Equitable Powers and Judicial Discretion: A Survey of U.S. Bankruptcy Judges.

Date22 March 2020
AuthorDick, Diane Lourdes

This article reports the results of a qualitative survey of 51 U.S. bankruptcy judges concerning their beliefs regarding, and approaches to, the equitable and discretionary powers of the bankruptcy court. The goal of this project was to understand how judges perceive the bankruptcy court's equitable powers, and whether and to what extent they view them as separate and distinct from the court's general discretion. While some judges have thoughtfully discussed their views on judicial discretion and equitable powers in published opinions, (1) interviews, (2) and extrajudicial writings, (3) no previous efforts have been made to conduct an in-depth study of bankruptcy judges' perspectives regarding these topics.

Survey questions were designed to help understand, among other things, what judges perceive to be the sources of the bankruptcy court's equitable powers, how they interpret and apply [section] 105(a) of the Bankruptcy Code, (4) what they believe it means for a court to act in the name of equity, whether they would like more guidance from Congress or the Supreme Court regarding the scope of the court's equitable powers, their approaches to exercising discretion, and whether they perceive a change in the level of discretion that bankruptcy judges possess.

Because of the methods used, (5) the results of this survey cannot be generalized to the entire population of U.S. bankruptcy judges. Nonetheless, the study provides important insights on the judicial decision making process of 51 bankruptcy judges. For one thing, responses echo the classic theoretical split in bankruptcy law between those who prefer more flexible decision-making approaches and those who favor strict adherence to the Code. (6) But because the terms "judicial discretion" and "equitable powers" lack clear definitions and boundaries, judges' views with respect to these concepts are exceptionally nuanced, multidimensional, and interconnected. Survey results suggest that bankruptcy judges' perspectives on judicial discretion and equitable powers are not binary; indeed, they probably do not even fall along a spectrum. Rather, they likely cluster into multiple, related sets of opinions and approaches. Accordingly, lawmakers and appellate judges must not assume that bankruptcy judges construe these and related terms the same way.

This article makes a novel contribution to the literature by identifying the clusters that were apparent in the responses received, and by describing the beliefs, attitudes, and approaches that tended to correlate with them. Additionally, the article quotes extensively from the judges' written comments, in the hopes that these insightful observations and opinions may help refine hypotheses and deepen our understanding of how bankruptcy judges perceive and use their judicial powers.

In Part II of this article, I describe the research methods used and the limitations of this study. This Part also introduces the study's key findings in the form of a multidimensional model of judges' views on discretion and equitable powers. Part III presents and analyzes the judges' responses by topic, highlighting significant trends and important questions that emerge from the written comments. Part IV considers how these findings can be used to inform broader conceptual debates concerning the nature and extent of the bankruptcy court's discretionary powers. Part V contains conclusions that can be drawn from the data.

  1. DESCRIPTION OF THE STUDY

    1. Research methods and limitations.

      In the spring of 2019, I designed an online survey that asked a combination of multiple choice and open-ended questions about the subjective, personal experiences of bankruptcy judges with respect to the court's discretion and equitable powers. Survey questions were largely derived from the academic and judicial debates over the bankruptcy court's equitable powers. The first set of questions focused on the bankruptcy's court's general discretion, the second set of questions focused on equitable powers, and the final set of questions focused on interpretations and uses of [section] 105(a). (7)

      Granted, the decision to survey judges on their own perceptions of their judicial decision-making style introduces some degree of bias into the study design. Respondents may not accurately self-report their experiences and approaches for a number of reasons, and it is impossible to know whether and to what extent survey results provide an accurate depiction.

      After receiving human subjects research approval from my university's Institutional Review Board, I coordinated with the National Conference of Bankruptcy Judges (the "NCBJ"), an association of U.S. bankruptcy judges, to distribute the survey. (8) The NCBJ's administrator delivered the survey link via listserv message to its membership, which at the time numbered 375 and consisted of a combination of sitting, (9) recalled, (10) and retired bankruptcy judges. (11) No incentives, such as gift certificates or cash payments, were offered or provided. Prospective participants were initially given four weeks to complete the survey, with the deadline subsequently extended by four days.

      Fifty-one judges completed the survey, resulting in a response rate of approximately 14%. While there is no universal minimum response rate, online surveys typically have lower response rates than traditional mailed paper surveys. (12) Indeed, the rate for this study is consistent with those of other recent online surveys of various populations reported in legal scholarship. (13) That said, response rates tend to be higher with respect to my target population of U.S. bankruptcy judges. For instance, a 2010 online survey by the Federal Judicial Center regarding courtroom use and sharing boasted an 81% response rate, (14) while a 2004 online survey by the Federal Judicial Center regarding mandatory disclosures in adversary proceedings reported a response rate of 36-38%. (15) And a 2009 survey of bankruptcy judges on their uses of mediation, which used both online and paper distribution methods, yielded a 44% response rate. (16) In addition to the online-only nature of my survey, it is possible that the length of the survey instrument, the amount of time needed to answer questions, and the nature of the survey topics may have contributed to the lower response rate. Bankruptcy judges are, after all, extremely busy managing high volumes of cases.

      Nevertheless, the large percentage of judges not responding to the survey makes it likely that there is systematic bias in the responses received. For instance, the judges who chose to respond may have particularly strong views on judicial discretion and the equitable powers of the bankruptcy court. Therefore, the results of this survey, while useful for developing hypotheses and creating explanations concerning judges' perceptions of, and approaches to, the bankruptcy court's equitable and discretionary powers, should not be taken as representative of the entire population of U.S. bankruptcy judges.

      Finally, no direct identifiers were collected and, although several judges chose to self-identify, participants were assured that their identities would not be revealed in study reports or publications. No demographic data was collected, (17) apart from a single question concerning length of service as a bankruptcy judge. However, the results from this question suggest that respondents came from a wide cross section of judges: ten respondents have been a judge for five or fewer years, thirteen have been on the bench for six to ten years, twelve have served for eleven to fifteen years, nine have served for 16 to 20 years, three have served for 21 to 25 years, two have served for 26 to 30 years, and two have over 30 years of experience on the bench.

    2. OVERVIEW OF RESULTS.

      The survey results show that there is no common understanding of the source and scope of the court's equitable powers, or of the distinction (if any) between exercises of discretion and exercises of the court's equitable powers--indeed, many respondents struggled to distinguish between the two concepts. While there is common ground, there is also substantial variation.

      Judges' views on judicial discretion and equitable powers are exceptionally nuanced, multidimensional, and interconnected. For instance, a judge's views on judicial discretion will depend, in large part, on whether she perceives a difference between judicial discretion and equitable powers; moreover, the same judge's approaches to exercising equitable powers will depend on her understanding of the source of such powers. It should not be a surprise, then, that survey results suggest that bankruptcy judges' perspectives on judicial discretion and equitable powers are not binary; indeed, they probably do not even fall along a spectrum. Rather, survey results suggest that they clustered into multiple, related sets of opinions and approaches.

      The following subsections describe the four distinct clusters that emerged from the responses I received. Given the limitations of this study, it is possible that there are other clusters not represented here. While not all respondents fell into these four clusters, most of the responses demonstrated a clear leaning toward a single cluster. Finally, these clusters do not necessarily fall along a spectrum of the traditional qualities used to describe judging styles, such as that of restraint versus activism. (18) They also do not appear to reflect political leanings, such as conservative versus liberal. (19) Judges from each cluster described themselves as restrained and cautious, and all signaled their deep concern with justice and fairness and their strong commitment to the rule of law.

      Cluster 1: Believes that the bankruptcy court has inherent equitable powers, but that they have largely been supplanted by the Code. Judicial discretion is exercised as directed by the Code, and then strictly in accordance with precedent.

      Judges in this...

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