Source: http://volokh.com/posts/1204140026.shtml
Timestamp: 2019-04-22 12:31:54+00:00

Document:
The L.A. Times reports that the Exxon Valdez punitive damages case might yield a 4-4 division — with no precedent being set, and the lower court decision being affirmed — because "Justice Samuel A. Alito Jr. withdrew because he holds Exxon stock." And indeed important cases have in the past yielded 4-4 deadlocks because one Justice owned stock in one of the companies.
This is a pretty bad result, it seems to me: An important issue will be unresolved, the Justices' time will be wasted, the parties' money will be wasted, and all over what is likely just a few thousand dollars' worth of investment.
Isn't there some better solution, even if we insist that a judge may not own even a small stake in one of the parties? For instance, if the problem is indeed just that the Justice owns actual stock (as opposed to owning a share in some fund that owns the stock), wouldn't it be much better for the Justice simply to sell the stock if certiorari is granted? This would presumably be little loss for the Justice, who could sell at market rates and lose just the commission (plus perhaps have some taxable capital gain that he might rather have deferred). Nor would the Justice have any enduring bias in favor of the company — it's not like the past stock ownership created or reflected an emotional relationship that persists even when the stock is sold. Or am I missing something here?
UPDATE: My colleague and corporations law maven Stephen Bainbridge has more. Also, to respond to some general comments: (1) I'd try to make this divestment-instead-of-recusal something of a rule, whether strictly binding or just followed as a matter of practice and precedent. (2) If there are insider trading objections to this (a matter discussed in the comments), I think the law should be amended to remove such objections; the minor insider-trading costs created by such behavior seem to me to be greatly outweighed by the benefits of letting Justices do their jobs.
(3) I realize that litigants generally aren't entitled to their day in the Supreme Court; but it still strikes me as unfair to litigants to cause them to spend a lot of money litigating the matter there, and then have the case end up 4-4 just because of happenstance. It's not a horrible unfairness, but it's something of an unfairness. And, more importantly, it also creates costs to the legal system -- generally, the grant of certiorari is triggered by the Court's judgment that there is uncertainty (say, a circuit split) that should be resolved for the benefit of future litigants and prospective litigants. If resolving that uncertainty is (all else being equal) a benefit, failing to resolve it tends to be a cost.
Prof- so then do you force the Justice to sell, or give him the option? Both answers seem wrong- a Justice shouldn't have to suffer financial losses as a result of his job, and giving him the option to sell and stay on the case or hold and recuse basically gives the Justice a choice of whether or not he wants to rule on the case, which strikes me as pretty unusual.
If they sell the stock after cert is granted it could border on/appear to be insider trading. Justice Alito knows how he will vote and possibly how other Justices will vote. If he sells the stock, possibly knowing that the punitive damages will be upheld, and then the damages are upheld and the stock then tanks, Justice Alito has just traded ahead of the market. Whether or not Justice Alito knows how his colleagues would vote is up for debate.
One could envision a scenario where analysis predict that Justice Kennedy is the swing vote. Justice Kennedy, owning stock in a corporate party to the litigation, sells, knowing full well that he is likely to vote against the company. That does not appear to be the best policy. It may not be illegal insider trading, but it may be appear to be unethical.
I concur with The Ace's worries about insider trading liability.
I don't doubt for a minute that the problem is one of appearances except that stock ownership in a corporation will give the owner of that stock a much greater than average understanding of the financial condition of a firm and a greater knowledge of the people who run that firm than non-owners. If, for instance, in this case the 2.5b dollar award was heard on cert with Alito on the bench and he realized by virtue if this greater understanding, that his $10-20,000 investment could be greatly diminished by upholding the judgment, I think that the thought might cross his mind as he contemplated his opinion. That in itself is enough in my mind to recommend recusal.
I don't think the justices meet the SEC's legal definition of an insider. Insiders have to be either officers or directors of the company, or own a fairly large percentage of a company's stock. Other people, even if they're acting on non-public information, don't count as insiders.
Recusals based on stock ownership arise at the U.S. Supreme Court fairly frequently. My understanding is that a Justice can sell the stock before the time of oral argument and then choose to participate in deciding the case on the merits.
There of course are other grounds for recusal that are not as easily remedied by the affected Justice, such as having a family member who is a lawyer for one of the parties in the case or having served as a judge on the lower court panel whose decision is now before the U.S. Supreme Court for review.
Some states have adopted procedures that seek to avoid the possibility of an equally divided ruling from those states' courts of last resort as the result of a justice's recusal. In essence, if a justice on the state's highest court is recused, a judge from an intermediate appellate court who is not recused is randomly selected to replace the recused justice. The value of this approach is that it avoids the possibility of an evenly divided court and the resulting failure to announce a decision that will govern future cases. The drawback of this approach is that there is absolutely no guarantee that the replacement judge will vote the same way as the recused justice, and therefore the outcome may differ from the outcome the state's highest court would have reached had no justice been recused.
I'm curious whether anyone would favor legislation or judicial rulemaking that would authorize the U.S. Supreme Court to randomly tap a non-recused judge from the U.S. Courts of Appeals to replace a recused Justice in a case in which certiorari has been granted?
Has a lower court judge ever sat by designation on the Supreme Court when a Justice couldn't fulfill his/her duties due to conflict, disease, etc? I gather doing so would be prohibited by the Constitution in some respects, although it wouldn't strike me as a bad idea, especially given the possibility of a 4-4 tie, etc., as EV points out above.
The appearance of insider trading would not occur at the time of sale, since the sale would be forced. Rather, the appearance would be insinuated at the time the Justices vote on whether to grant certiorari.
If the Justice/shareholder was required to sell the stock if cert was granted, wouldn't that create an incentive (if the justice wanted to retain the stock) to vote against cert? Separately, wouldn't the conflict still exist under your proposal, since the Justice/shareholder could exercise his bias, if so inclined, by voting a particular way on cert? The decision on whether or not to grant cert is an important one, as it can often be dispositive of a particular case.
Why Alito just place the stock in a blind trust, as others holding Constitutional offices have done (e.g. Cheney)?
If both litigants wanted to avoid the possibility of a 4-4 decision, couldn't they agree to waive the conflict?
Bashman beat me to it, by seconds, I presume.
I also concur with the Ace's worries re: insider trading. But, as a systematic matter, why is a 4-4 decision with no precedential value a bad thing? We expect judges to issue their holdings on narrow grounds, to not try to create sweeping new jurisprudence. There are also many times when litigants spend enormous amounts of moeny and don't get their cases to a final decision in the Supreme Court (where the Supreme Court denies Cert). So, I don't understand why, as a systematic matter, this is such a bad thing (it's obviously bad for the litigants, but then so is all sorts of standing rules, and the basic case or controversy law).
Didn't Congress recently pass a law permitting a recused Justice to sell stock without having to pay capital gains tax? I thought Roberts took advantage of it to sit in Stoneridge.
There's no reason for a justice to hold stock in individual companies. Put it in an index fund or a blind trust.
This is interesting. I'd be against it. If one or 2 cases on the Court's docket every year turn out to be duds because of tie votes and recusals, I don't think that's a huge problem. I think I'd be less upset about that than I'd be about the possibility that a roll of the dice could result in Justice-for-a-Day Reinhardt making binding law for the rest of the country.
If you force the justice to sell the stock, wouldn't this give the justice incentive to vote against the company and then buy the stock back at the lower price?
Question: Could Congress authorize the Supreme Court to replace the recused justice with a retired justice?
I think legislation of that sort would ultimately be struck down for violating the Constitution since that judge would not have been nominated or confirmed to that particular position as the Constitution requires.
A better path would be for Congress to set a monetary guideline, if there isn't one, for when a judge should recuse. If they own shares of that company involved via a mutual fund then I think there's less of a chance of direct financial gain being shown than there would be in outright owning shares of that individual company.
I'm curious to hear what other States have a truly random system of picking those tie-breaking Justices and how that has worked out.
I think we should go back to the days of Marbury v. Madison. It wasn't like the case was about Marshall's negligence or anything. How is that for vested interest?
I could be wrong, but I think U. S. Supreme Court justices have only sat by designation on lower courts as opposed to lower court judges on the U. S. Supreme Court.
Could one solution be an expansion of the Supreme Court to fifteen justices, sitting in panels of nine; with en banc rehearings being allowed, but only on the same basis as rehearings are currently granted. Expansion of the Supreme Court is very difficult politically, and probably could only be accomplished if the President identified before the bill became law the six people who would be nominated, and that the Senate agreed to confirm them en bloc.
A nice balanced list might be Rawlinson, Sotomayor, Berzon, Wardlaw, Kozinski and Posner; such a slate could give people confidence that this isn't an attempt at court-packing.
The justices should be required to sell all stock upon confirmation. Make it free of capital gains tax if you want. It is only 9 people so no great loss of tax revenue. No conflict issue.
Unfair? Don't take the post.
In fact, outsiders can be liable under many circumstances. The relevant case law arises out of the misappropriation theory of liability. See United States v. O'Hagan. The argument would be that the judge owes a duty to the government not to use information he learns in his judicial role for personal gain.
See generally my book on insider trading at http://astore.amazon.com/corporatilawa-20/detail/1566627370.
I think I'd be less upset about that than I'd be about the possibility that a roll of the dice could result in Justice-for-a-Day Reinhardt making binding law for the rest of the country.
An interesting question is, how binding would it be? If the same legal issue comes to the court again in a few years, with different parties and no reason for the justice to recuse, would the previously recused justice feel obligated to vote the same way his temporary replacement did?
Why is recusal unfair to the parties? a 4-4 vote is an affirmance of the lower court. I guess it makes it slightly harder for the appellant, as the appellee only needs 4 votes, but despite being non-precedential, it does decide the controversy.
I don't think Alito selling the stock based on his information about what other Justices would do is considered insider trading. The question is, at least, a tricky one.
There are two theories for why insider trading violates the securities laws. First, under fiduciary duty theory, the insider trader has violated the securities laws because he has violated a fiduciary duty to the corporation by misusing its information. See Chiarella v. US. Under this theory, Justice Alito couldn't be held liable since he doesn't owe a fiduciary duty to Exxon. He's just an ordinary shareholder, and ordinary shareholders don't owe fiduciary duties. Moreover, he isn't getting his information from anyone with fiduciary duties, since he's just getting information from the other Justices, who also don't hold fiduciary duties. This means that he can't be held liable under the tippee/tipper framework, which is a sort of aiding and abetting liability.
The second theory is misappropriation theory, under which an insider trader violates the securities laws when he breaches a "duty of trust and confidence" owed to the source of the information. See US v. O'Hagan. The source of the info here is the other Justices (or perhaps their clerks). Does Alito's recusal here violate any duty that he has to the other Justices? I doubt that there's any formal law that announces what duties Justices have to their other Justices (in part probably because there's no legal authority that can effectively promulgate such rules). If anything, a Justice's "duties" to his colleagues are defined only informally, through their general practices and understandings. If Justices have, in the past, sold stock in order to avoid recusal, it would be hard to argue that some informal practice among them barred that sort of conduct.
Thus, I think it'd be pretty tough to conclude that a Justice violates the securities laws when he sells stock to recuse himself from a case.
I agree that there may be constitutional concerns. But putting them aside, perhaps a fair way to go about this would be to assign the chief judges of the courts of appeal, on a rotating basis. For example, for this case, the CJ of the 1st Circuit would sit by designation, unless he had a conflict or the case came up from his circuit. The next time, the CJ of the 2d Circuit would sit. That would inject some randomness into the process, thus avoiding political wrangling over which judge would cast the deciding vote, while still making sure an experienced judge would hear the case. Allowing retired justices to make a comeback is intesting, too.
"a Justice shouldn't have to suffer financial losses as a result of his job": so propriety is valued at zero?
dearieme- Amazing, so you think this statement "a judge should not being forced to suffer financial losses" equals this statement "I don't value propriety." I'm at a loss for words as to how you reached this conclusion... is English your first language?
I don't think the issue is whether it's really material to the outcome of the case or whether selling it would really be insider trading. I think the real issue is the appearance that there might be some impropriety when considered by anyone, no matter the political history they might have. Here you have a politically charged case, a justice who is regularly attacked by his party's political opponents, who has a small stake in an oil company that is attempting to reduce its liability in an enviornmental disaster.
Were he to participate in the case, even after selling the stock, the Mother Jones and Nation articles practically write themselves.
As far as the financial part ("don't take the job"), a moment's googling tells me that an Associate Justice makes about $208,000, but a fifth year associate at Finnegan, Henderson, Farabow, Garrett &Dunner, L.L.P., a firm I picked by choosing the longest name in the first page of a listing of DC firms, makes a $215,000 base, with various bonuses and a potential 20 pct performance bonus. Clearly Justices aren't in it for the money anyway; why make it even less appealing?
All the justices agreed to suffer financial losses (future private sector earning potential) when they took the job. Why should we differentiate income earned from capital with income earned from labor?
Sticky - So if the Justices have already agreed to suffer one sort of financial loss they must have therefore agreed to suffer other sorts of financial losses?
The tax consequences of government service have been pointed out before, especially relating to Hank Paulson's service as Treasury Secretary, by The Economist newspaper.
Does anyone think that 26 U.S.C. 1043 wouldn't apply to Justice Alito? If it doesn't (I am certainly not a tax practitioner), shouldn't it? Would there be any consequence to divestiture then, especially if the divestiture took place prior to the grant of cert?
The conflict of interest meriting recusal doesn't arise from not selling the stock, it arises from having purchased the stock in the first place. The danger to be guarded against is not profiteering, it's bias. Say justice X is married to defendant Y. Upon granting cert, (s)he divorces her (him).
Does this solve the recusal problem? If X liked ABC co enough to invest in it, there's a danger that X's fondness for ABC co could cloud X's judgement, either in favor of or, by leaning backwards trying not to be or appear biased towards, be biased against.
Its been years since I had to study up on insider trading when I was a financial planner, but a judge would not normally count as an insider. He is not affiliated with the company. He could become the equivalent of an insider only if someone like a board member or president gave him inside info, like what supposedly happened with Martha Stewart who was not an insider, but who was given inside information and acted upon it.
Before reading this I had assumed all of the justices had their investments in blind trusts since that is what I would have done if in a similar position. That is a lot simpler than having to recuse yourself all the time.
Why don't the justices just do what politicans, financial journalists, and others who have potential conflicts do: don't own individual stocks and don't trade them actively? You can own a mutual fund, or you can have stocks in a blind trust, and be just fine financially. There's no need to play the market if you have a job like "Wall Street Journal reporter," "U.S. Senator," or "Supreme Court Justice." It just invites too many potential conflicts.
"Why don't the justices just do what politicans, financial journalists, and others who have potential conflicts do: don't own individual stocks and don't trade them actively? You can own a mutual fund, or you can have stocks in a blind trust, and be just fine financially. There's no need to play the market if you have a job like "Wall Street Journal reporter," "U.S. Senator," or "Supreme Court Justice." It just invites too many potential conflicts."
I've always wondered this. There was a report about Robert's holdings around the time when he got confirmed, and it turned out that he owned stock in nearly every blue chip company. I don't understand why he would do that instead of simply investing in some sort of large cap mutual fund.
I wasn't making a normative claim, I was simply stating the positive fact that the justices are willing to trade earnings for prestige/power.
If a justice should not have to endure financial losses of any kind (when there's a financial conflict of interest), then there is going to be the appearance of impropriety. If a justice should have to endure financial losses of up to $100, then proriety would be worth $100.
It's overly simplistic, of course, but attacking it with the rejoinder "is English your first language?" strikes me as childish.
How about having Justice O'Connor hear this case in place of Alito? It is her old seat after all.
Has a lower court judge ever sat by designation on the Supreme Court when a Justice couldn't fulfill his/her duties due to conflict, disease, etc?
I'm surprised no one has answered this question. This happened after a fashion in the antitrust case U.S. v. Aluminum Co. of Am., 320 U.S. 708 (1943) and 322 U.S. 716 (1944). Four justices recused themselves, resulting in the Supreme Court lacking a quorum. Congress amended the statute governing the Court's jurisdiction so that the case could be referred to the Second Circuit. That latter decision is reported at 148 F.2d 416. Thus, in effect, a panel of Second Circuit judges (including both Learned and Augustus Hand) served as the "Supreme Court" for that case.
But the whole thing is a roll of the dice. Had Florida turned out differently in 2000, or Ohio in 2004, Al Gore or John Kerry would have filled the seats now occupied by Roberts and Alito (maybe with Reinhardt; who knows?). Had Bush I not been asleep at the switch and appointed a conservative instead of Souter, a lot of cases might have turned out differently. Ditto with Nixon and Blackmun.
One of the things about our legal system that bothers me is that there are so many things that ultimately turn out to be a crapshoot. Maybe we should just admit as much and stop worrying about Alito's Exxon stock.
Constitutional issues aside, the best idea does seem one where justices either sell all their stock on taking their oaths, or put everything into a blind trust and don't touch it, etc. The Court hears few cases as it is, wouldn't it be better for the Justices to make some small financial sacrifice for a better system of adjudication? I seriously doubt this would deter anyone from taking a Supreme Court seat ever. Seriously, who here would turn down an appointment for that reason?
As Professor Bainbridge noted above, it could be considered insider trading under a misappropriation theory.
That said, the issue is easily solved. The Justices would merely adopt a 10b5-1 trading plan that would cause their shares to be automatically sold in the event that cert is granted in a case where the issuer is a party in interest. Rule 10b5-1 provides a safe harbor from the insider trading rules that, I think, could quite easily be used by the Justices.
The problem is that the act of granting cert itself is an act that can affect a stock price. The vote on granting cert and the results could manipulate a stock price much like a vote on a decision. Justices would vote on cert knowing they would have to liquidate if it is granted.
I don't see anything in the Constitution that would prevent an Article III Judge from sitting on the Supreme Court by designation. The Constitution leaves the structure of the federal judiciary up to Congress, requiring that there be only "one Supreme Court" and implying that there is to be a chief justice. The Supreme Court upheld circuit riding, the once common practice of the justices sitting on lower federal courts. The Court held this didn't violate the Appointments Clause or separation of powers. It seems like that should apply just as much with judges going in the reverse direction--from a lower court to the Supreme Court.
In any event, I agree that requiring Justices to divest their stock holdings before they begin service. Being a federal judge means surrendering much of your free speech rights. It seems like giving up stock ownership isn't so bad compared to that, especially given what they can make from book deals and lecture fees.
There's a different way to deal with this problem: grant cert in a case where stock ownership doesn't yield recusals. Issues of truly national significance needing the Court's resolution tend to arise in multiple petitions over time, giving the Court a choice of vehicles for resolving the issue. The Court can just pick a vehicle where stock ownership doesn't present a problem.
This option points up something else. In this case, had the Justices' individual conflict-check processes been functioning adequately, the rest of the Court should have known of Alito's stock ownership at the time of the cert grant. Sometimes those checks fail, and the conflict isn't noticed until after the grant. But that's not a reason to force Justices to sell their stock; it's a reason to have a better conflict check in the first place. If the conflict-checking process is working, then the Court will know when voting on cert whether 4-4 is a possibility. If it is a possibility, the Justices can simply decide to wait for a different case.
The L.A. Times story doesn't say when Alito announced his recusal, and I haven't checked to see whether the cert. grant noted his non-participation at the stage. If he did recuse at that stage, then one has to ask why the Court granted cert at all. Some would say that it's further proof that the Court was overwhelmed by the size of the punitives award in this case, and that it granted as an exercise in simple error correction. (Other evidence pointing in that direction, I'm told, is that subsequent legislative changes have made it virtually certain that the Court's decision will affect only this case.) If the cert grant was an exercise in error correction, then waiting for a later case without a conflict wouldn't satisfy the Court. But on the other hand, the Court really isn't supposed to be in the business of pure error correction.
In sum, if the Court (a) effectively checks for conflicts at the cert stage, (b) declines to grant cert in cases where conflicts present realistic risks of 4-4 results, and (c) recalls that its cert jurisdiction is not really designed for pure error correction, Eugene's proposal should be unnecessary.
Steve @ 3:59 pm has it right.
I can't imagine the Senate would approve any Supreme Court justices without confirmation hearings. These nominations would unleash the World Series of confirmation hearing(s). It might take years to make a decision (or decisions).
A better path would be for Congress to set a monetary guideline, if there isn't one, for when a judge should recuse.
1) If it splits 4-4, will we know very quickly, as we did earlier this term with the case on the IDEA Act and private schooling?
2) Why is it thought that this would split 4-4? I haven't had the time to read this one that closely and probably won't get to the argument transcript until this weekend, so somebody fill me in. If it's believed that the left wing of the Court will support the verdict, and we know that Scalia has opposed placing a cap on punitive damages (and, IIRC, penned a dissent in a later term in which he vowed to keep voting that way), wouldn't it be more likely to get 5-3 or 6-2 in favor of upholding the jury's damages award?
The Alcoa case referenced above (authored by Learned Hand) relies upon what is now codified at 28 USC 2109.
What may be an open question is whether Alcoa is binding precedent on all lower courts or not. Paragraph 2 of Section 2109 states that cases brought to SCOTUS for review other than by direct appeal where a quorum is lacking end up affirmed with the same effect as upon affirmance by an equally divided court (i.e., the SCOTUS ruling has no precedential value). See Arizona v. United States Dist. Ct., 459 US 1191 (1983).
However, paragraph 1 (governing cases that come before SCOTUS on direct review) does not have restrictions on how the opinion and judgment are treated.
Unless one also wants to argue that the transfer of review to the CTA under 2109, para 1, also is unconstitutional, I don't see why the assignment by designation (pursuant to some new statute) of another Article III judge to fill an empty slot would create any constitional problems.
Steve P.- "If a justice should not have to endure financial losses of any kind (when there's a financial conflict of interest), then there is going to be the appearance of impropriety." This assertion is wrong. There are certainly methods of avoiding financial losses that avoid impropriety- blind trusts for one. My point was coerced sales of stocks is a poor solution for protecting propriety.
You may think my statement childish, and perhaps it was. However wouldn't you find it insulting if someone claimed you don't value propriety of the justice system at all? My belief that a Judge should not be exposed to financial losses does not in any way correlate to not valuing propriety, and its pretty obnoxious for someone to claim it does.
I don't think any of these solutions address the primary problem: ownership of stock is more than a financial position, it's effectively an endorsement of the company.
I apply the same standard to my investments as I would to employment - I wouldn't buy stock in any company at which I wouldn't work.
I think that several of the suggestions above have a great deal of merit -- blind trusts, mutual funds, the Alcoa solution, and the like. My quibble is with the basic premise that there is something unfair about the litigants getting, in effect, a non-decision decision by the Supreme Court. There are dozens, if not hundreds, of circuit splits on important areas of law -- e.g., at some points in the past, and for years at a time, recovery for certain § 1983 claims and immunity thereto depended very much on the circuit in which the alleged tort occurred. This unfairness persists so long, and especially, as the Court's docket decreases.
I see nothing wrong with a Senior Justice being recalled in the event of a conflict. But if we are bringing in Circuit Judges on an "acting" basis, I suggest the Judges on the Federal Circuit. That certainly would be a blank slate (except in patent and trademark cases).
I agree with Anderson (and others) that mutual funds and blind trusts could easily solve these problems.
Simple solution: randomly recuse one of the other eight.
I agree with Fingerprint File and Dave N - just have O'Connor sit on the case. Obviously we're in a rare situation to have a retired justice around, but that's not a reason we can't take advantadge of that.
The costs of insider information and so forth are extremely small compared to the potential costs and benefits we are talking about with respect to the legal system.
I say let's go one better and simply grant all justices a lifetime savings account with guaranteed 10% interest for their money (no taking deposits in return for a cut). The cost to our government of renumeration for supreme court justices is just so small compared to the effects their decisions have even mucking around with making them spend time worrying about this seems silly.
This just occurred to me: federal judges, including Supreme Court justices, get their paychecks from the federal treasury. So at least in theory, shouldn't all of them have to recuse themselves from any case in which the IRS is a party?
You may well be right. They do have the advantage, though, of being relatively known quantities who have been through the Senate confirmation process already.
In California, a recused Supreme Court justice is replaced by a randomly appointed justice of the Court of Appeal.
Don't see why the feds couldn't do something similar.
Our legal system has managed with nine justices so far. I think recusal is a non-problem that will be rectified once the Senate stops confirming justices from one end of the continuum of legal thought. It could also be rectified if we get a Chief Justice who is intellectually respected by the associate justices and who is driven to get something more than just four other votes, but that appears to be a couple decades out at this point.
1) Buy and sell at times advantageous for the individual stocks rather than the Dow Jones as a whole.
2) Create his own blue-chip "fund" without the costs and fees associated with a fund. For a person with some significant assets, that extra 1 or 2% he loses in fees could be substantial enough he wanted to do it himself.
I have a question I haven't seen answered anywhere. If deciding a case in which you own stock in one party is a conflict of interest, is the same true for owning debt of one party?
If so, then wouldn't a judge deciding a case in which the U.S. government has a financial interest be in conflict if he owned any government bonds? With the same going for state, municipal and corporate bonds for their respective parties?
In state supreme courts, recusing has sometimes caused the remaining judges to just decide that the case won't be heard.
The California Supreme Court has refused to hear his appeal ... because four of the seven justices cited a conflict of interest because they controlled stock in oil companies that provided some of the solvents at issue in the case.
George said the remaining justices decided to dismiss the case because they were concerned that a Supreme Court ruling made with a majority of temporary justices wouldn't hold the same weight as an opinion of the permanent court.
Couldn't the Justice simply recuse himself or herself from the cert question, and then automatically sell the stock (or other security) in the event cert is granted? These concerns about the Justice being forced to suffer a financial loss strike me as overblown, since the Justice has already suffered the loss if the security's value has gone down. The Justice won't suffer an additional loss on top of the loss the Justice has already suffered unless the security is undervalued. That won't be the general case since securities markets are highly efficient. While I won't claim that securities are always correctly valued (which is obviously not true) there's not much, if any, evidence that undervaluation is more common than overvaluation.

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