Court Opinion

ID: 8938290
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:41:41.968053+00
Date Added: 2024-06-11T17:09:40.269047
License: Public Domain

FLAUM, Circuit Judge,
concurring in part and dissenting in part.
While I concur in the majority’s decision regarding the discovery order, I respectfully dissent from its treatment of the recusal issue because of my conclusion that a rule permitting district judges to “cure” section 455(b) disqualification by divestiture countermands congressional intent. Thus, despite the district judge’s concerned and highly responsive handling of the situation in this case, I would issue a writ of mandamus directing the judge to recuse herself.
The majority does not contest the fact that Judge Getzendanner was in a state of disqualification under section 455(b) when she became aware that her husband had a financial interest in two members of the plaintiff class. Nevertheless, the majority reasons that the judge cured or removed this state of disqualification by causing the interest to be sold. The majority concludes that the issue of disqualification then “bounced” out of section 455(b) and into section 455(a). I cannot adopt this position because section 455(b) is absolute in language and contains no provision for cure. Moreover, I read that language, and the intentions of Congress, to indicate that section 455(b) is the sole provision of the statute applicable to problems of financial interest and that analysis of this kind of problem under section 455(a) therefore is precluded.
The applicable provision of 455(b) mandates that the judge “shall disqualify” himself when he knows that he “has” a financial interest. The statute does not provide a “sell or disqualify” option, as Judge Getzendanner herself noted in her thoughtful analysis. Through a deft use of verb tenses, however, the majority suggests that Congress left open the possibility for cure by divestiture because once a judge learns of a financial interest and sells it, he no longer “has” the interest; rather the judge “had” an interest. The majority’s only proviso is that after the judge knows of the interest, he must sell before making any rulings in the case. This interpretation involves too much manipulation of the statutory language. A straight-forward reading of the statute would suggest that at the time a judge is made aware of a disqualifying interest, he falls squarely into the mandatory directives of section 455(b). Read this way, it appears that the lack of any specific mention in 455(b) of divestiture is due to Congress’s recognition of the fact that 455(b) encompasses every conceivable situation in which divestiture is relevant, since at the point at which the judge knows that he “has” an interest, the section directs the judge to step down. Thus, the language of section 455(b) operates as an insurmountable barrier and precludes any analysis under* the more “flexible” provisions of section 455(a).
Moreover, an examination of the intent underlying section 455(b) makes this interpretation compelling because it reveals that Congress desired to rid the statute of flexibility where financial interests are concerned. The central flaw in the majority’s approach is that the cure rule resurrects the “substantiality of the financial interest” inquiry that Congress expressly removed from the statute in 1974. As the majority acknowledges, the congressional amendment of section 455 in 1974 changed the threshold for financial disqualification from a “substantial interest” to “ownership of a legal or equitable interest, however small.” For non-financial interests, however, substantiality remained the trigger for recusal. The House Judiciary Committee explained at the time that “by setting specific standards [for financial disqualification], Congress can eliminate the uncertainty and the ambiguity arising from the language in the existing statute and will have aided the judges in avoiding possible criticism for failure to disqualify themselves.” H.R.Rep. No. 1453, 93d Cong. 2d *718Sess. (1974). Thus, it 'would appear that Congress intended where financial interest is raised as the ground for disqualification, that judges will not have the duty or the opportunity to decide the matter based on the significance of the interest: if financial interest exists, the judge must recuse himself.
The congressional decision to establish a unique per se rule for situations involving financial interest would clearly indicate that divestiture cannot cure disqualification by avoiding the proscription of section 455(b). As an analysis of the majority’s opinion reveals, such a cure approach entangles the district judge — and the judges sitting on review — in the prohibited exercise of weighing the substantiality of the financial interest. The majority’s rule en-grafts the once-vanquished substantiality standard onto the statute via section 455(a). Under the auspices of that section, the majority would have a district judge determine the propriety of his Continued presence in a case by assessing whether the cost of divestiture is so great as to cause a “reasonable person” to question the judge’s impartiality. This inquiry requires a judge to estimate not only the actual costs of divestiture — including brokerage fees, tax consequences, and so forth — but also the relative costs, derived by comparing actual costs to the value of the asset and to the financial worth of the judge and, if relevant, the judge’s spouse. At some level, presumably, these relative costs are so significant that the judge must step down because a reasonable person would suspect him of being “sore” at the party that had sought recusal. This results in nothing more than the pre-1974 substantiality test in another guise: a judge under both the pre-1974 scheme and the rule created today by the majority must decide a recusal issue by evaluating whether the size of the financial interest — or the cost of divesting it — is substantial relative to his entire worth. While such an analysis may be laudable in its search for economies of judicial manpower and administration, I am convinced that Congress enacted section 455(b) to eliminate this sort of analysis. Thus, I must conclude that the majority’s rule violates the mandate of the statute.
Turning to the majority’s statement that under a per se rule class actions such as the one here would require broad-scale disqualifications, I cannot share in its pessimism. First, we have no data before us suggesting that “many, probably most,” federal judges own securities that potentially could disqualify them in class actions. Moreover, judges wishing to avoid the possibility of disqualification can utilize “blind” trusts or invest in mutual funds, which were specifically exempted by Congress from the ambit of section 455(b). Finally, I can only assume that in the event that adherence to the per se rule creates problems of judicial administration, Congress will modify the statute. Until Congress so acts, however, we are limited by its statutory directives.
The majority concludes its discussion by suggesting that Union Carbide may have waited too long after it learned of the disqualifying interest before moving the judge to recuse herself, “at least where the ground for disqualification is merely the appearance of partiality.” Although I am also concerned about such a delay, I believe that with respect to section 455(b) disqualification, Congress’s unequivocal language means that parties cannot waive financial disqualification, even by their own misconduct or inaction. Because attorneys are officers of the court, as well as advocates, they have a responsibility to bring recusal motions at the earliest opportunity. Section 455(b) serves to protect the appearance and propriety of the judicial system, not just the interests of the immediate parties to the suit. Motions under this statute should not be used as part of litigation strategy, and if parties are intentionally dilatory in making 455(b) motions, appropriate sanctions should be considered.