July 01, 2009 | Litigation News

Federal Judges Try Again for Cost-of-Living Raises

4 min

A suit pending in the United States Court of Federal Claims has revived the debate over the importance of salaries in protecting the quality of the federal judiciary.

In Beer v. United States of America, seven judges allege that the United States violated the Ethics Reform Act of 1989 (ERA) and the U.S. Constitution’s Compensation Clause, which prohibits reductions in judicial pay, by failing to appropriate certain cost-of-living adjustments (COLAs).

The government has moved to dismiss the case based on, among other things, Williams v. United States, in which the U.S. Court of Appeals for the Federal Circuit rejected some of the Beer plaintiffs’ arguments. Although they described the Williams decision as “wrong,” the Beer plaintiffs said they “do not object” to dismissal based on Williams, subject to their right to challenge that decision on appeal.

“From a practical standpoint, it appears that the plaintiffs may be seeking a quick trip to the [U.S.] Supreme Court where they might expect a favorable review based on strong consensus dissents among judges criticizing the majority’s decision in Williams, and Justices Breyer, Scalia, and Kennedy’s joint dissent in denial of Williams’ petition for certiorari,” says Penny J. White, Knoxville, TN, cochair of the ABA Section of Litigation’s Task Force on the Independence of the Judiciary.

Beer “creates a classic separation of powers issue because the independence of the judiciary was a driving force in the creation of the federal judicial structure of life-tenured judges whose salaries were protected from diminution during their tenure in office,” says White.

“Judicial pay is a survival issue for the judiciary where judges continue to leave the bench for financial reasons. It just cannot be in our society that a first-year Wall Street lawyer has the same value to the legal system as a federal judge,” adds Elaine Johnson James, West Palm, FL, Section Task Force on the Independence of the Judiciary member.

Judicial Salary Inflation Decision
The Beer case is just the latest challenge to the manner in which Congress dictates judicial pay. In 1975, Congress passed the Executive Salary Cost-of-Living Adjustment Act of 1975 [PDF] to provide COLAs to federal judges. Based on unfavorable inflation rates, however, Congress and the president attempted to block COLAs on four separate occasions during the five years following 1975.

In United States v. Will, the Supreme Court determined that Congress and the president had improperly attempted to block two COLAs after the first day of the fiscal year. Those COLAs had become “payable and due” and were protected by the Compensation Clause. Because Congress and the president acted beforethe other two COLAs became “payable and due,” those COLAs had been appropriately blocked.

In the wake of Will, Congress passed legislation that required an affirmative act for judges to receive a yearly COLA (Section 140 [PDF]). Enacted several years later in response to Section 140, the Ethics Reform Act guaranteed COLAs for federal judges in any year that other federal employees received them without need for congressional action.

Interpreting the Ethics Reform Act
Several federal judges filed the Williams case, a class action, when “blocking statutes” prevented federal judges from receiving their COLAs for three years between 1991 and 1999. The district court agreed, finding, among other things, that Section 140 had expired. On appeal, the Federal Circuit agreed that Section 140 had expired but, over a dissenting opinion, concluded that the blocking statutes had been appropriately enacted. The majority based its decision on Will: Congress can deny increases in judicial compensation as long as the raise has not “vested” or is not “payable and due.”

After the Federal Circuit’s decision in Williams, Congress amended Section 140 [PDF] to require an affirmative action to apply COLAs to judges’ salaries for “fiscal year 1981 and each fiscal year thereafter” (emphasis added). “The law places judicial and congressional pay in lockstep, presenting a serious political problem where the judiciary remains at the mercy of Congress, which for political reasons might not raise its own salary level,” says James.

“It would be a pity if noncompetitive salaries put public service out of reach for talented and committed lawyers,” she says.