Rotunda Comments in Legal Times on Strategic Recusals
With the U.S. Supreme Court scheduled to hear arguments in the case of Stoneridge Investment Partners v. Scientific-Atlanta and Motorola in early October, there is speculation as to the make up of the Court that will hear and rule on the case.
Chief Justice John Roberts Jr. and Justice Stephen Breyer initially recused in the case on the basis that each owned stock in Cisco Systems, Inc., the parent company of one of the respondents. Current federal law, however, allows both to rejoin the case after curing the conflict of interest through a sale of stock, should they choose to do so.
Such recusals followed by unrecusals are problematic, says legal ethics expert Professor Ronald Rotunda, because they appear "manipulative."
Issue of 'Strategic Recusals' Arises in Key Supreme Court Case, Legal Times, August 20, 2007. By Tony Mauro.
"The notion of justices 'unrecusing' and re-entering a case strikes some as attempting to unring a bell, and it is causing discomfort among some judicial ethics experts. But a new -- and little-noticed -- federal law may be encouraging the practice.
"Under the new law -- which Roberts urged Congress to pass in his capacity as head of the Judicial Conference -- judges can defer the capital gains taxes on stock they sell if they can demonstrate they made the sale to remove a conflict of interest. Executive branch officials have long had this ability, but judges were not allowed the same privilege until the change was included in a tax bill signed into law on Dec. 20.
"Roberts may have made use of this new tax-deferral power already, when he recused from -- and then rejoined -- the antitrust case of Credit Suisse v. Billing last term. He first announced his recusal on Dec. 6, 2006, evidently because of holdings he had in investment firms involved in the case. Then on March 19, Justice Anthony Kennedy recused in the same case after realizing, belatedly, that his son Gregory Kennedy's compensation as a managing director at Credit Suisse might be affected by the outcome.
"Possibly to avoid a seven-member Court, Roberts suddenly rejoined the case on March 26, a day before oral argument. Under federal law, Roberts probably could not have rejoined the case without first curing the conflict -- most likely by selling the stock. In Stoneridge, all it would take for Roberts and Breyer to participate is to sell their Cisco stock, which they can now do without tax consequences.
"Without commenting on any specific case, judicial ethics expert Ronald Rotunda says he does not think judges should be allowed to recuse and unrecuse. 'It looks funny; it seems manipulative,' says Rotunda, a professor at George Mason University School of Law. Theoretically, he says a judge could sell a company's stock to cure a conflict, then rule in the company's case, and then buy back the stock at a lower price. 'Strategic recusals don't sound right.'"
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