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The Precedential Effect of BAP Decisions
The bench and bar are well acquainted with the principles of stare decisis and controlling precedent, but after nearly 25 years, we have yet to definitely settle the question of the precise binding effect and precedential value of decisions issued by one of the most misunderstood tribunals within the federal court system, the bankruptcy appellate panels (BAPs). A recent bankruptcy court decision from Ohio reminds us that the controversy goes on unabated, and with our attention once again focused on this nettlesome question, the time seemed ripe to review where we stand and posit some arguments as to where we should be headed.
Background
As part of the 1984 Bankruptcy Amendments and Federal Judgeship Act ('BAFJA'), Congress authorized each of the circuit courts of appeals to create a specialized tribunal, composed of the bankruptcy judges of that circuit, to convene and hear appeals of decisions of bankruptcy judges residing in that circuit's districts. The BAPs were designed as an alternative to the nominal appellate path from the Article I bankruptcy courts to the Article III district judges. The intended benefits included relieving congestion in the district courts, attracting the best and brightest of bankruptcy practitioners to the bench via this optional tasking, and utilizing a body of jurists with specific knowledge of the Bankruptcy Code, thereby yielding swifter and better results that the generalist Article III court might provide.
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