Director's Annual Report

Congressional Activities

Federal Courts Improvement
Courthouse Construction
Ninth Circuit Spilt
Class Action Fairness Act
Asbestos
Multi Litigation Restoration Act of 2005
Bankruptcy Refom Law
Sentencing Guidelines
Social Security
Habeas Corpus Reform
Redaction Authority Renewal

Administrative Office personnel support the Judicial Conference and its committees through effective and constant communications with Congress. During the especially busy legislative session in 2005, agency staff conveyed and explained the policies adopted by the Judicial Conference to Congress, assisted in the drafting of statements for judges testifying on behalf of the Conference, and identified and monitored legislation that potentially affected the organization and operation of the federal courts. Of particular importance were bills concerning judgeships, caseload, jurisdiction, appropriations, and courthouse facilities. AO staff also responded to congressional inquiries regarding legislative proposals and constituent concerns.

During the first session of the 109 th Congress, legislative action was taken on a wide range of issues of importance to the Judiciary. Judicial Conference committee chairs and other representatives of the Judiciary testified at hearings during 2005 in support of legislative proposals of the Conference and in response to issues that could affect the Judiciary. In addition, several bills were proposed that could have significantly affected the Judiciary's operations, but were not passed during the first session. Judges, Director Mecham, and Administrative Office staff worked to raise awareness throughout Congress of the Conference's positions on the relevant issues as bills were introduced and considered.

Federal Courts Improvement

During the first session of the 109th Congress, the Director, on behalf of the Judicial Conference, transmitted to Congress several proposals that reflected Judicial Conference positions. The proposed Federal Courts Improvement Act of 2005 contains 31 provisions that address the administrative, financial, personnel, and benefits needs of the Judiciary. For example, the legislation would authorize the federal courts to:

• coordinate and consult with the U.S. Marshals Service in determining the Judiciary's security needs;
  
• make intermittent confinement permanently available as a condition of supervised release, with several limitations;
  
• treat as civil debts the fines and/or orders of restitution in criminal offenses, making them payable immediately and collectable by the Department of Justice;
  
• identify as a crime the filing of a false lien or encumbrance against the property of any federal judge;
  
• provide Judiciary employees with a competitive comprehensive supplemental benefits package;
  
• extend to bankruptcy, magistrate, and territorial judges the same costs for group life insurance after age 65 as for Article III judges;
  
• extend to surviving spouses and families of federal judges the same eligibility for health insurance coverage as that enjoyed by other federal employees; and
  
• extend to territorial judges the same treatment as other non-Article III judges in their retirement coverage and employment cost index (ECI) adjustments.

One section of this proposed courts improvement bill was enacted on September 9, 2005, as the Federal Judiciary Emergency Special Sessions Act of 2005, P.L. No. 109-63. Prompted by Hurricane Katrina, this new law allows any federal court to conduct proceedings outside its jurisdictional boundaries during emergency situations.

The proposed Federal Courts Jurisdiction Clarification Act of 2005 is a package of substantive amendments to Title 28, U.S. Code. It includes provisions clarifying certain issues regarding diversity jurisdiction in such areas as the resident alien proviso and the citizenship of businesses with foreign contacts. The bill would also improve removal and remand procedures and index the amount in controversy for diversity jurisdiction. In November 2005, the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property held the first hearing on this bill.

Also transmitted was a proposal to amend the Higher Education Act of 1965 to make full-time federal defender attorneys eligible for cancellation of certain student loans over five years and authorize law clerks working full-time for federal judges to defer payments on certain federally-insured student loans for up to three years.

In addition, a proposed bill with two tax-related amendments was transmitted, which would make certain rules regarding sales of property comply with conflict-of-interest requirements in the federal Judiciary. The amendment would also specify that the value of transportation provided by a federal agency to a federal employee due to security concerns is not treated as taxable income. Lastly, the Judicial Conference transmitted to Congress a proposal to equalize the annual adjustments in the rates of pay of senior federal government officials, including federal judges' COLAs, with the average level received by most other federal employees under the General Schedule. Under the current pay system, the cumulative pay increases received by General Schedule employees since 1994 have been about 150 percent greater than the increases received by judges and other senior federal government officials.

Courthouse Construction

After imposing a courthouse construction moratorium, the Judiciary proposed only one construction project for FY 2006—the San Diego, California courthouse, which had been declared a space emergency. The President's proposed budget for FY 2006 included $231 million to build the new courthouse annex in San Diego and also $3 million requested by the GSA to demolish a building on a previously purchased site for the Austin , Texas project.

Congress approved appropriations for both projects. However, in December 2005, the House delayed authorization of the San Diego project, pending an accurate cost estimate from GSA. Congress further appropriated funds for seven additional courthouse construction projects, including four projects: Cape Girardeau, Missouri; Jackson, Mississippi; Las Cruces, New Mexico; and El Paso, Texas. It funded two projects: Rockford, Illinois and Jefferson City, Missouri ahead of schedule and one project, Tuscaloosa, Alabama, that has never been on the Judicial Conference five-year plan. Appropriations and authorizations of $126 million also were approved for FY 2006 for six courthouse repair and alterations projects, plus the Tuscaloosa, Alabama Federal Building.

Faced with a growing rent bill that has forced staff reductions, the Judiciary has sought relief in the rent it pays to GSA for court facilities and looked for ways to reduce space in courthouses. A rent working group composed of judges from the Judicial Conference Executive Committee, Budget Committee, and the Security and Facilities Committee met in June. Before the meeting, in February, GSA had rejected a late 2004 request for a reduction in rent from AO Director Mecham, Chief Judge Carolyn King, chair of the Executive Committee, and Judge Jane Roth, chair of the Committee on Security and Facilities. They had asked that the Judiciary's rent be reduced to reflect only operation and maintenance expenses, and not capital costs of land and construction, for a savings of $483 million annually. As a result of the Director's additional outreach to Congress on this issue, 11 senior members of the Senate Judiciary Committee also wrote to GSA in May to request rent relief for the Judiciary. They, too, received a negative response.

Other committees in Congress have focused on the possibility of courtroom sharing as a way for the Judiciary to reduce its space needs. In April, leaders of the House Committee on Transportation and Infrastructure requested a study by the Government Accountability Office (GAO) on the Judiciary's rent problems—to be completed in May 2006—and in June, there was a subcommittee hearing on the matter. As a result, the chairman of the House subcommittee requested that the Judiciary conduct a study on courtroom sharing. Then, the Senate required the Judiciary to report to the Appropriations Committee 120 days after enactment. Reports must cover the number of courtrooms compared to the number of judges nationwide, the number of senior judges that maintain sole use of a courtroom, the districts in which enough space is available that courtroom sharing could realistically occur, and the financial savings that could be accomplished through courtroom sharing.

Finally, GAO completed a report this year, requested by the Senate Committee on Environment and Public Works, on the reasons for changes in the size and cost of courthouse construction projects. The report concluded that final costs exceeded original estimates submitted to Congress at the design stage and at the construction stage by an average of 17 percent and 5 percent, respectively. Increased costs were attributed to changes in the project's scope, usually due to increased security requirements, or delays in the project. GAO found that deviations from the U.S. Courts Design Guide did not lead to increased costs, as such changes were usually offset by other space reductions.

Ninth Circuit Split

A number of bills were introduced in both houses of Congress to split the Court of Appeals for the Ninth Circuit, each proposing slightly different formulations, varying by the number of newly created circuits, combinations of states included in each circuit, and how existing or newly authorized judgeships would be allocated throughout the new configurations. Hearings were held in both the House and Senate on the proposed split and on the need for 92 new judgeships. The House passed the bill at the end of the session, but it was dropped by the Congressional conferees.

Class Action Fairness Act

With passage of the Class Action Fairness Act of 2005, P.L. No. 109-2, jurisdiction for most large class action suits moves from state courts to federal courts. Generally, the Act grants the federal courts jurisdiction over class action suits based on minimal diversity of jurisdiction between adverse parties when the aggregate amount in controversy exceeds $5 million. The Congressional Budget Office estimated that at least several hundred additional class action suits will be heard in federal courts.

Under the law, the Judicial Conference must report to the House and Senate Judiciary Committees by February 18, 2006 on class action settlement best practices and how they are applied.

Asbestos

At year's end, prospects for passage of new asbestos legislation remained uncertain, although the Senate indicated it would consider S. 852, the Fairness in Asbestos Injury Resolution Act of 2005 as the first major legislative issue of the second session of the 109th Congress.

Early in 2005, the Senate Judiciary Committee approved a bill introduced by Senators Specter and Leahy that would establish a $140 billion national fund through mandatory contributions by companies with prior asbestos expenditures and their insurers. Payments would be made from this fund to eligible individuals who meet certain medical and other specified requirements. The bill would create a no-fault administrative system for the processing of asbestos claims, established in the Department of Labor. Remedies specified in the bill would be the only ones available under state and federal law. The bill includes several new judicial review procedures, including procedures permitting any claimant aggrieved by the final decision of the administrative process to seek judicial review in federal appeals court.

Other asbestos legislation was introduced that would establish medical criteria to govern the eligibility of claimants to recover for asbestos exposure in cases filed in state and federal court.

Multidistrict Litigation Restoration Act of 2005

The Multidistrict Litigation Restoration Act of 2005, passed by the House in April, responds to the 1998 Supreme Court decision in Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach. That ruling held that a district judge conducting pretrial proceedings in cases transferred by the Judicial Panel on Multidistrict Litigation—which centralizes like cases—does not have statutory authority to retain a case for trial. This bill would allow a judge to retain such a case or transfer it to another district for trial, restoring a practice used effectively for decades.

The Multidistrict Litigation Restoration Act is strongly supported by the Judicial Conference. The House of Representatives has passed similar proposals in each of the three prior Congresses.

Bankruptcy Reform Law

Significant changes in requirements for bankruptcy filings were instituted with P.L. No. 109-8 , the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed into law by the President on April 20, 2005 . The new law imposed additional duties on the courts, including a duty to maintain and control access to federal tax returns filed by debtors. Workload impacts are discussed in detail elsewhere in this report. It also authorized 28 additional temporary bankruptcy judgeships in specified districts based on a 1999 recommendation of the Judicial Conference that does not match current workload requirements. The Administrative Office continues efforts to secure bankruptcy judgeships consistent with current recommendations by the Judicial Conference.

Sentencing Guidelines

Following the Supreme Court rulings in Booker and Fanfan, the chairman of the House Judiciary Committee introduced legislation that included a provision to restrict judicial discretion in sentencing. The bill would have converted the bottom of the now-advisory sentencing guideline ranges into mandatory minimum sentences and essentially limited downward departures to circumstances in which the government supports a lower sentence. Judge Sim Lake, Chair of the Criminal Law Committee, transmitted a letter expressing the views of the Judicial Conference to the House Judiciary Committee in April.

Social Security

In March 2005, the Judicial Conference took a position opposing "the elimination of a claimant's right to request review of an administrative law judge's adverse decision by the Appeals Council, or another administrative reviewing unit with comparable authority, prior to seeking relief in federal district court."

When the Social Security Administration (SSA) proposed regulations regarding the disability claims process, AO Director Mecham sent a letter expressing the views of the Judiciary to SSA. Two changes proposed by SSA raised particular concern for the federal Judiciary. SSA would abolish the Appeals Council and eliminate a claimant's right to request administrative appellate review by the Appeals Council of an administrative law judge's adverse decision. Instead, a Disability Review Board would be created that would have discretion as to which cases it would review.

In September, Judge Howard McKibben, Chair of the Committee on Federal-State Jurisdiction, testified before a joint hearing of the Subcommittees on Human Resources and Social Security of the House Ways and Means Committee on SSA's proposed changes.

Habeas Corpus Reform

Similar legislation introduced and considered in the Senate and House would limit federal court review of habeas petitions filed by state prisoners, and would also shift from the federal courts to the Attorney General of the United States the responsibility for determining, in capital cases under chapter 154 of Title 28, United States Code, whether a state has established a qualifying mechanism for providing competent counsel to indigent defendants in state post-conviction proceedings.

The Judicial Conference expressed its opposition to provisions in the legislation that have the potential to undermine the traditional role of the federal courts to hear and decide the merits of claims arising under the Constitution; impede the ability of the federal and state courts to conduct an orderly review of constitutional claims, with appropriate deference to state court proceedings; and prevent the federal courts from reaching the merits of habeas corpus petitions by adding procedural requirements that may complicate the resolution of these cases and lead to protracted litigation.

Although the Streamlined Procedures Act was not enacted during the first session, the legislation is expected to be actively considered in the second session. In addition, some of the provisions have also been included in the PATRIOT Act reauthorization bill, which Congress may consider early in its second session.

Redaction Authority Renewal

Recognizing the unique risks faced by judges, Congress in 1998 authorized the Judicial Conference to redact sensitive and personal information from financial disclosure reports upon finding in consultation with the United States Marshals Service (USMS), that the information could endanger the filer. Congress extended this initial authority through December 31, 2005. The Administrative Office has given the highest priority to extending this authority, conducting numerous meetings with congressional staff and coordinating testimony and congressional visits by federal judges.

In May 2005, Judge Jane Roth, Chair of the Committee on Facilities and Security, testifying before the Senate Judiciary Committee, called for the extension of redaction authority to safeguard federal judges. A provision to extend that authority without a sunset was included in the court security bill introduced in the House of Representatives and a bill to authorize a five-year extension was subsequently introduced in the Senate. Both the House and Senate passed bills late in the session, but were unable to reconcile the differences in the two bills.