United States Court of Appeals 

for the Federal Circuit 

__________________________ 

SHELL OIL COMPANY AND ATLANTIC 

RICHFIELD COMPANY, 

Plaintiffs-Appellees, 

v. 

UNITED STATES, 

Defendant-Appellant. 

__________________________ 

2010-5161 

__________________________ 

Appeal from the United States Court of Federal 

Claims in case no. 06-CV-141, Senior Judge Loren A. 

Smith. 

_________________________ 

Decided: March 7, 2012 

_________________________ 

MICHAEL W. KIRK, Cooper & Kirk, PLLC, of Washington, DC, argued for plaintiffs-appellees. With him on the 

brief was DAVID LEHN. Of counsel was PETER A.

PATTERSON. 

STEPHEN C. TOSINI, Senior Trial Counsel, Civil Division, Commercial Litigation Branch, United States Department of Justice, of Washington, DC, argued for 

defendant-appellant. With him on the brief were TONY 

WEST, Assistant Attorney General, JEANNE E. DAVIDSON, 
SHELL OIL COMPANY v. US 2

Director, and FRANKLIN E. WHITE, JR., Assistant Director. 

Of counsel on the brief was HEATHER R. CAMERON, Attorney, United States General Services Administration, of 

Washington, DC. 

__________________________ 

Before RADER, Chief Judge, O’MALLEY, and REYNA, 

Circuit Judges. 

O’MALLEY, Circuit Judge. 

This case is an appeal from a decision of the Court of 

Federal Claims requiring the United States to indemnify 

certain oil companies for environmental cleanup costs 

under the Comprehensive Environmental Response, 

Compensation, and Liability Act of 1978, 42 U.S.C. 

§ 9601, et seq. (“CERCLA”). The Court of Federal Claims 

initially entered judgment in favor of all four plaintiffs in 

this litigation: Shell Oil Company (“Shell”), Atlantic 

Richfield Company (“Arco”), Texaco Inc. (“Texaco”), and 

Union Oil Company of California (“Union Oil”) (collectively, “the Oil Companies”). Upon discovering that his 

wife had a financial interest in the parent company of 

Texaco and Union Oil, however, Judge Loren A. Smith: 

(1) vacated his 2008 and 2009 summary judgment rulings 

in favor of the Oil Companies; (2) sua sponte severed 

Texaco and Union Oil from the lawsuit and directed the 

clerk of court to reassign their claims to a different judge; 

(3) reinstated his prior summary judgment decisions with 

respect to Shell and Arco only; and (4) entered final 

judgment against the government in the total amount of 

$68,849,505.88. See Shell Oil Co. v. United States, 93 

Fed. Cl. 439 (2010) (liability); Shell Oil Co. v. United 

States, 93 Fed. Cl. 153 (2010) (damages); Shell Oil Co. v. 

United States, No. 06cv141 (Fed. Cl. Aug. 4, 2010), ECF 

No. 80 (final judgment). 
3 SHELL OIL COMPANY v. US

The government appeals from the Court of Federal 

Claims’ decision entering final judgment in favor of Shell 

Oil and Arco, and seeks reversal on a number of grounds, 

including the trial judge’s treatment of the discovered 

financial conflict. Because we find that the presiding 

judge was required to recuse himself under 28 U.S.C. 

§ 455(b)(4), and that vacatur is appropriate in the circumstances of this case, we vacate the final judgment and the 

summary judgment orders on which it was premised, and 

remand with instructions that this case be reassigned to a 

different judge. 

BACKGROUND

During World War II, the United States entered into 

contracts with several oil companies for the production of 

aviation fuel (“avgas”). Production of avgas resulted in an 

increased production of hazardous waste which was 

dumped at a waste site in California (referred to as “the 

McColl site”). Several decades later, after years of litigation in federal district court in California, the Oil Companies were held liable under CERCLA for the costs of 

cleaning up the waste dumped at the McColl site. 

On February 24, 2006, the Oil Companies filed suit in 

the Court of Federal Claims seeking reimbursement of 

the CERCLA cleanup costs from the government based on 

certain language in the avgas contracts. Because there 

was extensive discovery and the parties entered into 

comprehensive stipulations of fact in the underlying 

CERCLA action, the parties agreed that no further factual development was necessary, and the case was litigated on successive summary judgment motions – one as 

to liability and the other relating to damages. The trial 

court’s decisions on these summary judgment motions are 

the subject of this appeal. 
SHELL OIL COMPANY v. US 4

First, on February 2, 2008, the court granted the Oil 

Companies’ motion for partial summary judgment on 

liability, finding that the avgas contracts contained “open 

ended indemnification agreements” and that the “reimbursement clause of the contracts encompasses costs for 

the CERLCA cleanup as those costs were ‘charges’ and ‘by 

reason of’ production of the avgas.” Shell Oil Co. v. 

United States, 80 Fed. Cl. 411, 417-19 (2008). The Oil 

Companies subsequently moved for summary judgment 

with respect to the amount of recoverable damages. On 

March 31, 2009, the court granted, in part, Plaintiffs’ 

motion for summary judgment as to damages and 

awarded $84,536,763.65 collectively to Plaintiffs. Shell 

Oil v. United States, 86 Fed. Cl. 470, 475 (2009). 

On April 22, 2009, the government filed a motion for 

reconsideration asking the court to revisit its decision 

with respect to the remediation of property damage. The 

court denied the motion on September 28, 2009. 

On October 30, 2009, the trial court entered final 

judgment awarding the sum of $87,344,345.70 to the Oil 

Companies as follows: 

• Shell Oil: $51,166,317.71 

• Union Oil: $16,543,019.08 

• Arco: $16,543,019.08 

• Texaco: $3,091,989.83. 

On November 16, 2009,1 the trial judge conducted a 

telephone conference and informed the parties that, when 

he was entering final judgment in this case, he realized 

that his wife had inherited 97.59 shares of stock in Chev-

 1 November 16, 2009 was the deadline for the parties to seek rehearing under Rule 59 of the Rules of the 

United States Court of Federal Claims. 
5 SHELL OIL COMPANY v. US

ron Corporation, which is the parent corporation for 

Texaco and Union Oil. He explained that his wife inherited the shares in 2004, prior to the initiation of this 

lawsuit. Transcript, Shell Oil v. United States, No. 

06cv141 (Fed. Cl. Dec. 7, 2009), ECF No. 60 at 4:9-16. 

The judge then indicated that he initially did not discover 

the conflict because he “was particularly focused on Shell” 

and was looking for “conflict between Chevron and ownership in Shell or Texaco rather being a part of Shell.” Id.

at 3:6-10; 5:21-24. 

During the telephone conference, the judge did not 

identify the specific date on which he became aware of the 

conflict or whether he had sought a formal advisory 

opinion on the issue. Instead, he indicated that he “consulted with the various technical powers that be in the 

judiciary and looked at some of the material” and determined the appropriate resolution was to “break Texaco 

out of this case, vacate all the orders as they relate to 

Texaco” and have the clerk’s office reassign Texaco to a 

different judge.2 Id. at 3:13-4:1. The trial judge noted, 

however, that if the parties had a mutually agreeable 

alternative he would consider it. Both parties asked for 

more time to analyze the issue. 

On December 10, 2009, the government filed a Motion 

for Relief from Judgment and for Recusal pursuant to 

Rule 60(b) of the Rules of the Court of Federal Claims. In 

that motion, the government argued that recusal was 

mandatory and unwaivable under 28 U.S.C. § 455(b)(4), 

and that the presiding judge was required to recuse 

himself from the entire proceeding, not just with respect 

to individual parties. The government further argued 

 2 Although the judge referred only to Texaco during 

the telephone conference, it is undisputed that Chevron is 

also the parent company of plaintiff Union Oil. 
SHELL OIL COMPANY v. US 6

that the court’s orders as to Shell Oil and Arco would still 

have an unfair preclusive effect with respect to the claims 

by Texaco and Union Oil given the identity of issues 

between the Oil Companies. 

During the course of briefing on the Rule 60(b) motion, the government obtained a copy of the judge’s financial disclosure statement for the calendar year 2008. That 

disclosure report, which the judge signed and certified on 

May 15, 2009, disclosed an interest in “Chevron Texaco 

Stock.” See Exhibit - 2008 Financial Disclosure Form, 

Shell Oil, No. 06cv141 (Fed. Cl. Jan. 7, 2010), ECF No. 

66-1. 

On December 28, 2009, before briefing on the government’s Rule 60(b) motion was complete, the government 

appealed the court’s October 30, 2009 final judgment to 

this court. The government has explained that it filed the 

appeal at that time to avoid expiration of the time to 

appeal the court’s judgment. 

On February 2, 2010, the judge issued an order indicating that, in light of the government’s appeal, he no 

longer had jurisdiction to rule on the government’s pending Motion for Relief from Judgment and Recusal. In the 

order, the trial judge stated that: 

the Government could restore jurisdiction by 

withdrawing its appeal, in which case the Court 

would vacate its earlier decisions with respect to 

Texaco and Union Oil. The Government could 

then appeal the Shell Oil and Atlantic Richfield 

portions of the decision. The case almost solely focuses on the facts in Shell’s case. It could also 

then re-litigate the Texaco and Union Oil cases 

before another judge. 
7 SHELL OIL COMPANY v. US

Order, Shell Oil, No. 06cv141 (Fed. Cl. Feb. 2, 2010), ECF 

No. 71 at 2. Accordingly, the government filed a motion 

in this court to remand. 

On May 19, 2010, this court granted the government’s 

motion to remand the case so that the trial court could 

consider the government’s Rule 60(b) motion to vacate 

and for recusal. In the order, this court stated that, “we 

deem the better course is to remand so that the trial court 

may rule in the first instance on the United States’ motions.” Shell Oil Co. v. United States, No. 2010-5034 (Fed. 

Cir. May 19, 2010). We further found that the government’s request to have the court assign a “new judge to 

rule on its Rule 60(b) motion, should first be presented to 

the Court of Federal Claims and thereafter may be raised 

on appeal from a subsequent ruling, if appropriate.” Id. 

Accordingly, the case was remanded. 

On the same day this court remanded the case, the 

government filed a motion asking the Chief Judge of the 

Court of Federal Claims to transfer the case to a different 

judge. Motion to Reassign Case, Shell Oil, No. 06cv141 

(Fed. Cl. May 19, 2010), ECF No. 72. In that motion, the 

government requested that the case be transferred to a 

different judge to address the merits of the government’s 

still pending Rule 60(b) motion for relief from judgment 

and for recusal. 

On May 27, 2010, the trial judge issued an order finding a conflict with respect to Texaco and Union Oil, but 

not with respect to Shell Oil and Arco. Based on that 

conclusion, the judge ruled that he would allow Shell Oil 

and Arco to proceed to appeal “in the interest of justice,” 

sua sponte severed Texaco and Union Oil from the case, 

and ordered the clerk’s office to reassign their claims to 
SHELL OIL COMPANY v. US 8

another judge.3 In reaching this decision, the court noted 

that “[i]t would be manifestly unfair to allow a conflict 

with two of the four parties to delay the decision for the 

two companies where no conflict of any kind existed or 

exists.” Order, Shell Oil, No. 06cv141 (Fed. Cl. May 27, 

2010), ECF No. 74. Accordingly, the judge denied as moot 

the government’s: (1) Rule 60(b) motion for relief from 

judgment and for recusal; and (2) motion for the Chief 

Judge to transfer the case to another judge. The judge 

then vacated his October 30, 2009 judgment and its 2008 

and 2009 summary judgment orders and reissued his 

prior decisions with respect to Shell and Arco only. Shell 

Oil Co. v. United States, 93 Fed. Cl. 439 (2010) (liability); 

Shell Oil Co. v. United States, 93 Fed. Cl. 153 (2010) 

(damages). 

On August 4, 2010, the judge entered final judgment 

against the United States in the amount of 

$68,849,505.88, allocated as follows: 

• Shell Oil: $52,027,916.08; 

• Arco: $16,821,589.80 

The government timely appealed the final judgment 

to this court on September 17, 2010. As a general rule, a 

judge’s refusal to recuse under § 455 can be reviewed on 

an appeal from a final judgment. See 13D Charles Alan 

Wright, Arthur R. Miller & Edward H. Cooper, Fed. Prac. 

& Proc. § 3553, at 149 (3d ed. 2008) (noting that, where a 

judge refuses to disqualify “it is safe to say – generally, at 

least – that such an order can be reviewed on appeal from 

a final judgment in the case”). This is particularly true 

 3 At this stage, Texaco and Union Oil’s claims are 

pending before a different judge on the Court of Federal 

Claims in Texaco, Inc. v. United States, Case No. 

06cv1411. On July 12, 2010, the Texaco court issued an 

order staying the case pending resolution of this appeal. 
9 SHELL OIL COMPANY v. US

where, as here, the party asking for recusal timely raised 

the issue to the court below. We have jurisdiction under 

28 U.S.C. § 1295(a)(3). 

STANDARD OF REVIEW

Given our exclusive jurisdiction over appeals from final judgments of the Court of Federal Claims, we apply 

the law of this circuit when reviewing the denial of the 

government’s request for recusal. See 28 U.S.C. 

§ 1295(a)(3) (“The United States Court of Appeals for the 

Federal Circuit shall have exclusive jurisdiction . . . of an 

appeal from a final decision of the United States Court of 

Federal Claims.”). Consistent with the vast majority of 

courts to consider this issue, we review a judge’s failure to 

recuse for an abuse of discretion. See Phonometerics, Inc. 

v. Westin Hotel Co., 319 F.3d 1328, 1334 (Fed. Cir. 2003) 

(“Under the law of the Eleventh Circuit, the pertinent law 

on this recusal issue, a district court’s refusal to recuse 

may be raised in an appeal from the final judgment and is 

reviewed for an abuse of discretion.”) (citations omitted). 

DISCUSSION

The government argues that the judgment of the 

Court of Federal Claims is tainted because the judge’s 

wife owns shares in the parent company of two parties to 

the proceeding: Texaco and Union Oil. Specifically, the 

government argues that the trial judge was required to 

disqualify himself under 28 U.S.C. § 455(b)(4) from the 

entire proceeding, and, because he failed to do so, this 

court should vacate the lower court’s judgment and remand the matter with instructions that the case be assigned to a different judge. The government further 

argues that the judge’s decision to sever Texaco and 

Union Oil while reissuing the decisions with respect to 

Shell Oil and ARCO “could have preclusive or prejudicial 

effect upon the remaining matters,” such that the gov-
SHELL OIL COMPANY v. US 10

ernment would be prejudiced by any order other than one 

which vacates the judgment at issue in this appeal. 

Appellant’s Br. 30. 

In response, the Oil Companies argue that: (1) the 

trial judge complied with § 455(b)(4) when he severed 

Texaco and Union Oil from this lawsuit and had them 

transferred to a different judge; and (2) any error in the 

judge’s decision not to disqualify himself would be harmless because this court reviews the trial court’s grant of 

summary judgment de novo. 

For the reasons discussed below, we find that the trial 

judge was required to recuse himself under § 455(b)(4). 

Given the circumstances, we conclude that vacatur is the 

appropriate remedy.4

A. 28 USC § 455(b)(4) Mandates Recusal 

Section 455 governs the disqualification or recusal of 

federal judges. Section 455(a) provides that “[a]ny justice, 

judge, or magistrate judge of the United States shall 

disqualify himself in any proceeding in which his imparti-

 4 The government previously moved for summary 

reversal on the conflict issue. This court denied that 

motion, noting that “the better course is to deny the 

United States’ motions without prejudice to the United 

States raising its issues in its briefs.” Order on Motion, 

Shell Oil Co. v. United States, No. 2010-5161 (Fed. Cir. 

Jan. 4, 2011). We have noted that “summary disposition 

is appropriate, inter alia, when the position of one party is 

so clearly correct as a matter of law that no substantial 

question regarding the outcome of the appeal exists.” 

Joshua v. United States, 17 F.3d 378, 380 (Fed. Cir. 1994) 

(citation omitted). Given the unique posture and circumstances of this case, particularly the judge’s decision to 

sever the parties with whom his wife has a financial 

interest, summary disposition was not appropriate here. 
11 SHELL OIL COMPANY v. US

ality might reasonably be questioned.”5 While § 455(a) 

operates as a “catchall” recusal provision, § 455(b) lists a 

number of specific circumstances where recusal is required. The subsection at issue here, § 455(b)(4), provides 

that a judge shall disqualify himself when he “knows that 

he . . . or his spouse . . . has a financial interest in the 

subject matter in controversy or in a party to the proceeding.” A “financial interest” is defined as “ownership of a 

legal or equitable interest, however small.” 28 U.S.C. 

§ 455(d)(4). It is well-established that the ownership of 

stock constitutes a “financial interest.” The statute 

defines a “proceeding” to include “pretrial, trial, appellate 

review, or other stages of litigation.” § 455(d)(1). 

Section 455(b)(4) “expressly provides that the judge 

must know of his or her interest” before he is required to 

recuse. Liljeberg v. Health Servs. Acquisition Corp., 486 

U.S. 847, 859 (1988) (“A careful reading of the respective 

subsections makes clear that Congress intended to require knowledge under subsection (b)(4) and not to require knowledge under subsection (a).”). This language 

“embodies an actual knowledge test regarding disqualifying circumstances and provides a bright line as to disqualification based on a known financial interest in a 

party – i.e., an equity financial interest of any size is 

disqualifying.” Chase Manhattan Bank v. Affiliated FM 

Ins. Co., 343 F.3d 120, 127 (2d Cir. 2003); see also Union 

Carbide Corp. v. U.S. Cutting Serv., 782 F.2d 710, 714 

(7th Cir. 1986) (“Since the statute forbids only the knowing possession of a financial interest, since Judge Getzendanner relinquished control of the case as soon as she 

 5 Given that section 455 applies to “any justice, 

judge, or magistrate judge of the United States,” it “includes judges who sit on the United States Court of Federal Claims.” Addams-Moore v. United States, 79 Fed. Cl. 

578, 580 n.1 (2007). 
SHELL OIL COMPANY v. US 12

found out about the financial interest, and since she did 

not resume control until the financial interest was eliminated, at no time was she in literal violation of the statute.”). Pursuant to § 455(c), a judge “should inform 

himself about his personal and fiduciary financial interests, and make a reasonable effort to inform himself about 

the personal financial interests of his spouse and minor 

children residing in his household.” 28 U.S.C. § 455(c). 

Recusal under § 455(b) cannot be waived. Indeed, the 

statute specifically provides that “[n]o justice, judge, or 

magistrate judge shall accept from the parties to the 

proceeding a waiver of any ground for disqualification 

enumerated in subsection (b).” 28 U.S.C. § 455(e). Although recusal under § 455(b)(4) is mandatory, there is a 

statutory exception where the judge discloses and divests 

himself of the financial interest. Specifically, § 455(f) 

provides that, if a judge or spouse “has a financial interest 

in a party (other than an interest that could be substantially affected by the outcome),” and this interest appears 

or is discovered “after substantial judicial time has been 

devoted to the matter,” then “disqualification is not required if the [judge or spouse] divests himself or herself of 

the interest that provides the grounds for the disqualification.” 28 U.S.C. § 455(f); see also Kidder, Peabody & Co. 

v. Maxus Energy Corp., 925 F.2d 556, 561 (2d Cir. 1991) 

(finding that § 455(f) applied where the judge immediately disclosed and divested his stock and the parties had 

devoted nearly three years to the litigation). 

The legislative history reveals that § 455(f) was 

created: 

to permit a judge or his or her spouse . . . to resolve the conflict by divesting themselves of the 

property creating the conflict. Disqualification 

would continue to be automatic if the interest in 
13 SHELL OIL COMPANY v. US

the controversy was one that could be substantially affected by the outcome. For example, a 

significant stockholder in a closely held corporation with close acquaintances would be expected 

to recuse himself or herself rather than divest. 

In re: Certain Underwriter Defendants, 294 F.3d 297, 304 

(2d Cir. 2002) (citing H.R. Rep. No. 100-889, reprinted in 

1988 U.S.C.C.A.N. 6029-30). Where a judge discovers a 

financial interest and divests in accordance with § 455(f), 

disqualification under § 455(b)(4) is no longer required. 

See United States v. Pappert, 1 Fed. Appx. 767, 769 (10th 

Cir. 2001) (finding that the judge’s “prompt divestment 

prevented her from having to recuse” and that once the 

judge “divested herself of the stock that created the conflict . . . § 455(b)(4) no longer applied”). 

Here, there is no evidence that the judge’s wife divested the Chevron stock and therefore § 455(f) is inapplicable.6 Because the stock was not divested, recusal is 

mandatory under § 455(b)(4), and cannot be waived. 

Given the lack of divestiture, as soon as he discovered the 

conflict, the trial judge was required to disqualify himself 

from the entire proceeding and ask the clerk of court to 

transfer the case to another judge. 

Although the judge explained that he did not discover 

the interest until he was entering final judgment, the 

record reflects knowledge of his wife’s financial interest in 

Chevron at least as early as May 15, 2009 when he completed his certified Financial Disclosure Report disclosing 

 6 During oral argument, counsel for the government 

stated that: “We are unaware of any divestiture. There 

was not any divestiture as of the time we filed our notice 

of appeal or as of the time of severance.” Oral Argument 

at 13:50, available at http://www.cafc.uscourts.gov/oralargument-recordings/2010-5161/all. 
SHELL OIL COMPANY v. US 14

an interest in “Chevron Texaco Stock.” While the May 15, 

2009 disclosure date post-dates the trial judge’s February 

2, 2008 and March 31, 2009 opinions addressing the oil 

companies’ motions for summary judgment as to liability 

and damages, it pre-dates his September 28, 2009 decision denying the government’s motion for reconsideration 

with respect to damages, as well as his October 30, 2009 

entry of final judgment.7 Accordingly, the judge should 

have recused himself as of May 15, 2009 and should have 

taken no further action other than the ministerial act of 

transferring the case to another judge. See United States 

v. O’Keefe, 128 F.3d 885, 891 (5th Cir. 1997) (noting that, 

when a judge recuses himself from a case, he “may take 

no action other than the ministerial acts necessary to 

transfer the case to another judge”). Neither entering 

final judgment nor denying the motion for reconsideration 

can be construed as “ministerial tasks.” See id. (finding 

that, post-recusal, the district court judge “performed a 

discretionary act, not a ministerial act” when he ruled on 

a motion for reconsideration). 

The Oil Companies argue that the judge’s decision to 

sever Texaco and Union Oil satisfied § 455(b)(4) because 

he is no longer presiding over a proceeding in which his 

spouse has a financial interest. In other words, the Oil 

Companies suggest that the judge cured the conflict by 

“divesting” two of the parties from the case. Although a 

judge can divest a financial interest to avoid recusal, 

nothing in the statutory text supports the idea that a 

judge can avoid otherwise mandatory recusal by severing 

from the proceeding the parties in which his spouse has a 

 7 Because the financial disclosures must be filed 

yearly, the same stock ownership should have been disclosed on each financial disclosure which post-dated the 

2004 inheritance. It is unclear from the record whether 

these disclosures were made, however. 
15 SHELL OIL COMPANY v. US

financial interest and transferring those parties to a 

different judge. Because the divestment exception set 

forth in § 455(f) applies only to divesting a financial 

interest in a party, and there is no indication that Congress intended to create an exception whereby a judge can 

sever or “divest” certain parties from the case to resolve a 

conflict, we find Plaintiffs’ argument is not well-taken. 

This is particularly true where, as here, there is substantial overlap with respect to the issues involved in the 

remaining parties’ claims, and the matters had been 

considered jointly throughout the proceedings. 

Because the judge’s wife owns shares in the parent 

company of Texaco and Union Oil, § 455(b)(4) requires 

recusal. See Key Pharms., Inc. v. Mylan Labs., Inc., 24 F. 

Supp. 2d 480, 482 n.2 (W.D. Pa. 1998) (noting that, under 

§ 455, “the owner of stock in a parent corporation has a 

direct legal or equitable interest in a controlled subsidiary 

and the judge should disqualify himself”). The judge’s 

decision to sua sponte sever Texaco and Union Oil did not 

satisfy the statutory requirement of disqualifying himself 

from the entire proceeding. We emphasize that there is 

neither an allegation nor suggestion that the judge was 

unduly influenced by his wife’s financial interest, which 

no one argues was substantial. The statute does not 

require as much – it simply requires recusal whenever 

financial conflicts of interest exist, regardless of whether 

those conflicts affect the outcome of the case. Because 

the judge was required to recuse himself under 

§ 455(b)(4), his failure to do so violated the statute. 

B. The Appropriate Remedy 

Given our conclusion that the trial judge erred in not 

recusing himself from the case, we turn now to the appropriate remedy. Plaintiffs argue that any error in the 

judge’s decision not to recuse is harmless because the 
SHELL OIL COMPANY v. US 16

judgment is subject to de novo review on appeal. In 

response, the government argues that, under the Oil 

Companies’ theory, “any conflicted court could enter 

summary judgment and the error would be harmless” 

given the standard of review on appeal. Appellant’s Reply 

3. 

As the Supreme Court has noted, “[a]lthough § 455 

defines the circumstances that mandate disqualification 

of federal judges, it neither prescribes nor prohibits any 

particular remedy for a violation of that duty.” Liljeberg, 

486 U.S. at 862. Instead, Congress “wisely delegated to 

the judiciary the task of fashioning the remedies that will 

best serve the purpose of the legislation.” Id. 

In Liljeberg, the Supreme Court affirmed the Fifth 

Circuit’s decision to vacate a district court judge’s final 

judgment where that judge should have disqualified 

himself under § 455(a) due to an appearance of impropriety. Id. at 852. Although the Court agreed with the Fifth 

Circuit that vacatur was appropriate under the facts of 

that particular case, it explained that harmless error 

analysis can apply to violations of § 455(a). Id. at 862 

(“As in other areas of the law, there is surely room for 

harmless error committed by busy judges who inadvertently overlook a disqualifying circumstance. There need 

not be a draconian remedy for every violation of 

§ 455(a).”). The Court concluded that, when deciding 

whether to vacate a judgment for violation of § 455(a), a 

court should consider: (1) “the risk of injustice to the 

parties in the particular case”; (2) “the risk that the denial 

of relief will produce injustice in other cases”; and (3) “the 

risk of undermining the public’s confidence in the judicial 

process.” Id. at 864. 

While the Supreme Court in Liljeberg did not specifically address whether violation of § 455(b) could consti-
17 SHELL OIL COMPANY v. US

tute harmless error, this court and courts in other circuits 

have indicated that the “differences between sections 455(a) and 455(b) d[o] not ‘preclude the application 

of harmless error analysis in the context of a 455(b) 

violation.’” Polaroid Corp. v. Eastman Kodak, Co., 867 

F.2d 1415, 1421 (Fed. Cir. 1989) (citing Parker v. Connors 

Steel Co., 855 F.2d 1510, 1527-28 (11th Cir. 1988)); see 

also Patterson v. Mobil Oil Corp., 335 F.3d 476, 485 (5th 

Cir. 2003) (“[W]e are confident that § 455(b) violations are 

also subject to the doctrine of harmless error.”) (citation 

omitted). 

In Polaroid, this court rejected Kodak’s attempt to 

distinguish Liljeberg on grounds that it dealt with 

§ 455(a) rather than § 455(b). Polaroid, 867 F.2d at 

1420.8 Specifically, the panel stated that the “argument 

is meritless, the Supreme Court having made no such 

distinction in outlining the test to be used in deciding 

whether to vacate ‘for violation of § 455.’” Id. at 1420-21. 

The court, citing with approval the Eleventh Circuit’s 

decision in Parker, concluded that the Supreme Court’s 

Liljeberg decision did not draw any distinctions between 

 8 The facts in Polaroid are distinguishable from 

those at issue here. In Polaroid: (1) the trial judge informed the parties at the outset of trial that her motherin-law owned stock in Kodak but that she did not think it 

was a disqualifying conflict; (2) at the time of final judgment, neither the judge nor her spouse had a financial 

interest in a party to the proceeding (and thus § 455(b)(4) 

did not apply); (3) years later, after the judgment was 

appealed, this court affirmed, and the case was returned 

to the district court for assessment of damages and trial 

on remaining claims, the judge held a pretrial conference 

explaining that her mother-in-law died and that “she was 

sua sponte disqualifying herself because she was a legatee 

and her husband was executor of the estate”; and 

(4) Kodak sought to vacate all of the judge’s orders after 

six and a half years of litigation. 867 F.2d at 1416-17. 
SHELL OIL COMPANY v. US 18

sections 455(a) and 455(b) with respect to the appropriate 

remedy. Id. at 1421 (citing Parker, 855 F.2d at 1527-28). 

Applying the Supreme Court’s guidance in Liljeberg, we 

found that “the risk of injustice to the parties weighs far 

more heavily on Polaroid’s side of the scales” and that 

there was “little or no risk of injustice in other cases” 

because “the present denial rest[ed] on the specific facts of 

this case.” Id. at 1420. As such, this court affirmed the 

district court’s denial of the motion to vacate. 

In light of our decision in Polaroid, violations of 

§ 455(b) can constitute harmless error. Accordingly, 

although violation of § 455(b)(4) mandates recusal, mandatory recusal does not require mandatory vacatur. 

Instead, circuit courts have discretion with respect to the 

appropriate remedy for a violation of § 455. For the 

reasons discussed below, we conclude that, under the 

circumstances of this case, vacatur is the appropriate 

remedy. 

Applying the harmless error factors articulated in Liljeberg, we first consider the risk of injustice to the parties. 

See Liljeberg, 486 U.S. at 864. Here, the trial court’s 

decision to reinstate its judgment with respect to Shell Oil 

and Arco may have a prejudicial effect on the now-severed 

litigation of Texaco and Union Oil’s claims. Indeed, given 

the identity of issues involved, the parties do not dispute 

that a decision in this case will control the outcome in the 

severed case involving Texaco and Union Oil. See Oral 

Argument at 16:20 (noting that the Texaco case is stayed 

pending resolution of this case, and that this appeal “will 

be dispositive in that case, most probably”). The government argues that, if judge’s opinions with respect to Shell 

Oil and Arco are allowed to stand, the government would 

be precluded from challenging the court’s determinations 

under the doctrine of collateral estoppel because the 

issues would have already been decided adversely to the 
19 SHELL OIL COMPANY v. US

government. We agree. Because the Oil Companies’ 

avgas contracts contain substantially similar language 

and the facts relating to dumping waste at the McColl site 

are nearly identical as to all four companies, the judgment here could have a preclusive or prejudicial effect in 

the severed case. 

In addition to the risk of injustice to the parties, we 

find that, under these circumstances, there is also a “risk 

of undermining the public’s confidence in the judicial 

process.” See Liljeberg, 486 U.S. at 864. This is particularly true given that, several months after disclosing a 

financial interest in “Chevron Texaco Stock,” the trial 

judge: (1) denied the government’s motion for reconsideration; and (2) entered final judgment in excess of $86 

million in favor of the Oil Companies. 

The Oil Companies argue that the risks of injustice 

are non-existent because this court will subject the district court’s judgment to de novo review. In support of 

this position, Plaintiffs assert that “[e]very federal circuit 

court of appeals to consider the question has held that the 

availability of de novo appellate review renders harmless 

any error in failing to recuse under Section 455.” Appellees’ Br. 57; see Williamson v. Indiana Univ., 345 F.3d 

459, 464-65 (7th Cir. 2003) (“On appeal, this court reviews 

the grant of summary judgment de novo . . . and therefore 

Williamson has received a full review by an impartial 

panel”); Higganbotham v. Oklahoma, 328 F.3d 638, 646 

(10th Cir. 2003) (noting that the court “independently 

reviewed th[e] issues de novo and concluded that the 

plaintiff’s complaint was properly dismissed” and that any 

“error by the district court judge in not recusing himself 

would have been harmless under the circumstances of 

this case”); Patterson, 335 F.3d at 485 (“Because we 

review a summary judgment ruling de novo, using the 

same standards as the district court, the parties are 
SHELL OIL COMPANY v. US 20

guaranteed a fair, impartial review of the merits of the 

ruling.”). Unlike the circumstances here, however, the 

courts in the cases upon which Plaintiffs rely specifically 

found that the risks of injustice and concern for public 

confidence set forth in Liljeberg were not implicated. See

Williamson, 345 F.3d at 465 (“Likewise, the risk of injustice in other cases and concern for public confidence are 

not implicated by these facts.”); Higganbotham, 328 F.3d 

at 646 (considering the risks from Liljeberg and concluding that “none of these risks is present”); Patterson, 335 

F.3d at 486 (considering the risk of injustice and the 

public’s confidence in the judicial process in finding that 

the § 455(a) violation constituted harmless error). 

The fact that this court reviews the grant of summary 

judgment de novo does not supplant our consideration of 

potential injustice stemming from a trial judge’s failure to 

recuse in accordance with § 455(b)(4). In other words, a 

judge’s failure to recuse does not automatically constitute 

harmless error whenever there is de novo review on 

appeal. Otherwise, as the government notes, under 

Plaintiffs’ theory, there would be no need for a trial judge 

to recuse from any action in which the appellate court will 

apply de novo review. If that were the case, a judge’s 

financial interest in a party would always be harmless so 

long as the case is decided on summary judgment. Such a 

result is untenable. Because we find that the trial judge’s 

failure to recuse in this case was not harmless error, 

particularly given the risk of injustice and risk of undermining the public’s confidence in the judicial process, we 

conclude that the appropriate remedy is to vacate the 

district court’s orders and remand the case. 

CONCLUSION

For the foregoing reasons, we vacate Judge Smith’s 

final judgment in favor of Shell Oil and Arco, as well as 
21 SHELL OIL COMPANY v. US

the summary judgment orders on which it was premised. 

Specifically, we vacate the following: (1) the May 27, 2010 

Opinion and Order granting Plaintiffs’ cross-motion for 

summary judgment as to liability (ECF No. 75); (2) the 

May 27, 2010 Opinion and Order granting Plaintiffs’ 

motion for summary judgment as to damages (ECF No. 

76); (3) the Final Order dated August 2, 2010 (ECF No. 

79); and (4) the Judgment dated August 4, 2010 (ECF No. 

80). This case is hereby remanded with instructions that 

it be reassigned to a different judge on the Court of Federal Claims. 

VACATED AND REMANDED