June 1998

For Judges, a Recusal Reminder

Title 28 U.S.C. § 455 places on all judges the responsibility for avoiding conflicts of interest between their financial interests and their assigned cases. It requires a judge not only to be informed about his or her personal financial interests but also to make a reasonable effort to be informed about the personal financial interests of his or her spouse and minor children. Recent media coverage of judges who have failed to stay current should be fair warning of the importance of updating financial interest lists.

Section 455 is mirrored by Canon 3C(2) of the Code of Conduct for United States Judges, which imposes on judges a duty to keep informed so that they can recuse themselves from cases in which they have disqualifying financial holdings. In accordance with Canon 3C(1)(c), judges are required to recuse themselves whenever they or their spouses or minor children residing in the household have "a financial interest in the subject matter in controversy or in a party to the proceeding."

Administrative Office Director Leonidas Ralph Mecham wrote to judges in February emphasizing the importance of up-to-date financial information, as did Judges A. Raymond Randolph, chair of the Conference Committee on Codes of Conduct, and Frank Magill, chair of the Conference Committee on Financial Disclosure, in a subsequent memorandum to all judges. Mecham noted that it is important to ensure that appropriate screening mechanisms are in place to prevent possible conflicts from occurring. "Most courts already have such screening procedures in place in the clerk's office, in chambers, or both," Mecham said. "Nevertheless, it is always prudent to ensure that the financial information these procedures rely upon is complete and up-to-date." Randolph and Magill also urged that care should be taken to include all disqualifying financial interestswhether or not recorded on other reporting formswhen a recusal list is compiled.

The most common form of disqualifying financial interest is the ownership or control of securities. However, a judge's need to recuse can be minimized, depending upon the type of investment. For example, mutual fund investments will usually eliminate the risk of conflicts of interest involving individual companies, and the number of stocks can be limited to an easily managed number. Turning over investments to a trust or money manager, however, does not relieve a judge of his or her legal and ethical duties to remain informed about financial holdings.

In some courts, clerks of court maintain the recusal lists. In others, judges or their secretaries keep track of disqualifying connections. Even if the court has automated the process, automatically notifying judges of conflicts, the system is only as good as the information entered. Judges should review and update lists on a regular basis. An investment list can be supplied to the court officials responsible for reviewing new case assignments so that cases are not assigned to judges who own stock in a party. The list also can be used in chambers for comparison with the current caseload to ensure that an inheritance, gift, or new purchase of stock does not involve any parties in pending cases.