[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]




                       BANKRUPTCY JUDGESHIP NEEDS

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                                AND THE

                SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT
                             AND THE COURTS

                                 OF THE

                   SENATE COMMITTEE ON THE JUDICIARY

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 2, 1999

                               __________

                             Serial No. 90

                   (House Committee on the Judiciary)

                               __________

                          Serial No. J-106-60

                  (Senate Committee on the Judiciary)


         Printed for the use of the Committee on the Judiciary

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402

                     U.S. GOVERNMENT PRINTING OFFICE
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                    HOUSE COMMITTEE ON THE JUDICIARY

                   HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        BARNEY FRANK, Massachusetts
BILL McCOLLUM, Florida               HOWARD L. BERMAN, California
GEORGE W. GEKAS, Pennsylvania        RICK BOUCHER, Virginia
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
LAMAR S. SMITH, Texas                ROBERT C. SCOTT, Virginia
ELTON GALLEGLY, California           MELVIN L. WATT, North Carolina
CHARLES T. CANADY, Florida           ZOE LOFGREN, California
BOB GOODLATTE, Virginia              SHEILA JACKSON LEE, Texas
STEVE CHABOT, Ohio                   MAXINE WATERS, California
BOB BARR, Georgia                    MARTIN T. MEEHAN, Massachusetts
WILLIAM L. JENKINS, Tennessee        WILLIAM D. DELAHUNT, Massachusetts
ASA HUTCHINSON, Arkansas             ROBERT WEXLER, Florida
EDWARD A. PEASE, Indiana             STEVEN R. ROTHMAN, New Jersey
CHRIS CANNON, Utah                   TAMMY BALDWIN, Wisconsin
JAMES E. ROGAN, California           ANTHONY D. WEINER, New York
LINDSEY O. GRAHAM, South Carolina
MARY BONO, California
SPENCER BACHUS, Alabama
JOE SCARBOROUGH, Florida
DAVID VITTER, Louisiana

         Thomas E. Mooney, Sr., General Counsel-Chief of Staff
       Julian Epstein, Minority Chief Counsel and Staff Director
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                GEORGE W. GEKAS, Pennsylvania, Chairman

LINDSEY O. GRAHAM, South Carolina    JERROLD NADLER, New York
STEVE CHABOT, Ohio                   TAMMY BALDWIN, Wisconsin
ASA HUTCHINSON, Arkansas             MELVIN L. WATT, North Carolina
SPENCER BACHUS, Alabama              ANTHONY D. WEINER, New York
MARY BONO, California                WILLIAM D. DELAHUNT, Massachusetts
JOE SCARBOROUGH, Florida
DAVID VITTER, Louisiana

                  Raymond V. Smietanka, Chief Counsel

                     Susan Jensen-Conklin, Counsel

                        James W. Harper, Counsel
                   SENATE COMMITTEE ON THE JUDICIARY

                     ORRIN G. HATCH, Utah, Chairman
STROM THURMOND, South Carolina       PATRICK J. LEAHY, Vermont
CHARLES E. GRASSLEY, Iowa            EDWARD M. KENNEDY, Massachusetts
ARLEN SPECTER, Pennsylvania          JOSEPH R. BIDEN, Jr., Delaware
JON KYL, Arizona                     HERBERT KOHL, Wisconsin
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
JOHN ASHCROFT, Missouri              RUSSELL D. FEINGOLD, Wisconsin
SPENCER ABRAHAM, Michigan            ROBERT G. TORRICELLI, New Jersey
JEFF SESSIONS, Alabama               CHARLES E. SCHUMER, New York
BOB SMITH, New Hampshire
             Manus Cooney, Chief Counsel and Staff Director
                  Bruce Cohen, Minority Chief Counsel
                                 ------                                

        Subcommittee on Administrative Oversight and the Courts

                  CHARLES E. GRASSLEY, Iowa, Chairman
JEFF SESSIONS, Alabama               ROBERT G. TORRICELLI, New Jersey
STROM THURMOND, South Carolina       RUSSELL D. FEINGOLD, Wisconsin
SPENCER ABRAHAM, Michigan            CHARLES E. SCHUMER, New York
                       Kolan Davis, Chief Counsel
                 Matt Tanielian, Minority Chief Counsel
                            C O N T E N T S

                              ----------                              

                              HEARING DATE

                                                                   Page
November 2, 1999.................................................     1

                           OPENING STATEMENT

Gekas, Hon. George W., a Representative in Congress From the 
  State of Pennsylvania, and chairman, Subcommittee on Commercial 
  and Administrative Law.........................................     1
Grassley, Hon. Charles, a U.S. Senator From the State of Iowa, 
  and chairman, Subcommittee on Administrative Oversight and the 
  Courts.........................................................     2

                               WITNESSES

Bryant, Hon. Ed, a Representative in Congress From the State of 
  Tennessee......................................................    17
Castle, Hon. Michael N., a Representative in Congress From the 
  State of Delaware..............................................    12
Elsaesser, Ford, Esquire, Elsaesser, Jarzabeck, Anderson, Marks & 
  Elliot.........................................................    43
Hoyer, Hon. Steny H., a Representative in Congress From the State 
  of Maryland....................................................    16
Kingston, Hon. Jack, a Representative in Congress From the State 
  of Georgia.....................................................     7
Melloy, Michael J., U.S. District Chief Judge, Northern District 
  of Iowa and Chair, Committee on the Administration of the 
  Bankruptcy System, Judicial Conference of the United States....    19
Ray, Hugh M., Esquire, Andrews & Kurth, Houston, TX..............    41
Scott, Mary Davies, U.S. Bankruptcy Judge, Eastern and Western 
  Districts of Arkansas, President of the National Conference of 
  Bankruptcy Judges..............................................    36

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Bryant, Hon. Ed, a Representative in Congress From the State of 
  Tennessee: Prepared statement..................................    18
Castle, Hon. Michael N., a Representative in Congress From the 
  State of Delaware: Prepared statement..........................    13
Elsaesser, Ford, Esquire, Elsaesser, Jarzabeck, Anderson, Marks & 
  Elliot: Prepared statement.....................................    44
Gekas, Hon. George W., a Representative in Congress From the 
  State of Pennsylvania, and chairman, Subcommittee on Commercial 
  and Administrative Law: Prepared statement.....................     4
Hoyer, Hon. Steny H., a Representative in Congress From the State 
  of Maryland: Prepared statement................................    17
Kingston, Hon. Jack, a Representative in Congress From the State 
  of Georgia: Prepared statement.................................     8
Melloy, Michael J., U.S. District Chief Judge, Northern District 
  of Iowa and Chair, Committee on the Administration of the 
  Bankruptcy System, Judicial Conference of the United States: 
  Prepared statement.............................................    20
Ray, Hugh M., Esquire, Andrews & Kurth, Houston, TX: Prepared 
  statement......................................................    42
Scott, Mary Davies, U.S. Bankruptcy Judge, Eastern and Western 
  Districts of Arkansas, President of the National Conference of 
  Bankruptcy Judges: Prepared statement..........................    37

                                APPENDIX

Material submitted for the record................................    51

 
                       BANKRUPTCY JUDGESHIP NEEDS

                              ----------                              


                       TUESDAY, NOVEMBER 2, 1999

        House of Representatives, Subcommittee on 
            Commercial and Administrative Law, Committee on 
            the Judiciary, Jointly With U.S. Senate, 
            Subcommittee on Administrative Oversight and 
            the Courts, Committee on the Judiciary, 
            Washington, DC.
    The subcommittees met, pursuant to call, at 2 p.m., in room 
2141, Rayburn House Office Building, Hon. Gekas (chairman of 
the Subcommittee on Commercial and Administrative Law) 
presiding.
    Present for the House of Representatives Subcommittee on 
Commercial and Administrative Law of the Committee on the 
Judiciary: Representatives George W. Gekas, Steve Chabot, 
Jerrold Nadler, Melvin L. Watt, and William D. Delahunt.
    Also present: Representative Asa Hutchinson.
    Staff present for the House of Representatives Subcommittee 
on Commercial and Administrative Law: Raymond V. Smietanka, 
Subcommittee Chief Counsel; Susan Jensen-Conklin, Counsel; 
Sarah Zaffina, Staff Assistant; Daniel Freeman, Full Committee 
Counsel and Parliamentarian, and David Lachmann, Minority 
Professional Staff Member.
    Present for the Senate Subcommittee on Administrative 
Oversight and the Courts of the Committee on the Judiciary: 
Senators Charles E. Grassley and Joseph R. Biden, Jr.

              OPENING STATEMENT OF CHAIRMAN GEKAS

    The Chairman. The hour of 2 o'clock having arrived, the 
committee will come to order.
    Pursuant to the House rules, we cannot proceed until we 
have two members of the committee present and accounted for. 
But in striking the gavel at 2 o'clock, we have kept faith with 
opening our hearings and our markup sessions, all the meetings 
on time. Then we have had to dispatch the committee by 
declaring a recess until the second member should appear. We 
note the presence of Asa Hutchinson of Arkansas, he is not a 
member of our subcommittee, however.
    We note the entry and seating of Senator Grassley, the 
cochair of this joint markup, and the chairman of the relevant 
committee in the Senate of the United States.
    We will dispense with some housekeeping, even though it is 
out of protocol for the moment by simply stating that all the 
statements that have been submitted to us by various 
individuals, Members of the House and the Senate will be 
entered into the record and made a part of the record.
    We will repeat this statement when the hearing formally 
begins, but until such time as the session actually begins, I 
may sing a song or recite some poetry unless Senator Grassley 
wishes to do the same.
    We have several members who are here and ready to testify. 
I think I sound like Lowell Thomas describing the scene and 
waiting for something to happen. One housekeeping chore that we 
could proceed to accomplish without the necessity of a full 
record would be to recognize the gentleman from Arkansas, Mr. 
Hutchinson, for the real purpose for which he has attended this 
joint hearing.
    Representative Hutchinson.
    Representative Hutchinson. I want to thank the Chair, and I 
appreciate you letting a foreigner participate for a little 
while in this hearing. I am here as a member of the Judiciary 
Committee, but not a member of this particular subcommittee, to 
welcome a great Arkansan, Mary Davies Scott, who will be 
testifying on the third panel today. And I just wanted to 
personally extend my greetings to her and thank the committee 
for inviting her and her testimony.
    Judge Scott was appointed the United States Bankruptcy 
Judge for the Eastern and Western District of Arkansas in 1987. 
In 1997, she was appointed as a member of the Bankruptcy 
Appellate Panel for the 8th Circuit.
    She is a conferee on the National Bankruptcy Conference, a 
member of the American Law Institute, a fellow in the American 
College of Bankruptcy, and a member and past governor of the 
National Conference of Bankruptcy Judges. She is currently 
president of the conference and has served in a variety of 
offices. Judge Scott is an adjunct professor at our law 
schools, both in Fayetteville and in Little Rock. And she is 
also a member of the board of editors for Collier on 
bankruptcy. She is a faculty member of the American Law 
Institute for the American Bar Association programs covering 
banking and commercial lending law, and she also serves as a 
cochair in that capacity.
    In addition, she is a member of the advisory committee to 
the program subcommittee of the ALI, ABA, and serves on the 
bankruptcy education committee of the Federal Judicial Center.
    Mr. Chairman, as a former practitioner in Arkansas, I just 
want to say that she does an outstanding job for our courts in 
the Federal system and as a bankruptcy judge. And we have a 
good system in Arkansas, and we certainly welcome her and look 
forward to her testimony.
    Thank you, Mr. Chairman.
    The Chairman. We thank you.
    To expedite the formal proceedings, which have not yet 
begun, we will entertain now the opening statement of Senator 
Grassley.

             OPENING STATEMENT OF CHAIRMAN GRASSLEY

    Senator Grassley. At the outset, Congressman Gekas, of 
course, you should have a thank you for convening this hearing 
on the newest request for bankruptcy judgeships from the 
judicial conference. We have an Iowan testifying today on 
behalf of the Judicial Conference. Judge Mike Melloy is a 
district judge from Cedar Rapids, IA; has been a friend of mine 
for many years. And I look forward to hearing from Judge 
Melloy, and he had previous background in the bankruptcy courts 
as well.
    I start this process, Mr. Chairman, with an open mind, but 
also with the idea that the Federal judiciary has a tough 
burden to meet in terms of justifying this judgeship request. 
In the past, the Judicial Conference has not cooperated with 
requests seeking information on the process the courts use for 
deciding to recommend new judgeships. So I hope today, at this 
hearing, that will change and we will let the sun shine in on 
the process for requesting new judgeships.
    As I understand it, when a district requests new bankruptcy 
judgeships, the Judicial Conference sends out a team to assess 
the management of the requesting district. The team discusses 
court management issues with various judges in that district to 
assess whether a particular district is wisely managed.
    This team then makes recommendations for techniques for 
improving management in these districts. I think it is 
important for Congress to have access to the contents of these 
interviews. It is simply unacceptable for the courts to block 
the relevant committees of Congress from getting information 
which will help in determining whether a judgeship is 
necessary. And if the Federal judiciary is seeking new 
judgeships which will require the expenditure of tax dollars, 
Congress and the American people have the right to know whether 
districts requesting new judgeships are mismanaged in some way.
    In my view, it is high time that we open up this process 
then to public scrutiny. When the Judiciary Committee passed my 
bankruptcy bill earlier this year, the committee report was 
quite clear that we in the Senate will be taking a hard look at 
future judgeship requests.
    Now, there is another troubling aspect of this request for 
new judgeships and that is that it is not offset from a 
budgetary point of view. Under the 1990 Budget Act, the 
creation of a new bankruptcy judgeship is scored as mandatory 
spending by the Congressional Budget Office. Now, in the 
Senate, this means that legislation creating new judgeships is 
subject to a budget point of order unless there are offsets. I 
think it is only proper that the Judicial Conference suggest 
offsets when they forward a judgeship request to Congress.
    One of our witnesses, Mr. Hugh Ray, raises important points 
about the use of traveling judges to dispose of temporary 
spikes in the bankruptcy filings in some particular district. 
It seems to me that traveling judges could really help 
districts that suddenly find themselves under water, and 
perhaps this is something Congress can do to facilitate the use 
of traveling judges.
    Finally, the formula that is used to decide whether new 
judges are necessary really is quite old and quite outdated. 
The formula, over 10 years old, means that many of the 
advantages in computer and other technology may or may not be 
accounted for in the formula. And I hope that we can get into 
that topic today as well.
    So Congressman Gekas, we are all being asked to do a lot; 
perhaps we can. And I think that congressional oversight 
responsibilities are very important. And we should be very 
hesitant to grant requests for judgeships until we have all the 
information we need and until the request is paid for.
    Finally, you, Mr. Chairman, and I have introduced 
bankruptcy legislation which will make bankruptcy a much less 
appealing option. This in turn should reduce the number of 
bankruptcies filed. I think it is responsible to look at 
whether or not we need new bankruptcy judgeships in the context 
of the impact of our legislation.
    You convened an excellent panel of witnesses, and I look 
forward to hearing their statements.
    The Chairman. We thank you, Senator Grassley.
    Having noted the presence now of a hearing quorum with the 
attendance of the gentleman from New York, Mr. Nadler, the 
ranking minority member, and the gentleman from Massachusetts, 
Mr. Delahunt, the recess is declared defunct. And we will enter 
into the formality of the hearing.
    Without objection, the opening statement of Senator 
Grassley will be inserted in the record following the fall of 
the gavel.
    This committee is now in session for the purposes of an 
important hearing.
    [The prepared statement of Mr. Gekas follows:]
    Prepared Statement of Hon. George W. Gekas, a Representative in 
Congress From the State of Pennsylvania, and chairman, Subcommittee on 
                   Commercial and Administrative Law
    On behalf of the Subcommittee, we extend our most heartfelt welcome 
to our Senate colleagues and especially Senator Chuck Grassley, who is 
to be commended for his untiring leadership on the issue of bankruptcy 
reform in the other body. We also welcome those Members who have agreed 
to participate on our panel today and the other distinguished 
witnesses.
    More than two years ago, our Subcommittee held a comprehensive 
hearing on H.R. 1596, the ``Bankruptcy Judgeship Act of 1997,'' a bill 
that I introduced in May of 1997. H.R. 1596 would have authorized seven 
permanent and 11 temporary bankruptcy judgeships in 14 judicial 
districts and extended an existing temporary judgeship in another 
district. That bill, which was cosponsored by my colleague from New 
York, Mr. Nadler, was passed by the House and sent to the Senate for 
its consideration.
    Rather than taking up H.R. 1596, however, the Senate Judiciary 
Committee included a modified version of the bill in its bankruptcy 
reform legislation last year. This version, which was also included in 
the Conference Report on H.R. 3150, the Bankruptcy Reform Act of 1998, 
a bill that I introduced last year.
    Since we last considered the need for additional judgeships, there 
have been significant developments with regard to bankruptcy. First, 
bankruptcy case filings in calendar year 1998 topped 1.4 million in 
number, the highest level ever in our nation's history. Recently, 
however, the rate of filings has diminished somewhat. Second, we 
continue to be on the very precipice of bicameral bankruptcy reform. As 
we know, the House passed H.R. 833, the Bankruptcy Reform Act of 1999, 
last May with an overwhelming bipartisan vote of 313 to 108. With 
regard to the other body, we receive--on nearly a daily basis--reports 
that the Senate will take up S. 625, its version of comprehensive 
bankruptcy reform. The continuing and wide-ranging support for 
bankruptcy reform is undeniable.
    Accordingly, today's oversight hearing provides an excellent 
opportunity for us to have an update from the Judicial Conference 
concerning its assessment of bankruptcy judgeships, against the 
backdrop of these developments.

    The Chairman. We will introduce each member of the 
legislative panel, our colleagues who are interested in this 
subject matter. We will introduce them in the order that we 
have compiled their resumes so that no one should take offense 
as to seniority or any other factor, other than that is the way 
the Chair has them. And each member would be free to leave 
following his presentation to the committee. We will not engage 
in cross-examination, unless a member requests that that be 
accomplished. And we will proceed with the hearing after we 
hear the opening statement of the gentleman from New York, Mr. 
Nadler.
    Representative Nadler. Thank you, Mr. Chairman.
    I want to commend you first for scheduling this hearing. 
And I want to welcome our colleagues from the other body as 
well, and also to welcome our colleagues who will be providing 
testimony today. I hope to be here for the entire hearing; 
although, I would point out that this committee has a number of 
bills pending on the floor today, and I may have to absent 
myself briefly if the hearing is not concluded when some of 
those bills are called up on the floor.
    To any witnesses whose testimony I might miss as a result, 
my apologies; you may be assured we will be reviewing all the 
testimony submitted.
    It has been my pleasure to work with Chairman Gekas on this 
legislation since I first became the ranking Democratic member 
of the subcommittee. It has been a bipartisan and cooperative 
effort, even during times when we have strongly disagreed on 
other matters of bankruptcy policy. The plain fact is, however, 
we have not created a single new judgeship on the bankruptcy 
bench since 1992.
    That may not be a problem in some parts of the country, but 
in places where there are still a significant number of Chapter 
11s, and particularly in jurisdictions where mega-Chapter 11s 
are filed, very complicated cases with broad national impacts, 
it is, in my opinion, unconscionable that gridlock has held up 
legislation which is clearly necessary and long overdue.
    I don't know how much longer we are going to be derelict in 
our duty to pass such legislation, but the failure to provide 
for adequate judicial resources in the bankruptcy bench imposes 
real and increasing costs on creditors and debtors and on the 
people with whom they do business.
    In addition, if many of the proposed changes to the 
Bankruptcy Code that are pending in the bill now before the 
Senate that we have passed were to become law, it is 
inevitable, there is much testimony before this committee, 
including from the bankruptcy judges themselves as stated, it 
is inevitable that the provisions of that bill will cause much 
additional business and much additional work for the bankruptcy 
judges who will become even more busy and the resource backlog 
will become more severe.
    Those members who are proponents of the pending legislation 
as, of course, I am not, should look at the demands it will 
place on the bench, the additional demands it will place on the 
bench and commit themselves to ensuring the demands they 
propose to impose will have the adequate resource that--provide 
adequate resources to meet those additional demands that the 
legislation will impose on the bankruptcy bench.
    So with that, I look forward to hearing the testimony. Mr. 
Chairman, I yield back the balance of my time.
    The Chairman. We thank the gentleman.
    The record will indicate that the gentleman from Ohio, Mr. 
Chabot has joined us.
    We will begin with the introduction of the members who are 
present for the purpose of presenting testimony.
    Congressman Jack Kingston is in his fourth term 
representing Georgia's First Congressional District. Since 
being elected to Congress in 1992, Jack has been widely 
recognized for his commitment to cut taxes, balance the budget, 
and reduce government involvement in our lives. He has been 
named a taxpayers hero by Citizens Against Government Waste and 
received the Watchdog of the Treasury Golden Bulldog Award. In 
addition, he was awarded the U.S. Chamber of Commerce Spirit of 
Enterprise Award and was named a Friend of the Farmer by the 
Georgia Farm Bureau.
    In May 1997, Jack became the first Member of Congress to 
receive the National Rural Water Association's Green Key Award 
for his commitment to protecting public health, quality of 
life, and the environment.
    Before coming to Washington, Jack served for 8 years as a 
State representative in the Georgia General Assembly.
    Let the record indicate that Senator Biden has joined the 
panel.
    Jack Kingston is joined at the witness table by the 
Honorable Mike Castle, the Congressman----
    Senator Biden. Who represents Delaware.
    The Chairman. I think we concur.
    Senator Biden. That is a fact.
    The Chairman. The former two-term Governor of the State of 
Delaware. Over the course of his four terms in Congress, Mike 
has focused his efforts on crime control, handgun control, 
fiscal responsibility, and welfare reform.
    Mike currently chairs the House Education Subcommittee on 
Early Childhood, Youth, and Families where he pursues his 
commitment to improving educational opportunities for our 
Nation's youth. In 1997, Mike received the Congressional 
Distinguished Service Award from the National Committee for 
Education Funding for his leadership on education issues.
    Mike serves on the House Banking Committee and was the 
chairman of the Subcommittee on Domestic International 
Monitoring Policy in the 104th and 105th Congresses. He is also 
a member of the Permanent Select Committee on Intelligence. In 
addition, Mike serves in a variety of task forces and caucuses.
    Steny Hoyer joins the panel, the Member from the Fifth 
Congressional District of Maryland; Congressman Hoyer has 
served in the House of Representatives since 1981. Steny is a 
member of the House Appropriations Committee where he serves as 
the ranking member of the Treasury, Postal Service, and General 
Government Subcommittee and also serves in the Labor, Health 
and Human Services, and Education Subcommittee and the 
Legislative Appropriation Subcommittee.
    On the foreign policy front, Steny is the ranking member of 
the Commission on Security and Cooperation in Europe. Steny was 
first elected to the Maryland State Senate in 1966 at the age 
of 27 and served until 1978.
    Earlier this year, he was awarded the Jack Niles Medal of 
Honor by the Public Employees Roundtable for his commitment to 
public service.
    With our colleagues is Ed Bryant. Long before coming to 
Congress, Ed established a distinguished career in public 
service. He was an officer of the United States Army in the 
Military Intelligence Branch and served in the Judge Advocate's 
General Corps as a captain. Ed also taught constitutional law 
to the United States Military Academy in West Point, New York.
    In 1991, President Bush appointed Ed to serve as United 
States Attorney for the Western District of Tennessee. He was 
one of the first U.S. Attorneys to establish an investigative 
task force on abuse and fraud regarding various government 
funded health care programs.
    Since coming to Congress in 1994, he has been a staunch 
advocate for Federal tort reform, Federal anticrime and law 
enforcement measures, the protection of property rights and 
welfare reform.
    Ed is a former member of the House Judiciary Committee. He 
serves currently on the Commerce Committee and the House Task 
Force on Firearms.
    Representative Coble may be appearing at a little later 
period in this hearing.
    We note the presence now, the record should indicate that 
the gentleman from North Carolina, Mr. Watt, is present.
    Senator Biden, wish to make an opening statement?
    Senator Biden. Just to comment, Mr. Chairman, based on 
those introductions, you clearly are the more gentle body. We 
never say anything that nice about our colleagues from the 
bench. But I am delighted to be here in such distinguished 
company with the exception of Representative Hoyer.
    Representative Hoyer. Your statement is understandable.
    The Chairman. We thank you, Senator Biden.
    Let us proceed with the testimony. As is the custom, the 
written statements will become automatically a part of the 
record. We also ask that each of you try to synthesize the 
written statements into 5 minutes, more or less, for the 
purposes of proceeding with an expeditious hearing.
    Representative Kingston.

 STATEMENT OF HON. JACK KINGSTON, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF GEORGIA

    Representative Kingston. Thank you, Chairman Gekas and Mr. 
Nadler and Chairman Grassley and Senator Biden. It is a great 
honor to be here. In the approval of the House bill of 18 new 
bankruptcy judges, at the time that that was done, there were 
six others that were requested. And I wanted to speak about the 
six others. And I will make five points on it because one of 
them affects the district that I represent, the First District 
of Georgia.
    Based on the most recent statistics, the incumbent judges 
of the Southern District of Georgia are handling a weighted 
caseload which ranks them as ninth busiest district in the 
country. Their caseload exceeds the threshold established for 
approval of new judgeships by a margin of 25 percent, and it 
exceeds the national median caseload by approximately 50 
percent.
    Even after approval of this additional judgeship, the three 
full-time judges in the Southern District of Georgia would 
still be carrying a caseload in excess of 1500 weighted hours, 
the threshold level which would justify establishment of yet 
another, a fourth judge. The last time judicial resources were 
increased in the district was in 1993, when an additional 
judgeship was created to be shared between the Middle and 
Southern Districts of Georgia. Even after this additional one-
half judgeship in both districts, the caseload has continued to 
grow and has exceeded the 1500 threshold for several years.
    The survey team dispatched by the Judicial Conference to 
review the district's requests for the additional judgeship 
concluded that caseloads are being managed in a highly 
efficient manner in the district, and that there was no case 
management changes or suggestions that might be made in order 
to assist the courts in dispatching its business in a more 
expeditious manner.
    And the last point I want to make, Mr. Chairman, and 
members of the committee, is that the judges of the Southern 
District are very active, holding court in 6 divisional 
locations and cover a 43 county area encompassing a huge 
portion of the State of Georgia. Because of the shared nature 
of the current judgeship between the Southern and Middle 
Districts of Georgia, creation of another full-time judgeship 
in the Southern District will have the effect of converting the 
one-half judgeship in the Middle District of Georgia to a full-
time position there.
    That district is very similar in its geographic size, 
population, and caseload. The judges in the Middle District of 
Georgia, according to the latest statistics available, are the 
eighth busiest in the country and need this help as urgently as 
the Southern District does.
    And, Mr. Chairman, I will submit the rest of this in 
writing. I also have a letter that is signed by 18 Members of 
the Congress on a bipartisan basis urging the committee to 
consider the six additional judgeships.
    [The prepared statement of Representative Kingston 
follows:]
Prepared Statement of Hon. Jack Kingston, a Representative in Congress 
                       From the State of Georgia
    It is an honor to appear here today before your subcommittee, 
Chairman Gekas and Ranking Member Nadler. As one who has followed the 
bankruptcy judge issue closely for some time now, I am grateful that 
you chose to hold these hearings into a matter which I believe is very 
important to the judiciary not only in my home state of Georgia, but 
throughout the U.S.
    As you are aware, the House has previously approved 18 new 
bankruptcy judgeships in various districts. At the time the House 
acted, an official request had been forwarded to the Congress from the 
Judicial Conference of the United States asking for approval of six 
additional judgeships, one of which would be located in my district. 
These six additional judgeships were not the subject of any hearings in 
the House at the time the House passed H.R. 833 and thus I welcome the 
opportunity to lay out a case for the approval of this additional 
judgeship in Georgia at this time.

        (1) LBased on the most recent statistics available to me, the 
        incumbent judges of the Southern District of Georgia are 
        handling a weighted caseload which ranks them as the ninth 
        busiest district in the country. Their caseload exceeds the 
        threshold established for approval of new judgeships by a 
        margin of 25%. And it exceeds the national median caseload by 
        approximately 50%.

        (2) LEven after approval of this additional judgeship, the 
        three full-time judges in the Southern District of Georgia 
        would still be carrying a caseload in excess of 1,500 weighted 
        hours, the threshold level which would justify establishment of 
        yet another, or a fourth judgeship, in the district.

        (3) LThe last time judicial resources were increased in the 
        district was in 1993 when additional judgeship was created to 
        be shared between the Middle and Southern Districts of Georgia. 
        Even after this additional one-half judgeship, in both 
        districts, caseload has continued to grow and has exceeded the 
        1,500 threshold for several years.

        (4) LThe survey team dispatched by the Judicial Conference to 
        review the district's request for the additional judgeship 
        concluded, without any equivocation, that caseloads are being 
        managed in a highly efficient manner in the district, that 
        there were no case management changes or suggestions that might 
        be made in order to assist the court in dispatching its 
        business more expeditiously and the recommendation for the 
        additional full-time judgeship was approved by the Judicial 
        Conference in March this year.

        (5) LThe judges of the Southern District are very active, 
        holding court in six divisional locations and cover a 43 county 
        area encompassing a huge portion of the State of Georgia. 
        Because of the shared nature of the current judgeship between 
        the Southern and Middle Districts of Georgia, creation of 
        another full-time judgeship in the Southern District of Georgia 
        will have the effect of converting the one-half judgeship in 
        the Middle District of Georgia to a full-time position there. 
        That district is very similar in its geographic size, 
        population, and caseload. The judges in the Middle District of 
        Georgia, according to the latest statistics available to me, 
        are the eighth busiest in the country and need this help as 
        urgently as the Southern District does.

    In conclusion, approval of this judgeship for the Southern District 
of Georgia will alleviate the shortage of judicial resources in two 
districts of the state, both of which are operating at levels far 
beyond the threshold for creation of the new judgeship and I urge the 
committee to favorably act on this request in an expedited a manner as 
possible.
    Mr. Chairman, the facts seem clear to me, and my colleagues from 
other states can recite similar statistics as I have. It is time for 
this Congress to approve more bankruptcy judges in order to help 
alleviate what have become almost unbearable caseloads, which bog down 
the system and is a disservice to our citizens. I thank you for your 
leadership and for your assistance on this important question. And I 
once again commend your efforts in organizing these hearings today.

    The Chairman. Without objection, that letter will be made a 
part of the record. We thank the gentleman.
    The Chairman. We turn to Mike.
    Representative Kingston. Thank you.
    [The letter follows:]
    
    
    
    
   STATEMENT OF HON. MICHAEL N. CASTLE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF DELAWARE

    Representative Castle. Thank you, Chairman Gekas, I 
appreciate your overly generous introduction. And Chairman, 
Senator Grassley, and my friends, Mr. Chabot and Mr. Nadler and 
Mr. Watt and Mr. Delahunt, and, particularly, Senator Biden, 
who I know has a bigger name tag. I hope he has a 
disproportionate weighted vote in any matters that comes before 
any Judiciary Committees in the House and Senate on this issue.
    I do appreciate the opportunity very much to testify, and I 
realize how difficult it is to bring a joint committee 
together. So I appreciate the fact that both of the Senators 
were able to get over here. But we do need an additional 
bankruptcy judge in the State of Delaware.
    Attached to my testimony, which you have before you, I 
believe, you will see a chart which I have here. And this is an 
eye strain from there, so I don't expect you to see it; and I 
will talk about it a little bit more, but it shows that 
Delaware is the jurisdiction with the greatest need for a 
bankruptcy judge.
    And it summarizes the most recent data on the weighted 
filings for the judgeship for the 19 bankruptcy districts 
requesting judgeships. Now, something I learned about this is 
the weighted business means when you have bigger cases, you may 
be given extra, I guess, count in terms of the weighting in 
which they do. In that criteria, Delaware comes out the 
highest. Fourteen of these bankruptcy districts are scheduled 
to receive between one and four of the 18 judgeships authorized 
in the Bankruptcy Reform Bill passed by the House Judiciary now 
pending before the Senate.
    The District of Delaware is not among these four districts, 
but it is one of seven districts seeking either a half or full-
time judgeship for a total of six additional judgeships in our 
Nation's bankruptcy court system. I support the 14 bankruptcy 
districts scheduled to receive up to four of the 18 pending 
judgeships because their weighted filings per judgeship 
demonstrate the need for an expansion. As a matter of fact, I 
support the legislation that I believe both of you mentioned 
that would reduce some of the need for bankruptcy in general, 
too.
    Among those 14 districts who are getting judges, the 
weighted filings per judgeship range from 1427 to 2733. The 
case is equally compelling for the seven districts seeking up 
to one of six additional judgeships. For these seven districts, 
which are represented by all of us here, the weighted filings 
per judgeship over a 12-month period range from 1722 in the 
Eastern District of North Carolina to 3108 in the District of 
Delaware. Far above the 1500 filing standards that Judicial 
Conference uses as a threshold for considering adding a 
judgeship and even farther above the 1337 filing average for 
the nation.
    As a sole representative of Delaware, I would like to draw 
a special attention to the needs of the District of Delaware. 
With 3,108 weighted filings for judgeship, more than any other 
bankruptcy district, the numbers speak for themselves and 
really do not need my assistance nor, for that matter, Senator 
Biden's assistance.
    What the numbers do not describe is the tremendous strain 
Delaware's two bankruptcy judges Judge Walsh and Judge Walwrath 
are under. They are spending 8 hours a day on the bench and 
many more off the bench researching law preparing for their 
cases.
    Most of you have been trial lawyers at one time or another. 
You know if you are in court for 8 hours, you are putting a lot 
of time in to get ready for the other work you have to do. 
Their staffs' morale and their own morale are at all time lows 
in a struggle to maintain the excellent reputations for 
services come to characterize the practice of law in Delaware.
    Finally, I would like to explain to the joint committee 
while the District of Delaware was not included among the 14 
districts receiving judges in the House-passed bill--when the 
House passed H.R. 833, it included bankruptcy judgeships based 
on the 1997 recommendations from the Judicial Conference. The 
Judicial Conference did not recommend a new permanent 
bankruptcy judgeship for the District of Delaware because they 
believed the upward filing trends in Delaware could change 
drastically due to anticipated changes in interest rates and 
national economy and tax laws.
    Furthermore, the District of Delaware ordered an order 
dated January 23, 1997 which revoked the automatic reference of 
Chapter 11 cases to the bankruptcy judge, the chief district 
judge indicated that he and two other district judges would 
share, and this is unique by the way, the Chapter 11 caseload 
to assist the bankruptcy judges.
    However the 1998-99 judgeship survey revealed that the 
filing trends have increased not decreased. In fact, today the 
District of Delaware is the busiest district in the country. 
That is why I respectfully request that the Senate Judiciary 
Committee approve S. 625 with the six additional judgeships and 
that the House Judiciary Committee agree to the change on the 
matter that reaches conference.
    And again, I appreciate very much the opportunity of 
speaking here today.
    The Chairman. We thank the gentleman.
    [The prepared statement of Representative Castle follows:]
   Prepared Statement of Hon. Michael N. Castle, a Representative in 
                  Congress From the State of Delaware
    Chairman Gekas, Chairman Grassley, and distinguished Members of the 
House and Senate Judiciary Committees, I appreciate this opportunity to 
testify before the Joint Committee on the overwhelming need for an 
additional bankruptcy judge in the District of Delaware.
    Attached to this testimony you will see a chart summarizing the 
most recent data on the weighted filings per judgeship for the nineteen 
Bankruptcy Districts requesting judgeships. Fourteen of these 
Bankruptcy Districts are scheduled to receive between one and four of 
the eighteen judgeships authorized in the Bankruptcy Reform bill passed 
by the House this year and pending before the Senate. The District of 
Delaware is not among these fourteen districts, but it is one of seven 
districts seeking either a half or full time judgeship for a total of 
six additional judgeships in our nation's bankruptcy court system.
    I support the fourteen bankruptcy districts scheduled to receive up 
to four of the eighteen pending judgeship because their weighted 
filings per judgeship demonstrate the need for an expansion. Among 
those fourteen districts, the weighted filings per judgeship range from 
1,427 to 2,733. The case is equally compelling for the seven districts 
seeking up to one of six additional judgeships. For these seven 
districts, the weighted filings per judgeship over a twelve month 
period range from 1,722 in the Eastern District of North Carolina to 
3,108 in the District of Delaware--far above the 1,500 filings standard 
the Judicial Conference uses as a threshold for considering adding a 
judgeship and even farther above the 1,337 filing average for the 
nation.
    As the sole Representative of Delaware, I would like to draw 
special attention to the needs of the District of Delaware. With 3,108 
weighted filings per judgeship, more than any other Bankruptcy 
District, the numbers speak for themselves and do not need my 
assistance. What the numbers do not describe is the tremendous strain 
Delaware's two Bankruptcy Judges, Judge Walsh and Judge Walrath, are 
under. They are spending eight hours a day on the bench and many more 
off the bench researching the law and preparing for their cases. Their 
staff's moral and their own moral are at all time lows as they struggle 
to maintain the excellent reputation for service that has come to 
characterize the practice of law in Delaware.
    Finally, I would like to explain to the Joint Committee why the 
District of Delaware was not included among the fourteen districts 
receiving judges in the House-passed bill. When the House passed H.R. 
833, it included bankruptcy judgeships based on the 1997 
recommendations from the Judicial Conference. The Judicial Conference 
did not recommend a new permanent bankruptcy judgeship for the District 
of Delaware because they believed the upward filing trends in Delaware 
could change drastically due to anticipated changes in interest rates, 
the national economy, and tax laws. Furthermore, the District Court of 
Delaware entered an order dated January 23, 1997, which revoked the 
automatic reference of chapter 11 cases to the bankruptcy court. The 
chief district judge indicated that he and two other district judges 
would share the chapter 11 caseload to assist the bankruptcy judges. 
However, the 1998-1999 judgeship survey revealed that the filing trends 
had increased not decreased. In fact, today, the District of Delaware 
is the busiest district in the country.
    That is why I respectfully request that the Senate Judiciary 
Committee approve S. 625 with the six additional judgeships and that 
the House Judiciary Committee agree to the change when the matter 
reaches conference.


    The Chairman. We turn to Steny.

STATEMENT OF HON. STENY H. HOYER, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF MARYLAND

    Representative Hoyer. Mr. Chairman, Senator Grassley, and 
Mr. Nadler, Senator Biden, thank you very much for allowing me 
to appear.
    I suppose that I am number two behind Delaware. Maryland is 
the--at 2733, I think, the second busiest jurisdiction in the 
country. Last year, despite a booming economy and low 
unemployment, more than 1.43 million people filed for 
bankruptcy, as I think all of you know. I supported H.R. 833, 
only because it takes a major step forward in making people 
more responsible for their debt, because section 128 authorizes 
the creation of new judgeships for judicial districts in 
desperate need. I think desperate is the operative word there, 
in need of additional judges to meet the onslaught of increased 
filings.
    Although I am grateful, of course, that my home State of 
Maryland will be receiving, under the legislation pending, two 
additional bankruptcyships for a total of six, Maryland's 
bankruptcy judges have the highest, it says the highest, but it 
is the second highest workload and are among the hardest 
working in the Nation.
    Even with the two additional judges added, Maryland will be 
substantially above the weighted average necessary to qualify 
for an additional judge. And if we got a third judge, it would 
still be above the 1500 weighted criteria. From July 1, 1997 to 
June 30, 1998, the District of Maryland had a total of 34,463 
case filings or 8,616 per judge. That is almost 200 percent--
that is almost 200 percent above the national average and 
ranked Maryland first out of the Nation's 90 judicial districts 
in total volume.
    The 1999 recommendation made by the Judicial Conference of 
the United States called for a total of 24 additional 
bankruptcy judges, including three for the District of 
Maryland. Both the House and the Senate bills contain only 18 
judgeships, six short of the Judicial Conference's 
recommendations.
    Mr. Chairman, very frankly, while I speak for Maryland and 
ask for an additional judgeship, based upon my review of the 
figures, I think all six are critically needed. Clearly, 
Delaware needs it, my friend from Georgia--Tennessee, excuse 
me, and my friend from Georgia, Mr. Kingston, have spoken and 
I'm sure Mr. Coble will as well. With six bankruptcy judges, 
Maryland will still be far above the national average in regard 
to weighted filings per judgeship as I said. The seventh 
judgeship would significantly decrease that number and bring 
the caseload levels closer to, but not below or at the national 
average.
    While I focused on Maryland, as I said, the judicial 
districts of Delaware, southern Florida, southern Georgia, 
eastern North Carolina and Puerto Rico would also be seriously 
impacted without the additional judgeships.
    While I am hopeful that the Senate leadership can reach an 
agreement this week and move forward with the bankruptcy reform 
bill, I cannot stress how important it is that we pass 
legislation this year authorizing the creation of all 24 
positions with or without the underlying reform bill.
    Mr. Chairman, again, I know you are very knowledgeable in 
these areas and share our concern, collective concern, that we 
handle the filings with efficiency and effectiveness. And I 
appreciate very much this opportunity to appear before you.
    The Chairman. I thank the gentleman.
    [The prepared statement of Representative Hoyer follows:]
Prepared Statement of Hon. Steny H. Hoyer, a Representative in Congress 
                       From the State of Maryland
    Mr. Chairman, thank you for the opportunity to testify on the 
importance of authorizing additional bankruptcy judgeship positions to 
meet the ever increasing number of Americans filing for debt relief.
    Personal bankruptcy in this country has become a national 
epidemic--with a 400% increase since 1980. Last year, despite a booming 
economy and low unemployment, more than 1.43 million people filed for 
bankruptcy.
    I support H.R. 833 not only because it takes a major step forward 
in making people more responsible for their debt, but because section 
128 authorizes the creation of new judgeships for judicial districts in 
desperate need of additional judges to meet the onslaught of increased 
filings.
    Although I am grateful that my home state of Maryland will be 
receiving two additional bankruptcy judgeships for a total of six, 
Maryland's bankruptcy judges have the highest workload and are among 
the hardest working in the Nation. From July 1, 1997 to June 30, 1998, 
the District of Maryland had a total of 34,463 case filings or 8,616 
per judge. That is almost 200% above the national average and ranked 
Maryland first out of the Nation's ninety judicial districts.
    The 1999 recommendation made by the Judicial Conference of the 
United States called for a total of twenty-four additional bankruptcy 
judgeships including three for the District of Maryland. Both the House 
and the Senate bills contain only eighteen judgeships, six short of the 
judicial conference's recommendation. With six bankruptcy judges, 
Maryland will still be far above the national average in regards to 
weighted filings per judgeship. a seventh judgeship would significantly 
decrease that number and bring the caseload levels closer to the 
national average.
    While I have focused on Maryland, the judicial districts of 
Delaware, southern Florida, southern Georgia, eastern North Carolina, 
and Puerto Rico would also be seriously impacted without the additional 
six judgeships.
    While I am hopeful that the Senate leadership can reach an 
agreement this week and move forward with the bankruptcy reform bill, I 
cannot stress how important it is that we pass legislation this year 
authorizing the creation of all 24 positions with or without the 
underlying reform bill.

    The Chairman. We turn to our colleague, Ed Bryant.

STATEMENT OF HON. ED BRYANT, A REPRESENTATIVE IN CONGRESS FROM 
                     THE STATE OF TENNESSEE

    Representative Bryant. Thank you, Mr. Chairman. I thank all 
of you for being here today for this joint session. I also 
appreciate very much the opportunity to be here with my 
colleagues from the House to testify to you today about this 
very important matter. I won't take the entire 5 minutes, but I 
think it is important for me to reiterate Tennessee's strong 
need for an additional bankruptcy judge.
    As a former member of this Judiciary Committee, I am well 
aware of the House Judiciary support for fulfilling bankruptcy 
judges. I am equally aware that Congress hasn't authorized the 
additional judgeships since 1992. As you know, both H.R. 833 
and S. 625 provide an additional bankruptcy judge for the 
Western District of Tennessee, along with the provision 
extending the temporary judgeship in the Eastern District of 
Tennessee.
    This position has been endorsed by the Judicial Conference. 
In the Western District of Tennessee, the caseload burden on 
the four bankruptcy judges is among the highest in the nation. 
I think Mr. Castle's chart shows we are number 3 behind 
Delaware and Maryland. We have asked our judges in western 
Tennessee and across this Nation, for that matter, to work too 
hard for too long. Even if Congress provides the requested 
judgeships for this district and the other districts requested, 
the average caseload is still probably too high.
    I know in the Western District, it will be still among the 
highest in the Nation, even with the additional judge. And, in 
fact, the most current case weight numbers based on the filings 
through June of this year are at 2,380 cases per judge in the 
Western District. If an additional judgeship is provided, that 
will go down to 1904 per judge. I would also point out that 
1,500 is the level at which the Judicial Conference uses to 
show evidence of a potential need for additional judgeships.
    As a strong proponent of bankruptcy reform, I hope we will 
be able to send a meaningful reform bill to the President 
before the end of this first session. But should this not be 
possible, I join my colleagues in asking you to split the 
judgeships as a separate piece of legislation so that we can 
authorize these positions this year.
    Again, I thank you for holding this hearing. I appreciate 
the opportunity to highlight Tennessee's situation and would 
again encourage you to consider moving separate legislation 
this year authorizing these additional judgeships. And I yield 
back my time.
    The Chairman. We thank you.
    [The prepared statement of Representative Bryant follows:]
Prepared Statement of Hon. Ed Bryant, a Representative in Congress From 
                         the State of Tennessee
    Thank you Chairman Gekas, and Chairman Grassley I appreciate the 
opportunity to join with Representatives Kingston and Castle in 
appearing before you today. I can assure you that I will not use the 
entire 5 minutes, but I did think it important to reiterate Tennessee's 
strong need for an additional bankruptcy judgeship.
    As a former member of the Judiciary Committee, I am well aware of 
the House Judiciary Committee's support for filling bankruptcy 
judgeships. I'm equally aware that Congress hasn't authorized any 
additional judgeships since 1992. As you know, both H.R. 833, and S. 
625 provided for an additional bankruptcy judgeship for the Western 
District of Tennessee along with a provision extending the temporary 
judgeship in the Eastern District. This position has been endorsed by 
the Judicial Conference.
    In the Western District, the case load burden on the four 
bankruptcy judges is among the highest in the nation. We've asked these 
judges to work too hard, for too long. Even if Congress provides the 
requested judgeship for this district, the average case load for these 
judges would still be among the highest in the nation. In fact, the 
most current case weight numbers, based on filings through June of this 
year, is at 2,380 cases per judge in the Western District. If an 
additional judgeship is provided, that would go down to 1,904 per 
judge. I would also point out that 1,500 is the level at which the 
Judicial Conference uses to show evidence of potential need for an 
additional judgeship.
    As a strong proponent of bankruptcy reform, I hope we will be able 
to send a meaningful reform bill to the President before the end of the 
first session. But should that not be possible, I join my colleagues in 
asking you to split of the judgeships as separate legislation so that 
we can authorize these positions this year.
    Again, thank you for holding this hearing. I appreciate the 
opportunity to highlight Tennessee's situation and would again 
encourage you to consider moving separate legislation this year 
authorizing these additional judgeships.
    And I thank the chair.

    The Chairman. And we thank Mike and our other colleagues. 
And we dismiss them with our gratitude.
    We will now impanel the second set of witnesses which is a 
solo appearance. And we will ask Senator Grassley to make the 
formal introduction.
    Senator Grassley. As I said in my opening statement, I have 
known our next witness very well for a long period of time and 
feel that he does a very outstanding job as judge. He appears 
today on behalf of the Judicial Conference of the United States 
where he serves as Chair of the Committee on Administration of 
the Bankruptcy System.
    Judge Melloy began his judicial career in 1986 as a 
bankruptcy judge for the Northern District of Iowa. He was 
thereafter appointed chief judge of the United States District 
Court in 1992. Before coming to the bench, Judge Melloy was in 
private practice for more than 10 years. He attended Loras 
College in Dubuque, Iowa, graduated magna cum laude in 1970. He 
then served 2 years in the United States Army. Following the 
completion of his military service, Judge Melloy attended the 
University of Iowa College of Law where he graduated in 1974 
with high distinction.
    Judge Melloy.

  STATEMENT OF MICHAEL J. MELLOY, U.S. DISTRICT CHIEF JUDGE, 
     NORTHERN DISTRICT OF IOWA AND CHAIR, COMMITTEE ON THE 
ADMINISTRATION OF THE BANKRUPTCY SYSTEM, JUDICIAL CONFERENCE OF 
                       THE UNITED STATES

    Mr. Melloy. Thank you, Chairman Grassley, Chairman Gekas. I 
want to thank you for allowing me to appear in support of the 
conference recommendation for 24 additional bankruptcy 
judgeships. In addition to my comments today, I have prepared a 
written statement which has been provided to you.
    I would first like to thank both the committees for your 
past support for the 18 judgeships that were requested by the 
Judicial Conference last year. As you know, those 18 judgeships 
were included in both the House and Senate versions of the 
bankruptcy reform legislation that passed in last year's 
sessions of Congress.
    We come before you today requesting an additional six 
judgeships. We believe all 24 positions, the 18 approved last 
year and the six new positions, are critically needed.
    The need for additional bankruptcy judgeships is more 
critical than ever. Since Congress last approved an increase in 
judgeships in 1992, filings have increased by 43 percent. Many 
of the affected districts have been recommended for additional 
judgeships since 1993. Those districts have used a number of 
case management techniques to try to manage the heavy caseload. 
These do include the use of visiting and recall judges.
    Bankruptcy judges across the country have and continue to 
provide many hours and days of service as visiting judges in 
districts with heavy caseloads. However, visiting and recall 
judges can only provide temporary relief in overburdened 
districts. They do not provide a long-term solution. Their 
availability is often unpredictable. There is a lack of 
consistency in handling cases, particularly larger Chapter 11 
cases, when the judge is only in the district for a few days. 
There is significant support and judicial time involvement in 
preparing for a visit--sitting by a visiting judge.
    The bankruptcy committee biannually conducts a national 
survey. In assessing the needs for additional judgeships, the 
committee uses a number of criteria. These include factors such 
as a minimum workload of over 1500 hours, judicial management, 
and historic trends. The written materials which have been 
provided to you contain a detailed analysis of each proposed 
judgeship and show how the criteria was applied to each 
position.
    The Judicial Conference has given careful consideration to 
each request and only recommends those that are most 
desperately needed at this time. We have also recommended that 
11 of the positions be made temporary. The 13 positions we are 
recommending as permanent are those in districts with 
particularly high caseloads and a long history of high filings. 
These are districts which would have a very busy caseload and 
heavy filing statistics even if they did experience a dip in 
filings.
    We have seen an unprecedented increase in bankruptcy 
filings over the past several years. As you know, nearly 1.5 
million bankruptcy cases were filed last year. Although the 
numbers are down slightly this year, we expect filings to stay 
high and easily exceed 1 million for the foreseeable future.
    We anticipate the proposed bankruptcy legislation will also 
have a significant impact on judicial workload in these and all 
the other districts. We believe that the additional judgeships 
are desperately needed and are needed now.
    I would just like to close by urging you to act 
expeditiously on this request. All the districts we recommend 
for additional judgeships have been overburdened for many years 
and are in need of prompt relief.
    Thank you very much. And I would be happy to answer any 
questions you might have.
    [The prepared statement of Mr. Melloy follows:]
  Prepared Statement of Michael J. Melloy, U.S. District Chief Judge, 
Northern District of Iowa and Chair, Committee on the Administration of 
    the Bankruptcy System, Judicial Conference of the United States
    My name is Michael Melloy, and I am the Chief Judge of the United 
States District Court for the Northern District of Iowa. I am also 
Chairman of the Judicial Conference Committee on the Administration of 
the Bankruptcy System (the Bankruptcy Committee), and in that capacity 
I appear before you today.
    Thank you for the opportunity to appear today in support of the 
Judicial Conference's 1999 recommendation for the authorization of 24 
additional bankruptcy judgeships, in lieu of its previous request in 
1997 for 18 additional positions. Pending legislation provides for 18 
temporary bankruptcy judgeships only.
    The need for 24 additional judgeships is more critical than ever to 
ensure that the bankruptcy courts have sufficient judicial resources to 
effectively and efficiently adjudicate the rights and responsibilities 
of parties in bankruptcy cases and proceedings. Additional bankruptcy 
judgeships have not been authorized by Congress since 1992 when 35 new 
judgeships were approved. Since that time, case filings have increased 
nationally by 43 percent. In response to this increase, the Judicial 
Conference--as part of its process of reviewing bankruptcy judgeship 
needs every two years--made recommendations to Congress for additional 
bankruptcy judgeships in 1993, 1995, 1997, and (most recently) this 
year.
    While the focus of my testimony today is on the need for the six 
additional judgeships in addition to the 18, the need for the 18 
previously requested additional judgeships is as great as ever. The 
judiciary is concerned that pending legislation in the House and Senate 
provides that all 18 positions be temporary. The Conference believes 
that the addition of 13 permanent and 11 temporary bankruptcy 
judgeships and the conversion of three existing temporary judgeships to 
permanent judgeships are justified by the extremely heavy case-weighted 
filings per judgeship in the districts involved.
    Today I ask for your assistance in completing the process of 
securing authorization for the 24 additional bankruptcy judgeships 
needed by the bankruptcy system. For your convenience, I have provided 
a chart as Attachment A listing, on a district-by-district basis, the 
24 bankruptcy judgeships recommended by the Judicial Conference.

       JUSTIFICATION FOR THE SIX ADDITIONAL BANKRUPTCY JUDGESHIPS

    The Judicial Conference is required by statute (28 U.S.C. 
Sec. 152(b)(2)) to submit periodically recommendations to Congress for 
new judgeships. To assist the Conference in performing this 
responsibility, the Bankruptcy Committee biennially conducts national 
judgeship surveys pursuant to a policy statement adopted by the 
Conference in 1991.
    The policy statement sets out a number of workload factors that the 
Committee should consider in assessing a court's request for additional 
bankruptcy judgeships, the first of which is the weighted caseload of 
the bankruptcy court. Generally, it is expected that, in addition to 
other judicial duties, a bankruptcy court should have a caseload of 
1,500 annual case-weighted filings per judgeship to justify additional 
judicial resources. Other factors the Committee is to consider include 
the nature and mix of the court's caseload; historical caseload data 
and filing trends; geographic, economic, and demographic factors in the 
district; the effectiveness of case management efforts by the court; 
and the availability of alternative solutions and resources for 
handling the court's workload.
    Understanding the process and criteria used in evaluating requests 
for additional bankruptcy judgeships is important and should be, I 
believe, a part of the official record for every judgeship request. I 
have therefore included a detailed description of the process as 
Attachment B to my written testimony. The attachment also provides a 
description of the techniques used by the judiciary to manage existing 
judicial resources effectively and efficiently.
    As a result of the most recent judgeship survey conducted in the 
fall of 1998, the Bankruptcy Committee received requests for seven 
additional bankruptcy judgeships in addition to the 18 judgeships 
previously requested. At its January 1999 meeting, the Committee 
evaluated the requests based on the criteria provided in the 1991 
Conference policy statement and recommended that the Conference ask 
Congress to authorize the following six additional judgeships (in 
addition to the 18 already requested):

         for the District of Puerto Rico: add one temporary 
        judgeship and convert the existing temporary judgeship to a 
        permanent position;

         for the District of Delaware: add one permanent 
        judgeship and convert the existing temporary judgeship to a 
        permanent position;

         for the District of Maryland: add one permanent 
        judgeship (in addition to the two judgeships approved by the 
        Conference in 1997);

         for the Eastern District of North Carolina: add one 
        temporary judgeship;

         for the Middle District of Georgia: convert the 
        judgeship shared with the Southern District of Georgia to a 
        full-time judgeship in the Middle District of Georgia;

         for the Southern District of Georgia: following 
        conversion of the shared judgeship with the Middle District of 
        Georgia to a full-time position in the Middle District of 
        Georgia, add one permanent judgeship in the Southern District 
        of Georgia; and

         for the Southern District of Florida: add one 
        temporary judgeship (in addition to the additional position 
        approved by the Conference in 1997);

    At its March 1999 session, the Judicial Conference approved the 
Bankruptcy Committee's recommendation for 24 additional bankruptcy 
judgeships, which includes the 18 previously approved and the six I 
just mentioned.
    In September 1997, the Judicial Conference set forth its position 
regarding the ten temporary bankruptcy judgeships authorized by the 
Bankruptcy Judgeship Act of 1992. Other than the temporary bankruptcy 
judgeship for the district of Delaware, which, in March 1999, the 
Judicial Conference recommended converting to a permanent bankruptcy 
judgeship, the Judicial Conference's position is unchanged. The 
Conference recommends that the temporary bankruptcy judgeships in the 
district of Puerto Rico and the northern district of Alabama be 
converted to permanent judgeships. Further, the Conference recommends 
that the temporary bankruptcy judgeships in the district of South 
Carolina and the eastern district of Tennessee each be extended for an 
additional five year period.
    The need for these additional judgeships is critical. In making its 
recommendations to the Judicial Conference, the Bankruptcy Committee 
noted that, in addition to other justifying factors, the weighted 
filings per judge in each of the districts requesting additional 
bankruptcy judgeship positions were above the 1,500 annual weighted 
case-related filings per judgeship set forth in the 1991 policy 
statement approved by the Conference.
    The Committee also noted that each of the requesting districts had 
experienced a sustained period of heavy per judgeship weighted case 
filings, straining the abilities of its judges to effectively 
administer its caseload. The Judicial Conference is economically 
conservative in that it only recommends an additional bankruptcy 
judgeship for a district after the per judge weighted case filings in 
the district show a pattern of elevated judicial workload. This pattern 
of a sustained heavy judicial workload over a period of time has been 
clearly demonstrated with regard to the six additional requested 
judgeships:

         In the District of Puerto Rico, per judgeship 
        weighted case filings since 1995 have increased sixty percent, 
        reaching 1,843 in 1998 and 1,788 in 1999;

         In the District of Delaware, weighted case filings 
        per judgeship exceeded 3,000 for the past two years, more than 
        twice the level set by the Judicial Conference as the point at 
        which an additional judgeship will be considered;

         In the District of Maryland, the weighted case 
        filings per judgeship have been above the 1,500 level every 
        year since 1992, hitting record levels of 2,410, 3,020, and 
        2,733 in the past three years;

         In the Eastern District of North Carolina, the 
        weighted case filings per judgeship have been above the 1,500 
        level for three consecutive years, and are presently at 1,722;

         In the Southern District of Florida, weighted case 
        filings per judgeship have been above the 1,500 level for the 
        past 8 years, and are presently at 1,859;

         Finally, in the Southern District of Georgia, 
        weighted case filings per judgeship have been in excess of 
        1,500 for four consecutive years, and are presently at 1,880.

Similar patterns exist in the districts for which the Conference 
previously requested 18 additional positions.
    The districts I have just mentioned could have requested the six 
additional judgeship positions at the time of the last survey in 1996. 
In the interests of judicial economy, however, most did not, relying 
instead upon judicial management techniques to administer their heavy 
caseloads. The burden for those districts has now reached a critical 
point at which judicial management techniques are no longer effective 
and additional judgeships are necessary.

                               CONCLUSION

    We share a common interest in ensuring that the bankruptcy court 
system has the judicial resources it needs to manage near-record 
caseloads justly, speedily, and economically. An unprecedented number 
of cases are pending in our bankruptcy courts. Many of the 19 districts 
for which additional bankruptcy judgeships are sought have had 
overwhelming filings dating back years, in some cases to 1993, shortly 
after Congress last authorized additional positions. Although the 
judiciary has developed creative and innovative techniques to fully 
utilize its existing judicial resources and manage increasing 
caseloads--including the use of temporary bankruptcy judges, recalled 
bankruptcy judges, inter- and intracircuit assignments, and advanced 
case management techniques--the bankruptcy courts can no longer operate 
as effectively as the American public deserves because of the heavy 
weighted per judge caseloads. Our judicial resources are strained, and 
the cost to society of an overburdened bankruptcy system is enormous.
    I therefore urge you to provide for 24 additional bankruptcy 
judgeships, with the status of each designated as permanent or 
temporary as requested most recently by the Judicial Conference. Doing 
so will allow the bankruptcy system to move forward with sufficient 
judicial resources to meet the challenges it will face in the new 
millenium.
    Thank you, once again, for your consideration of our request and 
your continued support to the system. I look forward to our continuing 
joint efforts to improve the administration of bankruptcy and believe 
that the authorization of these long-needed additional judgeships will 
be our most important first step.
    I would be pleased to answer any questions or provide any 
assistance in this matter now or at any time.

                              ATTACHMENT A
              RECOMMENDED ADDITIONAL BANKRUPTCY JUDGESHIPS


----------------------------------------------------------------------------------------------------------------
             District                                              Recommendation
----------------------------------------------------------------------------------------------------------------
Puerto Rico                         1 temporary and convert the existing temporary position to permanent*
New York (N)                        1 temporary
New York (E)                        1 temporary
New York (S)                        1 temporary
Delaware                            1 permanent and convert the existing temporary position to permanent
New Jersey                          1 permanent
Pennsylvania (E)                    1 temporary
Pennsylvania (M)                    1 temporary
Maryland                            3 permanent
North Carolina (E)                  1 temporary
Virginia (E)                        1 permanent
Mississippi (S)                     1 temporary**
Michigan (E)                        1 permanent
Tennessee (W)                       1 permanent
California (E)                      1 temporary
California (C)                      3 permanent, 1 temporary
Georgia (M)                         Convert the judgeship shared with Georgia (S) to a full-time position for
                                     Georgia (M)
Georgia (S)                         1 permanent, and convert the judgeship shared with Georgia (M) to a full-
                                     time position for Georgia (M)
Florida (S)                         1 permanent, 1 temporary
----------------------------------------------------------------------------------------------------------------
TOTALS:                             24 and convert the existing temporary judgeships in Puerto Rico, Alabama (N)
                                     and Delaware to permanent
----------------------------------------------------------------------------------------------------------------
 * At its September 1997 meeting, the Judicial Conference approved transmission of proposed legislation to make
  permanent the existing temporary judgeship in Puerto Rico. JCUS-SEP 97, pp. 53-54.
** This position would help in Mississippi (N).


                              ATTACHMENT B
              ASSESSING THE NEED FOR BANKRUPTCY JUDGESHIPS

    In the late 1980's, encouraged by urging from Congress, the 
Bankruptcy Committee requested that the Federal Judicial Center conduct 
a detailed, quantitative study of the bankruptcy judges' workloads and 
recommend a comprehensive case measurement system. Based on time 
records of the activities of 97% of all bankruptcy judges recorded over 
a 10-week time frame, staggered throughout a one-year period, the 
Federal Judicial Center designed a work measurement system consisting 
of a case weight for each of the 17 specific case types within the 
jurisdiction of the bankruptcy courts.
    These case weights categorized bankruptcy cases filed under 
chapters 7, 11, 12, and 13 of the Bankruptcy Code; and adversary 
proceedings, i.e., a lawsuit within a case usually initiated by filing 
a complaint. The cases or proceedings are generally grouped by type and 
by the amount of assets or scheduled debts. For example, chapter 13 
cases are categorized into subgroups according to the amount of 
liabilities--one subgroup applies to cases in which the scheduled 
liabilities are less than $50,000 and another to those with scheduled 
liabilities of $50,000 or more. While the chapter 13 case weights are 
based on scheduled liabilities, case weights for chapter 11 cases and 
both the business and non-business chapter 7 cases are based on assets.
    Through this comprehensive work measurement system, the ``weighted 
judicial caseload'' in the United States bankruptcy courts can be 
determined and analyzed. Based upon the case weight assigned to each of 
the 17 categories of case types and the actual cases filed in the 
bankruptcy courts, a quantitative measurement of the judicial caseload 
can be made per district. This thorough system helps the judiciary 
ascertain the minimum number of bankruptcy judges needed in each 
district and throughout the country to administer the bankruptcy cases 
presently pending.
    At its January 1991 session, the Judicial Conference carefully 
reviewed the Federal Judicial Center's Time Study and adopted the 
proposed case weighting system. The Judicial Conference acknowledged 
the Center's determination that 1,280 hours was the ``average'' amount 
of time spent by bankruptcy judges on ``case related'' matters, noting 
that this figure excludes the nearly 700 hours per year that the 
average judge spends handling general office-chambers matters, 
addressing personal issues, traveling to divisional locations, 
attending meetings and seminars, conducting general research, etc. The 
Judicial Conference determined, however, that a district should have an 
even higher weighted judicial caseload than recommended by the Center, 
a minimum of 1500 annual ``case related'' hours per bankruptcy judge, 
before that district's request for an additional bankruptcy judge 
should be considered.
    Biennially, the Bankruptcy Committee's ``Judgeship Subcommittee'' 
thoroughly screens, reviews, analyzes, and assesses the pending 
requests for additional judgeships from the circuit councils and 
applies the weighted case filing criteria to all requests for new 
judgeships. The subcommittee identifies judicial resource needs that 
could be met without adding a judgeship and secures short-term relief 
for those in the greatest distress. In short, the subcommittee tries to 
stabilize those situations deemed most critical while awaiting the 
authorization of new bankruptcy judges.
    The weighted judicial caseload is not the sole determinant of 
whether the Judicial Conference endorses or denies a judgeship request. 
Other factors considered include:

        (1) the nature and mix of the court's caseload;

        (2) historical caseload data and filing trends;

        (3) geographic, economic, and demographic factors;

        (4) the effectiveness of the court's case management efforts;

        (5) Lthe availability of alternative resources for handling the 
        court's caseload; and

        (6) Lany other relevant factors.

    It is only after all these factors are considered that a decision 
is made regarding whether an additional judgeship should be requested 
from Congress for a district in need.
    The Judicial Conference denies many initial requests received from 
the judicial councils. Some of these denials are based on information 
obtained during on-site surveys. An ``on-site survey'' generally 
consists of a review at the requesting district by a survey team 
composed of a judge from the Bankruptcy Committee and one or more 
members of the Bankruptcy Judges Division from the Administrative 
Office of the U.S. Courts. The survey team reviews the court's policies 
and practices, focusing particularly on the court's calendaring 
procedures and docket sheets. Interviews are held with key court 
personnel, members of the local bar, the U.S. Trustee's office, panel 
trustees, and judges of the bankruptcy, district, and circuit courts. 
Before completing the on-site survey, the judge member of the survey 
team often meets with the judges of the bankruptcy court and furnishes 
a candid evaluation of that court's practices. Suggestions for 
improvements and ways to achieve greater efficiencies and productivity 
are discussed. This form of ``peer review'' has proven to be extremely 
helpful both to the courts and the Bankruptcy Committee in determining 
whether additional judges or better case management is the solution to 
the court's heavy workload.
    Continuous improvements and enhanced efficiencies are a constant 
goal and, as satisfied as we have been with the case weight and 
assessment system designed by the Federal Judicial Center, we recognize 
that periodic refinements are necessary. Thus, the Bankruptcy Committee 
asked the Center to re-examine and to attempt to quantify more 
precisely the judicial work required by chapter 11 ``mega cases''--an 
area that the Center had acknowledged at the outset of their report 
that the system may have undervalued. The Federal Judicial Center 
responded to this request by developing a prototype for adjustment to 
the case weight system in districts with a number of the mega cases, 
which the Bankruptcy Committee accepted and authorized at its June 1996 
meeting.
    We anticipate that additional adjustments to the case weighting 
system will be made as we gain experience with this system, so that we 
can ensure that the system provides as accurate an assessment as 
possible of the judicial workload for the various categories of 
bankruptcy cases and proceedings.

                        DICIAL MANAGEMENT TOOLS

    Management tools and processes currently used by the judiciary to 
maximize its resources include:

         Temporary positions: The Judicial Conference 
        recommends temporary judgeship positions in those instances 
        where the need for an additional bankruptcy judgeship is 
        demonstrated through the on-site survey process, but it is not 
        clear that the need will exist permanently in the district. Ten 
        of the 35 judgeship positions created by Congress in 1992 were 
        temporary positions (where the first vacancy resulting from the 
        death, resignation, or removal of a sitting judge occurring 
        after 1997 cannot be filled). Of the 18 judgeship positions 
        requested by the Judicial Conference on April 7, 1997, 11 were 
        recommended as temporary rather than permanent positions. 
        Moreover, three of the additional six judgeships requested by 
        the Judicial Conference on March 24, 1999, are temporary rather 
        than permanent positions.

         Recall: The judiciary also meets its judicial 
        resource needs through the recall by any circuit of retired 
        bankruptcy judges to serve in a district on either a full-time 
        or part-time basis. Currently, approximately 27 recalled 
        bankruptcy judges are serving nationwide. The number of 
        bankruptcy judges available for recall increases almost every 
        year.

         Shared Positions: The judiciary turns to shared 
        bankruptcy judgeship positions when possible to meet the 
        resource needs of more than one district, thus avoiding the 
        cost of an additional judgeship.

         Cross Designation: The judiciary also has the 
        authority to designate a bankruptcy judge to serve in more than 
        one district pursuant to 28 U.S.C. Sec. 152(d) which permits 
        designation of a bankruptcy judge to serve in any district 
        adjacent to or near the district for which the judge was 
        appointed.

         Intercircuit and Intracircuit Assignments: The 
        judiciary uses intercircuit and intracircuit assignment of 
        bankruptcy judges to furnish short-term solutions to the 
        disparate judicial resource needs of districts within circuits 
        and between circuits.

         Additional Law Clerks: The judiciary has developed 
        several programs through which the bankruptcy judges in the 
        busiest districts may be able to receive additional law clerk 
        help through emergency funds provided by the circuit councils, 
        funds for supplemental law clerks provided by the Judicial 
        Conference, and by allowing a bankruptcy judge to hire an 
        additional law clerk in lieu of a secretary.

         Judicial Education: Recognizing that the number of 
        bankruptcy judgeships authorized has not kept pace with the 
        dramatic increase in case filings, the judiciary relies on 
        continuing judicial education to help the incumbent judges do 
        more with less. Ongoing improvements in case management--
        through publications such as Case Manual for United States 
        Bankruptcy Judges and specialized management seminars--
        including those covering mega-cases and ADR processes--allow 
        the bankruptcy judges to handle more cases than before. To 
        enhance the management process further, the Administrative 
        Office provides each court with an annual ``case processing 
        measures report'' that reflects how that court is managing its 
        caseload. Moreover, the caseloads are constantly analyzed and 
        monitored through the case weight tables developed by the 
        Federal Judicial Center.

         Other Ongoing Initiatives: The Ninth Circuit has a 
        pilot project designed to balance disparate bankruptcy 
        caseloads more evenly within that circuit by transferring 
        pretrial work in adversary proceedings to districts with 
        lighter caseloads.

         Technology: The judiciary continues to explore other 
        innovative and novel ways to alleviate overly burdensome 
        caseloads through technical advancements, where judges can help 
        other districts through ``virtual courtrooms,'' video-
        conferencing, and the use of educational programs broadcast 
        over the FJTN, a closed circuit television network for the 
        judiciary.

    The Chairman. Judge Melloy, I just have one question to try 
to straighten out my thinking. The chart that was referred to 
by Representative Castle, have you seen that, is that a 
submission by the Judicial Conference at one point which was 
reflected in his statement, or is it one on which--for which 
you can vouch in one way or another?
    Mr. Melloy. Well, without going over the numbers, but it 
looks like a chart that was submitted. And those numbers are in 
the materials, if not in that exact form, in a chart form very 
similar to that.
    The Chairman. Would you do me one favor, review it when you 
can, I don't mean now or next week, but by next week.
    Mr. Melloy. Yes.
    The Chairman. And let me know whether the Judicial 
Conference has updated those figures at all or whether they 
stand as they are indicated there?
    Mr. Melloy. If my eyesight is correct, it says the 12-month 
period ending June 30, 1999, those are the most current numbers 
we have.
    The Chairman. They are?
    Mr. Melloy. Yes.
    The Chairman. All right. All right. Then we will allow that 
to stand as it is. I have no further questions.
    Does Senator Grassley have any questions?
    Senator Grassley. Yes, I do. Judge Melloy, in my opening 
statement, I mentioned that I had been seeking information 
gathered by the courts during their process for assessing the 
need for new judgeships.
    First, as a very general matter, don't you believe that 
Congress is entitled to this type of information in order to 
determine whether new judgeships requested by the courts are 
really necessary?
    Mr. Melloy. Well, I believe that the Congress is entitled 
to the report that we ultimately generate that results in the 
recommendation for new judgeship. But--I understand the tenor 
of your question, Senator, to be whether or not you are 
entitled to the underlying source material and the notes and 
that type of thing.
    And I guess in direct response to that concern, my position 
would be that the interviews of other judges about their fellow 
judges on their court are undertaken in strict confidence, the 
judges are asked some very frank--members, the members of the 
Bar are asked some very frank opinions about how the judges 
perform; and, quite frankly, I think the entire process would 
be compromised if we could not give some assurance of 
confidentiality.
    In addition, a lot of the interviews are not reduced to any 
kind of report form, they may even be the most sketchy of 
notes, sometimes maybe no notes at all because they are just 
sort of generalized interviews of how do you think this judge 
is performing, what do you think he or she might do 
differently?
    And I think without those assurances of confidentiality, we 
wouldn't be able to get the type of frank and meaningful 
information that is very useful to us in making these 
recommendations.
    Senator Grassley. Well, we could make sure that that 
confidentiality is maintained.
    What about synopses of the interviews?
    Mr. Melloy. Well, first of all, I am not even sure there 
are synopses of the interviews because generally what happens 
is when the person goes out and does the site survey, they talk 
to different people. And then they prepare a report, and that 
is really the only written documentation that results from the 
interview.
    But again, I think for the same reasons as previously 
stated, even if we had synopses, if we can't guarantee 
confidentiality, I think we would have a great difficulty in 
getting frank opinions.
    I just don't see practitioners who are being asked to 
critically critique a judge being honest with us if they know 
that it is going to be made available outside the committee 
that is looking at the information.
    Senator Grassley. You see--I think you look at our 
interests as something that is very personal toward somebody 
doing their job or not. We are talking about general 
administration, efficiencies that are being taken or can be 
taken. I think that it would be important for the seeking of 
information and some determination that personal information be 
kept in confidence so that it is not going to come out. But on 
the other hand if you gather all of this information, you come 
to Congress asking us to appoint judges that cost at least, 
article III, judges a million dollars a piece, it is laying out 
quite a bit of money just based on faith.
    And it seems to me that that is something, you know, the 
citizens of Iowa that we would have a difficult time in 
justifying to them that you just appropriate money on faith.
    Let me go on to another question. A witness on the next 
panel has suggested in his written testimony that the 
bankruptcy reform bills pending in Congress would reduce the 
need for new judges if they were enacted.
    Do you agree with this statement?
    Mr. Melloy. Certainly not in the short run, Senator. I 
think for several years. First of all, in the very short term, 
we would probably see a huge spike in filings before the new 
legislation became effective. But even over the longer term, 
historically what happens when you bring into play new 
legislation is that there is a tremendous amount of litigation 
as that new legislation is tested.
    The current bankruptcy bill is a very mature law. As you 
know, back when I started in 1986 in Iowa, we had a huge number 
of farm bankruptcies; and I think what has happened over the 
years is that as those lenders and debtors become more 
accustomed to what is going to happen in bankruptcy, we saw all 
kind of out-of-court workouts. We see cases that never come to 
bankruptcy court because everybody knows what is going to 
happen, and they can do it outside of the arena of the 
bankruptcy system, and they do out-of-court workouts.
    And I think any time we have a new legislation like this, 
there is going to be a tremendous learning curve. There is 
going to be a lot of litigation generated, and plus if the 
legislation has its intended effect of forcing a lot of people 
who are currently filing Chapter 7s to file Chapter 13s, that 
will increase the workload substantially. There is 
significantly more work involved from a judicial standpoint in 
handling a Chapter 13 case than in----
    Senator Grassley. You don't see the legislation having any 
impact long term of people who would otherwise file for 
bankruptcy foregoing bankruptcy?
    Mr. Melloy. I think that is very possible. I don't mean to 
say that it isn't, Senator, and I think that is a very 
possible--that is very possible and in the very long term, that 
we will see an ultimate decrease. But I think certainly over 
the next several years, it is not going to impact the workload 
of the judges in a positive sense.
    The litigation that is going to be generated will be 
substantial. And like I say, I think the Chapter 13s are going 
to result in a lot more work for most of the judges.
    Senator Grassley. I will ask one more question and then 
submit two for answer in writing--is that possible to have 
questions answered in writing?
    The Chairman. Without objection, we will do it.
    Senator Grassley. Judge Melloy, could you discuss how the 
formula for assessing judgeship needs accounts for the 
possibility of using visiting judges to help courts get their 
docket under control? Some of the testimony from the next panel 
suggests that more could be done in terms of using visiting 
judges to control dockets.
    Mr. Melloy. The formula itself does not factor in the use 
of visiting judges. And so it is not a factor in the formula 
itself. It is a factor, however, that is--when we talk about 
the formula being the 1500 hours, it is a factor that we 
consider in assessing the overall needs of a particular 
district. As I said in my prepared remarks, however, use of 
visiting judges I think is only a temporary solution. The 
problem with visiting judges is that they are not necessarily 
dependable, their availability is very unpredictable.
    One of the things that I think has been talked about a lot 
is of the benefit of consistency in rulings. There is nothing 
more inconsistent than having different judges rotating in 
through your district on a periodic basis. And in general, it 
helps in the short run, but I think in terms of addressing a 
long-term solution, if we had a district, Senator, that we saw 
a spike--as a matter of fact this is what happened with 
Delaware, we thought that Delaware was a temporary aberration 
that these numbers were going to go up and come back down. We 
would certainly advocate using visiting and recall judges if we 
thought it was just a spike situation and that the numbers are 
likely to come back down again. But once we come to the belief 
that that is a sustained filing situation, which we have now 
with Delaware, that is when we believe it is appropriate to 
recommend a new judgeship as opposed to using visiting judges, 
but certainly they have a place and particularly in those cases 
where we think the numbers are an aberration over a short 
period of time.
    Senator Grassley. Yes. In closing, my staff has 
communicated to the administrative office that I would be 
requesting updated information on noncaseload-related travel, 
so I would like to make that request officially in regard to 
the 18 districts.
    The Chairman. Without objection, that will be considered as 
a direct request to the witness, and we would prompt a 
response.
    Mr. Melloy. Okay.
    The Chairman. We thank the gentleman. And we now turn to 
the gentleman from New York; he is recognized for a period of 5 
minutes.
    Representative Nadler. Thank you, Mr. Chairman.
    Judge Melloy, as I stated in my opening comment, we have 
had testimony before this committee earlier this year and last 
year that the pending legislation would, in fact, increase the 
necessity--increase for new judges would increase the judicial 
workload. You just testified, I think you said, in two 
respects, one that because existing laws is a mature law, lots 
of things are settled out of court, because everybody knows 
what the new law is--but what the existing laws, I should say, 
but without a substantial change in the law, a major rewrite 
which is what the legislation is, you would have a lot of 
litigation as to what it means as to what a lot of--what the 
real meaning of a lot of the terms in the law, et cetera; and 
that would increase legislation--that would increase litigation 
substantially for a number of years until that flattened out.
    But you also said a lot of people would be now transferred 
from Chapter 7 to 13, which is one of the goals of the 
legislation, and there is more of a workload on the Judiciary 
in Chapter 13 cases than in a Chapter 7 sense, that would be a 
permanent increase in the workload of the Judiciary.
    Have I understood you correctly that?
    Mr. Melloy. That would be correct, Congressman.
    Representative Nadler. Let me ask a follow-up question. And 
thank you. How much more work is there for a judge on average, 
and I know it may be silly, to the extent you can say, on 
average in a Chapter 13 case than in a Chapter 7 case?
    Mr. Melloy. Well, in a Chapter 7 case and in a typical 
Chapter 7 case, there may be very little judicial involvement 
at all, whereas in a Chapter 13 case, at a minimum, you are 
probably going to have a confirmation hearing where the debtor 
comes in and the trustee. There may be litigation over 
exemptions and the other factor about a Chapter 13, unlike a 
Chapter 7 is that a Chapter 7, particularly if it is a no-asset 
Chapter 7 gets filed, there is minimal judicial involvement 
unless there is some, like dischargability litigation or 
something of that nature, and the case is closed within 60, 90 
days.
    A Chapter 13 case is going to go on for 5 years under most 
Chapter 13 plans. And so there is the ongoing potential for 
additional litigation if the debtor doesn't make their planned 
payments, they fall behind, maybe a creditor comes in during 
the pendency of the Chapter 13 and commences stay litigation. 
So there is the potential for a significant additional workload 
in a Chapter 13.
    Representative Nadler. Now, are there any other ways that 
this bill might increase workload, other than the definitional 
question and the switch from Chapter 7 to Chapter 13 that you 
already discussed? For example, what comes to mind immediately 
is that Chapter 13 workouts are now 3 to 5 years; under the new 
bill they will be presumptively 5 years, which obviously 
increases the supervisory role of the judges. Are there any 
other provisions that you would think, for example, the small 
business provisions or any other provisions of this bill would 
have an impact to increase or decrease the workload?
    Mr. Melloy. Well, to be honest with you, Congressman 
Nadler, I am not an expert on the new bill. And so I don't 
purport to know all the provisions that might result in the 
additional workload. So I guess I am just not prepared to 
answer that question with any specificity.
    Representative Nadler. Okay. But you would say then just to 
summarize what you have been saying that if we do pass this 
bill, it would be prudent to expect a substantial increase in 
the workload, and you would disagree with anyone who said it is 
probably going to result in a substantial decrease?
    Mr. Melloy. Certainly in the short run. And by short run, I 
mean 3 to 5 years until this initial period of litigation over 
the provisions work themselves out.
    Representative Nadler. Thank you very much. I yield back.
    The Chairman. The gentleman yields back the balance of his 
time.
    We will now recognize Senator Biden.
    Senator Biden. Thank you very much, Mr. Chairman. I want to 
thank you and Senator Grassley for having this hearing.
    Judge Melloy, since I was the author of the ninth, along 
with the Senator from Alabama, of the bankruptcy court to begin 
with. I would like to remind people of the historical fact, you 
district judge courts; and you weren't a judge in 1980, if I am 
not mistaken.
    Mr. Melloy. No, I was not.
    Senator Biden. And in 1980, the Judicial Conference 
opposed, initially, the establishment of bankruptcy court 
judges because you didn't like the idea that they would have 
any jurisdiction. And you all were very upset that there would 
be judges that could be called judges that aren't article III 
judges and would be in the same Federal courthouse.
    And so the only reason I bother to mention that, Mr. 
Chairman, is the Judicial Conference didn't like the notion of 
bankruptcy court judges, they are like masters, they like them 
much better because they were under their control more 
directly. And so if a Judicial Conference comes along 
recommending more judges, it is not because they like these 
guys and women.
    And I mean that sincerely, I know I am not supposed to say 
things that bluntly, but I was chairman of the Judiciary 
Committee for years and ranking member for years. And I would 
argue in making that argument that the fact that you were 
recommending these judges so strongly is evidence we probably 
need more than you are recommending.
    With regard to Senator Grassley's question, I would think 
you should be--go back, if I might respectfully suggest, and 
consider Senator Grassley's request, he and I disagree on the 
need for more judges. But he is right about one thing, the 
Judicial Conference is a congressionally authorized entity, you 
all can't do it without our approval. We can pass a law 
tomorrow eliminating the Judicial Conference and any 
recommendation you made about anything has absolutely no impact 
whatsoever if we did that.
    So you have no constitutional argument against supplying to 
Mr. Grassley, Senator Grassley what he is seeking. You have a 
very strong practical argument, a very practical point to make 
about how straightforward an answer you will get to questions 
if you can't assure confidentiality. It may be if I can suggest 
to Senator Grassley, it might be appropriate that he as the 
chairman of the subcommittee maybe meet with the Judicial 
Conference and see if he can work out a reasonable way in which 
to share this data you could guarantee its security.
    But you are right, they have no, zero, no constitutional 
authority to deny you the work product. You could introduce a 
bill tomorrow, I don't want to encourage you, but to eliminate 
the Judicial Conference, it might give you an idea, which I 
don't like doing. But I hope you can work that out, because 
Senator Grassley is the best lawyer, nonlawyer I know. He brags 
about not being a lawyer, but the problem is he knows too much 
about the law.
    And the most dangerous person in America is a nonlawyer who 
knows as much as lawyers know. Because he gets the benefit of 
bragging he is not a lawyer, and he has the knowledge base that 
lawyers have. But he is dead wrong, with all due respect, on 
the need for these additional judges. So I am not going to ask 
any questions, except suggest to you that you let the Chief 
know about this, because until you all on the bench begin to 
speak out more loudly about what is not being done with 
judicial nominees across the board, you all are going to get 
the kind of treatment you all have been getting.
    I thank you for your hard work. I am not going to make a 
special case for Delaware. If I make the special case for 
Delaware, which is overwhelming on its facts, someone along 
here will say I know how to fix your problem, and it won't be 
new judges. So I am not going to make the case. But I thank you 
very much for the workmanlike product.
    A closing comment, Mr. Chairman. For years, when I chaired 
the committee and the other body one of the things that I found 
without fail was how incredibly detailed and how incredibly 
thorough and thoughtful any analysis from the Judicial 
Conference was on most any matter. And when I was chairman of 
the committee during Republican Presidents, I am the guy that 
pushed through 89 new Federal district court judges.
    And I hope we can sort of look at that and begin to view 
the judicial needs and the workload in the context of need, not 
in the context of other considerations that don't relate to 
need. But again, my friend from Iowa and I are working very 
hard to pass a bankruptcy bill. I do think it is mildly 
premature to suggest whether it is going to impact or diminish 
the caseload, my guess is it will increase the caseload not 
diminish it.
    But I thank you for your work product. And I find it 
compelling across the board. I think we need all 24 of these 
judges myself. I thank you, Mr. Chairman.
    The Chairman. I thank the Senator.
    We turn to the gentleman from North Carolina, Mr. Watt, for 
a period of 5 minutes.
    Mr. Watt. Thank you, Mr. Chairman. And I probably won't 
have time to ask the judge questions, but I thought it would be 
a good time now since my good friend and colleague, Howard 
Coble from North Carolina, hasn't been able to come and may not 
be able to come before we get through to try to make the case 
for North Carolina that he would have made. And I want to say 
at the outset that I don't profess that I can do it nearly as 
good as Howard Coble so I hope you will deliver that word to 
him.
    The Chairman. We will do that.
    Mr. Watt. I do think that there are two compelling things 
that need to be said. One is that the current way filings per 
judge in North Carolina is 1,722. And we are one of the 
additional--Eastern North Carolina which is not where I am from 
or where Howard Coble is from, for that matter, is one of the 
recommended districts to get an additional judgeship, but 
beyond the current state of affairs insofar as the weighted 
filings per judge, I would like to ask unanimous consent to 
submit for the record a letter from the entire North Carolina 
delegation that talks about the impact that we anticipate 
Hurricane Floyd having on bankruptcy filings in North Carolina.
    Our concern is that homeowners, farmers, and small business 
owners, many of them will have no alternative to bankruptcy 
filings as a result of the predicament they are finding 
themselves in as a result of the extensive and devastating 
flooding that has taken place in Eastern North Carolina.
    So beyond the retrospective caseload and weighted averages, 
all of which were calculated well before the floods took place 
in North Carolina, this Eastern District of North Carolina is 
the same place that the flooding took place, and we don't see 
any way that we can escape a significant spike in bankruptcy 
filings in Eastern North Carolina.
    And so I would hope that Eastern North Carolina and the 
Eastern District of North Carolina will be included in whatever 
additional judgeships get approved. And I would ask unanimous 
consent to insert the delegation's letter in the record.
    The Chairman. Without objection, the letter and other 
documents submitted by the gentleman from North Carolina will 
be made a part of the record.
    [The letter from North Carolina Representatives follows:]
    
    
    
    
    Mr. Watt. Having made that case and probably not nearly as 
eloquently or in as downhome a fashion as probably our 
colleague, Howard Coble, would have made it, I will ask one 
question of Judge Melloy.
    I have noticed from one of the second panelists, I think, 
Mr. Ray, who is taking the position that allowing direct 
appeals to circuit courts from bankruptcy determinations should 
be done before we do any new judgeships. And I was just 
wondering what your reaction to that is and how that might have 
an impact on the need for additional judgeships?
    Mr. Melloy. Well, it is the Judicial Conference position 
that the current system should remain in effect with one 
modification, and that being that for cases of high importance, 
where there is clearly unsettled law, that the district judge 
or the bankruptcy appellate panel could certify a case directly 
to the Court of Appeals for decision and bypass that 
intermediate step of appeal. With all due respect, I am not 
sure it is going to have even that big of an effect, even if 
there was direct appeal.
    As I said to someone earlier today when we were talking 
about this issue, those of us at the district court bench who 
practice or who work in the area of civil litigation, see tons 
of cases coming out of the Court of Appeals in the area of 
employment litigation; and if you think that is a settled area 
of the law, someone is very sadly mistaken. The more cases tend 
to make it more confusing. So I don't think it is going to have 
a significant effect one way or the other on the workload of 
bankruptcy judges.
    Mr. Watt. Thank you, Mr. Chairman. I yield back.
    The Chairman. We thank the gentleman.
    We are ready to bring to the table the next panel. We thank 
you for appearing.
    The next panel and last panel is composed of the Honorable 
Mary Davies Scott who appears today on behalf of the National 
Conference of Bankruptcy Judges where she serves as president. 
In 1987, she was appointed to the bankruptcy bench and, 
thereafter, was appointed to the Bankruptcy Appellate Panel for 
the Eighth Circuit Court of Appeals in 1997.
    Judge Scott is a member of the National Bankruptcy 
Conference, the American Law Institute, the American College of 
Bankruptcy, and the Bankruptcy Judges Committee of the National 
Conference of Federal Trial Judges. She is also faculty member 
of the American Law Institute of the American Bar Association.
    In addition to her judicial responsibilities, Judge Scott 
is an adjunct professor of law at the University of Arkansas.
    She is joined at the panel table by Hugh Ray, a partner in 
the law firm of Andrews & Kurth in Houston, Texas. He has 
practiced bankruptcy law for more than 30 years and has 
actively participated in some of the Nation's largest Chapter 
11 cases.
    Mr. Ray is a former chair of the Business Bankruptcy 
Committee of the Business Law Section of the American Bar 
Association. Currently, he cochairs the ABA's Joint Ad Hoc 
Committee on Bankruptcy Court Structure and Insolvency Process. 
Mr. Ray is a member of the American College of Bankruptcy and 
the American Bankruptcy Institute. He obtained his law degree 
from Vanderbilt University in 1967.
    Ford Elsaesser appears today on behalf of the American 
Bankruptcy Institute where he serves as President and oversees 
the Institute's Executive Committee. He is also a member of the 
American College of Bankruptcy.
    Mr. Elsaesser is a partner with the Sandpoint, Idaho, law 
firm of Elsaesser, Jarzabek, Anderson, Marks & Elliott, where 
he practices commercial and banking litigation, bankruptcy, and 
real estate transactions.
    In addition to his law practice, Mr. Elsaesser serves as a 
trustee in Chapter 7, 11, and 12 cases. He also is a frequent 
lecturer on bankruptcy and commercial law.
    Mr. Elsaesser obtained his undergraduate degree from 
Goddard College and his law degree from the University of Idaho 
School of Law.
    As we have indicated to the previous panels, the written 
statements that have been prepared by the witnesses will be 
made a part of the record automatically. We will ask that each 
review of those statements be limited as far as possible to 5 
minutes. We will begin in the order of introduction with Judge 
Scott.

STATEMENT OF MARY DAVIES SCOTT, U.S. BANKRUPTCY JUDGE, EASTERN 
 AND WESTERN DISTRICTS OF ARKANSAS, PRESIDENT OF THE NATIONAL 
                CONFERENCE OF BANKRUPTCY JUDGES

    Ms. Scott. Thank you, Chairman Gekas, Representative Watt, 
and other members of the joint committee. My name, as you have 
indicated, is Mary Scott. I am one of three bankruptcy judges 
sitting in the Eastern and Western Districts of Arkansas. I am 
also a bankruptcy appellate panel judge for the Eighth Circuit 
Court of Appeals. This year, I have the great honor to serve as 
the President of the National Conference of Bankruptcy Judges. 
In that regard, I have been asked to appear here and make some 
comments about the pending judgeship bills before this 
committee.
    The Conference of Bankruptcy Judges was founded in 1926; 
and since that time, it has been a resource for Congress in the 
drafting of bankruptcy legislation. Mr. Chairman, 319 of the 
filled positions are members of the Conference of Bankruptcy 
Judges, which is virtually all of the judges in the country. We 
have been asked to testify here on the need for these 
additional judgeships.
    In 1994, the Judicial Conference of the United States 
recommended to the Congress that it authorize additional 
bankruptcy judgeships. We have been very fortunate in the past 
to have the support of both of these committees in recommending 
approval of these requests to Congress. As recently as the 
105th Congress, both the Senate and the House of 
Representatives approved the 18 judgeships recommended by the 
Judicial Conference in 1994. We are very grateful for this 
support and ask that these judgeships, in fact, be approved 
immediately.
    In addition, this past year, the Judicial Conference 
recommended to Congress that it authorize an additional six 
judgeships. Because there has been a decline in case filings 
for the first time in 6 years and only the third decline in 
case filings since 1980, a legitimate inquiry by these 
subcommittees and others has been raised as to the continuing 
need for these judgeships.
    Let me initially address the question of the continuing 
need for the judgeships that have been requested since 1994, 
the initial 18. In that year, the judgeships were requested 
based upon 800,000 case filings. Since 1996, case filings have 
exceeded 1 million cases per year to a record filing of 1.4 
million cases in 1998. Even with the decline in filings this 
year, no one is predicting that the filings will drop below the 
1994 levels. It is also worth mentioning that even though the 
total number of filed cases may be declining, that decline is 
not shared uniformly around the country. Virtually all of the 
districts requesting new judgeships are still experiencing the 
caseloads that convinced the Judicial Conference of the United 
States to approve them in the first place. In addition, many of 
these districts are experiencing an increase in filings.
    Looking at a year-to-year comparison gives a misleading 
picture. We urge you to look at the longer term picture. I can 
assure you that the judiciary has utilized and continues to 
employ all resource available to meet its needs before coming 
to Congress with these requests. The Eighth Circuit where I sit 
gives careful consideration to workload in deciding whether to 
fill judgeships of retiring judges. There is currently one 
judgeship not filled, and there are no plans to fill it. Other 
circuits have done the same. In addition, judges with lower 
caseloads are volunteering to help in districts with overload 
problems. But these are temporary assignments, and they do not 
provide a permanent solution. It is important to note that the 
recommendation for the 24 judgeships is being made only after a 
long-term pattern.
    I want to mention one thing about the six additional 
judgeships, and Representative Watt, I don't agree. I thought 
you were very eloquent, but I do want to mention the Eastern 
District of North Carolina. No one can have missed seeing the 
media coverage of the recent storms that devastated the State. 
All 44 counties in the Eastern District of North Carolina have 
been declared a disaster area. The damage from the flooding is 
of monumental proportions. Homes, businesses, and lives have 
been lost. To be sure, the citizens have lost much, but their 
situation may be even more dire. The media has just recently 
pointed out that most of these victims are not insured. In 
fact, the bankruptcy court will be their best possible solution 
to, in fact, get the fresh start that Congress has so long 
recognized as part of what the bankruptcy code is all about.
    I thank you. My written statement, of course, is longer, 
and I know that that is part of the record.
    [The prepared statement of Judge Scott follows:]
Prepared Statement of Mary Davies Scott, U.S. Bankruptcy Judge, Eastern 
and Western Districts of Arkansas, President of the National Conference 
                          of Bankruptcy Judges
    The National Conference of Bankruptcy Judges was founded in 1926. 
Since its founding the Conference has been a resource for Congress in 
the drafting of bankruptcy legislation. Of the 326 bankruptcy 
judgeships currently authorized in the United States, 319 are filled 
positions and virtually all of these judges are members of the 
Conference. Additional bankruptcy judges were last authorized by the 
Congress in August of 1992.
    The National Conference of Bankruptcy Judges has been asked to 
testify at this joint hearing on the need for additional judgeships. In 
1994, the Judicial Conference of the United States recommended to the 
Congress that it authorize additional bankruptcy judgeships. In 
addition, this past year the Judicial Conference recommended to the 
Congress that it authorize an additional six judgeships. Because there 
has been a decline in case filings for the first time in six years and 
only the third decline in case filings since 1980 (See Attached Chart), 
a legitimate inquiry by the Judiciary Committees and others has been 
raised as to the need for these judgeships.
    Let me initially address the question of the continuing need for 
the judgeships that have been requested since 1994. In that year, the 
judgeships were requested based upon over 800,000 case filings. Since 
1996, case filings have exceeded one million per year to a record 
filing of 1,442,549 cases in 1998. Even with the decline in filings 
this year, it is unlikely that we will see case filings drop below the 
1994 level. It is also worth mentioning that even though the total 
number of filed cases may be declining, that decline is not shared 
uniformly around the country. Those districts requesting new judgeships 
are still experiencing the case loads that convinced the Judicial 
Conference of the United States to approve the creation of them in the 
first place. In addition, many districts are experiencing an increase 
in filings.
    The Eighth Circuit, where I sit, gives careful consideration to 
work load in deciding whether to fill judgeships of retiring judges. 
There is currently one judgeship not filled and there is no plan to 
fill it. Other circuits have done the same. Judgeships are not being 
filled unless there is a need. Judges who have lower caseloads are 
volunteering to help in districts with overload problems. These 
temporary assignments are just that--temporary--and only provide 
momentary relief to those districts. Any argument that this temporary 
fix, which has been utilized historically to provide assistance to 
overburdened districts, could be the permanent solution is not 
realistic. Yes, bankruptcy judges are doing a good job, but they are 
being required to adjudicate disputes in an ever increasing caseload 
without a commensurate increase in judicial resources.
    In 1984, the year Congress reestablished the Bankruptcy Court 
following the decision of the United States Supreme Court in the 
Marathon case, there were 232 bankruptcy judges who processed a total 
caseload of 348,521 cases. In 1986, Congress, responding to a dramatic 
increase in agricultural bankruptcies in the farm states and 
significant increases in other parts of the country, created 52 new 
judgeships. I was one of the 52 judges. The number of cases filed that 
year totaled 530,438.
    Between 1986 and 1992, Congress, on two occasions, increased the 
number of sitting bankruptcy judges to 326. During those same years the 
case filings steadily climbed to 971,517. In the record breaking 1998 
year when 1,442,549 cases were filed, there were still only 326 
(actually 319 filled positions) authorized judgeships. (See Attached 
Chart.) I realize that simple division does not produce the number of 
cases per sitting judge because all caseloads are not divided equally. 
I would also point out that these figures, based on all filings, don't 
necessarily reflect whether they are business or consumer cases. In 
fact the actual statistics reveal that there were many more Chapter 11 
cases in the earlier numbers. However, in 1994, Congress significantly 
increased the debt limits for Chapter 13 eligibility which has allowed 
many individuals with small businesses to utilize that chapter. These 
cases dropped out of the Chapter 11 statistics, but they are still 
there and take considerably more time getting to confirmation than non-
businesses consumer cases. Hence, judges are busier than ever with 
complicated business related issues that used to just arise in Chapter 
11 cases.
    How can we do this? There are at least two reasons why the dramatic 
increase in workload has not so far overwhelmed the system. Judges have 
been able to handle this tremendous increase without asking for several 
hundred new judges because automation has allowed us to streamline our 
case processing techniques which, in turn, has increased our 
efficiency. The Federal Judiciary wisely decided, about the same time I 
became a judge, that the bankruptcy courts ought to be the initial 
focus of its massive effort to automate the federal courts. In 
addition, we and our staffs are working harder and longer hours. Thus, 
resources are stretched thin. The Judiciary budget requests are not 
being fully met. The decline in overall case filings does not really 
help those districts needing those judgeships.
    The statistics overwhelmingly demonstrate that all 18 judgeships 
approved by the Judicial Conference in 1994 are still desperately 
needed, and they need to be authorized now. The Bankruptcy Courts need 
to be ready with sufficient resources. History has amply demonstrated 
that waiting until the crisis is out of hand does not serve the 
taxpayers. Yes, the economy is good and unemployment extremely low. But 
I would caution against relying on these broad generalities in the same 
way I caution against reading too much into the recent decline in 
bankruptcy case filings. Overall figures or statements regarding a 
general trend are often misleading and do not give a true picture of 
particular areas where the generalities simply do not match the local 
conditions.
    While the authorization of these additional judgeships has been 
languishing since 1994, the Judicial Conference of the United States 
revisited those requests, reiterated the necessity for their 
authorization and identified the need for six additional positions 
meeting the strict criteria for creation of a new judgeship. We 
strongly encourage the Judiciary Committees to consider these requests 
together with the 18 judgeships I've already discussed. These judgeship 
requests are based on case filings and case weighted numbers per 
sitting judge that remain valid even though there is a decline in case 
filings at the national level. Again, I ask you to consider my comments 
and concern that overall generalities do not reflect the reality in a 
particular district. These judgeships are needed now.
    Let me mention one particular district in the additional six 
judgeships. It is the Eastern District of North Carolina. No one can 
have missed seeing the media coverage of the recent storms that have 
devastated that state. All 44 counties in the Eastern District of North 
Carolina have been declared a disaster area as a result of Hurricanes 
Floyd and Irene. One-half of the cotton crop has been destroyed. The 
damage from the flooding is of monumental proportions. Homes, 
businesses and lives have been lost. These citizens have lost much but 
their situation may be even more dire. The media has recently focused 
on the fact that an extremely high percentage of these victims of 
nature find themselves uninsured. There is little doubt that these 
families of farmers, sole proprietors, and mom and pop businesses will 
have little recourse. They will desperately need the relief that the 
Bankruptcy Code offers them. These are the honest but unfortunate 
debtors seeking a ``fresh start.'' For over a century and a half 
Congress has recognized that this relief could be required and would be 
essential in order to provide for a uniform and orderly system of debt 
relief and restructuring.
    The Bankruptcy Court has become the commercial court of the United 
States. Even those pointing to the decline in case filings are not 
willing to predict that we will ever see filings of less than 1,000,000 
cases per year. If a downturn in the economy or a recession occurs, 
these numbers could dramatically increase with no warning. The much 
appreciated assistance you have given to the Judiciary many times in 
the past is desperately needed again. In asking for your assistance, I 
assure you that this request for new bankruptcy judge positions is made 
only after the judiciary has taken earnest and sincere steps to 
maximize all other programs and resources to meet the districts' 
judgeship needs first.
    One last item bears mention. All bankruptcy judges are keenly aware 
that Congress is now considering significant bankruptcy reform. The 
National Conference of Bankruptcy Judges has attempted at every 
opportunity to comment upon the impact this legislation will have on 
the administration of the system and the workload of the judges and 
their staffs. No matter what will be the long term impact of this 
legislation, bankruptcy judges know that, upon passage, litigation will 
multiply. Creative lawyering will abound. No matter how clear the 
statute Congress passes, no matter that Congress intends to close 
loopholes and curb abuse of the bankruptcy process, history tells us 
that lawyers litigate new issues. New laws inevitably create new 
issues. Last year's President of the National Conference of Bankruptcy 
Judges, Randall Newsome, testified twice before the House Subcommittee. 
In March of 1999, he pointed out some 54 potential areas of litigation 
in the new legislation. Since then other new issues have arisen. 
Anytime new amendments to the Bankruptcy Code are passed, imaginative 
lawyering and litigation is inevitable. Thus, Judges will be busier 
than ever.
    Chairman Grassley and Chairman Gekas, I wish to thank you and the 
members of the two Subcommittees for the opportunity to present these 
comments at this joint hearing. The National Conference of Bankruptcy 
Judges stands ready to be of assistance in providing any additional 
information you seek. We need these judgeships. Your assistance is 
vital.

                   U.S. BANKRUPTCY COURTS--FILINGS FOR THE YEARS ENDING DECEMBER 31,1980-1998
----------------------------------------------------------------------------------------------------------------
                                    Total                                         Chapter    Chapter    Chapter
     12 Months Ended 12/31        Bankruptcy   Business  Nonbusiness  Chapter 7      11         12         13
                                   Filings     Filings     Filings     Filings    Filings    Filings    Filings
----------------------------------------------------------------------------------------------------------------
1980                                 331,265     43,671      287,594    247,083      6,753          -     77,420
1981                                 363,946     48,086      315,860    260,744     10,042          -     93,156
1982                                 380,252     69,242      311,010    257,674     18,821          -    103,748
1983                                 348,881     62,412      286,469    234,551     20,284          -     94,038
1984                                 348,521     64,214      284,307    234,861     20,325          -     93,315
1985                                 412,510     71,277      341,233    281,053     23,376          -    108,069
1986                                 530,438     81,235      449,203    374,786     24,773        607    130,257
1987                                 577,999     82,446      495,553    409,595     20,078      6,125    142,161
1988                                 613,465     63,853      549,612    437,769     17,684      2,037    155,945
1989                                 679,461     63,235      616,226    476,470     18,281      1,445    183,214
1990                                 782,960     64,853      718,107    543,334     20,783      1,346    217,468
1991                                 943,987     71,549      872,437    656,460     23,989      1,496    262,006
1992                                 971,517     70,643      900,874    681,663     22,634      1,608    265,577
1993                                 875,202     62,304      812,897    602,980     19,174      1,244    251,773
1994                                 832,829     52,374      780,455    567,240     14,773        900    249,877
1995                                 926,601     51,959      874,642    626,150     12,904        926    286,588
1996                               1,178,555     53,549    1,125,006    810,400     11,911      1,083    355,123
1997                               1,404,145     54,027    1,350,118    989,372     10,765        949    403,025
1998                               1,442,549     44,367    1,398,182  1,035,696      8,386        807    397,619
----------------------------------------------------------------------------------------------------------------


                                        AUTHORIZED BANKRUPTCY JUDGESHIPS
----------------------------------------------------------------------------------------------------------------
               Year                    Full time        Part time          Total               Public Law
----------------------------------------------------------------------------------------------------------------
1959                                110              67               177
1960                                112              67               179
1961                                130              65               195
1962                                136              60               196
1963                                140              59               199
1964                                160              51               211
1965                                160              51               211
1966                                167              50               217
1967                                170              46               216
1968                                175              45               220
1969                                178              41               219
1970                                180              38               218
1971                                184              37               221
1972                                184              37               221
1973                                185              36               221
1974                                185              36               221
1975                                190              34               224
1976                                210              25               235
1977                                214              24               238
1978                                215              24               239
1979                                217              23               240
1980                                219              21               240
1981                                221              21               242
1982                                229              12               241
1983                                230              11               241
7/84                                232              0                232              Pub. L.No. 98-353
10/86                               284              0                284              Pub. L.No. 99-554
11/88                               291              0                291              Pub. L.No. 100-587
8/92                                326              0                326              Pub. L.No. 102-361
----------------------------------------------------------------------------------------------------------------


    The Chairman. We thank the gentlewoman, and we turn to Mr. 
Ray.

STATEMENT OF HUGH M. RAY, ESQUIRE, ANDREWS & KURTH, HOUSTON, TX

    Mr. Ray. Thank you, Mr. Chairman. I appreciate the 
opportunity to be here.
    One of the suggestions that I made with my written 
materials was that we move judges around. Certainly, 
Representative Watt's situation is a prime example of how and 
why this should take place. This committee has available to it 
not just top-down data as to the number of cases which, in 
fact, are leveling off in 7 and 13 and declining in Chapter 11, 
but it doesn't just have this information available to it.
    It has bottom-up information such as if a bankruptcy judge 
is sitting on the bench only 7\1/2\ hours a month in a multi-
judge district, doesn't it seem logical that maybe that 
district doesn't need all the bankruptcy judges that it has and 
maybe those judges could be moved to North Carolina to sit and 
hear cases in dire straits as opposed to taking the rest of the 
month off.
    The court reporters are required to keep records of how 
much they sit when the judge is on the bench, the court 
reporter for a particular judge. I haven't seen any statistics 
nationwide on how many hours per month bankruptcy judges 
actually sit in certain districts. Certainly, there are some 
bankruptcy judges like those in Delaware, thanks to the 
Delaware venue provision, who sit more than 7\1/2\ hours a day. 
But there are some bankruptcy judges that I know of that I have 
been told by court reporters and others who sit less than 7\1/
2\ hours a month.
    There are plenty of soft spots in the bankruptcy system. 
When the first Continental Airlines case was filed in Houston, 
it was handled by a judge from Mississippi who came over to 
hear the case. The second Continental Airlines case was forum-
shopped to Delaware where Judge Balick heard the case. I get 
most of my income these days from Delaware. So it is a 
situation where we have a venue provision that encourages that 
to become our national bankruptcy court.
    But what about these other courts where they no longer have 
the caseload anymore? Do they need additional judges? Certainly 
the Chapter 7s and 13s have leveled off, the 11s are down; and 
in connection with the direct appeals, it is difficult to argue 
with the proposition that our society demands stability from 
its legal system.
    The bankruptcy system is unstable. And it is unstable for 
the following reason: You can find a lower bankruptcy court 
opinion for just about any proposition you want on bankruptcy 
law. Judge Melloy said that we had a mature code, it is 20 
years old. He said the code is now mature legislation. We have 
fewer cases because of mature legislation.
    I would submit that while it helps me for me to be able to 
say we don't need new judges because we have a mature, stable 
piece of legislation, the truth is that there are many 
unanswered, fundamental, seminal issues in bankruptcy law; and 
they are unanswered because we have a multiple of judges coming 
up with different decisions.
    And the appeal process in bankruptcy is ludicrous. It is 
ludicrous because cases go to the district court and sit there 
until they become moot or dismissed and the circuit courts 
never get a chance to hear it. That is not necessarily true in 
the Third Circuit where Delaware is because it has so many big 
cases that they have been able to get a number of good 
precedents there.
    So, a client comes in and asks me, well, here are my facts, 
what is the court going to do? And I have to answer hey, it is 
not what you say, it is who you say it to. So if we file in 
Delaware, I know this is going to be the answer. If you file it 
in L.A., we've got 22 judges, the answer could be anything.
    One last question. The predictions that we have heard on 
the need for bankruptcy judges are based on well, the new 
statute is going to increase it or the coming downturn in the 
economy is going to increase it. You know what? They are saying 
that these committees should appoint bankruptcy judges on the 
come. They are not Alan Greenspan, they don't know where the 
economy is going. I think we are supposed to appoint judges 
when there is a clear need shown. I am not an economist; I am a 
lawyer. I haven't seen any economists say anything to the 
contrary. So until we have a clear need, I don't think that we 
should have new judges.
    The Chairman. We thank the gentleman.
    [The prepared statement of Mr. Ray follows:]
      Prepared Statement of Hugh M. Ray, Esquire, Andrews & Kurth,
                              Houston, TX
    My name is Hugh Ray, I am a partner in the law firm of Andrews & 
Kurth where I head the bankruptcy section. I am a former chair of the 
Business Bankruptcy Committee of the Business Law Section of the 
American Bar Association and the current co-chair of its Joint Ad Hoc 
Committee on Bankruptcy Court Structure and Insolvency Process. I am a 
member of the American College of Bankruptcy, the American Bankruptcy 
Institute and former chair of the Bankruptcy Committee of the State Bar 
of Texas. The opinions expressed herein are my opinions and not 
necessarily the opinions of any of these organizations and those 
organizations may in fact have different opinions from my opinion.
    During the past 30 years that I have practiced bankruptcy law in 
various districts throughout the country, I have seen upswings and 
downswings in bankruptcy caseloads, often dramatically. In the Southern 
District of Texas in the late 1980s, a six year depression in the oil 
and gas industry led to a huge bankruptcy caseload increase. In 
particular, chapter 11 cases increased dramatically. After most of the 
caseload increase had abated, the number of bankruptcy judges for the 
Southern District of Texas was substantially increased. However, prior 
to the creation of new judgeships, judges from other districts in other 
states unaffected by the energy industry meltdown were brought in to 
assist in handling the increased bankruptcy caseloads.
    Before new bankruptcy judgeships are authorized for the districts 
that have a current increase in insolvency caseloads, it would seem 
logical to assist these districts (which are experiencing primarily an 
increase in chapter 7 cases and chapter 13 cases) by bringing in 
visiting judges. In some districts, the caseload increases may not be 
permanent and may not be sustained. Often the causes of increased 
bankruptcy caseloads are cyclical or attributable to a downturn in a 
particular industry. While chapter 13 cases and chapter 7 cases have 
increased, the most time consuming cases, those under chapter 11, have 
not generally increased. In addition, the bankruptcy reform legislation 
currently pending before Congress (Senate Bill 625) will impact 
caseloads substantially if it is passed. Many consumer bankruptcy 
specialists believe the legislation, if passed, may cause recidivist 
debtors to find bankruptcy substantially less attractive. Whether one 
opposes or supports the reform legislation now being considered, it 
would seem only sensible to determine whether or not that legislation 
is to pass before creating new judgeships to deal with caseloads that 
may change radically if it does pass.
    An important substantive proposal currently being considered by 
Congress is the proposal to permit direct appeals from the Bankruptcy 
Courts to the Circuit Courts. This proposal should be enacted prior to 
any new bankruptcy judgeships being created. There is currently largely 
an absence of stare decisis in bankruptcy substantive law. At present, 
a party can find bankruptcy case authority for virtually any 
proposition in the vast number of varying decisions of bankruptcy 
judges on seminal substantive questions of bankruptcy law. No other 
area of substantive law approaches it in this regard. For this reason, 
many major bankruptcy-related organizations support the direct appeal 
proposal. As these committees have heard in prior testimony, under the 
current appellate structure, appeals of the decisions of bankruptcy 
judges are usually futile at this time for structural reasons. Appeals 
often languish in the district courts until they become moot.
    The workload of bankruptcy judges would drop dramatically if clear 
precedents existed on fundamental bankruptcy principles. The district 
courts deal with no other area with such substantive uncertainties. In 
districts where multiple bankruptcy judges sit, clients contemplating 
bankruptcy are often dismayed to learn from their counsel that the 
answers to seminal legal issues in their cases will depend on which 
judge they draw. Corporate debtors often opt to file their chapter 11 
cases in Delaware where fewer substantive differences of opinions among 
judges usually lead to more predictable results.
    Society demands predictability and stability from its legal system. 
Currently, the bankruptcy system is unpredictable because of the 
appellate structure which has led to a lack of clear decisional 
authority interpreting a statute that has been in effect for 20 years. 
Creating more bankruptcy judgeships against this backdrop simply 
compounds the problem. The real way to solve the workload issue for 
bankruptcy judges is to lessen that load by giving the judges a 
structure that will facilitate more higher court precedents for 
recurring questions.

    The Chairman. Mr. Elsaesser.

  STATEMENT OF FORD ELSAESSER, ESQUIRE, ELSAESSER, JARZABECK, 
                    ANDERSON, MARKS & ELLIOT

    Mr. Elsaesser. Thank you, Mr. Chairman, Congressman Watt, 
and members of the committee and staff. The American Bankruptcy 
Institute is pleased to serve, we believe, as really the 
clearinghouse and most reliable source of all bankruptcy 
information, including the progress on the current legislation 
and including some of the background on this legislation. The 
general membership of the ABI really holds probably the 
majority of people who practice before the bankruptcy courts; 
and so we are, in reality, perhaps the most regular customers 
and the best evaluators of how the bankruptcy court systems 
actually work on a general basis.
    I want to speak today from my own personal experience as 
someone who has engaged in litigation and consumer agriculture 
and bankruptcy, business bankruptcies in several different 
bankruptcy courts. I would make the observation, having done so 
and having practiced before both overcrowded courts and courts 
that are not overcrowded, that overcrowded dockets do, in fact, 
sometimes create real prejudice to parties before the 
bankruptcy court and particularly creditors but often all 
parties in the bankruptcy process.
    The use of traveling judges and technology, I think, is 
something that needs to be addressed today before the 
committee. I come to you from the Ninth Circuit, which has been 
a leader in using visiting judges. Frankly, when it is 25 below 
zero in Butte or Juneau, it is not too hard to get visiting 
judges to travel to San Diego or Phoenix to help out with their 
caseloads in those areas in the wintertime.
    In addition, I have witnessed the innovative use of video 
and telephone conference hearings, with the help of the 
administrative office, to clear the backlogs, particularly in 
the Southern, Eastern, and Central district of California, 
where essentially they utilize Northwest judges who are, 
frankly, not that busy right now, using teleconferencing and 
video conferencing to have hearings before the courts in the 
Central and Southern Districts of California to clear up large 
backlogs of adversary cases. I think up to a certain point that 
does work, and it has helped considerably clearing backlogs of 
cases. But I think these are not, ultimately, means to an end 
that will cure the problem of those specific districts that are 
overcrowded. I think that technology has its limits too.
    I have had occasion to witness both telephone and video 
conference hearings where, frankly, the parties that are before 
the court are not particularly respectful of the court, and in 
many cases, that is because these are debtors who have never 
actually been in a real courtroom. That is something that is 
not really able to be substituted by using a telephone or a 
video conference.
    So while I think that that technology is of a great help in 
reducing backlogs, I don't think it tells the whole story. 
Likewise, I think visiting judges, particularly in the Ninth 
Circuit where you can have a fair amount of judges moving from 
north to south where the heavy caseloads are, I don't think 
actually addresses the problem that there are certain areas of 
California that do seem to genuinely show the need, as stated 
by the Judicial Conference.
    At the same time, as we said in our written testimony, we 
strongly support the increased use of technology as some of the 
areas that I don't think any of the witnesses disagree on, and 
the increased use of traveling and visiting judges. But the 
basic concept of having a judge with a caseload in the 1,000 to 
2,000 case range is really, we think, more the optimum 
condition.
    The third item I would like to address is the reform bill. 
As a Chapter 7 trustee that handles 1,200 cases a year, I agree 
with the chairman and I agree with Senator Grassley that if the 
reform bill passes this year in some form similar to both the 
House and the Senate bill, there will be a reduction in 
consumer case filings. It will not impact business or farm 
cases, but it will, I think, reduce--my own personal opinion in 
that it will reduce cases. At the same time, though, I think 
that the committee would have to admit you are creating a 
policing system for the existing consumer cases that will 
require substantially more work by judges in the consumer area, 
by trustees in the consumer area, and the U.S. trustees in the 
consumer area; and I think that argues that on balance, that 
this bill is a well thought-out bill. Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Elsaesser.
    [The prepared statement of Mr. Elsaesser follows:]
 Prepared Statement of Ford Elsaesser, Esquire, Elsaesser, Jarzabeck, 
                        Anderson, Marks & Elliot
    Chairman Grassley, Chairman Gekas and members of the joint 
subcommittees, I am Ford Elsaesser, the President of the American 
Bankruptcy Institute (ABI). I am a senior partner with the Sandpoint, 
Idaho firm of Elsaesser, Jarzabek, Anderson, Marks & Elliott where my 
practice is primarily in the areas of commercial and bankruptcy 
litigation, corporations, partnerships and rural electric cooperatives. 
I am also the bankruptcy panel trustee for chapters 7, 11 and 12 in the 
District of Idaho and the Eastern District of Washington, handling 
1,100 cases per year. As a speaker at numerous regional and national 
educational programs around the country, my perspective on bankruptcy 
is national in scope.
    As you know, the ABI is the nation's largest multi-disciplinary 
organization devoted to research and education on issues related to 
bankruptcy and insolvency. Founded in 1982, ABI is non-profit and non-
partisan. Our more than 6,800 members span the entire spectrum of 
bankruptcy professionals: attorneys for both creditors and debtors in 
individual and commercial cases, judges, accountants, lenders, 
trustees, credit managers, turnaround professionals, academics and 
others.
    Importantly, the ABI is not a lobbying organization and we do not 
advocate positions before Congress, although we regularly appear before 
these subcommittees and other committees of Congress. We have 
historically supported legislation that affects the administration of 
justice in the bankruptcy system, such as regarding the salaries of 
bankruptcy judges, or to provide for judicial retirement benefits, and 
to increase the number of judges where needed and appropriate. We 
appeared most recently in support of more judgeships in June, 1997 and 
December, 1995.
    We are pleased to appear again today to provide our views on the 
Judicial Conference's request for 24 additional bankruptcy judgeships, 
including 18 now contained in the bankruptcy reform bills (H.R. 833 and 
S. 625) and six additional positions (District of Puerto Rico, District 
of Delaware, District of Maryland, Eastern District North Carolina, 
Southern District of Florida, and Middle District of Georgia, to be 
shared with the Southern District of Georgia) recommended by the 
Conference in March 1999.
    The ABI applauds the work of the Judicial Conference of the United 
States for its continued careful assessment of the workload burdens of 
the bankruptcy courts, and for its prudent recommendations for 
additional judgeships. Congress last authorized new bankruptcy 
judgeships in 1992. The Judicial Conference sent recommendations for 
additional judgeships to Congress in 1993, 1995, 1997 and earlier this 
year. Each time, the Conference has reassessed its prior 
recommendations to ensure that the need continues to be demonstrated.
    The formal process of the Bankruptcy Committee of the Conference is 
elaborate, taking into account not only a weighted caseload formula 
developed by the Federal Judicial Center (generally requiring more than 
1,500 weighted filing per judge) but also on-site surveys and other 
factors not captured by a mere numerical formula. While the focus has 
been on the formula as an objective measurement, the results from the 
use of the formula are never dispositive. Some districts that exceed 
the 1,500 weighted case filings are not recommended for more judges 
because those courts believe they can handle the additional 
workload.\1\
---------------------------------------------------------------------------
    \1\ For example, the 1993 request for more judgeships did not 
include requests from 10 districts with more than 1,500 weighted case 
filings per authorized judgeship. In the 1995 request, there were 4 
such districts and in the 1997 request, there were 5 such districts.
---------------------------------------------------------------------------
Filing Trends in Perspective
    As these subcommittees are too well aware, the pending judgeship 
request comes in the wake of an explosion in bankruptcy filings during 
much of the 1990's, with total new cases peaking in 1998 at over 1.4 
million. Your subcommittees have heard much testimony over the last few 
years about the apparent paradox of record bankruptcies during ``the 
best economy in a generation,'' in the words of President Clinton. 
During the '90s, consumers have dominated the national economy, 
accounting for two-thirds of our gross domestic product. High rates of 
employment, household wealth and consumer confidence have coexisted 
with record levels of household debt as a share of after-tax income. 
For the first time, the rate of personal savings is negative. 
Bankruptcy filings have grown in virtual lock-step with an increase in 
family debt burden, from both home mortgages and installment debt.
    Most recently, as consumers' non-mortgage debt burden has 
stabilized (in the wake of sustained low interest rates and intense 
competition in the consumer credit markets), we have seen a leveling 
off and even a decline in personal bankruptcies. The U.S. per capita 
personal bankruptcy rate dropped by 17.5 percent from the fourth 
quarter of 1998 to the second quarter of 1999.\2\ Certain economic 
factors suggest that this decline will continue in the near term.\3\
---------------------------------------------------------------------------
    \2\ Visa's Bankruptcy Notification Service compiles weekly reports 
of the number of personal bankruptcy filings. They report filings to be 
down 8.3 percent this year. The Chicago Mercantile Exchange also 
compiles filing statistics in connection with its Quarterly Bankruptcy 
Index. The most recent CME index is off by 9.59 percent this year from 
a year ago.
    \3\ The fraction of consumer credit accounts that have been 30 days 
past due is falling and the fraction of accounts that have been 30 days 
or more past due is stable. Standard & Poor's DRI, September, 1999.
---------------------------------------------------------------------------
    Using a year-end of June 30, filings for the 12-month period ending 
in 1999 were 1,391,964. In comparison, 1,429,451 new cases were filed 
for the 12-month period ending in 1998. Although filings have declined 
this year, the number of new petitions filed represent a 62.2 percent 
increase over the same period ending in 1995.
Workload Impact
    As these subcommittees know, the focus cannot be entirely on total 
case filings as not all cases result in the same workload for a judge. 
The vast majority of cases are consumer filings. Since 1993, consumer 
(non-business) cases have accounted for an increasing percentage of 
total bankruptcies, peaking at 97 percent this year. These cases 
typically require less time of a bankruptcy judge. Unless there is an 
adversary proceeding brought by a creditor, or a motion to convert the 
case brought by the trustee, most of these cases now involve very 
little work by the judge.
    However, the pending requests should be considered in light of the 
significant changes to the consumer bankruptcy laws proposed by H.R. 
833 and S. 625. Consumer bankruptcy cases which now involve relatively 
little or no judge time will likely account for a greater workload if 
either of these bills become law. Attached to my statement is an 
excerpt from a comprehensive, new analysis completed last week by Hon. 
Eugene R. Wedoff, a bankruptcy judge in Chicago and the Co-chair of the 
ABI Consumer Bankruptcy Committee. Judge Wedoff's analysis identifies 
several discrete areas of ambiguity in the application of the means 
test found in H.R. 833, where parties and the trustee will be forced to 
litigate new issues. Beyond the means test, there exist an array of 
other changes to current law that will require satellite litigation 
before the bankruptcy judge. These areas include reaffirmations, 
broadened exceptions to discharge, credit counseling requirements, and 
more.
    As a Chapter 7 trustee, I can state that under the proposed 
changes, there would be a substantial increase in consumer bankruptcy 
litigation, even if there is a corresponding decline in filings due to 
the ``disincentives'' to file found in both H.R. 833 and S. 625. 
Ironically then, consumer bankruptcy cases that heretofore rarely 
reached a bankruptcy judge, will now occupy more judicial time.
    Neither will the reform legislation's proposals in the business 
bankruptcy area lessen the workload faced by bankruptcy judges. It is 
clear that business cases often involve numerous parties, creditors and 
collateral litigation over complex issues. These cases have a workload 
impact far beyond their numbers. The pending bills make few changes 
designed to lessen this workload. In part due to the healthy national 
economy, business cases have declined. In the year ending June 30, 
1998, there were 39,934 new business cases, down from 50,202 a year 
earlier. Chapter 11 filings in particular have dropped sharply in 
recent years, from 13,221 in 1995, to 12,859 in 1996, to 11,159 in 
1996, to 9,613 in 1998 and 8,684 last year.
    There is concern, however, that a rise in Chapter 11 filings could 
occur just around the corner. Federal bank regulators have issued 
repeated warnings in recent months about credit quality and concern 
over underwriting standards for commercial loans. Bond defaults are 
rising. Sectors including health care (nursing homes and hospitals) and 
retail are seeing growth in the number of financially-troubled 
entities. Health care bankruptcies, in particular, are very judicial 
time intensive.
Requests for Resources Should be Scrutinized
    While it is important to meet the legitimate resource needs of the 
courts, we agree with Chairman Grassley that the judiciary bears the 
burden of demonstrating the need for new judgeships. We applaud 
Chairman Grassley's healthy skepticism toward an ever-growing federal 
bench, especially a the appellate level. It is also important to 
realize that the Third Branch of government, including the bankruptcy 
courts, is not immune from oversight into its use of current resources. 
No request for more resources should be approved by Congress without an 
assessment that the current judges are being used in the most efficient 
manner. We note, however, that the Bankruptcy Committee has 
consistently recommended fewer permanent and more temporary judgeships 
than requested by the Circuit Councils.
    Limiting judgeship requests to the number necessary is important 
because each bankruptcy judgeship costs about $721,000 to establish and 
about $575,000 per year to maintain, according to the General 
Accounting Office. At the same time, it is important that there are 
sufficient judgeships to enable the bankruptcy system to operate fairly 
and efficiently. We believe the Judicial Conference, through its 
Bankruptcy Committee, has struck the appropriate balance in the pending 
requests.
Cost Saving Mechanisms Should be Pursued
    One cost-conscious innovation we support is the use of temporary 
judgeships. Eleven of the 24 new positions would be designated as 
temporary. This provides Congress with a periodic opportunity to assess 
the continued need for these positions. Converting temporary judgeships 
to permanent positions should occur only when the long-term need is 
clear.
    There are a number of other cost-saving innovations that should be 
further promoted, including more and better case management techniques, 
greater use of automation in the bankruptcy courts, expansion of the 
use of visiting judges both intra-circuit and inter-circuit, more use 
of recalled and retired judges, temporary law clerks and other ways to 
match the existing resources with current need. These devices are 
especially important in managing complex business cases. We encourage 
the Judicial Conference and the Administrative Office of the Courts to 
continue to work to find ways to better equalize the workload of 
judges.
    We thank the Subcommittees for inviting ABI to participate in 
today's hearing and we look forward to assisting you and your staff in 
any way you find helpful. I would be pleased to answer any questions 
you might have.
                               __________
    [Note: Additional material submitted for the record by Mr. 
Elsaesser: An Analysis of the Consumer Bankruptcy Provisions of H.R. 
833, Bankruptcy Reform Act of 1999, As passed by the House of 
Representatives, written by Hon. Eugene R. Wedoff, United States 
Bankruptcy Court, Northern District of Illinois, Chicago, Illinois--
prepared for the American Bankruptcy Institute, Web posted and 
Copyright October 29, 1999, American Bankruptcy Institute, is on file 
with the House Judiciary Committee's Subcommittee on Commercial and 
Administrative Law.]

    The Chairman. Does the gentleman from North Carolina seek 
recognition?
    Mr. Watt. Thank you, Mr. Chairman. Just briefly, to thank 
Judge Scott for her plug for North Carolina.
    Ms. Scott. Representative Watt, I got calls from my 
colleagues in North Carolina who wanted to be sure this 
committee knew the facts of what was going on, and I was 
pleased to see you be here today.
    Mr. Watt. It is a serious problem, and I hope--I wish that 
Representative Coble could have made it, but apparently he is 
not going to make it. So we did the best we could in his 
absence.
    Just to Mr. Ray to say that I have actually been an 
advocate of direct appeals from bankruptcy court to circuit 
courts, although not for this particular reason; this gives me 
a new argument to make. But it has always seemed to me that 
bankruptcy judges and district court judges who sit essentially 
in the same courthouse, it is very difficult for a district 
court judge who goes to lunch with and sees regularly his 
counterpart on the bankruptcy bench to then be in a position to 
overrule some decision that they have made, and I just have 
never seen one ever do that. It just seems to me that it makes 
better sense to have some more independent body to which an 
appeal can be taken.
    Mr. Ray. Thank you.
    Mr. Watt. I appreciate your perspective.
    I will yield back. I don't have any other questions or 
comments.
    The Chairman. We thank the gentleman.
    The Chair only has one question generally to ask for any 
and all of the three witnesses. That is, would it be prudent on 
the part of the Congress to accept the numbers that add up to 
the 24 new judgeships, but create them on a temporary basis, 
pending the flow of whatever might come of the bankruptcy 
reform bill, if it should pass, and to take into account the 
floods in Eastern North Carolina and any downturn in the 
economy, God forbid, and then be able to calculate at some 
future time whether they should be made permanent and even more 
judges be appointed, et cetera?
    This thought came to me only while we were listening to 
this testimony, and it is worth analyzing. Does anyone wish to 
respond to that? Mr. Ray.
    Mr. Ray. Yes, sir, Mr. Chairman. That is the most I take 
away from today's hearings, is that we have the floods in North 
Carolina that, hopefully they won't happen every year. But 
every time there is a tornado or hurricane or something like 
that, we do have an uptake in personal bankruptcies; but they 
last 3 or 4 or 5 years.
    I think, if I were running the show, I would do the 
following thing: First of all, I would find out the judges that 
are sitting 7\1/2\ hours a month and ask them, most people 
don't want to take a paycheck and sit there bored. I have had 
judges ask me from the bench, Mr. Ray, why don't you file that 
next big case here, because I don't have anything to do. That 
is on the record.
    I think if you would ask some judges to move, you might 
then know better where the mop is going to flop with this new 
bill, and this new bill I think is going--we think maybe it is 
not going to increase the caseloads. We think it is going to 
decline them. I think it is going to decline. People are going 
to stop using bankruptcy--bankruptcy is supposed to be a safety 
net, and people are using it as a trampoline. That is going to 
stop once we get the new legislation passed.
    But the most that I would take away from today's hearing is 
temporary judges. I don't see that anybody has made a case for 
14 years.
    Ms. Scott. Mr. Chairman, point of fact is, though, 14 years 
is the term of office for a bankruptcy judge, and creating only 
temporary judgeships does force the Judicial Conference to keep 
coming back to Congress in order to either make them permanent 
or get them extended. That takes a lot of resources on the part 
of the judiciary to perform that function, which again takes 
time.
    Again, a temporary judgeship is just that. We have proven 
the need for them historically. In some cases it has just 
simply been a Band-Aid approach, and we need the permanency of 
these judgeships.
    Again, I go back to the figures that the Judicial 
Conference used, the case-weighted numbers. These are all based 
on figures before 1994, having to do with the 18 judgeships. I 
don't think we are going to see the cases drop below those 
figures any time in the near future.
    I know that my colleague, Mr. Ray, has already admitted 
that he is a Chapter 11 lawyer, practicing, I guess, a lot in 
Delaware these days. In my case, the vast majority of the cases 
are consumer cases. I spend the vast majority of my time, and I 
assure you I am on the bench longer than 7\1/2\ hours in a 
given month, covering almost 9,000 cases.
    If the current Chapter 7 cases, which number about, 
according to last year's figures if I remember correctly, some 
993,000, suddenly become Chapter 13 cases, which numbered about 
359,000, I can assure you that we will be spending considerably 
more time dealing with the issues that are going to come before 
us. My colleague, Judge Randall Newsome, from the Northern 
District of California who preceded me as the president, spoke 
before your subcommittee last March 9, 1999. His written 
statement is in your records from that hearing. During that 
hearing, he outlined 54 litigation points that could cause more 
litigation in the bankruptcy court. Since that time, the 
proposed legislation has been changed or there are changes 
anticipated that will come up, so there are yet more issues 
that we haven't dealt with.
    But I know this: Lawyers are creative individuals; and, if 
there is a new piece of legislation, they will have to litigate 
to find out what the judge is going to say, what the judge is 
going to do. These cases do not go up on appeal. It doesn't 
matter whether it is a direct appeal or to the district court, 
the dollars simply are not there. So that I think the direct 
appeal argument for the vast majority of these cases doesn't 
stand on its own.
    Mr. Elsaesser. Mr. Chairman, just briefly, as stated in our 
written testimony, we do support the concept of temporary 
judgeships; and we do think that is a potential solution to 
this issue. But since Mr. Ray raised in his question, I wanted 
to just expand just very briefly on what the new bill will do 
to those of us who are in the mix, in the consumer business, 
that is--in my role as a Chapter 7 trustee, I am not--I believe 
that if the bill that is before the House and the Senate is to 
work as intended, there has to be more work for the judges in 
the courtroom because I think what you have created in the bill 
is a system of stricter, much stricter scrutiny of Chapter 7 
debtors. And if that scrutiny is going to work, the judges have 
to back up what is in the bill.
    I speak throughout the country to consumer bankruptcy 
lawyers on both sides. I spoke at the Visa conference just a 
month and a half ago of obviously attorneys representing the 
creditors of the credit card industry and the consumer 
bankruptcy lawyers, and I believe that they are in agreement on 
one issue and that is that there will be a substantial increase 
in consumer bankruptcy litigation across the board if the bill 
passes. I am not saying that is necessarily a bad thing, but it 
is probably going to happen.
    Thank you, Mr. Chairman.
    The Chairman. The time of the Chair has expired. All time 
has expired. We dismiss the panelists with our gratitude, and 
we will see what happens.
    The subcommittee stands adjourned.
    [Whereupon, at 3:30 p.m., the subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of Hon. Paul D. Coverdell, a U.S. Senator From the 
                            State of Georgia
    Congressman Gekas, Senator Grassley, I thank each of you today for 
agreeing to hold this joint hearing on an issue that is important to 
many states. Increased bankruptcy filings, as you know, are placing a 
severe strain on our federal courts and on the judges who preside over 
these cases. The House and Senate Bankruptcy Reform bills seek to 
address this issue by authorizing eighteen new bankruptcy judges. While 
Congress recognizes the need for these judges, it has not yet taken the 
steps it deems necessary to approve another needed group of bankruptcy 
judges identified by the U.S. Judicial Conference in March of this 
year. This hearing is an important step in that direction.
    As you know, Georgia is one of the states that the Judicial 
Conference has indicated needs another bankruptcy judge. The Middle and 
Southern Districts in Georgia have, respectively, the eighth and ninth 
highest weighted caseloads in the country. The most recent data from 
the Administrative Office of the U.S. Courts indicates that the 
weighted bankruptcy filings per authorized judgeships is 1,907 for the 
Middle District and 1,880 for the Southern District. Even with approval 
of a new judge for the Southern District, the three full-time judges in 
those Districts would still carry a caseload that exceeds the threshold 
of 1,500 weighted hours that justifies the creation of another 
judgeship.
    The review undertaken by the Judicial Conference of the workload in 
these districts also found that caseloads are being managed in a highly 
efficient manner. The Judicial Conference had no suggestions to assist 
the court in expediting its caseload. A new judgeship is the only 
solution to this caseload problem.
    I understand the Judicial Conference used the same criteria to 
justify the six new judgeships in their March 1999 recommendation that 
they used to justify the 18 judgeships in the Bankruptcy Reform bills. 
Understanding the need for a new bankruptcy judge in my state, I 
support the Judicial Conference's recommendation and have introduced 
legislation that would authorize the six additional judges. I believe 
this, along with today's hearing, will shed important light on 
caseloads and the need for new judges. Again, I thank the distinguished 
chairs for holding this important hearing and I hope it will help move 
this issue forward.
                               __________
 Prepared Statement of Hon. Dianne Feinstein, a U.S. Senator From the 
                          State of California
    I would like to thank Chairman Grassley and Chairman Gekas for 
conducting this hearing today to review the need for additional 
bankruptcy judgeships.
    I will focus my comments on the caseload crisis affecting the 
Central and Eastern Districts of California. The judges in these 
districts are so overwhelmed that the Judicial Conference has proposed 
three permanent and one temporary bankruptcy judgeships for the Central 
District, and one temporary judgeship for the Eastern District.
    Rising bankruptcy filings are not a new problem. Since 1980, 
Bankruptcy filings have risen over 400 percent. Congress last tried to 
address the increased burdens on bankruptcy courts in 1992 by enacting 
the Bankruptcy Judgeship Act, which created 25 permanent and 10 
temporary bankruptcy judgeships.
    Continued growth in bankruptcy filings have rendered the 1992 act 
obsolete. While no new judges have been authorized since 1992, 
bankruptcy filings have risen by 43 percent from 971,000 to 1,391,000. 
Four hundred thousand cases have been added to the docket.
    A disproportionate share of this caseload growth has impacted the 
Central and Eastern Districts of California. Judges in the Central 
District, for example, presided over 113,000 case filings in fiscal 
year 1999, which is approximately 8 percent of all bankruptcies filed 
nationwide. The Central District has the largest number of Chapter 7 
filings, the most Chapter 13 filings, and the second largest number of 
Ch. 11 filings of any district in the United States.
    The Judicial Conference uses a case-weighing system to analyze the 
workload of a bankruptcy court. This statistic measures not only the 
number of cases a judge handles, but also the complexity of the cases. 
The national average of case-weighted hours per judge is 1,397 hours. 
If a district has an annual caseload average of 1,500 hours per judge, 
the Judicial Conference will generally recommended that it receive 
another judgeship. In 1998, the Central District had a case-weighted 
average of 1,766 hours per judge and the Eastern District's average was 
1,731 hours per judge.
    The Eastern and Central Districts of California are also well above 
the national average in filings per judgeship. In calendar year 1998, 
the national average of filings per judgeship was 4,425. The Central 
District of California, meanwhile, had 5,761 filings per judgeship and 
the Eastern District of California had 6,558 filings per judgeship.
    Because of this overwhelming court docket, parties litigating in 
the Central and Eastern District of California receive substantially 
fewer judicial resources than in many other parts of the country. 
Judges have less time to hear cases, courtroom calendars are longer, 
and the costs of litigation are higher.
    Bankruptcy lawyers from the region report that any trials lasting 
longer than a day must be spaced over weeks, even months, because of 
the unavailability of clear court days. Moreover, practitioners are 
having to warn clients that the courts lack the time to read all of the 
pleadings, analyze financial documents or ferret out misleading 
assertions.
    The Senate is presently grappling with legislation to reform and 
update the bankruptcy code. I recognize that comprehensive bankruptcy 
reform may take some time to iron out, but we need to adopt more 
judgeships now. There is precedence for putting certain bankruptcy 
issues on the fast track. Recently, Congress enacted a needed extension 
to the Ch. 12 farm bankruptcy provisions of the bankruptcy code. I urge 
my colleagues to give bankruptcy judgeships the same high priority.
    When considering this issue, we also must recognize that it 
typically takes 18 months to install a judge after a new position is 
authorized. Thus, Congress has no time to waste.
    I pledge to work with colleagues in both the House and the Senate 
to move this issue forward.
                               __________
 Prepared Statement of Hon. Paul S. Sarbanes, a U.S. Senator From the 
                           State of Maryland
    Chairman Grassley, Chairman Gekas, I appreciate having the 
opportunity to submit this statement on the need for additional Federal 
bankruptcy judges in the District of Maryland.
    As the members of these House and Senate Subcommittees know all too 
well, bankruptcy filings across the country have skyrocketed in recent 
years. In Maryland alone, the total number of filings rose from 9,201 
in 1990, to 34,463 in 1998--an increase of approximately 275 percent.
    This year, as in years past, your Subcommittees have been hard at 
work to determine the causes of this dramatic expansion and what, if 
anything, can be done to stem the tide of bankruptcy filings. While 
Members of Congress may have reasonable differences of opinion in what 
should be done to reform the Bankruptcy Code, one thing we should all 
agree on is the need to administer that Code fairly and in a way that 
provides certainty to individuals and the business community.
    At the heart of dispensing such justice are our bankruptcy judges. 
Unfortunately, in too many cases these bankruptcy judges are 
overburdened and unable to perform their duties expeditiously. With the 
changes that may occur in the Bankruptcy Code, this situation could 
worsen. Simply put, we must ensure that bankruptcy judges are not 
spread too thin to deal with our current laws and we must increase our 
judicial resources as necessary to ensure that we have the ability to 
deal with any changes in the Bankruptcy Code.
    This year, the United States Judicial Conference has recommended 
the creation of 24 additional bankruptcy judgeships across the country. 
A look at the conditions currently facing Maryland's bankruptcy judges 
is a powerful example of the critical need for the new judgeships 
recommended by the Judicial Conference. Perhaps no state has been 
impacted as severely by the rise in bankruptcy filings as the State of 
Maryland. The last time Maryland received a new bankruptcy judgeship 
was in November of 1993. Since that time, the number of bankruptcy 
filings in Maryland has more than doubled. In fact, by any measure, the 
need for additional bankruptcy judgeships in Maryland is critical.
    In 1991, the U.S. Judicial Conference adopted a ``case-weighing'' 
system for bankruptcy judges under which different types of cases are 
assigned different degrees of difficulty and overall weighted case-hour 
goals are established for the judges. Under this system, the average 
United States bankruptcy judge currently has a weighted case-hour load 
of 1,337 hours per year. The Judicial Conference generally does not 
consider a request for new bankruptcy judgeships by a federal district 
unless the average case-hour total for the district's judges exceeds 
1,500.
    Given these yardsticks, the burdens facing the District of 
Maryland's bankruptcy judges are truly astounding. As of June 30, 1999, 
the average case-hour load of Maryland's four bankruptcy judges is 
2,733 hours a year. If Maryland received the two additional bankruptcy 
judges currently provided--although only on a ``temporary'' basis--by 
S. 625 tomorrow, the case-hours per judge in the District would still 
be 1,822, 136 percent of the national average and well in excess of the 
1,500-hour mark used to rate a District's need for new judges.
    In fact, if Maryland were to receive the three additional 
bankruptcy judgeships recommended by the Judicial Conference, 
Maryland's weighted case-hours per judge would still be 1,562 hours a 
year. Therefore, even with the addition of the three judgeships 
recommended by the Judicial Conference, Maryland bankruptcy judges will 
still have a case-hour total far in excess of the national average of 
1,337 hours a year and in excess of the 1,500-hour mark used to rate a 
district's need for new judges.
    Aside from the case-weighing statistics, consider the number of 
bankruptcy cases filed in Maryland. For the year ending June 30, 1998, 
the District had a total of 34,463 cases filed, or 8,616 cases filed 
per authorized judgeship. This places Maryland as first in the Nation 
among the 90 judicial districts in the total number of filings per 
authorized judgeship--at 196 percent of the national average.
    Clearly, this situation cries out for remedial action. Recognizing 
as much, the Judicial Conference recommended to the 104th Congress that 
Maryland receive an additional bankruptcy judgeship. Then, in March of 
1997, the Judicial Conference approved the addition of two bankruptcy 
judgeships for the District of Maryland. Unfortunately, neither of 
these proposals were enacted into law and, as a result, the problem 
worsened considerably. Now, in its most recent recommendation, the 
Judicial Conference has determined that Maryland is in need of three 
additional bankruptcy judgeships.
    Maryland's four sitting bankruptcy judges continue to show a 
dedication that is especially remarkable given the extraordinary 
burdens placed on them. But despite their admirable commitment, 
additional judgeships are essential to the fair administration of the 
Bankruptcy Code for all of the business and individuals that come 
before the Maryland District--whether as creditors or debtors. 
Furthermore, efficient operation of our bankruptcy courts is vital to 
Maryland's economy. Bankruptcy laws are crated to foster orderly, 
constructive relationships between debtors and creditors as they deal 
with economic difficulties. This in turn results in businesses being 
reorganized, jobs (provided by creditors and debtors) preserved, and 
debts managed fairly. Overworked bankruptcy courts have a destabilizing 
effort on this system and the economy suffers as a result.
    Howard Rubenstein, President of the Bankruptcy Bar Association for 
the District of Maryland, points out that the ``Bankruptcy Code can 
only work effectively when there is an opportunity for bankruptcy 
judges to promptly hear and resolve disputes that will enable 
bankruptcy cases to be administered and disposed of swiftly.'' The 
weighted case load burden on Maryland's District puts a severe strain 
on the ability of the Court to perform its duties in a manner that is 
consistent with the goals of the Bankruptcy Code.
    As your Subcommittees look into the problems facing our bankruptcy 
system, I urge you to recognize that additional bankruptcy judgeships 
are a critical component of the Congressional response to these 
problems.
                               __________
 Prepared Statement of Hon. John Tanner, a Representative in Congress 
                      From the State of Tennessee
    I would like to thank everyone involved in today's hearing on the 
Judicial Conference's recommendation for additional bankruptcy 
judgeships and on the extension of several temporary judgeships.
    As we all know, many states, including Tennessee, are being 
overwhelmed by the explosion in the number of bankruptcy filings in 
recent years. I am pleased that H.R. 833 includes an additional 
judgeship for the western district of Tennessee and also extends the 
temporary judgeship for the eastern district of Tennessee. West 
Tennessee ranks third in the nation in the number of weighted filings 
per authorized judgeship and the situation is not improving. I know how 
desperately an additional bankruptcy judgeship is needed in Memphis, 
Tennessee which is above the national average in bankruptcy cases 
filed. I agree that we must address the root problem of the causes of 
bankruptcy filings, but in the meantime we can not fight this problem 
when case load levels are rising and the number of judgeships is 
remaining static.
    I have heard from judges in my district that are frustrated with 
the situation as it stands and I would urge Members to approve these 
judgeships this year in order to address the deluge of bankruptcy cases 
that our courts are facing.
    I commend Chairman Gekas and Grassley for holding today's hearing 
and am hopeful that we can move forward in meeting the Judicial 
Conference's recommendation this year.
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