Recommendation That the Department of Justice Not Defend the Constitutionality of Certain Provisions of the Bankruptcy Amendments and Federal Judgeship Act of 1984

Recommendation that the Department of Justice not Defend
the Constitutionality of Certain Provisions of the Bankruptcy
Amendments and Federal Judgeship Act of 1984
Provisions o f the Bankruptcy Amendments and Federal Judgeship Act o f 1984 that retroactively
extend the appointm ents o f bankruptcy judges who were in office at the time of the expiration
of the transition provisions of the Bankruptcy Reform Act o f 1978, as amended, violate the
Appointments Clause o f the United States Constitution.
The Justice Department should not defend the constitutionality o f the reinstatem ents under the
Bankruptcy Amendments and Federal Judgeship Act o f 1984, because its general obligation
to defend the constitutionality of laws enacted by Congress does not extend to defending laws
that unconstitutionally infringe upon the powers of the President.
August 27, 1984
M e m o r a n d u m O p in io n for th e Attorn ey G eneral
This memorandum supplements our previous memoranda of June 29, 1984
(to Assistant Attorney General McConnell, from Acting Assistant Attorney
General Tarr) and July 6, 1984 (to Deputy Attorney General Dinkins, from
Acting Assistant Attorney General Tarr) concerning the Bankruptcy Amend­
ments and Federal Judgeship Act of 1984 (1984 Act). As we indicated in our
previous memoranda, and as we set forth in greater detail below, we believe
that the provisions (Grandfather Provisions) of the 1984 Act that purport to
reinstate all bankruptcy judges who were in office at the time of the expiration
on June 27, 1984 of the transition provisions of the Bankruptcy Reform Act of
1978, as amended (1978 Act), are constitutionally defective. We further be­
lieve that the constitutional defects are sufficiently serious and would have
such a significant impact on the appointment (and, potentially, the removal)
power of the Executive that the Department should refrain from defending their
constitutionality. The Department, however, should be prepared to defend the
other provisions of the 1984 Act if they are challenged in court. We specifically
recommend that the Department set forth its position regarding the Grandfather
Provisions in the case of In re Benny, Civ. No. 84120 MISC RHS BKY (N.D.
Cal.), as generally articulated in a draft brief prepared by the Civil Division and
transmitted to this Office on August 23, 1984.1
1 NOTE: A fter this opinion w as issued by the O ffice o f Legal Counsel, the United States C ourt o f Appeals
for the Ninth C ircuit refused to hold the reinstatem ent o f bankruptcy judges unconstitutional. See In re Benny,
812 F.2d 1133 (9th Cir. 1987). The C ourt o f A ppeals did not address the issue considered by the Office o f
Legal Counsel — w hether C ongress may retroactively extend Presidential appointm ents under the G randfa­
ther Provisions o f the 1984 Act — because it construed the transition provisions o f the 1978 Act as
prospective extensions o f the appointm ents. The C ourt o f A ppeals held that the prospective extension of the
appointm ents was constitutional.
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Under § 205 of Public Law No. 98-166, which continues the authorities
contained in § 21 of Public Law No. 96-132, 93 Stat. 1049-50, the Attorney
General is required to “transmit a report to each House of the Congress” in any
case in which he determines that the Department of Justice “will refrain from
defending . . . any provision of law enacted by the Congress in any proceeding
before any court of the United States, or in any administrative or other proceed­
ing, because of the position of the Department of Justice that such provision of
law is not constitutional.” Thus, if you concur that the Department should not
defend the constitutionality of the Grandfather Provisions and should, as we
recommend, participate in the Benny litigation consistent with our views and
those of the Civil Division, Congress must be notified of that decision. If you
concur, we will, with the participation of the Civil Division, draft a proposed
letter to Congress. We have set forth below the reasons why we believe the
Department should affirmatively contest, rather than defend, the constitution­
ality of the Grandfather Provisions.
I.
The 1978 Act was a comprehensive revision of the bankruptcy laws in which
Congress made significant changes to both the substantive and procedural law
of bankruptcy. See generally Pub. L. No. 95-598, 92 Stat. 2549 (1978). The
procedural changes included modifications to the jurisdiction and the method
of appointment of bankruptcy judges (previously referees in bankruptcy) to
preside over bankruptcy proceedings. Section 201(a) of the 1978 Act provided
for Presidential appointment of bankruptcy judges, who were to serve for a
term of 14 years. See 92 Stat. at 2657. These judges were made subject to
removal by the judicial council on account of “incompetency, misconduct,
neglect of duty, or physical or mental disability.” Id. Because of their remov­
ability and the fixed term o f their appointments, it was clear that these bank­
ruptcy judges were not intended by Congress to be judges in the sense envi­
sioned by Article III of the Constitution.
The 1978 Act provided for a transition period before the new appointment
procedures would take full effect on April 1,1984. See 92 Stat. at 2682-88. The
transition provisions provided that the previously existing bankruptcy courts
would continue in existence and that incumbent bankruptcy referees (who had
been and would continue to be during this transition period appointed by the
district courts to serve 6 year terms) would continue after the expiration of their
terms with no fresh appointment to be bankruptcy judges until the expiration of
the transition provisions. A bankruptcy referee would not be continued only if
the chief judge of the circuit court, after consultation with a merit screening
committee, found the referee to be not qualified.
The 1978 Act granted broad jurisdiction to bankruptcy courts over bank­
ruptcy and related matters. Although the Act initially vested this jurisdiction in
the district courts, the bankruptcy courts (and the bankruptcy judges) were
empowered to exercise all of the jurisdiction conferred upon the district courts
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with respect to bankruptcy matters. See 92 Stat. at 2668. This jurisdiction
included not only civil proceedings arising under the Bankruptcy Act, but also a
wide variety of cases that might affect the property of an estate once a bank­
ruptcy petition had been filed. Thus, included within the bankruptcy courts’jurisdic­
tion were various types of contract actions, including claims based on state law.
The constitutionality of this broad grant of jurisdiction to the bankruptcy
judges was challenged in a case that was decided by the Supreme Court as
Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50(1982). In Northern Pipeline, the Court declared that the broad grant of jurisdic­
tion to bankruptcy courts, at least insofar as it included contract actions arising
under state law, was inconsistent with the requirements of the Constitution that
such actions, if heard in federal court, must be heard by judges with the
protections and independence provided by Article III. The Court did not,
however, apply its decision retroactively. In fact, the Court stayed the effect of
its decision for three months in order to give Congress a chance to reconstitute
the bankruptcy court system. The Court subsequently extended the stay, at the
Solicitor General’s request, for an additional three months until December 24,
1982, 459 U.S. 813, but it denied the Solicitor General’s request for a further
extension thereafter. 459 U.S. 1094 (1982).
Although Congress failed to act by the deadline imposed by the Court, the
bankruptcy court system continued to operate through various ad hoc arrange­
ments. Because the 1978 Act had initially granted jurisdiction of all bankruptcy
proceedings to the district courts, the district courts resumed jurisdiction over
all cases with respect to which bankruptcy court jurisdiction had been held
unconstitutional under Northern Pipeline.
Thus, although the bankruptcy judges were disabled under Northern Pipeline
from exercising the broad jurisdiction conferred by the 1978 Act, the district
courts were able to utilize these courts for the resolution of certain bankruptcy
matters under a temporary delegation of authority. The constitutionality of this
interim arrangement was upheld by several courts of appeals. See, e.g., In Re
Kaiser, 122 F.2d 1574 (2d Cir. 1983); White Motor Corp. v. Citibank, N.A., 704
F.2d 254 (6th Cir. 1983); In Re Hansen, 702 F.2d 728 (8th Cir.), cert, denied
sub nom. First N a t’l Bank v. Hansen, 463 U.S. 1208 (1983).
After Northern Pipeline, Congress labored for almost two years to adopt
corrective legislation. Under the 1978 Act, the transition provisions were to
expire at midnight on March 31, 1984. Congress passed four consecutive
eleventh hour extensions of the transition provisions in order to delay the
demise of the bankruptcy courts and the terms of the bankruptcy judges. Each
such extension was passed by Congress and signed into law by the President
before the expiration of the prior period. Ultimately, however, both the courts
and the appointments expired on June 27, 1984, without Congress’ passing
either a new bankruptcy act or another temporary extension.2 The 1984 Act was
2 The original transition provisions provided that the term o f a bankruptcy ju d g e serving as a referee in
bankruptcy when the 1978 A ct was enacted would expire “on M arch 31, 1984 or when his successor takes
C ontinued
185
not passed by both Houses of Congress until June 29; it was not presented to
the President until July 6, 1984; and it was not signed by the President until
July 10, 1984. Thus, at the time the transition provisions expired, there were no
bankruptcy courts and no bankruptcy judges. When the transition provisions
expired, the Administrative Office of the U.S. Courts implemented a system
under which the district courts handled bankruptcy matters with the assistance
of the former bankruptcy judges, who performed their duties either as magis­
trates or consultants.
The 1984 Act, however, purported to continue in the new offices created by
that Act the judges whose positions and terms had gone out of existence on June
27, 1984. Section 121(e) states that the term of any bankruptcy judge who was
serving on that date is extended to the day of enactment of the 1984 Act (July
10, 1984). Section 106 purports to extend the retroactive appointments so that
they will expire on the date “four years after the date such bankruptcy judge was
last appointed to such office or on October 1, 1986, whichever is later.”
Although the President decided to sign the bankruptcy bill, he included the
following language in his signing statement:
I sign this bill with the following additional reservations. I
have been informed by the Department of Justice that the provi­
sions in the bill seeking to continue in office all existing bank­
ruptcy judges are inconsistent with the Appointments Clause of
the Constitution. I am also advised that Administrative Office of
the U.S. Courts has reached the same conclusion. Therefore, I
sign this bill after having received assurances from the Adminis­
trative Office that bankruptcy cases may be handled in the
courts without reliance on those invalid provisions. At the same
time, however, I urge Congress immediately to repeal the un­
constitutional provisions in order to eliminate any confusion
that might remain with respect to the operation of the new
bankruptcy system.
On July 27,1984, the Director of the Administrative Office of the United States
Courts issued a memorandum to all courts of appeals, district courts, and
former bankruptcy judges in which he stated that the 1984 Act “may not be
constitutionally valid.” Because of the “inherent risk of the invalidation of
judicial actions taken by bankruptcy judges,” the Director concluded:
I have therefore decided, upon advice of my General Counsel,
and in accordance with my responsibilities under section 604 of
2 (. . . continued)
office." Pub. L. No. 9 5 -5 9 8 , § 404(b), 92 Stat. 2549, 2683 (1982) (em phasis added). Thus, it is arguable that
under these o riginal provisions the appointm ents o f th e “transition’' bankruptcy judges would have continued
on even a fte r the expiration of the transition provisions. All four o f the extension acts, how ever, contained
specific provisions that declared that th e term o f office o f the transition bankruptcy judges w ould expire at the
conclusion o f the extension period. See, e.g., Pub. L. No. 98 -249, § 2, 98 Stat. 116, 116 (1984). Thus we
believe these actions by Congress m ade clear that the offices o f bankruptcy judges expired at the end o f the
extension period.
186
title 28 of the United States Code, that I will not approve
payment of salary to any former bankruptcy judge purporting to
exercise judicial authority under the provisions contained in
section 121.
Although the Administrative Office subsequently decided not to" withhold the
pay of the former bankruptcy judges, its position on the constitutionality of the
provision has not been altered. It was the apparent intent of the Administrative
Office that the bankruptcy system continue to operate with the prior bank­
ruptcy judges’ functioning in the manner of magistrates or consultants to assist
the district courts until remedial legislation could be obtained when Congress
returned from its recess, or until the courts of appeals could exercise their
authority under the 1984 Act to appoint new bankruptcy judges to 14 year
terms. The latter process, because of the appointment procedures imposed upon
the courts, was expected to take at least two months.
n.
It is beyond dispute that Congress could not constitutionally appoint bank­
ruptcy judges. The Appointments Clause of the Constitution, art. II, § 2, cl. 2,
provides that the President:
shall nominate, and by and with the Advice and Consent of the
Senate, shall appoint Ambassadors, other public Ministers and
Consuls, Judges of the Supreme Court, and all other Officers of
the United States, whose Appointments are not herein otherwise
provided for, and which shall be established by Law: but the
Congress may by Law vest the Appointment of such inferior
Officers, as they think proper, in the President alone, in the
Courts of Law, or in the Heads of Departments.
In Buckley v. Valeo, 424 U.S. 1 (1976), the Court held that “any appointee
exercising significant authority pursuant to the laws of the United States” is an
officer of the United States who must be appointed in accordance with the
Appointments Clause. Id. at 126. The Court also explicitly held that neither
Congress nor its officers may appoint officers of the United States. Id. at 127.
This prohibition is not altered by Congress’ plenary power to establish
“uniform laws on the subject of Bankruptcies throughout the United States”
under Article 1, § 8 of the Constitution. Thus, the Court in Buckley held:
The position that because Congress has been given explicit
and plenary authority to regulate a field of activity, it must
therefore have the power to appoint those who are to administer
the regulatory statute is both novel and contrary to the language
of the Appointments Clause. Unless their selection is elsewhere
provided for, all Officers of the United States are to be appointed
in accordance with the Clause.
187
Id. at 132. Likewise, the Court ruled that the Necessary and Proper Clause of
the Constitution cannot authorize Congress to do what the Appointments
Clause forbids. Id. at 134—35.
However, Congress did not purport in the Grandfather Provisions to make
appointments, but rather only to extend the terms of persons previously ap­
pointed in accordance with the Constitution. Had Congress extended the terms
before they expired on June 27, 1984, a different and more difficult issue would
be presented. See Myers v. United States, 272 U.S. 52, 128-29 (1926) (Con­
gress may prescribe duties, terms and compensation for public offices); Shoe­
m aker \ . United States, 147 U.S. 282 (1893) (Congress may add new duties that
are germane to the functions already performed by a current officer of the
United States). Thus, while a congressional extension of the term of an appoint­
ment could well raise constitutional questions, it would be qualitatively differ­
ent than what Congress did in the 1984 Act. Here it is clear that both the terms
of bankruptcy judges and their offices expired on June 27, 1984, two days
before Congress enacted the Grandfather Provisions and nearly two weeks
before the President signed them into law. Thus, the effect of Congress’ action
was to reinstate and recreate officers of the United States whose status as such
had terminated, albeit only for a short period. The critical issue, therefore, is
whether Congress may constitutionally achieve this result by purporting to
extend retroactively the offices and terms of the bankruptcy judges who were
sitting on June 27. While credible arguments can be made in favor of the
validity of Congress’ action, we conclude that this aspect of the 1984 Act
violates the Appointments Clause.
The Supreme Court has recognized that the Appointments Clause is a direct
limitation on Congress’ power and essential to the operation of the separation of
powers established by the Framers of the Constitution. Buckley v. Valeo, 424
U.S. at 118-19. Thus, the Court has held that the limitations imposed by the
Appointments Clause must be strictly construed, stating:
that Article II excludes the exercise of legislative power by
Congress to provide for appointments and removals, except only
as granted therein to Congress in the matter of inferior offices
. . . and that the provisions of the second section of Article II,
which blend action by the legislative branch, or by part of it,
Senate advice and consent in the work of the executive, are
limitations to be strictly construed and not to be extended by
implication . . . .
M yers v. United States, 272 U.S. at 164.
The Court’s decisions concerning efforts to reinstate former officers of the
United States reflect this strict construction. In Mimmack v. United States, 97
U.S. 426 (1878), for example, the President accepted the resignation of an army
captain on November 8,1868, but attempted to revoke his acceptance about one
month later, on December 11, 1868. The Court held that the attempted revoca­
tion was invalid, stating:
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Officers of this kind are nominated by the President and con­
firmed by the Senate; and if the petitioner ceased to be such an
officer when notified that his resignation had been accepted, it
requires no argument to show that nothing could reinstate him in
the office short of a new nomination and confirmation.
Id. at 437. It is noteworthy that in this context the attempted action would have
constituted a Presidential evasion of legislative prerogatives. The 1984 Act
reflects an attempted Legislative Branch encroachment into authority lodged in
other Branches.
The Court considered an analogous situation in United States v. Corson , 114
U.S. 619 (1885). In that case, President Lincoln dismissed a military officer
from the service on March 27, 1865. Shortly thereafter, on June 9, 1865,
President Johnson revoked the order of dismissal and restored the officer to his
former position. The Court found that as a result of President Lincoln’s order,
the officer “was disconnected from that branch of the public service as com­
pletely as if he had never been an officer of the army.” Id. at 621. Accordingly,
the Court held that the Appointments Clause barred President Johnson from
reinstating the officer save with the advice and consent of the Senate, stating:
The death of the incumbent could not more certainly have made
a vacancy than was created by President Lincoln’s order of
dismissal from the service. And such vacancy could only have
been filled by a new and original appointment, to which, by
the Constitution, the advice and consent of the Senate were
necessary . . . .
Id. at 622. See also Blake v. United States, 103 U.S. 227, 237 (1880) (“Having
ceased to be an officer in the army, he could not again become a post chaplain,
except upon a new appointment, by and with the advice and consent of the
Senate.”).
These precedents teach that from the moment an incumbent loses his status
as an officer of the United States, he cannot be restored to office save by a new
appointment in accordance with the Appointments Clause. While these particu­
lar cases protect the Senate’s right under the Appointments Clause to consent to
appointments, we see no principled basis for finding the President’s appoint­
ment power to be entitled to less protection in the context of an attempt by
Congress to exercise that power. In fact, these cases show that the Court has been
sensitive to erosion of the separation of powers principles at stake, which principles
act neutrally to protect the process rather than any particular office holder.
Indeed, Congress by its actions has acknowledged that it lacks power to
reappoint an officer of the United States. Thus, Congress has on occasion
changed the retirement pay of military officers by retroactively changing their
rank as of the date of their retirement, but has recognized that it cannot place an
officer who was discharged from service on the retired list without first provid­
ing for his reappointment:
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Congress has frequently exercised the power of changing the
mere rank of officers without invoking the constitutional power
of the Executive to appoint the incumbents to new offices. But
when it has been the purpose to place on the retired list one who
has been discharged from service, who no longer holds any
office in the Army, Congress has provided for his restoration or
reappointment in the manner pointed out by the Constitution, gener­
ally by the President alone, and then has authorized his retirement.
Wood v. United States, 15 Ct. Cl. 151, 161 (1879), a ffd , 107 U.S. 414 (1882).
See, e.g., Collins v. United States, 14 Ct. Cl. 568, 15 Ct. Cl. 22 (1879).
A much more recent case, United States v. Will, 449 U.S. 200 (1980), also
supports the conclusion that direct constitutional limitations on congressional
power will be strictly enforced. In that case, the Court considered a statute
repealing a scheduled cost of living salary increase forjudges. One of the four
separate measures under consideration in Will became law when signed by the
President on October 1,1976, hours after the increase took effect. Although no
judge ever received the increased salary, and although the statute would have
been constitutional if it had been signed by the President a few hours earlier, the
Court held that the statute violated the Compensation Clause because it pur­
ported to repeal a salary increase technically already in force. 449 U.S. at 225.
In reaching this result, the Court noted, “ “‘[w]henever it becomes important to
the ends of justice, or in order to decide upon conflicting interests, the law will
look into fractions of a day, as readily as into fractions of any other unit of
time.’” ” Id. at 225 n.29 (quoting Louisville v. Savings Bank, 104 U.S. 469,474—
75 (1881) (quoting G rosvenor\. Magill, 37 111. 239, 24041 (1865))).
This principle that direct constitutional limitations on the powers of a Branch
of Government, here Congress, must be strictly enforced distinguishes the cases
in which the Court has upheld retroactive statutes. E.g., Pension Benefit Guar­
anty Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984); United States v. Darusmont,
449 U.S. 293 (1981). These cases concern the limits on retroactive economic
legislation imposed by the Due Process Clause, not an explicit constitutional
limitation on congressional power central to the separation of powers. We are
not aware of any case in which the Court has allowed Congress to accomplish
by indirection, through the guise of retroactive legislation, what it could not do
directly under the Constitution.
While the conclusion that the moment an officer of the United States loses his
status as such he cannot be reinstated except in accordance with the Appoint­
ments Clause is admittedly a technical one, it is no more technical than the Will
Court’s holding that a judicial salary increase is fully protected by the Compen­
sation Clause the moment it takes effect. Moreover, the Court embraced pre­
cisely this construction of the Appointments Clause with respect to limitations
on Presidential power in Mimmack, Corson and Blake. The Supreme Court has
not hesitated to enforce structural provisions of the Constitution in their techni­
cal sense, undoubtedly because it is extremely difficult to locate a stopping
190
point once the initial erosion is permitted. Here, if a two-week hiatus were to be
tolerated, where would the line be drawn? A great deal of uncertainty and
litigation would undoubtedly follow. On the other hand, requiring Congress to
act, if it wishes to do so, before legislation expires, is not unduly burdensome.
Here, for example, Congress extended the terms of the bankruptcy judges four
times before it finally failed to meet its own deadline.
One could argue against this reading of the Appointments Clause that the
values protected by that provision are not implicated by Congress’ action at
issue here. In this regard, it is significant that the persons whose terms were
extended were initially appointed in accordance with the Appointments Clause,
and that Congress extended the terms of all sitting bankruptcy judges without
attempting to evaluate the wisdom of retaining any particular individual. More­
over, Congress acted on an emergency basis in the face of perceived potential
disruption of the bankruptcy system. However, the fact that the initial appoint­
ments were made in accordance with the Constitution does not distinguish Mimmack,
Corson and Blake. Furthermore, an emergency cannot create powers not afforded a
particular branch of Government under the Constitution. Youngstown Sheet and
Tube Co. v. Sawyer, 343 U.S. 579 (1952) (President’s seizure of steel mills during
Korean War held unconstitutional as violation of separation of powers).
For these reasons, we conclude that once the terms and offices of the
bankruptcy judges expired on June 27, 1984, those officers could not be
reinstated except by a new appointment made in accordance with the Appoint­
ments Clause. Congress could not evade this requirement through the fiction of
retroactively extending the terms of the judges who were sitting on that date.
While this conclusion may appear to some to be technical and restricts a
convenient and efficient mechanism for dealing with an emergency, we believe
that it is correct in light of the language and intent of the Constitution as
interpreted by the Supreme Court. As the Court stated in INS v. Chadha, 462
U.S. 919(1983):
The choices we discern as having been made in the Constitu­
tional Convention impose burdens on governmental processes
that often seem clumsy, inefficient, even unworkable, but those
hard choices were consciously made by men who had lived
under a form of government that permitted arbitrary governmen­
tal acts to go unchecked. There is no support in the Constitution
or decisions of this Court for the proposition that the cumber­
someness and delays often encountered in complying with ex­
plicit Constitutional standards may be avoided, either by the
Congress or by the President.
Id. at 959.
III.
The Supreme Court has consistently held that whether an unconstitutional
provision may be severed from a statutory scheme is a matter of congressional
191
intent, and that the invalid portions of a statute should be severed “unless it is
evident that the legislature would not have enacted those provisions that are
within its power, independently of that which is not.” Champlin Refining Co. v.
Corporation C om m ’n , 286 U.S. 210, 234 (1932). See, e.g., Buckley v. Valeo,
424 U.S. at 108. In reaffirming these principles in INS v. Chadha, the Court
identified three basic principles with respect to severability. First, the Court
reiterated the basic rule, stating:
Only recently this Court reaffirmed that the invalid portions of
a statute are to be severed ‘“ unless it is evident that the Legisla­
ture would not have enacted those provisions which are within
its power, independently of that which is not.’” Buckley v. Valeo,
424 U.S. 1, 108 (1976), (quoting Champlin Refining Co. v.
Corporation Comm’n, 286 U.S. 210, 234 (1932)).
462 U.S. at 931-32. Second, the Court stated that a severability clause is strong
evidence that Congress did not intend for the entire statute to fall when one of
its provisions is held to be unconstitutional. Accordingly, the presence of such a
clause in the statutory scheme reinforces the presumption of severability. Id.Finally, the Court held that “a provision is further presumed severable if what
remains after severance is ‘fully operative as a law.’ Champlin Refining Co. v.
Corporation C om m ’n, supra, 286 U.S. at 234.” 462 U.S. at 934,
Applying these principles, we conclude that the Grandfather Provisions of
the 1984 Act are severable. We have been unable to locate anything in the
language of the 1984 Act or its legislative history tending to rebut the usual
presumption of severability. To the contrary, § 119 provides:
If any provision of this Act or the application thereof to any
person or circumstance is held invalid, the remainder of this Act,
or the application of that provision to persons or circumstances
other than those as to which it is held invalid, is not affected
thereby.
This severability clause is, as noted above, persuasive evidence of congres­
sional intent.
Finally, the remaining provisions of the 1984 Act would be “fully operative
as a law” in the absence of the Grandfather Provisions. Under § 104 of the 1984
Act, bankruptcy judges are to be appointed by the courts of appeals for the
circuits in which the judgeships are located. The Grandfather Provisions are
designed to facilitate the transition to appointments by the court of appeals by
providing a temporary starting corps of judges. If the Grandfather Provisions
are invalidated, the courts of appeals could appoint bankruptcy judges in
accordance with the appointment scheme created by the 1984 Act. The courts of
appeals would determine whether to reappoint some or all of the bankruptcy
judges who were sitting on June 27,1984. But whatever the courts’ decisions in
this regard, the bankruptcy court structure and the substantive provisions of
bankruptcy law established by the 1984 Act would remain in place. Moreover,
192
because § 101 of the 1984 Act assigns plenary jurisdiction over bankruptcy
matters to the federal district courts, they will be able to establish suitable
arrangements for handling bankruptcy cases pending appointment of bank­
ruptcy judges by the courts of appeals. Thus, the 1984 Act could operate fully
without the Grandfather Provisions. For these reasons, we conclude that the
Grandfather Provisions are severable.
IV.
The President and his subordinates have a constitutionally imposed duty “to
take Care that the Laws be faithfully executed.” U.S. Const, art. II, § 3. Attor­
neys General have generally construed this obligation to include the enforce­
ment and the defense in court of laws enacted by Congress irrespective of
questions that have been or might be raised regarding their constitutionality:
[I]t is not within the province of the Attorney General to declare
an Act of Congress unconstitutional at least, where it does not
involve any conflict between the prerogatives of the legislative
department and those of the executive department and that when
an act like this, of general application, is passed it is the duty of
the executive department to administer it until it is declared
unconstitutional by the courts.
31 Op. Att’y Gen. 475, 476 (1919). See also , e.g., 40 Op. Att’y Gen. 158
(1942); 39 Op. Att’y Gen. 11 (1937); 38 Op. Att’y Gen. 252 (1935); id. at 136
(1934); 36 Op. Att’y Gen. 21 (1929).
Like the courts, the Executive should (and does) apply a presumption in favor
of the constitutionality of a federal statute. E.g., INS v. Chadha, 462 U.S. 919,
944 (1983). Members of Congress take an oath to uphold the Constitution, and
the Executive should presume that, in passing legislation, Members of Congress
have acted with due regard for their responsibilities to the Constitution. See
Rostker v. Goldberg, 453 U.S. 57, 64 (1981).
The Executive’s duty faithfully to execute the law and recognition of the
presumption of constitutionality generally accorded duly enacted statutes result
in all but the rarest of situations in the Executive’s enforcing and defending
laws enacted by Congress. United States v. Lee, 106 U.S. 196,220 (1882) (“No
officer of the law may set that law at defiance with impunity. All the officers of
the government, from the highest to the lowest, are creatures of the law, and are
bound to obey it.”).
There are sound reasons of policy for this general practice. Our constitutional
system is delicately balanced by the division of power among the three Branches
of the Government. Although each Branch is not “hermetically” sealed from the
others, Buckley v. Valeo, 424 U.S. at 121, and certain areas of overlapping
responsibility may be identified, the quintessential functions of each Branch
may be easily stated. It is axiomatic that the Legislature passes the laws, the
Executive executes the laws, and the Judiciary interprets the laws. Any decision
193
by the Executive that a law is not constitutional and that it will not be enforced
or defended tends on the one hand to undermine the function of the Legislature
and, on the other, to usurp the function of the Judiciary. It is generally inconsis­
tent with the Executive’s duty, and contrary to the allocation of legislative
power to Congress, for the Executive to take actions that have the practical
effect of nullifying an Act of Congress. It is also generally for the courts, and
not the Executive, finally to decide whether a law is constitutional. Any action
of the President that precludes, or substitutes for, a judicial test and determina­
tion would at the very least appear to be inconsistent with the allocation of
judicial power by the Constitution to the courts.
Exceptions to this general rule, however rare, do and must exist. These arise
whenever the role of enforcing and defending a federal statute may not suffi­
ciently discharge the Executive’s constitutional duty. The President’s veto
power will usually be adequate to express and implement the President’s
judgement that an act of Congress is unconstitutional. By exercising his veto
power, the President may fulfill his responsibility under the Constitution and
also impose a check on the power of Congress to enact statutes that violate the
Constitution. On some occasions, however, the exercise by the President of his
veto power may not be feasible. For example, an unconstitutional provision
may be a part of a larger and vitally necessary piece of legislation. The Supreme
Court has held that the President’s failure to veto a measure does not prevent
him subsequently from challenging the Act in court, nor does Presidential
approval of an enactment cure constitutional defects. National League o f Cities
v. Usery, 426 U.S. 833, 841 n.12 (1976); Myers v. United States, 272 U.S. 52(1926).
Cases in which the Executive has chosen not to defend an Act of Congress
may be placed in one of two categories. One category of cases involves statutes
believed by the Executive to be so clearly unconstitutional as to be indefensible
but which do not trench on separation of powers. Refusals to execute or defend
statutes based upon a determination that they meet these criteria are exceed­
ingly rare.3
3 O ur research has uncovered only three docum ented situations o f this nature, although we cannot be sure
there are not o thers, because informal (or e v en formal) decisions not to execute statutes would not necessarily
be recorded in such a w ay as to make them accessible to us. And, if the Executive refused to enforce or defend
the statute, the m atter may never have co m e to the courts, o r if it did, would have been unlikely to leave a
prom inent mark.
The first instance o f refusal to defend su ch a statute that we have located occurred in 1962 in the context o f
a private civil rights action contesting th e constitutionality o f a federal law that provided federal funds for
hospitals having “separate but equal facilities.'* In that case, Simpkins v. Moses H. Cone Memorial Hospital,
211 F. Supp. 628, 640 (M .D .N .C. 1962), rev'd, 323 F.2d 959 (4th C ir. 1963), cert, denied, 376 U.S. 938(1964), the U nited States intervened an d took the position that the statute in question, then 42 U.S.C.
§ 299e(f), w as unconstitutional.
O n O cto b er 11, 1979, form er Attorney G eneral C iviletti, over the strong objection o f this O ffice, notified
C ongress by identical letters to the S peaker o f the H ouse and the President pro tempore of the Senate that the
D epartm ent w ould not defend § 399(a) o f the Public Broadcasting Act o f 1967, 47 U.S.C. § 399(a). That
decision w as reversed by you in your le tte r to C hairm an Thurm ond and Senator Biden o f the Senate
C om m ittee on the Judiciary o f April 6, 1981. The Suprem e C ourt subsequently struck down, by a narrow 5 -
C ontinued
194
The other category involves statutes that the Executive believes are uncon­
stitutional (although not necessarily so clearly unconstitutional as statutes
falling in the first category) and that usurp executive authority and therefore
weaken the President’s constitutional role. The following statement of Presi­
dent Andrew Johnson’s counsel in an early recorded statement addresses the
President’s responsibilities with respect to the second of these categories:
If the law be upon its very face in flat contradiction of plain
expressed provisions of the Constitution, as if a law should
forbid the President to grant a pardon in any case, or if the law
should declare that he should not be Commander-in-Chief, or if
the law should declare that he should take no part in the making
of a treaty, I say the President, without going to the Supreme
Court of the United States, maintaining the integrity of his
department, which for the time being is entrusted to him, is
bound to execute no such legislation; and he is cowardly and untrue
to the responsibility of his position if he should execute it.
2 Trial o f Andrew Johnson 200 (Washington 1868). This statement, of course,
was made in the context of the attempt to impeach President Johnson for, inter
alia , having refused to obey the Tenure in Office Act, an act “which he
believed with good reason . . . to be unconstitutional.” 38 Op. Att’y Gen. 252,
255 (1935).
This early statement anticipated a practice that has subsequently been fol­
lowed by the Executive under which the President need not blindly execute or
defend laws enacted by Congress if such laws trench on his constitutional
power and responsibility. Of course, under that practice the President is obli­
gated to respect and follow the decisions of the courts as the ultimate arbiters of
the Constitution.
This category of cases exists because, in addition to the duty of the President
to uphold the Constitution in the context of the enforcement of Acts of Con­
gress, the President also has a constitutional duty to protect the Presidency from
encroachment by the other Branches. He takes an oath to “preserve, protect and
defend” the Constitution. An obligation to take action to resist encroachments
on his institutional authority by the Legislature may be implied from that oath,
especially where he may determine it prudent to present his point of view in
court. In this regard, we believe that the President must, in appropriate circum­
stances, resist measures which would impermissibly weaken the Presidency:
“The hydraulic pressure inherent within each of the separate Branches to
3 ( . . . continued)
4 vote, that aspect o f § 399(a) w hich had been view ed by this O ffice in 1979 as least susceptible to a credible
defense, in contrast to the other provisions which we believed to be clearly defensible. See FCC v. League o f
Women Voters o f California, 468 U.S. 364 (1984).
Finally, on January 13, 1981 form er A ttorney General C iviletti, with the concurrence o f this O ffice,
inform ed Congress by identical letters to the Speaker o f the House and the President pro tempore o f the
Senate that the D epartm ent w ould not prosecute, under 18 U.S.C. § 1461 and 39 U.S.C. § 3001(e), the
mailing o f truthful, oon-deceptive advertising regarding legal abortions.
195
exceed the outer limits of its power, even to accomplish desirable objectives,
must be resisted.” INS v. Chadha, 462 U.S. at 951 (emphasis added).
This duty to preserve the institution of the Presidency, captured above in the
words of President Andrew Johnson’s counsel, was articulated eloquently and
somewhat more authoritatively by Chief Justice Chase, who presided over the
trial in the Senate of President Johnson. Chief Justice Chase declared that the
President had a duty to execute a statute passed by Congress which he believed
to be unconstitutional “precisely as if he held it to be constitutional.” However,
he added, the President’s duty changed in the case of a statute which
direcdy attacks and impairs the executive power confided to
him by [the Constitution]. In that case it appears to me to be the
clear duty of the President to disregard the law, so far at least as
it may be necessary to bring the question of its constitutionality
before the judicial tribunals.
* * *
How can the President fulfill his oath to preserve, protect, and
defend the Constitution, if he has no right to defend it against an
act of Congress, sincerely believed by him to have passed in
violation of it?
R. Warden, A n Account o f the Private Life and Public Services o f Salmon
Portland Chase 685 (1874) (emphasis in original).4 If the President does not
resist intrusions by Congress into his sphere of power, Congress may not only
successfully shift the balance of power in the particular case but may succeed
in destroying the Presidential authority and effectiveness that would otherwise
act as a check on Congress’ exercise of power in other circumstances.
The major historical examples of refusal by the Executive to enforce or
defend an Act of Congress have been precipitated by Congress’ attempt to alter
the distribution of constitutional power by arrogating to itself a power that the
Constitution does not confer on Congress but, instead, reposes in the Executive.
In such situations, a fundamental conflict arises between the two Branches, and
this conflict has generally resulted in Attorneys General presenting to the
courts the Executive’s view of what the Constitution requires. The potential for
such a conflict’s arising was expressly recognized by Attorney General Palmer
in 1919 when he issued the opinion, quoted above, that the general duty of the
Attorney General to enforce a statute did not apply in the case of a conflict
between the Executive and the Legislature. See 31 Op. Att’y Gen. 475, 476
(1919).
Seven years later, this caveat to the general rule was applied when the
President acted contrary to a statute prohibiting the removal of a postmaster.
That act led to litigation in which the Executive challenged, successfully, the
4 C h ie f Ju stice C h a se 's comments w ere m ade in a letter w ritten the day after the Senate had voted to exclude
evidence that the entire cabinet had advised President Johnson that the Tenure of O ffice Act w as unconstitu­
tional. Id. See M. B enedict, The Impeachment and Trial o f Andrew Johnson 154-55 (1973). U ltim ately, the
S enate did adm it evidence that the President had desired to initiate a court test of the law. Id. at 156.
196
constitutionality of that statute in litigation brought by the removed postmaster.
Myers v. United States, 272 U.S. 52 (1926). Myers appears to be the first case
in which the Executive acted contrary to and then directly challenged the
constitutionality of a federal statute in court:
In the 136 years that have passed since the Constitution was
adopted, there has come before this Court for the first time, so
far as I am able to determine, a case in which the government,
through the Department of Justice, questions the constitutional­
ity of its own act.
Id. at 57 (summary of oral argument of counsel for appellant Myers).5
Almost a decade later, the Executive argued, unsuccessfully, that § 1 of the
Federal Trade Commission Act would be unconstitutional if interpreted to
prohibit the President’s removal of a member of the Federal Trade Commission.
Humphrey’s Executor v. United States, 295 U.S. 602 (1935). A similar argu­
ment was advanced, again unsuccessfully, by the Executive with respect to an
analogous removal issue in the case of Wiener v. United States, 357 U.S. 349(1958). Between these two cases, the Executive carried out, but then refused to
defend when sued, and indeed successfully challenged the constitutionality of, a
statute that directed that the salaries of certain federal employees not be paid.
United States v. Lovett, 328 U.S. 303 (1946).6 In 1976, the Appointments
Clause was once again at issue when the Executive challenged, successfully,
the appointment of members of the Federal Election Commission by officers of
Congress. Buckley v. Valeo, 424 U.S. 1 (1976).
In addition to these examples, there have been and continue to be a number
of cases involving the constitutionality of so called legislative veto devices in
which the Executive has successfully challenged the constitutionality of legisla­
tive vetoes. Representative of this class of cases is, of course, INS v. Chadha,
462 U.S. 919 (1983). As is true of the other cases discussed above, the Court has
never suggested that there has been any impropriety in the Executive’s conduct.7
5 It is perhaps notew orthy that this summary o f the argum ent o f appellant M yers' counsel goes on to record
counsel's view that as to the appearance o f the D epartm ent o f Justice in opposition to the statute, “I have no
criticism to offer; I think it is but proper." Further, that summary o f the oral argum ent does not record any
observations w hatsoever on this point by Senator G eorge W harton Pepper, who appeared as counsel for the
Senate and H ouse o f R epresentatives as amicus curiae See 272 U.S. at 65-77.
6 The Suprem e C ourt decided that the statute in question was unconstitutional as a bill o f attainder, a
constitutional defect not necessarily suggesting a clash between legislative and executive pow er. Because the
statute w as directed at subordinates o f the President, however, the case took on that characteristic both as
regards the bill o f attainder issue and, more specifically, with respect to the argum ent advanced by the
em ployees and jo in ed in by the Solicitor General that the statute at issue constituted an unconstitutional
attem pt by Congress to exercise the pow er to remove Executive B ranch em ployees See B rief for the U nited
States at 10, 56, United States v. Lovett. 328 U.S. 303 (1946) (No. 809). Thus, Lovett falls squarely w ithin the
second category o f cases as representing a clash betw een legislative and executive power.
7 On July 30, 1980 Attorney General Civiletti transm itted to Chairman Baucus of the Subcom m ittee on
Lim itations o f C ontracted and D elegated A uthority o f the Senate Com m ittee on the Judiciary a detailed
explanation o f this D epartm ent's policy with regard to defending federal statutes against constitutional
challenges. It is perhaps notew orthy that in his letter to the Attorney General, as observed by the Attorney
General in his response, Chairman B aucus had excluded from his broad inquiry “those situations where the
Continued
197
The general policy outlined above was rearticulated during this Administra­
tion in your letter of April 6, 1981, to Chairman Thurmond and Senator Biden
of the Senate Committee on the Judiciary in response to their request that the
Department reconsider its decision not to defend a provision of the Federal
Communications Act being challenged in a case brought by the League of
Women Voters in 1979. See supra note 2. That letter stated your view that
the Executive “appropriately refuses to defend an Act of Congress only in the
rare case when the statute either infringes on the constitutional power of the
Executive or when prior precedent overwhelmingly indicates that the statute is
invalid.”
As indicated by our discussion of the merits of the constitutionality of
§§ 106 and 121 of the Bankruptcy Amendments and Federal Judgeship Act of
1984 in part II above, the practical and legal effect of those provisions is to
grant Congress the power to appoint officers of the United States. It is true that
under the 1984 Act the power to make fresh appointments is vested in the
courts rather than in the President or a head of a department. It is also true that
bankruptcy referees whose terms were purportedly retroactively extended by
the 1984 Act were themselves appointed by the district courts both prior to
1978 and under the transition provision of the 1978 Act. Thus, an argument
could be made that the action o f Congress in this situation does not infringe so
directly on the power of the President as to place this particular enactment in
the category of statutes thought to invade the prerogatives of the Executive.
That argument is, however, untenable.
There can be no doubt that in the 1984 Act Congress could have placed the
appointment power in the President, with or without the advice and consent of
the Senate, the Heads of Departments, or the Courts pursuant to the Appoint­
ments Clause. If it were established that Congress could indeed make appoint­
ments in the manner they are made by the 1984 Act, there surely would be no
principled basis upon which that power could be limited under the Appoint­
ments Clause to the appointment of officers whose appointments were gener­
ally assigned to the courts as opposed to the President or Heads of Depart­
ments. Thus, the principle of constitutional law involved squarely implicates
the constitutional prerogatives of the Executive and warrants a challenge to the
1984 Act on this point by the Executive under the precedent discussed with
respect to the second category of situations in which the Executive has histori­
cally refrained from defending the constitutionality of an Act of Congress. The
inescapable fact is that if Congress may, as Congress would have it, retroac­
tively extend the term of an officer of the United States whose term has expired,
Congress presumptively could do so as regards any officer, thereby depriving
7 ( . . . continued
A cts them selves touch on constitutional separation o f pow ers between Executive and Legislative Branches.”
G iven the otherw ise broad nature of C hairm an B aucus’ inquiry and the pendency o f Chadha in the United
States C ourt o f A ppeals for th e Ninth C irc u it, it would be reasonable to infer from his request an absence of
concern as regards the A ttorney G eneral's challenge to the constitutionality o f such devices
198
the President or his subordinates of the important control they exercise through
the appointment process.8
We would add that this is not a case in which the Department’s refusal to
enforce or defend might produce a nullification of the Act of Congress which no
private person could prevent nor Congress effectively challenge. Although it is
not necessary to conclude that the obligation to defend the statute would be
different in the absence of a lawsuit previously filed by private persons, given
the fact that such a lawsuit has been filed, and that the courts will determine the
constitutional issue, we believe that the constitutional system will be better
served by early rather than delayed resolution of the issue.
Therefore, we believe that this is a case in which the Department, amply
supported by prior precedent, should depart from its usual practice of defending
the constitutionality of federal statutes. We recommend that an appropriate
letter be sent to the President of the Senate and the Speaker of the House to
inform them of the Department’s decision to defend the constitutionality of the
1984 Act as a whole, but to refrain from defending the constitutionality of the
Grandfather Provisions.
T h eo do re B. O lson
Assistant Attorney General
Office o f Legal Counsel
8 Indeed, if C ongress could retroactively extend the term s o f officers w hose terms have expired. Congress
could arguably not only arrogate to itself, as it does here, the pow er to appoint, but could exercise that pow er
even in the context o f an o ffice’s having been filled in the interim by the President pursuant to his authority to
m ake recess appointm ents; on such a hypothetical set o f facts. C ongress would not only have purported to
appoint one o fficer but would, in doing so, have purported to remove another.
199