Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 1 of 11
`
`Donate (https://www.occupy.com/donate)
`Join Commons.occupy.com (http://commons.occupy.com)
`
` (/)
`
`Read (/read) // Watch (/watch) // Look (/look) // Listen (/listen) //
`Engage (http://commons.occupy.com)
`
`REVEALED: FEDERAL JUDGES GUILTY OF OWNING
`STOCK IN CORPORATIONS THEY RULED ON
`
`THU, 5/1/2014 - BY REITY O'BRIEN, KYTJA WEIR, CHRIS YOUNG (/AUTHOR/REITY-OBRIEN-KYTJA-WEIR-CHRIS-
`YOUNG)
`THIS ARTICLE ORIGINALLY APPEARED ON THE CENTER FOR PUBLIC INTEGRITY (HTTP://WWW.PUBLICINTEGRITY.ORG/)
`119
`0
`0
`31
`Like 39
`reddit
`
`THIS WEEK IN REVIEW:
`SIGN UP FOR THE OCCUPY.COM
`WEEKLY NEWSLETTER
`Get the week's top articles sent
`to your inbox every Friday.
`
`First Name *
`
`Last Name
`
`Email *
`
`I'm not a robot
`
`reCAPTCHA
`Privacy - Terms
`
`LA T ES T (/ARTICLE/REVEALED-FEDERAL-JUDGES-GUI
`LTY-OWNING-STOCK-CORPORATIONS-THEY-RULED?QT
`-ARTICLE_TABS=0#QT-ARTICLE_TABS)
`M OS T R E A D (/ARTICLE/REVEALED-FEDERAL-JUDGES-GU
`ILTY-OWNING-STOCK-CORPORATIONS-THEY-RULED?Q
`T-ARTICLE_TABS=1#QT-ARTICLE_TABS)
`D I D YO U MI S S I T .. . (/ARTICLE/REVEALED-FEDERAL-JUDG
`ES-GUILTY-OWNING-STOCK-CORPORATIONS-THEY-RUL
`ED?QT-ARTICLE_TABS=2#QT-ARTICLE_TABS)
`
`(/article/we-must-stop-
`plastic-choking-ocean-
`and-earth)
`WE MUST STOP PLASTIC
`CHOKING THE OCEAN AND
`THE EARTH (/ARTICLE/WE-MUST-STOP-PLASTIC-
`CHOKING-OCEAN-AND-EARTH)
`
`Plastic pollution threatens all life. We need to
`rethink the way we live and challenge corporate
`power pushing our throw-away business-as-usual
`model. Like tackling climate change, a world not
`polluted by plastic is possible.
`// READ MORE (/ARTICLE/WE-MUST-
`STOP-PLASTIC-CHOKING-OCEAN-
`AND-EARTH)
`
`(http://www.occupy.com/sites/default/files/field/image/o-judge-facebook.jpg?
`itok=3h9xvPpC)
`W
`
`hen Linda Wolicki-Gables and her husband appealed a lawsuit all the way to the second-highest
`court in the nation against Johnson & Johnson over a malfunctioning medication pump that had been
`implanted in her body, the couple had no idea that one of the judges who decided their case had a
`financial stake in the giant multinational company.
`
`Eleventh U.S. Circuit Court of Appeals Judge James Hill owned as much as $100,000 in Johnson &
`Johnson stock when he and two other judges ruled against the Gables’ appeal
`(http://www.ca11.uscourts.gov/opinions/ops/200914342.pdf) in the precedent-setting case.
`
`For the Gables, a different decision in the 2011 appeal could have helped them win a verdict for as
`much as $20 million, a sum that would have vastly improved the quality of her care, according to their
`attorney, T. Patton Youngblood Jr. Today, the Florida woman is a partial paraplegic, he said, largely
`confined to her home with only her husband to care for her.
`
`The Center also found that Hill ruled on three other appeals involving companies in which he owned
`stock, violating clear rules governing the federal courts. In all four instances, the court rulings favored
`his financial interest. In a statement released by the court, Hill said he was not aware of those stock
`holdings at the time due to the complexity of his family’s trusts.
`
`Voip-Pal Ex. 2058
`IPR2016-01198 and IPR2016-01201
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 2 of 11
`
`“You like to think that people will be above board but we all know that’s not the case. You can’t presume
`that,” said Youngblood, the Gables’ attorney. “I don’t think it’s fair that he was able to preside over this
`thing. I just don’t think that’s right. That’s why they ask you for disclosures so that you don’t end up
`presiding over cases where you have a financial or other conflict.”
`
`The Center for Public Integrity uncovered Hill's conflicts by examining the three most recent years
`(https://www.publicintegrity.org/2014/04/22/14615/what-do-your-federal-appellate-judges-
`own) of financial disclosure reports filed by 255 of the 258 judges who sit on the nation’s 13 appellate
`circuits. In all, the Center identified 24 cases where judges owned stock in a company with a case
`before them. In two other instances, judges had financial ties with law firms working on cases over
`which they presided, bringing the total to 26 conflicts.
`
`After the Center notified the judges of its findings, 16 judges had letters sent to the parties in all of those
`cases uncovered by the Center during the months-long investigation. The letters are the first step in
`possibly reopening the cases.
`
`The violations occurred even though clear rules regarding conflicts of interest exist. Federal judges may
`not sit on cases in which they have a financial interest, according to a federal law
`(http://www.law.cornell.edu/uscode/text/28/455). A similar rule is also in place
`(http://www.uscourts.gov/RulesAndPolicies/CodesOfConduct/CodeConductUnitedStatesJu
`dges.aspx) in the code of conduct established by the court system. Judges have been warned before
`about participating in such cases. Following a Washington Post investigation
`(http://www.washingtonpost.com/wp-
`dyn/content/article/2006/04/17/AR2006041701296.html) in 2006, the courts even added a
`computerized screening process to help judges avoid conflicts.
`
`Yet the problems continue.
`
`The Center’s findings point to a larger issue of accountability — or lack thereof — in the federal court
`system. Judges face no formal punishment for breaking these rules.
`
`Appellate judges can affect a company’s stock price — or even an entire industry sector — with their
`rulings. They are also far more likely to own stock than the average American, making it all the more
`important for them to avoid the perception that their holdings could influence their rulings.
`
`Some judges don’t own individual stocks at all to avoid the risk of conflicting with their cases. Many
`judges are extremely careful in reviewing their holdings. Yet the Center’s findings show that some
`judges do not keep track of their own investments, even with the help of computerized databases.
`Sometimes they have failed to do so repeatedly, like Hill.
`
`“Come on guys, this is your obligation,” said Youngblood. “You tell us all the time about ignorance being
`no excuse.”
`
`William G. Ross, a Samford University law professor in Alabama who specializes in judicial ethics, said
`such failures undermine public confidence in the judiciary.
`
`“Considering the importance of judicial integrity and avoidance of conflicts of interest, I don’t think it is
`asking too much of a judge to expect him or her to know what his or her holdings are,” he said. “Even
`judges with significant portfolios should be familiar with their own holdings.”
`
`Wealthy, Powerful and Unknown
`
`The Center found that 59 percent of all federal appellate judges reported owning stock, despite the risk
`that the companies in which they have a financial stake could come before them. By comparison, the
`proportion of American families who directly own stock is much lower, just 15 percent as of 2010.
`
`That imbalance has grown over the past half-century, according to Ross, the Samford University
`professor. Like most highly paid professionals in America, federal judges have much larger and more
`diverse portfolios than they would have had 30 or 40 years ago, he said.
`
`(/article/new-york-city-
`plans-divest-5-billion-
`fossil-fuels-and-sue-oil-
`companies)
`NEW YORK CITY PLANS TO
`DIVEST $5 BILLION FROM FOSSIL FUELS AND
`SUE OIL COMPANIES (/ARTICLE/NEW-YORK-CITY-
`PLANS-DIVEST-5-BILLION-FOSSIL-FUELS-AND-SUE-
`OIL-COMPANIES)
`
`Mayor Bill de Blasio said "it’s up to the fossil fuel
`companies whose greed put us in this position to
`shoulder the cost of making New York safer and
`more resilient."
`// READ MORE (/ARTICLE/NEW-YORK-
`CITY-PLANS-DIVEST-5-BILLION-
`FOSSIL-FUELS-AND-SUE-OIL-
`COMPANIES)
`
`(/article/trump-
`administration-waives-
`punishment-convicted-
`banks-including-
`deutsche-which-trump-
`owes)
`TRUMP ADMINISTRATION WAIVES
`PUNISHMENT FOR CONVICTED BANKS,
`INCLUDING DEUTSCHE—WHICH TRUMP
`OWES MILLIONS (/ARTICLE/TRUMP-
`ADMINISTRATION-WAIVES-PUNISHMENT-CONVICTED-
`BANKS-INCLUDING-DEUTSCHE-WHICH-TRUMP-OWES)
`
`One of the Trump administration waivers for the
`LIBOR scandal was granted to Deutsche Bank —
`which is owed at least $130 million by President
`Trump and his business empire, and has also been
`fined for its role in Russian money laundering.
`// READ MORE (/ARTICLE/TRUMP-
`ADMINISTRATION-WAIVES-
`PUNISHMENT-CONVICTED-BANKS-
`INCLUDING-DEUTSCHE-WHICH-
`TRUMP-OWES)
`
`(/article/act-out-143-
`psychology-fight-good-
`news-nuns-vs-pipelines-
`water-protector-s-hub)
`ACT OUT! [143] -
`PSYCHOLOGY OF THE FIGHT, GOOD NEWS,
`NUNS VS. PIPELINES & THE WATER
`PROTECTOR’S HUB (/ARTICLE/ACT-OUT-143-
`PSYCHOLOGY-FIGHT-GOOD-NEWS-NUNS-VS-
`PIPELINES-WATER-PROTECTOR-S-HUB)
`
`This week, Kiilu Nyasha takes us into the New Year
`with some words of wisdom from a woman who's
`seen decades of what works and what doesn't.
`// READ MORE (/ARTICLE/ACT-OUT-143-
`PSYCHOLOGY-FIGHT-GOOD-
`NEWS-NUNS-VS-PIPELINES-
`WATER-PROTECTOR-S-HUB)
`
`(/article/native-
`americans-historic-
`moment-path-power-
`ballot-box)
`FOR NATIVE AMERICANS, A
`"HISTORIC MOMENT" ON THE PATH TO
`POWER AT THE BALLOT BOX
`
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 3 of 11
`
`All told, 150 of the judges on the appellate court invested between $76 million and $226 million in more
`than 1,000 corporations in 2012, according to the Center’s analysis. Disclosure rules require holdings to
`be reported in a range.
`
`Among the most commonly held stocks owned by appellate judges were General Electric Co. (at least
`$2.5 million), tech giants Intel Corp. (at least $495,000), Microsoft Corp. (at least $630,000) and IBM
`Corp. ($1.5 million), plus energy heavyweight ExxonMobil Corp. (at least $3.8 million) — a list that
`generally dovetails with most commonly held stocks among all investors.
`
`(/ARTICLE/NATIVE-AMERICANS-HISTORIC-MOMENT-
`PATH-POWER-BALLOT-BOX)
`
`Court battles playing out over indigenous voting
`rights have the potential to tip tight races in states
`with large native populations and to influence
`matters of national importance.
`// READ MORE (/ARTICLE/NATIVE-
`AMERICANS-HISTORIC-MOMENT-
`PATH-POWER-BALLOT-BOX)
`
`The Center examined the finances of 161 active and 94 senior judges, who also try cases in semi-
`retirement. The judges must disclose their holdings annually, plus those of their spouses and any
`dependent children.
`
`Forty-one percent of the judges the Center reviewed have eschewed individual stocks altogether, in
`some cases to deliberately avoid what one judge called the “mousetrap” of corporate stock ownership,
`opting instead for generally safer, if potentially less lucrative, investments such as mutual funds, bonds
`or real estate. Such investments are also less likely to interfere with a judge’s day job.
`
`Unsurprisingly, judges who did not report owning individual stocks were less wealthy, on average, than
`their stock-owning counterparts.
`
`The median value of a non-stockholding judge’s investments was between $498,000 and $1.3 million
`compared with stock-holding judges, who reported between $1.4 million and $4.2 million.
`
`Total reported assets, including stock and other investments, for all the judges were between $585
`million and $1.8 billion, according to the Center’s calculations.
`
`The easiest fix to the conflict of interest problem would be to ban judges from owning stock, but that
`would be “an overreaction,” said Stephen Gillers
`(https://its.law.nyu.edu/facultyprofiles/profile.cfm?section=bio&personID=19943), a New
`York University law professor who specializes in legal ethics.
`
`“It would be a high price to demand of people who go on to the bench that they limit their investments to
`government securities and mutual funds,” he said.
`
`For their work in the courts, federal appellate judges earn $211,200 a year, even in retirement, a salary
`far greater than the average American family, which pulls in roughly $52,000 a year. Still, that’s
`relatively low compared to what a top-notch lawyer can make in the private sector.
`
`Appellate judges’ wealth is matched by their power. Appointed for life, federal judges are an elite
`population removed from the general public by demographics, academic achievement and professional
`status. They are mostly male, mostly white and mostly 65 or older. Roughly one in five federal appellate
`judges graduated from Ivy League law schools, according to the Center’s analysis of Federal Judicial
`Center data.
`
`That says nothing of their influence on the bench. Appeals court judges can uphold or strike down a
`president’s signature health care law, determine how universities admit students
`(http://www.nytimes.com/2013/11/14/us/texas-universitys-race-admissions-policy-is-
`debated-before-a-federal-court.html) and even change the way the Internet works
`(http://www.washingtonpost.com/blogs/the-switch/wp/2014/01/14/d-c-circuit-court-strikes-
`down-net-neutrality-rules/). In the coming months, they will likely play a major role in determining
`whether same-sex marriage becomes legal nationwide.
`
`“They are the final arbiters in all but the tiny handful of cases that the Supreme Court takes,” said Arthur
`Hellman, a University of Pittsburgh law professor and an expert on the federal court system.
`
`They’re also on deck to fill vacancies on the U.S. Supreme Court.
`
`But despite their considerable influence, appeals court judges are largely anonymous to the American
`people — even to many lawyers. News stories sometimes neglect to name the judges who participate
`in panels that strike down or uphold multimillion-dollar verdicts.
`
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 4 of 11
`
`“They are largely unknown,” said Hellman, noting that most Americans couldn’t identify which circuit
`their state is in. “And even a pretty savvy lawyer would be hard-pressed to identify more than two or
`three of the judges.”
`
`Still, even their less-influential decisions that never make headlines can mean the world to the parties
`involved.
`
`Clean Hands?
`
`To save his home, Mountaga Bah needed to win a legal battle with a banking giant.
`
`Faced with the threat of foreclosure, Bah and his wife sued Wells Fargo Bank beginning in 2008,
`claiming that the bank engaged in predatory lending when it added a second mortgage to the Bowie,
`Md., house where they live with their three daughters.
`
`Wells Fargo, his original complaint alleged, “took advantage” of Bah — a native of the West African
`nation of Guinea, who was not fluent in English — by failing to ensure that he would be able to afford
`the monthly mortgage payments. The complaint alleged the bank’s lax underwriting meant it lacked
`“clean hands.”
`
`In 2010, a three-judge federal appellate panel confirmed a district court order in favor of Wells Fargo,
`dismissing Bah’s claims.
`
`At the time, 4th U.S. Circuit Court of Appeals Judge Barbara Keenan owned stock in the bank.
`
`“I couldn’t believe it,” Bah told the Center after he learned about the judge’s conflict of interest in March.
`“That’s not right.”
`
`Bah and his family have been able to stay in the house up until now in part because he filed for
`bankruptcy in 2009. But he struggles to keep up with mortgage payments to Wells Fargo and now
`questions the outcome in the case that had been his chance to keep his family home.
`
`“Why she did this?” he said.
`
`Keenan did not comment directly on the Bah foreclosure case, but the clerk of the appeals court,
`Patricia S. Connor, wrote in a letter that the judge was unaware of the conflict due to a “mistake in the
`judge’s office at the time the case was assigned.”
`
`Connor noted that the value of Keenan’s holdings in Wells Fargo was $1,900.
`
`Judges who own even one share of stock in a company that appears before them in court are required
`to disqualify themselves, according to the law.
`
`Stock ownership accounted for 24 of the 26 conflicts that sparked letters from the courts to the parties
`in the cases where a conflict arose.
`
`Some of the judges in those cases owned as few shares as Keenan while others may have owned as
`much as $100,000, or possibly more because some did not report value ranges for their stocks as
`required.
`
`Ninth U.S. Circuit Court of Appeals Judge Jay Bybee
`
`Wikimedia Commons
`
`The remaining two conflicts the Center uncovered involved financial ties to law firms that tried cases
`before them, including the case of 9th U.S. Circuit Court of Appeals Judge Jay Bybee.
`
`After becoming a judge, Bybee received more than $78,000 worth of legal services from 2009 through
`2012 from Davis Polk & Wardwell LLP to defend him for actions in his prior job where he signed the so-
`
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 5 of 11
`
`called “torture memos” for the Bush administration’s Justice Department. The memos justified the
`controversial interrogation method of “waterboarding.”
`
`Despite the help, he did not step aside in a 2010 case of a Guatemalan woman who sought asylum
`under the Convention Against Torture even though she was represented by a lawyer from the firm. The
`three-judge panel, including Bybee, affirmed the Justice Department’s denial of asylum, thus ruling
`against the firm that helped him. He acknowledged his failure to recuse himself in a letter sent to the
`parties in the case after the Center brought it to the court’s attention.
`
`In addition to the 26 conflicts acknowledged by the judges, the Center found about 20 more cases that
`raised questions, but did not require automatic disqualification of judges.
`
`Federal judges are required to monitor their financial portfolios so that they know when to recuse
`themselves from particular cases. But interviews with judges suggest that they aren’t always familiar
`with the stocks they own and the financial transactions they make.
`
`“I don’t pay much attention to those stocks because it’s handled by a stockbroker,” said 11th U.S.
`Circuit Court of Appeals Judge Peter Fay, one of the 16 judges the Center found who wrongly
`participated in a case. “I don’t know what he’s doing. … I sit down at the end of the year and say, ‘help
`me fill out this form.’”
`
`For some judges, their list of investments may fill up just a few lines on their annual financial disclosure
`form. Other judges, however, have much more complicated portfolios.
`
`Sixth U.S. Circuit Court of Appeals Judge Helene White
`
`ca6.uscourts.gov
`
`One appeals court judge, Helene White of the 6th U.S. Circuit Court of Appeals, filed a financial
`disclosure in 2012 that included 40 pages of financial holdings and transactions.
`
`The Center found five examples in which White’s holdings overlapped with her caseload. The judge
`ruled in favor of her financial interests in two of them. Through letters to the involved parties, she
`admitted to failing to recuse herself in all five of the cases.
`
`One letter said that White did not realize she owned up to $50,000 in Priceline.com stock when she sat
`on a three-judge panel in 2012 that affirmed a judgment
`(http://www.ca6.uscourts.gov/opinions.pdf/12a0316p-06.pdf) in favor of the company and other
`travel businesses. The suit had accused the travel companies of violating local tax laws by not charging
`occupancy taxes on customers who book hotel rooms online. The ruling set a precedent that could
`affect cases from other cities nationwide.
`
`“I’m not sympathetic to their forgetting to check,” said Tom Fitton, president of the conservative-leaning
`Judicial Watch, an organization that promotes transparency in government. “It’s not that hard to do.”
`
`However small the investment — and however unintentional the errors may have been — conflicted
`judgments loom large for litigants like the Bahs, whose family home hangs in the balance. And they
`reflect poorly on a court system that’s expected to uphold the law.
`
`“Clearly it raises questions about impartiality and threatens to damage public perception of judges as
`fair and impartial,” said Nan Aron, the president of Alliance for Justice, a liberal advocacy group that
`focuses on the judicial system.
`
`Charles Geyh, an Indiana University law professor who specializes in judicial ethics, agreed that the
`conflicts present a “perception problem” for the federal courts. But he questions whether a reasonable
`person would think a judge’s decision on the bench would be swayed because they owned stock in a
`party — especially if the investment is small.
`
`“It looks bad,” Geyh said. But unless a judge is a repeat offender, “I’m hesitant to refer to it as a
`significant problem.”
`
`Federal court officials downplayed the Center’s findings.
`
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 6 of 11
`
`David Sellers, a spokesman for the Administrative Office of the U.S. Courts, said in an email that while
`federal judges take their ethical responsibilities seriously, the more than two dozen conflicts identified
`by the Center are mistakes that can be attributed to human error.
`
`“It appears that a very small number of judges inadvertently were involved in cases in which they had a
`financial conflict,” he wrote.
`
`And the judges do not rule on cases by themselves. They typically sit with at least two other judges on
`each case.
`
`Sellers noted that the two dozen conflicted cases represented just 0.02 percent of the 109,000 total
`cases decided in the U.S. Courts of Appeals over the last three years. Some experts agreed that it’s
`important to analyze the Center’s findings in a larger context. Information on judges' disclosures often
`blacked out By Reity O'Brien, Kytja Weir and Chris Young April 28, 2014
`
`However, the Center’s search was not exhaustive. Center reporters manually searched key words from
`judges’ three most recent annual disclosure reports against a legal database of case rulings from 2010
`to 2012. In one instance, the search led reporters to a 2014 case, as well. The analysis may undercount
`the actual number of times when judges’ financial ties overlapped with their work on the courts.
`
`In addition, other conflicts could be hidden from view because more than 110 of the 255 judges had
`some information redacted from their financial disclosure reports in 2012, including information about
`gifts they received, income they earned and investments they held.
`
`A Safety Net With Holes in it
`
`Guillermo Ramirez died at age 58 last year after a long fight with cancer that his family believes he
`contracted from a DuPont chemical he applied to his Florida strawberry fields. DuPont recalled the
`fungicide, Benlate, and paid him for his lost crops but said the chemical wouldn’t harm people.
`
`Ramirez sued the company after he was diagnosed with the cancer that started in his kidneys and
`eventually spread throughout his body.
`
`He did not know that Judge Joel Dubina, one of the three judges assigned to the case when it got to the
`11th U.S. Circuit Court of Appeals, owned up to $15,000 worth of stock in DuPont. The panel
`unanimously affirmed a jury verdict in favor of DuPont in 2011.
`
`Now his family, including his 33-year-old daughter Veronica R. Juan, is reeling from the Center’s
`discovery.
`
`“To them it might not have been a big deal, but for us?” Juan said. ”There are days we feel we just can’t
`function correctly because he was such a great person to all of us.”
`
`It is puzzling to her how the judge didn’t disclose the information before taking the case. The conflict,
`even if it was an accidental oversight as Dubina said it was, seems all the more frustrating to Juan
`given the large amount of information her parents had to gather for the case, all while her father was
`seriously ill — so weak he could barely walk.
`
`“He did everything possible to get all the information that was needed and for him to be just let down?”
`she said. “Who is to say what could have happened if that person wasn’t there?”
`
`Conflicts of interest such as Dubina’s aren’t supposed to fall through the cracks — not in a federal court
`system equipped with computer databases designed to backstop judges who might fail to identify
`conflicts on their own.
`
`In September 2006, the Judicial Conference of the United States, a group of judges who oversee and
`set policy for the U.S. Courts, adopted a mandatory policy requiring all federal courts — except the U.S.
`Supreme Court — to conduct automated screenings to help flag potential conflicts of interest.
`
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 7 of 11
`
`The automated system, which courts began implementing in 2007, followed a number of stories in The
`Washington Post (http://www.washingtonpost.com/wp-
`dyn/content/article/2006/04/17/AR2006041701296.html) that identified instances in which
`federal judges ruled on cases despite having a financial interest in one of the parties.
`
`The Judicial Conference policy now requires each court to enter judges’ financial conflicts into a
`database that stores case information, including parties and attorneys. Judges, according to the policy,
`must provide the court with a list of their financial conflicts. The list must be regularly updated to ensure
`that nothing is missed as judges make investment transactions during the year.
`
`Each court is required to screen for conflicts “on a regular schedule, including screening new matters as
`they are filed,” the policy states. And when the database flags a conflict, the court must notify the judge.
`
`The decision on whether to recuse is ultimately up to the judge. Ethics guidelines for federal judges are
`very clear in some areas such as stock ownership. Beyond the bright-line, one-share rule on stock
`ownership, a judge must step aside from any proceeding “in which his impartiality might reasonably be
`questioned.”
`
`Typically, court officials try to prevent judges from getting such cases in the first place by using the
`database to bypass judges for assignments when their financial interests match up with cases. Doing
`so makes it unnecessary for judges to decide themselves whether to step aside.
`
`If a conflict is missed by the database, an additional screening step requires judges in all courts to
`check for potential conflicts after they are randomly assigned to a case.
`
`But the system for flagging conflicts through both automated and manual screening is “not foolproof,” as
`the 4th Circuit’s conflict-screening plan
`(http://www.ca4.uscourts.gov/docs/pdfs/FourthCircuitConflictScreening.pdf?
`sfvrsn=10) states. After all, the automated database is only as good as the information the judges feed
`into it.
`
`“This is a complex and sometimes fluid area,” said Sellers of the Administrative Office of the U.S
`Courts. “While software managed by the clerks’ office is very helpful, it is dependent on judges
`providing up-to-date and accurate information about their financial holdings, on staff entering that
`information correctly and timely, and on automated systems accurately identifying and processing the
`entries.”
`
`Eleventh U.S. Circuit Court of Appeals Judge Frank Hull
`
`Alan Diaz/AP
`
`Take, for example, a stock conflict involving Judge Frank Hull of the 11th U.S. Circuit Court of Appeals.
`Hull sat on a panel in October 2010 that affirmed a lower court ruling in favor of Jacobs Engineering,
`despite the fact that the judge had purchased up to $15,000 worth of stock in the company several
`months before the decision.
`
`The conflict slipped by several layers undetected, according to the court, in part because the judge had
`abbreviated the company name differently than it appeared on the court’s docket. The judge said in a
`statement that it had slipped through three layers of checks and she was not aware of any potential
`financial conflict or disqualification when she sat on the case.
`
`Other judges said they ruled on cases not realizing they or their spouses had inherited stocks following
`a death. Some blamed their investment advisers.
`
`“We’ve got a good system. I thought it worked 100 percent of the time,” 9th Circuit Judge Joseph
`"Jerome" Farris told the Center after learning that he ruled on a case in which he had a financial
`interest. “Now you are pointing out it’s only 99.9 percent.”
`
`Still, Bert Brandenburg, executive director of the Washington, D.C.-based Justice at Stake nonprofit that
`focuses on issues in federal and state courts, said that the system cannot continue to regularly have
`two dozen cases where judges acknowledge a conflict after the fact.
`
`http://www.occupy.com/article/revealed-federal-judges-guilty-owning-stock-corporations-t...
`
`1/12/2018
`
`

`

`Revealed: Federal Judges Guilty of Owning Stock in Corporations They Rule
`
`Page 8 of 11
`
`“There has to be a strong system in place to identify those conflicts in advance so the judges can step
`aside,” he said. “If that was a failure here, then there needs to be a strong look taken at the system.”
`
`Errors do occur, and the judges and court staffers are humans who make mistakes. But ultimately, it’s
`up to the judges to guard against such errors.
`
`And even when the cases slip through the cracks, judges can always come forward after the fact to
`report the mistake. They also have another chance to spot problems when they have to file their annual
`financial disclosure report.
`
`Eleventh U.S. Circuit Court of Appeals Judge Beverly Martin
`
`Beth Stephens/Wikimedia Commons
`
`Eleventh Circuit Judge Beverly Martin was one judge who corrected her mistake.
`
`She ruled on a 2010 case in favor of an insurance company represented by her then-husband’s law
`firm, Sutherland Asbill & Brennan LLP. As a partner in the firm, he could stand to gain financially from
`the decision, grounds for disqualification from a case.
`
`“I just screwed up. I didn’t do it on purpose,” she said. “My husband had walked out on me the month
`before. I don’t remember much. I was not living with him. I was devastated. I wasn’t sleeping. I wasn’t
`eating. I didn’t have my presence of my mind. I shouldn’t have participated in the case.”
`
`She said that although she was not financially supported by him then, she recused herself a month after
`issuing the decision. The opinion she had worked on was scrapped and the case was taken up again
`without her.
`
`A new panel of judges came to the same conclusion, affirming the lower court’s decision in favor of the
`insurance company represented by her now ex-husband’s firm.
`
`Ruling in the Gray Zone
`
`Beyond the clear conflicts, where a U.S. statute and the code of conduct for judges lay out definitive
`rules, is a sea of gray. It is generally up to the judges to decide if the outcome of the case could affect
`their finances, a system lacking transparency and any outside oversight.
`
`The Center found about 20 cases in which judges had financial ties to the parties before them but there
`was no clear-cut violation of the rules. Those include five instances in which a married couple on the 5th
`Circuit, Judges Thomas Reavley and Carolyn King, ruled on cases in which parties in the cases were
`energy companies that paid the couple royalties for extracting minerals from their property.
`
`“I don’t think that’s a problem for him or for me,” said King. “I don’t think there are any recusal issues
`here.”
`
`Judges are not required to step aside in cases in which they own bonds in one of the parties or receive
`royalties from a litigant. The investments don’t represent an ownership stake in the company. Gains for
`the judge would be unlikely if the company’s value soars, though their investments could suffer if the
`company suffered financially.
`
`However, according to the judicial code of conduct, judges may need to step aside in those cases “if the
`outcome of the proceeding could substantially affect the value” of the judges’ financial holdings. In other
`words, it depends on the extent to which the court’s decision could cause the investment to increase or
`decrease in value.
`
`Judicial ethics experts said bonds and royalties pose little risk for conflicts. Unlike stocks, they would
`require recusal only if a “reasonable person” — not one of the litigants involved in the case — would
`question a judge’s