More than 130 Federal Judges Broke the Law by Hearing Cases Involving Their Own Financial Interests

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More than 130 federal judges might have broken the law — some accidentally — by hearing court cases that involved their own financial interests, breaching a bedrock principle of American jurisprudence, which maintains no one should be a judge of their own cause, according to a report by the Wall Street Journal.

An investigation conducted by the newspaper found 131 federal judges violated U.S. law and judicial ethics by overseeing cases involving companies in which they or their family owned stock. The judges reportedly failed to disqualify themselves from 685 cases across the country since 2010.

Moreover, when the judges participated in such cases, about two-thirds of their rulings ended up being in favor of their or their family’s financial interests.

In New York, for example, Judge Edgardo Ramos handled a lawsuit between an Exxon Mobil Corp. unit and TIG Insurance Co. over a pollution claim while owning between $15,001 and $50,000 of Exxon stock. Judge Ramos ultimately accepted an arbitration panel’s opinion that TIG should pay Exxon $25 million, and added $8 million of interest.

In Colorado, Judge Lewis Babcock oversaw a court case involving a Comcast Corp. subsidiary, in which he ruled in its favor. Meanwhile, the judge or his family reportedly had between $15,001 and $50,000 in Comcast stock.

And at an Ohio-based appeals court, Judge Julia Smith Gibbons wrote an opinion that favored Ford Motor Co. in a trademark dispute while her husband held stock in the auto maker. And before the ruling, her husband’s financial adviser bought more Ford stock for his retirement account.

Judges offered a variety of explanations for their violations, Wall Street Journal reported, which added that some judges blamed their clerks, while others said their recusal lists had misspellings, which caused the court cases to make it past their conflict-screening software. Other judges simply pointed to trades that resulted in losses.

An official of the New York federal court claimed Judge Ramos was unaware of his violation, because his “recusal list” included only parent Exxon Mobil Corp., not the unit, and therefore slipped through the cracks of the court conflict-screening software, which relied on exact matches.

The unit, however, had informed the court at the beginning of the case that it was a subsidiary of Exxon Mobil, so that Judge Ramos — who was appointed by former President Barack Obama — could “evaluate possible disqualification or recusal,” according to court filings.

In the Comcast case, a Colorado couple accused the company’s workers of bullying them, scaring their 10-year-old daughter, and injuring their dog, and asked Judge Babcock to issue an order blocking Comcast from accessing their property to install fiber-optic cable.

Judge Babcock — who was appointed by former President Ronald Reagan — ruled the couple had “continually blocked Comcast’s access to the easement,” and sent the case back to state court, which was what Comcast wanted.

“I dropped the ball,” Judge Babcock said when asked about his violation. The judge went on to blame flawed internal procedures, and thanked the Wall Street Journal for “helping me stay on my toes the way I’m supposed to.”

As for the Ford case, Judge Gibbons — appointed by former President George W. Bush — claimed she had mistakenly believed a holding in her husband’s retirement account didn’t require her recusal, the report adds.

“I regret my misunderstanding, but I assure you it was an honest one,” Judge Gibbons insisted.

The Administrative Office of the U.S. Courts reacted by stating, “The Wall Street Journal’s report on instances where conflicts inadvertently were not identified before a case was resolved or transferred is troubling, and the Administrative Office is carefully reviewing the matter.”

The office added that the federal judiciary “takes very seriously its obligations to preclude any financial conflicts of interest,” and has taken steps — such as conflict-screening software and ethics training — to prevent future violations.

“We have in place a number of safeguards and are looking for ways to improve,” the office insisted.

You can follow Alana Mastrangelo on Facebook and Twitter at @ARmastrangelo, and on Instagram.

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