Judicial compensation and the definition of judicial power in the early republic.

Author:Pfander, James E.

Article III's provision for the compensation of federal judges has been much celebrated for the no-diminution provision that forecloses judicial pay cuts. But other features of Article III's compensation provision have largely escaped notice. In particular, little attention has been paid to the framers' apparent expectation that Congress would compensate federal judges with salaries alone, payable from the treasury at stated times. Article III's presumption in favor of salary-based compensation may rule out fee-based compensation, which was a common form of judicial compensation in England and the colonies but had grown controversial by the time of the framing. Among other problems, fee-paid judges were understood to have a financial interest in expanding their jurisdiction. By placing federal judges on salary, Article III may have provided subtle institutional support for the notion that federal courts were to be courts of limited jurisdiction.

This Article explores the role of judicial compensation in shaping the familiar jurisdictional landmarks of the early Republic. It shows that Congress chose a salary-based compensation scheme, and took early steps to rule out fee payments to federal judges. The Article also demonstrates that the judicial salary was understood to include compensation for official travel, a fact that sheds important new light on the Supreme Court Justices' hostility to the burdens, and expense, of riding the circuit. The Article suggests that financial self-interest may have played a role in shaping the early definition of judicial power and the willingness of the Justices to take on extra judicial assignments. Such familiar episodes in the historiography of the early Republic as the refusal of the circuit courts to hear pension claims, the Court's refusal to issue advisory opinions, the paradoxical willingness of Chief Justice Jay to accept a position as ambassador to Great Britain, and the Court's complex response in Marbury v. Madison to the repeal and reestablishment of circuit duties all take on new meaning when viewed against the backdrop of financial self-interest. Concluding remarks focus on judicial independence and the way Article III frames debate over judicial compensation and workload.

TABLE OF CONTENTS INTRODUCTION I. THE COLONIAL AND EARLY STATEHOOD CRITIQUE OF FEE-BASED COMPENSATION II. FRAMING ARTICLE III's COMPENSATION PROVISION III. JUDICIAL COMPENSATION IN THE FEDERALIST ERA A. Travel Expenses and Judicial Salaries B. Congressional Preclusion of Fee-Based Judicial Compensation IV. SALARIES, TRAVEL EXPENSES, AND EXTRAJUDICIAL DUTIES A. Circuit Duty and Rotation B. Circuit Duty: Eliminating Circuit Riding C. Extrajudicial Duties: Pensions, Advisory Opinions, and Plural Officeholding D. Marshall, Circuit Riding, and the Revolution of 1801 CONCLUSION APPENDIX INTRODUCTION

Chief Justice John G. Roberts, Jr. drew headlines on January 1, 2007, when he devoted his year-end report to an argument for a judicial pay increase. (1) Whatever the report's merits as an advocacy piece, (2) its submission would not have surprised James Madison. Madison had proposed precluding any change in judicial pay, both increases and reductions, for fear that judges would approach Congress hat in hand (to secure the one and avoid the other). (3) But Madison's colleagues at the Philadelphia convention did not agree. Madison was outvoted--twice--by those concerned less about the erosion of judicial independence than about the erosion of judicial salaries through wage and price inflation and the steady accumulation of additional work. (4) As a result, the final terms of Article III establish a one-way ratchet that permits Congress to raise but not reduce judicial compensation. (5) Such a provision encourages Congress to err on the low side of judicial pay, and assures the sort of interbranch dialogue exemplified by the Chief's report. (6)

Just as Article III's one-way ratchet structures interbranch dialog about the adequacy of judicial compensation, the form of compensation may shape the incentives of the federal judiciary. At the time of the framing, the judges of superior courts in England received two forms of compensation: a salary paid by the Crown and fees paid to the judges by the litigants themselves on a piecework basis. (7) (The winning party could recover its own court fees from the loser as part of the taxable costs of litigation.) (8) Fee-paid judges were also commonplace in colonial America; justices of the peace and the judges of the colonial vice-admiralty courts received a substantial share of their compensation in the form of fees. (9) But reliance on litigant fees to compensate judges had grown controversial during the eighteenth century. After the Declaration of Independence, new state constitutions often imposed restrictions designed to moderate the corrupting influence of fee-based judicial compensation. For example, Maryland's constitution called for a secure judicial salary, and foreclosed judges from both holding other offices and receiving any fees or perquisites of office. (10)

Article III does not follow the Maryland Constitution in expressly foreclosing fee-based compensation. But it may establish a presumption in favor of salary-based compensation. (11) The well-known terms of Article III require that federal judges receive for their services, "at stated Times" a "compensation" that shall not be diminished during their continuation in office. The word "compensation" is broad enough to encompass all forms of judicial pay, including both salaries and fees (and other emoluments of office). The requirement that this compensation be paid "at stated Times" appears to have been framed with judicial salaries in mind; fee-based compensation was paid at various times over the course of the litigation. Similarly, the nodiminution rule may contemplate the certainty of a salary rather than the fluidity of fee-based compensation; the ebbs and flows inherent in fee-based payment systems would not obviously comply with the no-diminution requirement. (12) Certainly, the debates in Philadelphia between Madison and Gouverneur Morris over the impact of inflation on fixed judicial salaries assume that Article III calls for the payment of salary-based compensation. (13)

To the extent that Article III establishes a presumption in favor of salary-based compensation, it apparently seeks both to ward off corruption in office and to provide subtle structural support for the view of federal courts as courts of limited jurisdiction. Founding era debates took for granted the fact that the English superior courts had expanded their jurisdiction through the use of legal fictions. (14) Fee-based compensation offered an obvious financial incentive for judges to indulge in such fictional docket expansion. Indeed, Professor Daniel Klerman has suggested that fee-based compensation may have led not only to jurisdictional expansion but also to the development of plaintiff-friendly legal doctrines that would attract new business that only plaintiffs could steer to their courts. (15) If competition for fees tended to encourage judges to grasp for new judicial business, then salary-based compensation would have the opposite tendency. Rather than seeking new business, judges on a salary might predictably view new assignments with some suspicion. (16) Such assignments would bring the burdens of more work without the promise of any immediate compensation. A salary-based compensation system might help to encourage federal courts to stay within the boundaries of Article III, rather than competing for business with one another or with the state courts.

Congress followed Article III's lead in providing for the payment of salaries to federal judges. (17) Interestingly, the use of fictions to secure jurisdictional expansion does not appear to have characterized the practice of the early federal courts. (18) Indeed, to a striking degree, early jurisdictional controversies tended to flow from the refusal of the judges to take on new assignments. In Hayburn's Case, the Justices cited the lack of judicial finality in support of their refusal to sit as judges of the circuit courts to decide the pension claims of disabled war veterans. (19) Striking a similar tone in later correspondence, the Court refused to issue advisory opinions at the behest of the executive branch. (20) In both instances, the Justices couched their objections in terms of the separation of powers--and no doubt such principles played a central role in their refusal to act. But the subtle influence of their salary-based, rather than fee-based, compensation may have helped confirm the wisdom of their principles. Both tasks would have added a significant new share of work to their judicial obligations.

This Article explores the way judicial compensation and financial self-interest may have influenced the formative years of the federal judiciary. (21) Consider the influence of compensation on the Justices' attitude toward circuit riding, a chore they were assigned in the Judiciary Act of 1789. (22) While historians have emphasized the physical burdens of the circuit, they have paid somewhat less attention to the fact that circuit riding also represented an important pocketbook issue for the Justices. Congress paid federal judges a flat salary and the Justices were expected to pay their own expenses when traveling to attend their circuits. (23) As a result, any reduction in circuit-tiding duties would effectively represent a significant, but to the public largely invisible, salary increase for the Justices. By contrast, the judges would experience any expansion of circuit duties (such as those involving the disability claims of war veterans) as an uncompensated addition to their official chores.

Understanding the financial self-interest that informed the Justices' complaints about circuit riding sheds new light on a variety of familiar episodes...

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