Today, the Supreme Court issued two decisions, described below, of interest to the business community.
Caperton v. A.T. Massey Coal Co., No 08-22 (previously discussed in the November 17, 2008 Docket Report)
In certain circumstances, the Due Process Clause prohibits a judge from sitting in a case. Today, the Supreme Court extended its constitutional recusal rule to judicial elections and possibly beyond.
The case before the Court involved the contentious 2004 election for a seat on the West Virginia Supreme Court of Appeals. During the campaign, the CEO of respondent A.T. Massey Coal Co. (“Massey”) spent nearly $3 million in independent expenditures opposing the reelection of the incumbent, Justice Warren McGraw. The challenger, Brent Benjamin, won the election. Two years later, Massey petitioned the Supreme Court of Appeals to review a $50 million verdict that had been entered against it. The plaintiffs in the case (petitioners in the United States Supreme Court) requested that Justice Benjamin recuse himself, but he denied their motion. The Supreme Court of Appeals granted review and ultimately overturned the verdict. The United States Supreme Court then granted certiorari to decide whether Justice Benjamin’s participation in the case violated due process. In a 5-4 decision issued today, the Court held that it did.
The constitutional standard adopted in the majority opinion, which was authored by Justice Kennedy, requires a judge’s recusal when there is “a serious risk of actual bias.” Slip op. 14. In the context of judicial elections, the Court explained, there is such a risk when “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.” Id. The Court concluded that the standard was satisfied on the “extreme” and “extraordinary” facts of this case. Id. at 16.
The principal dissent, which was written by Chief Justice Roberts and joined by Justices Scalia, Thomas, and Alito, pointed out that disqualification was constitutionally required under the common law and the Court’s precedents only when the judge had “a financial interest in the outcome of the case” or was “presiding over certain types of criminal contempt proceedings,” neither of which was true here. Slip op. 2 (Roberts, C.J., dissenting). The dissent faulted the majority for its “inability to formulate a ‘judicially discernible and manageable standard’” and for instead adopting a vague “probability of bias” standard that was “inherently boundless.” Id. at 10, 11. The dissent also disagreed with the conclusion that disqualification was required even under the standard adopted by the Court, emphasizing that the expenditures were made independently of Justice Benjamin’s campaign, that expenditures of nearly the same size were made in support of Justice Benjamin’s opponent, and that there is reason to doubt that the expenditures played a significant role in Justice Benjamin’s election.
Justice Scalia wrote a separate dissent, which observed that “the principal consequence of today’s decision is to create vast uncertainty with respect to a point of law that can be raised in all litigated cases in (at least) those 39 States that elect their judges.” Slip op. 1 (Scalia, J., dissenting).
As the dissenting opinions make clear, the Court’s decision has significant ramifications for business litigation in all States, and particularly those in which judges are elected. The broad and open-ended standard adopted by the Court creates the potential for satellite litigation in which one party seeks recusal of a judge whose election (or appointment) was influenced by campaign expenditures (or some other form of support) from the other party.
Mayer Brown represented the respondents in the Supreme Court.