Judge Who Axed J&J Bankruptcy Move Handed Biden a Vacancy

When Tom Ambro got a call from a friend in 1990 who mentioned “eleven-ten,” he thought it was a reference to the time rather than the section of the bankruptcy code that covers airplanes.

Ambro, then a transactional lawyer at Richards Layton & Finger in Wilmington, Del. agreed to represent aircraft financiers in Continental Airlines’ second bankruptcy.

That case, which he later argued before the US Court of Appeals for the Third Circuit, altered the trajectory of Ambro’s career, pivoting his focus to bankruptcy. He ultimately returned to the Third Circuit as a judge, where he is perhaps the foremost authority on bankruptcy law sitting on any federal appeals court.

“He’s probably forgotten more bankruptcy than many circuit judges will hope to learn,” said Bruce Markell, a former bankruptcy judge who now teaches at Northwestern University.

Ambro, 73, is still making a mark even after recently taking senior status, penning the decision that struck down a Johnson & Johnson subsidiary’s bankruptcy earlier this year.

He may not have semi-retired at all if not for the election of fellow Delawarean Joe Biden, who had shepherded Ambro’s nomination through the Senate 20 years ago. By taking senior status, Ambro handed his friend a vacancy.

“I think I owed it to my friend, who’s the president,” Ambro said during an interview in his wood-paneled, fifth-floor chambers in Wilmington.

J&J Case

The decision to strike down the J&J subsidiary’s bankruptcy was a serious shakeup to a controversial legal strategy some corporations are using to resolve mass liability through bankruptcy. The subsidiary could not receive bankruptcy benefits because it was not in financial distress, Ambro wrote.

“That opinion begins to curb some of the cleverness that parties are taking,” said Barbara Houser, former chief judge of the US Bankruptcy Court for the Northern District of Texas.

She said she admired Ambro for walking a “very careful line,” although she said some wanted him to come down harder against the J&J maneuver.

Judge Thomas Ambro of the Third Circuit

Courtesy of Judge Ambro

Ambro declined to comment on J&J because he may have to weigh in on the case again. J&J is back in bankruptcy court making a second, similar attempt at the maneuver. A judge is considering if this attempt should be dismissed, which could result in another appeal to the Third Circuit.

“There often are two quite plausible sides—you pick one, you give your rationale,” Ambro said, describing his general approach to cases.

“Sometimes it’s text, sometimes it’s the structure of a particular enactment, sometimes it’s looking at the consequences of what you’re doing,” he added. “Sometimes fairness comes in, maybe all four.”

Ambro said he borrowed from all four elements in writing the dissent in In re Philadelphia Newspapers in 2010. His view, which argued that lenders should be able to credit bid on assets, was later endorsed by the Supreme Court in a decision on another case.

Ambro said the high court’s ruling didn’t make him feel vindicated. After all, the people with whom he disagreed on the initial case are “dear friends.”

“The cases come and go, the people don’t,” he said. “And you’re there with really bright people who have interesting takes on issues and life—and people that you enjoy being with.”

Early Days

Ambro admits he didn’t know exactly where Delaware was while growing up in Cambridge, Ohio.

“In Ohio, if you said Delaware, you were thinking of Delaware, Ohio— which is north of Columbus—which is where Ohio Wesleyan is,” he said.

He was much more familiar with how many miles it took to drive to Columbus (80), Cleveland (120), and Cincinnati (183) having provided them so many times to motorists who stopped to fuel up at the gas station his father managed.

It was as an undergraduate at Georgetown University that he met Delaware-born Mary Lou, who later became his wife.

Mary Lou’s Delaware ties explain why Ambro sought out the state’s senators while looking for work on Capitol Hill during law school. He ended up with Republican Sen. William Roth when then-Sen. Biden didn’t have any openings.

Ambro also got to know the future president by attending semi-annual “Biden seminars,” where the then-senator would bring prominent figures to speak in Delaware.

He had known Biden for many years by the time the senator reached out about a vacancy on the Third Circuit in 1999.

When the other potential nominee dropped out for health reasons, Biden and Ambro discussed the vacancy at Elizabeths, a Wilmington-area pizza restaurant. He was ultimately confirmed 96-2.

Decades later, Ambro saw taking senior status as an opportunity to thank Biden.

“I am frankly very sorry to see Judge Ambro take senior status, because I think he has contributed so much to the Third Circuit and to the judiciary and law in Delaware and regionally,” Sen. Chris Coons (D-Del.) said.

Bankruptcy Practice

After Continental Airlines, Ambro began to develop a bankruptcy practice at Richards Layton.

“I grabbed a couple of folks, repurposed them into the bankruptcy area, and we just dived in,” he said.

In those days, a colleague began referring to the “Ambro Mobile”—his practice of picking up visitors from the Wilmington Amtrak station—rather than having them call a car.

It’s a courtesy that friends and colleagues still mention and one he extends to potential clerks that come to interview. These days, the “Ambro Mobile” is a black Lexus SUV.

“It’s just easier that way,” he said. “And that way, they don’t feel uncomfortable. They meet somebody who’s with them there at the station.”

Ambro brought his corporate law work ethic to the bench, often working long hours, said Intisar Rabb, a former clerk who is now a professor at Harvard Law School.

Ambro paid special attention to those who had less experience with the legal system, she said. He tried to make decisions understandable for people who were representing themselves and extended patience and kindness to young lawyers arguing before him, she added.

“He’s a brilliant jurist,” Rabb said. “He operates with a tremendous amount of precision and empathy and erudition.”

His dedication to the job came at a cost at home.

“I was never home, I worked seven days a week,” Ambro said. “I tell people it was just an illness.”

“I hope my kids have forgiven me,” he added, referring to his three children. “They’re really good people, and I credit my wife for that. But I just wasn’t home.”

An ‘Extended Family’

On an early summer day in his chambers, Ambro points at group photos of his clerks from over the years, talking through where some of them have ended up. Kenneth Polite has been leading the Justice Department’s criminal division as an assistant attorney general. Robert Parker leads the department’s criminal appellate section.

Once, while interviewing a potential clerk, Ambro asked the Yale standout why he hadn’t joined the school’s law review.

“He said, ‘All they talk about is constitutional law; nobody talks about bankruptcy.’”

“I go, ‘You’re hired.’”

The photos of clerks hang in a corridor outside his chamber’s library. Part of that corridor was expanded when the judge determined his personal office was too large.

Before the pandemic, Ambro would regularly bring his former clerks together for a reunion. The network functions as an “extended family,” Rabb said.

Last month, the judge brought his clerks to his Maryland vacation home for “Tribal Council,” where they decide which cases should get oral argument.

The judge says he’s most productive when working from the Maryland home. There, he’s less distracted by the three Notre Dame football websites he subscribes to.

Ambro said he’s more likely to grant oral argument if a case is likely to be reversed, is high-profile, has difficult facts, or tests a new theory.

By taking senior status, Ambro still gets to weigh in on those high-profile issues. He can still write opinions and plans to do five sittings instead of six.

“You get to think in this job,” Ambro said. “It’s kind of fun.”