Rethinking the Principal-agent Theory of Judging

Abstract: This Article challenges the underpinnings of the principal-agent understanding of judicial hierarchies. While principals select their agents, higher court judges usually do not select lower court judges. Moreover, while lower court judges may cast votes with an eye to the possibility of elevation to a higher court, the higher court judges who review the lower court's decisions usually do not decide whether to elevate judges. This Article empirically examines whether judicial actors behave as the theory suggests in a setting where application of the theory should be at its apex—the federal bankruptcy litigation system. Bankruptcy court judges who sit as trial judges are appointed for renewable time-limited terms by the court of appeals. Moreover, the court of appeals provides a second intermediate level of appellate review of bankruptcy court decisions. Initially, such decisions are appealed to a bankruptcy appellate panel (BAP) if the circuit has created one. BAP judges are selected from the circuit’s bankruptcy judges by the circuit’s judicial council, over which the court of appeals has dominant sway. If the principal-agent theory of judging has traction, evidence of it should exist in this setting. Our study examines the voting behavior of circuit judges and bankruptcy judges (both as trial judges and as appellate judges when sitting on the BAP) in student-loan-discharge proceedings in consumer bankruptcy cases. While we find that circuit judges’ ideological preferences predict their voting behavior, we find no evidence that bankruptcy judges’ voting conforms to circuit court preferences. These findings cast doubt on the principal-agent theory of judging.