Director's Annual Report 2005

As the fiscal year drew to a close, Hurricanes Katrina and Rita had an enormous effect on court operations in Florida, Louisiana, Mississippi, Texas, and Alabama. Following Hurricane Katrina, Director Mecham and AO staff helped locate judges and court staff, and began to assess the storms' impact on court and family members. Immediately, and regularly, the Director issued memoranda to affected judges and court unit executives addressing issues of key concern: relocating judges and court employees to safety; sharing expert guidance on temporary duty travel and related expense reimbursement; contacting banks to transmit paychecks promptly; making sure Judiciary employees received their benefits; allocating supplemental funds to cover disaster expenses; delegating certain procurement authority for replacement furniture, supplies, and equipment; and setting up alternative communications equipment to address service outages affecting court business.

An expert AO staff team traveled to provide onsite assistance in the areas of human resources and financial management, travel, information technology, procurement, space and leasing, security, and FEMA benefits. Throughout September, the teams deployed to Jackson in the Southern District of Mississipp, Baton Rouge, Houma, and Lafayette in the Eastern and Western Districts of Louisiana, and to the Rita-impacted Southern and Eastern Districts of Texas. AO staff clarified the special authorities delegated by the Director, and advised how to apply them to individual court needs. The AO team also helped judges and staff clear backlogged transactions to close out the fiscal year for the Fifth Circuit and the Eastern District of Louisiana.

In Washington, DC, AO staff from 18 program offices formed the Director's Judiciary Emergency Response Team to discuss and coordinate answers for affected courts in the areas of procurement, facilities, technology, travel, finance, human resources, legislative affairs, public affairs, and legal counsel.

After Katrina devastated the Gulf, the Eastern District of Louisiana was unable to operate in New Orleans. The AO pressed for legislation to allow district courts to hold sessions or conduct business outside their own districts during emergencies, and the Federal Judiciary Emergency Special Sessions Act of 2005 became law on September 9. In addition, the AO worked to gain authority for an emergency leave transfer program for the judicial branch similar to that established in the executive branch. Judiciary employees affected by emergencies declared by the President, such as hurricanes, could be eligible to receive leave donations from colleagues.

Overall effects of Hurricanes Katrina and Rita on the courts will be felt for a long time, and will require ongoing staff attention.

Bankruptcy Reform

The most sweeping changes to bankruptcy law in the past 20 years were enacted on April 20, with The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The Act's impact on Judiciary resources, including AO staffing, has been monumental. The general effective date of the Act was October 17, 2005. Due to the size and impact of the Act, and the short amount of time allowed to implement it, many Administrative Office staff focused on the massive amount of work required to implement the new law in a timely manner.

Work on the legislation began before it was introduced to identify technical corrections, and the Judicial Conference recommended substantive amendments for transmittal to congressional staff. The Administrative Office responded to numerous inquiries from Congress to analyze, comment upon, or provide suggested amendments to discrete sections of the bill. AO staff also prepared a correction to the fee provisions in the bill, which ultimately was enacted by Congress as part of a FY 2005 emergency supplemental appropriations act (P.L. No. 109-13).

To coordinate the Administrative Office's efforts, Director Mecham formed a Bankruptcy Act Implementation Working Group, which met three times a month to monitor progress in implementing provisions of the Act and to identify and discuss issues of concern. Administrative Office staff developed numerous memoranda to the courts and created a web page on the J-Net to keep bankruptcy judges, bankruptcy administrators, and court personnel apprised of the issues in the Act affecting the Judiciary and actions taken by the Judicial Conference and the Administrative Office to implement it. Staff drafted guidance, procedures, and forms for use by the courts following review and adoption by the Judicial Conference.

Administrative Office staff worked with the Executive Office of the United States Trustees on implementation issues, and offered assistance to the Small Business Administration concerning its responsibilities under the Act. AO staff provided guidance to the bankruptcy administrators (BAs) in the six judicial districts located in Alabama and North Carolina to identify the BAs' new responsibilities and to assist in their implementation of the Act. A conference was held in August 2005 to help BAs identify their new duties and educate their staff and trustees. Forms and instructions were developed for application by consumer credit counseling groups in BA districts, as required by the Act. The AO also has begun revising the work measurement formula for bankruptcy clerks and developing a work measurement formula for bankruptcy administrators.

Additionally, staff drafted a proposed technical corrections bill for submission to Congress, and have responded to further congressional inquiries regarding the Act. Staff also helped develop of testimony presented to the House Judiciary Committee during an oversight hearing on the Judiciary's conformance with the Act.

Bankruptcy Basics was revised and posted on the Judiciary's public web site two weeks in advance of October 17, 2005, the general effective date of the Act. This popular and widely acknowledged publication provides basic information on the federal bankruptcy laws and answers some of the most common questions about the bankruptcy process.

Interim Bankruptcy Rules and Forms. Since passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the Advisory Committee on Bankruptcy Rules and the Administrative Office have been engaged in an intensive effort to review the new law, determine the necessary changes in the Bankruptcy Rules and official forms to implement the law, and to prepare and disseminate the new necessary rules and forms.

Beginning with an organizational meeting the day after enactment of the law, the Advisory Committee conducted more than 20 conference calls, three subcommittee meetings, and two full committee meetings. In addition, members of the Advisory Committee, the committee's consultants, and Administrative Office staff spent numerous hours conferring, drafting, and exchanging e-mail on the new and revised rules and forms.

As a result of this work, the Advisory Committee and the Judicial Conference Committee on Rules of Practice and Procedure approved amendments to 35 existing rules, eight new rules, amendments to 33 existing official forms, and nine new official forms. The 180-day period between enactment and the law's general effective date of October 17, 2005, did not provide sufficient time to promulgate national rules and Official Forms under the Rules Enabling Act. Therefore, the Advisory Committee proposed Interim Bankruptcy Rules and revised official forms. The Executive Committee of the Judicial Conference adopted the official forms and approved transmitting the Interim Rules to the courts for adoption locally.

Administrative Office staff posted the Interim Rules and official forms on the Judiciary's Internet web site. Staff have responded to numerous inquiries about the rules and forms and have participated in many meetings, more than a dozen national teleconferences, and a satellite broadcast with bankruptcy judges, clerks, and other court staff on the new rules and forms.

The Interim Rules are expected to apply to bankruptcy cases from October 17, 2005, until final rules are promulgated and effective under the regular Rules Enabling Act process. The Advisory Committee continues to carefully study the Act and comments on the Interim Rules and official forms with the goal of publishing proposed national rules no later than August 2006 with an effective date of December 1, 2008.