(CN) - Congress illegally withheld cost-of-living salary raises from federal judges in six different years, the the Federal Circuit ruled, overturning 11-year-old precedent.
In 2009, six judges led by Peter Beer filed a class action against the United States for failing to pay certain cost-of-living adjustments in violation of the Ethics Reform Act of 1989 and the compensation clause of the U.S. Constitution.
The act requires automatic adjustment of judicial salaries each year based on the Employment Cost Index. The raise can be withheld only if severe economic conditions make the salary adjustment "inappropriate."
Congress withheld the salary adjustments for federal judges in 2007 and 2010, citing a lack of funds, but other federal employees received the cost-of-living adjustment.
Judges had challenged these actions before, but the Federal Circuit had upheld the withdrawal of promised cost-of-living adjustments in 2001.
That case, Williams v. United States, concerned unadjusted judicial wages for 1995, 1996, 1997 and 1999. When the court decided it Williams, it relied on the Supreme Court's 1980 decision in United States v. Will.
In 2010, based on Williams, the Court of Appeals shot down the judges' newer demands. It had affirmed dismissal even after the Supreme Court ordered "consideration of the question of preclusion" in 2011, but the judges finally found victory last week in a rehearing en banc.
"This court en banc now overrules Williams and instead determines that the 1989 Act triggered the Compensation Clause's basic expectations and protections," Chief Judge Randall Rader wrote for a 10-member majority.
"The founders of this nation understood the connections amongst protections for Life, Liberty, and the Pursuit of Happiness, protections for judicial independence, and protections for judicial compensation. ... As explained in The Federalist Papers, '[n]ext to permanency in office, nothing can contribute more to the independence of the judges than a fixed provision for their support,'" Rader said, quoting Alexander Hamilton.
Overturning its decision in Williams, the court held that "the 1989 act set a clear formula for calculation and implementation of those maintaining adjustments. Thus, all sitting federal judges are entitled to expect that their real salary will not diminish due to inflation or the action or inaction of the other branches of government. The judicial officer should enjoy the freedom to render decisions - sometimes unpopular decisions - without fear that his or her livelihood will be subject to political forces or reprisal from other branches of government."
Congress may set up a new scheme for paying judges and managing cost of living increases, but any changes may not affect sitting judges, the court found.
"If a future Congress wishes to undo [its] promises, it may, but only prospectively," Rader wrote. "Any restructuring of compensation maintenance promises cannot affect currently-sitting Article III judges."
On remand, the Court of Federal Claims must calculate the judges' damages and the additional compensation to which they are entitled.
"As relief, appellants are entitled to monetary damages for the diminished amounts they would have been paid if Congress had not withheld the salary adjustments mandated by the act," Rader wrote. "On remand, the Court of Federal Claims shall calculate these damages as the additional compensation to which appellants were entitled since January 13, 2003 - the maximum period for which they can seek relief under the applicable statute of limitations. In making this calculation, the Court of Federal Claims shall incorporate the base salary increases which should have occurred in prior years had all the adjustments mandated by the 1989 act had actually been made."
The majority emphasized the need to protect the separation of powers that the Constitution ensconced in the three branches of government.
"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 [cost of living adjustments] in the 1989 act triggered the expectation-related protections of the compensation clause. As such, Congress could not block these adjustments once promised."
Judge Timothy Dyk penned a 10-page dissent joined by Judge William Bryson that said the majority overstepped.
"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. "The Supreme Court may distinguish its own opinions by limiting them to their facts, or choose to overrule them, but that is not an option for this court."
Judge Kathleen O'Malley, who joined the majority opinion in full, also filed a concurring opinion joined by Judges Haldane Mayer and Richard Linn. Judge Evan Wallach authored his own concurring opinion.
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