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Bankruptcy judges serve as judicial officers of the U.S. district courts and constitute the bankruptcy court for their respective districts. The U.S. court of appeals for each circuit appoints bankruptcy judges to renewable fourteen-years terms. The number of bankruptcy judgeships is determined by Congress, which receives periodic advice from the Judicial Conference of the United States on the need for additional judges.
The position of bankruptcy judge was established by Congress in 1978 as part of broad legislation that reorganized the nation's bankruptcy system (92 Stat. 2657). Under the Bankruptcy Act of 1898, referees appointed by district judges oversaw the administration of bankruptcy cases in the district courts, and a series of subsequent acts increased the judicial duties of the referees. In 1973 the Supreme Court issued rules that recognized the importance of these judicial duties and applied the title of bankruptcy judge to the referees. Also in 1973, the congressionally chartered Commission on Bankruptcy Laws of the United States recommended the formal establishment of bankruptcy judgeships to preside over judicial proceedings related to bankruptcy in courts that would be independent of the U.S. district courts. The commission called for the appointment of executive branch officers to carry out administrative responsibilities related to bankruptcy cases.
Over the next five years, Congress considered a range of bills to establish bankruptcy courts with their own judges. Much of the debate concerned the method of appointment and terms of service for bankruptcy judges. The Bankruptcy Reform Act of 1978 established bankruptcy courts in each judicial district, with bankruptcy judges appointed by the President and confirmed by the Senate for terms of fourteen years. The act relieved the bankruptcy judges of the administrative duties of the referee system and established a pilot program for U.S. trustees who would assume these responsibilities. The act also set a transition period within which those appointed under the referee system would continue in office until March 31, 1984, or until a successor took office. Upon full implementation of the act in 1984, two bankruptcy judges were to serve on the Judicial Conference of the United States.
In 1982, in Northern Pipeline Construction Co. v. Marathon Pipe Line Co. (458 U.S. 50), the Supreme Court decided that it was unconstitutional for Congress to grant bankruptcy jurisdiction to independent courts composed of judges who did not have the protections of Article III, but the Court postponed the application of its judgment so that Congress could enact legislation to restructure the bankruptcy courts. The Bankruptcy Amendments and Federal Judgeship Act of 1984 (98 Stat. 333) made the courts of appeals responsible for the appointment of bankruptcy judges and declared that the bankruptcy judges "shall serve as judicial officers of the United States district court established under Article III of the Constitution." Although the bankruptcy judges constituted a bankruptcy court under the terms of the new statute, Congress reserved for the district courts certain jurisdiction over bankruptcy proceedings in order to meet the concerns expressed by the Supreme Court. In 2011, in Stern v. Marshall (564 U.S. 462), the Supreme Court found that Congress' grant of jurisdiction to bankruptcy judges exceeded the limitations of Article III with respect to certain counterclaims filed by an estate.
The act of 1984 authorized the Judicial Conference to establish qualifications for bankruptcy judges and authorized the circuit councils to establish merit selection committees to recommend nominees for bankruptcy judgeships. The act included no provision for the representation of bankruptcy judges on the Judicial Conference. In 1997 the National Bankruptcy Review Commission, established by Congress to consider further reforms of the bankruptcy system, recommended that the bankruptcy courts be established under Article III of the Constitution. The subsequent legislation introduced in Congress, however, did not adopt this recommendation that would have extended to bankruptcy judges the protections of life tenure and immunity from any reduction in salary.