Justice best served by leaving intact a conflicted judge’s ruling: 5th Circuit

A Walmart logo is displayed above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., August 16, 2018. REUTERS/Lucas Jackson
  • 5th Circuit ruling
  • Judge Summerhays opinion
  • Liljeberg v. Health Services Acquisition Corp

(Reuters) - The 5th U.S. Circuit Court of Appeals ruled on Thursday that a federal trial judge in Louisiana made an “unfortunate mistake” when she failed to recuse herself in a 2015 civil rights case against Walmart Inc. The judge owned Walmart shares, the appeals court said, so there’s no doubt that she was required to step aside under the rules for judicial recusal.

But the appeals court also said that the plaintiff in the case is not entitled to reassert claims dismissed by a conflicted trial judge – and not just because the judge’s underlying decision was well-grounded. The 5th Circuit held that justice, writ large, is best served by calling out the since-retired trial judge, Rebecca Doherty of Lafayette, Louisiana, for failing to step aside but leaving her judgment intact.

Public faith in the system, wrote judges Patrick Higginbotham, Kyle Duncan and Kurt Engelhardt in a per curiam opinion, would be more undermined by reviving the suit -- especially because the plaintiff, Sloane Roberts, did not appeal the 2016 judgment for Walmart – than by letting the outcome stand.

That’s at least a debatable conclusion, based on my conversations with three judicial ethics experts. Michael Frisch of Georgetown University Law Center highlighted the right of the plaintiff, Roberts, to adjudication by an unbiased judge. “The admonition to future judges is cold comfort” to her, Frisch said by email. “Faith in the judicial system weighs in favor of a litigant's right to a conflicts-free adjudication.”

But Arthur Hellman of the University of Pittsburgh School of Law and Bruce Green of Fordham University School of Law said the 5th Circuit seems to have considered competing interests, including the consequences to the judicial system of relitigating a case that was correctly dismissed.

“This is a case where everything points in the same direction – there’s no reason to reopen the judgment,” Hellman said.

The context of the 5th Circuit ruling is important. Although Roberts’ counsel, Edward Moses of the Moses Law Firm, did not respond to my query, it appears that Roberts learned of Doherty’s Walmart shares as a result of The Wall Street Journal’s bombshell reports on federal judges failing to step aside from cases in which they have a financial stake in a party.

Roberts, who claimed that Walmart’s counterfeiting accusations led to her unwarranted incarceration for more than eight months, received word from the federal court clerk’s office about Doherty’s Walmart investment in October 2021. That was years after Doherty dismissed her constitutional claims for being filed too late and for failure to state a claim, but only weeks after the Journal’s story broke.

The Journal ultimately found that more 150 federal judges failed to follow recusal rules in nearly 1,100 cases. Courts in more than 800 cases, according to the publication, notified litigants that they might be entitled to have their cases reopened.

Roberts was apparently in that group. She sought to vacate the dismissal of her suit against Walmart and officers from two Louisiana police departments under Rule 60 of the Federal Rules of Civil Procedure, arguing that Doherty did not have jurisdiction because she should have disqualified herself. (Rule 60 addresses the rare circumstances in which a party is entitled to relief from a final judgment based on newly discovered evidence, fraud on the court or other factors.)

In a decision last January, U.S. District Judge Robert Summerhays of Lafayette concluded that Roberts failed to satisfy any of the factors in the test established by the U.S. Supreme Court in 1988’s Liljeberg v. Health Services Acquisition Corp. Summerhays said Roberts could not show that Doherty’s failure to step aside was unjust to her or that it risked creating injustice to parties in other cases. And public confidence, Summerhays said, was more likely to be impaired by the rote reversal of a well-reasoned opinion than by allowing Doherty’s ruling to stand.

The 5th Circuit adopted Summerhays’ analysis with hardly any discussion, merely concluding that the judge had “ably and succinctly” applied the Supreme Court test. In that regard, the appellate opinion can hardly be considered important or precedential.

But what is significant, said Hellman and Green, is that the 5th Circuit chose to publish an otherwise humdrum decision. That’s where the context of The Wall Street Journal bombshell becomes important: Green said he believes the appellate court published the opinion to send a message to any other litigant trying to undo years-old rulings against them based on recent disclosures about judges’ stock holdings: Unless you can show that the conflicted judge was biased or issued an unjust ruling, don’t expect your case to be resurrected.

Hellman was less declarative about the 5th Circuit’s motive but said one way to read the court’s decision to publish the opinion would be as a warning against Rule 60 motions based only on a trial judge’s failure to recuse because of stock ownership.

“The court is thinking about costs to the system,” Hellman said.

Walmart appellate counsel Philip Fontenot of Davidson Meaux Sonnier & McElligott did not respond to my email query.

Green told me the public’s confidence in the judicial system probably wouldn’t be undermined if the 5th Circuit had given Roberts another shot – but that doesn’t mean reviving the case would have been the right thing to do.

“It would serve very little public interest,” he said, “if there’s no reason to think the trial judge’s ruling was affected.”

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Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.