A Judge Judging Himself: Another Opinion on Judicial Recusal

Last year I wrote about the unique challenge posed by a motion to recuse, in which the judge accused of being insufficiently impartial must rule on his own ability to hear the case. A judge judging himself: judicial recusal. I have come across yet another opinion from Texas on this sticky situation. Pease v. First National Bank of Giddings, Adv. No. 10-1011 (Bankr. W.D. Tex. 5/4/10).

What Happened

In the latest case, a pro se debtor thought he had scored a major coup. He sued a bank and recovered a default judgment for $8 million. However, the judgment had a few problems. First, the plaintiff did not serve the motion for default judgment on the defendants. Second, the motion sought unliquidated damages, which would have required a hearing. The bank was none too happy with the judgment, since it would have put it out of business. The bank moved promptly for reconsideration. This time the debtor did not appear. The court gamely recognized that it had made a mistake and vacated the judgment.

At this point, the case moved out of the procedural realm and into the pro se zone, a place where saying something makes it so. According to the court's opinion:

After the entry of the order setting aside the default judgment, a copy of the order was sent to the plaintiff. The plaintiff was evidently displeased with the ruling, as he filed a document entitled “Notice of Non Acceptance and Return of Order and Notice of Void Order” on May 3, 2010. The plaintiff attached a copy of the order, across the face of which the plaintiff had written “VOID” with the explanatory statement “Refusal for Cause, No Notice! No Security! Violation of Stay by Defendants!” He signed his name, under which he wrote “Surety in Fact” and dated it April 30, 2010. In the Notice, plaintiff states that the order must be void as a denial of his due process, and details his basis for that contention – that the expedited hearing was too expedited to be adequate notice under the Constitution. At the end of the pleading, the plaintiff states that the order of this court setting aside the default judgment “... is void and is hereby returned to the court.”

Opinion, p. 3.

While it is possible to understand the debtor's frustration at losing his victory over the bank, the specific language used suggests a magical view of the law where a judicial action may be invalidated merely by saying so. However, the debtor supplemented his response with one which was recognizable: a motion to recuse. This placed the court in the uncomfortable position of having to rule upon its own competency.

The court described the motion to recuse as follows:

On the same day, the plaintiff also filed this motion to recuse. In it, plaintiff recounts what he believes are multiple reasons why I should recuse myself. He recounts his version of the facts and the law in this case, and, in essence, asserts bias on my part because I do not agree with his version of the facts and the law. He also alleges bias based upon “extrajudicial sources and actions,” and for support, contends that “Judge Clark received and used false ex parte evidence, rumors and innuendo in the hearing to lift stay on February 1, 2010.” He then explains the basis for this contention, namely that the court heard evidence presented by the bank at that hearing “... although the Bank had never filed a claim against Plaintiff, nor submitted any nexus of debt between itself and the Plaintiff and sua sponte claimed that Plaintiff was responsible for his brother’s debt, even though the bank never sued his brother for the debt.” In other words, the plaintiff disagreed with this court’s ruling on the motion for relief from stay, and the basis of this court’s ruling. Plaintiff, in other words, finds bias from the fact that the court did not agree with the plaintiff’s version of the facts and the law.

For further support, the plaintiff claims bias from the fact that the court set aside the default judgment, and from what plaintiff describes as failing to “zealously guard the jurisdiction of the court.” He claims the court “knew from the filings that the Bank had trespassed on federal jurisdiction, and he made no move to hold the guilty parties in contempt, thereby ratifying the unlawful seizure and destruction of all of Plaintiff’s personal property.” This allegation is an evident reference to a pleading filed March 1, 2010, in which Plaintiff claimed “contempt of federal jurisdiction” in the main case. Plaintiff obviously finds prejudice from the fact that this court did not believe that any contempt had taken place. However, the pleading filed by plaintiff was entitled “Notice of Contempt of Federal jurisdiction.” On its face, the caption of the pleading was not a motion. No form of order was submitted with the pleading, meaning that, under the court’s electronic filing system, the motion would not have come to the court’s attention. The docket also reflects a “motion for expedited hearing” with regard to the notice of contempt, but the document actually filed on that date was a duplicate of the Notice. No order was uploaded with this document either. In the final paragraph of the Notice, plaintiff states “Petitioner prays for an expedited hearing on the matter of sanctions and requests that the trsutees of this court demand an accounting of the property held in trust and the taking, destruction, and devastation visited upon said property and that all actors be held responsible and accountable for their complete and total disregard and disdain for any authority other than that of their own making.”

Opinion, pp. 3-5.

The Court went on to quote the conclusion of the motion at length:

Because Judge Clark’s fias or prejudice prevents Plaintiff from receiving a fair hearing before the court, the judge should recuse himself and his order of April 28, 2010, is void because the Defendants are in violation of the automatic stay as of February 27, 2010 and have never questioned the debt prior to this, although the proposal to contract was offered in 2007. At no time has the debt ever been questioned and it is apparent from the record that the debt was liquidated by the Court record. What is the new trial about? The debt is well plead and the Defendant bank is liable for numerous constitutional violations over a five year period against the Plaintiff. Judge Clark is not on the side of the Texas Legislature concerning the underlying possession issue and has clearly departed from his previous rulings in order to give the Defendants the right to violate the automatic stay, re-instate the stay in order to create the illusion of emergency and then set aside an eight million dollar judgment without any supporting affidavits or protection fro the Plaintiff in the form of a supersedeas bond is clearly non-governmental. Either tyhe Judge or Mr. Powell or both needs to post a ten million dollar bond and restore me to possession of the property.

Opinion, p. 6.

Considering the Motion to Recuse

On a motion for recusal, the judge is placed in the interesting position of evaluating his own ability to consider the case. Judge Clark noted that "A motion to recuse is entrusted to the sound discretion of the judge to whom the motion is submitted."

The standard for recusal is "whether a judge's impartiality might reasonably be questioned." A judge must recuse himself if he has a bias or prejudice against a party or has knowledge of disputed evidentiary facts. However, the judge is presumed to be impartial and bias arising from proceedings occurring in court is only grounds for recusal if the judge has "a disposition so extreme that as to display a clear inability to render a fair judgment."

Thus, if the judge determines that a party is a liar, the obligation to recuse would depend on the source of that belief. If the judge makes this determination based upon evidence submitted in court, he may remain on the case so long as he is capable of giving the witness the benefit of the doubt in future hearings. On the other hand, if he decides that the witness is a liar because someone from his church told him so, then the judge would need to recuse himself.

Turning to the allegations of the motion, the court found that "the plaintiff’s principal bases for claiming bias and prejudice is that this court has not agreed with his version of the facts, or his vision of how the law works. These are not valid bases for finding bias or prejudice." Opinion, p. 7.

This was not a difficult case. However, it illustrates the unique nature of motions to recuse. On a motion to recuse, the judge is both a fact witness and the trier of fact. This works as long as the judge has the integrity and the clear-sightedness to recognize even the appearance of impropriety.

However, there is potential for abuse, as shown by the case of U.S. District Judge Thomas Porteous, who is now facing impeachment, for among other things, refusing to recuse himself in a case where he had received gifts and things of value from one of the attorneys appearing before him.

The current system assumes that cases of outright dishonesty, such as the Porteous case, will be extremely rare. On the other hand, most requests for recusal, such as the one in this case, are likely to be based on sour grapes. The difficult case will be where the judge's bias clouds his own perception of whether he is biased. In those cases, appeal or mandamus will be available to correct the mistake. As long as the procedure gets the result right in the vast majority of cases, it is probably good enough despite its unusual aspects.

Interestingly, there is an alternate procedure for recusing a judge under 28 U.S.C. Sec. 144. Under Sec. 144, a judge must cease hearing a proceeding upon the timely filing of an affidavit by a party asserting bias and a certificate of counsel. However, this statute has been held to be inapplicable to bankruptcy judges. In re Johnson, 408 B.R. 123 (Bankr. S.D. Ohio 2009).

While it is not designed as a recusal mechanism, the procedure for withdrawing the reference to the district court is another way to achieve the same result.

The Pro Se Zone

On a final note, it would be a mistake not to comment on the eccentric pleadings filed by the debtor in this case. The terms that he used, such as "proposal to contract" and "notice of contempt of federal jurisdiction" are typical of the sovereign citizen movement. This is the same debtor who attempted to pay for the filing fee for his appeal with a self-created "Certified Money Order." They believe that the U.S. Government and its monetary system are illegal and that they can create their own alternate authority and money. However, when they get into trouble, sometimes they run to the federal bankruptcy court, whose jurisdiction they seek but ultimately reject.

Back in 2003, Manuel Newburger from my firm was quoted in an article in the ABA Journal about this phenomenon. I was not able to find the article online, but I did find a blog article which repeated some of its content, which I will link to here. It is certainly a strange world out there when people can copyright their names and pay their debts in self-created currency.

Dealing with these issues is just one of the challenges of being a federal judge.

A judge judging himself: judicial recusal

Judges are in high demand for continuing education seminars. Astute conference planners will often schedule a judges' panel at the end of the day to insure full attendance. If the judge is outspoken, or at least colorful, so much the better. However, what happens when the outspoken judge displays displeasure with your client's industry and you have a similar matter pending before him? If you file a motion for recusal, you could find yourself in the interesting position of having the judge judge himself. That is what happened in the case of In re Wilborn, 401 B.R. 848 (Bankr. S.D. Tex. 2009) in which Wells Fargo sought to recuse Judge Jeff Bohm over comments he made at a CLE conference. After a lengthy analysis, Judge Bohm concluded that the movant had not met his burden and that he had "an affirmative duty not to recuse himself."

The Seminars

At issue were presentations made at two conferences, the State Bar of Texas Advanced Consumer Bankruptcy Conference and one held at the LSU Law School. The motion was based on written materials and oral statements made at the two conferences. However, it turns out that Judge Bohm was not the author of written materials for either forum. In the first case, Judge Bohm was a substitute for Judge Marvin Isgur, who authored in the materials. In the second case, Judge Elizabeth Wall Magner presented a powerpoint which she prepared after which Judge Bohm spoke.

In his Dallas discussion, Judge Bohm began with a rather straightforward discussion of construction of Bankruptcy Rule 2016 and 11 U.S.C. Sec. 1322(b)(2) as they relate to post-petition fees and charges assessed by mortgage creditors. The positions articulated by Judge Bohm, namely, that Rule 2016 applies to mortgageholder fees, that Sec. 1322(b)(2) does not preclude review of the reasonableness of fees and that Sec. 105 allows redress for debtors charged unreasonable fees were not anything that he hadn't ruled previously.

However, the judge did not stop there. He proceeded to lecture both debtor's lawyers and creditors about practices in the industry. Speaking to debtor's lawyers, he said "if you are zealously representing your client, then you want to focus like a laser beam, it seems to me, on what some creditors are doing in terms of charging your clients after they have filed a petition." He also suggested that debtor's lawyers to write a monthly letter to the creditors' attorney stating:

Dear attorney for home lender in chapter 13, I am writing you this letter to inquire as to whether your client is charging any fees and expenses now that my client has filed for bankruptcy. Please advise. Because if I find out that you are and you haven't disclosed it, I'm going to scream bloody murder in bankruptcy court.

I think you ought to send that letter once every month. that might get the attention of some creditors' lawyers. And it might--and I say might get the attention of some lenders.

401 B.R. at 855.

Judge Bohm was just warming up. In closing, he got on his soapbox and articulated the following:

Why do I cite these newspapers to you? Freddie Mac, Fannie Mae, AIG and the Lehman Brothers. I don't think I cited Washington Mutual, but I'll cite them. What are they all? They're all creditors. I used to represent creditors. I used to be a banker before I went to law school. Well, I am finding since I've been on the bench on the creditors' side is that we've got a culture going of arrogance and hubris. We have forgotten how to be thorough and how to pay attention to detail, and it's coming home to roost in spades.

I mean, think about it folks, Freddie Mac and Fannie Mae, FDR would be turning over in his grave if he could see those institutions today. The directors, the dispute that's going on right now is, are we going to pay the two presidents of these institutions golden parachutes of millions of millions of dollars? This, for while they were head of their ships, ran aground.

We've got AIG going belly up. By the way, Freddie Mac and Fannie Mae, the institutions that are about buying loans portfolios for loans that never should have been made. That's why I say we've got--we have lost the need--the paying attention to detail.

* * *

I'm policing my docket. You're going to get more opinions, at least from me, and I assume the true--same will be true for at least Judge Isgur and Judge Magner. We want to see the I's dotted and T's crossed, and if they're not, then as I've said, 105 sanctions will be--will be used.

I hate to end on that kind of note, but given where we are with a lot of the institutions that I just cited, I don't know how else to express my frustration with some--not all, of the mortgage lenders in my court. I wish to emphasize that I--I think highly of most, virtually all, of the attorneys who appear in my court these days, so I don't want you to leave this seminar thinking that I am upset with you, but do please convey to your clients tht I feel very strongly that the rules and the statutes need to be complied with.

401 B.R. at 857-58.

The Dallas conference did not single out Wells Fargo. However, one slide in Judge Magner's powerpoint did:

Wells Fargo manages 7.7 million loans. If only one $15 fee were charged per year on each loan, its revenue would be $115 million.

401 B.R. at 859.

Meanwhile, Judge Bohm was presiding over a class action sought brought against Wells Fargo alleging that it charged improper fees in chapter 13 bankruptcy cases. Judge Bohm's candor apparently made Wells Fargo feel that he had targeted a bulls eye on them. They filed a motion to recuse. However, as noted by Judge Bohm, a motion to recuse "is committed to the discretion of the targeted judge." This leaves the judge in the unusual position of sitting as trier of fact with regard to his own impartiality.

The Ruling

In his ruling, Judge Bohm discussed several legal principles applicable to disqualification:

1) Under 28 U.S.C. Sec. 455(a), a judge "shall disqualify himself in any proceeding in which he is presiding in which his impartiality might reasonably be questioned."

2) The movant must establish that a judge is not qualified by clear and convincing evidence.

3) "(A) judge's comment is disqualifying only if it connotes . . . a closed mind on the merits of the case."

4) Recusal based on bias may be based on "a danger that the judge will rely on an extrajudicial source for his rulings" or "where the judge displays such a high degree of favoritism or antagonism as to make fair judgment impossible."

These principles appear to be in conflict. The statute speaks in terms of situations in which "his impartiality might reasonably be questioned." This language, particularly in its use of the words "might" and "reasonably" suggests a low standard, one in which the mere appearance of partiality is sufficient to bring about disqualification. However, the requirement of proof by clear and convincing evidence (which must be established to the judge being questioned) and the requirement of a closed mind on the particular case set a very high bar. Indeed, it might be suggested that a motion for recusal should never be necessary, since the conduct demanding recusal should be so obvious to the judge that he should have voluntarily removed himself prior to any motion being filed.

Judge Bohm continued with a very thorough analysis of what comments made outside of the courtroom would merit recusal. Generally, comments made to legal education seminars on general legal issues are permissible, while statements to a newspaper about the merits of a pending case are not. Since Judge Bohm did not single out Wells Fargo or talk about any specific pending case, much less the Wellborn v. Wells Fargo case, recusal was not appropriate.

How Educational Do You Want Your CLE To Be?

Given that recusal requests are addressed to the judge sought to be recused and that judges are given wide latitude, the result in this case is not particularly surprising. The larger question is, should judges be speaking so freely about issues that will come up in their courtrooms? Should they be so blunt, including giving advice to one side about what they should be doing to zealously represent their clients?

With one limited exception, I say preach on Brother Bohm. I say this as an attorney who is more likely to appear in front of His Honor as a creditors' lawyer than representing a debtor. In fact, I fully expect that I will appear in front of him on one of his hot button issues. It is just a question of when.

When I appear in front of a judge, I want to know as much as possible about his thinking. I am going to study his rulings and talk to attorneys who have appeared in front of him. If I'm going to listen to him speak at a conference, I don't want to hear namby-pamby platitudes. I want to hear the good stuff. I want to hear the good stuff because it is useful intelligence.

On the other hand, it does give me pause when the judge starts dictating letters for debtor's lawyers to use, especially when the debtor's lawyer is invited to scream bloody murder to the bankruptcy court. It almost comes off as a wink, wink, nudge, nudge, follow this procedure and I will sock it to the mortgage company. The issue of disclosure of post-petition fees and charges is a legitimate one and one which is being addressed by amended Rule 2016. It is a bit unseemly for the judge to be encouraging lawyers to engage in guerilla tactics rather than looking for a systemic response. However, beyond that, the judge did not talk about cases currently pending before him or call out lawyers he was unhappy with. Indeed, he went so far as to express his respect for the bar.

On balance, the benefit of getting inside the judge's head is worth more to me than the risk that he will engage in cheerleading for the other side. I won't always agree with Judge Bohm, but I will always find him passionate and informative.