Please, Somebody Sell Justice Scalia Some Stock: Ann Woolner –

For Chief Justice John Roberts, it’s Hewlett-Packard. Stephen Breyer has Colgate-Palmolive, Bank of America, IBM, Nestle. Samuel Alito: Bristol-Myers Squibb and Exxon Mobil. Those companies are among 33 that went to the U.S. Supreme Court in hopes of killing a lawsuit against them. Victims of South Africa’s brutal apartheid era are suing American companies they say aided racist repression there.

But when the businesses asked the Supreme Court to consider reversing a lower court ruling that keeps the case alive, the justices couldn’t muster a quorum.

Four stepped aside, the court reported this week. Anthony Kennedy presumably declined to participate because his son is a banker at Credit Suisse Group, one of the companies bringing the appeal. Fine.

Roberts, Breyer and Alito, on the other hand, apparently removed themselves from the roster because they hold stock in at least one of the companies bringing the appeal.

We must presume this, because the justices don’t explain their recusals. We are left to guess based on the justices’ financial disclosure reports, the latest of which shows those three justices had shares in the companies named above as of 2006. A financial disclosure update is due any day now.

With no quorum at the Supreme Court, a 2-1 decision by the 2nd U.S. Circuit Court of Appeals in New York stands. And so a major case involving far-reaching issues against some of the nation’s biggest multinationals, a case with international implications, will go undecided by the top court.

Satisfying Result

Frankly, I think the appeals court got it right, so the result doesn’t alarm me.

If I were only concerned about results, I would try to persuade someone to sell certain justices on the right wing of the court equities in hundreds of companies. This would turn the Roberts Court into the most consistently pro-consumer, pro- employee, pro-environment court in history.

But that would be wrong.

“Needless recusal deprives litigants of the nine justices to which they are entitled,” says the court’s 1993 statement on the issue, which all the current justices have agreed to.

As is, the justices with the longest list of individual equity holdings in 2006 were Roberts, Breyer and, to a lesser degree, Alito. The rest were invested in funds, bonds, annuities, insurance and real estate, with the possible exception of Ruth Bader Ginsburg. She didn’t itemize the holdings in her retirement accounts.

Making a Choice

By law, justices must choose between keeping their investments or participating in cases involving those companies.

Why don’t these guys sell their stock, invest in mutual funds and do their jobs?

Another Roberts disqualification this term created a 4-4 vote in a major case against pharmaceuticals because he has shares of Pfizer. The tie leaves the lower court decision intact, which lets certain kinds of lawsuits against such companies proceed. It isn’t the sort of result Roberts probably would have voted for.

That same thing could happen in the long-running Exxon- Valdez case because Alito’s ownership of Exxon shares kept him out of that case. A decision in that matter is due soon.

And in yet another appeal, this one focused on whether California can save $1.4 billion in energy costs, Roberts and Breyer both stepped aside.

Recusal Policy

“Even one unnecessary recusal impairs the functioning of the court,” says the court’s policy.

Beyond making a tie vote possible, a single disqualification “has a distorting effect” on the court’s decisions on which cases to hear. It takes four votes to get your case on the docket, which is easier to get with nine justices than with eight.

By my count, 59 decisions to grant or deny consideration were made this term with at least one and sometimes more justices sitting it out.

Many recusals have nothing to do with stock holdings, of course. Breyer stays out of cases handled by his brother, a federal trial judge in San Francisco, for example. Alito and Roberts, the newest members of the court, may still be recusing themselves from cases they helped decide as appellate court judges.

And when the justices have close family members who are lawyers involved in the case or whose position in a law firm would give them a financial stake in the outcome, the justices must step aside, too.

Unnecessary Conflicts

But all those reasons are precisely why justices should avoid creating unnecessary conflicts of interest.

If these people put their responsibility to their rather important jobs above their portfolios, they would have sold their shares and done the work they were selected to do. As for tax implications, a 2006 law lets them defer capital gains tax when selling stock to avoid a conflict of interest.

It isn’t as if they are filing clerks or bat boys. And given how many of the tough questions have been decided by 5-4 votes in recent years, every justice counts.

Yes, going on the court usually requires financial sacrifice, and a big one at that. In private practice until 2001, Roberts pulled down more than $1 million a year. As chief justice he earns a mere $217,400.

That is paltry compensation for this important work done by these bright and accomplished people.

But, please. They knew that going in. And the job does have other forms of compensation, like helping set the legal landscape of the nation for decades to come.

As for the South African case, it will live on for a while and eventually wind up back before the Supreme Court a few years from now.

Maybe by then all the justices will have cleaned their portfolios of individual holdings and do their work.

Print Friendly, PDF & Email