Specialization in Judicial Decision Making: Comparing Bankruptcy Panels and Federal District Court Judges

Abstract

Federal Courts created under Article III are generalist courts. In contrast, specialized federal courts are usually created under Article I. Article I and Article III courts thus have different institutional structures and purposes. One of the most prominent of the Article I specialized courts is the United States Bankruptcy Court, the primary court for the adjudication of bankruptcy filings. Losing litigants in the Bankruptcy Court have a choice of appeals to either the generalist Federal District Court or a specialized Bankruptcy Appellate Panel (BAP) made up of three Article I bankruptcy judges from that particular circuit. In this manuscript, we examine the different rulings made in these appeals to determine if there are any systematic differences between the specialized and generalist courts. One argument used to deny specialized courts Article III status is that specialized courts, but not generalist courts, are subject to “capture” by interests who regularly litigate in these courts. We find no evidence of capture but we do find that the BAP and District Court judges both use ideological preferences in decision making. Specifically we find that conservative judges on both courts do not necessarily favor creditors over debtors, but favor business interests over the interests of individuals, regardless of creditor or debtor status.