THE PLANK MAY 12, 2008
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The Supreme Court announced today that for the first time in recent memory, it will be unable to consider a case because too many justices recused themselves due to conflicts of interest. The case asked whether lawsuits based on the 1789 Alien Tort Claims Act can proceed against companies who did business with Apartheid-era South Africa. (The lawsuits will go forward, since the opinion from the Second Circuit Court of Appeals will now be the final word on the matter.) The Supreme Court was unable to weigh in because it lacked the six justices needed for quorum:
Chief Justice John G. Roberts Jr. and Justices Stephen G. Breyer and Samuel A. Alito Jr. could not take part because they own stock in some of the companies involved. Justice Anthony M. Kennedy does not, but his son Gregory is a managing director at Credit Suisse, one of the defendants, so he recused himself as well.
Kennedy's excuse sounds pretty solid. The others, I'm not so sure about. It isn't incredibly common for justices to have to recuse themselves because of stock holdings, but it's at least the second time this term the problem has come up: Justice Alito had to recuse himself from the Exxon Valdez case because of his Exxon stockholdings. Eugene Volokh addressed this issue when the Exxon case was argued, and in light of today's annoucement it becomes more pressing. Wouldn't it be reasonable for justices to be expected to put their assets into a blind trust upon taking office? Or, at least, to sell their stock in the companies in question at market rates, rather than recuse themselves? If you're going to be on the Supreme Court, surely you should be expected to be available to participate in as many cases as possible, unless conflicts of interest are genuinely random and unavoidable, like Kennedy's here.
--Josh Patashnik
8 comments
Agreed, Josh. Though justices, like anyone else, have the right to own stocks wherever they choose, their ability to adjudicate cases as members of the highest tribunal in the land always comes first. Accordingly, situations where their business interests preclude participation in lawsuits that come their way ought to be prevented. I for one would greet the requirement that they do away with their stocks upon taking office.
- jkolic
May 12, 2008 at 7:48pm
How does one "do away with their stocks"? If I am inclined to invest in GM, doesn't that determine my view of, for example, NAFTA. Or trade unions. Or trade protection legislation. Of course. That judges are impartial is silly. They bring their experiences and prejudices to the bench. I wpuld if I were a judge. Otherwise, I'd be stupid.
- raylward
May 12, 2008 at 8:42pm
If you work in the securities industry, there are a variety of ways in which you may be limited in your stock ownership. Firm's don't cease their business in deference to the conflict -- the employees and other associated persons just don't get to own exactly what they would like. Comes with the territory. The justices should either put their stocks in trust or dispose of them if necessary to participate in a case. That simple. They can buy them back after the decision is announced if they are desperate to own them.
- roidubouloi
May 12, 2008 at 10:33pm
Yep. With a typical diversified investment portfolio, it's conceivable that people of the age and financial stature expected for a SCOTUS justice would have small shares in a sizeable proportion of the Fortune 500. Are they then to recuse themselves from any matter that has some conceivable bearing on the fortunes of any one of those corporations?
And do justices necessarily have the "right" to own stock? Does a Supreme Court justice have the right to sit on a corporate board of directors? I mean, we can't ask them to live as monks, abandoning all interest in the world at large, but it seems to me that recusal from the court case is only one of two ways to resolve any real or perceived conflict of interest. The other way is, as Josh suggests, for justices to "divest" themselves of their interests in the businesses involved, selling them off at market rates, BEFORE the legal decision is rendered.
Two ironies:
1) This discussion of the merits of divestment on the part of SCOTUS judges arises in the setting of a court case about the lack of divestment in Apartheid South Africa.
2) By deciding not to decide, the justices effectively decided the case at hand, creating a result that will have effects either positive or negative on their financial interests in the relevant companies.
- aeromonas
May 12, 2008 at 10:51pm
Raylward: There is no such thing as total impartiality, contrary to a certain strain of Platonic liberalism. But every stance is not simply a will -to - power, a debased Nietzscheanism, as I call it. One can lean against one's interests; this will not yield a "neutral" position (I don't even know what that would mean) but rather, a less interested one. The justices should follow this path as often as possible.
- liberal reformer
May 12, 2008 at 11:28pm
Why not own mutual funds?
- tec619
May 13, 2008 at 12:01am
Conflict of Interest is more often a perception issue rather than a real issue. Given the treatment of the Supreme Court by the media the Justices' behavior shouldn't be surprising.
I don't think it pessimisstic to suggest that TNR may not be very willing to give Chief Justice Roberts of Justice Alito the benefit of the doubt if they made a positive decision for companies they invested in, no matter if it was through mutual funds or not.
I've yet to see any evidence of such willingness to provide benefit of the doubt to those not of our idealogical basis.
- avidus
May 13, 2008 at 8:53am
The justices recused themselves for the appearance of a conflict, not for an actual conflict. Let them own stock. Let them rule on cases involving companies they own stock in. Our default position should be to assume the justices have the integrity to rule impartially.
If, however, they join a position favoring a company they own stock in, the stock price rises as a result, and they then dump their stock for a nice profit, it would be certainly justifiable for the House to begin impeachment proceedings. Let the political process handle the problem.
- adamvaught
May 13, 2008 at 9:46am