Nearly 700 federal court cases between 2010 and 2018 were heard by 131 judges who had financial interests in a company that was part of the case. This legal bombshell could lead to the cases being heard again by new judges.
An investigation by The Wall Street Journal led to this discovery. The report also found that in two-thirds of those cases the judge ruled in favor of the company they had interest in. The cases include lawsuits involving companies like Comcast, Exxon Mobil, Apple, Ford, among other major corporations.
The judges failed to recuse themselves from 685 lawsuits and in 21 cases, a judge or family held more than $50,000 in stock of a company involved in the litigation, while in 173 cases the holdings were higher than $15,000.
These are veteran jurists, who were appointed by nearly every president from Lyndon Johnson to Donald Trump.
Following the finding of the Wall Street Journal (WSJ), 56 of the judges have directed court clerks to notify parties in 329 lawsuits that they should have recused themselves. New judges now might be assigned, potentially changing rulings.
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Judges are permitted to own stocks, but since 1974 federal law has barred judges from hearing cases that involve a party in which they, their spouses, or their minor children have a “legal or equitable interest, however small.”
When alerted to their violations, the judges offered a variety of explanations.
“Some blamed court clerks. Some said their recusal lists had misspellings that foiled the conflict-screening software. Some pointed to trades that resulted in losses. Others said they had only nominal roles, such as confirming settlements or transferring cases to other courts, though there is no legal exemption for such work,” The WSJ reported.
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