Do Bankruptcy Judges Belong in Chambers? Rethinking Inherent Civil Contempt Power in Bankruptcy

In recent years, the Supreme Court of the United States has recognized limitations on the adjudicatory authority of the bankruptcy judge in certain contexts. In the face of this seeming erosion in the previously presumed power of the bankruptcy judge, the time is ripe to consider areas in which a bankruptcy judge’s adjudicatory authority may be further challenged. Inherent civil contempt power is one such area. Contempt power in the bankruptcy context has been murky since the creation of the non-Article III bankruptcy court in 1978. While today, courts generally agree that bankruptcy judges possess (at least some) inherent civil contempt power, this conclusion often rests on the extension of Article III case law on inherent contempt power—most notably, Chambers v. NASCO. However, a close examination of Chambers calls into question the soundness of this extension. This Article contributes scholarship on the history of how federal statutes and rules have treated contempt in the bankruptcy context—a strange story marked by the creation of non-statutory “judges,” the questionable vesting of adjudicatory authority in non-judges, the application of Article III case law to a non-Article III court, and the promulgation of federal rules that brought confusion and inconsistency—the ghosts of which still haunt bankruptcy law. It then examines the current state of the law on inherent civil contempt in bankruptcy, including the application of Chambers, and ultimately calls for the abandonment of the Chambers-based approach. It argues instead for an approach based on a theory of implicit delegation of the inherent contempt power of the district court to its bankruptcy judges. The implicit delegation-based approach is consonant with the jurisdictional and referral statutes that govern the district court’s relationship with its bankruptcy judges, does not offend constitutional concerns, and puts to rest much of the search for the “limits” of a bankruptcy judge’s inherent civil contempt power.