Impact of New Bankruptcy Law Tops Committee’s Concerns

An Interview with Judge Barbara M.G. Lynn

Judge Barbara M.G. Lynn (N.D. Tex.)

Judge Barbara M.G. Lynn was nominated to the U.S. District Court for the Northern District of Texas in 1999. Judge Lynn has served as a member of the Judicial Conference Committee on the Administration of the Bankruptcy System since 2003, and was appointed Committee chair in 2007.

On April 20, 2005, the President signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. How has the Act impacted the number of bankruptcy filings and the work of bankruptcy judges?

Although bankruptcy filings greatly decreased after the Act became effective, and remain significantly below pre-Act filing levels, bankruptcy filings have been slowly but steadily increasing. The Bankruptcy Committee is concerned about early indications that, even though bankruptcy filings have not yet returned to their pre-Act levels, the work of bankruptcy judges and court staff on a per-case basis has increased substantially under the 2005 Act compared with their work under the prior bankruptcy law. The Act created more than 35 types of new motions, objections, and hearings that did not exist prior to the Act. Judges report spending more time analyzing new issues created by the Act, making a decision, and reporting it to the bar through written opinions, orders, or instructions.

The Bankruptcy Committee is engaged in a project with the Federal Judicial Center to develop a new case-weighting formula for use in evaluating the need for new and existing judgeships. What is the status of this project?

Detailed information on judicial time spent on cases and other judicial activities had been collected from two-fifths of bankruptcy judges before being halted when the President signed the new Act. The Bankruptcy Committee decided to suspend the project in May 2005 at the end of the reporting period for the second of five groups of judges in anticipation that the Act would dramatically change the nature of bankruptcy judges’ work, and that the resulting case weights would not accurately reflect the judicial resources necessary to process bankruptcy cases and proceedings.

At its June 2007 meeting, the Committee decided to resume the case weighting study by April 1, 2008. The Committee believes that resuming the study during that time period should result in reliable and valid measures of judicial work under the new Act because the courts will have had sufficient experience with cases filed under the Act and filing patterns will likely have normalized. The Committee will also conduct the next additional judicial needs survey of bankruptcy courts in the fall of 2008.

How has the new bankruptcy law impacted bankruptcy clerks’ office staffing levels?

The Bankruptcy Committee has been especially concerned about the impact of the Act on clerks’ office staffing. There is abundant evidence from docket activity and case files demonstrating that the changes mandated by the Act have significantly increased the work in clerks’ offices that is required to process a bankruptcy case. Until a new work measurement formula is in place for clerks in fiscal year 2009, it is not clear to what extent the additional work per case offsets the reduction in filing levels.

Since we will not have a new formula until 2009, fiscal year 2008 is shaping up to be a transition year. Increased filings and continued careful management by bankruptcy clerks (as evidenced by the maintenance of a significant vacancy rate), coupled with what looks to be a good budget for the upcoming year, should allow bankruptcy courts to maintain current on-board staffing levels. The Bankruptcy Committee will continue to stay informed on the staffing issues and weigh in on the new formula for 2009.

The Bankruptcy Committee continues to examine proposed enhancements to the Case Management/Electronic Case File System (CM/ECF) that will directly benefit the work of bankruptcy judges, and the need to explore options for the next generation of the bankruptcy courts’ automated case management system. What is the status of these efforts?

At its June 2007 meeting, the Bankruptcy Committee received reports from the Administrative Office concerning both of these topics, which are vital to the future effectiveness of CM/ECF not only for bankruptcy judges, but for all bankruptcy court personnel.

The AO reported on its efforts to obtain suggestions from a designated group of bankruptcy judges concerning how to improve CM/ ECF for judges and chambers staff. The 17 judges who were contacted provided the AO with approximately 200 suggestions, including ideas related to improving navigation throughout the system, integrating order processing functionality within the system, and providing comprehensive report creating capability. The AO is in the process of organizing the suggestions and will present them to these same judges for prioritization. Once the judges have prioritized the suggestions, they will be forwarded to the Bankruptcy CM/ ECF Working Group, which will make efforts to include several of the suggestions in future releases of CM/ECF.

Beyond improving CM/ECF in the short run, the Committee is also keenly interested in making certain that definite plans are in place to provide for the next generation of automated case management for the bankruptcy courts. For several years, CM/ECF has provided the bankruptcy courts greatly enhanced functionality that has benefited users within the Judiciary, including judges, and has also been a great tool for external users, such as the bar and parties in bankruptcy cases. Notwithstanding its success, CM/ECF as we know it today is being overtaken by advances in technology. The Committee wants to make certain that all that can be done is being done to take advantage of technological advances so that the bankruptcy courts’ automated case management system can be as efficient and effective as possible, which could very well require a very different system. The AO reported to the Committee that similar views and concerns were also expressed in letters received by the AO from the Bankruptcy Clerks Advisory Group and the National Conference of Bankruptcy Clerks. The AO has created an ad hoc group that includes bankruptcy judges and clerks to examine what should be done to assure that the system used by our bankruptcy courts is as advanced as possible. That is certainly a good first step in a process that may take some time to accomplish.

The Bankruptcy Committee has asked the AO to report again on these efforts at the Committee’s January 2008 meeting. The Committee wants to be sure that all appropriate progress is being made, and to find out if there is anything else the Committee can do to focus attention on these vital efforts to keep our technology current and efficient.

We look forward to working with the IT Committee, chaired by Judge Thomas I. Vanaskie (M.D. Pa.), in these efforts.

As chair, what are your goals and/or projects for the Bankruptcy Committee?

I hope to continue on the fine course charted by our wonderful past chair, Judge Marjorie Rendell (3rd Cir.), who reached out to all segments of the bankruptcy system to assure that it is reasonably and appropriately funded, responsive to the needs of users of the system, and focused on the future as the system evolves under BAPCPA. Our Committee will embark on a new and focused approach to long range planning for the bankruptcy system. The information we gather from existing projects—to update the case-weights for evaluating judgeship needs, develop new staffing formulae for bankruptcy administrators and clerks, increase the efficiency of bankruptcy courts through use of enhanced technology, and streamline the entire bankruptcy fee structure—will greatly assist us in this work.