State-building in the Judiciary, Judicial Independence, and Judicial State-building

For the Balkinization Symposium on Emily Zackin and Chloe Thurston, The Political Development of American Debt Relief (University of Chicago Press, 2024).

Bradley D. Hays 

Emily Zackin and Chloe N. Thurston have written a thoughtfully constructed, carefully researched, and highly accessible study of debt relief in the United States.  The book’s primary contribution comes through its detailed analysis of how debt relief policy shifted from debt policies favorable to creditors to debtor-protective policies as debtors mobilized and, then, regression back to a creditor-friendly regime.  In telling this story, the authors also contribute to our understanding of institution building in the judiciary.  This story will be of interest to a wider section of academic who, like myself, know little about debt policy but are interested in judicial capacity and authority.  For the purposes of this review, I focus on this state-building and the way it connects to other episodes within the judiciary.  In doing so, I hope to point out how Zackin and Thurston’s work connects not just to state-building within the judiciary but to judicial independence and judicially driven state-building.

The Political Development of American Debt Relief tightly ties debt relief to expanding the federal judiciary’s governing capacity.  Each debt relief reform brought changes to the means of administering and enforcing that policy.  In other words, certain debt relief legislation changed the state’s governing capacity.  And since, as Zackin and Thurston explain, bankruptcy administration was granted to the judiciary, it meant the courts were vested with new capacity and authority.  These expansions of capacity are episodes of state-building.  Characterizing these measures, particularly the Bankruptcy Law of 1898, as state-building matters for several reasons.  First, as the authors note, the state-building we see here precedes the New Deal period that is typically the focus of scholars concerned with the development of American state governing capacity.  Second, establishing the judiciary as the administrator of bankruptcy proceedings represents a choice to empower courts rather than the federal bureaucracy.  In the era of parties and courts, Congress opted against a potentially more expensive and slower-to-implement bureaucratic option and, instead, empowered federal district judges to appoint referees to aid in conducting bankruptcy proceedings (83). In other words, administrative capacity was located in the judiciary.  Third, the development of the referee system contributed to further developments in the lower levels of the federal judicial structure.  While Zackin and Thurston do not focus on these connections, the threads identified within the book are important as they enable future scholars to explore the connection of debt-related state-building in the judiciary to subsequent episodes that expanded judicial capacity.  These threads also help us understand the shift from state-building within the judiciary to judicial state-building.  In what follows, I identify how one such connection can be made, what additional administrative capacity means for independence, and how this capacity enables the judiciary to engage in expanding its own governing capacity.

The bankruptcy referee system paved the way to the transformation of the United States commissioner system into the existing federal magistrate judges system.  The mid-twentieth century saw renewed interest in reforming various aspects of the justice system.  Zackin and Thurston detail how Congress centralized and professionalized the bankruptcy referee system by granting the Administrative Office of the United States Courts supervisory authority and establishing salaries (rather than fees) for referees.  As early as 1942, the Administrative Office identified weaknesses in the existing commissioners system.  After the reforms to the bankruptcy referee system, the Judicial Conference of the United States acknowledged that while “a system of compensating public officers is always preferable to a fee system,” in the case of US commissioners, “it would be impractical” due “to the large number of United States commissioners” compared to the number of referees.[1]  (The Judicial Conference also studied the merits of expanding commissioner jurisdiction to try petty offenses.)  While not yet considered practical, the referee system was being used as a model for how reforms might be brought to the commissioner system. 

The ideas of the 1940s and 1950s found traction in the 1960s.  This was due, in part, to the experience with the bankruptcy referees and its perceived efficiencies.  When the Judicial Conference again assessed the commissioners system in 1964, reform proposals regularly incorporated aspects of the bankruptcy referee system.  This time, the Administrative Office had nearly two decades of oversight experience from which to draw.  Zackin and Thurston note that efforts to establish institutional autonomy have “political consequences for the structure of the federal state” (88).  Here, the Director of the Administrative Office, Warren Olney III, marshaled examples and models from the referees system to help build legislative momentum for broader reform.  Notably, a model of assistance to district judges, much like the referee system, proved more compelling than expanding the district courts via additional judgeships. 

The experience with bankruptcy referees not only addressed institutional concerns but also constitutional questions.  Specifically, concerns were raised that delegating certain authorities to the magistrates (e.g. trying petting offenses) violated Article III by having non-Article III officials exercising power exclusive to Article III judges.[2]  However, the lengthy history of bankruptcy referees and their exercise of “judicial functions” demonstrated that the judicial power could “be split up and portions handled by various judicial officials.”[3]  Zackin and Thurston observe that constitutional questions about the purposes of bankruptcy laws were settled by the late 19th century.  Yet, the institutions created to enforce now-settled constitutional policy were then cited as precedent that vesting such judicial functions in officials who were not Article III judges was also constitutional.  Zackin and Thurston tell us a story that lays out a constitutional settlement on bankruptcy and the creation of institutions to enforce those policies.  They also lay a foundation to connect one episode of state-building within the judiciary to other episodes. 

Developing institutions to facilitate bankruptcy proceedings also contributes to an underappreciated buttress for judicial independence.  Vesting the administrative capacity to manage and adjudicate bankruptcy proceedings within the judiciary contributed to the need for centralized oversight and administration.  The creation of the Administrative Office in 1939 established a supervisory agency that was assigned such authority over bankruptcy referees in 1946 (86).  As the supervisory office, the Administrative Office became the expert on bankruptcy court operations inclusive of its referees.  This mattered as the Administrative Office and its director serve as the judiciary’s legislative liaison, providing direct, professional, and expert advocacy before Congress.  As such the Administrative Office developed the means to influence legislation and, thereby, affect the scope of judicial authority and the purpose for which that authority is deployed. 

Exerting legislative influence contributes to contemporary judicial independence.  Conventionally, judicial independence is framed through the mechanisms that insulate the courts from inappropriate external influence.  Here, we might think of independence as constituted by negative safeguards, stopping political interventions or reprisals.  And, yet, we know that Congress can shape many aspects of the federal courts and their operations, sending powerful signals about preferred behaviors.  Despite these sources of influence, the Administrative Office and other elements of the administrative wing of the federal judiciary provide the means to play offense by influencing the legislative agenda for the courts and shaping the legislation that affects the courts.  This layer of influence that comes from the building out of judicial administrative capacity enables both the protection of existing autonomy and capacity and its expansion over time.  This can come directly through legislation that proposes institutional reforms and indirectly when considering policy-specific reforms like debt relief.

Finally, it is worth drawing attention to how Zackin and Thurston observe not just state-building within the judiciary but judicially driven state-building.  Initially, the Bankruptcy Act of 1898 was motivated by popular movements, specifically agrarian interests that desired “debtor-protective features” (81).  Establishing referees that would be in continual operation meant that these referees could organize and the judiciary could become invested in these officers facilitating bankruptcy proceedings.  As Zackin and Thurston note, the organized referees helped resist subsequent efforts to create a bankruptcy-focused administrative agency.  Notably, when bankruptcy reform was back on the legislative agenda in the late 1970s, the Judicial Conference drew upon its experience and expertise to alter the establishment of an independent bankruptcy court system and, instead, insisted on bankruptcy courts within the district court structure.[4]  And, notably, some of the Judicial Conference’s skepticism about the merits of these reforms later surfaced in Supreme Court decisions (91), requiring Congress to make subsequent legislative changes that brought the legislative regime closer to the Judicial Conference’s vision for the bankruptcy courts and their operation.  In short, the judiciary’s administrative capacity created the means to shape and enhance its governing capacity. 

Excellent scholarship explores subjects in new ways that illuminate new perspectives and truths.  Excellent scholarship also identifies threads that future scholars can explore.  Zackin and Thurston have accomplished both of these and The Political Development of American Debt Relief should be on the reading list of anyone interested in the politics and policy of debt, political development, and/or judicial authority and capacity. 

Bradley D. Hays is an associate professor of political science at Union College. He can be reached at haysb@union.edu.