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Judge’s failure to recuse because of stock ownership doesn’t require vacating decision, 5th Circuit says

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December 14, 2022
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Judge’s failure to recuse because of stock ownership doesn’t require vacating decision, 5th Circuit says

By Debra Cassens Weiss

December 12, 2022, 10:49 am CST

A federal appeals court has refused to disturb a judge’s ruling in favor of Walmart, despite her ownership of company stock.

The 5th U.S. Circuit Court of Appeals at New Orleans refused Dec. 8 to vacate a decision against Sloane Roberts, who sued Walmart and law enforcement for alleged injuries stemming from her arrest and jailing in 2010.

The 5th Circuit ruled in a per curiam decision by Judge Patrick Higginbotham, Judge Kyle Duncan and Judge Kurt Engelhardt, Reuters reports. Duncan and Engelhardt are appointees of former President Donald Trump, while Higginbotham is an appointee of former President Ronald Reagan.

U.S. District Judge Rebecca Doherty of the Western District of Louisiana had tossed Roberts’ claims against Walmart because they were barred by the statute of limitations.

Roberts sought to vacate Doherty’s decision after being informed in 2021 by the clerk of the Western District of Louisiana that Doherty had Walmart stock while she was presiding in the case.

The clerk made the announcement after an investigation by the Wall Street Journal revealed that more than a hundred federal judges had failed to recuse from hundreds of cases involving companies in which they or their families owned stock.

A new federal judge, Judge Robert R. Summerhays, ruled that Doherty’s failure to recuse was harmless, and the 5th Circuit affirmed.

Doherty should have recused herself, but her “unfortunate mistake” does not automatically make her judgment void, the appeals court said. Instead, her decision should be evaluated by determining whether the error was harmless.

“Judge Doherty’s ruling was based on firm legal principles, there is no evidence of bias or favor, and Roberts neither appealed Judge Doherty’s decision at the time nor refiled her state law claims in state court within the time permitted her,” the appeals court said.

The 5th Circuit said its holding that Doherty erred by failing to recuse will “serve as a cautionary note” to future district court judges who may also have financial interests in a case.

The appeals court also said the public’s faith in the judicial system “may be more undermined by vacating a straightforwardly correct decision like Judge Doherty’s, given the passing of time and Roberts’ original
decision neither to appeal nor to refile.”

Reuters spoke with ethics efforts who said it was significant that the 5th Circuit chose to publish the decision.

Bruce Green, a professor at the Fordham University School of Law, told Reuters that he thinks that the 5th Circuit published the decision to send a message to other litigants that rulings against them would not be vacated because of a judge’s stock ownership, unless they can show bias or an unjust decision.

Michael Frisch, a professor at the Georgetown University Law Center, told Reuters that the 5th Circuit’s cautionary note to judges “is cold comfort” to Roberts.

“Faith in the judicial system weighs in favor of a litigant’s right to a conflicts-free adjudication,” Frisch said.

Hat tip to How Appealing, which noted the Reuters story and linked to the decision.





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Tags: 5th Circuit CourtABA JournalCareer & PracticeConsumer LawCorporate LawEthicsJudiciarylawlegal newsLouisianaStatesTrials & Litigation
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