29 September 21
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The potential for these revelations to tie the federal courts in knots for years cannot be overstated.
More than 130 federal judges have violated U.S. law and judicial ethics by overseeing court cases involving companies in which they or their family owned stock. A Wall Street Journal investigation found that judges have improperly failed to disqualify themselves from 685 court cases around the nation since 2010. The jurists were appointed by nearly every president from Lyndon Johnson to Donald Trump.
About two-thirds of federal district judges disclosed holdings of individual stocks, and nearly one of every five who did heard at least one case involving those stocks. Alerted to the violations by the Journal, 56 of the judges have directed court clerks to notify parties in 329 lawsuits that they should have recused themselves. That means new judges might be assigned, potentially upending rulings. When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family’s financial interests.
The potential for these revelations to tie the federal courts in knots for years cannot be overstated. Less than half the judges named have directed their clerks to notify the parties in 329 lawsuits, and that’s a huge tangle all on its own. Leave that aside for the moment. Some of the examples presented by the Journal are positively garish.
When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family’s financial interests. In New York, Judge Edgardo Ramos handled a suit between an Exxon Mobil Corp. unit and TIG Insurance Co. over a pollution claim while owning between $15,001 and $50,000 of Exxon stock, according to his financial disclosure form. He accepted an arbitration panel’s opinion that TIG should pay Exxon $25 million and added $8 million of interest to the tab. In Colorado, Judge Lewis Babcock oversaw a case involving a ComcastCorp. subsidiary, ruling in its favor, while he or his family held between $15,001 and $50,000 of Comcast stock.
I mean, come on. This isn’t hard. If your family has 50 large in stock in one of the parties to a suit before you, you recuse the hell out of yourself. You gather up your robes around you, run as fast as you can from the courthouse, and go fishing somewhere. In the latter case, the judge at least seems conveniently contrite.
In the Comcast case, a Colorado couple asked Judge Babcock to issue an order blocking Comcast from accessing their property to install fiber-optic cable. Representing themselves in court, Andrew O’Connor and Mary Henry accused Comcast workers of bullying them, scaring their 10-year-old daughter and injuring their dog, Einstein, allegations the company denied. Judge Babcock, who was appointed to the court by former President Ronald Reagan, ruled the couple had “continually blocked Comcast’s access to the easement.” He sent the case back to state court, as Comcast wanted.
“I dropped the ball,” Judge Babcock said when asked about the recusal violation. He blamed flawed internal procedures. “Thank you for helping me stay on my toes the way I’m supposed to,” he said.
I think I might be rooting for Einstein to bite this judge in the balls.
In case you were wondering, judges (and their families) can own stocks, which I really think is something we ought to look at seriously, but they’re legally obligated not to sit on cases to which the companies in which they hold stock are parties. This seems very simple. This is a dazzling job of work by the WSJ team and it seems to have caught most of the federal judicial branch completely flatfooted.
In response to the Journal’s findings, the Administrative Office of the U.S. Courts said: “The Wall Street Journal’s report on instances where conflicts inadvertently were not identified before a case was resolved or transferred is troubling, and the Administrative Office is carefully reviewing the matter.” It said the federal judiciary “takes very seriously its obligations to preclude any financial conflicts of interest” and has taken steps, such as conflict-screening software and ethics training, to prevent violations. “We have in place a number of safeguards and are looking for ways to improve,” the office said.
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