by Joseph R. Wilbert
Recently, United States Magistrate Judge Paul S. Grewal recused himself from a case after announcing that he was leaving the bench to work for Facebook, Inc. Interestingly, Facebook is not a party to the case. Nor does it have a direct financial interest. Rather, the case involves Google, Inc., an entirely separate company, which is a defendant in a putative consumer class action.
The recusal stemmed from a routine protective order dispute. After the parties could not agree on the terms of a protective order to govern Google’s confidential information, the plaintiffs suing Google requested Judge Grewal’s recusal. They asserted that his “impartiality might reasonably be questioned” because “Google’s and Facebook’s interests in protecting their confidential and proprietary information” are “aligned.” Corley v. Google, Inc., No. 5:16-cv-00473-LHK (N.D. Cal.) (Corley), dkt. 95. Judge Grewal, while stating that the circumstances came “nowhere close” to suggesting doubts about impartiality, nevertheless agreed to recuse himself from the matter.
This case raises an interesting ethical question: What are a judge’s recusal obligations when his or her future employer may have certain views or preferences on the legal issues before the judge, even though the employer is not a party? In short, more is likely required for recusal than a simple assertion that a judge’s future employer may have aligned interests or hold similar litigation views as a party before the judge.
Corley involves “Google Apps for Education,” which is a suite of applications that Google offers to educational institutions. The Corley plaintiffs allege that Google engaged in improper data collection practices, including profiling individuals to serve targeted advertising to them. The plaintiffs assert that these practices violated the Electronic Communications Privacy Act.
After the parties submitted briefing on the terms of a protective order to govern Google’s confidential information, the plaintiffs filed a one-page letter to Judge Grewal requesting that he consider whether recusal is warranted. The letter stated that, in light of Judge Grewal’s upcoming position at Facebook, “the dispute before you concerning the form of protective order to be entered . . . raises questions directly pertinent to your new job.” Corley, dkt. 95.
How, then, are issues related to a protective order involving Google “directly pertinent to” Judge Grewal’s new position at an entirely different company? The plaintiffs “believe that Google’s and Facebook’s interests in protecting their confidential and proprietary information, both in general and in the course of litigation with consumers, are sufficiently aligned that a reasonable person might now question [the judge’s] impartiality in this dispute.” Id. And what is the authority supporting this serious request? While the plaintiffs’ letter was not a fleshed out brief, it cited 28 U.S.C. section 455(a), which states that “[a]ny justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.”
Judge Grewal erred on the side of caution and, despite disagreeing with the plaintiffs, granted their recusal request. He stated that he “struggle[d] to understand the basis for [the] request.” Corley, dkt. 96. His order noted that the only articulated basis for recusal was “the fact that [his] new employer may hold certain views about protecting confidential information in cases such as this.” Id. Judge Grewal found that the issues raised “come nowhere close to meeting the requirement under 28 U.S.C. § 455(a) that [his] impartiality might reasonably be questioned.” Id. Nevertheless, Judge Grewal granted recusal, stating that “the goal of Section 455 is ‘to avoid even the appearance of partiality,’” and that parties “deserve reasonable assurances that, when ruling on even the least significant procedural matter, their judge is not thinking even one bit of anything other than the merits of their positions under the law.” Id. (quoting Liljeberg v. Health Servs. Acquisition Corp., 468 U.S. 847, 860 (1988)). The recusal was, in his words, done “at the risk of erring on the side of caution and unnecessarily burdening [his] already overburdened colleagues on the bench.” Id.
In closing, Judge Grewal stated:
I must indulge in a final word to whichever magistrate judge colleague finds this pile dropped on his desk. Under ordinary circumstances, I would buy you lunch for this inconvenience as a small token of my appreciation. But the present circumstances suggest that even such a limited gesture might be misinterpreted. So rather than giving you lunch, I give you something far more modest, but just as heartfelt: my thanks.
Id.
Rules Governing Judicial Recusal due to Impartiality Concerns
The Corley plaintiffs cited 28 U.S.C. section 455(a) as the legal basis for their request. As mentioned above, that provision requires disqualification of United States judges in proceedings where their “impartiality might reasonably be questioned.” California has a similar provision, which states that “a judge shall be disqualified if . . . [a] person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial.” Cal. Code Civ. Proc. § 170.1(a)(6)(A)(iii).
There are many other rules on judicial recusal, too, and there is not room for all of them here. Speaking generally, both federal and California rules hold that judges should consider recusal if, among other things, they have a personal bias, they have a financial interest in the outcome, or there would be an appearance of impropriety. 28 U.S.C. § 455(a)-(b); Cal. Code Civ. Proc. § 170.1.
Further, there are both federal and California standards governing judicial ethics. As to impartiality concerns, the standards echo and supplement the law. For example, the Code of Conduct for United States Judges, Canon 2 states that “a judge should avoid impropriety and the appearance of impropriety in all activities,” and Canon 3 states that judges should perform duties “impartially,” and mirrors the rule requiring disqualification where “the judge’s impartiality might reasonably be questioned.” Additionally, the Judicial Conference of the United States, Committee on Codes of Conduct published an opinion addressing judges’ “Pursuit of Post-Judicial Employment,” but that opinion does not directly address cases like Corley—where a judge’s future employer may have particular views about legal issues in pending cases, even though the employer is not a party. See Guide to Judiciary Policy, Vol. 2B, Ch. 2, Published Advisory Opinion No. 84 (2016).
Underlying all of this are notions of fair play and due process. An oft-repeated maxim is that “no man can be a judge in his own case and no man is permitted to try cases where he has an interest in the outcome.” In re Murchison, 349 U.S. 133, 136 (1955). Read broadly to include idealistic or indirect interests in the outcome of a litigation, such a maxim would call for recusal in numerous cases. Accordingly, the Supreme Court has generally held that, judges may also be disqualified on grounds of due process, but only where they have a “direct, personal, substantial, pecuniary interest” in a matter. Id.
Unsurprisingly, when confronted with whether a judge should be recused, courts heavily rely on the facts presented. For example, in Caperton v. A. T. Massey Coal Co., 556 U.S. 868, 884 (2009), the Court found “a serious risk of actual bias” in a judge where “a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge’s election campaign when the case was pending or imminent.” In Cheney v. United States Dist. Court, 542 U.S. 367 (2004), on the other hand, Justice Scalia refused recusal in a case involving his personal friend, then-Vice President Richard B. Cheney, after assessing the particular facts at issue.
Judicial Recusal In Cases Where Resolution of Legal Issues May Impact the Judge in Other Matters
Where a judge’s future employer is a party or law firm in a case before that judge, recusal is typically proper. See, e.g., Guide to Judiciary Policy, supra, Opinion No. 84. Such a rule makes good common sense, but that was not what Judge Grewal faced in Corley. That case presented a much more attenuated issue—namely, what should judges do when an issue in one of their cases may have an indirect impact on their future employers’ interests?
At least some cases hold that judges should not be disqualified solely because they may have an indirect interest in the outcome. For instance, cases routinely hold that judges should not grant recusal in cases involving the rights of minority groups to which they belong. A compelling early example is Pennsylvania v. Local Union 542, Int’l Union of Operating Eng’rs, 388 F. Supp. 155 (E.D. Pa. 1974), where a black judge refused recusal in a racial discrimination case. And an interesting contemporary illustration is the Perry same-sex marriage case that addressed the constitutionality of California’s Proposition 8, which had amended California’s Constitution to define “marriage” as excluding same-sex couples. There, after a bench trial, a federal judge held that Proposition 8 violated the United States Constitution. That judge later disclosed, after resigning from the bench, “that he was gay and that he had for the past ten years been in a relationship with another man.” Perry v. Brown, 671 F.3d 1052, 1095 (9th Cir. 2012), vacated on other grounds by Hollingsworth v. Perry, 133 S. Ct. 2652 (2013). After this disclosure, the proponents of Proposition 8 sought to vacate his ruling, arguing that the judge had an “interest that could be substantially affected by the outcome of the proceeding,” and that “his impartiality might reasonably be questioned.” Id. at 1095. The Ninth Circuit flatly rejected this argument, holding that it was not “reasonable to presume . . . that a judge is incapable of making an impartial decision about the constitutionality of a law, solely because, as a citizen, the judge could be affected by the proceeding. To hold otherwise would demonstrate a lack of respect for the integrity of our federal courts.” Id. at 1096 (citation and quotation marks omitted).
The Perry and Local Union 542 cases make perfect sense. Indeed, California statutory law states that “[i]t shall not be grounds for disqualification that the judge . . . [i]s or is not a member of a racial, ethnic, religious, sexual or similar group and the proceeding involves the rights of such a group.” Cal. Code Civ. Proc. § 170.2(a).
But what about cases in different contexts? Consider the Supreme Court case Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813 (1986). In Lavoie, a judge’s interest in a legal issue before him was so direct that it required disqualification. That case involved individuals who sued an insurance company for (1) unpaid insurance benefits, and (2) punitive damages due to the insurer’s alleged bad faith failure to pay a valid claim. Id. at 816. A jury awarded $3.5 million in punitive damages. On appeal, the Alabama Supreme Court addressed novel questions of Alabama insurance law and the propriety of the punitive damages award, and affirmed by a 5-4 vote.
It turned out that one of the justices who joined the majority had brought two lawsuits against insurance companies alleging bad faith and seeking punitive damages, at least one of which was pending when the justice joined the Alabama Supreme Court’s opinion. Further, the novel issues addressed by the case were also at issue in the justice’s pending lawsuit. Based on this, the United States Supreme Court held that the justice should have been disqualified because “his interest was ‘direct, personal, substantial, [and] pecuniary.’” Id. at 824 (brackets in original).
The Corley situation lies somewhere in the middle, but is closer to Perry, and it likely would not have been reversible error for Judge Grewal to refuse recusal. As Judge Grewal recognized, at most, his future employer may have held certain views about protecting confidential information that were similar to the views of a party before him. Without more, it would be difficult for a reasonable person to doubt that a judge could impartially apply the law. Indeed, the Corley plaintiffs’ argument, if adopted, could require recusal in almost any case involving a judge’s future employment. Almost every company has an interest in protecting confidential information, whether it is a small company or Facebook. And most every law firm has clients that have such concerns. In other words, Judge Grewal was likely being very cautious because of the particular circumstances in Corley, and not necessarily because the plaintiffs’ arguments were strong.
The case for recusal may have been stronger, of course, if the judge had been tasked with deciding issues that would have a direct and important impact on the judge’s future employer. For example, if Facebook had been actively involved in similar litigation, or if the Corley case had alleged that one of Google’s practices was illegal and Judge Grewal knew that Facebook was engaged in the same practice, the case for recusal would have been clearer.
Ultimately, though, issues involving judicial recusal are highly fact intensive, requiring a case-by-case approach. Judge Grewal’s recusal was cautious. Litigants should not expect judges to grant recusal solely because they will, in the future, work for an employer that might share similar litigation views as a separate party before the court.
Joseph R. Wilbert is a partner at Wilbert Bark LLP in Irvine, California. Mr. Wilbert’s practice focuses on intellectual property, insurance law, business law, and personal injury matters. He currently serves as the Chair-Elect of the OCBA’s Insurance Law Section and Secretary of the OCBA’s Professionalism & Ethics Committee. He can be reached at jwilbert@wilbertbark.com .
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