June 15, 2010 2:30PM

Recusal Rules Impact Environmental (and Other) Litigation

Two weeks ago I blogged about the dismissal of the Katrina‐​related global warming case because half the judges on the Fifth Circuit were recused for having financial interests in the energy companies and utilities (which the plaintiffs chose specifically to gain recusals but mis‐​timed their strategy). Well, now it seems that many judges on the Gulf Coast are recusing themselves from the nascent (and future) oil spill suits, again because they own shares of BP, Transocean, and the other companies involved. Indeed, over half the federal district judges in the affected states — Texas, Louisiana, Mississippi, Alabama, and Florida — will not be participating in these cases, leading to calls to appoint judges from elsewhere in the country to handle them.

That’s ridiculous! Owning a few hundred or thousand dollars worth of shares of stock is not enough to change the way a judge will behave, particularly when the public knows which judge owns which stock. If we cannot agree that such purported “conflicts” don’t really show an appearance of impropriety — if we really doubt the integrity of our judiciary to such an extent — then we might as well throw out the ethics rules, throw up our hands, and declare the country ungovernable. (I’m reminded of the Carrie Underwood song, “Jesus Take the Wheel.”)

Moreover, the financial conflict rules are murky. As this AP story discusses, “a judge does not have to step aside if the investments are part of a mutual fund over which they have no management control. Mere ties to companies or entities in the same industry, no matter how extensive, also don’t require disqualification.” So here we’re valuing form over substance.

Look, maybe this is just a pet peeve of mine — it’s not an ideological issue one way or the other — but I think you just have to apply the “reasonable skeptic” standard. Every judge is human and has his various biases. It’s one thing to recuse if counsel for one of the parties is the judge’s spouse or child, or if half the judge’s wealth is invested in one of the parties. But dinky little “abundance of caution” recusals cost the justice system more in administrative hassle, sunk attorney fees, and other wastes of time and money than they benefit it in increased integrity.

As for the oil spill litigation, the U.S. Judicial Panel on Multidistrict Litigation — which looks at complex cases on similar issues brought in disparate venues — meets July 29 in Boise, Idaho (of all places), to hear arguments on consolidation. In light of the aforementioned recusals, the Louisiana cases may well be sent to Alabama, Mississippi, or South Florida — or a federal courthouse near you!