The Precedential Effect of BAP Decisions

Under the Judicial Code, the judicial council of an individual circuit can establish a BAP to hear initial appeals instead of the district court. The panels must be composed of bankruptcy judges serving within that circuit. 28 U.S.C. ' 158(b)(1). The Ninth Circuit was the first to institute a BAP. The Sixth Circuit has a BAP, as does the Second Circuit, but it is a 'partial' BAP that prevails over some, but not all, districts, within that New York-centric jurisdiction. Having reaffirmed how the BAPs came into being, let us quickly turn to the newest case that puts their authority (or lack thereof) front and center once again.

In re Hunter

The most recent case that lays out the ongoing struggle over a BAP's true precedential authority is Rhiel v. OhioHealth Corp. (In re Hunter), 380 B.R. 753 (Bankr. S.D. Ohio 2008). The underlying legal issue, once highly controversial, is that the debtors claimed their respective interests in certain retirement plans, commonly known as 'Section 403(b)' plans (akin to the more widely used Section 401(k) plans), were not subject to creditor claims because they were held in trust and subject to anti-alienation provisions outlined in the retirement plans themselves. The debtors cited Section 541(c)(2), the Bankruptcy Code proviso that excludes from the estate any interest held by a debtor in a trust or plan that contains an anti-alienation clause enforceable under non-bankruptcy law. Id. at 757. See also In re Handel, 301 B.R. 421, 423, 435 (Bankr. S.D.N.Y. 2003) (Drain, J.).

The Hunter court was generally in accord, and ruled that most of the subject plans were beyond the reach of creditors. Id. at 757. However, the one sticking point was an interest in an annuity held by one of the debtors. Relying upon Rhiel v. Adams (In re Adams), 302 B.R. 535 (Bankr. 6^th Cir. 2003), a prior decision of its own Sixth Circuit Bankruptcy Appellate Panel, the Hunter court held that investment vehicle did not qualify for the Section 541(c)(2) exclusion. Id. at 770. Bankruptcy Judge Hoffman was adamant that the Adams decision was precisely on point, and, as a ruling emanating from his very own circuit's bankruptcy appeals panel, he was compelled to follow it. Id.

Hunter's adherence to the edict of its own BAP forms the thrust of this article. In brief, some jurists, case in point Bankruptcy Judge Hoffman, firmly believe they are bound to follow the relevant decisions of the BAP overseeing their districts, as a matter of respect for stare decisis and the precedential effect of rulings issued by an authority ostensibly higher than their own.

Other bankruptcy courts are not so sure of the exact reach of the BAPs. Finally, there are bankruptcy judges who deem a BAP to be merely a peer, lacking authority to bind the former's decisions, although they regard the latter's pronouncements with respect. See Daly v. Deptula (In re Carrozzella & Richardson), 255 B.R. 267, 273 (Bankr. D. Conn. 2000) (BAP decisions persuasive, but not binding).

Four Divided Camps

In his learned treatise, Bankruptcy Judge William L. Norton, Jr. recapitulates four divided camps. First, there are those who view a BAP as a unit of the same United States Circuit Court of Appeals, which created it. All the inferior bankruptcy courts of a particular circuit are universally bound by its BAP's rulings, since the latter holds the same authoritative weight as its progenitor. 6 Norton, Norton's Bankruptcy Law & Practice 2D, ' 148:17 (2d ed. 2007) (footnotes omitted) ('Norton').

The second school of thought views the BAPs and the district courts as occupying the same intermediate appellate level. According to this perspective, one must consider the federal district from which the appeal is taken. In a circuit such as the Ninth, where the bankruptcy courts of each and every district therein are subject to the oversight of that tribunal's BAP, any on-point holding of the panel controls all the bankruptcy jurists within the circuit. Id. See also In re Windmill Farms, Inc., 70 B.R. 618, 622 (Bankr. 9^th Cir. 1987) (BAP decisions bind each and every bankruptcy judge within its circuit), reversed sub. nom on other grounds, Vanderpark Props., Inc. v. Buchbinder (In re Windmill Farms, Inc.), 841 F.2d 1467 (9^th Cir. 1988).

A third point of view similarly considers the BAPs and the district courts as occupying the same level in the hierarchy, and the panels as essentially a substitute for the district bench. Under this reasoning, a BAP decision is no more binding that a holding of the district court in whose shoes it stands. This assumes, of course, that a specific district court decision binds the bankruptcy judges of that same district. Compare In re TLI, Inc., 292 B.R. 589, 591 n.1 (Bankr. W.D. Mich. 2003) (rulings of Sixth Circuit BAP no more controlling that that of a district court in another district). The obvious corollary is that if the decision of a single district judge in a multi-judge district does not bind the bankruptcy judges below, then neither would a BAP ruling. Norton, supra.

Fourth and last is the most restrictive view, in that there is no stare decisis impact by any BAP or even district court decision. Adherents to this doctrine assert that the bankruptcy judges are simply components of the district court. Norton, supra. There is credence for that rationale, since the Judicial Code indicates that the bankruptcy courts are units of the relevant district court. See generally 28 U.S.C. ' 157. It follows that the referral of a bankruptcy court decision to a BAP is not a move upward, but merely lateral.

Among the Districts

It is a given that bankruptcy court decisions in one district do not bind bankruptcy judges in other districts. Hunter, supra, 380 B.R. at 776, citing State of Oregon v. Selden (In re Selden), 121 B.R. 59, 62 (D. Or. 1990). Indeed, a bankruptcy court decision does not even bind its brethren in the very same district. See Colby v. J.C. Penney Co., 811 F.2d 1119, 1124 (7^th Cir. 1987). And since the district court decisions in bankruptcy cases do not bind other district judges nor even the inferior bankruptcy judges sitting within the same vicinage (only a circuit court of appeals ruling can be so binding), see In re Shattuc Cable Corp., 138 B.R. 557, 565, 567 (Bankr. N.D. Ill. 1992), and compare In re Trudell, 381 B.R. 441, 442 n.1 (Bankr. W.D.N.Y. 2008) (parenthetically noting that an unpublished district court affirmance of another bankruptcy judge's decision in the same district binds all bankruptcy judges in that district), then by analogy the rulings of a BAP are not stare decisis, even within its own district. Norton, supra.

Proponents of the position that BAP decisions bind the bankruptcy courts of their circuit rely upon In re Tong Seng Vue, 364 B.R. 767 (Bankr. Or. 2007), which largely predicated its view upon the concept of stare decisis. That doctrine advances two crucial principles: uniformity and predictability. The latter is a matter of 'fundamental fairness to the parties ' [o]therwise, parties will often be forced to the trouble and expense of an appeal to achieve a lawful result whenever the trial court disagrees with the higher court's view of the law.' Tong, supra, 364 B.R. at 771-72.

An important precursor to Tong and Hunter is Muskin, Inc. v. Industrial Steel Co. (In re Muskin, Inc.), 151 B.R. 252 (Bankr. N.D. Cal. 1993), where the bankruptcy judge clearly disagreed with an influential decision of the Ninth Circuit BAP, but nevertheless concluded it could not simply disregard what its own appellate panel had to say, for two main reasons.

First, to ignore a BAP decision is to push aside the work of fellow bankruptcy judges who volunteered, not merely to resolve the disputed matter, but to provide guidance for all those who would follow. 'Ego aside, there is no good reason why a bankruptcy judge should want to spend hours struggling with a complicated and thorny issue when three other bankruptcy judges have already done the same thing, reached a conclusion, and published a decision for the benefit of all.' A failure to give weight to the work of the BAP is to waste a valuable resource. Muskin, supra, 151 B.R. at 254-55.

Second, Muskin declared that any bankruptcy jurist who ignores a relevant BAP decision 'deprives every attorney in his or her territory of the ability to predict the outcome of a bankruptcy dispute.' Muskin acknowledged that '[i]t is the attorneys, and not the judges, which make any legal system work,' by counseling clients as to what issues are worthy of adjudication, thus winnowing down to only a sensible few the myriad of controversies that might come before the court. The published decisions of a bankruptcy appellate panel 'are the tools a competent lawyer uses in advising his or her clients.' A bankruptcy judge who considers himself or herself above those holdings 'takes this tool away from the attorneys and thereby harms the system.' Muskin at 254-55.

Returning to Hunter, Judge Hoffman declared firm allegiance to the Tong/Muskin cadre. To ignore the Sixth Circuit bankruptcy panel's holding in Adams ' a decision precisely on point as to the Hunter controversy ' 'would seriously undermine the BAP's role in promoting the law in this circuit and waste valuable judicial resources.' Hunter, supra, 380 B.R. at 775. The bankruptcy appellate panels were created to help develop a dependable body of bankruptcy case law, fashioned by tribunals of bankruptcy judges, utilizing their own specialized expertise. Accordingly, Hunter staunchly adhered to the precedent of its own BAP.

That is how we arrived at the present day, with Hunter bringing to the fore this seemingly endless controversy over the precedential value of BAP decisions. Before having a proper sort-out of how to best resolve this dilemma, let's first review some of the more cogent points made by the divided camps, and well as some criticisms of same.

A Review

Those favoring imbuing the BAPs with the full weight of stare decisis power rely in the main upon the panels exercising authority bestowed by the circuit court. The greatest merit to such a position is that Congress explicitly mandated the BAPs in order to create a wholly new tribunal, one with specialized expertise, and at the direction of the powerful Article III circuit judges. Failing to grant precedential weight to the panels' rulings is to leave unfulfilled the goals the legislators set out.

But how constitutionally valid is the delegation of the judicial power from the Article III circuits to the BAPs? If the holdings of a panel of Article I bankruptcy judges take on the same luster of stare decisis as their Article III betters, are we not falling into the same trap as we did nearly three decades ago in Marathon? Certainly, any BAP decision is subject to further review by its circuit, and so the constitutional mandate of oversight by a tribunal possessing the full breath of the judicial power of the United States appears to be met. Yet is that truly so, and, moreover, is it enough?

Contending that the BAP is merely a substitute for the district court at the same intermediate level of review, it cannot be argued that they are completely incorrect, assuming one was simply to look at the functionality on a flow chart of the federal court system. But it's not that simple. The main occupant of that floor is an Article III district court. If we so easily displace it with a trio of Article I bankruptcy judges, are we not back to the old Marathon constitutionality problem? ? See generally Samahon, 'Are Bankruptcy Judges Constitutional? An Appointments Clause Challenge,' __ Hastings L. Rev. ___ (2009) (pending). Even with circuit court review, can we so easily usurp the Article III bench without offending the Constitution?

Very well then, let's take the safest course out, and one numerous federal courts adhere to. BAP decisions shall continue, they shall be persuasive, but they shall not be binding. That largely avoids most of the aforementioned constitutional quagmire. With BAP holdings lacking stare decisis impact, the final, true arbiters of bankruptcy controversies shall be the Article III circuit courts and beyond.

But doesn't that run counter to why the BAPs were formulated in the first place? In order to avoid constitutional infirmities, we consign the entire bankruptcy system to a free-for-all of decisionmaking by bankruptcy judges, unfettered by the restraint of their own BAP rulings. We solve one problem only to encourage another.

What is the answer? This writer contends that there is no good answer, only a choice to be made of which option is the least detrimental to the system. Let's get one thing off the table right away; Congress will never grant bankruptcy judges Article III status nor reconstitute the BAPs as a super-specialized Article III tribunal. Such a direct solution to the constitutionality problem has never gained traction in the last 30 years, and it will not now.

Given the confusion over the status of the BAPs themselves, why not just abolish them? The truth is they can be legislated out of existence just the way they were written into law some 25 years ago. But what a colossal waste that would be! BAPs do a yeoman's job in contributing to bankruptcy jurisprudence, exploiting the knowledge and energy of the very jurists who are supposedly specialists in the field anyway. To not continue to take advantage of this obvious resource would be shameful. Better to keep them and their many good works, and focus on resolving the rightful scope of their powers.

Third, various commentators and even some courts have called for the parent circuits to once and for all declare the limits of the powers of their respective BAPs, if not by explicit decision, then by administrative order. The latter avenue is certainly expedient, but again would it be true to the constitutional demands of due process and such? While it might be more time consuming, the much stronger case is for each involved circuit to patiently wait for a true live case and controversy to come before it, and then seize the opportunity to pronounce once and for all the stare decisis and precedential impact of the rulings of its BAP.

And what if the circuits reach differing conclusions as to the scope of precedential power held by their respective BAPs? Then such an internecine conflict would be ripe for a final, unequivocal resolution by the Supreme Court. To be sure, that judgment day may be a fair way off, and so we will have to live with the system as it is now, confused and controversial. However, our best hope lies in shepherding its evolution toward this ultimate conclusion. Until then, Hunter only prolongs the hunt for justice on this issue.

Anthony Michael Sabino is a Professor of Law at the Peter J. Tobin College of Business, St. John's University, New York. He practices at Sabino & Sabino, P.C., and can be reached at 516-294-3199 and at www.sabinolaw.com.

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.

Under the Judicial Code, the judicial council of an individual circuit can establish a BAP to hear initial appeals instead of the district court. The panels must be composed of bankruptcy judges serving within that circuit. 28 U.S.C. ' 158(b)(1). The Ninth Circuit was the first to institute a BAP. The Sixth Circuit has a BAP, as does the Second Circuit, but it is a 'partial' BAP that prevails over some, but not all, districts, within that New York-centric jurisdiction. Having reaffirmed how the BAPs came into being, let us quickly turn to the newest case that puts their authority (or lack thereof) front and center once again.

In re Hunter

The most recent case that lays out the ongoing struggle over a BAP's true precedential authority is Rhiel v. OhioHealth Corp. (In re Hunter), 380 B.R. 753 (Bankr. S.D. Ohio 2008). The underlying legal issue, once highly controversial, is that the debtors claimed their respective interests in certain retirement plans, commonly known as 'Section 403(b)' plans (akin to the more widely used Section 401(k) plans), were not subject to creditor claims because they were held in trust and subject to anti-alienation provisions outlined in the retirement plans themselves. The debtors cited Section 541(c)(2), the Bankruptcy Code proviso that excludes from the estate any interest held by a debtor in a trust or plan that contains an anti-alienation clause enforceable under non-bankruptcy law. Id. at 757. See also In re Handel, 301 B.R. 421, 423, 435 (Bankr. S.D.N.Y. 2003) (Drain, J.).

The Hunter court was generally in accord, and ruled that most of the subject plans were beyond the reach of creditors. Id. at 757. However, the one sticking point was an interest in an annuity held by one of the debtors. Relying upon Rhiel v. Adams (In re Adams), 302 B.R. 535 (Bankr. 6^th Cir. 2003), a prior decision of its own Sixth Circuit Bankruptcy Appellate Panel, the Hunter court held that investment vehicle did not qualify for the Section 541(c)(2) exclusion. Id. at 770. Bankruptcy Judge Hoffman was adamant that the Adams decision was precisely on point, and, as a ruling emanating from his very own circuit's bankruptcy appeals panel, he was compelled to follow it. Id.

Hunter's adherence to the edict of its own BAP forms the thrust of this article. In brief, some jurists, case in point Bankruptcy Judge Hoffman, firmly believe they are bound to follow the relevant decisions of the BAP overseeing their districts, as a matter of respect for stare decisis and the precedential effect of rulings issued by an authority ostensibly higher than their own.

Other bankruptcy courts are not so sure of the exact reach of the BAPs. Finally, there are bankruptcy judges who deem a BAP to be merely a peer, lacking authority to bind the former's decisions, although they regard the latter's pronouncements with respect. See Daly v. Deptula (In re Carrozzella & Richardson), 255 B.R. 267, 273 (Bankr. D. Conn. 2000) (BAP decisions persuasive, but not binding).

Four Divided Camps

In his learned treatise, Bankruptcy Judge William L. Norton, Jr. recapitulates four divided camps. First, there are those who view a BAP as a unit of the same United States Circuit Court of Appeals, which created it. All the inferior bankruptcy courts of a particular circuit are universally bound by its BAP's rulings, since the latter holds the same authoritative weight as its progenitor. 6 Norton, Norton's Bankruptcy Law & Practice 2D, ' 148:17 (2d ed. 2007) (footnotes omitted) ('Norton').

The second school of thought views the BAPs and the district courts as occupying the same intermediate appellate level. According to this perspective, one must consider the federal district from which the appeal is taken. In a circuit such as the Ninth, where the bankruptcy courts of each and every district therein are subject to the oversight of that tribunal's BAP, any on-point holding of the panel controls all the bankruptcy jurists within the circuit. Id. See also In re Windmill Farms, Inc., 70 B.R. 618, 622 (Bankr. 9^th Cir. 1987) (BAP decisions bind each and every bankruptcy judge within its circuit), reversed sub. nom on other grounds, Vanderpark Props., Inc. v. Buchbinder (In re Windmill Farms, Inc.), 841 F.2d 1467 (9^th Cir. 1988).

A third point of view similarly considers the BAPs and the district courts as occupying the same level in the hierarchy, and the panels as essentially a substitute for the district bench. Under this reasoning, a BAP decision is no more binding that a holding of the district court in whose shoes it stands. This assumes, of course, that a specific district court decision binds the bankruptcy judges of that same district. Compare In re TLI, Inc., 292 B.R. 589, 591 n.1 (Bankr. W.D. Mich. 2003) (rulings of Sixth Circuit BAP no more controlling that that of a district court in another district). The obvious corollary is that if the decision of a single district judge in a multi-judge district does not bind the bankruptcy judges below, then neither would a BAP ruling. Norton, supra.

Fourth and last is the most restrictive view, in that there is no stare decisis impact by any BAP or even district court decision. Adherents to this doctrine assert that the bankruptcy judges are simply components of the district court. Norton, supra. There is credence for that rationale, since the Judicial Code indicates that the bankruptcy courts are units of the relevant district court. See generally 28 U.S.C. ' 157. It follows that the referral of a bankruptcy court decision to a BAP is not a move upward, but merely lateral.

Among the Districts

It is a given that bankruptcy court decisions in one district do not bind bankruptcy judges in other districts. Hunter, supra, 380 B.R. at 776, citing State of Oregon v. Selden (In re Selden), 121 B.R. 59, 62 (D. Or. 1990). Indeed, a bankruptcy court decision does not even bind its brethren in the very same district. See Colby v. J.C. Penney Co . , 811 F.2d 1119, 1124 (7 th Cir. 1987). And since the district court decisions in bankruptcy cases do not bind other district judges nor even the inferior bankruptcy judges sitting within the same vicinage (only a circuit court of appeals ruling can be so binding), see In re Shattuc Cable Corp., 138 B.R. 557, 565, 567 (Bankr. N.D. Ill. 1992), and compare In re Trudell, 381 B.R. 441, 442 n.1 (Bankr. W.D.N.Y. 2008) (parenthetically noting that an unpublished district court affirmance of another bankruptcy judge's decision in the same district binds all bankruptcy judges in that district), then by analogy the rulings of a BAP are not stare decisis, even within its own district. Norton, supra.

Proponents of the position that BAP decisions bind the bankruptcy courts of their circuit rely upon In re Tong Seng Vue, 364 B.R. 767 (Bankr. Or. 2007), which largely predicated its view upon the concept of stare decisis. That doctrine advances two crucial principles: uniformity and predictability. The latter is a matter of 'fundamental fairness to the parties ' [o]therwise, parties will often be forced to the trouble and expense of an appeal to achieve a lawful result whenever the trial court disagrees with the higher court's view of the law.' Tong, supra, 364 B.R. at 771-72.

An important precursor to Tong and Hunter is Muskin, Inc. v. Industrial Steel Co. (In re Muskin, Inc.), 151 B.R. 252 (Bankr. N.D. Cal. 1993), where the bankruptcy judge clearly disagreed with an influential decision of the Ninth Circuit BAP, but nevertheless concluded it could not simply disregard what its own appellate panel had to say, for two main reasons.

First, to ignore a BAP decision is to push aside the work of fellow bankruptcy judges who volunteered, not merely to resolve the disputed matter, but to provide guidance for all those who would follow. 'Ego aside, there is no good reason why a bankruptcy judge should want to spend hours struggling with a complicated and thorny issue when three other bankruptcy judges have already done the same thing, reached a conclusion, and published a decision for the benefit of all.' A failure to give weight to the work of the BAP is to waste a valuable resource. Muskin, supra, 151 B.R. at 254-55.

Second, Muskin declared that any bankruptcy jurist who ignores a relevant BAP decision 'deprives every attorney in his or her territory of the ability to predict the outcome of a bankruptcy dispute.' Muskin acknowledged that '[i]t is the attorneys, and not the judges, which make any legal system work,' by counseling clients as to what issues are worthy of adjudication, thus winnowing down to only a sensible few the myriad of controversies that might come before the court. The published decisions of a bankruptcy appellate panel 'are the tools a competent lawyer uses in advising his or her clients.' A bankruptcy judge who considers himself or herself above those holdings 'takes this tool away from the attorneys and thereby harms the system.' Muskin at 254-55.

Returning to Hunter, Judge Hoffman declared firm allegiance to the Tong/Muskin cadre. To ignore the Sixth Circuit bankruptcy panel's holding in Adams ' a decision precisely on point as to the Hunter controversy ' 'would seriously undermine the BAP's role in promoting the law in this circuit and waste valuable judicial resources.' Hunter, supra, 380 B.R. at 775. The bankruptcy appellate panels were created to help develop a dependable body of bankruptcy case law, fashioned by tribunals of bankruptcy judges, utilizing their own specialized expertise. Accordingly, Hunter staunchly adhered to the precedent of its own BAP.

That is how we arrived at the present day, with Hunter bringing to the fore this seemingly endless controversy over the precedential value of BAP decisions. Before having a proper sort-out of how to best resolve this dilemma, let's first review some of the more cogent points made by the divided camps, and well as some criticisms of same.

A Review

Those favoring imbuing the BAPs with the full weight of stare decisis power rely in the main upon the panels exercising authority bestowed by the circuit court. The greatest merit to such a position is that Congress explicitly mandated the BAPs in order to create a wholly new tribunal, one with specialized expertise, and at the direction of the powerful Article III circuit judges. Failing to grant precedential weight to the panels' rulings is to leave unfulfilled the goals the legislators set out.

But how constitutionally valid is the delegation of the judicial power from the Article III circuits to the BAPs? If the holdings of a panel of Article I bankruptcy judges take on the same luster of stare decisis as their Article III betters, are we not falling into the same trap as we did nearly three decades ago in Marathon? Certainly, any BAP decision is subject to further review by its circuit, and so the constitutional mandate of oversight by a tribunal possessing the full breath of the judicial power of the United States appears to be met. Yet is that truly so, and, moreover, is it enough?

Contending that the BAP is merely a substitute for the district court at the same intermediate level of review, it cannot be argued that they are completely incorrect, assuming one was simply to look at the functionality on a flow chart of the federal court system. But it's not that simple. The main occupant of that floor is an Article III district court. If we so easily displace it with a trio of Article I bankruptcy judges, are we not back to the old Marathon constitutionality problem? ? See generally Samahon, 'Are Bankruptcy Judges Constitutional? An Appointments Clause Challenge,' __ Hastings L. Rev. ___ (2009) (pending). Even with circuit court review, can we so easily usurp the Article III bench without offending the Constitution?

Very well then, let's take the safest course out, and one numerous federal courts adhere to. BAP decisions shall continue, they shall be persuasive, but they shall not be binding. That largely avoids most of the aforementioned constitutional quagmire. With BAP holdings lacking stare decisis impact, the final, true arbiters of bankruptcy controversies shall be the Article III circuit courts and beyond.

But doesn't that run counter to why the BAPs were formulated in the first place? In order to avoid constitutional infirmities, we consign the entire bankruptcy system to a free-for-all of decisionmaking by bankruptcy judges, unfettered by the restraint of their own BAP rulings. We solve one problem only to encourage another.

What is the answer? This writer contends that there is no good answer, only a choice to be made of which option is the least detrimental to the system. Let's get one thing off the table right away; Congress will never grant bankruptcy judges Article III status nor reconstitute the BAPs as a super-specialized Article III tribunal. Such a direct solution to the constitutionality problem has never gained traction in the last 30 years, and it will not now.

Given the confusion over the status of the BAPs themselves, why not just abolish them? The truth is they can be legislated out of existence just the way they were written into law some 25 years ago. But what a colossal waste that would be! BAPs do a yeoman's job in contributing to bankruptcy jurisprudence, exploiting the knowledge and energy of the very jurists who are supposedly specialists in the field anyway. To not continue to take advantage of this obvious resource would be shameful. Better to keep them and their many good works, and focus on resolving the rightful scope of their powers.

Third, various commentators and even some courts have called for the parent circuits to once and for all declare the limits of the powers of their respective BAPs, if not by explicit decision, then by administrative order. The latter avenue is certainly expedient, but again would it be true to the constitutional demands of due process and such? While it might be more time consuming, the much stronger case is for each involved circuit to patiently wait for a true live case and controversy to come before it, and then seize the opportunity to pronounce once and for all the stare decisis and precedential impact of the rulings of its BAP.

And what if the circuits reach differing conclusions as to the scope of precedential power held by their respective BAPs? Then such an internecine conflict would be ripe for a final, unequivocal resolution by the Supreme Court. To be sure, that judgment day may be a fair way off, and so we will have to live with the system as it is now, confused and controversial. However, our best hope lies in shepherding its evolution toward this ultimate conclusion. Until then, Hunter only prolongs the hunt for justice on this issue.

Anthony Michael Sabino is a Professor of Law at the Peter J. Tobin College of Business, St. John's University, New York. He practices at Sabino & Sabino, P.C., and can be reached at 516-294-3199 and at www.sabinolaw.com.