Should federal judges have to obey the law? - Albuquerque Journal

Second in a two-part series.Should judges obey the law?

In December, 1974, four months after President Richard Nixon resigned in disgrace, Congress enacted a law intended to help root out public corruption. The law requires federal judges to disqualify themselves from presiding over any case in which they or their family members have a financial interest, “however small.”

The statute makes an exception for investments in mutual funds, so long as the judge has no hand in the management of the fund. But if a judge owns even a single share of stock in a corporation that has business before his or her court, that judge is required to step back from presiding over the case.

The reasons for the law are so obvious that it’s a bit shocking it dates only from 1974. A person who buys shares in a company is betting the share price will rise. And judges sometimes have the power to make that happen.

The business professor Chelsea Liu has documented the way lawsuits against major corporations move the market. She was studying the impact of environmental suits and found a predictable pattern of share price fluctuations.

For a judge interested in making money on the stock market, that presents a temptation. The purpose of the 1974 law was to remove the temptation.

At the start of any federal lawsuit, the parties are required to file disclosure statements naming parent corporations and major publicly owned investors, so as to alert judges to their legal obligation to recuse.

Last fall, though, the Wall Street Journal found many federal judges ignore the parties’ disclosure statements. The WSJ identified 131 federal judges who presided over cases in which they or a close family member owned stock in one of the parties.

Sixty-one judges or family members even traded stock in companies that had cases pending before the judge. That’s getting perilously close to insider trading.

Some violations were arguably trivial. (Are trivial violations of the law okay?) Judges sometimes perform routine administrative tasks.

But one California judge, Janis Sammartino, reportedly “heard 54 cases involving companies held in her family’s trusts.” Texas Judge Rodney Gilstrap failed to recuse no fewer than 138 times, according to the WSJ.

It’s important to note that the WSJ’s investigation found that the majority of federal judges comply with the law. And I didn’t find the names of any New Mexico judges in the WSJ’s reporting.

But note, too, how extremely easy it is to comply. A judge can invest in mutual funds instead of trading individual stocks. Or the judge can recuse from a given case, knowing there’s an unending stream of other cases to take its place.

The judges’ excuses for not taking these simple steps bordered on the comical. Some told the WSJ they didn’t know what the law required of them. Imagine an immigrant or addict raising that as a courtroom defense.

Others claimed they relied on conflict-checking software that caught only exact matches, not keywords. Which can only mean the judges didn’t bother to read the parties’ disclosure statements for themselves.

It also suggests those judges (or someone acting on their behalf) opted for software that wasn’t fit for purpose, which isn’t really an excuse at all.

The Administrative Office of the U.S. Courts issued a statement claiming to be “carefully reviewing” the issues raised by the WSJ investigation. In the same breath it described those issues as “instances where conflicts inadvertently were not identified.”

That word “inadvertently” made me laugh. While minimizing the significance of judicial lawbreaking, this lap dog agency announced the result of its review before starting it.

In his year-end message, Chief Justice John Roberts reassured the American public that the WSJ “did not report that any (violation of the law) affected the judge’s consideration of a case.”

That’s a fine example of the legal art of saying something not-false, as opposed to true.

The WSJ actually reported that, when conflicted judges ruled on contested motions, their rulings “favored the judges’ financial interests in 94 cases, went against the judges’ interest in 27 cases and had mixed outcomes in 24 cases.”

Roberts went on to refer to various back-office steps the Administrative Office might take to prevent truly inadvertent slip-ups, the least of the concerns raised by the WSJ’s reporting. He didn’t consider the obvious solutions: banning the trading of individual stocks or, at a minimum, requiring real-time public disclosure.

In recent years, all sorts of institutions in our society, from the Catholic Church to law enforcement agencies debating lapel cams, have faced variations on the same question: Is it more important to have a good reputation or to deserve one?

The chief justice answered that question as too many bishops initially did.

Joel Jacobsen is an author who in 2015 retired from a 29-year legal career. If there are topics you would like to see covered in future columns, please write him at [email protected].

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source: https://www.abqjournal.com/2482893/should-federal-judges-have-to-obey-the-law.html

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