expressly authorized by the Arbitration Act, which is the model for this bill, every one of those districts has supplemented an arbitration program with a mediation program and with other forms of dispute resolution in orderin their own individual judgments, to accommodate the needs of litigators to resolve cases short of litigation. The reason for that is that mediation and all other forms of ADR emphasize settlement rather than victory or loss. It's very important for all litigants that they be able to walk away from litigation with some degree of satisfaction, and when we are able to encourage parties to focus on settlement and creative solutions, we have accomplished a substantial amount in terms of satisfaction.
This, members of the committee, is terribly important, particularly, in circumstances of continuing relationships. For example, workplace disputes between employers and employees; contract disputes between suppliers and contractors where there's simply one issue that seems to be irreconcilable, but the parties don't want to dissolve a 10 or 15 year solid working relationship. By using arbitration or by using the Federal judicial system to get an ultimate adjudication, someone will win and someone will lose. Sometimes even winning is not winning because of delay, but mediation encourages the parties to focus on issues and interests: ''What do you need to resolve this?'' And what we find, for example, in the Northern District of California which runs an arbitration program pursuant to the statute, but also has a full panoply of mediation and other provisions, is that there is a high level of satisfaction by the participants in the process; cases get resolved more quickly; the parties save time and money, and, ultimately, if it's our goal to encourage people to walk away from this with a higher degree of satisfaction, then I think that by promoting solutions that not even courts or arbitrators have the power to impose, is the goal that we should all subscribe to. We, at the Department of Justice, have increased the use of ADR over the past 2 years under the Attorney General's active encouragement and direction. We've tripled the number of cases, and in almost every circumstance, we have used mediation.
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Now, I want to be careful to indicate that we're not dissatisfied with arbitration, but when we see the growth of mediation andindeed, Mr. Chairman, on the way up I was thinking about a recent meeting that I attended at the American Arbitration Association. Several of their executives were wearing buttons that said, ''Mediation is our middle name.'' Under those circumstances, I think it would be appropriate to broaden the scope of this bill. We would be delighted to work with the committee on such an approach. My written testimony contains a number of suggestions in that regard as to how this bill could be improved.
And in conclusion, although we don't have any written testimony on H.R. 2294, and we will send a views letter, there's one brief point that I would like to make in less than a minute, and that is to indicate that we really appreciate the effort of Judge Hodges, who is the Chair of the Executive Committee of the Judicial Conference. He has worked long and hard and very diligently to resolve a problem that gave us a great deal of concern, and that is the provision in this bill which authorizes judges to carry weapons. Section 405 of this measure, has addressed all of our concerns, and we are now prepared to support that measure, and we express our gratitude to Judge Hodges for making that possible. Mr. Chairman, I'd be delighted to answer any questions.
[The prepared statement of Mr. Steenland follows:]
PREPARED STATEMENT OF PETER R. STEENLAND, JR., SENIOR COUNSEL FOR ALTERNATIVE DISPUTE RESOLUTION
Mr. Chairman and Members of the Committee, it is a pleasure to be with you today to discuss the Administration's commitment to Alternative Dispute Resolution (ADR) in general and, more specifically, its views on H.R. 2603, the ''Alternative Dispute Resolution and Settlement Encouragement Act of 1997.'' I would like to confine my comments to Section 2 of H.R. 2603, dealing with ''Arbitration in District Courts.'' The Department requests the opportunity to submit additional comments in writing, after this hearing, on Section 3, ''Award of Reasonable Costs and Attorney's Fees in Federal Civil Diversity Litigation after an Offer of Settlement,'' as well as on H.R. 2294, the ''Federal Courts Improvement Act of 1997.''
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In general, we feel that the bill unduly and unnecessarily discourages parties from selecting and participating in the type of dispute resolution they feel is most suited to their needs. As the Department's Senior Counsel for Alternative Dispute Resolution, it is my responsibility to promote, coordinate and oversee the use of various methods of dispute resolution by our civil litigators. These ADR processes include the use of mediation, early neutral evaluation, minitrials, summary jury trials and arbitration. I am pleased to report that as a result of the Attorney General's clear and unwavering support of our efforts, the Department of Justice has made a strong beginning in working to incorporate ADR techniques into the standard case handling processes employed by our attorneys.
To promote and encourage greater use of dispute resolution processes, the Attorney General has directed the Department's litigating components to use dispute resolution whenever appropriate, to achieve faster and better settlements of civil cases. We provide ADR training to all our civil litigating attorneys, and are working closely with our client agencies to gain their cooperation in settling cases already in litigation, and to encourage them to settle matters administratively that would otherwise find their way to court.
These actions are producing benefits. In the two years that our program has been underway, we have tripled the number of cases in which ADR has been used to more than 1,200 per year. We are using court-sponsored ADR settlement programs, Federal magistrate judges who have been trained in ADR techniques, and private ADR providers who assist the parties to reach a consensual resolution of their disputes with the government.
ADR is being used to settle employment or workplace suits, including Title VII discrimination claims. We are using ADR to settle tort claims filed against the United States, and to resolve procurement and other contract disputes. ADR is being used in a wide variety of environmental litigation, including both defensive and affirmative litigation. In the civil rights area, ADR has proven extremely helpful in assisting the parties to obtain consensual and creative resolutions. Promoting greater use of dispute resolution is one of the Attorney General's highest priorities with respect to litigation, and we expect even greater results in the future.
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We are not alone in promoting greater use of dispute resolution to resolve and avoid litigation. In Executive Order 12988, President Clinton directed government litigators to make greater use of ADR processes where appropriate in litigation involving the United States. Similarly, through the enactment of the Administrative Dispute Resolution Act of 1996, Congress encouraged Federal agencies to be more aggressive in their use of ADR to resolve disputes at the administrative stage.
It should also be noted that many courts are experiencing positive results from the use of dispute resolution to settle pending litigation in the Federal courts. A number of Federal courts are operating effective ADR case settlement programs that have the strong support of both the bench and the local bar. I would like to discuss several of these programs in greater detail at a later point in my testimony.
There is also a growing interest by the private sector in making greater use of alternative means of dispute resolution. For example, the CPR Institute for Dispute Resolution in New York City is a non-profit organization supported by corporations and the nation's leading law firms to develop alternatives to the high costs of litigation facing business and public institutions. More than 850 global corporations and 2,800 corporate subsidiaries have signed the CPR Corporate Policy Statement on Alternatives to Litigation. More than 1,500 law firms have signed a similar pledge for law firms. CPR has created a panel of distinguished neutrals, including individuals such as William Webster, Lloyd Cutler, A. Leon Higginbotham, Jr., and Robert Bork, who are available to parties seeking to use ADR techniques as an alternative to litigation.
Mr. Chairman, we believe that it is now time to recognize that the traditional means of resolving disputes should be supplemented with these dispute resolution tools. Not every case is appropriate for ADR, and ADR will not always work when it is attempted. However, this emerging consensus among bench, bar, litigants and others suggests that dispute resolution is one more technique every attorney, and every court, should have available, for use when appropriate. In that context, I would like to turn to H.R. 2603, and offer the Department's views.
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This bill would amend the Arbitration Act (28 U.S.C. §65158) to make permanent the experimental arbitration programs established in designated pilot and comparison districts, expand the Act's coverage to apply to all districts rather than just the experimental ones, and raise the Act's damages ceiling for mandatory referral of certain cases to arbitration from $100,000 to $150,000.
While we support wholeheartedly the idea of providing for an ADR program in all district courts, we believe that this bill is too restrictive in its approach to the use of ADR in Federal courts. We believe that the scope of the program should be expanded to include not just arbitration but the full range of ADR procedures that have been tested and proved valuable.
Mr. Chairman, our overall view of this bill rests on a simple but profound notion: the principle benefit of using dispute resolution techniques is that these processes enable the parties to resolve their disputes themselves, often in a way that neither the courts nor other adjudicators could provide. When parties are encouraged to work with each other to identify what they really need to settle a dispute, they can often achieve a resolution far superior to one that is imposed upon them, whether that comes from a judicial decree or an arbitral award. If we are to be concerned about our citizens' satisfaction with our justice system, we must build into that system not only opportunities for efficiency but also measures that encourage and aid litigants in resolving their disputes in a consensual manner. It is said that on some occasions, after bruising each other in court battles, litigators may retire to a bar across from the courthouse to have a friendly drink. I know of no parties to bruising litigation who act similarly.
Page 13 PREV PAGE TOP OF DOC Many of the disputes that find their way to courts involve continuing relationshipsemployer vs. employee, contractor vs. supplier, regulator vs. the regulated community. In many of these cases, the prevailing party does not win in litigation. The costs, the delays, and the disruptions to an ongoing relationship are terribly corrosive and harm all parties. All too often, these costs far outweigh the benefits of a victory decreed by someone else; ultimately, no one wins in these circumstances. That is why every form of ADR, with the exception of arbitration, offers a consensual process to assist the parties in resolving themselves.
For many years, of course, arbitration has been a valuable tool for resolving disputes. It can be quicker, more efficient and preferable to traditional litigation for many who agree to be bound by an arbitrator's award. But for a growing number of parties, such as many in the construction industry who traditionally used arbitration to resolve disputes, mediation and other consensual ADR processes are being used more and more.
Another indication that mediation is a more effective means of settling civil cases than arbitration is found in the ADR processes used by the United States Courts of Appeals. With the sole exception of the United States Court of Appeals for the Federal Circuit, every Federal court of appeals now has a case settlement program where mediation techniques are used to assist the parties resolve litigation that has gone from trial to appellate court. In every court, trained mediators work with the parties to provide an alternative to appeal. As a general rule, these programs work very well.
Therefore, based on our experience and that of others, we are pleased that this Committee is considering a measure that would provide an alternative to traditional litigation. We all share the goal of finding and promoting reliable, efficient and effective means of alternative dispute resolution. Any measure that successfully promotes prompt resolution relieves the pressure on our overcrowded courts, and provides access to justice for those who truly need to litigate. We encourage the Committee to broaden its sights, and the Bill, by authorizing courts to offer a full range of ADR procedures.
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PROBLEMS WITH THE PRESENT ARBITRATION ACT
Based upon feedback from litigators at both Main Justice and U.S. Attorneys' Offices throughout the country, the Arbitration Act which serves as the model for this portion of H.R. 2603 has yielded, at best, mixed results. Arbitration is the most resource-intensive and formal of the ADR tools, and the Act's focus on arbitration, to the exclusion of the other available ADR tools, particularly those designed for use early in the life of a dispute, has often undercut rather than promoted efficient dispute resolution.
Some of the reasons for this disappointing record have to do with design flaws that can be corrected. For example, the threat of sanctions under the Arbitration Act, in the form of costs, arbitrators' fees, and/or attorneys' fees, discourages litigants from opting-in and encourages them to opt-out. And the absence of a requirement that parties participate personally in the process of accepting or rejecting ADR mechanisms has limited the program's effectiveness.
More fundamentally, we believe that the limited success of the Arbitration Act reflects the reality that many cases are not appropriate for arbitration even though they might be well-suited to other ADR procedures such as mediation, early neutral evaluation, mini-trials, or summary jury trials. Consequently, in the absence of any other available ADR process, parties have avoided arbitration, or sought a trial de novo.
The Department's Proposed Alternative Approach
Page 15 PREV PAGE TOP OF DOC We believe that a bill authorizing consideration of the full range of existing ADR options through a court-annexed process would significantly promote access to the justice system and reduce the excessive costs and delays that plague our present system.
Pursuant to the provisions of the Arbitration Act and the Civil Justice Reform Act (CJRA), two district courts have devised court-annexed, multi-option ADR programs that have been more successful than pilot programs centered solely upon mandatory arbitration. These court-sponsored programs feature early, mandatory consideration of a full range of ADR mechanisms, and safeguards to prevent inappropriate cases from being funneled into ADR. We advocate legislation that would implement broadly the successful aspects of these programs.
The United States District Court for the Northern District of California, an Arbitration Act pilot district and Civil Justice Reform Act experimental program district, sponsors an ADR MultiOption Pilot Program offering litigants in certain civil cases a full range of court-annexed ADR processes. Those litigants are required to participate in an ADR conference with a court official prior to the scheduling conference required by Rule 16 of the Federal Rules of Civil Procedure, and are presumptively required to participate in one non-binding ADR process offered by the court. Available processes include arbitration, early neutral evaluation, mediation, and Magistrate-sponsored settlement conferences.
Counsel in all eligible cases must participate, in their clients' presence or with their clients' express knowledge, in a joint conference with a court-employed ADR specialist and must consider the full range of ADR options. If the parties conclude that no ADR mechanism will be helpful, or cannot agree on a mechanism, the court may either select an ADR mechanism for the parties or exempt the action from further ADR proceedings. The exemption may be permanent, if the case is of a type that is not suited for ADR, or temporary, if there is an impediment to ADR that may eventually be removed. For instance, if a party believes it is entitled to judgment as a matter of law, so that until the court resolves a dispositive motion there is little use in attempting settlement, a decision on ADR referral can be set aside until the court rules on the appropriate motion.
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In our view, the Northern District of California's ADR program can and should serve as a model for this Committee's consideration. It has the strong support of the bench and the bar, including the United States Attorney's Office. It has a clearly defined mission, and has always been well managed by a small staff of experienced and dedicated ADR professionals.
The United States District Court for the Western District of Missouri, a CJRA experimental program district, has a similar program. It, too, provides effective and popular ADR services for litigants. Of course, there are a number of other, well-run, effective court-sponsored ADR programs that I have not mentioned today that also offer a range of ADR processes.
I recognize that the recently released RAND Institute study of the Civil Justice Reform Act found in its study of six ADR programs established pursuant to the CJRA ''no strong statistical evidence that these programs either increased or decreased litigant costs or the length of litigation''. However, the Department of Justice believes that these six ADR programs were not representative of the 51 mediation and 14 neutral evaluation programs that currently exist in the Federal courts. Many of the programs RAND studied were new, and several underwent substantial revision and improvement while the RAND study was underway. For our purposes today, we believe the recent report by the Federal Judicial Center of ADR programs that are successful provides helpful insight for designing ADR programs that create an effective and enduring alternative to litigation.
The programs studied by the Federal Judicial Center have functioned well, reducing delay and cost, and providing user satisfaction. In fact, an examination of these and other court-related ADR systems suggests that:
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(1) parties can successfully be compelled to consider seriously ADR as an alternative to traditional court litigation;
(2) parties cannot successfully be compelled to use any one particular mechanism;
(3) the optimal time to submit appropriate cases to ADR varies with the case; and
(4) the imposition of sanctions in the framework of an ADR program is counterproductive, creating a deterrent to using such programs.
Based upon the success of programs such as these, we believe that any legislation addressing arbitration also address, and require consideration of, other generally recognized ADR procedures rather than arbitration alone. Specifically, this legislation should contain the following basic features:
ADR legislation should authorize courts to require consideration of (but not referral to) ADR. We recommend that the court be given the statutory authority to require parties to Federal court litigation to attend an ADR conference presided over by a court-annexed official at which they will be presented with a full range of ADR options, each of which they must expressly consider. Such a conference might be either combined with the customary Rule 16 scheduling conference or held separately from and earlier than that conference. Individual district courts should, however, be free to schedule these conferences as they wish, and to exempt classes of cases they deem inappropriate.
Page 18 PREV PAGE TOP OF DOC Options to be considered at the ADR conference should include mediation, early neutral evaluation, mini-trial, summary jury trial, arbitration, and any other ADR approach suggested by one of the conference participants.
At the conclusion of the ADR conference the presiding official should be required to file a summary report with the assigned judge stating whether the parties have elected to pursue an ADR mechanism at that time, and if so, what type; whether the parties have elected to defer a decision on ADR pending specific events, such as the resolution of a dispositive motion or the taking of some discovery; and whether the parties have taken part in a good faith consideration of the applicability of ADR to their dispute.
I should note here that the flexibility to defer a decision on ADR pending dispositive motions is of particular concern to the United States, which often has unique jurisdictional or other threshold defenses such as sovereign immunity, failure to exhaust administrative remedies, performance of a discretionary function, and other constitutional, statutory, and regulatory restrictions on recovery from the Treasury.
Based upon the presiding official's report, the assigned judge could enter a scheduling order, or other appropriate order, reflecting the outcome of the conference and staying or modifying the course of discovery or any other aspect of the litigation if appropriate. If the outcome of the conference is a decision to defer ADR consideration, the court should issue an order specifying the events upon which ADR consideration is contingent and scheduling a follow-up ADR conference.
By making the conference mandatory and requiring that the parties in good faith consider all available ADR tools, the significant problem of litigators' concern with ''not blinking first'' would be avoided, and constructive progress toward resolution by ADR may, in appropriate cases, begin.
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However, I also should note that ADR may not be appropriate in cases involving the United States that turn upon law enforcement issues, constitutional questions, policy issues, or statutory and regulatory interpretation issues of importance to the Government.
ADR legislation should be applicable to all district courts. Consistent with the approach of H.R. 2603, we strongly agree that ADR should be encouraged in all Federal district courts rather than just the previously-designated experimental districts.
ADR legislation should provide for an ADR Administrator in each district. Administration of an effective ADR program is a full-time job, and a court employee in each district should be charged with implementing and administering that district's ADR program. Moreover, it is inappropriate for the Article I or III judge who may ultimately preside over a trial to function in the same manner as the neutral who first tries to resolve the matter through ADR, and existing caseloads make it difficult for magistrates and judges to devote sufficient time to this process. Again, the successful experience of the Northern District of California provides a clear example of the benefits that flow when a case settlement program is administered by an ADR professional.
ADR legislation should encourage the direct participation of party decision-makers whenever possible. The attendance of party decision-makers at the court-annexed ADR conference should be encouraged.
ADR legislation should encourage flexibility. Although it is clearly in the best interest of both courts and litigants to discourage delay, rigid deadlines can be counterproductive. For instance, the Arbitration Act's mandatory 180-day deadline for arbitration to begin may be unrealistic in some casesparticularly those presenting legitimate discovery disputes, or very complex factual issues. Imposing a deadline for the completion of an ADR mechanism may also deter participation or cause such participation to end prematurely. Courts have express and inherent authority to sanction parties for delay or other process abuse, which, together with the scheduling mechanism we propose, should be sufficient to move cases quickly.
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ADR legislation should not contain sanction provisions. Because ADR is, at bottom, a consensual process aimed at voluntary dispute resolution, we believe that legislation promoting it should not contain sanction features. The punitive features of the Arbitration Act allowing for the taxation of arbitrators' fees as costs, and for the imposition of costs and attorneys' fees relating to arbitration proceedings even in situations where no bad faith has been shown (28 U.S.C. §655) have tended to discourage participation in the pilot programs.
I should also note for the record the Department's position that these punitive features cannot be enforced against the United States because, absent a specific and unequivocally expressed statutory waiver of the United States' sovereign immunity, no costs, attorneys' fees, or other punitive devices may be taxed or enforced against the United States.
In conclusion, the Department of Justice, as the country's largest civil litigator, is very interested in promoting the use of appropriate dispute resolution mechanisms. The cost of legislation along the lines we recommend would be small relative to the savings from reducing protracted and expensive litigation. The successful pilot programs mentioned earlier have been partially funded to pay for neutrals' services. In addition, many courts have been able to maintain pools of qualified members of the bar who are qualified to serve as neutrals for all but the most specialized matters and who have been willing to offer their services pro bono.
The Justice Department welcomes the opportunity to work together with the members of this Committee and the Senate Judiciary Committee to fashion appropriate legislation in this area. We have an opportunity to increase access to justice by expanding the tools for dispute resolution, while at the same time reducing costs and delays. Although our Federal courts have many needs, our own experience at the Department of Justice in promoting greater use of ADR leads us to conclude that full and sustained support for a comprehensive menu of ADR processes in all our district courts is essential if dispute resolution is to be viewed and used as an integral component of our Federal justice system.
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Thank you for the opportunity to appear today and share the Department's views with you. I look forward to responding to any questions.
Mr. COBLE. Thank you, Mr. Steenland. Mr. Steenland, can you give us an estimate of how much of the Department's caseload is resolved through some sort of alternative dispute resolution, if you can, and how does that translate into savings for the public?
Mr. STEENLAND. The numbersthe last time I looked, Mr. Chairman, the Department had over 20,000 civil cases pending in Federal district court. We have used ADR in slightly more than 1,200. Now, not all of those cases have settled, but even when cases didn't settle, our lawyers are telling us that they did get some benefits from it: issues were dropped; discovery was facilitated, or somehow we learned more about the case. The savings that we're seeing are, at this point, somewhat difficult to quantify, because we don't have a complete reporting system. What we are seeing are several things: number one, we're not spending as much money on witnesses, because we don't have to go to trial; number two, in many cases, we're getting better results; the judgments are lower, and I think that's a terribly important point. The reason judgments are lower, in some of our cases, is because mediation allows the parties to identify interests that they need, particularly non-monetary interests, and, so, in some cases, we can spare the judgment fund a significant amount of money if we can identify, through mediation, something that the plaintiff needs that's easy for us to provide in a programmatic kind of sense, but doesn't cost dollars.
Now, we've only been at this for about 2 years, and the initial data is encouraging, but we don't we have a good handle on it yet, because it's just coming in page by page by page, and asking lawyers to fill out reports is, of course, a challenging thing even in the Department of Justice. But our initial indications are that this is very positive, and I would have to say that over 95 percent of our efforts have involved mediation, not arbitration.
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Mr. COBLE. In your testimony you indicated your willingness to work with us in developing specific language. We look forward to doing that, Mr. Steenland.
Mr. STEENLAND. Thank you very much, Mr. Chairman.
Mr. COBLE. The gentleman from Florida, Mr. Canady.
Mr. CANADY. I have no questions of this witness.
Mr. COBLE. The gentleman from Indiana, Mr. Pease.
Mr. PEASE. Thank you, Mr. Chairman. Mr. Steenland, in a prior life I chaired Judiciary Committee in the Indiana senate at a time when we were looking at these very issues, and at the time, which was 10 years ago, we encounteredalthough we eventually went forward and were glad that we didresistance, primarily from the Bar, most of whom had been trained to be litigants and very few who had been trained to be mediators, and there was also some parochialism, quite frankly, about who was going to mediate.
Aside from those issues, our experience that we eventually dealt with all those and went forward was very positive and very constructive, not just in terms of the ability to handleto give judges greater latitude in handling their caseload, and not just because there were financial savings, although both of those were true, but because the satisfaction of the parties and eventually of their attorneys was much higher than it had been in the traditional system, understanding there are times when there is no choice but to litigate.
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Do you anticipatehave you experienced that sort of resistance in your efforts so far? If so, how have you dealt with it, and what would you recommend that we do as we look toward your suggestion here?
Mr. STEENLAND. Thank you, Congressman; that's a very thoughtful and important question. We have not encountered resistance. What we have encountered is unfamiliarity with these processes. The Department of Justice, often referred to as the Department of Litigation, traditionally has respected and honored those litigators who have either brought their opponent's head home on a pike or come home on their shield; that's the culture, and I am dealing with the same questions that you were in Indiana.
We're doing several things. First of all, like you in your State, the Attorney General has emphasized that the role of our litigators is not just to litigate but to be problem solvers. She's told that to the ABA; she's told that to us.
We are working on changing the culture in several ways. First of all, we are providing for policy statements on when one would use ADR. Now, most policy statements issued by the Government have a certainperhaps, an uncertain or dubious value. In this case, the policy statement prevents the opposing counsel from thinking that the reason you want to use ADR is that you're weak or you're not prepared or somehow you're reluctant to go to trial. We can now blame it on the Attorney General.
Secondly, every attorney who has a civil practice is being trained in what we call mediation advocacy, how to represent the United States as an advocate in these processes. They are different skills. They are different skills than litigation skills; they're complimentary, and the ultimate goal here is not to mediate everything, because many cases require adjudication. The ultimate goal is to simply tell lawyers that in this day and age, this is one more tool that a fully professional, totally competent litigator will have to be used when appropriate.
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We are also, in our annual performance evaluations, grading and measuring our attorneys on how well they negotiate and how they use ADR when it's appropriate. So, we're giving them many different messages. The biggest obstacle, Congressman, is lacking of training and education; it's that simple. If people understand what this process is and what the benefits are, their clients will make them do it.
Mr. PEASE. I appreciate your response, Mr. Steenland. I'm one who is very much interested in your suggestion that we pursue this more broadly and will look forward to reading your materials and working with you and the chairman in that regard.
Mr. STEENLAND. Thank you very much, Congressman.
Mr. COBLE. Thank you, Mr. Pease. Thank you, Mr. Steenland, for being with us.
Mr. STEENLAND. Mr. Chairman, thank you so much.
Mr. COBLE. Our next panel of witnesses consists of judges.
Chief Judge D. Brock Hornby of the United States District Court for the district of Maine became chief judge for Maine in November, 1996. He is also the Chair of the Federal Judicial Center's Committee on District Judge Education, and teaches extensively on case management issues.
Page 25 PREV PAGE TOP OF DOC Next, we have Judge Philip Pro of the United States District Court for the district of Nevada. Judge Pro was appointed by Chief Justice Rehnquist to serve as Chair of the committee on the administration of Magistrate Judges System of the Judicial Conference of the United States.
And our third witness is Magistrate Judge, Tommy E. Miller. Magistrate Judge Miller is the president of the Federal Magistrate Judges' Association and an active member of the Criminal Rules Advisory Committee of the Judicial Conference.
We appreciate you all being with us. We have copies of your written statements which will be submitted into the record in their entirety, without objection. Judge Pro, this is a geographic quark, but do you Nevadans prefer Nevada or Nevada?
STATEMENT OF HON. D. BROCK HORNBY, CHIEF JUDGE, U.S. DISTRICT COURT FOR THE DISTRICT OF MAINE
Mr. PRO. It's Nevada, Mr. Chairman, if you would, but certainly I will be happy to hear either one, but those in Nevada call it Nevada.
Mr. COBLE. If you like Nevada, it will be Nevada.
Judge Hornby, why don't we start off with you.
Mr. HORNBY. Good morning, Mr. Chair, members of the committee, and thank you for the opportunity to appear before you.
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H.R. 2603 has been titled the Alternative Dispute Resolution and Settlement Encouragement Act. In fact, however, the bill requires courts to implement an arbitration program which is only one very narrow form of ADR. In light of that apparent inconsistency, before I explain what the Judicial Conference's position on this legislation is, I'd like to provide some background on ADR, generally, and its various forms.
Under the Civil Justice Reform Act of 1990, almost every district court has instituted some form of ADR. In fact, 80 out of the 94 districts have an ADR program, but they're very diverse. There are at least 10 different types of ADR currently employed: voluntary mediation that you've already heard about this morning; nonbinding arbitration; summary jury trials where a court conducts an abbreviated jury trial and issues a nonbinding verdict; early neutral evaluation where the litigants present summaries of their cases to a neutral who then identifies the major issues and provides a realistic assessment of a likely outcome; settlement conferences where the judge meets with the parties and attempts to reach a settlement before trial; mini-trials where the litigants give an abbreviated version of their case to business representatives who have full authority to settle; special masters where litigants present their case to a third party who then provides a recommendation to the court; and formal settlement negotiations where the litigants are required to attempt to resolve the issues in the case before judicial involvement. All of these combinations as well as others are used in the Federal courts. In fact, arbitration was one of the first types of ADR. It was begun under a pilot program in 1979. Congress expanded it in 1988. It was focused on 10 districts, first of all, as a mandatory program and then expanded to be voluntary.
What we've discovered as the years have passed, as more forms of ADR have developed, is that arbitration is not the most preferred method. In fact, it's one of the less preferred methods, and of the 10 mandatory districts, for example, at least 5 have abandoned it, and even in the voluntary districts it's not used as much as it once was.
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In comparison, mediation is offered in at least 51 out of the 94 districts; summary jury trials in 48 out of the 94 districts; 13 are doing early neutral evaluations.
So, with that background, let me explain the Judicial Conference's position on this arbitration legislation, focusing on two issues. First, is the requirement that all courts establish arbitration programs, and second, is the possible expansion of mandatory participation in these programs.
We believe those two provisions are not a good idea considering that the vast majority of districts are already using a variety of forms of ADR. The Judiciary has supported ADR for almost two decades. It clearly states in the long range plan for the Federal courts that the Conference supports the variety of types of programs that may be used.
What the Conference opposes is the requirement that all courts establish an arbitration program. As I said, 80 districts have already got some form of ADR. It's unnecessary and duplicative to require these 80 now to set up specifically an arbitration program in addition to the ADR program they already have.
It would also be costly. Arbitration programs generally require a paid clerk, maybe additional clerical staff, and paid arbitrators. Finally, we think it would be unwise to require all courts to establish such a program. Some districts like the Eastern District of Virginia that you may hear referred to as the ''Rocket Docket'' is already so fast that they've concluded they don't need an ADR program, that they are disposing of their cases very quickly without that.
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This view is also in keeping with the spirit of the Civil Justice Reform Act which required each court, with a local committee of litigators and members of the citizenry, to develop local plans of what would be best. Many of those committees looked at their State practice to see what was going on in State courts to try to develop programs that would be consistent. In the national literature, people who are involved in this are recognizing the diversity from place to place.
A second concern we have, as I say, is the expansion of mandatory participation of some of those programs. That would allow a district court to require all litigants to go through the extra step of arbitration. That could actually add to the cost in some cases, and add to the delay, and can also impinge upon the constitutional right to jury trial by that cost and delay.
So, we believe that requiring mandatory arbitration programs is not a good idea. If you're disposed, Mr. Chair and members of the committee to do something, we would encourage you to enlarge it and to make it permissive. In other words, to authorize a variety of ADR programs throughout the courts.
And, if I may make one final comment, we're concerned, also, about the use of the local rules as the vehicle. You've used the local rules, I believe, on only two occasions: one, in the pilot program that was the arbitration provision when it started in 1979, and, two, in the Civil Justice Reform Act when you encouraged districts to experiment. Typically, the National Rules Committee, under the Rules Enabling Act, governs the rules of the Federal courts, and so we're concerned about giving specific authority to each district to do something through its local rules that then might be seen as in conflict with any attempt later, through a national process, to develop consistency throughout the country. Thank you, Mr. Chair, and I'd be pleased to answer any questions.
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[The prepared statement of Mr. Hornby follows:]
PREPARED STATEMENT OF HON. D. BROCK HORNBY, CHIEF JUDGE U.S. DISTRICT COURT FOR THE DISTRICT OF MAINE
I am Brock Hornby, Chief Judge of the United States District Court of Maine, and chair of the Judicial Conference's Committee on Court Administration and Case Management. H.R. 2603 is entitled the ''Alternative Dispute Resolution and Settlement Encouragement Act,'' but Section 2 requires courts to implement an arbitration program, one narrow form of ADR.
Before I explain the Judicial Conference's position on this legislation I would like to provide some background on ADR generally. Under the Civil Justice Reform Act of 1990 almost every district court instituted some form of ADR, and 80 of the 94 districts now have an ADR program. They include: voluntary mediation; non-binding arbitration; summary jury trials; early neutral evaluation; settlement conferences; mini-trials; special masters; and formal settlement negotiations. These, and various combinations, are all used in the federal courts.
In 1979, the Judicial Conference began an experimental pilot project for arbitration, by authorizing ten pilot courts to establish mandatory court-annexed arbitration programs. In 1988, Congress authorized ten additional courts to establish voluntary court-annexed arbitration programs. After conducting this pilot experiment for nearly 20 years, arbitration is far from the most popular form of ADR. Five mandatory arbitration districts have either abandoned it, have made it a voluntary procedure, or use it very rarely, and several of voluntary arbitration districts rarely use it. By comparison, mediation is now offered by at least 51 courts, summary jury trials are offered in at least 48, and 13 districts are operating early neutral evaluation programs.
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H.R. 2603 would require courts to establish an ADR program for only arbitration. The Judicial Conference believes this is unwise andconsidering that the vast majority of districts already use ADRunnecessary. Eighty of the 94 districts now use some form of ADR. It is unnecessary and duplicative to require these to set up an arbitration program in addition to the ADR program they already have, especially when arbitration's popularity as a form of ADR is diminishing. It would be costly, requiring a clerk, additional clerical staff, and arbitrators. It would also be unwise to require all courts to establish an ADR program. Some courts rejected it because they dispose of cases so quickly. The Conference believes that the decision whether to adopt a particular court-annexed ADR program should be left to the courts, and advises against imposing a legislative requirement that arbitration be used regardless of a particular district's needs.
A second concern the Judicial Conference has with this legislation is that it would permit individual courts to require all litigants to automatically go through the extra step of arbitration, which they might not want or need, before having access to the traditional trial process. This could add to the cost and delay of civil litigation rather than reducing it. Also the time and expense involved in mandatory arbitration could seriously impact on the Constitution's Seventh Amendment right to trial. The Conference's view is that well run voluntary programs will attract participants and provide an effective form of ADR. In light of these concerns, if the Congress is disposed to legislate in this narrow area of arbitration, the Conference supports giving courts the authority to utilize voluntary court-annexed arbitration as one form of ADR but not mandatory court-annexed arbitration programs.
Page 31 PREV PAGE TOP OF DOC Finally, H.R. 2603 would amend the current arbitration statute to require district courts to ''authorize by local rule the use of arbitration in civil actions . . .'' This would preclude any future national rule-making through the Rules Enabling Act, and is a very dangerous precedent. In fact, the only two instances that I can think of where federal legislation provides specific authorization for an activity through local rules are the current arbitration statute, and the CJRA. And, both of these statutes established only pilot experimentation programs. In all other instances, except pilot experimentation programs, the federal rules of Civil Procedure, as promulgated through the Rules Enabling Act, govern the district courts across the Nation.
Good morning, Mr. Chairman and members of the Committee. Thank you for the opportunity to appear before you and testify on Section 2 of H.R. 2603. My name is Brock Hornby and I am Chief Judge of the United States District Court of Maine. I also serve as chair of the Judicial Conference's Committee on Court Administration and Case Management. I replace Judge Ann Williams, who testified before this Committee several times regarding various issues that are of importance to the federal courts.
H.R. 2603 is entitled the ''Alternative Dispute Resolution and Settlement Encouragement Act.'' In fact, however, H.R. 2603 requires courts to implement an arbitration program, which is only one very narrow form of ADR. In light of this apparent confusion, before I explain the Judicial Conference's position on this legislation I would like to provide some background on ADR generally, and its various forms.
Under the Civil Justice Reform Act of 1990 (CJRA) almost every district court instituted some form of ADR. Now, approximately 80 of the 94 districts have an ADR program. Reflecting the diversity and circumstances of each district, at least ten different types of ADR are currently employed by the courts. They include: voluntary mediation, where litigants meet with an outside mediator who helps them try to reach agreement and resolution; non-binding arbitration, where litigants present their case to an arbitrator who then issues a non-binding decision; summary jury trials, where a court conducts an abbreviated jury trial and issues a non-binding verdict; early neutral evaluation, where litigants present summaries of their case to a neutral who then identifies the major issues and provides a realistic assessment of the likely outcome of the case; settlement conferences, where a judge meets with litigants and attempts to reach a settlement prior to trial; mini-trials, where litigants present an abbreviated version of the case to business representatives who have full authority to settle; special masters, where litigants present their case to a third party who then prepares a recommendation to the court; and formal settlement negotiations, where litigants are required to attempt to resolve the issues in the case before judicial involvement. These forms of ADR, as well as various combinations, are all used in the federal courts.
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In 1979, the Judicial Conference began an experimental pilot project for arbitration, the subject of H.R. 2603. It authorized ten pilot courts to establish mandatory court-annexed arbitration programs, where cases that met the jurisdictional requirements were required to participate in an arbitration program prior to the traditional trial process. In 1988, Congress authorized those courts to continue mandatory court-annexed arbitration and authorized ten additional courts to establish voluntary court-annexed arbitration programs, where parties had the choice to participate in arbitration. After conducting this pilot experiment for nearly twenty years, we have discovered that arbitration is far from the most popular form of ADR. Of the ten districts that are authorized to conduct mandatory arbitration, at least five have either abandoned it, have made it a voluntary procedure, or use it very rarely. [MIW, MOW, NCM, OKW, TXW] Several of the ten courts that are authorized to conduct voluntary arbitration also use it rarely. For example, in the Northern District of Ohio, only four cases were referred to arbitration in 1994. By comparison, mediation is now offered by at least 51 of the 94 district courts, summary jury trials are offered in at least 48 districts, and 13 districts are operating court-administered early neutral evaluation programs.
With this background on ADR generally, I would like to give the Judicial Conference's position on this arbitration legislation, focusing on two issues. The first is this legislation's requirement that all courts establish arbitration programs, and the second is the possible expansion of mandatory participation in these programs.
H.R. 2603 would require courts to establish an ADR program that employs only arbitration. The Judicial Conference believes this is unwise andconsidering that the vast majority of districts already use ADRunnecessary.
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For almost two decades, the Judiciary has supported the use of ADR. As is stated in the Long Range Plan for the Federal Courts, the Judicial Conference encourages district courts ''to make available a variety of alternative dispute resolution techniques, procedures, and resources to assist in achieving a just, speedy, and inexpensive determination of civil litigation.'' And more recently, in its final report to Congress on the CJRA, following evaluations by the RAND Corporation and the Federal Judicial Center, the Judicial Conference recommended last June that ''local courts continue to develop suitable ADR programs, including non-binding arbitration.'' Thus, the Judiciary has a long history of encouraging the use of ADR in its various forms.
What the Conference opposes is the requirement, which this legislation would impose, that all courts establish a court-annexed arbitration program. As I said, 80 of the 94 districts now use some form of ADR. It is unnecessary and duplicative to require these 80 to set up specifically an arbitration program in addition to the ADR program they already have, especially when arbitration's popularity as a form of ADR is diminishing. It would also be costly. Arbitration programs generally require a paid clerk, perhaps additional clerical staff, and paid arbitrators. Finally, it would be unwise to require all courts to establish an ADR program. Although 80 of the 94 courts have them, other courts, such as the Eastern District of Virginia, which is commonly referred to as the ''Rocket Docket,'' considered establishing an ADR program, and rejected it because that court already disposes of its cases so quickly. The Conference believes that the decision whether to adopt a particular court-annexed ADR program should be left to the courts, and advises against imposing a legislative ''across the board'' requirement that arbitration be used regardless of a particular district's needs.
Page 34 PREV PAGE TOP OF DOC This view is also in keeping with the spirit of the CJRA, which required each court to develop a civil justice cost and delay reduction plan that considered the particular needs and circumstances of the districts, litigants, and the litigants'' attorneys. It is a view which is also shared by ADR professionals. For example, Elizabeth Plapinger, director of the Judicial Project at the CPR Institute for Dispute Resolution, stated in a September 22, 1997 National Law Journal article on the growth of ADR, that ''the recent wave of ADR development reflects the strong influence of regionalism and local legal culture. In many districts, courts [have] adopted programs similar to well-established ADR programs in nearby state courts and followed their neighbors'' lead on such issues as training and fees.'' Considering the wide array of ADR programs that have been developed by district courts across the country based on their particular circumstances, the Judicial Conference believes there is no need to mandate that all courts institute an arbitration program.
A secondand longstandingconcern the Judicial Conference has with legislation like H.R. 2603 is the expansion of mandatory, as opposed to voluntary court-annexed arbitration. This legislation would permit individual courts to require all litigants to automatically go through the extra step of arbitration, which they might not want or need, before having access to the traditional trial process. This could add to the cost and delay of civil litigation rather than reducing it. There is also a concern that the time and expense involved in mandatory arbitration could seriously impact on the Constitution's Seventh Amendment right to trial. The Conference's view is that well run voluntary programs will attract participants and provide an effective form of ADR without demanding that all litigants participate regardless of their circumstances.
Because courts already have the authority to establish ADR programs, the Conference does not support the bill's provision that would require all courts to institute a court-annexed arbitration program. It is unnecessary, duplicative, and could impose significant costs on the district courts. Instead, the Conference continues to support strongly the myriad alternative dispute resolution programs that the individual districts have developed to fit their own particular needs. The Conference supports what the title of this legislation suggests, that is ''Alternative Dispute Resolution and Settlement Encouragement,'' but opposes the unnecessary requirement that courts establish a court-annexed arbitration program, rather than allowing them to decide if ADR is needed and what type of ADR suits their particular needs best.
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In light of these concerns, if the Congress is disposed to legislate in this narrow area of arbitration, the Conference supports giving courts the authority to utilize voluntary court-annexed arbitration as one form of ADR but not mandatory court-annexed arbitration programs.
Finally, we are concerned about H.R. 2603's reliance on the local rules. Subsection(b)(1) of Section 2 would amend the current arbitration statute to require district courts to ''authorize by local rule the use of arbitration in civil actions . . .'' This would preclude any future national rule-making through the Rules Enabling Act, and is a very dangerous precedent. In fact, the only two instances that I can think of where federal legislation provides specific authorization for an activity through local rules are the current arbitration statute, and the CJRA. And, both of these statutes established only pilot experimentation programs. In all other instances the federal rules of Civil Procedure, as promulgated through the Rules Enabling Act, govern the district courts across the Nation.
Thank you for inviting me to testify on this important issue. The Judiciary appreciates Congress's continuing interest in case management issues generally and looks forward to working with Congress to develop legislation that will benefit litigants, the courts, and the entire judicial process.
Mr. COBLE. Thank you, Judge Hornby.
Page 36 PREV PAGE TOP OF DOCSTATEMENT OF HON. PHILIP M. PRO, JUDGE, U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA,
Mr. PRO. Thank you, Mr. Chairman. Mr. Chairman, I am here today to address the members of the committee as indicated on H.R. 2294, the Federal Courts Improvement Act.
My written testimony that has been provided is extensive and today I don't plan to touch upon all of it. Certainly, with the 5 minutes allocated, I'd like to stress four provisions in particular.
Each of the provisions of the act, however, are designed, and I think, do, in fact, provide for a measure of efficiency within the judicial branch by enhancing savings and time, money and resources.
I'd like to turn my attention, first of all, to an area of particular interest, since, as you mentioned, Mr. Chairman, I happen to Chair the Judicial Conference Committee on the Magistrate Judges' System; that's section 305 regarding magistrate judge contempt authority. Since its creation by Congress in 1968, the Magistrate Judges' System has grown significantly to assist the Federal courts in resolving a host of cases. Magistrate judges are involved in the pretrial case management; deciding motions in civil and criminal cases; conducting preliminary proceedings in criminal cases, and, of course, where the parties consent, they have the authority to fully adjudicate civil cases and misdemeanor cases. But they one power that is lacking and that is any form of contempt authority to punish contemptuous behavior which occurs in their presence or to enforce or assist them in enforcing court orders which they have entered in a particular case.
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Section 305 would remedy that particular problem by authorizing limited contempt authority for magistrate judges. The proposal provides for a contempt penalty limit of 30 days imprisonment and a fine of up to $5,000 which is exactly consistent with the sentencing authority which magistrate judges already have for Class C misdemeanors where these same penalties may be imposed. It is also serves to distinguish the range of penalties which can be imposed by a magistrate judge as compared to an article III judge. Such contempt authority would not be unique for non-article III judges. Congress has already conferred such authority on immigration judges, tax court judges, judges of the court of veterans appeals and military court martial judges among others.
I'd like to turn my attention, next, to section 405 which is entitled ''Judges Firearms Training Program,'' and I appreciate very much the Department of Justice announcing this morning their support for that provision. That is a provision which would authorize Federal judges to carry firearms for purposes of personal security, and, equally important, would provide and mandate training for those judges who choose to do so.
In many respects, this is an unpleasant topic, but the facts are that in recent years, threats against judges have increased. There are judges who must travel in rural districts or, in some of the vast western States, great distances, crossing boundaries of counties and sometimes, States. Some of those judges, out of their concern for their personal safety, have determined it's appropriate to seek authorization to carry firearms, and, indeed, have obtained local permission to do so, but there's a difficulty when they cross boundaries from one municipality to another or State lines in some cases.
Page 38 PREV PAGE TOP OF DOC This legislation would address that problem; would empower those judges to cross those types of boundaries with the permit that would be authorized by this legislation, but tied to it, very importantly, is the requirement that each judge who seeks to avail himself or herself of this option would have to undergo a comprehensive training program under guidelines established by the Judicial Conference and set up through the aid of the Department of Justice, U.S. Marshall Service, and the Federal Bureau of Investigation.
A third provision which I would like to turn my attention to is section 310, and I would hope the Department of Justice would also join us on this one; that is the wiretap report which must be preparedI brought a copy with me of the 1996 wiretap report. As part of the Omnibus Crime Control Act of 1968, Congress required that the Administrative Office annually prepare a report regarding all electronic surveillance conducted by the Federal and State courts. The fact is that the administrative office has significant difficulty gathering data from State and local prosecutors regarding wiretaps which have been authorized in those States, and the administrative office has no mechanism to compel States to provide that information. The Department of Justice, by comparison, works closely with those entities, and it's the view, in a nutshell, of the Judicial Conference that this provision would ensure a more complete report, more accurate report, faster and less extensivelyless expensively.
Finallyand I know my light has just come on to stopI have one provisionI just couldn't go back to Nevada if I didn't mention Guam. Section 303 would authorize the establishment of a magistrate judge position for the district court in Guam or the northern Mariana Islands; that's in the far Western Pacific, as you know. It's the farthest west district that we have, and the judge there, the district judges, both on Guam and on Sipan of the Northern Mariana's do not have the assistance of a magistrate judge. The Judicial Conference determined that there should be a part-time position payable at a rate of $20,000 plus a year, but does not have the ability to authorize that, because legislation doesn't provide for it. It's terribly needed by the court in Guam and Sipan, and among the many provisions, all of which I think serve the very laudatory purpose which the chairman addressed in his opening statement of reducing costs of litigation, reducing delay. I think these provisions as well as the other provisions in the Improvements Act would serve that purpose, and I'd be happy to respond to any questions.
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[The prepared statement of Mr. Pro follows:]
PREPARED STATEMENT OF HON. PHILIP M. PRO, JUDGE, U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA
Mr. Chairman and members of the Subcommittee, I am Philip Pro, Judge of the United States District Court for the District of Nevada, and Chair of the Judicial Conference Committee on Magistrate Judges. I am pleased to be here this morning to testify on behalf of the Judicial Conference of the United States on H.R. 2294, the ''Federal Courts Improvement Act of 1997.''
On behalf of the Judicial Conference, I want to thank you, Mr. Chairman, for introducing H.R. 2294, and for scheduling this hearing today.
H.R. 2294 contains thirty separate provisions and touches upon on a wide range of issues including federal court jurisdiction, the authority of judicial officers and Judicial Branch personnel and administrative programs.
This bill reflects the ongoing commitment of the Judicial Conference, and the 23 committees of judges which support the Judicial Conference, to improve the effectiveness and efficiency of the federal judiciary.
With your permission, Mr. Chairman, I have included as Attachments to this statement, eight additional recommendations of the Conference. These proposals resulted from meetings of the Conference in March and September of this year. I hope you can consider these along with the provisions of H.R. 2294.
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This morning I will confine my remarks to three sections of the bill: Section 305, Section 310, and Section 405.
Magistrate Judge Contempt Authority (SEC. 305)
Section 305 of the bill would expand the contempt authority of magistrate judges. As Chair of the Committee on the Administration of the Magistrate Judges System, I have a particularly strong interest in this issue. Presently, the lack of adequate contempt authority by magistrate judges undermines both the magistrate judge's and the court's authority when confronted with misconduct or failure to obey court orders.
This section of the bill would provide magistrate judges with summary criminal contempt authority to punish any misbehavior occurring in their presence. Summary criminal contempt authority is necessary to maintain order and to protect the court's dignity in response to contumacious behavior by witnesses, parties, counsel, and others present at court proceedings. The need for power to immediately vindicate the court's authority in the face of disruptive behavior exists whenever a magistrate judge presides for the district court regardless of litigant consent. Felony initial appearances under Fed. R. Crim. P. 5, detention hearings under the Bail Reform Act, 18 U.S.C.§3142, and evidentiary proceedings in case-dispositive matters under 28 U.S.C. §636(b)(1)(B) are typical examples where magistrate judges preside routinely on behalf of the district court without the litigants' consent.
The bill would also provide magistrate judges with additional criminal and civil contempt authority in civil consent cases under 28 U.S.C. §636(c) and in misdemeanor cases under 18 U.S.C. §3401. Since magistrate judges serve as the final dispositional judicial officer for the district court in these cases, this authority is necessary to enable magistrate judges to enforce compliance with the court's orders. Such authority does not constitute a significant expansion of magistrate judge authority, but provides them with a tool needed to perform effectively their existing statutory duties for the district court.
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The bill would also establish limits on the penalties magistrate judges may impose for criminal contempts. Imprisonment for a summary contempt committed in the presence of the magistrate judge, or for a criminal contempt occurring in a civil consent or misdemeanor case outside the magistrate judge's presence, would not exceed 30 days incarceration (the maximum term of imprisonment for a Class C misdemeanor set forth in 18 U.S.C. §3581(b)(8), and a fine could not exceed $5,000 (the maximum fine that may be imposed on an individual for a Class C misdemeanor under 18 U.S.C. §3571(b)(6). The restricted contempt penalties are intended to provide magistrate judges with an effective tool to impose order in the courtroom that is distinguishable from the criminal contempt power of Article III judges.
Potential constitutional concerns about providing magistrate judges with criminal contempt authority are resolved by placing appropriate limits on the penalties magistrate judges may impose. Limitations on penalties differentiate magistrate judge contempt authority from that of Article III judges, who may impose theoretically unlimited terms of imprisonment or fines upon entities who commit contumacious acts. 18 U.S.C. §401. By contrast, this bill would impose limits on the penalties magistrate judges could order in contempt situations.
Transfer to Department of Justice of Reports Concerning Intercepted Wire, Oral, or Electronic Communications (Sec. 310)
The Judiciary regularly submits reports on a wide variety of subjects to the Congress. Many of these reports are directed to the Judiciary Committees. Almost without exception, the reports relate to federal judicial operations, programs, or finances. Reporting to Congress on such matters as Congress sees fit is a responsibility of the Judicial Branch which we willingly accept.
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However, in 1968, for reasons that are somewhat unclear, Congress directed the Administrative Office of the United States Courts to compile and submit an annual report which relates to activities of state and federal prosecutors and law enforcement agencies. 18 U.S.C. §2519 provides that the Attorney General of the United States, and the principal prosecuting attorney of a State, or a political subdivision of a state, compile information relating to intercepted wire, oral, and electronic communications they request from federal or state judges. These judges are required to report on the orders granted. Again, the reason for requiring judges to be involved in this way is unclear. The statute then requires the prosecutors to report on all activities after the grant of the order including a description of the subjects of the interceptions, the number of arrests, convictions, and other prosecutorial details resulting from such interceptions.
All of this information is then not submitted to Congress, but rather is submitted to the Director of the Administrative Office, who in turn submits it to Congress. The Judicial Conference respectfully requests that this responsibility be transferred to the Department of Justice (DOJ), assuming that this Subcommittee concludes this information continues to be of use to Congress.
This request is based on more than the desire of the Judicial Conference that the Administrative Office use all of its resources for Judicial Branch programs and activities. Over the years, the Administrative Office is increasingly encountering difficulties in obtaining the data required by the statute, and obtaining it in a timely manner. For example, the 1996 report should detail 568 intercept orders issued and completed at the state level in 1996. However, the reports of the prosecutors in 99 of these cases were received after the report had been completed and therefore, not included in the report.
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Each year the Administrative Office receives data from federal and state authorities that appears to be unrealistic or inaccurate. Although Administrative Office staff does its best to verify numbers that seem implausible, the DOJ, with its wiretapping knowledge and expertise, is in a better position to review and verify the data if need be.
Although neither the Administrative Office nor DOJ have direct authority over the state and local prosecutors reporting this activity, DOJ has a better understanding of the issues faced by these prosecutors in compiling the data and, so, is in a much better position to manage the compilation of the report than an agency in the judiciary. The potential improvement that could be gained in the responsiveness of state and local prosecutors by shifting the source of the request for these data from a judiciary official to the top law enforcement official in the country, the Attorney General, should not be underestimated.
Judges' Firearms Training Program (Sec. 405)
The Judicial Conference strongly recommends the enactment of Section 405 which directly relates to the personal safety of federal judicial officers. Threats against judges, and judges families, has risen significantly over the past ten years. The security of judges, judiciary employees, and federal courthouses is a priority matter.
Section 405 would accomplish two highly desirable goals. First, many federal judicial officers currently carry concealed firearms because of safety concerns. They do so by obtaining licenses from state and/or local authorities, as any citizen is entitled to do so. Currently, 41 States allow licensees to carry concealed firearms.
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The enactment of Section 405 would mean that judges who carry firearms would effectively be required to successfully participate in a training and safety program. The Judiciary would rely on the United States Marshal Service for expertise in establishing the firearms training program. Failure on the part of judges to participate in the training program would mean such judges who carry firearms would be acting in a manner contrary to statute.
The second problem relates to the fact that judges often travel outside of their district or circuit on official, professional, or personal business. When they cross State lines, the firearms license from their home state loses its' effect. Because of this, judges in travel status often are not able to be armed. Clearly, if a judge is in danger, the fact that he or she is in one state or the other does not eliminate the danger.
Therefore, the enactment of Section 405 would provide that federal judges are, in most circumstances, exempted from state and local firearms laws and regulations. This same treatment is afforded to federal law enforcement agents and federal probations officers who routinely carry concealed firearms and travel in interstate commerce.
Title IFEDERAL COURTS STUDY COMMITTEE RECOMMENDATIONS
Section 101Parties' Consent to Bankruptcy Judge's Findings and Conclusions of Law
Section 157(c)(1) of title 28 of the United States Code provides that the district court may refer to a bankruptcy judge, for hearing and final determination, certain ''non-core''(see footnote 1) related proceedings when all parties to the proceeding consent to the referral. The present statute does not specify whether the consent must be express or whether it may be implied.
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In the interest of avoiding jurisdictional controversies, the judiciary has interpreted the statute restrictively, and the Federal Rules of Bankruptcy Procedure require express consent, as set out in Bankruptcy Rules 7008(a) and 7012(b). In the absence of this consent, a bankruptcy judge is limited to filing proposed findings of fact and conclusions of law, which must be presented to a district judge for review and entry of a final order or judgment, even when all parties agree to what the bankruptcy judge has proposed or when the defendant is in default. Accordingly, the Federal Courts Study Committee in 1990 recommended enactment of an implied consent mechanism, and this principle was endorsed by the Judicial Conference in 1992.
Section 101 of the bill provides that, unless the party files a timely objection to the bankruptcy judge's proposed findings of fact and conclusions of law, that party will be deemed to have consented to them and they will become final. This proposal is intended to avoid unnecessary delay and expense to the parties, and unnecessary use of judicial resources when no issue of fact or law needs to be resolved.
Title IIJUDICIAL FINANCIAL ADMINISTRATION
Section 201Reimbursement of Judiciary for Civil and Criminal Forfeiture Expenses
The courts must be given adequate resources to provide qualified counsel to indigent defendants pursuant to the Criminal Justice Act (CJA). In three of the past five Fiscal Years, the CJA program has experienced budget shortfalls that led to the suspension of payments to private ''panel'' attorneys. Without sufficient funding to cover the basic elements of the program, the CJA's mission is jeopardized.
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The use of asset forfeiture by the Department of Justice adds to the financial burden on the courts by requiring the judiciary to appoint counsel for otherwise financially secure defendants without providing compensating resources for that responsibility. When the Department of Justice seizes the assets of a defendant, that person is often left without sufficient funds to cover the costs of retaining private counsel. Consequently, the Defender Services appropriation must bear the costs of representing the defendant against criminal charges. The courts are not reimbursed.
Representation and costs are in addition to the costs of hearing conducted by the courts in processing forfeiture actions. Other entities of the federal government, or state and local governments, are reimbursed for costs related to seizures and forfeitures of assets based upon their participation in these actions. The courts receive no similar reimbursement. It would be more equitable if the expenses to the Defender Services appropriation, and those of the judiciary generally, were offset by provisions for appropriate sharing of the funds that accrue to the federal government through seized and forfeited assets. At a minimum, the judiciary should be authorized to recover the direct additional costs charged to the Defender Services appropriation when a defendant's assets are seized and legal counsel is provided at government expense.
Section 201 of H.R. 2294 would authorize the reimbursement of the judiciary from the Asset Forfeiture Fund for costs arising from the forfeiture of assets of defendants. To avoid even the appearance of a conflict of interest on the part of counsel compensated from the Defender Services appropriation, the reimbursement of that appropriation would be limited to the extent to which the courts are already authorized by subsection (f) of the CJA to order reimbursement from a defendant for the costs of representation provided under the Act. We estimate that reimbursement for the costs of defense representation would be approximately $21.2 million annually.
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Section 202Transfer of Retirement Funds
Section 202 allows the judiciary's contributions, and accrued interest, to the Civil Service Retirement and Disability Fund to be paid back to the judiciary when bankruptcy and magistrate judges, for whom the contributions were made, elect to transfer from the Civil Service Retirement System or the Federal Employees' Retirement System to the judicial retirement system established under the Retirement and Survivors' Annuities for Bankruptcy Judges and Magistrates Act.(see footnote 2) The contributions of bankruptcy and magistrate judges to the Federal Employees' Retirement System and the Civil Service Retirement Systems, as well as the Judiciary's contributions to those systems, are paid to the Office of Personnel Management. When a judge separates from office or elects to participate in the Judicial Retirement System, the judge may withdraw his or her retirement contributions. The Judiciary's contributions are not refunded. Currently, when a bankruptcy or magistrate judge elects to transfer to the Judicial retirement system, that judge's contribution to the Civil Service Retirement System is returned. However, the judiciary's contributions made on behalf of the same judges are not returned to the judiciary. These contributions should be returned because the judiciary, not the Civil Service Retirement and Disability Fund, is responsible for paying the judges' retirement benefits if they transfer into the judicial retirement system. It is estimated that the judiciary has already contributed about $6 million to the Civil Service Retirement and Disability Fund on behalf of judges who subsequently transferred into the judicial retirement system.
Section 203Judicial Conference Foundation
Page 48 PREV PAGE TOP OF DOC At present the Judicial Conference has no mechanism under its control for the purpose of administering Judicial Conference-approved exchange programs with the judiciaries of other nations, when the programs rely wholly or in part on non-Judiciary funding. This section would create a foundation through which the Judicial Conference could accept and expend public and private gifts in support of the Judiciary's exchange and education programs with foreign and state judicial systems. This section is based on 28 U.S.C. section 629 which provides comparable authority to Federal Judicial Center Foundation.
Section 204Judiciary Information Technology Fund
This Fund is a financial mechanism which enables the judiciary to make plans and procurement expenditures which address the automation needs of the judicial branch of government. Unfortunately, since its original enactment the Judiciary Information Technology Fund has contained a sunset provision; the current sunset date is September 30, 1998. Limiting the life of the Fund made sense at its original enactment, when the nature of this new approach to automation procurement was still experimental. Now that the Judiciary's process for planning, developing, managing and acquiring information technology has proven to be viable and cost-effective, however, such a limitation is no longer needed. In fact, in 1994 when Congress was unable to extend the then-applicable sunset provision it became necessary to reauthorize the Fund on a retroactive basis. This required extensive planning, duplicate record keeping, and additional policy and legal review. All of this delay took time and cost money.
In addition to eliminating the sunset date for the Fund, section 204 of the bill would eliminate uncertainty created by the passage of the Information Technology Management Reform Act of 1996 (ITMRA) and repeal of the Brooks Automatic Data Processing Act. Under the ITMRA, the Office of Management and Budget was charged with management policy and oversight of information technology resources for the executive branch through the budget and appropriations management process The Judiciary Information Technology Fund statute was amended to replace the requirement that procurements comply with the Brooks Act to a requirement that the procurement of information technology be conducted in compliance with ''the provisions of law, policies, and regulations applicable to executive agencies under the Information Technology Management Reform Act.'' The potential reach of this language is so broad that it could be read to apply many statutes with varying implications, e.g. Administrative Procedures Act, Contract Disputes Act, Small Business Act, to which the judiciary is not subject, to a single activity of the judiciary, i.e. procurement of information technology equipment under the Fund. Management and reporting features equivalent to those instituted under ITMRA are already in place for these resources in the judicial branch and the language added by ITMRA should be deleted. This amendment would clarify that the judiciary's Fund is not subject to laws that would not otherwise apply to the federal judiciary.
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Section 205Bankruptcy Fees
In 1986, Congress passed Public Law 99554, 100 Stat. 3088 (1986) which authorized the Judicial Conference to establish bankruptcy administrator programs, in lieu of the U.S. Trustee program, in six judicial districts in the states of Alabama and North Carolina.
Currently, debtors in the United States trustee and bankruptcy administrator districts pay the same fees when filing for bankruptcy, but chapter 11 debtors in bankruptcy administrator districts are not subject to the additional fees on quarterly disbursements that are subsequently levied on chapter 11 debtors in United States trustee districts.
In St. Angelo v. Victoria Farms, Inc., 38 F.3d 1524 (9th Cir. 1994), a regional United States trustee objected to the bankruptcy court's calculation of the quarterly fees to be paid by the debtor under 28 U.S.C. §1930(a)(6). On appeal, the debtor for the first time argued that the trustee's claim should be denied because the quarterly fees do not apply uniformly in all judicial districts. The debtor argued that the bifurcated system violates the Uniformity Clause of the Constitution, which authorizes Congress to enact ''uniform laws on the subject of bankruptcies throughout the United States.''
The court agreed, determining that the United States trustee system is more costly for debtors than the bankruptcy administrator program and there is no legislative history justifying the difference. As indicated above, this issue was first raised on appeal. Jurisdiction over the bankruptcy administrator districts was also lacking.
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At its March 1996 proceeding, the Judicial Conference determined that implementing the establishment of chapter 11 quarterly fees in the bankruptcy administrator districts would eliminate any Victoria Farms problem and by providing that the judiciary could retain the fees much-needed revenues could be used to offset the cost of operating the bankruptcy administrator program. If a quarterly fee were implemented in the bankruptcy administrator districts through which the judiciary could retain the fees, any surplus exceeding the costs of the bankruptcy administrator program would be dedicated to the judiciary to offset costs of the judicial system.
Thus, the proposed language authorizes the Judicial Conference to implement fees in the bankruptcy administrator program in the judicial districts in the states of Alabama and North Carolina similar to those currently imposed by 28 U.S.C. §1930(a)(6). In addition, the language also provides that these new fees shall be deposited into a fund established under 28 U.S.C. §1931 for the operation and maintenance of the federal judiciary, including the bankruptcy administrator program.
Section 206Disposition of Miscellaneous Fees
This provision responds to a directive from congressional appropriations committees that the Judiciary identify ways to increase offsetting receipts. This provision would allow the judiciary to retain any additional offsetting receipts derived from increases in miscellaneous fees charged in the federal courts of appeals, district courts, bankruptcy courts, the Court of Federal Claims, and the Judicial Panel on Multidistrict Litigation. The miscellaneous fees schedules include fees for services such as record searches, reproduction of records, and returned checks. Typically, the Judicial Conference acts to raise such fees to reflect increases in inflation. The additional amounts collected would be deposited into the special judiciary fund in the Treasury and these receipts would be available to offset funds which are appropriated by Congress for the operation and maintenance of the courts.
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Section 301Removal of Cases Under the Employee Retirement Income Security Act
This section amends section 1445 of title 28, United States Code, to limit the removal from state court to federal court of subsection 1132(a)(1)(B) claims under the Employee Retirement Income Security Act of 1974(ERISA). (29 U.S.C. §10011461.) ERISA governs employee benefit plans and provides exclusive federal jurisdiction over such areas as disclosure of plan information, vesting and funding of plans, and the fiduciary role of plan administrators.
ERISA also allows participants and beneficiaries of employee benefit (e.g., health insurance and severance pay) plans to bring actions regarding the terms of these plans in either federal or state court under 1132(a)(1)(B) to: (1) recover benefits due; (2) enforce rights; or (3) clarify rights to future benefits. These actions typically involve the application of a benefit plan to a particular individual or individuals rather than present global questions of federal law arising from ERISA's complex statutory scheme.
In enacting ERISA, Congress determined those principles of ERISA law that must be decided by a federal court. However, by providing concurrent jurisdiction for claims where persons are seeking to recover benefits or enforce or clarify rights, Congress recognized that the state courts are an appropriate forum for resolution of these cases. These claims involve principles of contract and trust lawareas in which the state courts have substantial experience. Furthermore, state courts must apply the federal standards established by ERISA and are subject to appellate review by the Supreme Court.
Page 52 PREV PAGE TOP OF DOC Under current law, a plaintiff is allowed to choose a state or federal forum, whichever will be more convenient and less costly. Section 301 would provide that once filed in state court, the case would not be subject to removal solely on the basis of section 1132(a)(1)(B). Removal, nonetheless, is possible if the suit includes not only an 1132(a)(1)(B) claim, but another transactionally related claim having a jurisdictional basis for a federal forum. Also, if the plaintiff and defendant have diversity of citizenship and the threshold amount in controversy is met, the defendant would have the right to pursue the case in federal court.
Although it is difficult to measure the caseload impact of this amendment, it will ease the federal civil docket while allowing state courts to handle these benefit claims. During the twelve-month period ending June 30, 1997, 9,881 ERISA cases were filed in federal district court (122 with the United States as the plaintiff, 19 with the United States as the defendant, and 9,740 filed under federal question jurisdiction (U.S. Government not a party)). Although the statistics do not indicate which cases were initiated specifically under subsection 1132(a)(1)(B), the Department of Labor estimates that approximately 50 percent of all ERISA cases (federal and state) are based in whole or in part on this particular subsection. Thus, it is estimated of the 9,881 ERISA cases filed in federal court, approximately 5,000 of these cases involve 1132(a)(1)(B).
Section 302Elimination of In-State Plaintiff Diversity Jurisdiction
Section 302 would repeal in-state plaintiff (ISP) diversity jurisdiction. In-state plaintiff diversity jurisdiction allows a plaintiff to litigate in federal court a civil claim based on state law, even though the plaintiff is a citizen of the state whose court system the plaintiff seeks to avoid. There appears to be no federal interest in providing a forum for enforcing rights under state law when the plaintiff is a citizen of the state in which suit is brought. Section 302 pertains only to one type of diversity jurisdiction, namely ISP, and has a limited effect on the general scope of diversity jurisdiction.
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In-state plaintiff diversity jurisdiction was first created by Congress in 1789 as part of the Judiciary Act's creation of the federal court system. At that time Congress permitted federal diversity jurisdiction to be invoked by an in-state plaintiff while forbidding removal to federal court by an in-state defendant. The basis for such jurisdiction demonstrates that the original justification for ISP diversity jurisdiction has entirely disappeared.
Congress had particular reasons in 1789 for treating in-state defendants and in-state plaintiffs differently in their access to general diversity jurisdiction. The original purpose of general diversity jurisdiction was to provide a neutral federal forum for resolution of interstate commercial controversies. The national problem of impairment of credit provided ample justification for giving a creditor, who would have been the plaintiff, the right to enforce a substantial debt in federal court whenever diversity of citizenship existed. In 1789 there was a genuine danger that state courts would disrupt the national economy and the rule of law by systematically favoring two distinct classes of litigants: home-state citizens, and anyone resisting the payment of a debt. Because there was no reason for Congress to fear state court prejudice against debtors, as opposed to creditors, it was logical for the First Congress to grant the right to invoke federal diversity jurisdiction by removal only to out-of-state defendants and to provide in-state plaintiffs with the alternative forum of a federal court.
Whatever arguments may justify retaining general diversity jurisdiction in light of modern conditions in state and federal courts, the historical reasons for supplementing general diversity jurisdiction with ISP diversity jurisdiction have completely disappeared. It is difficult to argue today that in-state plaintiffs require access to federal diversity jurisdiction because state courts are systematically biased in favor of defendants in the adjudication of state-law claims or that state courts are systematically under enforcing state-created rights. Repeal of ISP diversity jurisdiction is compatible with the arguments advanced in favor of general diversity jurisdiction, including the retention of the rights of removal by out-of-state defendants as a protection against whatever local bias they may encounter when sued in state court by in-state plaintiffs.
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The justification for repealing ISP diversity jurisdiction is not based solely on a sense of history and the changed circumstances of modern times. There is a growing recognition that federal caseloads have increased in size and have changed in their complexity. In the thirty-five years from 1962 to 1997, total filings (civil and criminal) in the district courts have tripled. During the same period, filings in the courts of appeals increased ten-fold.
In 1962, almost 62,000 civil cases were filed in the district courts. In 1997, the number of civil filings in the federal courts had reached 265,151. This quadrupling of the federal civil caseload has not been distributed evenly among the different types of cases. Nearly 80 percent of all civil filings now consist of private civil cases. Of these, the proportion of private federal question cases has mushroomed, from about 26 percent of the federal civil caseload in 1962 to nearly 60 percent today.
Although it is difficult to predict case filings, particularly in view of recent congressional initiatives, if filings grow at an average rate of 5 percent annually, the federal courts' civil caseload will double every fourteen years. The federal courts' appellate caseload today is over 52,000.
There are several core functions of the federal courts which, taken together, generally comprise the essential mission of the federal judiciary. The challenge facing the judiciary today is choosing among competing priorities. Repeal of ISP diversity jurisdiction would assist the federal courts in meeting the needs of contemporary plaintiffs who seek judicial enforcement of the rights conferred on them by federal law and ensuring that scarce judicial resources are used wisely.
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In 1997, there were 56,257 diversity cases filed in the federal courts. Of that number, 16,828 were ISP diversity cases, which was approximately 30 percent of all new diversity cases filed in 1997. If ISP diversity jurisdiction is repealed, however, we do not expect the number of diversity cases filed annually to drop by the same amount. We would project the amount to be less than the entire number of ISP cases because two alternative routes will continue to exist or filing such diversity cases in federal court.
First, a diverse defendant sued in state court by an in-state plaintiff retains the right to remove that case to federal court. Second, a plaintiff who would be barred by the proposed repeal of ISP diversity jurisdiction from filing a diversity case in his or her home state retains the right, if the plaintiff so chooses, to file that case in a federal court in any other state in which the defendant is subject to personal jurisdiction. Under that scenario, however, the plaintiff must give up the benefit of the substantive law of his or her home state, and must incur the costs and uncertainly of proceeding under the law of another state.
Thus, these two alternative avenues for invoking federal diversity jurisdiction over cases that are presently filed as ISP diversity cases make it difficult to assess accurately the impact of this amendment if enacted. However, weighing the above factors, we estimate that if section 302 is enacted, federal civil case filings would be reduced by approximately 8,000 per yearabout half of the number of ISP cases now filed.
The judiciary recognizes the importance of the availability of a fair forum for cases involving in-state plaintiffs, and firmly believes that the state courts are fully capable and willing to resolve these cases. In congressional testimony in May of 1994, the Conference of Chief Justices affirmed the willingness of the state courts to assume any additional caseload resulting from the repeal of ISP diversity jurisdiction.
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The historical justification for ISP diversity jurisdiction no longer exists. Furthermore, the repeal of ISP, which is a conservative proposal, is consistent with sound judicial administration and effective utilization of scarce judicial resources.
Section 303Extension of Statutory Authority for Magistrate Judge Positions to be Established in the District Courts of Guam and the Northern Mariana Islands
The Federal Magistrates Act, 28 U.S.C. §631639, as amended, does not apply to the district courts of Guam or the Northern Mariana Islands. Under the Act, magistrate judge positions in other federal district courts are established, adjusted, and eliminated by the Judicial Conference of the United States in response to changing needs. The proposed amendment would allow the Conference to establish magistrate judge positions, if warranted, in Guam and the Northern Mariana Islands.
Current circumstances illustrate the importance of the proposed amendment. The Judicial Conference determined in 1994 that the district court of Guam had developed a need for the services of a part-time magistrate judge (compensated at $20,640 per annum under the applicable salary schedule). The district judge of that court, working alone, must frequently interrupt his scheduled trials to perform felony preliminary proceedings. The efficiency of the court would be enhanced if a magistrate judge were available to perform these functions, which include initial appearances, detention hearings, arraignments, and review of search and arrest warrant applications.
The proposed amendment includes the Northern Mariana Islands to avoid the need for another statutory change when and if the caseload of that jurisdiction develops to a level warranting the assistance of a magistrate judge.
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Section 304Bankruptcy Administrator Authority to Appoint Trustees, Examiners, and Committee of Creditors
This section provides statutory authority for bankruptcy administrators in Alabama and North Carolina to appoint bankruptcy case trustees, standing trustees, examiners, and committees of creditors and equity security holders, as is done in the rest of the country by United States trustees. Experience with the bankruptcy administrator program established in the judicial districts in Alabama and North Carolina pursuant to section 302(d)(3) of the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986, has shown that it would be desirable to have bankruptcy administrators make these appointments and fix standing trustees' compensation and percentage fees. Acting pursuant to regulations adopted by the Judicial Conference of the United States and guidelines promulgated by the Director of the Administrative Office of the United States Courts, bankruptcy administrators currently make recommendations to the court on these matters.
Authorizing bankruptcy administrators to make these appointments and fix standing trustees' compensation and percentage fees directly would further one of the central goals of the Bankruptcy Reform Act of 1978, Pub. L. 95598, freeing bankruptcy judges from an administrative role in their cases. Although the 1986 Act authorized United States trustees to perform these functions, it did not specifically authorize bankruptcy administrators to do so even though the two officials have similar roles in overseeing the administration of estates and supervising trustees and other fiduciaries in bankruptcy cases. This amendment would give bankruptcy administrators authority that is comparable to that of trustees.
Page 58 PREV PAGE TOP OF DOCSection 306Consent to Magistrate Judge Authority in Petty Offense Cases and Magistrate Judge Authority in Misdemeanor Cases Involving Juvenile Defendants
Under 28 U.S.C. §636(a) and 18 U.S.C. §3401 (b) and (g), United States magistrate judges may try petty offense cases that are Class B misdemeanors charging a motor vehicle offense, Class C misdemeanors, and infractions, without the consent of the defendant. Prior to the enactment of the Federal Courts Improvement Act of 1996 (Pub. L. No. 104317, 110 Stat. 3847 (October 19, 1996)), magistrate judges were not able to try any misdemeanor or petty offense case unless the defendant consented to be tried before the magistrate judge and specifically waived the right to be tried by a district judge. The Federal Courts Improvement Act of 1996 eliminated this requirement in Class B misdemeanors charging a motor vehicle offense, Class C misdemeanors, and infractions. This new section removes the consent requirement in all other petty offense cases.
A large number of the petty offense cases heard by magistrate judges are not exempt from the current consent requirement. These cases include hunting and fishing violations on wildlife refuges (18 U.S.C. §41) and any trespass, assault, or theft which occurs under regulations governing conduct on property controlled by the Department of Veterans Affairs (38 C.F.R.§1.218 et. seq.), the National Park Service (36 C.F.R. §1.3 et. seq.), or military bases (18 U.S.C. §1382).
These types of non-exempted cases can be as simple as fishing with two poles or having an unleashed dog in a National Park.
This section would also enhance the efficiency of the courts by simplifying the procedure for obtaining consent from defendants charged with petty offenses. Under current law, a magistrate judge must determine whether the charge against a defendant is one of the types of cases exempted from the consent requirement. Magistrate judges report that this process can be time consuming because they often hear more than 50 petty offense cases in one day. A magistrate judge is required to admonish certain defendants that they have a right to an article III judge and others that they do not have this right. This section would simplify this confusing procedure.
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These amendments would enhance judicial efficiency by also permitting magistrate judges to preside over all misdemeanor cases, including Class A misdemeanor cases, that involve juvenile defendants, and by providing them with the authority to sentence juvenile defendants to terms of imprisonment in petty offense and misdemeanor cases.
In 1968, 18 U.S.C. §3401 was amended as part of the enactment of the Federal Magistrates Act. The new Act gave magistrate judges ''jurisdiction to try persons accused of, and sentence persons convicted of, minor offenses committed within that judicial district.'' 18 U.S.C. §3401(a) (1970). The term ''minor offenses'' was defined as ''misdemeanors punishable under the laws of the United States, the penalty for which does not exceed imprisonment for a period of one year, or a fine of not more than $1,000, or both. . . .'' 18 U.S.C. §3401(f) (1970). Section 3401 did not distinguish juvenile defendants or youth offenders. At that time, however, the Juvenile Delinquency Act, 18 U.S.C. §5031 ET SEQ., gave jurisdiction over juvenile defendants exclusively to Article III judges.
The federal courts have now had more than 25 years of experience with the federal magistrate judges system. Magistrate judges now try and sentence almost all adult federal misdemeanor defendants. In Class B misdemeanors involving a motor vehicle offense, Class C misdemeanors, and infractions, the requirement that a defendant, either adult or juvenile, must consent to the jurisdiction of a magistrate judge has been eliminated. See Federal Courts Improvement Act of 1996, Pub. L. No. 104317, 110 Stat. 3847 (October 19, 1996). Moreover, with the 1984 enactment of the Bail Reform Act, 18 U.S.C. §3141 et seq., magistrate judges began exercising broad authority to order the pretrial detention of criminal defendants, sometimes for extended periods of time.
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Under the Juvenile Delinquency Act, magistrate judges have the authority to detain juvenile defendants before trial. See 18 U.S.C. §5034 and 5035. This results in a curious paradox: magistrate judges may order the pretrial detention of juvenile defendants who have committed felonies, yet are forbidden to sentence a juvenile to even a minimal prison sentence for committing a petty offense. Under the current system, magistrate judges may not even punish a juvenile defendant who violates a probation or a supervised release term, except to impose an additional term of probation or supervised release. Under these circumstances, it is appropriate to give magistrate judges the authority to impose sentences of imprisonment upon juvenile defendants in misdemeanor cases.
Section 308Place of Holding Court in the Eastern District of Texas
This amendment would implement the March 1991 Judicial Conference proposal to designate Plano, Texas as a place of holding court in the Eastern District of Texas. In addition, the provision clarifies that court for the Eastern District of Texas and the Western District of Arkansas may be held anywhere in the Federal Courthouse which sits astride the Texas-Arkansas state line.
Section 309Federal Substance Abuse Treatment Program Reauthorization
The Federal Substance Abuse Treatment program was created in the Contract Services for Drug Dependent Federal Offenders Treatment Act of 1978 (Pub. L. No. 95537, October 27, 1978). The proposal in section 103 would reauthorize appropriations for Fiscal Year 1998 and subsequent years ''such sums as may be necessary to carry out'' the drug and alcohol aftercare program for federal offenders administered by the Federal Corrections and Supervision Division of the Administrative Office of the United States Courts pursuant to the authority granted the Director of the Administrative Office under 18 U.S.C. §3672.
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This amendment would eliminate the necessity for repetitive enactment of bills to reauthorize appropriations for this important program in favor of a permanent reauthorization. The program has operated under the judiciary appropriations bill without a reauthorization in Fiscal Years 1993, 1994, 1995, 1996, and 1997.
Section 311Membership in Circuit Judicial Councils
This section amends section 332(a) of title 28, United States Code, to enhance judge participation in the federal judiciary's internal governance process at the regional (i.e., judicial circuit) level. The Judicial Conference requests this legislation in accordance with Recommendation 50 of the Long Range Plan for the Federal Courts, which encourages ''broad, meaningful participation of judges in governance activities at all levels'' and specifically identifies the need to: (1) equalize the representation of circuit judges and district judges on circuit judicial councils (Implementation Strategy 50a(2)); and (2) establish the eligibility of senior circuit and district judges to serve as members of those councils (Implementation Strategy 50b(3)).
Title IVJUDICIARY PERSONNEL ADMINISTRATION, BENEFITS, AND
Section 401Judicial Retirement Matters
Federal circuit and district judges may serve for life and are entitled to their compensation for life. This Constitutional arrangement insulates the judiciary from any form of political pressure. But an inequity exists for those who become federal judges before age 50. Under present law, life-tenured judges may not retire from regular active service or take senior status until they reach age 65 with a minimum 15 years in service. This requirement is commonly known as the ''rule of 80'' because its age and service requirements must add up to 80.
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Section 401 modifies the ''rule of 80'' to permit a judge with 20 years in service who has reached age 60 to take senior status. This modification would not affect the requirements for a judge to retire from office. The minimum age for a judge's retirement to vest would remain age
65 with at least 15 years of service. Section 401 applies only to transfers to senior status.
It seems to us unfair that a judge who serves on the bench for many years but must leave the judiciary prior too the time he or she reaches age 65 would have no vested interest in any retirement income and would receive nothing in the way of benefits from those years that he or she served. Judges are alone among Federal employees in this respect.
Revision of the current ''rule of 80'' would also increase the flexibility of the judiciary and Congress in dealing with periodic imbalances of caseloads by increasing the numbers of senior judges who are readily available to accept temporary reassignment to other courts. By definition, senior judges are very experienced members of the court and a valuable resource. Senior judges can be assigned to sit on a court where there are special problems that can be solved by the immediate availability of a seasoned judge, such as emergencies caused by illness or districts with persistent unfilled judicial vacancies and significant case backlogs. The judiciary is constantly seeking ways to handle its caseloads more efficiently, and a greater pool of senior judges is one way to add resources without changing the total number of judgeships authorized by law.
A judge who takes senior status continues to receive the salary of the office and continues to perform judicial duties. In order to continue receiving the full salary of the office, which includes adjustments to salary that are not cost-of-living adjustments, a senior judge must perform judicial duties equivalent to at least 25 percent of the workload of an average active judge. The vast majority of senior judges choose to provide valuable and irreplaceable service. For the 12 month period ending September 30, 1995, senior judges accounted for about 17 percent of all appellate participations and about 19 percent of all trials. These totals are equivalent to the annual services of almost 100 active judges.
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Section 402Disability Retirement and Cost-of-Living Adjustment of Annuities for Territorial Judges
Section 402 provides parity for the four territorial judges by giving them similar retirement benefits to those of bankruptcy judges, magistrate judges, and Court of Federal Claims judges.
Currently, the judges of the district courts in Guam, the Northern Mariana Islands, and the Virgin Islands are nominated by the President and, after confirmation by the Senate, serve for 10-year terms. Since these judges do not enjoy lifetime tenure and salary protection under Article III of the Constitution, they are not ''judges of the United States' eligible to retire under sections 371 and 372 of title 28, United States Code. Instead, their retirement rights and benefits are set forth in section 373 of that title.
A territorial district judge may retire from office (a) after meeting the same ''Rule of 80'' age and service requirements applicable to Article III judged, (b) if removed by the President solely on grounds of mental or physical disability after serving at least 10 years, or (c) if not reappointed at the end of a term. An annuity equal to the pre-retirement salary (prorated, in cases of disability or failure of reappointment, for judges with less than 15 years of service) is payable beginning at the time of retirement or upon attaining age 65, whichever is later. For judges who retire under the ''Rule of 80,'' the annuity is subject to the same cost-of-living adjustment as annuities payable under the Civil Service Retirement System, provided that such adjustment cannot result in a total annuity greater than 95 percent of an Article III district judge's salary.
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In two key respects, the retirement arrangements for territorial district judges under section 373 compare unfavorably with analogous arrangement for bankruptcy judges, magistrate judges, and judges of the Court of Federal Claims (see 28 U.S.C. §178;377): (1) territorial judges cannot retire on disability grounds before completing 10 years of service (as compared with 5 years for other non-Article III judges) and, even then, no annuity is payable until age 65 (no age restriction for other judges);(see footnote 3) and (2) territorial judges are not afforded cost-of-living adjustments in their retirement annuities unless they retire under the ''rule of 80'' (i.e., no adjustment for disabled judges or judges who are not reappointed), and even then, any adjustment must wait until active judge salaries have increased to the point that the retired judge's annuity is less than 95 percent of an active judge's salary.(see footnote 4)
Section 403Federal Judicial Center Personnel Matters
This provision corrects an inequity which exists between the Federal Judicial Center and every other agency of the government, including the Administrative Office of the United States Courts. The Center's 1967 statute limits maximum compensation of Center staff (other than the Director and Deputy Director) to that equal to Executive Schedule level V. Although the Center for most of its history was essentially at statutory parity with the Administrative Office, changes to the Administrative Office personnel statute have placed the Center at a recruitment disadvantage with respect to the Administrative Office, as well as the Executive Branch. Authorizing Executive Schedule level IV compensation for five percent of the Center's staff could reach up to eight persons, but the Center intends to use this authority only for its five division directors. The Center is fully prepared to absorb the very modest cost increment. The Board of the Federal Judicial Center has approved the amendment.
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Section 404Judicial Administrative Officials Retirement Matters
Section 404 provides for a greater degree of equity and parity in crediting prior service in the Legislative Branch for purposes of retirement by the Director of the Administrative Office, the Director of the Federal Judicial Center and the Administrative Assistant to the Chief Justice. These officials currently may receive a maximum of five years of retirement credit for prior service in any civilian presidential appointment in the Executive Branch requiring Senate confirmation, but they may receive credit for prior service in the Legislative Branch only as a Member of Congress.
Section 404 allows credit for prior Legislative Branch service of a comparable rank and responsibility to the Executive Branch service that is currently creditable. Credit would be allowed to a primary administrative assistant to a Member of Congress or as staff director or chief counsel for a committee or subcommittee. Although section 404 limits congressional service credit to high-level positions, it further requires that the person serving in the position have served in that capacity for at least five years or at a salary that is within the top 10 percent of salaries for congressional staff at the time of the service. This provision passed the Senate in 1992 as part of S. 1569, the ''Federal Courts Study Committee Implementation Act of 1991.''
Section 406Exemption From Jury Service
Section 406 amends the Jury Selection and Service Act of 1968 to eliminate an automatic exemption from jury service for the following categories of persons: (1) members of state or local fire or police departments and (2) ''public officers'' of federal and state governments.(see footnote 5) Experience has shown that many individuals who fall within the scope of the exemptions could easily serve, such as police officers or fire fighters who work only 20 hours a week. In addition, the definition of ''public officer'' at 28 U.S.C. §1869(i) includes any person elected to public office or one directly appointed by an elected official. Under existing law, federal courts have to bar from service elected school board officials and state legislators who perform their public service only sporadically, as well as secretaries and clerks appointed by locally-elected magistrates and justices of the peace. These citizens may not serve even if they wish to do so. Section 406 would allow these ''public officials'' to be treated like other citizens regarding federal jury service.
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Section 407Expanded Workers' Compensation Coverage for Jurors
Section 407 extends Federal Employees' Compensation Act (FECA) coverage (workers' compensation) to persons summoned for jury duty in the federal courts, while they are traveling to or from court. Although claims by commuting jurors have not arisen frequently, they do occur. The Department of Labor, which administers FECA, denied compensation to a special grand juror in the District of Maryland who was injured while en route from her home to the courthouse.(see footnote 6) Although it is unknown whether the individual in that case had insurance protection, some jurors may well be financially unprotected while traveling to and from the court.
Jurors appear in court under compulsion of law; they are not free to decline to come to court at the time and place directed. The fact that they might have to travel a long distanceoften across an entire judicial districtor suffer significant inconvenience in so doing does not relieve them of this legal obligation. Additionally, while regular employees must bear their own travel costs, the Jury Act at section 1871(c) provides that jurors shall receive mileage reimbursement for their expenses of commuting to and from the courthouse, as well as reimbursement of toll charges and (in the discretion of the court) parking expenses. Thus, as a matter of law, the Jury Act can be viewed as providing that jury service begins ''when a juror steps out of his or her door.'' Statutory consistency suggests that FECA coverage be in accord.
The number of occasions on which FECA claims will be filed by commuting jurors cannot be estimated with any precision, but the number will be small. The dollar value of benefits provided by the Labor Department in FECA claim awards likewise will be insignificant because the Jury Act at section 1877(b)(1) deems jurors to be paid at the rate of GS2 of the General Schedule.
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Section 408Property Damage, Theft, and Loss Claims of Jurors
Section 408 authorizes the Director of the Administrative Office of the United States Courts to compensate jurors and prospective jurors for their personal property when it is lost or damaged during their official service. At present, the only means available to compensate jurors for personal property that may be damaged, lost, or stolen in the course of their official service is an administrative claim under the Federal Tort Claims Act,(see footnote 7) which requires the head of an agency to find that some agency employee negligently caused the loss. Evidence of such negligence is almost always speculative, or nonexistent, compounding the time it takes to conduct any kind of investigation. Furthermore, it is often unclear to which agency's employee the supposed negligence should be attributedfor example, the court, the United States Marshal, or the General Services Administration. The items lost by jurors tend to be everyday things such as overcoats, wallets, and pocketbooks. Considering the importance of jurors to the functioning of the court system and the burden of service they assume, it is in the interest of the United States to establish a fast, effective means of compensating them for these losses in appropriate circumstances.
This amendment grants the Director authority equivalent to that by which federal employees may be compensated under the Military Personnel and Civilian Employees' Claims Act.(see footnote 8) That statute does not require a finding of negligence; it simply requires a determination that the claimant was not at fault. Extension of this authority is consistent with the provision of other employee-like benefits and protection to jurors in recognition of the value of their public servicefor example, travel expenses and subsistence allowances,(see footnote 9) and on-the-job injury benefits under the Federal Employees' Compensation Act.(see footnote 10) The cost of paying claims under this amendment is likely to be negligible.
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Section 409Annual Leave Limit for Court Unit Executives
This amendment permits the Judicial Conference to designate certain positions within the judiciary as ''court unit executive positions'' for purposes of permitting those officials to accumulate and carry over up to 90 days of annual leave from one year to the next. At present, the Leave Act(see footnote 11) prohibits these court officials from carrying over more than 30 days of leave. In contrast, senior executives in the Executive Branch and Administrative Office may carry over up to 90 days of annual leave from year-to-year. Thus, this change will enable the courts to remain competitive with other government agencies in hiring and retaining top executives.
We anticipate that this provision will affect approximately 370 officials, including circuit executives, clerks of courts of appeals, district court clerks, district court executives, bankruptcy court clerks, clerk of the Court of International Trade, clerk of the United States Court of Federal Claims, chief probation officers, chief pretrial services officers, senior staff attorneys, chief preargument attorneys, bankruptcy administrators, and circuit librarians.
Title VCRIMINAL JUSTICE AMENDMENTS
The Criminal Justice Act (CJA) is the means by which this nation fulfills the promise of the Sixth Amendment that every person accused of a crime shall have the assistance of counsel for his or her defense. Public confidence in the federal criminal justice system is based in large part on the assumption that no person will be deprived of life or liberty without the opportunity for an advocate to ensure effective representation. The CJA is built upon the fundamental principle that the determination of an accused's guilt or innocence should not be affected by the person's financial status.
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In the Judicial Improvements Act of 1990 (Pub. L. No. 101650), the Congress directed the Judicial Conference of the United States to conduct a comprehensive study to assess the effectiveness of the federal defender program. The Judicial Conference concluded, in a report submitted to the House and Senate Judiciary Committees in March 1993, that:
The Criminal Justice Act has been a major success in carrying out the mandate of the Sixth Amendment of the United States Constitution and the policy of the Congress to provide effective assistance of counsel to all criminal defendants in the federal courts who are financially unable to retain their own attorney.(see footnote 12)
While recognizing the success of the CJA throughout its 31-year history, the Judicial Conference looked forward to identify means to improve the operation of the CJA to meet the needs of the evolving federal criminal justice system. The improvements to the CJA program proposed in H.R. 2294 are largely based upon the recommendations contained in the 1993 Judicial Conference Report. These measures would increase the efficiency and effectiveness of the CJA program. They are designed to ensure the high quality of legal representation, to compensate fairly the attorneys who furnish those representational services, and to reduce the administrative burden on the courts.
Section 501Maximum Amounts of Compensation for Attorneys
This section would increase the case compensation maximum amounts for attorneys by approximately the rate of inflation since 1986 (43.3%), the last year case compensation maximums were increased. In 1986, recognizing that approval of vouchers in excess of the case compensation maximums was a significant administrative burden on the chief judges of the courts of appeals, Congress amended the Criminal Justice Act to authorize the chief judge to delegate voucher approval authority to another active judge of the court of appeals (18 U.S.C. §3006A(d)(3).) Over the past decade, inflation has significantly eroded the level of the case compensation maximums for appointed counsel. In addition, the Sentencing Guidelines have been implemented, which has further increased the amount of work required for representation in each case. As a result, in many districts, particularly those districts for which higher rates of compensation have been established (up to $75 per hour, compared to the $60/$40 in-court/out-of-court rates prevailing in 1986), a much greater proportion of cases involve compensation in excess of the statutory maximum amounts. This has again substantially increased the administrative burden to review claims for excess compensation.
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This section also would change the case compensation maximum applicable to counsel representing non-capital habeas corpus petitioners. The appointment of counsel to represent a non-capital habeas corpus petitioner is not mandatory; it is within the discretion of the presiding judicial officer based upon a determination that ''the interests of justice so require.'' (18 U.S.C. §3006A(a)(2)(B).) Those non-capital habeas corpus cases which merit the appointment of counsel generally have significant issues that warrant compensation greater than the $750 currently authorized by the Criminal Justice Act. Because the collateral representation is often as difficult as that provided in directly defending against a felony prosecution, the compensation for counsel in non-capital habeas corpus matters should be governed by the limits applicable to felonies (currently $3,500 in the district court and $2,500 in the court of appeals, but proposed in this section to increase to $5,000 and $3,600, respectively). It is not anticipated that the proposed amendment would have a significant budgetary impact because the chief judges of the courts of appeals (or their designees) have the authority to approve compensation in excess of the statutory limits in appropriate cases.
Section 502Maximum Amounts of Compensation for Services Other Than Counsel
This section, as with the previous section relating to compensation of appointed counsel, would increase the compensation maximums of investigators, experts, and other service providers by approximately the rate of inflation since 1986 (43.3%), the last year case compensation maximums were increased. The Criminal Justice Act Revision of 1986 increased from $150 to $300 the amount which could be expended for investigative, expert, and other services without prior judicial approval, and increased from $300 to $1,000 the amount which could be expended for such services without the approval of the chief judge of the court of appeals or an active judge of the court of appeals to whom the chief judge has delegated this authority. (18 U.S.C. §3006A(e).) The costs of professional fees have risen substantially since that time, resulting in a greater percentage of compensation vouchers being submitted to the chief judges of the courts of appeals or their designees for review, increasing the administrative burden of judicial officers. It is not anticipated that the proposed amendment would have a significant budgetary impact because the chief judges of the courts of appeals (or their designees) have the authority to approve compensation in excess of the statutory limits in appropriate cases.
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Section 503Federal Tort Claim Act Amendment
In amending the Federal Tort Claims Act (FTCA) in 1988, Congress appears to have inadvertently included federal public defenders within the FTCA, negating the 1986 amendment to the CJA authorizing the Director of the Administrative Office to provide representation. Currently, when a malpractice complaint is filed against a federal public defender employee, the Administrative Office notifies the Department of Justice and the Department, in turn, arranges for counsel to provide representation. This puts the Department of Justice in the position of representing the interest of a federal public defender employee who is the courtroom adversary of the United States attorney. Although the Department can take steps to insulate the attorney who represents the federal public defender from those attorneys who prosecute defendants represented by the defender, doing so imposes an administrative burden on the Department.
This difficulty can be avoided by removing federal public defenders from the scope of the FTCA and restoring the CJA's authorization for representation by the Director of the Administrative Office.
The amendment in section 503 would exempt federal public defender organization officers and employees from the Federal Tort Claims Act for claims related to representational services and rely instead on the malpractice provision specifically added to the CJA in 1986 to respond to such claims. 18 U.S.C. §3006A(g)(3). This would simplify the provision of representation to federal public defender employees and avoid creating unnecessary conflicts of interest for the United States attorney and the federal public defender.
Page 72 PREV PAGE TOP OF DOC Based upon experience in providing representation to federal public defenders prior to their inclusion under the Federal Tort Claims Act, pursuant to the 1988 amendment to that Act (Pub. L. No. 100604), we anticipate that the costs of this provision would not exceed $50,000 annually and would probably be substantially less. These costs would be offset by reductions in the cost of representation provided by the Department of Justice.
Through the cooperative efforts of the courts, federal defenders, and private defense attorneys, the Defender Services program has secured for defendants in the federal courts the legal services essential to guard the basic rights of a fair trial guaranteed by the Constitution. Our system of justice is held forth as the model for the free world because no one may be convicted without the assistance of an attorney to test the evidence and to ensure due process. The improvements proposed in this bill would greatly assist the judiciary in its efforts to provide for eligible defendants this fundamental requirement of effective assistance of counsel.
SEC. . PAYMENTS TO MILITARY SURVIVORS BENEFITS PLAN
Section 371 of title 28, United States Code, is amended as follows (new language is italicized):
§371. Retirement on salary; retirement in senior status
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(e) Notwithstanding subsection (c) of section 5532 of title 5, if a regular or reserve member or former member of a uniformed service who is receiving retired or retainer pay becomes employed as a justice or judge of the United States, as defined by section 451, or becomes eligible therefor while so employed, such retired or retainer pay except such as is deductible from the retired or retainer pay as a result of participation in any survivor's benefits plan in connection with the retired pay, shall not be paid during regular active service as a justice or judge, but shall be resumed or commenced without reduction upon retirement from the judicial office or from regular active service (into senior status) as such justice or judge.
This section addresses an inequity in the treatment of regular active Article III judges who are military retirees. These judges, unlike other former military retirees employed by the federal government, do not have contributions made to the Military Survivor Benefit Plan (MSBP) on their behalf from the military retirement fund, as is provided under the Dual Compensation Act. 5 U.S.C. §5532(c)(2)(B). This amendment corrects this inequity by entitling Article III judges to have contributions made to the MSBP on their behalf from the military retirement fund even though they are ineligible to receive retired pay from that fund while in regular active service.
In pertinent part, section 371(e) of title 28 states that ''[n]otwithstanding subsection (c) of section 5532 of title 5, United States Code, retired pay for a former member of a uniformed service who . . . becomes employed as a justice or judge of the United States . . . shall not be paid during regular active service as a justice or judge but shall be resumed or commenced without reduction upon retirement from the judicial office or from regular active service (into senior status).'' See Pub. L. No. 100702, Sec. 1005, 102 Stat. 4666 (1988). Before this provision was enacted, the retired pay of all military retirees in federal civilian service (including Article III judges) was subject to reduction in accordance with the offset requirements of the Dual Compensation Act. 5 U.S.C. §5532(b), (c). Under that statute, the military retired pay due a federal employee whose salary equals or exceeds Level V of the Executive Schedule (currently $108,200 per annum) is reduced to zero, with the amount otherwise payable transferred to the general fund of the Treasury, except that the retired pay cannot be ''reduced to an amount less than the amount deducted . . . as a result of participation in any survivor's benefits in connection with the retired or retainer pay or veterans insurance programs.'' 5 U.S.C. §5532(c)(2)(B). Based on that exception, contributions to the MSBP or similar survivor benefits plans are subtracted from an individual's retired pay before the balance is returned to the Treasury. As a result, most military retirees employed by the federal government are still generally entitled to have their survivor benefit contributions paid from the military retirement fund even though they cannot receive any money directly from that fund.
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In contrast, the Comptroller General has construed section 371(e) to require Article III judges to make contributions directly to the Survivor Benefit Plan until they retire from the judicial office or take senior status. Matter of Major General Ira Dement III, USAFR (Retired), B252391 (Comp. Gen. Oct. 22, 1993) (holding that 28 U.S.C. §371(e) removed retired pay received by judges from the coverage of 5 U.S.C. §5532, with the result that the limit on reductions to military pay in section 5532(c)(2)(B) is no longer available). This amendment corrects this outcome and provides for parity in the treatment of military retirees.
Proposed language to amend title 28 of the United States Code to permit the appointment of disbursing and certifying officers in the judicial branch of the United States Government.
SEC. . CREATION OF CERTIFYING OFFICERS IN THE JUDICIAL BRANCH
A bill to amend title 28 of the United States Code to permit the appointment of disbursing and certifying officers in the judicial branch of the United States Government, and for other purposes.
Section 1. Chapter 41 of title 28, United States Code, is amended by adding the following new section after section 612:
Page 75 PREV PAGE TOP OF DOC''613. Disbursing and certifying officers.
''(a) The Director may designate in writing officers and employees of the judicial branch of the United States Government, including the courts as defined in section 610 of this title but excluding the Supreme Court, to be disbursing officers in such numbers and locations as the Director considers necessary. These disbursing officers will (1) disburse moneys appropriated to the judicial branch and other funds only in strict accordance with payment requests certified by the Director or in accordance with subsection (c) of this section, (2) examine payment requests as necessary to ascertain whether they are in proper form, certified, and approved, and (3) be held accountable as provided by law. However, a disbursing officer will not be held accountable or responsible for any illegal, improper, or incorrect payment resulting from any false, inaccurate, or misleading certificate for which a certifying officer is responsible under subsection (c) of this section.
''(b)(1) The Director may designate in writing officers and employees of the judicial branch of the United States Government, including the courts as defined in section 610 of this title but excluding the Supreme Court, to certify payment requests payable from appropriations and funds. These certifying officers will be responsible and accountable for (A) the existence and correctness of the facts recited in the certificate or other request for payment or its supporting papers, (B) the legality of the proposed payment under the appropriation or fund involved, and (C) the correctness of the computations of certified payment requests.
''(2) The liability of a certifying officer will be enforced in the same manner and to the same extent as provided by law with respect to the enforcement of the liability of disbursing and other accountable officers. A certifying officer shall be required to make restitution to the United States for the amount of any illegal, improper, or incorrect payment resulting from any false, inaccurate, or misleading certificates made by the certifying officer, as well as for any payment prohibited by law or which did not represent a legal obligation under the appropriation or fund involved.
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''(d) A certifying or disbursing officer (1) has the right to apply for and obtain a decision by the Comptroller General on any question of law involved in a payment request presented for certification and (2) is entitled to relief from liability arising under this section in accordance with title 31 of the United States Code.
''(e) Nothing in this section affects the authority of the courts with respect to moneys deposited with the courts under chapter 129 of this title.''.
Section 2. The table of sections at the beginning of Chapter 41 of title 28, United States Code, is amended by adding the following item at the end:
''613. Disbursing and certifying officers.''.
Section 3. Paragraph (8) of subsection (a) of section 604 of title 28, United States Code, is amended to read as follows: ''Disburse appropriations and other funds for the maintenance and operation of the courts;''.
Proposed language to amend title 28 of the United States Code to permit the appointment of disbursing and certifying officers in the judicial branch of the United States Government.
The Certification Act of 1941 [31 U.S.C. 3528] was enacted to create pecuniary liability for those officers and employees in the Executive agencies whose duty it is to certify as to the propriety of a payment made through the disbursing officials. These certifying officials are assigned definite responsibilities for verifying receipt of goods or services and ensuring funds are available. Certifying officials are also held personally liable for the propriety of payments which they certified. The disbursing official only have to ensure the payment is in proper form and properly certified to avoid liability.
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There is no such statutory provision for certifying officials in the judiciary. The clerk of each court must act as disbursing official for all units of the court, including the probation office and pretrial services agency, despite being distanced from their operations and unable to rely on any binding certification of the requested payments. The proposed section 613 within title 28 U.S.C. would enable the Director of the Administrative Office of the United States Courts (AO) to appoint certifying officials in the various court units who would be responsible for the propriety of payments they request. The legislation would also enable the Director of the AO to appoint disbursing officials in the various court units who would be responsible for ensuring that payment requests are proper, certified and approved. This legislation would allow these financial duties and the corresponding accountability to be placed within the court units where the expenditures arise. It would also eliminate duplicate paper and redundant efforts in the courts, and increase operational efficiencies. This new section would bring the Judicial branch into conformity with the executive and legislative branches.
Subsection (a) authorizes the Director of the AO to designate disbursing officials for the judicial branch, except for the Supreme Court of the United States, which disburses its own funds. The subsection sets the conditions under which a disbursing official makes disbursements and requires the official to insure that payments are made in strict accord with duly certified and approved vouchers presented in proper form. The disbursing official could be relieved of personal liability where payment results from a false, inaccurate or misleading certificate for which responsibility rests upon a designated certifying official. This subsection parallels existing provisions that govern disbursing officials in the executive branch, the Library of Congress and the Government Printing Office.
Page 78 PREV PAGE TOP OF DOC Subsection (b)(1) authorizes the Director of the AO to designate certifying officials and sets forth the duties of the certifying officials. A certifying official would be held responsible for the existence and correctness of the facts presented in the certificate, the legality of the proposed payment and the correctness of the computations.
Subsection (b)(2) provides for the enforcement of personal liability of certifying officials in the judicial branch by the same means applicable to other accountable federal officials. The subsection also defines the grounds on which a certifying official may be required to make restitution to the Government.
Subsection (c) grants to certifying and disbursing officials in the judicial branch the authority to apply for and obtain, in their own name, an advance decision from the Comptroller General on any question of law involved in a payment request presented for certification or payment which will be conclusive on the accounting officials of the Government in the settlement of the accounts. This subsection is based on comparable statutory provisions respecting accountable officials in the executive and legislative branches.
Subsection (d) makes it clear that the Director's authority to designate certifying and disbursing officials does not affect the authority of the courts to order the disbursement of funds deposited into court pending the outcome of civil and criminal cases.
Section 2 amends the table of sections for title 28, United States Code, to include the new Section 613.
Section 3 amends paragraph (8) of section 604 of title 28 to eliminate the reference to the United States marshals, who no longer disburse funds on behalf of the judicial branch, and to substitute the disbursing officials to be designated under the amendment made by Section 1 of this bill. A reference is also added to the disbursement of funds other than appropriations; such funds include the offsetting fund established under 28 U.S.C. §1931 and the no-year Judiciary Information Technology Fund established under 28 U.S.C. §612, both of which receive moneys from non-appropriated sources.
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Section 613. Fee Authority for Technology Resources in the Courts
The Judicial Conference is hereby authorized to prescribe reasonable fees pursuant to sections 1913, 1914, 1926, 1930, and 1932 of this title, for collection by the courts for use of information technology resources provided by the judiciary for remote access to the courthouse by litigants and the public, to facilitate the electronic presentation of cases, and for other services which will increase the efficiency of and ease of access to the courts. All fees hereafter collected by the Judiciary under this authority shall be deposited to the Judiciary Information Technology Fund and be available to the Director without fiscal year limitation to be expended on information technology resources developed or acquired to advance the purposes set forth above.
There are a number of emerging information technologies, such as electronic filing, videoconferencing, and electronic evidence presentation devices, that will make courts more efficient and accessible to the bar and the public. These technologies may, in the future, also provide substantial savings for litigants and attorneys. In accordance with federal policy to defray the cost of providing services by assessing a fee for their use, this section provides the judiciary with the authority to set, collect, and retain fees for the use of these technologies provided by the courts. This extends the authority granted in P.L. 101515 to prescribe, collect, and retain fees for electronic public access to court records to also cover the expanding use of technologies for such purposes as facilitating remote access to the courthouse, as by videoconferencing or electronic filing, using developing technology to facilitate presentation of evidence, and facilitating public access to judicial records.
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The Judicial Conference of the United States is authorized to prescribe reasonable fees pursuant to sections 1913, 1914, 1926, 1930, and 1932 of title 28 of the United States Code, for the use of information technology resources provided by the judiciary to improve the efficiency of and access to the courts. Fees collected pursuant to this section are to be deposited into the Judiciary Information Technology Fund for reinvestment in information technology resources which will advance the purposes of this section.
SEC. . INCREASE IN FEE FOR CONVERTING A CHAPTER 7 OR CHAPTER 13 BANKRUPTCY CASE TO A CHAPTER 11 BANKRUPTCY CASE
(a) CONVERSION FEE INCREASE.Section 1930(a) of title 28, United States Code, is amended by striking ''$400'' at the end of subsection (6) and inserting in lieu thereof: ''an amount equal to the difference between the filing fee paid under the original chapter and the amount of the filing fee prescribed in Section 1930(a)(3) of title 28, for filing a case under chapter 11.
This section would make the fee for converting a chapter 7 (liquidation) or chapter 13 (individual debt adjustment) bankruptcy case to a chapter 11 (reorganization) case equal to the filing fee for a chapter 11 case. This would correct the inconsistency that occurs when a petitioner files a case under chapter 7 for an initial fee $175 or chapter 13 for an initial fee of $160 and then converts the case to a chapter 11 case for a conversion fee of $400. In those instances, the total amount paid ($575 and $560, respectively) is less than the $800 fee for originally filing a case under chapter 11.
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SEC. . INCREASE IN CHAPTER 9 BANKRUPTCY FILING FEE
(a) FILING FEE INCREASE.Section 1930(a)(2) of title 28, United States Code, is amended by striking ''$300'' and inserting in lieu thereof ''the same amount as the filing fee prescribed in Section 1930(a)(3) of title 28, for filing a case under chapter 11. Any portion of the fee exceeding $300 shall be deposited into the special fund of the Treasury established under section 1931 of title 28, United States Code.''
This section would increase the fee for filing bankruptcy petitions under chapter 9 (debt adjustment for municipalities) from $300 to the fee for filing petitions under chapter 11 (reorganization), which is $800. This increase reflects more accurately the judicial resources required to process chapter 9 cases, which are procedurally similar to chapter 11 cases. The resulting increase would be deposited into the special judiciary fund in the Treasury and would be available to offset funds that are appropriated by Congress for the operation and maintenance of the courts.
SEC. . RENUMBERING OF BANKRUPTCY COURT FEE SCHEDULE
Page 82 PREV PAGE TOP OF DOC (a) Section 404(b) of the Departments of Commerce, Justice, and State, The Judiciary, and Related Agencies Appropriations Act of 1990 (Pub. L.101162) is amended by striking ''for any service enumerated after item 18'' in the first sentence and inserting in lieu thereof the following: ''for any fee implemented after November 21, 1989''.
This section would allow for the renumbering of the Bankruptcy Fee Schedule that is required due to the repeal of outdated fees, while retaining the current revenue structure. Pursuant to Pub. L. 101162, all revenues received from fees listed below and including Item 18 of the Bankruptcy Fee Schedule are deposited into the general Treasury. Revenues received from fees above Item 18 are deposited into the special judiciary fund in the Treasury and are available to offset funds that are appropriated by Congress for the operation and maintenance of the courts. This section would continue that structure by requiring that fees established prior to the enactment of the legislation establishing the judiciary fund be deposited into the general treasury, and any fees established after that date be deposited into the judiciary fund. This would also provide flexibility in numbering of the Bankruptcy Fee Schedule and facilitate periodic review by the Judicial Conference.
SEC. . REPEAL OF SECTION 2520, COURT OF FEDERAL CLAIMS FILING FEE
Section 2520 of title 28 United States Code, is repealed.
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This section would repeal §2520 of title 28 United State Code, which provides for a filing fee for the United States Court of Federal Claims. The statute predates the Judicial Conference's authorization to establish a miscellaneous fee schedule for the Court of Federal Claims under §1926 of title 28 United States Code, and therefore is no longer necessary.
SEC. . TECHNICAL BANKRUPTCY CORRECTION
Section 1228 of title 11, United States Code, is amended by striking ''section 1222(b)(10)'' each place it appears and inserting ''section 1222(b)(9).''
Title 11, United States Code, section 1228 contains incorrect cross references to 11 U.S.C. §1222(b)(10). Those references should be to 11 U.S.C. §1222(b)(9). Section 1228 provides for the discharge of debt in chapter 12 bankruptcies. Under that provision, as soon as the debtor completes all payments under the debtor's plan, debt will generally be discharged, subject to a few, limited exceptions. One obvious exception covers certain payments that, under the plan, will necessarily extend beyond the period of the plan. It simply makes sense that, where the plan contemplates payments to be made beyond the period of the plan, the debt will not be discharged at the close of the plan period.
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The exception currently refers to subsections 1222(b)(5) and 1222(b)(10), which appear in that section of chapter 12 governing the contents of the plan. The reference to subsection 1222(b)(10) is plainly in error, however, and should be to subsection 1222(b)(9). Subsections 1222(b)(5) and 1222(b)(9) both concern debts on which payments are due following completion of the plan. Subsection 1222(b)(10), however, concerns something entirely different: the vesting of property in the debtor or another entity. The current cites to subsection 1222(b)(10) should be to 1222(b)(9). This bill corrects those errors.
Mr. COBLE. Thank you, Judge Pro.
STATEMENT OF HON. TOMMY E. MILLER, MAGISTRATE JUDGE, FEDERAL MAGISTRATE JUDGES ASSOCIATION
Mr. MILLER. On behalf of the Federal Magistrate Judges' Association, I thank you for inviting us to this hearing. I only plan to address two sections of H.R. 2294, the Federal Courts Improvement Act of 1997.
The first is section 305, which Judge Pro has already talked about briefly, dealing with magistrate judges having contempt powers. The two primary issues here: one is to allow us, as magistrate judges, to maintain control in our courtrooms. I think that the authority of criminal contempt, or the use of criminal contempt, will be rare in the courtroom, but having the power to impose criminal contempt will assist magistrate judges with problem situations that can occur in court. And the minimal penalties, 30 days in jail, $5,000 fine, are drafted so that it distinguishes the magistrate judges authority from that of the article III judges.
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Secondly, in civil cases and an example from the middle district of Florida, Mr. Canady, is that a magistrate judge was authorized to try a trademark case under 28 USC 636(c). She tried the case; issued an order; issued an injunction type relief to one of the parties. The other party violated the injunctive relief and attempted to prey on the trademark, and the magistrate judge had no authority to enforce her order toin contempt to charge the otherto compel the other party from stopping using the trademark. So, the matter was certified to a district judge. There was delay in efficiency, and in the meantime, the contemptuous party continued to use the trademark. So, in civil cases, we think that it's important for magistrate judges to be able to enforce the orders by imposing civil contempt.
Section 306 of the Federal Courts Improvement Act of 1997 addresses two issues dealing with petty offenses and misdemeanors. The first is to provide that all petty offenses may be tried before a magistrate judge without the consent of the party; that no consent is needed. At present, all class c misdemeanors, all infractions, and class b misdemeanors, which are punishable up to 6 months in jail and a $5,000 fine and, which are motor vehicle related, can be tried before a magistrate judge without the consent of the party. So, you end up with some strange situations. In my district we have many military bases. We had someone drive up to the military base, and they had an I.D. check, and the person produced a false military I.D. card and a driver's license which has been suspended. Both are punishable by up to 6 months in jail and a $5,000 fine. The driver's license violation could be tried before a magistrate judge without consent, but in the military I.D. case which is punished exactly the same, the defendant could elect to have it tried before a district judge. There are many examples such as this. It makes more sense, makes complete sense to have all petty offenses tried without consent before magistrate judges.
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In addition, in juvenile matters, we're asking that the statutes be amended to allow magistrate judges to have the same authority for juvenile defendants as they have with adult defendants; that is to be able to try all juvenile cases that are petty offense violations, and to, with the consent of the juvenile, try misdemeanor cases, other misdemeanor cases, that are punished by more than 6 months in jail. In addition, we're asking for authorization to imprison a juvenile. Juveniles, presently, if they're placed on probation by a magistrate judge, and they violate the probation, can come back before a magistrate judge for a probation violation hearing, and the magistrate judge can do nothing other than extend probation; no jail time, no otherimprisonment.
Those are the three issues that we have urged the committee to recommend favorably, and we appreciate the Judicial Conference presenting these proposals to this committee. I'd be happy to answer any questions.
[The prepared statement of Mr. Miller follows:]
PREPARED STATEMENT OF HON. TOMMY E. MILLER, MAGISTRATE JUDGE, FEDERAL MAGISTRATE JUDGES ASSOCIATION
Mr. Chairman, and Members of the Subcommittee, I am Tommy Miller, United States Magistrate Judge for the United States District Court for the Eastern District of Virginia. I am the President of the Federal Magistrate Judges Association. The FMJA is a professional organization exclusively for United States Magistrate Judges. The vast majority of United States Magistrate Judges are members of this voluntary organization. The FMJA thanks you for the opportunity to make this presentation. Our organization believes that enactment of Sections 305 and 306 of H.R. 2294 will substantially improve the ability of Magistrate Judges to perform their functions and to assist in the administration of justice.
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The Judicial Conference of the United States fully supports Sections 305 and 306 of H.R. 2294. The FMJA appreciates the Judicial Conference's endorsement of these changes.
SECTION 305 MAGISTRATE JUDGE CONTEMPT AUTHORITY
Under the present law a Magistrate Judge has no power to punish for contempt, either civil or criminal. See 28 U.S.C. §636(e). When contumacious behavior occurs, a Magistrate Judge currently is required to certify the facts of the person's conduct to a District Judge before whom the person is required to show cause why that person should not be held in contempt of court. The District Judge then hears evidence and determines if the person is in contempt and may impose punishment.
There are two major deficiencies in this process. The first is that this complicated process does not address the situation where a party, lawyer, witness, or spectator to the proceeding engages in such misbehavior that the actions obstruct the administration of justice and the proceedings before the Magistrate Judge. The second arises in civil consent cases where a Magistrate Judge presides over the entire case, including entry of judgment pursuant to 28 U.S.C. §636(c). If a party seeks to enforce the judgment through contempt, the Magistrate Judge, who is the Judge most familiar with the case, cannot decide if the conduct by the disobeying party is a violation of the Court's order, but is required to certify the facts to a District Judge who is likely to be completely unfamiliar with the case.
Page 88 PREV PAGE TOP OF DOCCriminal Contempt
Subsections (2), (3) and (5) of Section 305 provide for criminal contempt authority with limited penalties. Under these provisions the maximum penalties that a Magistrate Judge could impose for criminal contempt can not exceed the penalties for a Class C misdemeanor, 30 days in jail and a $5,000 fine. Congress already has authorized Magistrate Judges to impose sentences of up to 30 days in jail and a $5,000 fine without the consent of a party and in some cases up to six months and a $5,000 fine in some petty offense cases without consent. 18 U.S.C. §3401 (b) and (g).
Under these provisions, the instances where a Magistrate Judge could use criminal contempt authority are limited. Under Subsection (2), a Magistrate Judge could summarily impose a penalty for misbehavior occurring in the presence of the Magistrate Judge if it constitutes obstruction of justice. Under Subsection (3), a Magistrate Judge could impose criminal contempt penalties in civil cases where the Magistrate Judge presides with the consent of the parties, or in any misdemeanor case where the criminal contempt constitutes disobedience of the Judge's orders. Criminal contempt proceedings in these cases must be conducted after notice and hearing pursuant to Federal Rule of Criminal Procedure 42(b).
These criminal contempt provisions will improve Magistrate Judges' ability to maintain order in the courtroom and to obtain compliance with the orders of the District Court.
Subsection (4) of Section 305 provides for civil contempt authority in civil consent and misdemeanor cases. When a Magistrate Judge disposes of a case pursuant to 28 U.S.C. §636(c), the Magistrate Judge exercises all the authority of the District Court except for the power to impose civil contempt to enforce the orders of the court. A waste of judicial resources occurs under the present system because a District Court Judge must enforce the orders of a Magistrate Judge in 28 U.S.C. §636(c) cases or in misdemeanor or petty offense cases.
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The Judicial Conference has taken the position that a District Judge's involvement with a civil consent case should end when the case is assigned with the litigant's consent to the Magistrate Judge for adjudication. Congress agreed with this position last year when it determined that the only appeal route in a civil consent case is to the circuit court of appeals. Logically, it follows that a Magistrate Judge should have the power of contempt to enforce the orders which the parties themselves have consented to have the Magistrate Judge enter.
Subsection (6) of Section 305 permits certification of contempt to a District Judge if the criminal contempt is so serious that the Magistrate Judge believes that the limited criminal penalties permitted in Subsection (5) are inappropriate for the conduct. In addition, if the misbehavior occurs outside the presence of the Magistrate Judge or if it is civil contempt that is not within the parameters of Subsection (4), then the Magistrate Judge will certify the facts to a District Judge and direct the person to appear on a date certain to show cause why the District Judge should not impose contempt upon the person. This provision allows the District Judge to continue to supervise contempt matters that are so serious that a Class C misdemeanor punishment is insufficient, and in other contempts not covered by Subsections (2), (3), and (4).
Section 305 provides the Magistrate Judge with the authority needed to effectively conduct the business of the District Court.
SECTION 306 CONSENT TO MAGISTRATE JUDGE AUTHORITY IN PETTY OFFENSE CASES AND MAGISTRATE JUDGE AUTHORITY IN MISDEMEANOR CASES INVOLVING JUVENILE DEFENDANTS
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The Federal Courts Improvement Act of 1996 recognized that there is no constitutional requirement that defendants consent to proceed before a Magistrate Judge in petty offenses cases (offenses for which the punishment is no greater than six months in jail and a $5,000 fine). Congress amended Title 18 Sections 3401 (b) and (g) so that consent need not be obtained in a petty offense charging a motor vehicle offense, in a Class C misdemeanor, or in an infraction.
The 1996 amendments were a step in the right direction but did not go far enough. There are many petty offense cases that proceed before Magistrate Judges where the offense does not involve a motor vehicle. Often on the same misdemeanor dockets are motor vehicle related petty offenses that proceed without consent before a Magistrate Judge and other petty offenses that require the consent of the defendant before they can proceed before a Magistrate Judge. Sometimes the same defendant is charged with both types of petty offenses.
The practical problems of explaining the different consent provisions and the confusion to defendants resulting therefrom have been noticeable. In order to increase efficiency, the FMJA urges the adoption of the provisions in Section 306 that remove the necessity for consent to be obtained from a defendant in all petty offense cases. A common example of this confusion arises when a defendant has two petty offense charges, one of which requires the defendant to consent to proceed before a United States Magistrate Judge and another which requires no consent. A defendant may be charged with trespassing and drunk driving in a national park. The defendant is required to proceed to trial before a Magistrate Judge on the drunk driving charge, but may elect to be tried before a District Judge on the trespassing charge even though the charge arose out of the same fact situation. Each of the offenses in a national park carries the same maximum penaltysix months in jail and a $5,000 fine.
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In order to maximize the effectiveness of Magistrate Judges in disposing of the nearly 70,000 petty offense cases a year, the FMJA advocates the elimination of the consent requirement in all petty offense cases.
The remaining provisions of Section 306 relate to juvenile defendants. The amendments to 18 U.S.C. §3401(g) provide that a Magistrate Judge could, without the need for consent, exercise all the powers of the District Court in petty offense cases involving juveniles. In addition, the Magistrate Judge, with the consent of the juvenile, could exercise all powers of the district court in misdemeanor cases other than petty offense cases. And finally, the Magistrate Judge could impose a term of imprisonment in a juvenile case.
Since the vast majority of misdemeanor cases are heard and decided by Magistrate Judges, these amendments enable Magistrate Judges to try juvenile defendants in the regular handling of misdemeanor matters that arise out of a federal enclave.
We believe that these minor amendments would expedite justice for juveniles and their victims.
On behalf of the Federal Magistrate Judges Association, I wish to thank the Subcommittee for allowing the Association to appear at this hearing and to comment upon these issues. I will be happy to answer any questions that the Subcommittee may have.
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SECTION 305 MAGISTRATE JUDGE CONTEMPT AUTHORITY
|Tommy E. Miller, President,|
|Federal Magistrate Judges Association.|
The Federal Magistrate Judges Association supports Subsections (2), (3) and (5) of Section 305 which provide for criminal contempt authority for Magistrate Judges with limited penalties. These provisions will improve the Magistrate Judge's ability to maintain order in the courtroom and to obtain compliance with orders of the District Court.
We also support Subsection (4) which provides for civil contempt authority in civil consent and misdemeanor cases. This provision would allow a Magistrate Judge to enforce the Judges' own orders.
SECTION 306 CONSENT TO MAGISTRATE JUDGE AUTHORITY IN PETTY OFFENSE CASES AND MAGISTRATE JUDGE AUTHORITY IN MISDEMEANOR CASES INVOLVING JUVENILE DEFENDANTS
The FMJA supports the elimination of the consent requirement in all petty offense case.
The FMJA also supports the proposed amendments that would permit Magistrate Judges to exercise full authority over juveniles charged with petty offenses, as well as, with the consent of the juvenile, in Class A misdemeanors.
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|Tommy E. Miller, President,|
|Federal Magistrate Judges Association.|
Mr. COBLE. Thank you, Judge Miller.
Judge Hornby, in your testimony, your opposition to the bill is based in part on the assumption that requiring all litigants to go through an arbitration process prior to trial might well add to the cost and delay to civil litigation. The bill does not require the courts to mandate participation. Does your position as to the overall cost take into account the number of cases to be resolved by such a program?
Mr. HORNBY. We think the voluntary programs work well, Mr. Chair, and do reduce cost and delay. Our concern is where the courts make it mandatory. There are some cases that simply aren't fit for arbitration and may result in a hinderance and, thereby, and increased cost to the ultimate resolution, so the Conference's position is that voluntary participation works very well; is well supported, and so we would encourage the committee to authorizeif you seek to do somethingto authorize a variety of programs and voluntary programs, and we would fully support that, and let me just say, I would be happy to work with you and your staff along those lines. I appreciate the comments the Justice Department made. I'd urge you not even to focus on mediation and arbitration alone, but even broaden it beyond that.
Mr. COBLE. Thank you, judge.
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I understand, gentlemen, that there is some resistance within the entire Judicial Conference to requiring every district to establish mandatory programs. Do you all agree that the 20 existing programswhich, incidentally, we just reauthorizedhave been quite successful? And if you do agree with that, doesn't this success support the argument for us to extend the program nationally?
Mr. PRO. Mr. Chairman, if I could, perhaps, pick up on that. I think that the success that has been had with the 20 projects does send a very loud message, and it is an important one to all of us in the courts, and it's the type of thing, I think, as was stressed by the representative of the Department of Justice and by Judge Hornby, flexibility is perhaps the key. Districts are different; the local culture of the Bar is different. For example, in the district of Nevada, particularly in Las Vegas, we've had a State mandatory arbitration program which the Bar has had great difficulty with, and our Civil Justice Reform Act committee has recommended against an arbitration, ADR program in the U.S. district court for the district of Nevada, but instead, has touched upon and recommended that we employ, and, in fact, we've started an early neutral evaluation program. It's a different form of ADR, so I think that a variety of forms of ADR are very useful. I think that these experiences we've seen nationwide tell us that, but I think they also tell that we need to retain the flexibility to employ ADR programs that are broad ranging; that allow each district the flexibility to fit the needs of their particular district which are going to be different in Florida or Nevada or North Carolina as the case may be.
Mr. COBLE. Judge Miller, do you want to be heard on that?
Page 95 PREV PAGE TOP OF DOC Mr. MILLER. Just to follow something that Judge Hornby said. I am from the eastern district of Virginia which he referred to as the ''Rocket Docket.'' We do not have any mandatory or formal ADR programs. We have early judicial intervention and management of cases. We set trial dates very early; very soon after the answer is filed, we set a trial date within 6 months, and we try the case. We have informal ADR methods. Magistrate judges are available in all four of our divisions to handle settlement conferences, and if we see a case anywhere along the line that we think a settlement conference is appropriate or other types of ADR methods, we jump in and do it, but we don't have a formal local rule, and we don't have any formal program, and I think that emphasizes what both Judge Pro and Judge Hornby have said, you need flexibility.
Mr. COBLE. Judge Hornby, do you want to add to that or concur?
Mr. HORNBY. I think I will just concur. Thank you, Mr. Chairman.
Mr. COBLE. Thank you, gentlemen. The gentleman from Florida, Mr. Canady.
Mr. CANADY. Thank you, Mr. Chairman. Judge Hornby, in your statement you mentioned the potential future development of a national process to develop consistency throughout the Nation, and that's relevant to what we've been talking about here. Do you see any virtue in the Judicial Conference moving forward with something that would develop more consistency throughout the Nation or do you think that we should basically continue as we are now?
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Mr. HORNBY. I want to answer yes to both sides of that question, Congressman Canady, and let me explain why. This is still a very new development in the scheme of judicial things. The ADR movement, as it's sometimes called, is only about 20 years old, and we're still learning a lot as we go. There are the studies that were done by the Federal Judicial Center, the Rand Corporation, and a lot of individual studies, and so we're learning new things and new programs as we go along, so there's virtue right now in having individual variation and flexibility, but as principles emerge, I believe that the national process ought to be available so that there can be systematic, then, attention across the country.
That's why I encourage Congress not to do this through the local rule that gives each district almost legislative authority that then can't be altered by the National Rules Committee under the Rules Enabling Act. If you're going to do something here, I encourage you, authorize the programs, but then leave open the ordinary rule making process to go forward that as the principles emerge, can be applied nationally. Doe that answer your question?
Mr. CANADY. Yes, that's helpful, Judge. That's all I have.
Mr. PEASE. [presiding] The gentleman from Florida, Mr. McCollum.
Mr. MCCOLLUM. I don't have any questions. Thank you very much, gentlemen. I apologize for coming in late.
Mr. DELAHUNT. Again, my apologies, also, for being tardy.
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Mr. PEASE. I do have a question, Judge Millerof course, I left my notes down here. [Laughter.]
Thank you. Your discussion of, in effect, greater authority to the magistrates interests me, but it would be helpful to know if there have been any studies done, either by the Conference or others, about the relative caseloads of magistrates v. article III judges; the time to dispense cases that are before the magistrates v. the article III judges, and the reason for that is that while I'm generally sympathetic to the arguments that you made today, I'm curious whether that's going to help or hurt caseload management throughout the system.
Mr. MILLER. Well, on the petty offense and the juvenile matters, I think it would help, because the matters can be disposed by a magistrate judge in the ordinary course of the magistrate judge's business as opposed to having the case sent to a district judge and trying to fit the matter in to the district judge's felony trial schedule and civil trial schedule.
Mr. PEASE. I shouldn't conclude from that that you're not as busy as the article III judges?
Mr. MILLER. No, I think in my written statement I said that the magistrate judges in the misdemeanor matters could handle the cases in their routine business. We have set dates to handle misdemeanor matters, so the juvenile defendant, for example, could have a ticket written for November 3rd, and it would come before the magistrate judge that day, and it would be a fixed time that the witnesses would be there; the juvenile would be there; their parents would be there, and the matter would be disposed of. If it were handled before a district judge, they'd have to go through arraignment and then fitting it in to the district judge's trial schedule somewhere within the Speedy Trial Act. On the contempt side, it would increase efficiency, because the district judge would not have to be bothered at all with these contempt matters unless they're extremely serious. They wouldn't have to be bothered with contempt matters, either civil or criminal.
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So, it's not who's busier, it's just that the magistrate judge, within the magistrate judge's authority, could handle a misdemeanor matter or the civil consent matter entirely, and the appeal would then go to thecivil matters to the court of appeals and bypassing the district judges completely. I'm not sure I've answered your question fully.
Mr. PEASE. You have with the one exception that I'm still curious as to whether there are any studies about the relative caseloads and time to dispose of matters between the two.
Mr. MILLER. Let me mention one point, and Judge Pro is the chairman of the Magistrate Judges' Committee of the Judicial Conference, and he may have better knowledge than myself, but I know that magistrate judges now dispose of approximately 17 percent of the civil jury trials in the country. This has been gradually increasing 1 or 2 percent a year for the last several years, and so the district judges dispose of the rest, but I don't know about these particular studies, if I could defer to Judge Pro.
Mr. PEASE. Judge Pro.
Mr. PRO. Perhaps, Congressman Pease, if I could respond briefly. The Judicial Conference, annually, does produce a statistical report which outlines the caseload profiles for each district, and it also breaks down bankruptcy courts, district courts, and so forth. Included within that are statisticalor is statistical data concerning the numbers of matters handled by magistrate judges.
Page 99 PREV PAGE TOP OF DOC I think it's extremely important to note, and of course Congress is the one who created the Magistrate Judges' System in 1968; augmented it in 1972 and 1976 with legislation, but that act is a marvelously flexible act which provides for utilization of magistrate judges which may be different depending upon the district that you're in. You may be in a district where they have a tremendous petty offense caseload as compared to a district where they have none, and if you're in the district at Yellowstone National Park or Yosemite National Park, you're really busy with petty offenses. If you're in another district, maybe the southern district of New York, it's a different profile of cases.
The magistrate judges are adjuncts to the district judges, and they assist the district judges in those cases. So, the studies would not single out magistrate judge v. district judge in terms of how long to disposition. They would reflect how long from disposition within that district, and then you would be able to see what the magistrate judges did in those cases as compared to the district judges.
Mr. PEASE. I appreciate that. Judge Hornby, I didn't perceive any substantive conflict between your comments and those of the representative of the Department of Justice, but if you did I would appreciate knowing them, because I'm inclined to agree with your more expansive treatment of the subject, and would like to pursue it with the Department of Justice as this bill goes forward.
Mr. HORNBY. Certainly with the oral comments, I was in complete agreement. The written comments, I thought, suggested a couple of things I was concerned about. One, that mediation that be the only focus instead of arbitration. We think it's broader than that.
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Mr. PEASE. I would agree with that.
Mr. HORNBY. Second, the mandatory establishment in each district of an ADR coordinator which would require allocation of staffing to a full-time position in each district regardless of the need, again, we think there's a need for flexibility on that kind of concern. Some districts, like eastern Virginia, may not need to set aside an entire person with all of the panoply of things that go with that. So, to the degree that Justice is speaking of flexibility, we're in full support, and, again, as I say, we would be happy to work with you on that.
Mr. PEASE. Great, thank you very much.
Mr. COBLE. [presiding] Thank you. I'm told the gentleman from Florida and the gentleman from Massachusetts have no questions, so, gentlemen, thank you all for being with us.
Mr. HORNBY. Thank you.
Mr. PRO. Thank you, Mr. Chairman.
Mr. COBLE. And this train continues to run on schedule. A thanks to all of you for cooperating with the 5 minute rule. I'll call our next panel forward.
The panel consists of Professor E. Allan Lind from the Fuqua School of Business at Duke University. Dr. Lind also serves as the Leiden University Fund's Special Professor of Social Justice and Social Conflict in the Netherlands. From 1989 to 1996, he served as a senior research Fellow for the American Bar Foundation, and was also a senior behavioral scientist for the Rand Corporation for 4 years. Dr. Lind also studied arbitration issues as a research social psychologist for the Federal Judicial Center from 1978 to 1981 and has written and spoken extensively on arbitration related matters. Dr. Lind, from down home. You're not in my district, I presume, almost, but not quite.
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Mr. LIND. Not quite.
Mr. COBLE [continuing]. You're in the shadow of it.
Mr. Mitchell Dolin on behalf of the American Bar Association, we're pleased to welcome you, as well, sir. Mr. Dolin is a litigation attorney practicing here in Washington. He currently serves as a co-chair of the task force of the judiciary of the ABA's litigation section. We have copies of your written statements which will be submitted into the record in their entirety, without objection. Dr. Lind, since I introduced you first, why don't you begin.
STATEMENT OF E. ALLAN LIND, PROFESSOR, FUQUA SCHOOL OF BUSINESS, DUKE UNIVERSITY
Mr. LIND. Thank you. In this statement, I'd like to describe, briefly, our current state of knowledge with respect to three key characteristics of court annexed arbitration, and I'd like to do it from the perspective of having researched Federal court annexed arbitration since the first wave of experimentation with arbitration programs in the late 1970's.
The three key characteristics I'd like to speak to are the fundamental fairness of the procedure; its capacity to reduce the cost of litigation, and its capacity to speed the resolution of lawsuits.
For reasons that I'll go into in just a moment, my conclusion with respect to the fairness issue will be that Federal court annexed arbitration is fair and is seen to be fair by those who experience it. My conclusion with respect to the cost issue will be that arbitration has been shown to reduce private litigation costs, and my conclusion with respect to the speed of resolution issue will be that court annexed arbitration can, if properly designed and implemented, speed case resolution, but that this has not always been the case.
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Let me speak first the fairness issue. In 1978, when as a research psychologist at the Federal Judicial Center I began to study court annexed arbitration, the most frequently articulated criticism of such programs was that they somehow constituted second class justice. From a 20-year later perspective, I think the clear message of empirical evaluations of Federal court annexed arbitration is that arbitration is most certainly first class justice.
For example, in a study of court annexed arbitration that I conducted in the Middle District of North Carolina, I found that litigants whose cases were subject to arbitration viewed the entire litigation process as fairer than did litigants in a control group not subject to arbitration. My research showed that the key factor driving the higher fairness ratings was that arbitration gave litigants a greater opportunity to see their case presented to a neutral party and to receive a judgment on the merits of the case. Thus, arbitration appears to result in greater feelings of fairness because it gives more litigants a chance to have their cases adjudicated.
Attorneys with cases subject to court annexed arbitration programs generally give quite favorable assessments of the programs. Again, referring to my research in the Middle District of North Carolina, attorneys there whose cases were subject to arbitration rated the procedure and its outcome as being at least as fair, and often fairer than traditional procedures.
In the study in the Middle District of North Carolina, I also went beyond subjective evaluations of the fairness of the arbitration, and looked for evidence of any objective unfairness in the process. Specifically, I looked to see whether the existence of a court annexed arbitration seemed to change the distribution of outcomes in court cases. What I found was that there was no changeno observable change, at leasteither in the amount of dollars changing hands once the arbitration program was in place, or in terms of the percentage of plaintiffs who received some payment in their case.
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My study of arbitration in the Middle District of North Carolina showed a substantial reduction in litigation costs. Depending on the specific assumptions made in various statistical analyses, I estimated savings attributable to the arbitration program to be between 20 and 38 percent of litigants' total legal fees and costs. The case is less clear with respect to savings in court costs. In several studies, there have been tantalizing hints that arbitration programs may, in fact, reduce the proportion of cases going to trial, but nowhere are the data definitive on this point. Absent any demonstrated savings from lower trial rates, the court savings from arbitration seems to just compensate for the costs associated with the administration of the program.
Under the subject of costs, one topic that needs to considered, I think, is that court annexed arbitration programs require an investment of arbitrator time and effort. The arbitrators' fees generally constitute a partial, but only a partial compensation for the work they put in on their cases. This said, I would note, that in the programs I've studied, arbitrators have been quite supportive of the programs, and they've willingly given their time and effort beyond the level compensated by their fees.
With respect to the speed of case resolution my research and the research of other scholars who have looked at Federal court annexed arbitration shows that arbitration programs can speed case resolution but that this benefit is not always realized. In general, if cases are moved to an arbitration hearing with reasonable dispatch, the speed of termination is enhanced. If delays are allowed or permitted, however, the capacity of an arbitration program to speed case resolution is quickly undermined, and this has happened in a fair number of the experimental programs.
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These findings showI would arguethat court annexed arbitration does what we want it to do, but in closing, I'd like to say a word in favor of mandatory arbitration. For an arbitration program to work, it must have cases. However beneficial arbitration and other alternative dispute resolution procedures are, the dynamics of adversarial justice makes it difficult to implement ADR on a voluntary basis. When we look at voluntary ADR programs, including voluntary arbitration programs, they simply do not get very large caseloads. I think that this is because it's difficult for attorneys to opt into these programs; that the dynamics of practice and client relations just makes that hard to do. It's too easy, I think, for an attorney to worry that counseling a client to arbitrate a case will be viewed negatively if the outcome of the arbitration is not everything the client wants. It's also very easy, I think, for an attorney to think that a suggestion to opposing counsel that a case be arbitrated will be taken as a sign of weakness that can undermine later settlement negotiations.
Sometimes, I think, especially in the heat of litigation, we have to be led to do things that are, in fact, to our own benefit. It's just such leadership, I think, that a mandatory annexed arbitration program provides. There are certainly some cases that are inappropriate for arbitration, but my research and that of others suggests that the great bulk of tort and contract cases will benefit from mandatory court annexed arbitration. Thank you for considering my views, and I'm happy to answer any questions you may have.
[The prepared statement of Mr. Lind follows:]
PREPARED STATEMENT OF E. ALLAN LIND, PROFESSOR, FUQUA SCHOOL OF BUSINESS, DUKE UNIVERSITY
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Federal district courts have been experimenting with court-annexed arbitration procedures for nearly twenty years, with generally very favorable results. My own research and that of other scholars has shown that:
Arbitration is fair, both in the eyes of those who bring their disputes to the courts and in objective terms;
Arbitration reduces the cost of litigation; and
Arbitration can speed the resolution of cases, both by resolving cases through arbitration awards and by promoting pre- and post-arbitration settlement.
In addition to these well-documented benefits of court-annexed arbitration, there is some evidence that a well-implemented arbitration procedure can improve access to justice. Arbitration appears to yield these benefits at the cost of administrative support from the court and with the substantial, but largely voluntary, support of the arbitrators themselves.
Court-annexed arbitration can provide litigants with cases in U.S. District Courts with a timely, neutral, and relatively inexpensive forum for presenting of their arguments and evidence and for obtaining a considered judgment about their case. This, my research shows, is precisely what most litigants want. Arbitration programs should be structured in such a way as to move cases quickly to an arbitration hearing, the arbitrators should be well-chosen and well-trained to ensure neutrality of perspective and action, and the arbitration hearing procedure should be designed to provide good opportunities to hear all sides of the case. Arbitration programs that fulfill these criteria will contribute substantially to the administration of justice.
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Mr. Chairman and Members of the Subcommittee, my name is Allan Lind. I hold a Ph.D. in social psychology from the University of North Carolina, and I am a tenured Professor of Management at the Fuqua School of Business at Duke University. For nearly twenty years I have conducted empirical research on court-annexed arbitration programs in federal and state courts. I have published numerous articles on this topic in scholarly journals, and I have written a number of monographs reporting my research on specific programs. As a researcher at the Federal Judicial Center in the late 1970's and early 1980's I conducted an empirical study of the first wave of federal court-annexed arbitration programs, and working with John Shapard I wrote an FJC research report entitled Evaluation of Court-Annexed Arbitration in Three Federal District Courts (1981).(see footnote 13) Later, as a senior behavioral scientist at the RAND Corporation's Institute for Civil Justice, I studied court-annexed arbitration in one of the district courts in the second wave of federal court experimentation with the procedure. This study, which is the most intensive and rigorous evaluation of federal court-annexed arbitration conducted to date, examined the arbitration program in the Middle District of North Carolina. My report of this project was published as a RAND Report entitled Arbitrating High-Stakes Cases: An Evaluation of Court-Annexed Arbitration in a United States District Court (1990).(see footnote 14) In the years since I completed my study of arbitration in the Middle District of North Carolina, I have continued my work in this area with additional analyses of the data from that study and with studies of state court arbitration, mediation, and settlement programs.
I. INTRODUCTION AND OVERVIEW
In this statement, I will describe briefly our current state of knowledge with respect to three key characteristics of court-annexed arbitration: the fundamental fairness of the procedure, its capacity to reduce the cost of litigation, and its capacity to speed the resolution of lawsuits. My conclusion with respect to the fairness issue is that federal court-annexed arbitration is a procedure that is fair and, perhaps just as important, that is seen to be fair by those who experience it. My conclusion with respect to the cost issue is that there is good evidence that court-annexed arbitration reduces the private litigation costs of those whose cases are subject to arbitration. My conclusion with respect to the speed of resolution issue is that court-annexed arbitration can, if properly designed and implemented, speed the disposition of cases.
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At the end of this statement I will suggest some of the characteristics of an ideal court-annexed arbitration program, at least insofar as my data and the data of other researchers can speak to that question.
II. FAIRNESS, COST SAVINGS, AND SPEEDY RESOLUTION GOALS
A. Fairness Issues in Court-Annexed Arbitration
In 1978, when I began my work on court-annexed arbitration with my studies of the then-new programs in the Eastern District of Pennsylvania, the District of Connecticut, and the Northern District of California, the most frequently articulated criticism of such programs was that they somehow constituted ''second-class justice.'' Today, the clear message from empirical evaluations is that federal court-annexed arbitration is most certainly ''first-class justice.'' Let me address this issue first in terms of the level of justice experienced by those whose cases are arbitratedi.e., in terms of feelings of fair treatmentand then in more objective terms.
There are many ways to approach the question of whether or not a legal procedure is fair, but one of the most direct is simply to ask those who experience the procedure, and their lawyers, whether they think the process they encountered was fair. This is precisely what I did in the my study of the arbitration program in the Middle District of North Carolina. In the Middle District of North Carolina some cases that would otherwise have been eligible for arbitration were removed for purposes of statistical comparison, creating a ''control'' group that could be compared to the arbitration-eligible group of cases. I compared the responses of litigants in the arbitration-eligible group to the responses of litigants in this control group.
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The litigants whose cases were subject to arbitration gave higher ratings of overall fairness than did the litigants in the control group. The arbitration advantage in experienced fairness was evident in both tort and contract cases, and it was evident both in the responses of litigants who were in court on their own behalf and in the responses of litigants who were in court as officers or representatives of corporations. When I asked litigants whose cases had actually been arbitrated for their assessments of the arbitration hearing, they rated both the hearing procedure and its outcome as fair.
I conducted a finer-grained investigation of precisely why litigants in the arbitration-eligible group were more likely to say that the process was fair, and I found that the key factor was that the arbitration program provides a greater opportunity for the litigants to see their case presented to a neutral party and to receive a judgment on the merits of the case. When litigants received an arbitration hearing (or any other form of adjudication of their case, an adjudication at trial, for example, or in motions hearings that involved the merits of the case), they emerged from the litigation experience feeling more fairly treated than when they settled without any adjudication of their case. The great benefit of court-annexed arbitration in enhancing litigants' belief that justice has been done appears to result from its capacity to provide more litigants with an adjudicatory hearing than do traditional procedures.
This finding fits well with the results of other ICJ research comparing various resolution procedures in state courts (The Perception of Justice: Tort Litigant's Views of Trials, Court-Annexed Arbitration, and Judicial Settlement Conferences, 1989). That research showed that trial and arbitration engender higher ratings of fairness than do settlement conferences or negotiated settlements. Indeed, much of my research over the past two and a half decades shows that having a chance to present one's case to a neutral partyto receive a hearing, even an informal hearinggoes a long way toward satisfying most litigants' sense of justice (The Social Psychology of Procedural Justice, 1988).
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Of course, there might have been injustice in the arbitration program that was not evident to the litigants and that therefore did not figure in their personal assessments of fairness. In part to answer this concern and in part to evaluate the acceptability of court-annexed arbitration to the bar, in all of the arbitration evaluations I have done, attorneys in cases subject to the procedure were asked for their assessments of the fairness of the arbitration process and outcome. In all of the studies attorneys with cases subject to court-annexed arbitration programs gave quite favorable assessments of the arbitration programs. In the study in the Middle District of North Carolina, where direct comparison with attorneys whose cases were not subject to arbitration was possible, the data show that attorneys whose cases were subject to arbitration rated the arbitration process and its consequences for case outcomes as being as fair or fairer than traditional procedures.
In the study in the Middle District of North Carolina, I also looked for any objective evidence of unfairness in the arbitration process. If the arbitration procedure introduced any consistent change in the pattern of outcomes, any clear bias in favor of either plaintiffs or defendants, I reasoned, someone might argue that arbitration had altered the fairness of the litigation process. There was no evidence that having a court-annexed arbitration procedure biased case outcomes in favor of either defendants or plaintiffs. This was my conclusion both in terms of the dollar amounts changing hands and in terms of the percentage of plaintiffs who received some payment. This said, I must note that this sort of comparison involves some difficult data collection and research design questions. In particular, as with any statistical analysis, the size of the data set dictates how certain one can be about a conclusion of ''no difference.'' In the North Carolina study we saw no indication of difference or bias, but the sample of cases was not large and so the conclusion is not definitive. However, when viewed in conjunction with the subjective evaluations of the process by litigants and attorneys, these data give a generally favorable picture of the fairness of the arbitration process.
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B. Arbitration and Litigation Costs
It has long been argued that court-annexed arbitration programs reduce the private and public cost of litigation, but until recently there was little empirical data on this issue. Indeed, as I will note in just a moment, it is still unclear whether arbitration programs reduce court costs. The study of arbitration in the Middle District of North Carolina did show a substantial savings in the cost incurred by litigants. Depending on the specific assumptions made in various statistical analyses, I estimated savings attributable to the arbitration program to be between 20% and 38% of total legal fees and costs. The savings seemed to apply to both tort and contract cases and to both large and small cases.
It remains unclear whether federal court-annexed arbitration procedures save the courts money. The reason we are unable to determine whether there are savings in public costs is that no studies have had a sufficiently large case sample, a sufficiently rigorous research design, and a sufficiently long time span to determine whether arbitration programs substantially reduce trial rates. There are tantalizing hints in several studies, including those that I have conducted, that arbitration programs reduce the proportion of cases going to trial, but nowhere are the data definitive. Absent savings from a lower rate of trials, the courts' savings from arbitration seem to just compensate for the costs associated with arbitration. Arbitration programs often reduce the frequency of some types of motions hearings, but these savings are offset by costs associated with administering the program and with an increase in motions hearings concerning the arbitration procedure itself.
Of course, another cost of court-annexed arbitration programs is the investment of arbitrator time in training, work on the case, and the hearing itself. The arbitrator fees constitute a partial, but generally only a partial, compensation for the arbitrators' work. In the programs I have studied, however, the arbitrators have been quite supportive of the program, and they have willingly given their time and effort.
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C. Arbitration and Speed of Case Resolution
Existing research on federal court-annexed arbitration shows that arbitration programs can speed case resolution, but that this benefit is certainly not always realized. In general, if cases are moved to an arbitration hearing with reasonable dispatch, the speed of termination is enhanced. If, however, delays are allowed, the capacity of the program to speed case resolution is quickly undermined.
My studies suggest a complex dynamic of effects of arbitration programs on case resolution, which taken as a whole produce the overall consequences described in the preceding paragraph. Very early in the life of a case, the prospect of a timely and relatively inexpensive hearing can lead litigants who believe in their cases, but who worry about delay and litigation costs, to put off settlement. This is not an altogether bad thing, I would argue, since it suggests that some litigants who would otherwise find our justice system too slow or too costly can hope, with an arbitration program in place, to have their disputes handled in an acceptable fashion. In these cases arbitration is promoting access to justice.
This ''early delay'' effect is countered as the date for the arbitration hearing approaches. On the eve of the hearing, litigants who are less certain of the value of their cases become more likely to settle, and counsel begin to take a hard look at the merits of their case and turn their attention to the possibility of settlement. Some of the cases that reach arbitration are terminated by arbitration award, of course, and many of those that move on along the process, through requests for trial de novo, settle relatively soon after the hearing.
Page 112 PREV PAGE TOP OF DOC If either the timetable for arbitration or the implementation of that timetable allows for delay in the hearing, then the ''early-delay,'' settlement-retarding processes can predominate and the case resolution advantages of arbitration can disappear. On the other hand, if hearing timetables are strictly enforced, then the settlement-enhancing, pre- and post-arbitration processes predominate, and the net effect of the arbitration program is to speed case resolution.
In this context, a word or two about rates of trial de novo request might be helpful. In federal court-annexed arbitration programs, trial de novo is requested with considerable frequency. In the four courts I have studied, for example, the rate of trial de novo request ran from a low of 55% to a high of 67%. Very few of these cases actually go to trial. In fact, there is evidence that cases with trial de novo requests settle with greater frequency than the same case would without an arbitration hearing. What appears to be happening is that the hearing and the arbitration award satisfy the litigants' desire to have their case heard, and that the trial de novo request is simply a move to give one side or the other a bit of bargaining room once the hearing has provided the psychological groundwork for acceptance of a settlement.
III. ESSENCE OF A GOOD COURT-ANNEXED ARBITRATION PROGRAM
In closing, I would like to offer a picture, based on my research, of what is needed for a good court-annexed arbitration program in a federal district court. The key elements, I would argue, reflect the benefits outlined above: the program must assure fairness, it must seek to reduce cost, and it must speed case resolution. To be fair, and to be seen as fair, requires a hearing process that is open to the consideration of all relevant information and evidence, and it requires an arbitrator or arbitrators who conduct the hearing with competence, dignity and neutrality. Cost savings require that over-formality of the hearing and over-elaboration of evidentiary requirements be avoided, and that the formality of the hearing and the scope of pre-hearing discovery fit the magnitude of the controversy and the complexity of the issues. Speeding case resolution requires that cases be put on a firm, but reasonable, timetable to arbitration and that this timetable be strictly enforced.
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Finally, for an arbitration program to work, it must be applied. However beneficial arbitration and other alternative dispute resolution procedures are, the dynamics of adversary justice makes ADR difficult to implement on a voluntary basis. It is too easy for an attorney with a case that might benefit from arbitration to convince him- or herself that counseling a client to arbitrate a case will be seen as blameworthy if the outcome of the arbitration is not all the client wants. It is too easy also for an attorney to think that a suggestion to opposing counsel that the case be arbitrated will be seen as a sign of weakness that might undermine later settlement negotiations. Sometimes, especially in the heat of litigation, we have to be lead to do things that are to our own benefit, and I would argue that it is just such leadership that a mandatory court-annexed arbitration program provides. There are certainly cases that are inappropriate for arbitration, but my research suggests that the great bulk of diversity tort and contract cases will benefit from programs like those I have studied. And my data suggest that, however hesitant they might be to undertake arbitration on a voluntary basis, litigants and counsel will find the process and its outcome to be fair and effective in resolving their disputes.
Mr. COBLE. Thank you, Dr. Lind.
STATEMENT OF MITCHELL F. DOLIN, ATTORNEY, AMERICAN BAR ASSOCIATION
Mr. DOLIN. Thank you, Mr. Chairman and members of the subcommittee. It's a pleasure to appear before the subcommittee today on behalf of the ABA. Many of the issues addressed by the two pending bills are of considerable interest to the ABA and to its members. While the ABA does not have formal policy on every aspect of these two bills, we do have positions on several provisions, and they are dealt with at length in my written statement.
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During my oral testimony this morning, I would like to focus on only one aspect of H.R. 2294, and that is the provision in section 302 that would abolish in-state plaintiffs, also known as ISP, diversity jurisdiction. I will be brief on the subject, in part because this subcommittee held hearings on identical legislation in both 1994 and 1996.
The ABA believes that the pending in-State plaintiffs diversity proposal fails to account for the historical role of diversity jurisdiction, the numerous benefits of diversity jurisdiction, and the burdens that abolition would impose both on litigants and on the State court systems.
The principal arguments we hear in favor of eliminating ISP diversity are that in-State plaintiffs are least in need of the benefits of a Federal forum and that the elimination of such cases would relieve serious strains on the Federal courts without swamping the State courts at the same time. We take issue with both of these arguments.
The ABA believes that in-State plaintiffs, like out-of-State plaintiffs, are fully entitled to the benefits of diversity jurisdiction. These benefits transcend concerns about geographical bias. Diversity shields litigants from prejudices of all sorts; it facilitates speedy resolution of cases, particularly in parts of the country where the State courts are seriously clogged; and it places before the Federal courts questions of national and international commercial significance that are fully worthy of consideration by the Federal judiciary. These benefits are equally attractive and important to in-State plaintiffs and to out-of-State plaintiffs.
Page 115 PREV PAGE TOP OF DOC We are also not persuaded that eliminating ISP diversity jurisdiction is needed to alleviate Federal caseload burdens.
Mr. COBLE. Mr. Dolin, if you'll wait just a minute to be sure everything's okay. You okay, Bill? All right. Go ahead, Mr. Dolin.
Mr. DOLIN. Okay, thank you, Mr. Chairman. While the ABA is sympathetic to the burdens that the Federal judiciary currently carries, we just don't think that eliminating ISP diversity jurisdiction is either a serious or a particularly appropriate way to address that problem. Diversity cases, as of the most recent statistics, account for only about 21 to 22 percent of the current Federal civil docket; that's not even including criminal cases. We've got a situation where the diversity portion of the Federal docket is about as low as it's been in 50 years. Besides that, since 1989, diversity cases have been on the decline. In the 8 years since 1989, filings have declined from about 29 percent of the civil docket to around 21 or 22 percent of that docket. In raw numbers, diversity filings have decreased from around 70,000 annually to on the order of 50,000 to 60,000 cases annually.
Moreover, our full expectation is that diversity cases will continue to decline even without the proposed legislative initiative, and this is so because last year Congress increased the amount in controversy for Federal diversity cases from $50,000 to $75,000. This increase just took effect in January 1997, and our view is that before we tinker with diversity jurisdiction again, we should at least understand and assess the impact of this most recent change, which I suspect will prompt a decline of about 10 percent in diversity filings.
Diversity is just the wrong culprit if the problem is Federal caseload burden. The causes of Federal caseload burden or at least the leading causes, are increased criminal caseloads, unfilled judicial vacancies, and the steady creation of new Federal causes of action and crimes.
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Finally, any decrease in the Federal caseload burden as a consequence of this bill would simply result in increased caseload pressures on our State courts. As one commentator has aptly observed, moving cases from a Federal logjam to a State logjam is no solution to the problem.
In sum, the ABA thanks the subcommittee for hearing our views on the subject, and asks that the diversity-related provisions of H.R. 2294 be rejected just as this subcommittee rejected similar legislation in 1994 and again in 1996. Thank you very much, Mr. Chairman.
[The prepared statement of Mr. Dolin follows:]
PREPARED STATEMENT OF MITCHELL F. DOLIN, ATTORNEY, AMERICAN BAR ASSOCIATION
My name is Mitchell F. Dolin, and I am a practicing attorney with Covington & Burling in Washington, D.C. I am Co-Chair of the Task Force on the Judiciary of the American Bar Association's Litigation Section.
Diversity Jurisdiction. The ABA opposes those provisions of H.R.2294 which would eliminate diversity jurisdiction for an in-state plaintiff. For more than 200 years, since the ratification of the Constitution and the enactment of the Judiciary Act of 1789, diversity jurisdiction has well served the ends of justice in America. Congress should not alter that jurisdiction in the absence of a compelling demonstration of a need for change. The ABA believes that the proponents of change cannot make that showing.
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The ABA believes that in-state plaintiffs, like out-of-state plaintiffs, are equally entitled to the benefits of diversity jurisdictiona proposition recognized by Congress in 1789. Diversity jurisdiction shields litigants from localized prejudices, places before the federal courts questions of national importance, and fosters an important dialogue between the state and federal systems. If jurisdiction is eliminated for in-state plaintiffs, the benefits of a federal forum will be denied to plaintiffs without the financial means to pursue litigation outside of their home states.
Diversity cases account for approximately 22 percent of the civil filings in the federal district courts. In total numbers, annual diversity filings have declined from 70,000 to 60,000 over the past decade, and a further decline is expected as a result of the January 1997 increase in the amount-in-controversy from $50,000 to $75,000. The leading causes of federal court congestion are the increased criminal caseload, unfilled judicial vacancies, and the creation of new federal causes of action and crimes. Curbing diversity jurisdiction is no panacea if the problem is federal court congestion.
Finally, the ABA is concerned that any new limitations on the scope of diversity jurisdiction would place undue strains on the state courts. The most recent quantitative study of which we are aware concludes that elimination of in-state plaintiffs' diversity might be as burdensome to the state courts as total elimination. Moving cases from a federal logjam, to a state logjam is no solution.
Rule of 80. The Association supports the proposed change in Section 401 of H.R.2294 that would amend 28 U.S.C. Sec. 371(b) to permit a federal judge to elect senior status between the ages of 60 and 64 if the judge's age and years of service equal 80. The Association has urged such an amendment since 1988, believing that a judge between the ages of 60 and 64 should also be permitted to retire in senior status if the judge's work years and age total 80. Section 401 does not allow, nor does the ABA policy support, amending subsection (a) to permit a judge between the ages of 60 and 64 to retire on salary.
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Criminal Justice Amendments. Sections 501 and 502 of H.R.2294 would amend the Criminal Justice Act to authorize increases in fees and the compensation paid assigned counsel. The ABA takes no position on the specific amounts recommended; however, the Association endorses an administrative mechanism for increasing case rates and compensation authorized under the Criminal Justice Act so that adjustments can be made in a timely manner.
Mandatory Arbitration. The ABA strongly objects to the mandatory arbitration provisions of Sec. 2 of H.R.2603, but it does support those provisions that requires each federal district court to authorize by local rule the use of voluntary arbitration in civil actions, including adversary proceedings in bankruptcy.
''Loser Pay'' requirement in diversity cases. The ABA opposes enactment of legislation such as Section 3 of H.R.2603 that would apply a concept of ''losers pay'' to all cases brought in the federal courts pursuant to the grant of diversity jurisdiction because (1) it is an ill-advised approach to limiting diversity jurisdiction, (2) it would encouraging forum shopping, (3) it would deter those who lack the financial wherewithal to absorb not only their own legal fees, but also those of their adversaries from filing meritorious claims or defending meritorious positions, and (4) it would undermine our country's concept of equal justice under the law.
In conclusion, I commend the Subcommittee for addressing these issues and appreciate the opportunity to contribute to the dialogue on these legislative proposals.
Mr. Chairman and Members of the Subcommittee: my name is Mitchell F. Dolin, and I am a practicing attorney with Covington & Burling in Washington, D.C. I am Co-Chair of the Task Force on the Judiciary of the American Bar Association's Litigation Section. I have been designated by the ABA's president, Jerome J. Shestack, to present the Association's position on certain aspects of H.R. 2294, the Federal Courts Improvement Act of 1997, and H.R. 2603, the Alternative Dispute Resolution and Settlement Encouragement Act. We at the ABA welcome these hearings as an opportunity to bring the expertise and experience of the organized bar to your consideration of this legislation.
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The two bills under consideration contain numerous technical and substantive provisions. My testimony today will focus on those substantive areas where the ABA has adopted policy, principally those that would affect the scope of federal diversity jurisdiction.
H.R. 2294FEDERAL COURTS IMPROVEMENTS ACT OF 1997
A. INSTATE PLAINTIFF DIVERSITY JURISDICTION
Section 302 of H.R. 2294 seeks to limit the scope of diversity jurisdiction by prohibiting the invocation of this jurisdiction by in-state plaintiffs. This measure, identical in substance to proposed legislation repeatedly rejected by Congress in recent years, is unwise as a matter of policy and practice. Before turning to the specifics, a few general comments about diversity jurisdiction may be helpful in putting this proposal in perspective.
The Association's position on diversity jurisdiction is one of long standing. In June 1978, the ABA adopted its position opposing the elimination of diversity jurisdiction in general and the elimination of diversity jurisdiction for in-state plaintiffs in particular. This action was taken after the House of Delegates had rejected a resolution to abolish or curtail diversity jurisdiction. The ABA's policy opposing limitations on diversity jurisdiction was formally reaffirmed in August 1996.
For more than 200 years, diversity jurisdiction has well served the ends of justice in America. The system of coordinate jurisdiction, under which the federal and state courts are both empowered to resolve questions of state and federal law, has been a vital part of our federalism since 1789. While some may think it anomalous, it is an important part of our federal system and is not inconsistent with notions of sound judicial administration. Congress should not alter diversity jurisdiction in the absence of a compelling demonstration of a need for change. The ABA believes that the proponents of change have not made, and cannot make, that showing.
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The arguments for and against legislative change are by now familiar to the members of this Subcommittee. Those who propose the total elimination of diversity jurisdiction rely most heavily on two arguments: (1) that the fear of local prejudice originally justifying diversity jurisdiction is a vestige of the past; and (2) that the elimination of diversity jurisdiction would relieve our overburdened federal courts. Those who favor retention of diversity jurisdiction dispute the premise that localized prejudices have disappeared and believe that there are better ways to lessen the burdens on our federal system than to shift that burden to our overtaxed state courts.
The oft-stated goal of the Judicial Conference of the United States has long been the abolition of diversity jurisdiction. Its endorsement of limitations such as eliminating in-state plaintiff suits and last year's increase of the amount-in-controversy threshold are interim steps toward that goal. Notwithstanding the Judicial Conference's position, few issues of concern to the legal profession have evoked the Bar's uniform, sustained, and strongly held opposition as this issue. The vast majority of the organized bar, including the American Trial Lawyers Association, the American Corporate Counsel Association, and all fifty state bars have steadfastly opposed such diversity ''reforms.''
The Judicial Conference recently took this opposition into account when it finalized the recommendations of its Proposed Long Range Plan for the Federal Courts relating to federal court jurisdiction. Earlier versions of the Plan called on Congress ''to eliminate diversity,'' with narrow enumerated exceptions, or alternatively to reduce substantially the scope of diversity by eliminating in-state plaintiffs' jurisdiction and by raising the minimum amount-in-controversy requirement. The final approved Long Range Plan drops the call for eliminating diversity jurisdiction and instead urges Congress to ''consider seeking to reduce the number of federal court proceedings'' based on diversity jurisdiction. Section 302 of H.R. 2294 reflects the Judicial Conference's incremental approach. The ABA, however, believes that the in-state plaintiffs' proposal is as flawed as the older calls for complete elimination of diversity.
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Section 302 of H.R. 2294 would bar plaintiffs from invoking diversity jurisdiction when they sue in their home states. Under this proposed legislation, however, an out-of-state defendant sued in state court by an in-state plaintiff would still have the right to remove to federal court.
The elimination of diversity jurisdiction for in-state plaintiffs obviously implicates different arguments from proposals to eliminate diversity jurisdiction entirely. Those who propose elimination of in-state plaintiffs' diversity jurisdiction tend to argue from narrower grounds; they argue: (1) that although local bias may persist, a plaintiff suing in his or her home state need not fear such bias; and (2) that elimination of diversity jurisdiction for resident plaintiffs is a moderate change that would alleviate the federal caseload burden without swamping the state courts.
The ABA submits that, while the pending bill appears to be less extreme than total elimination of diversity, it has the same basic defects and in some ways would have consequences even more untoward than total elimination.
The argument that in-state plaintiffs are not entitled to a federal forum in their home states because they need no protection against localized prejudices is both untrue and beside the point. The fact is that many in-state plaintiffs seek a federal forum in their home states to escape real or perceived state-court bias.(see footnote 15) For example, a local plaintiff suing an out-of-state corporation might nonetheless be the victim of local bias if the corporate defendant is the major employer in his or her small town. Similarly, some in-state plaintiffs may be much more out of step with local folkways and sympathies than the out-of-state defendant. Federal court would provide such plaintiffs access to a jury venire drawn from a broader geographical range, one that may be (or perceived to be) less beholden or sympathetic to the defendant. Thus, while we tend to assume that the non-resident defendant is the only party that needs protection from local prejudices, this is not always the case.
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In any event, the argument that in-state plaintiffs need no refuge from local prejudice misses the mark for a more fundamental reason: It incorrectly assumes that avoidance of local prejudice is the only justification for diversity jurisdiction.(see footnote 16) In fact, quite little is known about why diversity jurisdiction was provided for in the Constitution and the Judiciary Act of 1789.(see footnote 17) If protection of non-resident defendants from geographical prejudices had been the main rationale for diversity jurisdiction, it would be difficult to explain why in-state plaintiffs have been permitted to invoke diversity jurisdiction since the enactment of the Judiciary Act of 1789.(see footnote 18)
The benefits of diversity jurisdiction are many and transcend concerns about geographical bias. Diversity jurisdiction brings to the federal courts questions of national importance; indeed, as one federal judge has observed, the ''demonstrable need for a federal jurisdiction in major matters affecting interstate commerce . . . alone should justify its continued existence.''(see footnote 19) Diversity jurisdiction also facilitates an important dialogue between the state and federal courts by which each system learns from the other in connection with procedural and evidentiary rules, as well as matters of substantive law. It also preserves a citizen's access to justice and provides an alternative forum well worth its cost. Aside from complaints about the burdens that diversity cases may impose on the federal courts, there appears to be general satisfaction with the manner in which the federal courts handle diversity cases.
Eliminating in-state plaintiffs' diversity jurisdiction would deprive litigants of important federal innovations. For instance, the machinery now available under Section 1407 of the Judicial Code (28 U.S.C. §1407) for pretrial consolidation of multi-district litigation (''MDL'') involving mass disasters and mass-tort situations applies only to cases in federal court. Similar benefits, actual and potential, are facilitated by nationwide class actions in the federal courts. In addition, some very recent federal innovations, such as the December 1993 changes in the Federal Rules of Civil Procedure regarding pre-trial discovery and the plans of individual districts pursuant to the Civil Justice Reform Act of 1990, promise to streamline the pre-trial process for all civil cases in the federal district courts.
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If congestion in the federal courts is the problem, the solution is not to limit the public's access to the system by reducing the scope of diversity jurisdiction, especially when that jurisdiction is serving a useful purpose in our society. Diversity jurisdiction should not be blamed for the fact that many federal courts are crowded.
In the recent past, diversity cases have tended to account for between twenty percent (20%) and twenty-three (23%) of the annual civil case filings in the federal courts. According to the statistics published by the Administrative Office of the United States Courts for the twelve-month period ending September 30, 1996, diversity cases accounted for just over twenty-two percent (22%) of civil filings. Prior to the 1989 effective date of the increase in the amount-in-controversy requirement from $10,000 to $50,000, diversity cases accounted for nearly twenty-nine percent (29%) of the federal civil docket. In terms of annual filings, diversity cases were down from nearly 70,000 in 1988 to approximately 60,000 in 1996.(see footnote 20) As a percentage of the federal civil docket, diversity filings are about as low as they have been in 45 years and down seven percentage points below where they were several years ago. And as a result of the recent increase in the diversity amount-in-controversy from $50,000 to $75,000, which became effective in January 1997, diversity cases can be expected to decline further in both numerical and percentage terms.(see footnote 21)
Diversity-related strains on the federal system have been significantly reduced during the past decade and will be further reduced once the January 1997 increase in the amount-in-controversy is felt. Congestion in the federal courts comes from many other sources, including the increased criminal caseload, the statutory creation of new federal causes of action and crimes, unfilled judicial vacancies, population growth, and the increasing litigiousness of the American public and its government. Curtailing diversity jurisdiction is no panacea if the problem at issue is federal court congestion.
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Moreover, any perceived benefits of relieving federal burdens by eliminating federal jurisdiction for in-state plaintiffs would be more than offset by the burdens that would be imposed on our state judicial systems. The argument that diversity cases should be shifted from the federal courts, which are overburdened, to the state courts, which can easily absorb them because of the state system's collectively larger capacity, is an inaccurate over-simplification. Some federal districts are not overburdened, while some state courts are so overburdened that it takes several years to get a case to trial. Obviously, justice will not be served by ''transferring cases from one logjam to another.''(see footnote 22)
Since 1985, civil caseloads in the state courts have dramatically increased. In 1992, filings per federal judge totaled 1,238 while filings per state judge totaled 3,365; for civil and criminal cases, filings are increasing much more rapidly in the state courts.(see footnote 23) In many urban areas, including Houston, New York City, and Pittsburgh, the median time from filing to disposition has tended to be much higher in state court than in federal court.(see footnote 24)
Although we obviously cannot predict with certainty how many cases will be shifted from federal to state court as a result of the pending proposal, indications are that the numbers may be substantial and that those cases will impose a substantial burden on the state courts. The most recent quantitative study of this issue of which we are aware concludes that ''barring in-state plaintiffs from filing diversity cases in federal court would impose a disproportionate burden on state courts'' and ''might be nearly as much of a burden on state court as would be total abolition of diversity jurisdiction.''(see footnote 25) Since federal court diversity cases are on average more complex and time consuming than state court cases, transferring cases from the federal courts will impose burdens on state courts that they are not as well equipped to handle. For example, the transferred cases will involve high amounts in controversy, so they will be more complex and less susceptible to settlement. Furthermore, state courts would have to deal with additional complex multiparty litigation, but without access to federal procedural mechanisms. By combining the unprecedented burdens our state courts are facing today with the added burden of having to deal with complex new cases, enactment of Section 302 would greatly increase the problems faced by our state courts. I would also note that state courts are already facing an enormous challenge in the face of recently enacted laws shifting former federal functions to the states.
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The pending bill would also have undesirable consequences for litigants and the federal courts. The practical effect in many cases would be to deprive an injured individual of access to the federal court in his home state even though his interest would be better served in federal court. The alternative of initiating litigation in an out-of-state federal court, which will be pursued by some plaintiffs, will be unavailable to poorer litigants. In cases where that step is taken, all that will be accomplished is to increase the cost of litigation and to inconvenience both the witnesses and the parties. Another consequence of eliminating in-state plaintiffs' diversity jurisdiction is that it would shift the forum-selection decision from the plaintiff to the defendant. Under the pending bill, the defendant sued by an in-state plaintiff would have the opportunity to choose between state and federal court, and it is possible that this option will be exercised by many defendants to place cases in the more heavily congested judicial system.(see footnote 26)
Finally, we note that the proponents of Section 302 can offer nothing new in support that should prompt Congress to enact a measure that it has considered and rejected year after year. Particularly in light of the fifty percent (50%) increase in the amount-in-controversy, which just became effective earlier this year, Section 302 is particularly ill timed. When Congress adopted the diversity amount-in-controversy increase last year, Congress specifically rejected abolition of ISP diversity and consciously determined ''to leave the in-state plaintiff as is.''(see footnote 27) We therefore urge Congress not to reconsider its earlier rejection of this measure.
B. JUDICIAL RETIREMENT MATTERS
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Section 401 changes the ''rule of 80'' age and service requirements for retirement to senior status by justices and Article III judges under 28 U.S.C. §371(b).
The senior status system which originated in 1919 permits a federal judge to retire from regular active service, but retain the office and continue to perform such judicial duties as he or she is able and willing to undertake. In 1984, Congress amended the law to provide a more comprehensive and rational spectrum of age and years-of-service criteria for the retirement of federal judges. Presently under 28 U.S.C. §371, a judge between the ages of 65 and 70 whose age and years of service total 80 may elect either to retire on salary under subsection (a), or retire in senior status under subsection (b). Federal judges have life tenure under Article III of the Constitution and are not required to retire or to take senior status when they become eligible.
The most recent modification to the Rule of 80 in 1989 imposed a requirement that senior judges work a schedule that is at least 25 percent of the average active judge's schedule to be eligible for salary increases other than COLAs. The Judicial Conference must certify in each calendar year those senior judges who are meeting the 25 percent requirement.
Section 401 would only amend Section 371(b) to permit a federal judge to elect senior status between the ages of 60 and 64 if the judge's age and years of service equal 80. The Association has urged such an amendment since 1988, believing that a judge between the ages of 60 and 64 should also be permitted to retire in senior status if the judge's work years and age total 80. Section 401 does not allow, nor does the ABA policy support, amending subsection (a) to permit a judge between the ages of 60 and 64 to retire on salary.
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This judicial retirement system has served our nation well, particularly during periods of reduced resources available to the federal judiciary. Senior judges have provided an essential service by helping to relieve staggering caseload pressures and by helping to compensate for lost resources due to judicial vacancies. Lowering the eligibility requirement for senior status to age 60 with a consequent increase in the years of service requirement, as proposed in Section 401, expands the number of judges available to hear cases at a minimal additional cost to the government.
The costs to the government associated with the amendment would not be substantial because a judge will continue to receive the same salary whether he or she elects senior status or not. There is, of course, the salary and related expenses associated with the appointment of a successor judge. However, such costs do not compare with the cost associated with the creation of a new judgeship. Indeed, some of the need for new judgeships is reduced by the earlier appointment of successor judges and the concomitant expansion of the pool of senior status judges. Allowing judges to assume senior status beginning at age 60 would generate an additional number of experienced judges for the pool of senior judges.
Statistics gathered by the Administrative Office of the United States Courts show that senior judges provide invaluable service to the courts, litigants, and taxpayers. Senior judges have become an indispensable resource in the efficient management of the caseload of the district courts, especially with regard to civil cases. On a day-to-day basis, senior judges are utilized to write opinions, decide motions, provide administrative services and participate in settlement efforts. They are assigned to complex litigationboth civil and criminal, emergency hearings, and oral argument panels. Allowing judges between the ages of 60 and 64 who have the requisite years of experience would significantly enlarge the value of senior judges to our judicial system.
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The ABA strongly urges the adoption of Section 401.
C. COMPENSATION FOR ATTORNEYS AND FOR SERVICES OTHER THAN COUNSEL
Sections 501 and 502 would amend the Criminal Justice Act to authorize increases in fees and the compensation paid assigned counsel. The ABA takes no position on the specific amounts recommended in Sections 501 and 502. Our policy, however, endorses compensation rates and case compensation maximum amounts, and fees that are appropriate to the type of cases and the location in which services are provided, and the administrative flexibility to adjust compensation rates to reflect changes in the costs of law practice. To that end, the Association has long endorsed an administrative mechanism for increasing case rates and compensation authorized under the Criminal Justice Act. The objective of our policy is to provide reasonable compensation in accordance with prevailing standards. (See attached policy adopted February, 1982.) Also, in addressing reasonable compensation, our standards urge that administrators of assigned counsel programs have the flexibility to develop criteria for compensation that take into consideration the number of hours reasonably expended in light of the complexity, duration and difficulty of the case. (See Standard 52.4. ''Compensation and expenses.'' ABA Standards for Criminal Justice: Providing Defense Services, Third Edition.)
These policies reflect concern over the continued willingness of counsel to participate in the defense of indigent clients. Regardless of the method chosen by Congress to provide for compensation and fee adjustments under the Criminal Justice Actstatutory or administrativewe urge that periodic adjustments be made in a timely manner in order to preserve the integrity and purposes for which the Act was passed.
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H.R. 2603THE ALTERNATIVE DISPUTE RESOLUTION AND SETTLEMENT ENCOURAGEMENT ACT
Turning now to H.R.2603the Alternative Dispute Resolution and Settlement Encouragement Act. While the American Bar Association has long supported voluntary arbitration in the federal courts, it strongly opposes mandatory arbitration programs, even if nonbinding, where involuntary participation is required before litigants are allowed a trial before a jury or federal judge. All Americans are guaranteed the right to a jury trial in suits at common law by the 7th Amendment to the U.S. Constitution. While arbitration can often be a useful, cost-effective way to resolve many legal disputes, it must be the parties' decision whether to waive their right to judicial fact finding and pursue this option.
A. ARBITRATION IN DISTRICT COURTS
Section 2 of H.R. 2603 would expand the use of both voluntary and mandatory arbitration in federal district courts. It would amend the Judicial Improvements and Access to Justice Act, which was signed into law in 1988, by requiring all federal district courts to authorize by local rule the use of arbitration in civil actions, including adversary proceedings in bankruptcy. The bill would also allow parties in any civil action to submit voluntarily to court-annexed arbitration, while at the same time granting federal district judges the power to force litigants to arbitrate certain cases involving less than $150,000. H.R. 2603 would leave intact the current procedure by which a party who is dissatisfied with the arbitration award may demand a trial de novo in the district court.
Under the 1988 Judicial Improvements and Access to Justice Act, federal judges in 10 judicial districts around the country were granted the power, on an experimental basis, to refer certain cases to mandatory arbitration so long as no federal constitutional questions are involved and so long as only monetary damages of $100,000 or less are being sought. H.R.2603 would greatly expand the use of mandatory arbitration by granting every federal district court the power to make such mandatory referrals and by increasing the maximum size of such cases to $150,000.
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The ABA believes that both of these proposed changes are unwarranted and would result in even more parties being effectively denied their constitutional right to a trial by jury. Even though parties who are unsuccessful in arbitrations compelled by the court are permitted to seek a trial de novo and have the dispute heard again by the trial court, their right to have their disputes heard by a judge and jury in the first instance would be taken away. Perhaps more importantly, by requiring parties to initiate a separate court proceeding to reverse the arbitrator's award, parties will be forced to incur unnecessary additional attorneys' fees and court costs, as well as further delays in resolving their claims. As a result, the mandatory court-annexed arbitration programs such as those promoted by H.R.2603 would burden, abridge and often effectively deny the right of civil litigants to a due process evidentiary-based trial in federal court.
Although the ABA strongly objects to the mandatory arbitration provisions of H.R.2603, it does support that portion of the bill that requires each federal district court to authorize by local rule the use of voluntary arbitration in civil actions, including adversary proceedings in bankruptcy. Under the expanded pilot program created by the Judicial Improvements and Access to Justice Act, 20 federal district courts were authorized to refer cases to arbitration when all parties agree to arbitrate. This worthwhile experiment should be extended to all federal courts, and every federal district court judge should have the ability to refer appropriate cases to arbitration when the parties fully consent. To the extent that H.R.2603 would require the creation of such voluntary arbitration programs throughout the country, the bill serves the interests of justice by encouraging the prompt and efficient resolution of cases and by helping to reduce the caseloads of the overburdened federal courts.
Page 131 PREV PAGE TOP OF DOCB. AWARD OF REASONABLE COSTS AND ATTORNEY'S FEES IN FEDERAL CIVIL DIVERSITY LITIGATION AFTER AN OFFER OF SETTLEMENT
Section 3 of H.R.2603 would revise the federal rules of procedure and apply a modified ''losers pay'' or fee shifting rule in diversity jurisdiction cases brought in federal court. It would require that if either side rejected a settlement offer prior to trial, and did less well at the trial than the offer, that party would be responsible for a portion of the attorney's fees of the other party.
The American Bar Association opposes enactment of legislation such as Section 3 of H.R.2603 that would apply a concept of ''losers pay'' to all cases brought in the federal courts pursuant to the grant of diversity jurisdiction because (1) it is an ill- advised approach to limiting diversity jurisdiction, (2) it would encouraging forum shopping, (3) it would deter those who lack the financial wherewithal to absorb not only their own legal fees, but also those of their adversaries from filing meritorious claims or defending meritorious positions, and (4) it would undermine our country's concept of equal justice under the law.
Despite its ostensible purpose of facilitating meaningful settlement negotiations, Section 3 is fundamentally flawed. It is biased toward litigant with financial muscle and places an unfair burden on defendants with limited financial means. Its effect will be to deter most claimants with limited financial means, and encourage settlement by gamesmanship rather than encouraging realistic appraisals. Consider the following examples of its potential negative impact.
The proposal does not require that settlement offers be reasonablea defendant can trigger the fee-shifting rule by offering to settle for as little as one dollarforcing claimants or defendants either to accept an unfair settlement offer or run the risk of incurring the fees of the other side.
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It places an extra burden on the poor, the middle class and small businesses who are entitled by law to choose a federal forum. This extra burden is unrelated to the merits of their claims. Worse yet, its weight is involuntary when it falls on the poor, the middle class and small businesses when they are brought to the federal forum by a litigant much better able to bear the burden of possible fee- shifting.
Claimants who are not required to pay their own attorney's fees unless they prevail will find themselves losing the entire benefit of that fee arrangement once the defendant makes any offer that triggers the fee provision. Only the wealthy claimant will be able to run the risk of incurring such fees, and in particular, the middle class claimant, who has some assets to lose, will be in the greatest jeopardy.
In a clear case of liability, the advantage may lie with the plaintiff. That advantage may be partially alleviated by a counter offer or demand, but in all cases the risk of litigation is greater for someone believing their claim or defense is just.
This proposal does not provide safeguards to allow reasonable access to the federal courts for all litigants and safeguards against an abusive misuse of the fee-shifting procedures. The exemption in Subsection (4) and the relief provided in Subsection (6) for manifest injustice do not begin to level the playing field.
Although the ABA does not support court rules or statutes that include fee-shifting based on rejection of settlement offers, it adopted policy in February 1996 suggesting that if such a statute or rule is being contemplated, certain safeguards outlined in an ''offer of judgment procedure,'' included in the report be incorporated in such a statute or rule. That policy is attached.
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The ABA does supports fee-shifting in certain instances when a private party prevails against the government. For example, it supports legislation to shiftin certain types of administrative and judicial proceedingsthe costs of legal representation from a prevailing party to the government to achieve a substantial public benefit or enforce important public rights if the economic interest of the party is small in comparison to the cost of effective participation, and if the prevailing party does not have sufficient resources to compensate counsel adequately.
The case, however, has not been made for abandoning the tradition in this country of requiring each party to bear its own attorneys' fees. While some fee- shifting occurs under some state or federal statutes and procedures, the heavy burden of persuasion must rest on the proposers of such variance from the American Rule.
Before denying access to the courts to those unable to afford the substantial litigation costs involved in this modified ''loser pays'' proposal, it should first be determined whether there are compelling reasons to change the current American Rule beyond the limited number of statutory exceptions now in effect, or to impose such arbitrary limits on all diversity jurisdiction cases. It has not been demonstrated that this modified ''loser pays'' procedure is the way to address the concerns it is claimed that the proposal would address.
The early disposition of litigation and the disincentive to filing frivolous claims are important considerations in any civil justice system. In fact, under the current system, the vast majority of cases settle before trial. There is no reason to assume this proposal would have the positive effect of increasing the percentage of cases that settle.
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This is exactly why the ABA believes the procedures under the Rules Enabling Act should be the vehicle for considering whether suitable revisions of the federal rules of procedure will enhance early settlement and discourage frivolous litigation without aggravating the existing reality that an advantage in most civil litigation rests with those with the greatest financial resources.
The ABA fully supports the Rules Enabling Act processes which are based on the following three fundamental concepts: (1) the general principle of judicial rulemaking; (2) procedures that permit full public participation of the members of the legal profession, and (3) recognition of a Congressional review period.
The ABA does not question Congressional power to regulate the practices and procedures of federal courts. Congress exercised this power by delegating its rulemaking authority to the judiciary through the enactment of the Rules Enabling Act, while retaining the authority to review and amend rules prior to their taking effect. The ABA does, however, question the wisdom of circumventing the Rules Enabling Act, as is proposed in H.R.2603.
For the foregoing reasons, the ABA urges the rejection of H.R.2603.
In conclusion, I commend the Subcommittee for addressing these issues and appreciate the opportunity to contribute to the dialogue on these legislative proposals.
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Page 135 PREV PAGE TOP OF DOC Mr. COBLE. Thank you, Mr. Dolin. Mr. Dolin and Dr. Lind and ladies and gentleman, we have a vote on now. The subcommittee will stand in recess while we go vote, and upon our return we will question the witnesses.
Mr. COBLE. Folks, when I left I was told that there would be only one vote, and when I got there I found we had five votes. I apologize. I could have given a better timeframe had I known that.
Thank you, gentleman, for your testimony. Dr. Lind, let me start by throwing an obvious softball to you.
How do you respond to the criticism, of which we've all heard, that arbitration simply is another layer of litigation in many cases?
Mr. LIND. I would respond this way: I think what you need to do when you consider the impact of a program like court-annexed arbitration is consider its impact on the entire caseload. Certainly there will be some cases that go to arbitration and that subsequently go to trial, but those few cases are far outweighed, in the research I've done, by cases that terminate either before or after arbitration, and that realize some benefit from the program.
Mr. COBLE. Mr. Dolin, do you want to be heard on that?
Page 136 PREV PAGE TOP OF DOC Mr. DOLIN. Briefly. We agree that the additional layer is something that can cause added expense to litigants, and for that reason, the ABA's view is that any court-annexed program should be voluntary, and as long as it's purely voluntary, the parties will have bought into the notion of some delay and decided for themselves that arbitration's worth the risk of a little bit of delay and extra expense.
Mr. COBLE. I'll put this question to each of you. Testimony before this subcommittee in the past has indicated that 97 percent of the districts that are utilizing arbitration support it. Doesn't that suggest that the judges who are not supporting arbitration are the ones who probably haven't tried it? Is that a justifiable conclusion on my part?
Mr. LIND. I don't know that I can speak directly to that, but I think that the benefits are out there, and that the benefits are such that they are not immediately obvious in each case; it's in the totality of cases that you see the benefits, and that might another reason for the reservation.
Mr. COBLE. Mr. Dolin, do you want to respond to that?
Mr. DOLIN. I just don't know the answer to that question.
Mr. COBLE. I think it's a convincing argument that I put forward if 97 percent support it; that's a pretty convincing percentage to overcome. That's the direction from which I was coming.
Page 137 PREV PAGE TOP OF DOC Let me go to the gentleman from Virginia, Mr. Goodlatte.
Mr. GOODLATTE. Thank you, Mr. Chairman. I appreciate very much your holding these hearings and your leadership on this legislation which I have introduced with you. As you well know, Mr. Chairman, in the last Congress, as a part of the contract with America, we had a proposal regarding ''loser pays,'' and I had some concerns about the traditional english ''loser pays'' rule, and so I offered a modified settlement-oriented ''loser pays'' provision, and I think the American Bar Association opposed us last time. We did not pass that legislation through the House of Representatives, and we are now bringing it forward it again, and so, Mr. Dolin, I want to make a few comments about your observations and your testimony regarding that portion of the bill.
First of all, you had indicated that it's an ill-advised approach to limiting diversity jurisdiction. The purpose is not to limit diversity jurisdiction. The purpose is to limit cases brought anywhere and the second purpose is to serve as a model for encouraging settlement of lawsuits, not just in Federal courtand this is a very limited trial basis or model for doing so, but we would hope that if plaintiffs decided to bring their cases in State court insteadand, of course, remember any defendant can remove that case to Federal court if they meet the other requirements of diversity, but if they should attempt to engage in forum shopping in addition to the usual rules that are available right now, the States have the additional remedy of imposing their own, and some States already have variations on requiring that the loser in litigation pay for the fees. In fact, those variations are much broader than these cases, which are limited strictly to the realm of diversity jurisdiction cases.
But here's the big problem I have. The third objection you have is that it would deter those who lack the financial wherewithal to absorb not only their own legal fees but also those of their adversaries from filing meritorious claims or defending meritorious positions. If the claim is meritorious as opposed to frivolous or fraudulent which is what my legislation is targeted at, then it seems to me that they have every incentive of bringing it in the jurisdiction that's going to allow them to recover their own attorneys' fees in addition to the recovery of the loss, because it gives them every incentive to do so. It's only in cases where their claim may not have merit that they would want to be careful about bringing litigation that would result in their having to pay the opposing counsel's attorneys' fees, and I would also point out that the legislation strictly limits that. You cannot pay the opposing counsel any morepay for the opposing counsel's attorneys' fees any more than you're paying your own attorney. If it's on a contingent fee basis, we impute a value that you paid your own attorney, and, secondly, we give the parties an opportunity to cut off their exposure to simply the time from 10 days before trial to through trial by having made a bona fide settlement offer during the course of the process.
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So, what you have is a situation where they are exposed to a small portion, in many instances, of the opposing counsel's attorneys' fees, and that is offered in response to exhibit a, here. This is the District of Columbia Bell Atlantic Yellow Pages, and you start off withand this is the way it works in most places, toothe biggest ads come up first, and then you work your way through, but every single one of them say, ''No fee, if no recovery in this law office''. Over here, the same thing, ''No fee, if no recovery.'' These guys are little more creative, they say, ''Take the road to recovery,'' and they've got a couple of cars crashing into each other, ''Take the road to recovery or no fee.'' The fourth is even more creative than that. It says, ''No fee unless you win,'' and we could go on and on and on, but that's for, I would guess, 50 pages or more of the D.C. phonebook, and you see that in every other phonebook around the country. So, the point of the matter is that everybody else involved in this litigation has a risk. The plaintiff's attorney has a risk; the defendant certainly has a risk; they've got to pay to defend their case no matter what happens.
Why should we send a message that you can bring a lawsuit regardless of its merit and have no risk? That is, in my opinion, what this is directed at, and the way we've designed it helps to promote settlement negotiations and keeping cases out of court, not just Federal court, but could we allow him to at least defend himself?
Mr. DOLIN. Yes, Congressman, I understand the aspiration of the bill is not a frontal assault on diversity jurisdiction, and I did not mean to imply that. Our view is that that's perhaps an unintended consequence of the bill. Where plaintiffs or defendants have the option to plead into or out of Federal court, this will be another part of the equation that they consider when they make their forum selection decisions, and our hunch is that it will have, perhaps the unintended consequence of cutting back a little bit on diversity jurisdiction.
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Our perspective on this bill is similar to our perspective on the English rule generally. I know this bill has a settlement-oriented approach, but it injects a gaming element. Our belief is not that it discriminates against plaintiffs or defendants; it, in fact, has untoward consequences for plaintiffs and defendants alike. A plaintiff could very well have a meritorious claim and feel very strongly about that meritorious claim, but not know whether the damages are going to come in at $100,000 or $300,000, or $100,000 or $150,000. It seems to me that this legislation injects a gaming element that allows a shrewd and financially sophisticated plaintiff or defendant to play the game and try to shift the burden. Now, both parties are going have to
Mr. GOODLATTE. Don't you think that takes place right now in every piece of litigation that comes along? Don't you think that plaintiffs and defendants take into account the costs? Certainly, the plaintiff's attorney has to take into account the risk involved in bringing the case, because in a contingent fee case, he doesn't get paid anything unless he's got a good claim, and I think that is an important element, and it's why I support contingent fee recoveries; I'm not opposed to that. I'm simply saying that everybody participating in the process ought to be exposed to the risk involved in bringing litigation forward when you consider the enormous costs that are imposed upon defendants and others in cases that have little or no merit, and that's what I think this legislation's geared toward.
And, Mr. Chairman, I'd ask that this article from United States Law Week of February 13, 1996, be made a part of the record in which the headline is ''ABA Urges Offer of Judgment Changes to Counter Movement to Loser Pays Rule.'' The American Bar Association, February 5, asked Congress and the States to respond to the public cry for tort reform by retooling current offers of judgment procedures instead of rushing to adopt the English rule requiring the loser in civil litigation to pay the opponent's attorneys' fees. That's exactly what my legislation is geared ona revision of Federal Rule Civil Procedure 68 to expand it to include attorneys' fees in the offer of judgment and allowing both sides to make an offer of judgment, not just the defendant.
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Mr. DOLIN. I understand that the ABA opposes this legislation, but did prescribe standards that it hoped would be adhered to, safeguards, if this sort of settlement-oriented ''loser pays'' approach was pursued.
Mr. GOODLATTE. Sounds like more than standards, though, when they say retooling current offer of judgment procedures.
Mr. DOLIN. The ABA's position, of course, is that amendments to rule 68 in the first instance should be part of the rule making process.
Mr. GOODLATTE. Thank you, Mr. Chairman.
Mr. COBLE. Gentleman's time has expired. Without objection, your exhibit will be submitted and included as part of the record.
[The information referred to follows:]
INSERT OFFSET RING FOLIOS 27 HERE
Mr. COBLE. The gentleman from Massachusetts.
Mr. GOODLATTE. But not the phonebook.
Mr. COBLE. No, not the phonebook. No questions Mr. Delahunt?
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Mr. DELAHUNT. Oh, I'm sorry. Just to pick up on the point that I think Mr. Dolin was making. I see the potential for a plaintiff who has a meritorious cause of action, who is severely injured, to be placed at a disadvantage in terms of the particular provision, and I wonder if that embraces a concept of justice that is really fair and equitable under our system of jurisprudence. That's just a comment, and if you want to make further comment, Mr. Dolin, feel free to do so.
Mr. DOLIN. The ABA's view is that the litigant
Mr. DELAHUNT [continuing]. And these are real live situations with real live people, and I think it would probably occur in those cases where the damages are substantial and the case is egregious, but I know that if I was there as an unsophisticated plaintiff and had incurred injuries that made me unable to work on a permanent basis, I would be not gaming, I would be terrified.
Mr. DOLIN. The ABA's view is that the American rule is the appropriate rule for these sorts of cases, and part of that is a recognition that as matters stand under the current system, the loser in litigation already pays. You don't need to shift fees to make the loser the loser. When the plaintiff, even when represented by a contingent fee lawyer, loses, that plaintiff loses in a very real way, and the added punishment on either a losing plaintiff or defendant of cost shifting, in our view, is inappropriate.
Mr. DELAHUNT. If you know, Mr. Dolin, in terms of the English rule, have there been commentaries or essays in Great Britain about the English rule that you would want to bring to light to the subcommittee?
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Mr. DOLIN. That's an interesting point. England, which of course in the source of the English rule, is currently rethinking that very rule, and there appears to be fairly widespread and influential sentiment in England for changing it, because of some of the harsh features that the American courts have recognized in a fee shifting regime.
Mr. GOODLATTE. Would the gentleman yield on that point, because that's what we attempted to do, and, in fact, we were addressing concerns raised by the ABA and others at the time in early 1996, but under the English rule, if I sued you for $100,000 and you offered me $50,000 to settle the case, and I turned you down and went to court, and I got a $10,000 judgment against you, under the English rule, you'd have to pay my attorneys' fees even though I think I'm the loser, because I left $50,000 on the table; took up all the courts time, and got $10,000. Under this legislation, I sue you for $100,000; you offer me $50,000; I say, ''No, but I'll take $75,000.'' If we go to court, if I get more than $75,000, then you pay my attorneys' fees; less than $50,000, I pay yours; if it's between the two parties, no one pays anybody's attorneys' fees, because no one can arguably say they were more reasonable than the other in the negotiation process if they left that gap before they went to court. That's the difference, plus we don't have exposure for the full amount of attorneys' fees, only exposure for the last 10 days before trial, through trial, and not in an amount greater than what you're paying your own attorney.
Mr. DELAHUNT. No, I respectreclaiming my timeI respect what the gentleman's trying to do, but I just wonder if it works
Mr. GOODLATTE. Well, that's where
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Mr. DELAHUNT [continuing]. In real life terms.
Mr. GOODLATTE. If you'd yield further, that's why we want to haveof all of the court cases, all the civil court cases in this country, only a very tiny percentage would be affected and for a limited period of timefor this proposal to work, Federal diversity cases and see if it doesn't promote settlement and the weeding out of fraudulent and frivolous cases. In response to that, yes, the plaintiff may well be unsophisticated, but their attorney seldom is.
Mr. DELAHUNT. Well, with all due respect to my colleagues at the bar, I've been an observer where there have been many plaintiffs, counsel that I wouldn't characterize as competent, let alone sophisticated.
Mr. COBLE. I thank the gentleman. The gentleman from Florida, Mr. Canady.
Mr. CANADY. I have no questions, Mr. Chairman.
Mr. COBLE. The gentleman from Florida, Mr. McCollum.
Mr. MCCOLLUM. Thank you, Mr. Chairman.
Professor Lind, how did you do your study to determine the fairness of the alternative dispute or the court annexed?
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Mr. LIND. The study that I referred in my statement was done in the middle district of North Carolina. We randomly removed a certain proportion of the cases from being subject to arbitration and then looked at the reaction of litigants, counsel, and the nature of the outcome.
Mr. MCCOLLUM. Did you send out a questionnaire to them or what?
Mr. LIND. Yes, we interviewed the litigants and counsel. We sent questionnaires to counsel and interviewed those that didn't respond to our questionnaire on the telephone and we interviewed the litigants on the telephone.
Mr. MCCOLLUM. Did you examine State bar complaints to determine if there had been any ethics complaints or complaints filed from professional standpoints with respect to these procedures?
Mr. LIND. I did not, no, sir. The nature of that district was such that I think I would have heard if there had been any, but I can't say for sure.
Mr. MCCOLLUM. Well, the reason I ask that is that in Florida we have experienced some ethics problems related to this and primarily because of the concerns that people have after they have gone through this that they were pressured into some settlement or agreement by the parties, particularly by the persons doing the mediation or the arbitration, or whatever, and that has become of concern. You have not studied that as such?
Page 145 PREV PAGE TOP OF DOC Mr. LIND. Well, I've studied it only insofar as I'm able to say that the quality of arbitration and the quality of the program is a big factor in how this sort of a program works. In North Carolina, it was a very high quality program and I think it produced good results.
Mr. MCCOLLUM. Mr. Dolin, I know that your testimony today is directed to these two bills, but our next couple of witnesses are here because they believe that we should add more Federal district judges and courts of appeals judges. There have not been any added since 1990, and I realize we have some vacancies we haven't filled either, but our job isn't to fill the vacancies; that's the Senate's and the President's. Our job is to determine whether we need additional judgeships. The Conference, Judicial Conference, has recommended 17 for the court of appeals and 36 for the U.S. district courts. Does the ABA have a position on this?
Mr. DOLIN. The ABA does not have formal policy on this issue. Our view, of course, is that the first step is to do everything in our power to get those vacancies filled so we see what kind of problem we have, and I recognize that that's for the Administration and the Senate, not the House. But as far as adding judgeships, we have, in the past, supported adding judgeships; we don't have any policy, in part because I don't know that there are any current proposals, and ABA policy is often driven by the existence of a concrete proposal.
Mr. MCCOLLUM. Well, there's no bill, I guess, maybe to do that per se, but there certainly is the Judicial Conference recommendations that's come forward pretty strongly the last couple of years and will be presented here in a few minutes.
Page 146 PREV PAGE TOP OF DOC Well, thank you. We'd like to hear from you when they do come forward.
Mr. DOLIN. I will assure that the ABA will look into it.
Mr. MCCOLLUM. Thank you very much. Mr. Chairman, that's all.
Mr. COBLE. I thank the gentleman. Dr. Lind, we've heard discussion this morning which suggests that we should expand this bill beyond arbitration to include other alternative dispute resolution programs. You appear to be inclined to favor arbitration.
Mr. LIND. Okay. I don't have anything
Mr. COBLE. Talk to us a little bit about that.
Mr. LIND. I don't have anything against mediation in the right context, I think it's a very useful procedure. I've spoken to arbitration because I think that in the Federal courts it's the best proven ADR procedure. We have the most experience with it and we know the most about how it works. I also have some reservations about mediation in Federal courts because I think that mediation involves a different set of skills for mediators and for counsel than arbitration does. I think arbitration is closer to traditional trial practice, and therefore, it's easier for counsel, for the great bulk of lawyers, to handle.
Finally, I have some concerns about mediation because I think some of the assumptions driving mediation recommendations don't apply to the Federal courts. For example, one benefit that people often mention with respect to mediation is that it preserves existing relationships. In my research I've asked litigants about the existence of continuing relationships with their opponents. It's relatively rare that those relationships exist and there's very little optimism on the part of most litigants that they will continue to exist, whatever the outcome of litigation. So some of the assumptions don't seem to me to apply.
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Mr. COBLE. I thank you, sir.
Finally, Mr. Dolin early last year the ABA urged the Congress to adopt a similar provision in moving away from a true looser-pay proposal that we have before us now. Now, in my opinion it appears that the ABA may be backing away from a proposal that is quite similar to the one that they asked us to adopt. I may be missing the target there, but how would you propose that we strengthen rule 68's ability to move parties closer to settlement?
Mr. DOLIN. I might have to rely on my counsel from the organization itself, I'm not up to speed on all the nuances of ABA policy.
Mr. COBLE. Or Mr. Dolin, would rather respond to us in writing?
Mr. DOLIN. I think I will respond to you in writing, but I believe I have the correct explanation, which is that the ABA opposed this measure, but took the view that if such a measure of loser pays were adopted that it have certain safeguards and limitations.
Mr. COBLE. I understand, and if you don't mind, please respond to us in writing in a little more detail.
Mr. DOLIN. I will respond in writing whether that statement was right or wrong, I will respond in writing.
Page 148 PREV PAGE TOP OF DOC Mr. COBLE. Gentlemen, thank you. Bill, anymore?
Mr. DELAHUNT. Can I just, ask one more question?
Mr. COBLE. Sure.
Mr. DELAHUNT. I direct this to Mr. Lind. You know, we've been talking today, obviously, about civil jurisdiction, and I don't know if you have any experience, but are you aware of any diversion program that exists within the Federal district court system? In criminal cases? In other words, there was a reference earlier, I think from one of the judges, to petty offenses. Most States have, within either the court system or the district attorney's office, programs to divert, particularly juveniles from the system in cases involving misdemeanor, non-violent crimes where they're first offenders. That really has made a difference in terms of the backlog and the time from the arrest to the time when a case is finally disposed of, as far as the more serious crimes are concerned.
Mr. LIND. Congressman, I don't know personally of any such programs, but that's because I've specialized in so much civil justice issues. I do know of the sort of programs you're talking about in State courts and I do know of some successful results from those programs, but it's not my specialty area.
Mr. DELAHUNT. You wouldn't have any idea, Mr. Dolin?
Mr. DOLIN. I would not.
Page 149 PREV PAGE TOP OF DOC Mr. DELAHUNT. Okay, thank you. Thank you, Mr. Chairman.
Mr. COBLE. The gentleman from Florida for a second round of questioning?
Mr. MCCOLLUM. No questions, Mr. Chairman.
Mr. COBLE. Gentlemen, thank you for being with us.
I'm now pleased to introduce our final panel today: Chief Judge Julia Smith Gibbons. Chief Judge Gibbons was appointed to the United States district judge for the western district of Tennessee in 1983. Chief Justice Gibbons is also the chairwoman of the Judicial Conference Committee on Judicial Resources.
Now, Congressman Young has requested permission to introduce our second witness and I don't see him here, so I may get him shortly; if not, I'll let Mr. Canady introduce our second witness.
Mr. COBLE. Mr. Canady, would you like to introduce our second witness?
Mr. CANADY. Yes, thank you, Mr. Chairman. I'm happy to introduce Judge Elizabeth Kovachevich, who serves as the Chief Judge of the Middle District. Judge Kovachevich has served ably in that capacity and has been an advocate for expanding the ability of the Middle District to meet the commitments that the Middle District has in carrying out justice for the people of Florida. So, I'm very glad that Judge Kovachevich is with us today.
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Mr. COBLE. Judge Kovachevich, I will say to you that Mr. Canady, particularly Mr. Canady, but Mr. Young and Mr. McCollum each have buggy-whipped me consistently about your problem and I'll look forward to hearing it from you.
Judge Gibbons, why don't you start us off? Please keep in mind the red light.
STATEMENT OF HON. JULIA SMITH GIBBONS, CHIEF JUDGE, U.S. DISTRICT COURT, CHAIR, COMMITTEE ON JUDICIAL RESOURCES
Ms. GIBBONS. Thank you. Mr. Chairman and members of the subcommittee, I'm Julia Gibbons. I'm chief judge of the United States district court for the western district of Tennessee and I'm here today in my capacity as chair of the Judicial Conference Committee on Judicial Resources. That committee is responsible for all issues of human resource administration including the need for Article III judges and support staff in the Federal courts of appeals and district courts. I'm here today to provide information about the judicial resource needs of the courts and the process by which the Judicial Conference of the United States determines those needs.
Before I get into the substance of my statement, I want to thank you, Mr. Chairman, and the members of your staff, for all that you did in securing passage of S996 and the provision relating to the extension of ten temporary judgeships in the district courts. The extension of those positions was a high priority for the Conference and will allow the judiciary to maintain judgeships in districts that continue to experience high caseloads. We appreciate your efforts and the members of the Conference and the judges of the individual courts are grateful for your attention to the needs of the judiciary.
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Mr. COBLE. You're, indeed, welcome.
Ms. GIBBONS. On March 21 of this year, the Director of the Administrative Office of the U.S. Courts transmitted to the Speaker of the House of Representatives a draft bill containing the recommendations of the Judicial Conference to create 17 additional judgeships, 12 permanent and 5 temporary, for the U.S. Courts of Appeals, and 36 additional judgeships, 24 permanent and 12 temporary, for the U.S. District Courts. That draft bill has been introduced in the Senate by Senator Leahy, but it's not been introduced in the House. These recommendations for judgeships were approved by the Judicial Conference in September 1996 and March 1997.
The last time the Congress added to the numbers of Article III judgeships was in 1990. Since that time, the Conference has submitted recommendations every other year on the numbers of additional judgeships required in the judicial system, without action on the part of Congress. The recommended additions were developed with considerable thought and review within the judiciary.
In developing recommendations for additional judgeships, the Conference uses a formal, systematic methodology for evaluating judgeship needs in the courts of appeals and district courts. The courts submit a detailed justification to the Judicial Resources Committee's Subcommittee on Judicial Statistics which reviews and evaluates the requests and prepares a preliminary recommendation for consideration by the courts and the appropriate circuit judicial councils. Recent caseload information is used to evaluate responses from the judicial council or the court and to prepare recommendations for the full committee. The committee's recommendations are then provided to the Judicial Conference for final approval.
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Throughout the process, the judiciary uses established caseload standards for comparison with the caseloads of the courts requesting additional judgeships and rarely recommends additional judgeships in courts that do not meet those standards. A detailed description of the process and the standards we use is included in my prepared statement.
The judiciary has also adopted a variety of approaches to maximize use of judicial officer resources, including use of new, more conservative formulas to evaluate judgeship requests in the courts of appeals and district courts; requesting temporary rather than permanent judgeships; use of senior judges; inter-circuit and intra-circuit assignment of judges; use of magistrate judges; and use of alternative dispute resolution. Even with these efforts to utilize judicial officer resources to the maximum of our ability, there are workload needs that cannot be met with the current level of resources.
Workload has increased in both district and appellate courts since the last judgeship bill in 1990. Since that time, the number of cases filed in the courts of appeals has grown by 21 percent. This increase is in addition to the unprecedented growth experienced in the appellate courts throughout the 1970's and 1980's. Despite these increases, the Conference has requested only a 10 percent increase in the number of judgeships for the courts of appeals. I would say that in the district courtsand I see my time is up so I'll try to speed to the conclusionin the district courts the case filings have grown by 24 percent, the increase requested by the Conference is an increase of less than 6 percent. In the districts in which we have requested new judgeships the increase is far above that average increase for the most part.
The Conference recognizes there cannot be indefinite growth in judicial officer resources and we are concerned about continuing growth. The long-range plan for the Federal courts acknowledges the need for growth in the judiciary to be carefully controlled so that creation of new judgeships is limited to the number necessary to exercise Federal court jurisdiction. The Conference is constantly evaluating the need to control growth and the need to seek resources that are appropriate to the workload.
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On behalf of the Conference, I request that this subcommittee give full consideration to the draft bill to create the new judgeships we have requested in the appellate and district courts.
I have with me, for the use of the subcommittee, and would ask that this be made a part of the record, all of the caseload data that relates to the various courts for which we request new judgeships and that just for your use.
[The prepared statement of Ms. Gibbons follows:]
PREPARED STATEMENT OF HON. JULIA SMITH GIBBONS, CHIEF JUDGE, U.S. DISTRICT COURT, CHAIR, COMMITTEE ON JUDICIAL RESOURCES
The Judicial Conference of the United States has recommended that Congress create 17 additional judgeships for the U.S. Courts of appeals and 36 additional judgeships for the district courts.
Since fiscal year 1991, the last time the Congress created additional judgeships, the number of cases filed in the courts of appeals has grown by 21 percent. Despite this substantial increase, the Judicial Conference has requested only a 10 percent increase in the number of judgeships for the courts of appeals.
In the district courts, the change in the caseload has been even more dramatic. Since 1991, the number of case filings has grown by 24 percent. When these cases are weighted for complexity, the increase is 27 percent. By way of comparison, the Judicial Conference has requested the addition of only 36 judgeships in the district courts, an increase of less than six percent. In the 23 courts where the Judicial Conference has requested additional judgeships, the case filings are up over 30 percent and weighted filings in those courts have increased 33 percent, just since 1991.
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In developing recommendations for additional judgeships, the Judicial Conference uses a formal, systematic methodology for evaluating judgeship needs in the courts of appeals and district courts. The courts submit a detailed justification for consideration by the Subcommittee on Judicial Statistics, the judicial council of the circuit, the Committee on Judicial Resources, and finally by the Judicial Conference.
The judiciary has adopted a variety of approaches to maximize use of judicial officer resources, including: use of new, more conservative formulas to evaluate judgeship requests in both the courts of appeals and district courts, requesting temporary rather than permanent judgeships, use of senior judges, intercircuit and intracircuit assignment of judges, use of magistrate judges, and use of alternative dispute resolution. Even with these efforts to balance judicial officer resources, there are workload needs that cannot be met with the current level of resources.
The Judicial Conference recognizes that there cannot be indefinite growth in judicial officer resources and is concerned about continuing growth. The Judicial Conference is constantly evaluating the need to control growth and the need to seek resources that are appropriate to the workload. In an effort to place that policy in effect, the Conference has requested far fewer judgeships than the caseload increases would suggest are now required.
Mr. Chairman and members of the Subcommittee, I am Julia Smith Gibbons, Chief Judge of the U.S. District Court for the Western District of Tennessee and Chair of the Judicial Conference Committee on Judicial Resources. That Committee is responsible for all issues of human resource administration, including the need for Article III judges and support staff, in the U.S. courts of appeals and district courts. I am here today to provide information about the judicial resource needs of the courts and the process by which the Judicial Conference of the United States determines those needs.
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SUMMARY OF NEED
On March 21, 1997, Mr. Leonidas Ralph Mecham, Director of the Administrative Office of the U.S. Courts, transmitted to the Speaker of the House of Representatives a draft bill containing the recommendations of the Judicial Conference to create 17 additional judgeships (12 permanent and 5 temporary) for the U.S. Courts of appeals and 36 additional judgeships (24 permanent and 12 temporary) for the U.S. district courts. These recommendations were approved by the Judicial Conference in September 1996 and March 1997. The last time the Congress added to the numbers of Article III judgeships was in 1990. Since that time, the Judicial Conference has submitted recommendations every other year on the numbers of additional judgeships required in the judicial system, with no action on the part of Congress. The recommendations were developed with considerable thought and review within the judiciary. Later in my testimony, I provide a detailed explanation of the process used by the Judicial Conference to determine need. But first, I think it will be helpful to provide information about the caseload in the courts.
Since fiscal year 1991 (the year in which the last judgeships were created) the number of cases filed in the courts of appeals has grown by 21 percent. This increase is on top of the unprecedented growth experienced in the courts of appeals throughout the 1970s and 1980s. Currently the number of appeals filed per authorized panel in these courts is 939, more than 160 above the number in 1991. Despite the substantial increases, the Judicial Conference has requested only a 10 percent increase in the number of judgeships for the courts of appeals. The draft bill requested by the Judicial Conference would establish only 17 additional judgeships, and five of those would be temporary.
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In the district courts, the change in the caseload has been even more dramatic. Since 1991, the number of case filings has grown by 24 percent to over 300,000 cases. When these cases are weighted for complexity (see District Court Reviews later in testimony), the increase is 27 percent. By way of comparison, the Judicial Conference has requested the addition of only 36 judgeships in the district courts, an increase of less than six percent. For the 23 courts where the Judicial Conference has requested additional judgeships, the case filings are up over 30 percent and weighted filings in those courts have increased 33 percent, just since 1991. The weighted caseload in some of the individual courts has grown by as much as 60 percent since 1991, without the addition of judgeships. In comparison to the caseload changes, the Judicial Conference request for additional judgeships is rather modest.
JUDICIAL CONFERENCE PROCESS
In developing judgeship recommendations for consideration by Congress, the Judicial Conference, through its committee structure, uses a formal survey process to review and evaluate Article III judgeship needs, regularly and systematically. The nationwide surveys of judgeship needs are based on established criteria related to the workload of the judicial officers. These reviews are conducted biennially by the Committee on Judicial Resources, with final recommendations on judgeship needs approved by the Conference.
The recommendations are based on justifications submitted by each court, the recommendations of the judicial councils of the circuits, and an evaluation of the requests by the Committee on Judicial Resources using the most recent caseload data. During each judgeship survey, the Conference reconsiders prior recommendations based on more recent workload data and makes adjustments for any court where the workload no longer supports the need for additional judgeships. In the next survey the Judicial Conference will also implement a new process for evaluating situations where it may be appropriate to recommend that certain positions in district courts be eliminated or left vacant when the caseload does not support a continuing need for the judicial officer resource.
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In general, the survey process is very similar for both the courts of appeals and the district courts. First, the courts submit a detailed justification to the Subcommittee on Judicial Statistics. The Subcommittee reviews and evaluates the request and prepares a preliminary recommendation which is given to the courts and the appropriate circuit judicial councils for their recommendation. More recent caseload data is used to evaluate responses from either the judicial council or the court and to prepare recommendations for approval by the Committee on Judicial Resources. The Committee's recommendations are then provided to the Judicial Conference for final approval.
COURT OF APPEALS REVIEWS
At its September 1996 meeting, on the recommendation of the Judicial Resources Committee, which consulted with the chief circuit judges, the Judicial Conference unanimously approved a new judgeship survey process for the courts of appeals. Because of the unique nature of each of the courts of appeals, the Conference process involves consideration of local circumstances that may have an impact on judgeship needs. The process includes a formula, similar to that used in evaluating the district courts, which generally indicates whether there is a need for additional judgeships. The components of the formula are:
1. Base the evaluation of judgeship needs on current case filings;
2. Remove appeals reinstated after procedural default;
3. Weight pro se appeals .33 and all other appeals 1.0; and
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4. After the adjustments noted in 2 and 3 above, apply a standard of 500 appeals per panel to the adjusted filings to provide an estimate of the number of judgeships required.
In approving the formula, the Conference noted that it should be used as a general guide and not applied inflexibly. The process allows for discretion to consider any special circumstances applicable to specific courts and recognizes that court culture and court opinion are important ingredients in any process of evaluation. The opinion of a court as to the appropriate number of judgeships, especially the maximum number, plays a vital role in the evaluation process, and there is recognition of the need for flexibility to organize work in a manner which best suits the culture of the court and satisfies the needs of the region served. The formula and the evaluation process will not be used to suggest that courts adopt a method of operation which simply minimizes the need for judgeships, or that courts need additional judgeships when none have been requested by the court. It was on the basis of this process that the Judicial Conference approved the transmittal of a request to create 17 additional judgeships for the courts of appeals.
DISTRICT COURT REVIEWS
In an ongoing effort to control growth, in 1993, the Conference adopted new, more conservative criteria to evaluate requests for additional district judgeships, including an increase in the benchmark caseload standard from 400 to 430 weighted cases per judgeship. Although numerous factors are considered in looking at requests for additional judgeships, the primary factor for evaluating the need for additional district judgeships is the level of weighted filings. Specifically, the Committee uses a case weighting system(see footnote 28) designed to measure judicial workload, along with a variety of other factors, to assess judgeship needs. The Conference and its Committee review all available data on the caseload of the courts and supporting material provided by the individual courts and judicial councils of the circuits. The Committee took the following approach in developing its most recent recommendations for additional district judgeships:
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A. A general standard of 430 weighted filings per judgeship was used as an indication of the need for additional judgeships.
B. In applying the 430 level, the Committee reviewed the caseload of the individual courts to determine if there were any factors that created a temporary situation which would not provide justification for additional judgeships. The Committee also considered any factors in the caseload which would make the situation unique and provide support either for or against a recommendation for additional judgeships.
C. If an additional judgeship would leave the current caseload above or near the 430 level, the Committee recommended an additional judgeship, unless there were other factors present which would suggest that a temporary judgeship or no additional judgeships were appropriate. If the addition of a judgeship would drop weighted filings to between 350 and 430, the Committee recommended a temporary judgeship unless other factors unique to the district offset the per judgeship caseload factor (see also item D below). In small courts the addition of a judgeship would sometimes drop the caseload per judgeship near or below 300; in those situations the Committee recommended an additional judgeship only if the current per judgeship caseload exceeded 500 per judgeship.
D. In situations where a district met the 430 standard, but the addition of a judgeship would have resulted in a reduction of the per judgeship caseload to well below 430, the Committee also reviewed the senior judge situation in the district and recommended additional positions if the court had no senior judges and no short-term prospects for senior judges. If a court had active senior judges or active judges who would soon be eligible for senior status, the Committee recommended no additional judgeships.
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E. The Committee reviewed all requests in detail, including those which the Judicial Conference approved in 1994.
It was on the basis of this process that the Judicial Conference developed its request for 36 additional judgeships for the district courts.
ACTIONS TO MAXIMIZE USE OF JUDGESHIPS
In addition to the conservative and systematic processes described above for evaluating judgeship needs, given the current climate of fiscal constraint, the judiciary is continually looking for ways to work more efficiently without additional resources. As a part of the normal judgeship survey process or as a separate initiative, the judiciary has used a variety of approaches to maximize the use of resources and to ensure that resources are distributed in a manner consistent with workload. These efforts have allowed us to request fewer additional judgeships than the increases in caseload would suggest are required. Among the more significant methods in use are:
(1) Surveys to review requests for additional permanent and temporary judgeships and extensions or conversions of temporary judgeships to permanent: As described previously, surveys are conducted biennially of all Article III judgeships needs. To reduce the number of additional judgeships requested from Congress, the Judicial Conference has recently adopted more conservative criteria for determining when to recommend creation of additional judgeships in the courts of appeals and district courts.
Page 161 PREV PAGE TOP OF DOC (2) Recommending temporary rather than permanent judgeships: Temporary, rather than permanent, judgeships are recommended in those instances where the need for additional judgeships is demonstrated, but it is not clear that the need will exist permanently.
(3) Development of a process to recommend not filling vacancies: In March 1997, the Judicial Conference approved a process for reviewing situations where it may be appropriate to recommend elimination of a district judgeship or that a vacancy not be filled. The Judicial Conference will include this process in its biennial surveys of judgeship needs for recommending to the Executive and Legislative Branches that specific vacancies be eliminated or not be filled. A similar process is under development for the courts of appeals.
(4) Use of senior judges: Judicial officer resource needs are also met through the use of Article III judges who retire from active service to senior status. Most senior Article III judges perform substantial judicial duties; almost 400(see footnote 29) senior judges are serving nationwide. In the district courts during the past five years senior judges closed 15 percent of the civil cases and criminal defendants terminated, and conducted between 16 to 19 percent of all trials. In the courts of appeals during the same time senior judges participated in almost 15 percent of all oral hearings and submissions on briefs.
(5) Shared judgeships: Judgeship positions have been shared to meet the resource needs of more than one district without the cost of an additional judgeship.
(6) Intercircuit and intracircuit assignment of judges: To furnish short-term solutions to disparate judicial resource needs of districts within and between circuits, the judiciary uses intercircuit and intracircuit assignments of Article III judges. On average during the past 10 years, 415 visiting judges disposed of 5270 appeals and 243 visiting judges closed 2277 cases in district courts. This program has the potential to provide short-term relief to understaffed courts.
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(7) Use of Magistrate Judges: Magistrate judges serve as adjuncts to the district courts, supplementing the work of the Article III judges. Use of magistrate judges on many routine court matters and proceedings allows for more effective use of Article III judges on specialized court matters.
(8) Use of alternative dispute resolution: Since the late 1970s and with increasing frequency, courts use various alternative dispute resolution programs such as arbitration, mediation, and early neutral evaluation as a means of settling civil disputes without litigation. By 1995, of the 94 district courts, 22 had arbitration programs, 51 had mediation programs and 14 had early neutral evaluation programs. While case referral numbers are not kept nationally on most of the programs, statistics are maintained on arbitration referrals and show that approximately 10 percent of civil cases are referred to arbitration annually. In addition, all of the courts of appeals have programs designed to encourage resolution of many civil appeals by the parties without the need for judicial resources.
(9) Use of technology: The judiciary continually explores ways to help align caseloads through technological advancements, where judges can assist other districts or circuits without the need to travel.
The courts continue to introduce new tools to equalize judicial workloads and reduce requests for additional judgeships. However, even with these numerous efforts to balance judicial officer resources, there are workload needs which cannot be met with the current level of judicial officers.
Page 163 PREV PAGE TOP OF DOC Over the last 20 years the Judicial Conference has developed, adjusted, and refined the process for evaluating and recommending judgeships needs in response to congressional concerns. In addition, some adjustments have been made because the Conference recognizes that there cannot be indefinite growth in judicial officer resources and is concerned about continuing growth. In the Long Range Plan for the Federal Courts this issue is recognized in Recommendation 15 which acknowledges the need for growth in the judiciary to be carefully controlled so that creation of new judgeships is limited to that number necessary to exercise federal court jurisdiction. The Judicial Conference is constantly evaluating the need to control growth and the need to seek resources that are appropriate to the workload. In an effort to place that policy in effect, the Conference has requested far fewer judgeships than the caseload increases would suggest are now required. On behalf of the Judicial Conference, I request that this Subcommittee give full consideration to the draft bill submitted by the Judicial Conference to establish 17 additional judgeships for the U.S. courts of appeals and 36 additional judgeships for the U.S. district courts.
Mr. COBLE. Without objection, it'll be a made part of the record. Thank you, Judge Gibbons.
[The information referred to follows:]
INSERT OFFSET RING FOLIOS 28 TO 123 HERE
Mr. COBLE. Judge Kovachevich.
STATEMENT OF HON. ELIZABETH A. KOVACHEVICH, CHIEF JUDGE, U.S. DISTRICT COURT, MIDDLE DISTRICT OF FLORIDA
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Ms. KOVACHEVICH. Yes. Mr. Chairman, Members of the Committee, I want to thank you very much for this opportunity to be with you today and I especially want to thank three Congressmen. First of all, my good friend for over 35 years and for whom I served as a State legislative aide, Congressman Young. He asked me to relate to you the following: He had to leave, I know you know that he was here
Mr. COBLE. He was so happy to see you Judge, he fell to the deck. [Laughter.]
Mr. KOVACHEVICH. I know, I know, and he came back. I asked him not for a repeat performance of that and he indicated to me that he wanted me to put on the record that he fully supports our efforts on behalf of the Middle District of Florida, and that he will endeavor to do all that he can, and he wants that as a matter of record, and would have said that himself today. I also want to thank Congressman Canady for all of the efforts that he has expended toward you, physical and otherwise. He twisted your arm to set this hearing for today, and also Congressman McCollum, who has been most helpful with regard to all of this and I wish that he were here for the presentation.
I incorporate by reference and adopt the summary and the statement that you've already received and would like to focus on a few things for you. First of all, showing is better than telling. The blacked-out area of the State of Florida is the Middle District of Florida. It ranges on the northeast to the Georgia border on a crescent-shaped pattern diagonally from Jacksonville, St. Augustine, Daytona Beach down to Orlando, Ocala; that also includes the Lakeland, Winter Haven area, down to Tampa/St. Petersburg; moving southward, Sarasota, Venice, Port Charlotte, Ft. Myers and Naples. It is 56 percent of the population of Florida, 35 of the 67 counties of the State. This is where we are and what we are.
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I am here as chief judge of the Middle District of Florida composed of 11 authorized district judges. We just received our 11th district judge. He hasn't received his commission yet. He hasn't been sworn in yet. But, we want to thank Chairman Hatch and the Committee for all of their efforts in making it possible for our last vacancy to be filled. It has now been filled; all of our vacancies. I also want to thank the Judicial Conference of the United States for recommending four judgeships for the Middle District of Florida; U.S. district judgeships which we desperately need.
I also want to add that many of the comments that have been made this morning by the people that made their presentations apply to the Middle District of Florida and we are most grateful that they have been made. The Middle District of Florida has ten authorized magistrate judges. Two more have been recommended, but they have not yet been funded by Congress which would bring us to twelve. That would be 11 district, 12 magistrate and we have 8 bankruptcy judges.
Our caseload is composed of both the criminal and the civil. On the contiguous law-enforcement basis, law-enforcement would tell you in the U.S. Attorney's Office that we are a cocaine corridor and a heroin highway moving down that chain, diagonally in the State of Florida. As a result of efforts by law enforcement and the U.S. Attorney's Office, land 70 miles northeast of Tampa was forfeited, that was drug proceeds money, and there, the Bureau of Prisons built what is to become in 1999 the largest Federal institution operated by the prisons in the United States. It will bypass Fort Dix, New Jersey. We'll have the biggest in the country. It's FCI Coleman, going to be U.S. Penitentiary Coleman, almost 4,000 people, with plenty more land in which the judges in the Middle District of Florida presided over the trials to make it possible for that to be forfeited.
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The U.S. Attorney's Office has set a record. This year, for the first time in the 35 year history of the Middle District of Florida, 1,060 criminal cases have been filed. Are we able to process them? Let me tell you what's pending right now. The Tampa division has four judges, a fifth is yet to come on board, and we have presently a thousand defendants awaiting trial, almost 1,100 in the Tampa-Ft. Myers divisions. We have no judge in the Ft. Myers division.
I see the red light is on. Let me shift to something real quickly. I haven't even gotten to the civil. The Washington Post, the ABC News focused on Chief Judge Kazen in the Southern District of Texas; he's got a crisis. Additionally, the Southern District of California, Chief Judge Judith Keep was focused last week on NPR radio on an exceptional report done by Nina Totenberg; they've got a crisis situation. We've got a crisis. Notice those three States are out of the four States with the largest population in the United States. Think about the impact of the Middle District of Florida. Florida is fourth, moving to third, probably with population by the year 2,000 more than 50 percent of the majority of the eligible voting population is in the Middle District of Florida.
We can do no more. We don't have the number of judgeships we need because we've been conservative. We have said can do, can do, can do. I'm telling you: We can do no longer. We are not able to do anymore. We desperately need those four judgeships and we need them now and if we don't get them, what will happen if we collapse?
[The prepared statement of Ms. Kovachevich follows:]
PREPARED STATEMENT OF HON. ELIZABETH A. KOVACHEVICH, CHIEF JUDGE, U.S. DISTRICT COURT, MIDDLE DISTRICT OF FLORIDA
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The Judicial Conference of the United States recommended four new judgeships for the Middle District of Florida, three permanent and one temporary. The following data is provided in support of this request.
Demographics of the Middle District of Florida
Stretches nearly 400 miles from north of Jacksonville to south of Naples.
Encompasses 3 urban areas and 11 of 20 metropolitan statistical areas in Florida.
Population of the Middle District of Florida
Fifty-six percent of the population of Florida.
By the year 2005, it is projected that the Middle District will have 2/3 of the population in the state and only 1/3 of the judges, if no additional judgeships are approved.
Since 1980, the population of the Middle District has increased by 52%.
Population is expected to increase an additional 21% by 2005 meaning 1.65 million people will be added to the 7.8 million current residents.
Projected increase is greater than the current population of 13 states and the District of Columbia.
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Caseload of the Middle District of Florida
Consistently among the top 10 in a variety of workload indicators.
One-third more filings per judge than in other districts.
In 1996, the district ranked 6th nationally in total civil filings.
Since 1992, the filings per judgeship have been 35% higher than national average.
Since 1992, the weighted caseload for Middle District judges has been about 47% higher than the national average.
The combined civil and criminal caseload has increased 60% since 1990, the last year in which a district judge was added.
Other Workload Data for the Middle District of Florida
In fiscal year 1996, ranked 3rd nationally in number of criminal trials conducted.
14.2% of criminal cases went to trial compared to 8.3% trial rate nationally.
Probation Office has the 5th highest caseload of supervised defendants in the nation.
Page 169 PREV PAGE TOP OF DOC In Probation's Orlando Office, 41% of the cases under supervision have been sentenced in another district.
Federal Correctional Center at Coleman will be largest prison complex in the U.S. when penitentiary is completed in fiscal year 1999.
Bankruptcy Court has 3rd highest caseload in the nation.
Good morning, Chairman Coble and members of the Subcommittee on Courts and Intellectual Property. I want to express my appreciation to Chairman Hyde and to you for allowing me to have this time in front of you today to address the Middle District of Florida's need for additional U.S. District Judges. I especially want to express my appreciation to three members of Congress.
First, I want you to know that I am most grateful to United States Congressman C.W. ''Bill'' Young from Florida who has been my Congressman and my friend for so many years. I look at the administrative aides that are sitting there with the Congressmen, and I want you to know that 36 years ago, I was an administrative aide for then state senator C.W. ''Bill'' Young.
The other two members of this committee that I wish to thank are Congressman Bill McCollum and Congressman Charles T. Canady, both from Florida, without whose assistance my presence here at this committee hearing would not have been possible.
As you may be aware, the Judicial Conference of the United States recommended four new judgeships for the Middle District of Florida, three permanent and one temporary. I am here to support this recommendation and to provide you with information and data to assist the committee in understanding the judicial needs of the Middle District of Florida.
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To start, I believe it is important that you understand the demographics of the Middle District of Florida. This District stretches nearly 400 miles from north of Jacksonville to south of Naples encompassing three major urban areas and 11 out of the 20 metropolitan statistical areas located in the State of Florida. Fifty-six percent of the population of Florida lives in the 35 counties that comprise the Middle District. By the year 2005, it is projected that the Middle District of Florida will have approximately two-thirds of the population in the state and only one-third of the judges to serve this population, if no additional judgeships are approved.
Since 1980, the population of the Middle District has increased by 52%, giving us 2.7 million new residents. The district's population is expected to increase an additional 21% by 2005 meaning 1.65 million people will be added to the 7.8 million current residents. The 10 year projected increase is greater than the current population of thirteen states and the District of Columbia (Maine, New Hampshire, Rhode Island, Vermont, Nebraska, North Dakota, Nevada, South Dakota, Delaware, Idaho, Alaska, Hawaii and Wyoming).
Money magazine's 1996 list of the best places to live in the United States reported that seven of the top 20 are located in the Middle District of Florida. Further, according to the University of Florida's long-term economic forecast, four out of the five counties projected to be the fastest growing in the state of Florida over the next five years are in the Middle District, specifically, Glades, Flagler, Hernando, and Osceola Counties.
In addition, the population swells each winter with the arrival of ''snowbirds'' seeking to escape northern winters. This seasonal influx of part-time residents coupled with the approximately 12.5 million tourists who travel to the Orlando area alone each year to visit area attractions, such as Disney World, Disney MGM Studios, Universal Studios Florida and Sea World, are two unique characteristics of the Middle District's population.
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The Middle District of Florida has one of the heaviest caseloads in the country, consistently ranking among the top ten in a variety of workload indicators with approximately one-third more filings per judge than in other districts. In 1996, the district ranked sixth nationally in total civil filings. Since 1992, the filings per judgeship have been 35% higher in the Middle District than the national average (577 average filings per judge in Middle District of Florida v. 427 average in the U.S.). During the same time period, the weighted caseload for Middle District judges has been approximately 47% higher than the national average (636 average weighted filings in Middle District of Florida v. 434 weighted average in the U.S.).
In fiscal year 1996, the most recent year for which complete data is available, the Middle District of Florida averaged 684 weighted filings per judgeship compared with the national average of 472 weighted filings per judgeship. The Middle District would need a total of 16 district judges (five more than we currently have and one more than authorized by the Judicial Conference) merely to bring the Middle District to the national average weighted caseload.
In the Middle District of Florida, the combined civil and criminal caseload has increased 60 percent since 1990, the last year in which a District Judge was added. This includes an 18.5 percent increase in the past year alone.
In fiscal year 1996, the Middle District of Florida ranked third nationally among the 94 districts in terms of the number of criminal trials conducted. During this time period 14.2 percent of criminal cases in the Middle District went to trial compared to only 8.3 percent of criminal cases nationally.
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The criminal caseload reflects significant growth in criminal cases filed in the past four fiscal years in the Middle District of Florida. For fiscal year ending September 30, 1997, 1,060 cases were filed which is almost 200 more than in fiscal year 1996. This is the highest number of cases ever filed in the Middle District of Florida.
Our Probation Department ranks as the fifth busiest in the nation with 3,000 cases under supervision. In fiscal year 1997 the Middle District of Florida also handled over 1,000 (1038) cases of offender non-compliance (ranging from notification of drug use to revocation of probation).
Consistent with the overall demographics which indicate persons are moving to Florida in record number; the number of persons under supervision relocating to be with their families has increased. This is most evident in our Orlando division where 41% of the cases under supervision have been sentenced in another district. Although these cases require a tremendous amount of Court involvement for managing non-compliance they are not included in the workload formulas for the judiciary. The Courts are provided judgeships on the basis of fillings which does not take into account the work generated by supervision.
The Federal Correctional Center at Coleman opened in October 1995 with low security and medium security facilities. A woman's camp will be completed in November of this year and a United States penitentiary is under construction. When the United States penitentiary is completed in fiscal year 1999, the rated capacity for FCC Coleman will be approximately 3,900 inmates, making it the largest prison complex operated by the Bureau of Prisons in the country. The presence of this large prison complex within the Middle District of Florida will have a substantial impact on the number of prison case filings.
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The Bankruptcy Court in the Middle District ranks third in the nation in filings behind only the Central District of California (Los Angeles) and Illinois Northern (Chicago). The Middle District of Florida had a 21 percent increase from 1995 to 1996. A 24 percent increase is projected from 1996 to 1997.
To top it all off, a recent report from the United States Marshals Service Headquarters indicates that the Middle District of Florida now leads the nation in the number of inappropriate communications/threats with eighty-one (81) reported cases for fiscal year 1997. The District of Colorado reported sixty-seven (67) ranking it number two in the United States.
To try to help ourselves, we have decided to withdraw our forces from the Jacksonville and the Orlando Divisions and to redeploy and to attack the caseload in Tampa and Fort Myers this summer by having the active U.S. district judges abandon Orlando and Jacksonville for three months and come to Tampa. This will put all eleven U.S. district judges in Tampa courtrooms to tackle the backlog of civil cases in the Tampa and Fort Myers divisions. We recognize that by doing so we will cause undue hardship to the constituents of the Orlando and Jacksonville divisions. We are forced to steal from Peter to pay Paul, and realize that this is merely a short-term solution to a long-term problem.
In conclusion, I want to remind members that there have been no increases in federal trial judges since 1990. At the same time, the demands and expectations of the courts continue to grow. Compounding the pressure on the courts, in general, to perform under the public's increasing demands and expectations, I must remind you that growth rates experienced by the Middle District are unparalleled in the country. From 1990 to 2000, it is projected that the population nationally will increase by 10%. For the same time period, it is projected that the Middle District of Florida will experience a 25% increase in population.
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Consequently, I respectfully urge members of this Subcommittee to support additional judgeships as recommended by the Judicial Conference of the United States, that is, 3 permanent and 1 temporary judgeship for the Middle District of Florida.
PERSONAL: Born December 14, 1936.
EDUCATION: 1954-Grad. VALEDICTORIAN from High School. 1953-Amer. Legion Aux. Delegate to Florida Girl's State, and Girl's Nation, Washington, DC; 1956-Grad. VALEDICTORIAN from St, Petersburg Junior College, AA Degree; 1958-Grad. MAGNA CUM LAUDE from the Univ. of Miami, BBA. Degree; Major in Finance; FIRST in School of Business Admin; 1961-Grad. SECOND IN CLASS from Stetson Univ. College of Law, J.D; 1993-LLD. (Hon. Degree) Stetson Univ. College of Law.
LAW PRACTICE: 1961-Regular session of Florida Legislature Research and Administrative Aide to Pinellas County Legislative Delegation; General practice of law,own office, sole practitioner-11 yrs.
JUDICIAL EXPERIENCE: 1972-Elected First Woman Circuit Judge in the Sixth Judicial Circuit, for Pinellas & Pasco Counties, State of Florida, for over 9 yrs; 1982-Nominated to be US District Judge by Pres. Ronald W. Reagan.; 1996-Became Chief Judge for 7 year term.
SELECTED PROFESSIONAL HIGHLIGHTS: 1970-Member of the Board of Regents for the State of Florida, two years; 1973-1977 Appointed by Pres. Richard M. Nixon as Member of the President's Commission on White House Fellowships, and re-appointed by Pres. Gerald R. Ford; 1973-Member of the Defense Advisory Committee on Women in the Service (DACOWITS), United States Department of Defense, three years; 198994-Chairperson, Security Committee, Middle District of Florida; this District was used as a model by the General Accounting Office, for a security study requested by United States Senators Nunn, Glenn, and Graham.
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SELECTION OF A FEW CIVIC AWARDS & ACTIVITIES: 1970-Recipient of the Stetson University Distinguished Alumni Award; 1972-Received ''Dedication to Christian Ideals'' Award from Knights of Columbus, and ''Man of the Year'' Award; 1975-Certificate of Appreciation, U.S. Department of Defense; Appreciation Award, U.S. Navy Recruiting Command; Designated ''Honorary Navy Recruiter, U.S. Navy Recruiting Command; October 30, 1975-Certificate of Flight ''BLUE ANGEL 7'', St. Petersburg-Clearwater International Airport; 1989-Commenced Federal Judicial Internship Program, Stetson University College of Law; on-going, provided on site at Courthouse, three semesters per year. Adjunct Professor of Law.
Hon. HENRY J. HYDE, Chairman,
|Fowler, White, Gillen, Boggs, Villareal and Banker, P.A.,|
|Tampa, Fl, October 6, 1997.|
Committee On The Judiciary,
House of Representatives,
Congress Of The United States,
Washington, D.C. 20515.
Re: United States District Courts Middle District of Florida
DEAR CHAIRMAN HYDE: I write to you on behalf of the public and private lawyers who regularly practice law before the United States District Court for the Middle District of Florida. I am the immediate past president of the Federal Bar Association, Tampa Bay Chapter, and I currently serve as a member of the Civil Justice Reform Act Committee for the Middle District of Florida. I have practiced law in Tampa continuously since 1973, and I represent clients in private civil litigation throughout the Middle District. My law firm is the largest law firm in the Middle District.
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In concurrent testimony, Elizabeth A. Kovachevich, Chief Judge of the United States District Court for the Middle District of Florida, has provided you with the statistical data that document the enormous growth experienced by the Middle District in the past fifteen (15) years. This growth, both population and business, has stretched the federal judiciary of the Middle District and its support staff beyond all reasonable expectations. I write to you to discuss (and will be prepared to elaborate for your Committee) the very real injury that such understaffing inflicts upon companies having a substantial business presence in the Middle District.
Over the past fifteen (15) years, the major cities served by the United States District Court for the Middle District of FloridaJacksonville, Orlando, Tampa/St. Petersburg/Clearwater, Sarasota, and Ft. Myers/Napleshave developed a significant base of businesses whose primary assets qualify as ''intellectual property''. These businesses range from computer software developers (e.g. Information Management Resources, Inc., and PowerCerv, Inc.) to medical technology innovators (e.g., Johnson & Johnson) to the well-known entertainment centers of Disney and MGM. Many out-of-state technology companies (e.g., Motorola, Inc., and A. C. Nielsen Company) have substantial business operations in the Middle District. The Middle District also has a major research university (the University of South Florida, in Tampa), several other significant universities (the University of North Florida, in Jacksonville, and the University of Central Florida, in Orlando), and a new university (to be built in the Ft. Myers/Naples area). All of these businesses and institutions are engaged in very substantial research and development efforts that, in turn, generate intellectual property. That property frequently becomes the subject of statutory protection, as patented or copyrighted subject matter.
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For Florida to continue to attract and develop high-technology businesses that generate high-paying, low-polluting jobs, it must assure businesses and institutions that their intellectual property will be protected and that intellectual property disputes will be promptly and carefully decided. Congress has revised federal patent and copyright statutes to broaden and clarify intellectual property rights. And the Florida Legislature has enacted the Uniform Trade Secrets Act, Section 688.001 et seq., Florida Statutes, and has adopted a revised restrictive covenants statute, Section 542.335, Florida Statutes. Accordingly, extensive statutory protections are in place at both federal and state levels.
The burgeoning caseload of the United States District Court for the Middle District of Florida, coupled with the failure to provide additional district judges for that Court, is having a significant adverse effect upon the ability of Middle District businesses to protect their intellectual property rights and to have disputes about those rights adjudicated promptly and thoroughly. Such disputes generally are complicated ones, frequently beginning with requests for emergency injunctive relief and ending with multi-week jury trials. Judges whose dockets are double those of judges in other federal judicial districts simply do not have the time and energy required to adjudicate these complex technology-oriented disputes.
Lawyers who regularly litigate civil cases before the United States District Court for the Middle District of Florida can confirm that the district judges of this Court are overworked and that, if Congress fails to authorize the multiple additional district judge positions certified by the Judicial Conference of the United States, civil justice in this District will become a national embarrassment. Such adverse publicity for Florida, and for the Middle District's judicial system, would be irreparable. If technology-based businesses believe that their rights will not be protected and that their disputes will not be promptly and thoroughly decided, they will go elsewhere. Florida simply cannot become known as a state whose federal judiciary does not have the time and energy to adjudicate these critical cases, to give them the resources and effort essential to proper decision-making.
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Other significant business groups also are being injured as a result of the documented understaffing of the United States District Court for the Middle District of Florida. For example, property and casualty insurance companies aim to resolve litigated claims as quickly as possible. To the extent that such cases linger in the courts, these companies lose money. Similarly, business that must defend various labor-related claims (e.g., discrimination, disability, and FLSA cases) also require prompt adjudication of those claims. And out-of-state businesses that file (or defend) diversity-based claims in the Middle District often are shocked at the delay in resolving those cases.
Please understand that the United States District Court for the Middle District of Florida confronts a genuine emergency. Stop-gap measures will have little or no effect. The Middle District is using every available avenue (e.g., emphasizing and encouraging consent referrals of civil cases to magistrate judges and employing extensive court-annexed arbitration and mediation procedures) to advance its civil docket. But, without at least four (4) additional district judges, the Middle District will continue to fall behind in handling these civil cases.
Pursuant to the requirements of House Rule XI, clause 2(g)(4), I enclose with this prepared statement a copy of my current resumé. To the best of my knowledge, information, and belief, my law firm has not received any federal grant, contract, or subcontract in this current year or in the preceding two fiscal years.
INSERT OFFSET RING FOLIOS 124 TO 126 HERE
Mr. COBLE. I thank you, ladies. We have a vote on and I don't think time is going to permit questioning you prior to going to vote.
Mr. MCCOLLUM. Mr. Coble, I'm not going to be able to come back. May I have some time to do that?
Mr. COBLE. Any objection?
Mr. DELAHUNT. No, I defer to my friend from Florida.
Mr. MCCOLLUM. I would really appreciate it if you will.
Mr. COBLE. All right, if you will, Bill.
Mr. MCCOLLUM. I don't want to take a lot of time. I just want to emphasize I happen to be, Mr. Chairman, from the Middle District of Florida. That is my judicial district and my entire congressional district's in it, and I've heard Judge Kovachevich and other judges talk about this for some time. We're building to a big head on this.
What kind of support, depth of support do you believe, Judge, that your getting from the Judicial Conference on this? I know they send reports over. We meet with them regularly. Occasionally they say, you know, they're supportive, but there've been times, I've been here now 17 years, and the Chairman's been here about the same time, I guess, and we sometimes get them really putting the full court press on and sometimes they don't. Frankly, I haven't seen the signs and, to be very honest, Judge Gibbons, with the full court press on this. I know you are
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Ms. KOVACHEVICH. Oh, yes.
Mr. MCCOLLUM [continuing]. I know the judges are in the districts that are affected, but what about the Judicial Conference? Are they really going to put a full court press on this?
Mr. COBLE. Judges, if you all will suspend for a minute, we will do this very informally. I'm going to go vote then I'll come back and resume the questions. You all continue to respond to Mr. McCollum and we will stand in recess after he finishes his questioning.
Mr. MCCOLLUM. [presiding] I thank you for that indulgence, Mr. Coble.
Ms. KOVACHEVICH. Thank you, Mr. Chairman.
I would think that the best person to defer to answer that would be Chairperson Gibbons, because she speaks for the Judicial Conference. As far as I know, they fully support what it is that we're trying to do and perhaps, she might want to respond to that.
Mr. MCCOLLUM. Judge Gibbons.
Ms. GIBBONS. Well, certainly the Conference does not submit requests for judgeships unless it feels strongly that those judgeships are needed and that all of those, that each and every one of those judgeship requests meets our criteria. So, certainly, we're fully and strongly supportive of the requests that has been made. To the extent that the Conference effort might not be seen as a full court press, I must tell you that we have been somewhat pessimistic about our prospects of obtaining the requested judgeships. I would hope though that to the extent that pessimism might be conveyed, that would not also convey any lack of enthusiasm or any strong support because the Conference feels strongly that the judgeships are needed.
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Mr. MCCOLLUM. Well, let me say to you, and I think this is very important that it be conveyed back to other judges who are not necessarily in the districts affected, but are indeed in responsible leadership positions. That pessimism, if it is transmitted in the form of lack of enthusiasm, is going to simply compound the difficulty of getting this job done. What I see in Senators who are concerned about this, but not concerned enough, is that they don't really think it's that big a problem. It may be a problem for you in Orlando, but the judges in the country aren't seeing it. There's no pounding on my door. I've seen it in some of my colleagues. I don't think thatand I don't want to name namesbut I don't think Chairman Hyde really realizes the significance of this. You may meet with him, but I don't think that he senses that, with all these seats that aren't filled over here.
And that would be my other point in this: There are a whole bunch of vacancies; we know there are problems with that and we know that that's getting a lot of attention as it should right now, but the sense is that those vacancies have to be filled first. Why should we come along and create new judges as long as we have those vacancies? It may take us, with all the politics involved, we might not fill those vacancies, so the argument goes, in the next 3 years. So why give any new judgeships until we fill those vacancies? And that's the kind of arguments I'm getting. How do you answer that and to what extent can the Judicial Conference, so to speak, put on the full court press to overcome that?
Ms. GIBBONS. I would say that as far as the vacancies and the new judgeships are concerned, certainly it is very important to the Conference also to have the vacancies filled, but the vacancies are not necessarily in the same places that the new judgeships are needed. For example, Judge Kovachevich does not have a vacancy, but she desperately needs her new judgeships. While we do a number of things that are designed to work around those problems and to get resources where they're needed in the judiciary, given the statutory basis for district and circuit lines there are things we cannot do as far as shifting resources around, but that's important too.
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Mr. MCCOLLUM. I understand.
Ms. GIBBONS. I don't think I got to everything you wanted.
Mr. MCCOLLUM. No, you're not, and I don't want to belabor the point. I'm using you and the opportunity to make a point and I've already done it, I think, butand I've got to go vote like everybody elsebut my sense of frustration comes in part, too, when we had all the district judges meetings up here and I went down to the White House with some of you were up here for all of that, and what I heard was and every other person on the Judiciary Committee is, gosh, we don't have those judgeships filled; and (b), when are you guys going to separate our pay from yours? Which, of course, I vote for and all of us here do.
And the fact there were new judges down there, the only people talking about that were like Judge Kovachevich and two or three others interested in it. Then they didn'tthey came to see me and saw the few they could, but I just want to see this issue raised to a higher profile, Judge Gibbons.
Ms. GIBBONS. Well, we will try to raise it to a higher profile. And let me say to you, Congressman, I would hope we would not be penalized for our restraint in the numbers of judgeships we are seeking, because we have been restrained in seeking new judgeships. So every judge in every district within the Federal judiciary is not as directly affected by this problem, and while we would certainly like every judge to be advocating the cause of judges in other districts, as you know, it doesn't always filter to the top of their consciousness. And I would suggest that that's why you're not hearing about it from every single Federal judge. And I hope we wouldn't be penalized by our efforts to be responsible.
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Mr. MCCOLLUM. We're not penalizing; I'm not saying
Ms. GIBBONS. I don't mean penalized in a
Mr. MCCOLLUM. I'm just suggesting that the voice of the Conference is represented not only by judges, but by staff who come and knock on doors and who press and argue and lobby and then take judges in to see particular Senators and Congressman. I know how that works and so do you, and I'm just encouraging this to be done at a higher level than just this hearing today, and done sooner rather than later, that's all.
Ms. GIBBONS. I've heard your message, Congressman.
Mr. MCCOLLUM. Thank you, ma'am.
I don't have anything else I can give you, Judge Kovachevich. I'm sorry I can't come back. I really would like to be here.
Ms. KOVACHEVICH. That's all right, but Congressman Canady's going to come back.
Mr. MCCOLLUM. I know he is. I guess we're in recess right now.
Ms. KOVACHEVICH. I guess we're in recess, okay.
Page 184 PREV PAGE TOP OF DOC Mr. MCCOLLUM. I've got to go vote.
Ms. KOVACHEVICH. All right.
Mr. MCCOLLUM. Thank you.
Mr. COBLE. [presiding] See, you all are used to doing it from the other end.
Ms. KOVACHEVICH. That's right. I heard the gavel, though. I respond to that.
Mr. COBLE. Folks, we have conducted this hearing sort of irregularly procedurally, but sometimes we have to do that to respond to these bells in a timely way.
Were you finished, Judge?
Ms. KOVACHEVICH. Well, no, I'm never finished, but I don't know that Congressman McCollum had finished his question and I deferred to Judge Gibbons to answer his question, and then he had to leave, and we were waiting for Congressman Canady to come back because he had questions to pose. And I don't know what youI don't know how you want to handle it.
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Mr. COBLE. Well, why don't I start with my questions? That way, we can at least get started.
Ms. KOVACHEVICH. Okay, now how much time do I have to answer your question or do you have a light up there that stops you?
Mr. COBLE. Well, I impose that same red light against me that I do on you, so we try to run through here rather quickly.
Ms. KOVACHEVICH. All right sir.
Mr. COBLE. As I said at the outset this morning, I don't want anybody to think that we're rushing you through here just for the sake of rushing, because we have your written testimony and that will be examined thoroughly.
Ms. KOVACHEVICH. All right sir.
Mr. COBLE. Judge Kovachevich, you mentioned the rapid growth, population-wise, that your district has experienced and common sense tells me that this growth probably is accompanied by similar rapid growth in criminal prosecutions.
Ms. KOVACHEVICH. Yes, sir.
Mr. COBLE. What has this done to your ability to handle your civil docket? Probably played havoc with it.
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Ms. KOVACHEVICH. Sure. Middle District of Florida is third in the Nation in criminal trials, 159 of them last year, third in the Nation. The trials that we have are not of short duration. For example, right now in our courthouse, a motorcycle gang trial is going on. Last year we had a motorcycle gang trial; the one last year lasted four-and-a-half months, one case.
Part of what is driving the adverse effect to the civil side of the store is that very point. Let me quote something, if I may, that will perhaps focus the civil for youwell, give you some additional statistics. We have over 6,000, almost 6,300 civil cases pending in the district 3,500 of them are in the Tampa-Ft. Myers divisions. I remind you again, we have no judge in Ft. Myers, and Ft. Myers is handled by the Tampa judges. We still have only four judges in place and we just got our fifth confirmed.
Mr. COBLE. So, in other words, it's played havoc with your ability to dispose of your civil docket?
Ms. KOVACHEVICH. More than played havoc with it, and here's what's happening, if I may. Well, what I wanted to be able to add to the record, because I think it's important, is a comment that came in a letter as part of the record from the former president of the Federal Bar Association, so you get a lawyer's perspective, and he is also a member of the Civil Justice Reform Act Committee. He is a partner, and he handles the business litigation, antitrust, for the largest law firm of the Middle District of Florida, the Fowler-White firm. There are two paragraphs from his letter that's part of the package that we've incorporated by reference. It's so important I want to read it to you.
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''Lawyers who regularly litigate civil cases before the United States District Court for the Middle District of Florida can confirm the district judges of this court are overworked, and if Congress fails to authorize the multiple additional district judgeship positions certified by the Judicial Conference, civil justice in this District will become a national embarrassment. Such adverse publicity for Florida, for the Middle District's judicial system, would be irreparable. If technology-based businesses believe that their rights will not be protected and that their disputes will not be promptly and thoroughly decided, they will go elsewhere. Florida simply cannot become known as a State whose Federal judiciary does not have the time and energy to adjudicate these critical cases and give them the resources and effort essential to proper decision-making process.''
That's pretty strong words from that lawyer. So I think that's in clear response to what it is that he feels is happening because of the double pressure that we are facing. On top of that, the bankruptcy court in the Middle District of Florida is the third largest bankruptcy court in the country, only behind Los Angeles and Chicago. This bankruptcy court has over 30,000 cases. I can assure you that they're going to be asking for more judgeships for themselves; and their appeals, as you know, come to the district court.
You know, there's an aside I might give to you with regard to this. You know we talk about preventive medicine and people aren't able to tell you how much illness is prevented if you have preventive medicine. Let's take the reverse of that. We have an enormous increase of bankruptcy cases in the urban areas of this country, Middle District of Florida, for example. Could it be that because businesses cannot get their cases and disputes resolved at the civil level in the Federal district courts, that is tipping the balance for those companies who can't make decisions with regard to expansion, employment opportunities, and the rest of it, and it's forcing these people into taking the alternative of bankruptcy? I don't know the answer to that, but there are a lot of ingredients into what happens in the economic side of this country; I can't say as strongly as I want, how much I think this needs to be soberly examined from a political standpoint. There could be far-reaching implications to what is happening to our courts in this crisis. It's not going to be resolved by a quick fix.
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Mr. COBLE. Well, my red light has expired and I've only asked you one question. Give me a brief answer, Judge
Mr. CANADY. We'll give you more time, Mr. Chairman.
Mr. COBLE. Thank you, I appreciate that. But the Judge is going to exhaust it all in responding to me. [Laughter.]
Ms. KOVACHEVICH. Well, I can keep talking, sir; you just ask the next one.
Mr. COBLE. I'm sure you can.
Mr. CANADY. She's just starting to rock, I can tell you.
Ms. KOVACHEVICH. I'm on a roll here, sir. Go ahead.
Mr. COBLE. Judge, yes or no, if you can.
Ms. KOVACHEVICH. Yes or no? You sound like me from the bench. Go ahead. [Laughter.]
Mr. COBLE. Do you offer arbitration or other forms of ADR to litigants in your district?
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Ms. KOVACHEVICH. Middle District of Florida was a pilot program for arbitration. We use arbitration and mediation, and right now I would say that mediation, with more lawyers becoming involved in it, has become the predominant choice in our district.
Mr. COBLE. Judge Gibbons, we've heard today that there are judges who resist arbitration or any other form of ADR. I don't mean this to sound as critical as it's going to sound. Given that fact, as you are requesting more judges due to the high caseload, could arbitration by a little more flexible way for them to lower their caseloads?
Ms. GIBBONS. Certainly we have the promotion of alternative dispute resolution mechanisms within the judiciaryhas had a positive affect on our ability to handle the caseload with the resources we had. I'm not aware, and this gets a little bit into the jurisdiction of committees other than mine, so I don't want to speak on alternative dispute resolution as a judiciary representative, but I'm not aware that there is any overwhelming opposition to alternative dispute resolution mechanisms, particularly in districts that are overworked.
The districts that I'm aware of, just speaking for myself personally, not as the chair of the committee, where there has been a desire not to use it have been those like the district referred to earlier in Virginia which has such a current docket and which has a strong philosophy of moving cases through, setting early dates and trying them, rather than trying to settle them.
Mr. COBLE. Of course, the direction from which I come is that, on the one hand, the judiciary is requesting more Federal judges be available, and then if most of these Federal judges are opposed to this sort of approach, that's going to frustrate our efforts.
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Ms. GIBBONS. I don't think you'll find Federal judges are opposed in any great numbers to alternative dispute resolution. I think, as you might expect, that numbers of them have different ideas about what kinds of mechanisms ought to be used and what's most effective.
Mr. COBLE. I will come back to you both in the second round of questions. Let me recognize the gentleman from Massachusetts right now.
Mr. DELAHUNT. Well, I hear you knocking. Earlier when Mr. McCollum was here, he posed a question to Judge Gibbons about raising, if you will, the level of your concerns I think he was referring specifically to the Judicial Conference. I mean, Idon't think it's any great secretand you can disagree with methat there is a substantial crisis, not just, with all due respect, in the Middle District of Florida, but all over this Nation in terms of the Federal judicial system. Do you agree with that, Judge Gibbons?
Ms. GIBBONS. No.
Mr. DELAHUNT. Okay.
Ms. GIBBONS. Are you talking about in terms of workload?
Mr. DELAHUNT. Right.
Ms. GIBBONS. No, it is not a problem that is throughout the system entirely. It exists in individual courts, in individual districts. We do have courts that cannot handle their work with the resources they have, but we also have many courts that can.
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Mr. DELAHUNT. Well, let me just say that I know when I hear from the Federal district court judges in Massachusetts that Imaybe not quite to the degree that was outlined by Judge
Ms. KOVACHEVICH. Judge ''K.'' Everybody calls me Judge ''K.''
Mr. DELAHUNT [continuing]. Okayby Judge ''K''; they express similar concerns.
Ms. GIBBONS. Well, under our criteria, the judges in your district don't need anymore help, but that doesn't mean that they're not working very hard. I'm in a district that statistically does not need more help, and I would not say we need more judges, but that doesn't mean that I'm not overwhelmed on a daily basis by what I have to do, just as anybody who has a very responsible job.
Mr. DELAHUNT. Let me ask you this: Are the criteria that you're utilizing at this point in timehave they become more expansive, if you will?
Ms. GIBBONS. The criteria have actually become somewhat more conservative over the last several years, so that we are requiring a higher caseload, and that's oversimplifying it, but we are requiring
Mr. DELAHUNT. But a higher caseload is becoming more acceptable in terms of the resources that you're seeking from Congress.
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Ms. GIBBONS. We've tried very hard to be fiscally responsible and to request of Congress only those resources that we feel we must have.
Mr. DELAHUNT. Judge, where do see the problem, on the criminal side or on the civil, or both?
Ms. KOVACHEVICH. It's on both sides and you've got it being driven by several things. It's being driven by the population, and that's resident and non-resident. The number one travel destination of the United States, according to Triple A, is Orlando; number five is the Tampa Bay areaboth in the Middle District of Florida. When it comes to the seven out of the twenty areas of the country where people are moving to, seven out of the twenty are in the Middle District of Florida, up and down the west coast and elsewhere.
Mr. DELAHUNT. So this is with the shift of population?
Ms. KOVACHEVICH. It's shift of population and the type of cases. We get all of them. You name it, we can checkmark all of them. We've got racketeering criminal cases; we've got the drug; we've got the fraud.
Mr. DELAHUNT. Judge, do you
Ms. KOVACHEVICH. Heavy emphasis on
Mr. DELAHUNT. Do you find more cases going to trial now, as opposed to negotiated pleas?
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Ms. KOVACHEVICH. I will tell you right now, the U.S. Attorney would tell you, that if all of the cases went to trial, the criminal justice system would absolutely collapse. We get pleas, we get a lot of them, but the cases that go to trial are long, protracted cases, racketeering cases. In our cases, it's not unusual for us to have one case take three to 4 months.
Mr. DELAHUNT. Let me ask you another question. In terms of negotiated pleas, I'm a new member here, and continually we have before this subcommittee and the full committee legislation imposing mandatory sentences. In those cases, let me ask you, what's your opinion of mandatory sentences in terms of the backlog of criminal cases? Is it creating a problem?
Ms. KOVACHEVICH. The mandatory sentences, first of all, it is your department as legislators to make up your mind what it is that
Mr. DELAHUNT. I understand that, but just in relation to
Ms. KOVACHEVICH. And as far as the mandatory sentences are concerned, you've decided the areas and designated the areas that should be having those mandatory sentences.
Mr. DELAHUNT. Right.
Page 194 PREV PAGE TOP OF DOC Ms. KOVACHEVICH. First and foremost, I would say to you, as a judge with over 25 years' experience, it did not warm my heart to see my discretion taken away from me, because I thought that we were doing a good job. But, having said that, it was the wisdom of Congress to pass the guidelines and I apply them. As far as the mandatories are concerned, they have their place and their application. On the converse side, let me say to you, the ''white collar fraud crimes are absolutely too low. They should be much higher on the scale, and yet
Mr. DELAHUNT. But that's part of the mandate of the Sentencing Commission. No?
Ms. KOVACHEVICH. No it's not; it's per the mandate of what those guidelines are, Congressman, and those guidelines say you don't depart unless you follow one, two, three, four, and I don't depart, even though in many situations, on the white collar crimes, I think the sentence is too low. So, an examination by Congress with regard to all of this, that's your department. That's not the judiciary's department.
Mr. DELAHUNT. I understand that. I'm just asking your opinion of the impact that it may or may not have in terms of the processing and the transaction of criminal business within the Federal system.
Ms. KOVACHEVICH. The sentencing aspect of it has to do with the power that the U.S. Attorney's office has, and you know that under the guidelines they possess the power to negotiate and to make the deals and to ascertain who is going to flip to make the cases to convict the rest of the other people in these long, big, protracted cases. We're talking about cases with international significance. I got through with a case that took 5 years to get people extradited out of Canada where there was an alleged connection with the Italian mafia regarding heroin. Now, you want to talk about small cases; they may not have that in ''Podunk,'' but we've got that in the Middle District.
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Mr. DELAHUNT. By the way, was that a case that went to a jury?
Ms. KOVACHEVICH. No, it didn't go to a jury in that particular case.
Mr. DELAHUNT. It didn't go to a jury?
Ms. KOVACHEVICH. It didn't go to a jury trial, but it was pending for 5 years. Part of that case went to trial and I tried it and I was in there for many months.
Mr. DELAHUNT. What was the verdict?
Ms. KOVACHEVICH. The other part of the case pled.
Mr. DELAHUNT. Can I ask you, the part that went to a jury, was there a jury, and
Ms. KOVACHEVICH. Jury trial, yes.
Mr. DELAHUNT [continuing]. What was the verdict?
Ms. KOVACHEVICH. Yes.
Page 196 PREV PAGE TOP OF DOC Mr. DELAHUNT. Guilty verdict?
Ms. KOVACHEVICH. Guilty.
Mr. DELAHUNT. Guilty verdict?
Ms. KOVACHEVICH. Guilty verdicts; and of course, part of whatthe red light's on. You know, I'm trying
Mr. DELAHUNT. Don't worry about that red light.
Ms. KOVACHEVICH. Don't worry about it because you're talking
Mr. COBLE. Believe me, she is not going to worry. I noticed that she's not worrying about it. [Laughter.]
Ms. KOVACHEVICH. Thank you, Mr. Chairman.
Mr. DELAHUNT. This is a very informal hearing at this stage, and I'll defer because I don't know if Mr. Canady's had an opportunity, but I'd like to come back.
Mr. COBLE. Why don't we recognize Mr. Canady, then we'll come back for a second round, if need be. The gentleman from Florida.
Page 197 PREV PAGE TOP OF DOC Mr. CANADY. Thank you, Mr. Chairman, and I apologize if I go over any ground that I missed when I was out voting, because I understand that the proceedings continued. I did want to ask you, Judge Kovachevich, about something. I understand that you recently signed a special order assigning all active Middle District judges to hear civil trials in Tampa next summer. Now, with respect to that, could you explain why you have issued the special order, the impact that order will have on other branches of the Middle District, such as Orlando, Jacksonville, and do you know if any other district courts have issued a similar special order?
Ms. KOVACHEVICH. This is a declared emergency, voted upon by the Board of Judges, unanimously, of the Middle District of Florida. What we're going to do is take all 11 of the U.S. district judges, including all of them from Orlando and Jacksonville, withdraw those forces from those two cities, redeploy them, and attack the civil caseload in Tampa. We've targeted 1,500 civil cases, June, July and August, which means we're going to get the monster cases and tell them it's show-and-tell time, ladies and gentleman. There's going to be 11 U.S. district judges sitting in the new courthouse and the old courthouse, prepared to try your cases. Now that's part of what we're doing with regard to our solution for processing those civil cases.
There's a price we're going to pay for that and I'll get to that in a second. As a result of doing that, we are having both the arbitration and mediation side of the store, which we utilize to the nth degree, including getting consent for magistrate trials of our civil cases. You look at those stats; we're in the top ten in the Nation. On the filings and the productivity, we're as efficient as we can be, but if you'll also notice the current statistics for 1996, we're starting to fall behind on our 3-year cases. I know based upon what I see in 1997, and so do my brother and sister judges, that we are going to be in a real crisis and here's why it's going to happen.
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We're sitting here with 11 judges in 1997; in 1998 it's the only summer we can do this. It's the last hurrah for Tampa this decade and this century to do this, because in 1999, 2 of our 11 judges are eligible for senior status; one in Orlando, one in Jax. When that happens, those divisions will go from three to two; one-third down, and they'll have to split it between the two respective judges per division that are there in 1999.
So, as we start the year 2000, here's our problem: We've got Jacksonville, Orlando, and Ocala in a triangle being serviced. We've got Ft. Myers and Tampa on the west coast of Florida and no judge in Ft Myers; we've had to surround the wagons and bring everybody up there to Tampa, even drawing the Ft. Myers civil and criminal cases up there to Tampa so that we can attack them. So here's our prospect: Five judges on the west coast of Florida doing those two divisions, and four handling Ocala, Jacksonville, and Orlando in that particular segment.
We have no choice but to do this accelerated trial. We've left the senior judges in their respective divisions, and we've also got backup judges to handle emergency criminal; the magistrate judges are staying to do consent trials in Orlando and Jax and we've got magistrate judges ready to do consent trials in Tampa. We're going to attack those 1,500 cases and try and get them out of there. Is that going to help enormously? No; that's just to stay even. We've got 3,500 cases now; we're falling behind 77 a month. We'll have 4,400 cases by next July. The fact that we have the judge that's just been appointed will help, but we'll still be falling behind because he can't be expected to produce 77 cases civil every month!
There's a thousand criminal cases that will be there next Summer, bringing us from 4,400 civil plus a thousand criminal, up to 5,400 cases for five district judges handling Ft. Myers and Tampa. Now any way you cut that, that's too much.
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We're here to serve the public. You work overtime; we work overtime. We're not complaining, but I'm telling you, if we don't get some reliefthere's only three things that produce in civil and criminal cases and let me tell you what they are. When it gets down to whether you're going to go to trial or you're going to plead, or you're going to go to trial or you're going to settle, three things produce results: One, a U.S. district judge sitting in that courtroom. Two, a courtroom the size to accommodate the number of parties in that trial; and three, a jury venire sitting there waiting to be picked. Now that's the moment of truth and that's what you've got to have.
My red light, I'm getting better with the red light; it just came on. [Laughter.]
Mr. COBLE. Any more questions for you, Charlie?
Mr. CANADY. We can proceed.
Mr. COBLE. Let's try a second round. Judge Gibbons, let me permit you to put your oars into the water here. We have heard this morning about the so-called rocket docket in Virginia. What is that court doing to resolve cases that perhaps other courts could do? You may not know the answer to that.
Ms. GIBBONS. I know a little bit about it and it is notit's outside the jurisdiction of my particular committee; it's really within the jurisdiction of another committee to talk about the methods that are being used, but just speaking for myself, I believe what they doand I hate to venture out into something I may not know too much aboutbut I think what they do is that they essentially use a master calendar, so that rather than an individual calendar, they have a group of judges who are able to reach cases as they become ready for trial and that gives a greater certainty to the trial date. It makes them better able to keep those early trial dates. My district does something very similar for our criminal docket. We call it our criminal rotation docket and we do it for our short criminal cases, those that will take 5 days or less.
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There are efforts going on in the judiciary now and some of them are just beginning to provide more exchange of these good ideas among judges, so that all can benefit to a greater extent from what some of the most effective districts are doing.
Mr. COBLE. So that can be widely disseminated?
Ms. GIBBONS. Right.
Mr. COBLE. Perhaps more widely disseminated than is being done now?
Finally, when I said earlier that it appears to me, and this was my opinion, that there may be some judges who resist arbitration or other forms of ADR, that may be an inaccurate statement. What I should have said is that maybe some of these Federal judges don't want to be told they have to direct attention to that area. Now let's face it folks, none of us wants to be told by someone else what we have to do. Federal judges, doctor, lawyer, Indian chief, Member of Congress, we all like to drive our own train the way we want to drive it, but sometimes we may be told by other. In our cases, we have 550,000 people who can tell us what to do.
Mr. DELAHUNT. Mr. Chairman, you tell me what to do.
Mr. COBLE. Yes, but you don't listen to me. But, think about that. Take that back to your colleagues.
Page 201 PREV PAGE TOP OF DOC Ms. GIBBONS. I'm glad you came back to that, Mr. Chairman, because I found a statistic that's in my prepared statement that wasn't on the tip of my tongue when you asked me about that earlier.
Mr. COBLE. Okay.
Ms. GIBBONS. By 1995, of the 94 district courts, 22 had arbitration programs, 51 had mediation programs, and 14 had early neutral evaluation programs. So I think that those figures do speak to the fact that there is rather wide acceptance of forms of alternative dispute resolution in the Federal judiciary, and it certainly may be true that judges have preferences for one form over another or have definite ideas about the extent to which those programs should be mandatory, but I don't sense that Federal judges are generally resistant to trying these techniques.
Mr. COBLE. I hope you're right about that.
The gentleman from Massachusetts, another second round, Bill?
Mr. DELAHUNT. Yes, I just kind of want to get a sense of it on a national perspective. I think your remarks, Judge ''K,'' are very well taken, despite your comment earlier, Judge Gibbons, about the fact that in Massachusetts, at least based on certain statistics, the need doesn't appear to be there. Yet, we know, those of us who have been in those courtrooms, that there's a big difference between reading a report with statistics and what really happens in terms of the quality of justice that is being administered. I think we've got to understand and focus on the fact, that as a Nation, one of our jewels is the fact that in most cases our system of justice works. It works. We might have a lot of disagreements, but generally it works, and it works because of the quality.
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I honestly do not believe that we have adequate resources in terms of the numbers of judges and as importantly, in terms of the resources, administrative support services, for example, that are absolutely essential for a smooth and efficient and effective functioning of the judiciary, which is more than just simply a bunch of judges sitting in robes in a room on a bench. I invite a reaction.
Judge ''K,'' go ahead and then we'll ask Judge Gibbons.
Ms. KOVACHEVICH. Well,
Mr. DELAHUNT. We're wrapping it up.
Ms. KOVACHEVICH. Okay. You're wrapping it up. Let me just say to you, we're all here to serve the public. I will tell you that the points made several times by the chairman with regard to mediation, there isn't a stronger supportive district for mediation and alternative resolution dispute and trying to coordinate efficiently and effectively all of those things. If we didn't have them working as effectively as they are, we wouldn't be in the top ten in productivity. Between the judges' chambers, what your talking about, and the support personnel, they're giving their all. They really are. Which is what you would expect them to do, but there is a point when there's no light at the end of the tunnel, where you cannot see any relief, and then we are forced to do what we're doing about getting our forces combined, anticipating, that, we're not going to get what we need. How can we make sure that we're going to cover ourselves and not loose cases to speedy trial, not have this happen or the other thing happen? Let me add to the stress-load for you, because, you know, I told you you could check-mark
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Mr. DELAHUNT. Now these are factors that are not reflected in black-and-white statistics?
Ms. KOVACHEVICH. You're absolutely right and here's one that's not reflected and you heard it this morning. The number one district in the country for threats is now the Middle District of Florida. No other district; we're number one. Now you want to talk about stress-load. You've got your job; you've got your cases; you've got your trials; you're trying to figure every way you can do it. We've been conservative; we haven't asked. You know what our problem was? We stayed back and said we would do it. I told that to you earlier. Because we relied upon the fact that you would know what we are tasked to do. It is our duty to do this and we thought you would do your duty toward usact justly.
Mr. DELAHUNT. Let me ask: Why has the caseload, both on civil and the criminal side, expanded?
Ms. KOVACHEVICH. Why? There's more people out here trying to make a living on the criminal side doing things illegally. There's more activity; we've got more people that are trying; and we don't catch them all.
Mr. DELAHUNT. Right, we certainly don't, but let me ask you thisand this is a question based upon the relationship between State and Federal law-enforcement agenciesthere is an increasing federalization of the criminal law. Would you agree with that?
Page 204 PREV PAGE TOP OF DOC Ms. KOVACHEVICH. You mean that we have statutes that we apply? Congress and their judgment?
Mr. DELAHUNT. I mean Congress has, I think, in the past decade, expanded what would be traditionally perceived to be an area that has been reserved for the States in terms of violent crimes and has expanded the Federal jurisdiction.
Ms. KOVACHEVICH. I will tell you
Mr. DELAHUNT. And I'm not asking you to agree
Ms. KOVACHEVICH. No. First of all, I think Judge Gibbons would agree with me; whatever the law is, we apply it. There is something there behind the scenes that you may find driving this. Two comments ought to be made: One, in our district there is an increasing utilization of law enforcement task forces. You have local law enforcement, sheriff, local police, U.S. Marshal, the State department of law enforcement, whatever it might be, combining in task forces to decide what recommendations they will make about prosecuting particular individuals, who have not gotten as heavy a hit in the State system and now they're targeting people for prosecution. That legislation gives the option for the U.S. Attorney to decide that he is going to target this individual who's been a big State offender and we're going to get him now and prosecute him in the Federal system. I think that's occurring.
Mr. DELAHUNT. Cases that in the past several decades would have been prosecuted in the State courts are now being transacted in the Federal?
Page 205 PREV PAGE TOP OF DOC Ms. KOVACHEVICH. You're talking about the crackexcuse me.
Mr. DELAHUNT. Judge Gibbons, let me hear from you on that.
Ms. GIBBONS. Could I go back to where we started with really the question before that because you mentioned some factors that are really so true in terms of evaluating resource needs? Formulas, the kinds of criteria that we use, are not a magic; I mean there's no way. I mean, they're the best guide we have in our efforts to be responsible about what we request, but they don't quantify how thorny an issue is or how much to what extent a judge has to wrestle with it. Like your judges in Boston, there are just many days when the work is overwhelming and we just try to do our best, and I really think that it's a tribute to the men and women of the Federal judiciary, judges and the staff as well, that we do as well as we do with what we've gotso if you'll forgive the tooting our own horn just as far as our diligent efforts to do the job that we need to do in the courts.
I'm not certain about all the different reasonsthere are many things that impact on increased filings. Of course, every court has not seen increased filings, but many have and there are all kinds of things. Everything from federalization of certain crimes to, you know, sometimes something will happen in a particular community that gives rise to a large number of lawsuits; there may be a temporary situation.
Mr. DELAHUNT. Well, again, to interrupt, the full committee just held a hearing this past week a bill that would, in matters involving taking, would circumvent the State courts and bring them directly to Federal Court in the majority of cases, and we might have some disagreements in terms of the reading of that language, but would clearly increase the caseload of the Federal court. I mean, you're going to be dealing, you could very well be dealing, with appeals from boards of zoning appeals in Ocala, Florida.
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What I'm concerned about is as your resources decline, at the same time we're expanding the jurisdiction and the role of the Federal courts and we're going to createand, Judge ''K,'' that you articulated it so well in your opening statementwe're going to create a crisis in the confidence of the American people in the integrity of the system. I think that if we're going to expand the jurisdiction and ask the men and women who serve in the Federal judiciary to do more, then we've got to pony up and provide the resources. I mean, we've got over 100 vacancies existing now in the Federal system. Is that correct, or thereabouts, Judge?
Ms. GIBBONS. Thereabouts.
Mr. DELAHUNT. You're asking for 17 additional court of appeal judges and 36 additional district court judges. So, what we're talking about is a deficit of 150 judges, and at the same time we're passing legislation that's going to increase your workload. Every time we pass a bill that requires a mandatory sentencefor example, if I was defense counsel, we're going to try that case. We're going to try it. We're going to try it, because I know that sooner or later, if there are enough members of the defense bar to try these cases, we're going to make you scream and you're going to come back here and say, please think this through.
Ms. KOVACHEVICH. Mr. Chairman, may I ask you a question? Is that permitted?
Mr. COBLE. If we can do it quickly because I was supposed to be somewhere 10 minutes ago.
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Mr. DELAHUNT. I would like to just ramble on. [Laughter.]
Ms. KOVACHEVICH. Let me just ask you this: With regard to that rocket docket, I would submit to you I was extremely interested with regard to the rocket docket. An occasion presented itself for me to speak with the chief judge of the State court who just happened to be a former Federal law clerk, who's now the chief State judge of that area. I said, ''Well how do they make the rocket docket work there?'' and I would urge you to explore this because her answer to me was, ''The lawyers bring a lot of their admiralty and other work in Norfolk to the State court.''
Mr. Chairman you raised that point and that's what reminded me of it. There are a lot of reasons why it won't work for us; if you've got 400 milesSenator Grassley's committee asked me why we couldn't have lunch daily and have collegiality. It's because we'd have to meet somewhere in Sebring, Floridaonce a day going from Jacksonville to Naples. It makes a difference where your judicial bodies are located, to try to implement something and we don't have them in one city; we have them in three.
Mr. COBLE. Well, Judge G and Judge ''K,'' let me thank you on behalf of the gentleman from Massachusetts. It's good to have you all with us. I think it's been an illuminating hearing.
This concludes the hearing on H.R. 2603 and H.R. 2294. The record will remain open for 10 days. Thank you all again for your cooperation, and the subcommittee stands adjourned.
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Ms. GIBBONS. Thank you so much.
Ms. KOVACHEVICH. Mr. Chairman, Congressman McCollum wanted this added to the record.
Mr. COBLE. I think we already did it, but without objection, it will be included in the record.
Ms. KOVACHEVICH. Thank you.
Mr. COBLE. We stand adjourned.
Ms. GIBBONS. Thank you.
[Whereupon, at 1:25 p.m., the subcommittee adjourned.]
A P P E N D I X
Material Submitted for the Hearing
Insert offset folios 127 here
INSERT OFFSET RING FOLIOS 128 TO 180 HERE
Page 209 PREV PAGE TOP OF DOC [The appendix is being held in the Committee's file.]
ALTERNATIVE DISPUTE RESOLUTION AND SETTLEMENT ENCOURAGEMENT ACT; FEDERAL COURTS IMPROVEMENT ACT, AND NEED FOR ADDITIONAL FEDERAL DISTRICT COURT JUDGES
SUBCOMMITTEE ON COURTS AND INTELLECTUAL PROPERTY
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
Page 210 PREV PAGE TOP OF DOCALTERNATIVE DISPUTE RESOLUTION AND SETTLEMENT ENCOURAGEMENT ACT
FEDERAL COURTS IMPROVEMENT ACT, AND NEED FOR ADDITIONAL FEDERAL DISTRICT COURT JUDGES
OCTOBER 9, 1997
Serial No. 90
Printed for the use of the Committee on the Judiciary
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB INGLIS, South Carolina
Page 211 PREV PAGE TOP OF DOCBOB GOODLATTE, Virginia
STEPHEN E. BUYER, Indiana
SONNY BONO, California
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
Page 212 PREV PAGE TOP OF DOCSTEVEN R. ROTHMAN, New Jersey
THOMAS E. MOONEY, Chief of Staff-General Counsel
JULIAN EPSTEIN, Minority Staff Director
Subcommittee on Courts and Intellectual Property
HOWARD COBLE, North Carolina, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
ELTON GALLEGLY, California
BOB GOODLATTE, Virginia
SONNY BONO, California
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
BILL McCOLLUM, Florida
CHARLES T. CANADY, Florida
BARNEY FRANK, Massachusetts
JOHN CONYERS, Jr., Michigan
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
ZOE LOFGREN, California
WILLIAM D. DELAHUNT, Massachusetts
MITCH GLAZIER, Chief Counsel
BLAINE MERRITT, Counsel
Page 213 PREV PAGE TOP OF DOCVINCE GARLOCK, Counsel
DEBBIE K. LAMAN, Counsel
ROBERT RABEN, Minority Counsel
EUNICE GOLDRING, Staff Assistant
C O N T E N T S
October 9, 1997
Coble, Hon. Howard, a Representative in Congress from the State of North Carolina, and chairman, Subcommittee on Courts and Intellectual Property
Dolin, Mitchell F., Attorney, American Bar Association
Gibbons, Hon. Julia Smith, Chief Judge, U.S. District Court, Chair, Committee on Judicial Resources
Hornby, Hon. D. Brock, Chief Judge, U.S. District Court for the District of Maine
Kovachevich, Hon. Elizabeth A., Chief Judge, U.S. District Court, Middle District of Florida
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Lind, E. Allan, Professor, Fuqua School of Business, Duke University
Miller, Hon. Tommy E., Magistrate Judge, Federal Magistrate Judges Association
Pro, Hon. Philip M., Judge, U.S. District Court for the District of Nevada
Steenland, Jr., Peter R., Senior Counsel for Alternative Dispute Resolution
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE RECORD
Dolin, Mitchell F., Attorney, American Bar Association:
Article entitled ABA Urges Offer of Judgment Changes to Counter Movement to 'Loser Pays' Rule
Gibbons, Hon. Julia Smith, Chief Judge, U.S. District Court, Chair, Committee on Judicial Resources:
U.S. Courts of Appeals summary of judgeship requests and judicial caseload profile
Hornby, Hon. D. Brock, Chief Judge, U.S. District Court for the District of Maine: Prepared statement
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Kovachevich, Hon. Elizabeth A., Chief Judge, U.S. District Court, Middle District of Florida: Prepared statement
Lind, E. Allan, Professor, Fuqua School of Business, Duke University: Prepared statement
Miller, Hon. Tommy E., Magistrate Judge, Federal Magistrate Judges Association: Prepared statement
Pro, Hon. Philip M., Judge, U.S. District Court for the District of Nevada: Prepared statement
Steenland, Jr., Peter R., Senior Counsel for Alternative Dispute Resolution: Prepared statement
Material submitted for the record
(Footnote 1 return)
Although the statute does not specifically define ''non-core proceedings,'' courts have defined such proceedings ''as those that do not involve a substantive right provided by title 11 or that, by their very nature, generally arise outside the context of a bankruptcy case.'' Diamond Mortgage Corp. of Illinois v. Sugar, 913 F.2d 1233, 1239 (7th Cir. 1990).
(Footnote 2 return)
28 U.S.C. §377. (Pub. L. No. 100659).
(Footnote 3 return)
Strictly speaking, territorial district judges, unlike other Federal judges, cannot voluntarily ''retire'' for disability. To receive a retirement annuity, a disabled territorial judge must seek to be removed from office by the President solely on that ground. 28 U.S. C. §373(e).
(Footnote 4 return)
By contrast, all retired bankruptcy judges and magistrate judges are afforded cost-of-living adjustments so long as the total annuity does not exceed 100 percent of an active bankruptcy or magistrate judge's salary, see 28 U.S.C. §377(e), and Court of Federal Claims judges who retire under section 178 of title 28 are guaranteed an annuity based on the full salary payable to active judges of that court. The 95-percent limitation on cost-of-living adjustments for retired territorial district judges is peculiar inasmuch as territorial judges in regular active service have received the same salary as the Article III district judges for the past 40 years or more but the provision for cost-of-living adjustments was added to section 373 only 19 years ago.
(Footnote 5 return)
28 U.S.C. §1863(b).
(Footnote 6 return)
The Department of Labor reasoned that a juror is not covered while traveling to and from his or her home. Department of Labor File No. A25316984.
(Footnote 7 return)
28 U.S.C. §26712680.
(Footnote 8 return)
31 U.S.C. §3721.
(Footnote 9 return)
28 U.S.C. §1871.
(Footnote 10 return)
28 U.S.C. §1877j; 5 U.S.C. §8101 et seq.
(Footnote 11 return)
5 U.S.C. §6301 et seq.
(Footnote 12 return)
Report of the Judicial Conference of the United States on the Federal Defender Program (hereinafter referred to as ''Judicial Conference Report''), March 1993, p. 11.
(Footnote 13 return)
This research was supported by the Federal Judicial Center.
(Footnote 14 return)
This research was supported by the National Science Foundation's program in Law and Social Science (grants SES 8411142 and SES 18597) and by the RAND Corporation's Institute for Civil Justice.
(Footnote 15 return)
According to a survey conducted by Neal Miller of the Institute for Law and Justice, 22.4% of defense attorneys surveyed stated that plaintiffs face some sort of bias in state court. Neal Miller, An Empirical Study of Forum Choices in Removal Cases under Diversity and Federal Question Jurisdiction, 41 Am. U.L. Rev. 369, 408 n.149 (1992).
(Footnote 16 return)
The proponents of measures such as Section 302 have in the past asserted that in-state plaintiffs' diversity was originally provided for to protect creditors' rights. While protection of creditors' rights and the promotion of interstate commerce are reasons why diversity jurisdiction was created, we are aware of no direct 18th Century evidence explaining why in-state plaintiffs were allowed to invoke diversity jurisdiction, though there is reason to doubt that it was based solely on solicitude for creditors' rights. The creditors' rights hypothesis may be difficult to square with the fact that the Judiciary Act of 1789 (a) set a $500 amount in controversy and (b) did not extend diversity jurisdiction to cases in which none of the parties resided in the forum state.
(Footnote 17 return)
See generally 15 James W. Moore, et al., Moore's Federal Practice §102 App.03 (3d ed. 1997); 13B Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure §3601, at 337 (1984).
(Footnote 18 return)
See Richard A. Posner, The Federal Courts: Crisis and Reform 141 (1985).
(Footnote 19 return)
Charles A. Brieant, Diversity Jurisdiction: Why Does the Bar Talk One Way But Vote the Other Way With its Feet, 61 N.Y. St. B.J. 20, 21 (1989).
(Footnote 20 return)
There is reason to believe that the 60,000 case figure for 1996 resulted from double counting of breast-implant lawsuits. See Chief Justice William H. Rehnquist, 1996 Year-End Report on the Federal Judiciary, 7 n.2 (Jan. 1, 1997).
(Footnote 21 return)
Federal Courts Improvement Act of 1996, P.L. 104317, §205 (amending 28 U.S.C. §1332).
(Footnote 22 return)
John P. Frank, The Case for Diversity Jurisdiction, 16 Harv. J. on Legis. 403, 405 (1979).
(Footnote 23 return)
State Justice Institute, State Court Caseload Statistics: Annual Report 1992 (Feb. 1994).
(Footnote 24 return)
Administrative Office of the United States Courts, 1992 Federal Court Management Statistics (Washington, D.C. 1992); John A. Goerdt, Reexamining the Pace of Litigation in 39 Urban Trial Courts 39 (Williamsburg, VA: National Center for State Courts, 1987).
(Footnote 25 return)
Victor E. Flango & Craig Boersema, Changes in Federal Diversity Jurisdiction: Effects on State Court Caseloads, 15 Dayton L. Rev. 405, 455 (1990).
(Footnote 26 return)
As the Federal-State Jurisdiction Committee itself observed at page 42 of its June 18, 1993, report to the Judicial Conference, ''plaintiffs will seek the forum offering speedier trial, and (all else being equal) defendants will prefer the forum offering greater delay in getting to trial.''
(Footnote 27 return)
S. Rep. No. 104366, at 29, reprinted in 1996 U.S.C.C.A.N. 4202, 4209 (Sept. 9, 1996).
(Footnote 28 return)
''Weighted filings'' is a mathematical adjustment of filings, based on the nature of cases and the expected amount of judge time required for disposition. For example, in the weighted filings system for district courts, each student loan civil case is counted as only 0.031 cases while each cocaine distribution defendant is counted as 2.27 weighted cases. The weighting factors were developed on the basis of time studies c0onducted by the Federal Judicial Center/
(Footnote 29 return)
Source: Statistical Report for Justices and Judges of the United States, July 31, 1996.