March 25, 2024 - On March 12th, the United States Judicial Conference, which exists to consider administrative and policy issues affecting the federal court system, issued a non-binding policy recommendation relating to random civil case assignment. According to the announcement the policy aims to limit “the ability of litigants to effectively choose judges in certain cases where they file lawsuits.” Somewhat relatedly, the LSTA has closely followed the issue of “judge shopping” in bankruptcy courts and recently joined the Creditor Rights Coalition (CRC) and others to propose a rule to the United States Judicial Conference that would recommend random case assignment in all complex bankruptcy cases. As described below, the new civil judge shopping policy has garnered both strong support and significant pushback, almost all along partisan lines. In contrast, the proposal on bankruptcy shopping is not partisan and should not be able to avoid the political roadblocks now facing civil judge shopping reform.
Bankruptcy Judge Shopping. As we’ve noted, bankruptcy courts like the Southern District of Texas that have “complex case panels,” where one of two judges are guaranteed to oversee any case filed in the district, have adjudicated an incredibly large percentage of all complex bankruptcy cases in the United States. Similarly, certain federal districts that contain geographic divisions where only one or two judges sit (such as White Plains, part of the Southern District of New York (SDNY)) also attracted a disproportionate number of complex cases. Indeed, Houston became the dominant district for mega cases and, together with Delaware and New York, presided over 84% of all big cases in 2020. Former Judge David Jones of Texas handled 39% of all such cases alone. Several academics have bemoaned this trend as a breakdown of the bankruptcy system, giving debtors and their counsel undue advantages. Importantly, several courts have already addressed the issue of judge shopping on their own. For example, the SDNY in November 2021 revised its case assignment rules to require random assignment of mega cases irrespective of the district in which they are filed. Similarly, the Eastern District of Virginia, which for some time was a popular venue for mega cases, changed its rules to require random assignment. But not every court has been so forthcoming. In response to a request from stakeholders, the district court overseeing the SDTX bankruptcy court refused to get rid of its complex case panel. The CRC’s proposed rule would increase the pressure on courts to move to random case assignment.
Civil Judge Shopping Reform. A similar but much more politically charged attempt at ending civil judge shopping is also taking shape. The policy recommendation addresses all civil actions that seek to bar or mandate state or federal actions, “whether by declaratory judgment and/or any form of injunctive relief.” In such cases, judges would be assigned through a district-wide random selection process. Advocates for this policy generally argue that practices that do not reflect random case assignment tend to undermine the independence of the judicial branch and the public’s trust in the judiciary. Nevertheless, many Republicans and several courts have pushed back, arguing that the new policy was politically motivated and would disadvantage Republicans.
Last week, Senate Majority Leader Chuck Schumer called on the chief judge of the Northern District of Texas to implement the policy alleging that Republican state attorneys general and activists had seized on local rules in Texas to sue in small courthouses whose one or two judges were appointed by Republican presidents, enabling them to essentially choose judges who have often ruled in their favor on issues like abortion, immigration and gun control. Given the current political environment and the stakes, it is doubtful that the recommended new policy will be implemented in the very courts that have been targeted.
Where Does This Leave Bankruptcy Judge Shopping Reform? In contrast to the civil judge shopping reform efforts, we believe that the bankruptcy reform efforts are not partisan and will not attract that type of opposition.
