In a 10-2 decision, the U.S. Court of Appeals for the Federal Circuit has found that Congress cannot revoke cost-of-living adjustments promised to federal judges in the Ethics Reform Act of 1989, reversing the court’s holding to the contrary in 2001. 

Six current and retired federal judges sued over Congress’ decision to block cost-of-living adjustments in the past and whether legislation passed after the court’s 2001 decision overrode provisions of the 1989 law.

In the October 5 decision, the court found that Congress had violated the Compensation Clause of the Constitution, which aims to protect judicial independence by limiting the ability of the other branches of government from reducing judges’ salaries. If Congress wanted to amend the 1989 law, the judges wrote, it could, but not in a way that affected any sitting judges.

“Congress committed to providing sitting and prospective judges with annual COLAs in exchange for limiting their ability to seek outside income and to offset the effects of inflation. This decision furthered the Founders’ intention of protecting judges against future changes in the economy,” Chief Judge Randall Rader wrote. By blocking cost-of-living adjustments in the 1990s, he added, “Congress broke this commitment and effected a diminution in judicial compensation.”

Finally, the court found that a 2001 amendment to an appropriations rider requiring congressional authorization to increase judicial salaries after December 1981 didn’t preclude the 1989 law’s requirements.

“The judiciary, weakest of the three branches of government, must protect its independence and not place its will within the reach of political whim,” Rader wrote. “The precise and definite promise of COLAs in the 1989 Act triggered the expectation-related protections of the Compensation Clause. As such, Congress could not block these adjustments once promised.”

The 1989 law, according to the opinion, required non-discretionary cost-of-living adjustments for judges, in exchange for limiting judges’ ability to earn outside income. The cost-of-living adjustment for judges would automatically kick in whenever an adjustment went into effect for federal employees.

After Congress blocked cost-of-living adjustments for federal judges throughout the 1990s, a group of judges filed a class action lawsuit. The Federal Circuit ruled that future salary adjustments were not considered protected “compensation” and, as a result, Congress had the discretion to block them. The Supreme Court declined to hear the case.

In a dissenting opinion, Judge Timothy Dyk, joined by Judge William Bryson, wrote that the majority opinion ran afoul of U.S. Supreme Court precedent on the issue. Dyk wrote that the high court’s 1980 opinion in United States v. Will clearly held that Congress could revoke a cost-of-living adjustment as long as it was before such an adjustment was due to be paid. The majority opinion had addressed this issue, holding that the Will case did not apply because it had to do with a different type of cost-of-living adjustment.

“In short, neither the dissent from denial of certiorari in Williams nor the Supreme Court’s remand in this case can be read as an invitation for this court to perform reconstructive surgery on Will,” Dyk wrote.

Lead counsel for the judges, Kirkland & Ellis partner Christopher Landau, said today that he and his clients are “delighted” with the decision. “The framers understood that protecting judicial pay was key to protecting judicial independence and this ruling simply recognizes that Congress must keep its statutory promises regarding judicial pay,” he said.

Brian Simkin, assistant director of the U.S. Department of Justice’s commercial litigation branch, who argued for the government, could not immediately be reached today for comment.

U.S. District Judge Royal Furgeson of the Northern District of Texas, president of the voluntary Federal Judges Association, which has supported the plaintiffs in briefs, said the decision was “correct” and “provides a thoughtful and well considered discussion of the judicial compensation issue.” He declined to comment further in light of the pending litigation.

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