March 18, 2011

California Supreme Court justices’ financial disclosure statements show safeguards have been implemented to avoid mass recusals

In Wednesday’s Daily Journal [subscription required], Laura Ernde had an article regarding the justices’ recent filings of their annual Statements of Economic Interest. This year’s statements show that five of the six justices hold oil industry stocks. This is noteworthy because, in November 2007, four justices’ ownership of oil company defendants’ stock compelled those justices’ recusal and the Court’s dismissal of a toxic tort case after briefing on the merits and extensive amicus briefing had been completed. Lockheed Litigation Cases, S132167. Since then, however, safeguards have been put in place to prevent a repeat of that unfortunate incident. As a result, as Ernde reports, this year “no more than two justices own stock in any single oil company.” Full disclosure: Horvitz & Levy LLP was counsel of record in the Lockheed Litigation Cases for defendants Exxonmobil Corporation and Union Oil Company of California.

One Response to “California Supreme Court justices’ financial disclosure statements show safeguards have been implemented to avoid mass recusals”

  1. In has been reported that while the Court normally replaces disqualified justices with alternates from the Court of Appeal, George felt that having four substitutes would not give trial courts, lawyers and the public assurance that a decision by a less than full court would be the same under the full court. Apparently a decision on the merits by appointed justices would not carry the same weight as a decision of the regular court members. Reportedly, the Chief is distinguishing appointed panels which were created out of necessity and not conflicts of interest. The Supreme’s solution of dismissing the case and not having any decision gave the appearance of bias. The new safeguards of allowing judges to unrecuse themselves does not eliminate the appearance of bias. Allowing a substitute justice who never had the conflict does. How can a Supreme be impartial when they thought enough of the company to invest their money? Also, how will it look if a Supreme reinvests in the company after the decision—particularly if the decision was in favor of the conflicted-company? The better rule is once there is a conflict, there is always a conflict. If substitute justices are competent and qualified to be appointed out of necessity, they should hear cases where there are conflicts of interest.

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