LILJEBERG v. HEALTH SERVICES ACQUISITION CORP.
Legal provision: 28 U.S.C. 455
ORAL ARGUMENT BY H. BARTOW FARR, III, ESQ., ON BEHALF OF PETITIONER
Chief Justice William H. Rehnquist: We will hear argument, now, on 86-957, John Liljeberg v. Health Services Acquisition Corp. Mr. Farr, you may proceed whenever you are ready.
Mr. Farr: Thank you, Mr. Chief Justice.
May it please the Court:
At issue in this case is a decision of the Fifth Circuit holding that a litigant can undo all prior rulings of a judge, even final judgments, merely by showing after the fact an appearance of impropriety.
Our disagreement with this broad rule rests upon two principal points.
First, and foremost, we think that the drastic remedy of retroactive relief simply should not be awarded for claims based on appearances of impropriety.
An appearance of impropriety justifies prospective relief under the statute, but not the invalidation of prior orders.
Second, and more specifically, we think that retroactive relief is particular inappropriate in the case where the judge did not know of the grounds for possible recusal at the time of his rulings.
In such a case, there is no possibility of actual prejudice infecting the judgment.
Now, before turning to these points in more detail, I would like to note briefly the precise grounds on which the court below invalidated the judgment.
The Court of Appeals accepted the fact that Judge Collins, who is a trustee of Loyola University, did not know when he ruled that Petitioner was one of several possible purchasers of Loyola University land.
By the way, I should point out that in Judge Collins' opinion on the merits, there is a discussion at some length of a parcel of land for building a hospital.
That is not the land owned by Loyola University.
That particular land was not mentioned at all in the case.
The appearance in this case, therefore, was based wholly on the notion that Judge Collins should have known about this because the matter had come up several times at Loyola Board meetings.
Unidentified Justice: He testified that he did not know; didn't he, at the time?
Mr. Farr: He did.
He testified under oath, Justice Blackmun.
Unidentified Justice: How could that be?
Mr. Farr: That he would not know about this particular parcel?
Unidentified Justice: Yes.
Mr. Farr: I think that is actually not so surprising, Your Honor.
As he testified, he had something like four boxes full of minutes of Loyola Board meetings and this is a matter that came up a few times at the Board meetings.
The most extended discussion, really, the only extended discussion was in January of 1980.
And, for a year and a half after that, there was no discussion about this whatsoever.
This was not an area in which he took any particular interest, as he testified.
And, indeed, Cannon Five of the Code of Judicial Ethics, which was not enacted into the statute, affirmatively prohibits a judge from giving investment advice to a University or a charitable institution or a religious organization.
Unidentified Justice: Mr. Farr, how large is the Board of Trustees?
Mr. Farr: It is quite substantial.
If you look at the membership, I don't know the exact number, but I think it is 30-35 members or something like that.
Unidentified Justice: And is it divided into small committees with particular responsibilities?
Mr. Farr: Typically for operations, Your Honor, that's what happens.
Unidentified Justice: And what sort of committee handled this piece of real estate?
Mr. Farr: There was a real estate committee which handled matters like this and Judge Collins was not on the real estate committee.
He was on a student affairs committee.
He was on a presidential search committee.
But he was not on a committee that had anything to do with the University and its investments.
Unidentified Justice: And how often did the committee report to the full Board?
Mr. Farr: I believe it just reported as it had need to.
In the minutes that are reproduced in the appendix, Your Honor, there are indications of certain reports that they had made.
And you might note, we didn't reproduce the entire minutes in there, but there are usually one or two paragraphs out of 10 or 11 pages worth of minutes.
Unidentified Justice: What is the difference that he didn't remember the actual occurrence when he was on the Board.
He knew he was on the Board.
Mr. Farr: He knew he was on the Board.
Unidentified Justice: And he knew that the case he was trying was a case against an organization that he was a member of the Board of Trustees.
Mr. Farr: Let me clarify that.
Unidentified Justice: He knew that; didn't he?
Mr. Farr: Let me clarify.
The case was not against Loyola University.
Loyola University was--
Unidentified Justice: Well, was it involved in it?
Mr. Farr: --It was not in any way a party to the case.
Unidentified Justice: In the discovery?
Mr. Farr: No.
There was no discovery involving Loyola University whatsoever.
It was never mentioned in the case.
So, there was nothing about the case, itself, that would have alerted Judge Collins to any possible grounds for recusal, unless he remembered the discussions that accompanied these Board minutes.
Unidentified Justice: Well, I am sure... I just can't understand how he didn't remember.
Mr. Farr: Well, I think that that is a finding that Judge Schwartz made, looking at the particular history of the minutes, looking at his role, he said that he accepted Judge Collins' testimony which, of course, he made under oath, that he did not know about this particular interest.
Unidentified Justice: But he did know that he was on the Board.
Mr. Farr: Oh, of course, he knew he was on the Board, Your Honor.
Unidentified Justice: And he did know that the Board was involved in the case.
Mr. Farr: No.
That he did not know, Your Honor.
That is the point I am trying to make.
In this particular case, there was nothing--
Unidentified Justice: It wasn't prepared... nobody... there wasn't discovery.
You said they had discovery.
And they didn't find out that the Board was involved?
Mr. Farr: --Justice Marshall, the underlying case was about ownership of a corporation.
Unidentified Justice: But in all of the argument, I just want to warn you, that it appears that what you are saying is that he didn't know about it.
Mr. Farr: That's correct.
Unidentified Justice: And he couldn't have known about it and he shouldn't have known about it.
Mr. Farr: I am saying that he did not know about it.
There was nothing about the case, itself, that would have alerted it to us.
Unidentified Justice: Well, then, it wasn't important to the case; was it?
Mr. Farr: In the particular situation--
Unidentified Justice: It was or it wasn't?
Mr. Farr: --The Court of Appeals found that this was an interest of Loyola's that would have been... that Loyola had an interest that would have been affected by the outcome of the case.
But there was nothing about the case, itself, that would have alerted the presiding judge, which was Judge Collins, to that fact.
The piece of information he needed to alert him to possible grounds for recusal had come out of Board meetings.
Some of which he had attended and some of which he hadn't and from the minutes of those Board meetings.
And Judge Schwartz, a separate district judge in Louisiana made an express finding that he accepted that Judge Collins did not actually know at the time he was presiding in this case and making his rulings that Loyola had any interest whatsoever.
What the Court of Appeals did then was to say,
"We accept the finding that he had no knowledge. "
"But because he could have had knowledge, we are going to set the judgment aside anyway. "
Unidentified Justice: And should have.
Mr. Farr: And should have in that particular case.
Unidentified Justice: It certainly is hard for a colleague to sit on this kind of a case involving another colleague's word; isn't it?
Mr. Farr: Justice Blackmun, I think it obviously is an awkward matter.
But let me point out several things.
First of all, there is nothing uncommon about judges passing on the actual conduct of another judge.
Unidentified Justice: Of a colleague?
Mr. Farr: Excuse me?
Unidentified Justice: Of a colleague?
Mr. Farr: Of course.
Under Section 372 of Title 28, Congress has set up a process for investigating disciplinary complaints against judges.
And that precisely depends... the complaints are referred to the chief judge of the district.
They are reviewed by judges in the circuit of that district.
So, Congress clearly has an expectation through that statute, if none other, that when it is necessary, judges can and should pass on the conduct of their colleagues.
And in this particular case, I might just point out there are seven different judges who have said that they accepted Judge Collins' explanation as being true.
Unidentified Justice: Well, Mr. Farr, did the judgment below rest on the premise that he could have known and should have known or on the premise that in any event, there was an appearance of bias.
Mr. Farr: Well, in a sense, it rests on both, Justice Brennan.
What he said, what the Court of Appeals' rationale is, as I understand it, is that because he should have known, someone looking at the case from outside and no knowing or not accepting that he didn't remember would have expected that he would remember.
So, the two are in some sense linked, I think in the Court of Appeals.
Unidentified Justice: Well, I think they are essential; aren't they?
The only reason the appearance would have been the case, is if he should have known.
Mr. Farr: Well, in fact, my belief, Justice White, is the only way there is an appearance is actually if he did know.
Unidentified Justice: I know that is your position.
Mr. Farr: But, at least, if the Court of Appeals' decision, by its own terms, does at least involve the idea that he should have known that there is at least negligence involved here.
Unidentified Justice: May I ask: How is the property described?
I can imagine my sitting in a case that involves the real estate that my house is on.
If it is only described by meets and bounds or something, I have no idea what the meets and bounds are.
Mr. Farr: It was described as the Monroe tract.
That is the term that is used.
Unidentified Justice: So, it is something well enough known in the community that he would know what the Monroe tract was?
Mr. Farr: Well, I don't think it is a household word, Justice Scalia.
I think it is just something that that was the term that was used.
This is not property, I should point out, that is connected to Loyola University.
This is just property like a lot of universities have that was given to the university.
Unidentified Justice: What I am suggesting is that there are two elements involved in the "should have known" part of the inquiry.
Element 1 is that he should have known that the University had an interest in this particular trace.
And Element 2 is that he should have known that that tract which the University had an interest in was also the tract that was under discussion in the case.
Is it conceded that the identification of the two is self-evident.
And that anybody who had sat in on the University proceedings would know that this is the same tract?
Mr. Farr: I think from that question I have failed to make one thing clear.
The tract that was discussed in the case was not the tract that Loyola University owned.
And the only thing that came up in the case that would have triggered the memory of Judge Collins would have been the mention of St. Jude Corporation, which was one of the potential buyers of the Monroe tract.
But at the time that the case was going on, the tract that was being discussed in the case was some other tract that was bought by Hospital Corporation of American.
It had nothing to do with Loyola University at all.
So, there is nothing about that tract or the discussion of that in the case that would give him any hint that Loyola University--
Unidentified Justice: How did the other tract come into this?
Mr. Farr: --What essentially happened, as a practical matter, is that Liljeberg, the Petitioner, thought he was going to have an agreement with HCA.
And HCA had bought a tract, not the Loyola tract, a tract having nothing to do with Loyola.
When that agreement fell apart, when HCA said,
"We're not going to enter into any agreement with you, then Liljeberg resumed negotiations with Loyola looking to some other tract. "
"But that had nothing to do with what was in front of Judge Collins. "
Unidentified Justice: Well, how, again, did the lower courts reason that he should have disqualified himself in this case?
Mr. Farr: Well, in fact, there is no way that he could have, as a practical matter, disqualified himself because of something he didn't know about.
So, what they are really saying is that he should have known about it because St. Jude Corporation had been mentioned a couple of times at Board meetings at Loyola University as one of several possible purchasers of a Loyola tract of land.
And, also, Mr. Liljeberg had been mentioned once several years before.
What they are saying is: That should have essentially put him on notice that when a corporation named St. Jude appeared in front of him and there was a debate over ownership of this corporation and who would have the rights to construct a hospital pursuant to a certificate of need, that should have triggered in his mind the memories of what happened at the Board meeting so that then he would have recognized it and recused himself.
And Judge Collins said,
"If I had remembered this, if anything had triggered in my mind, I would have recused myself. "
But that just simply didn't happen.
Unidentified Justice: Because of this, he should not have sat in a case in which St. Jude was a litigant.
Is that the idea?
Mr. Farr: He said that had he known that St. Jude... had made the connection between the St. Jude that was a litigant or the corporation that was in the case and the potential purchaser of land from Loyola and, since he wanted to build a hospital on it, winning the case was something that had an effect on whether he bought the land from Loyola.
If he had made that connection, which he simply didn't, he would have recused himself.
And that is what he testified to.
Unidentified Justice: Well, Mr. Farr, what effect does Section 455(c) have here, if indeed this is something that the judge properly should have informed himself about?
If we get that far, if it fits, what effect does that sub-section have?
Mr. Farr: Well, I think there are two questions about that, Justice O'Connor.
First of all, if a judge... if, in fact, this is an interest that a judge had an absolute obligation to know about under sub-section (c)--
Unidentified Justice: If he is covered by sub-section (c) here.
Mr. Farr: --Just assuming that for moment, which I don't think is true, as I will explain in a second, then the question would be: Is retroactive relief still is that a proper remedy essentially to enforce his failure to know something that he should have known?
Is that a proper punishment essentially for his negligence, facing the fact that it doesn't really fall on Judge Collins.
It falls on the litigant who has prevailed in the case.
Unidentified Justice: But in the long run, do you think it conceivably would be better for judges to have a "should have known" rule applied to them than to go into the actuality of their knowledge and have it tried in each instance?
That's kind of tough.
Mr. Farr: That brings me to the second point which is that, to some extent, this is exactly what Congress faced and the Ethics Committee faced in drafting the code and the rules.
And there are a couple of things.
First of all, they didn't put (b)(4), where they specifically used the term, (b)(5) where they could have very easily said, "knows" or "should know" and they didn't do it.
So, to some extent, it is Congress that has put knowledge into play at least in the cases arising before.
Unidentified Justice: But they also enacted sub-section (c).
Mr. Farr: But sub-section (c), even if read at its strictest, would only impose a duty of absolute knowledge in a couple of instances: personal financial interest and fiduciary financial interest.
It has only a reasonable efforts clause, for example, regarding the interests of a spouse, a reasonable efforts clause regarding the interests of a minor child and doesn't have any requirement for anybody else.
Unidentified Justice: Well, is this a fiduciary financial interest; do you think?
Mr. Farr: It is not as the code intends it.
And think this is what is important.
Unidentified Justice: Why?
Mr. Farr: If you look at Section 5 of the Judicial Code, which is not incorporated in the statute, to begin with, that has a specific section which is headed, "Fiduciary Interest", and speaks of the very strict limitations on a sitting judge serving as a private fiduciary.
And you can only be a fiduciary of a family trust.
You cannot be a fiduciary of a trust for any of your close friends, for example, or anything like that.
Cannon Five also makes distinctions between private trusts and charitable organizations, universities, religious organizations.
And it is specifically intended and I think the statute pulls this in at least in part in sub-section (d) to try to give judges broader latitude to serve as public trustees.
It simply does not fit that scheme.
Unidentified Justice: Well, you think we are not bound by the language of Section 455 in defining financial interests, then?
Mr. Farr: No.
I mean I think that you are bound to interpret the language in 455.
I am not suggesting that it is irrelevant.
All I am saying is that it should be read in context with section (b)(4) which talks of specific kinds of interest on which you are automatically recused in connection with the legislative history and in connection with the Cannon.
Unidentified Justice: Well, doesn't an interest in real estate qualify as something other than securities, for example?
Mr. Farr: Well, I think it is not... this is something that, unfortunately, the legislative history is not entirely clear on.
There are financial interests and then there are economic interests that aren't financial interests.
I think it is quite clear if you take it all together that investments other than, let's say, a very narrow definition of securities, stocks and bonds, which are owned by a university are not in any way the kinds of things that Congress intended that a judge have to keep track of--
Unidentified Justice: No, but maybe real estate is.
Mr. Farr: --Well, that is a subject that is not specifically spoken to.
I would point out that many universities own literally hundreds of parcels of real estate that are left to them in wills, that are given to them by donors, and to say that a judge who sat on a case had to know every single real estate holding of a university and how it would be effected, and that would be the absolute duty under Section 455(c), because that basically says you have to know.
It doesn't say you should know or anything like that.
It says you have to.
If that was true, then judges simply would not realistically be able to sit as trustees of those organizations and that is exactly the reverse of what Congress and the drafters of the code had in mind.
They wanted to permit great latitude for judges to be able to sit as trustees of those institutions.
Unidentified Justice: Well, I think that is maybe overstating it.
It seemed to me when they used the language that they don't have to... the judge doesn't have to be concerned about the ownership of a such an institution in securities, that we have to think that it did, then, include other interests.
Mr. Farr: Justice O'Connor, I agree that there is a way that you can, like Rubic's Cube, work all the way through the statute to come out to put the pieces together that way.
But in all honesty, that result has nothing to do with what I think it was clear at least the drafters of the code were trying to get at.
The idea that they had was that for private trustees, your interests, if you were a private trustee for a family member, essentially that interest is the same interest as if you had a personal interest.
You are expected to know about it.
And you are supposed to act in the same way to disqualify yourself as if you owned it, yourself.
That is not what they intended for trustees of public universities.
If the construction that we are talking about right now was actually the right construction, it would mean that a judge who was a trustee of a university or a religious organization would have to know more about the holdings of that organization and he would have to know about those of his or her spouse.
That just doesn't make any sense, quite frankly, in the statutory scheme.
If Congress was totally silent about public trustees, or if the drafters had been, it would be perhaps a reasonable reading.
But under the circumstances, I submit it really is not.
Unidentified Justice: Mr. Farr, can I ask you a question about your basic position in the case?
Mr. Farr: Yes, Your Honor.
Unidentified Justice: If we assume for the moment that there is a violation of 455(a), and I know you even argue that may not be justified, but assume that is so.
Is it your position that there is never a case in which this would be a permissible remedy?
No matter how strong the basis for believing his impartiality might be questioned?
Because the statute, itself, doesn't address the question of remedy.
And I guess we are primarily concerned with remedy here.
Mr. Farr: That's right.
That, of course, is the rule the 7th Circuit appears to have adopted.
Unidentified Justice: Well, that is reading that case rather broadly.
Mr. Farr: In several other cases, I just might add, since then they have said if you raise... in a couple of cases where there have been claims raised under sub-section (b) on appeal, they have considered those.
And, then they've said,
"Now, we turn the ones under (a) and we don't review them under appeal, because we don't give retroactive relief. "
Unidentified Justice: But I am really asking your position.
Your position is that although the Congress didn't say so that we, in effect, should read in an absolute prohibition against retroactive relief in 455(a)?
Mr. Farr: It seems to me... I naturally hesitate to proclaim something quite that absolutely.
I think that clearly should be the general rule.
Whether there is some case where the involvement of the judge in whatever it is is so serious that it raises the same concerns that you would have under due process or perhaps under (b), I suppose there might be latitude for that.
Unidentified Justice: For example, would there be latitude if, say, the day after he released his findings, they discovered the alleged conflict... the disqualifying fact.
And they had gone in right away on a motion for a new trial and motion to disqualify and have another judge taken another look?
Would you take the same view that it is just simply too late?
Mr. Farr: The view to me is not that it is too late.
It is simply that that is not enough to invalidate everything that went before.
I mean it is not a timeliness argument so much as it is those particular grounds.
There is simply no justification--
Unidentified Justice: I was asking the other way around.
If it were much more timely so that it would be perhaps less of an upsetting of something.
Mr. Farr: --But what I am saying is that the timeliness doesn't make any difference to me.
Unidentified Justice: It doesn't enter into it.
Mr. Farr: What I am saying is that when you have a judgment, you have had all the proceedings, you have had all the judge's rulings, and the trial for all it could be could take five years.
In this particular case, it didn't; but it could.
That even the day after when somebody comes in and says,
"Well, I've just now uncovered an appearance of impropriety that I didn't know about the day before you ruled against me. "
"I would like to set everything aside. "
I don't think it ought to be set aside unless it rises to a level of much more.
Unidentified Justice: Mr. Farr, in this case, what do you do with that statement by the judge that had he known, he would have disqualified himself?
Mr. Farr: Well, that is exactly the distinction I am trying to make, Justice Marshall.
Between prospective recusal and retroactive recusal.
I think there are certain grounds, the grounds set out in 455 as a whole, (a) and (b), are sufficient to justify prospective recusal.
When you simply say,
"I'm not going to sit on the case. "
"The case is going to be reassigned to another judge in this same building. "
There is not much of an effect in doing that.
And that is what Congress wanted to encourage.
And the supporters of the bill said,
"There are plenty of Federal judges. "
"What is the point of having a judge sit on a case when he knows of grounds to recuse himself? "
Unidentified Justice: Mr. Farr, what about this as a limiting principle for what you are urging in front of us?
The statute doesn't really talk about appearance of impropriety.
It talks about when impartiality might reasonably be questioned.
Now, had this judge died before this matter came to light and had it been impossible to make the inquiry as to whether he actually knew, you could say... you could reasonably question his impartiality.
But, here, you had a proceeding.
The court found that he did not know.
There is now no basis on which you could say his impartiality could reasonably be questioned.
He didn't even know of the real estate.
So, you would come out with a different result where the proceeding continued to have an infection to it.
Where even after all the hearings were done, you really didn't know whether this judge was impartial or not.
Wouldn't you allow it to be set aside, then?
Mr. Farr: I'm sorry.
Unidentified Justice: If he had died.
If he had died, because then you would still... you have a judgment that you don't really know it was an impartial judgment.
Here you are telling us we do know it was an impartial judgment because we know that he didn't even know about this connection.
Mr. Farr: Let me say two things, Justice Scalia.
First of all, I think that the first point of what you said really comes out of the appearances test, which is a person knowing all the circumstances.
Unidentified Justice: It isn't an appearances test.
That is exactly the point I am trying to make to you.
It is whether his impartiality can reasonably be questioned.
Mr. Farr: Well, the name they do give it generally is--
Unidentified Justice: I know.
I am suggesting that is misleading.
Mr. Farr: --All I am saying is that if you accept the finding in this case, his impartiality cannot reasonably be questioned.
Now, if there was a situation where you were unable to hear his side of the story for some reason so that you just had the allegation, quite frankly, I am not sure that I would automatically throw out a judgment based on mere allegations.
I think it would depend on the credibility and so on and so forth.
Unidentified Justice: But assume the court said he should have known that and the fellow was dead, you would probably say that he probably did know it.
Mr. Farr: I think that is possibly right.
If you simply, at that stage, cut off the inquiry.
But what I am suggesting and I think Justice Scalia makes a good point in this is that you don't cut off the inquiry at that point.
And it is not just a question of knowledge.
You could have an allegation, for example, somebody could come forward with a third-party affidavit saying,
"I gave a bribe to the judge on behalf of this person's opponent. "
And he says,
"I would like to have the judgment thrown out on that basis. "
Well, if in fact the allegation is true, the judgment should be thrown out.
But if the allegation isn't true, then simply you would be setting aside a judgment based on somebody's charge that something might have happened or something as in this case when you move it over into knowledge, something should have happened.
Unidentified Justice: Isn't it possible, Mr. Farr, that even if we were to decide that a judgment should perhaps be effected retroactively, we would need to consider Rule 60(a) and (b) to see how long afterwards it could be effected retroactively.
Mr. Farr: Well, I do think that's right.
I mean there are questions at what particular point this is raised.
Certainly, our argument, quite frankly, is that whenever this had been raised, had it been the day after or had it been during appeal or, as it was here, a year and a half after the judgment, itself, that the rules should be the same.
But I think it is even more so the later the time is and the more unsettling the effects.
I mean this trial was six years ago.
The hospital has been built since then and those are exactly the principles of finality that have been recognized in civil and criminal cases which do, in fact, help public confidence in the judicial systems, not to have things being constantly relitigated.
If I could, I would like to just save my remaining few minutes for rebuttal.
Chief Justice William H. Rehnquist: Very well, Mr. Farr.
We will hear now from you, Mr. Lucas.
ORAL ARGUMENT BY WILLIAM M. LUCAS, JR., ESQ., ON BEHALF OF RESPONDENT
Mr. Lucas: Mr. Chief Justice, and may it please the Court: First, I would like to clear up one thing.
Judge Collins was found by both lower courts to have had knowledge.
He did have knowledge.
He had knowledge on January 24, 1980.
He had knowledge on September 25, 1981 and, more importantly, he had knowledge on December 12, 1981, which was 18 days before the complaint was filed--
Unidentified Justice: How does that bear on Judge Schwartz's finding, Mr. Lucas?
Mr. Lucas: --He found knowledge and said that Judge Collins forgot.
In other words, he said he had the knowledge.
Unidentified Justice: So, when you say, "knowledge", you don't mean the same thing as actually was thinking about it at the time.
Mr. Lucas: That's correct.
Unidentified Justice: You mean a kind of constructive thing.
Mr. Lucas: No.
Unidentified Justice: Actual knowledge of what?
Mr. Lucas: At the time, he had actual knowledge of the fact that Loyola University was negotiating with Mr. Liljeberg and the St. Jude interest to sell them a piece of land--
Unidentified Justice: But he did forget at the time.
There was a finding that he had forgotten when he sat on the case.
Mr. Lucas: --Yes, Justice White.
Unidentified Justice: Do you accept that?
Mr. Lucas: Do I accept that?
Unidentified Justice: Yes.
Mr. Lucas: I think first, if I may answer you in this way, first, I don't think it is a question of whether I accept.
It is whether the people sitting in this courtroom and the public at large accept it based on appearances.
Unidentified Justice: Now, do you think people sitting in a courtroom ought to be, should be able to say,
"Well, we just don't believe him. "
And think the judge who found that he had forgotten just was wrong.
Mr. Lucas: Let me answer you this way.
I think that the Fifth Circuit laid down a very narrow test for the invalidation of a judgment in a case such as this.
And that test was one of whether the reasonable person would firmly expect... I think the key words are, "firmly expect", that the judge had knowledge of the impropriety.
And that there was, thus, an appearance of impartiality, a lack of partiality.
Unidentified Justice: There is a finding to the contrary.
There is a finding by Judge Schwartz... Justice White asked you a few minutes ago whether or not you accepted it.
I don't think you have yet answered that question.
Mr. Lucas: I cannot rationalize in my own mind why a man as bright... and I don't say that he wasn't telling the truth, if that is what you are asking.
Unidentified Justice: The Fifth Circuit didn't set that finding aside as clearly erroneous.
Mr. Lucas: No, it did not.
Unidentified Justice: So, we have to accept here; do we not?
Did you even claim it was clearly erroneous in the Court of Appeals?
Mr. Lucas: No, sir, I did not.
I did not.
I think the truth of the matter is that there is no way that the lower courts, there is no way that this honorable Court, there's no way of anyone other than Judge Collins being able to decide what Judge Collins knew, when he knew it, when he forgot, what he forgot and when he remembered, again.
Unidentified Justice: Those questions are involved in many, many kinds of law suits dealing with fraud, notice.
And, traditionally, those things are set for trial before a judge, like Judge Schwartz who makes findings.
Judge Schwartz made a finding here.
It was not challenged in the Fifth Circuit.
It seems to me we have to accept that.
Mr. Lucas: I think it is a question, I think that is one factor in the overall picture.
Unidentified Justice: No.
It is a central factor.
The trouble, Mr. Lucas, is if you accept it, then you have accepted the proposition that his impartiality could not reasonably be questioned unless, unless you assert that it is reasonable to think that the judge who made that finding was lying.
Or you have to assert the proposition that you can reasonably just either lying or erroneous... that you can reasonably disbelieve the judgment of a court.
You have a court who said, "This man did not know".
Now, he may have been negligent before, but he was impartial when he decided the case.
That is the finding we have and that is what sub-section (a) requires: his impartiality might reasonably be questioned.
Now, how could his impartiality in light of all that has happened since reasonably be questioned unless you choose not to believe the court's judgment.
Mr. Lucas: For two reasons.
First, he had knowledge.
Let's begin with that proposition, if we may, Justice Scalia.
Unidentified Justice: At one time.
Mr. Lucas: At one time.
Knowledge held to have been forgotten.
Now, I would like to refer the Court as we did in our brief--
Unidentified Justice: I am not too sure of that.
I understand that there is a good possibility that these things came up and he never even heard about it, while he was on the Board.
Mr. Lucas: --I think the facts belie that, Justice Marshall.
Unidentified Justice: Is there anything that said he was at a Board meeting where this matter was discussed?
Mr. Lucas: Yes, Your Honor.
Unidentified Justice: At a particular Board meeting?
Mr. Lucas: Three particular Board meetings.
Unidentified Justice: Now, those are the ones you are talking about that shows--
Mr. Lucas: Yes, sir.
Unidentified Justice: --He might have been asleep.
Mr. Lucas: His testimony at his deposition was that it was his habit to read the minutes of the previous Board meeting and the agenda for the upcoming Board meeting, both of which were mailed to him in advance of the coming Board meeting.
And on December 11th, 29 days from the date that he attended a Board meeting at which it was unanimously passed a resolution was unanimously passed, which means Judge Collins presumably voted for it, to authorize the Vice President of Business and Finance of Loyola University to continue negotiations.
Twenty-nine days later at page 1 of the joint appendix, you will note that the judge entered an order, all attorneys were present in his chambers where he denied an injunction that the defendants had filed.
That was 29 days from the time he attended the Board meeting and voted on November the 12th concerning St. Jude and Liljeberg.
The case was a declaratory judgment action.
It did not involve property, per se.
It involved who owned a particular corporation which had been granted this certification of need, which we call an 1122 certificate in Louisiana.
Now, there is another factor present, too, in terms of knowledge that I don't think we can ignore.
And that is the whole doctrine of the fact that perceptions are important.
Justice Frankfort identified this in Public Utilities Commission v. Pollack.
In Pepsico v. McMillen, which is a 7th Circuit case which was decided in 1985, they spoke of some unconscious level.
In other words, the idea being,
"Once we acquire knowledge, who is to say to what extent that unconscious state has an effect on our judgments, on our decisions? "
In other words, these are perceptions that knowledge creates once we have acquired it.
And I think that is a significant factor, certainly.
Unidentified Justice: Was your motion to reopen here, was that under 60(a) or 60(b)?
Mr. Lucas: Yes, Mr. Chief Justice, it's under 60(b).
Unidentified Justice: And for what time limit would you say governed that motion?
Mr. Lucas: As we all know, the Congress didn't set a time limit, which I think throws us into a situation where our procedural vehicle is 60(b).
And, of course, there it is based upon reasonableness.
Now, we know from other cases, we know that in the U.S. v. Brown case, a judgment was vacated six years after it was rendered.
Roberts v. Bailar, four years.
Unidentified Justice: What courts were those decided in?
Mr. Lucas: I know that Brown was the Fifth Circuit.
Roberts v. Bailar was 6th.
Unidentified Justice: Do you know anything from this Court since the Ackermann and Clapraw cases?
Well, supposing a year or so after the case had become final, you had decided there had been a very erroneous jury instruction given in that case, do you think you could then come in under Rule 60(b) and say,
"You know, let's have a new trial because this instruction was clearly wrong. "
Mr. Lucas: No.
I think you are dealing with a much larger purpose here.
You are dealing with the question of how do we, as judges and lawyers and justices, how do we want the public to perceive our judicial system if there is even an appearance of impropriety.
Unidentified Justice: Well, supposing I come in and make the kind of motion and I say,
"Well, certainly we don't want the public perceiving our system is one which gives flatly wrong jury instructions on major points in the case. "
I suppose my opponent would argue,
"There comes a time when a judgment has to become final. "
"And why shouldn't that apply in this case, too? "
Mr. Lucas: Because this is governed purely by 455(a).
There is no 455(a) applying in the case of the jury.
Unidentified Justice: No, but 455(a) does not say what should be done.
You agree that 60(a) and 60(b) govern requests for relief of this sort.
Mr. Lucas: Yes.
That's the vehicle to do it, yes.
Now, one other fact I would like to mention.
In the deposition of Mr. Steeg, who was Chairman of the Board of Loyola University, he testified that in his opinion there wasn't a single member of the Board of Loyola who wasn't aware of the Liljeberg offer.
He is the Chairman of the Board of Trustees.
The Monroe tract: I believe Justice Scalia was asking counsel for Petitioner about the Monroe tract.
The Monroe tract is an extremely tract.
It is well known in the area outside of New Orleans, owned by Loyola University.
I dare say I don't know how many hundreds or thousands it is, but in this case, alone, the hospital was built on an 81-acre site and the area that was going to be rezoned was 115-acre site and there are many more hundreds of acres, if not thousands.
It is a significant tract.
It is not the kind of thing that if you were sitting on the Board of Trustees, like you are selling a lot on the corner in the middle of a block.
It is not that kind of thing.
It is very large.
Unidentified Justice: But is it correct, as Mr. Farr told us, that this is a different tract from the one that was the subject matter of the litigation?
Mr. Lucas: Let me clarify that because it gets a bit confusing.
First of all, it was Hospital Affiliates International, not HCA, that was involved in the purchase of another tract of land that was approved by the Department of the State that issues these approvals for the building of a hospital.
Then the certificate issued.
And the certificate came out in the name of St. Jude Hospital of Kenna, LA.
, Inc. Without bothering the Court with all the documents involved, the issue then was: Who owned that hospital?
I mean who owned that corporation which in turn owned the certificate?
The court ruled that Mr. Liljeberg owned it and Mr. Liljeberg needed a place to put his hospital because the piece of property we had was in a different location.
And, therefore, he bought a second piece of the land that was not involved in this litigation directly.
Unidentified Justice: What you are saying, I gather, is that if he had lost the litigation instead of winning it, then he would not have been an eligible purchaser for the Loyola property.
Mr. Lucas: That is correct.
Unidentified Justice: So, it did actually effect Loyola's ability to make the transaction they ultimately made with them.
Mr. Lucas: That's correct.
Had Mr. Liljeberg lost that law suit, more importantly, Loyola would not have been able to gain an increment of $9 million in the value of their surrounding property which Mr. Liljeberg was obligated to rezone in order to acquire the property on which to build his hospital.
Hospital Affiliates International merged into HCA after that.
I might add that the merger and the issuance of the certificate of need came down the same day.
I don't think there is any significance to that, though.
I think that if we look at what Petitioner is saying, well, first let me direct my remarks to Petitioner's argument about prospective knowledge.
I mean knowledge and then prospective recusal.
I would direct the Court's attention and say that we fully agree with petitioner to page 26 of his original brief when he says,
"We think that the earliest point should be when the judge actually knows of the facts requiring recusal. "
We submit that that date was January 24, 1980, long before... long before this case.
Unidentified Justice: The section really, construed that way, the section means that if you ever know anything, you are not entitled to forget it.
Mr. Lucas: No, Justice White.
Unidentified Justice: Well, for purposes of application of the section.
Mr. Lucas: Again, the public has to firmly expect that the judge would have forgotten.
For instance, that--
Unidentified Justice: Well, then your answer should be, yes.
You construe the statute as meaning that even if you have forgotten it is irrelevant because people are entitled to believe that you didn't.
Mr. Lucas: --No, sir.
I'm not for an invalidation of a judgment.
I think there is a distinction between invalidation of a judgment and recusal.
I think the cases seem to indicate that if a reasonable man harbors doubts, there is possibility of recusal for an appearance of impropriety, but not for an invalidation of judgment.
For an invalidation of a judgment, as I read the Fifth Circuit opinion, the reasonable person, the objective observer must firmly expect... not speculate... they say that specifically.
Firmly expect that the judge, because in January 1980, he had knowledge, firmly expect that he wouldn't forget it.
I don't want to limit this to January 24, 1980 in this case, because this was a continuous.
Unidentified Justice: Yes, but that is when you say that's the date.
Mr. Lucas: That's when he first acquired it.
Petitioner says when he first acquired knowledge.
And I am saying to the Court that when Judge Collins first acquired knowledge, it was January 24, 1980.
There were repeated instances of meetings, communications which he read after that time.
This is a continuous thing.
Not an isolated one.
Unidentified Justice: This strikes me as really quite unrealistic.
The Chief Justice is by statute the Chancellor of the Smithsonian, a trustee of the National Gallery.
I attend numerous Board meetings, just speaking from my own experience.
And the idea that you carry around in your mind after you leave those meetings everything on the agenda certainly doesn't square with my experience.
Mr. Lucas: I agree, Mr. Chief Justice.
I agree, Mr. Chief Justice.
And we are not suggesting that.
We are certainly not suggesting.
Unidentified Justice: Well, then, what do you mean when you say it is a continuous thing?
Mr. Lucas: Perhaps I didn't express myself well.
There were continuous meetings that Judge Collins attended.
There were continuous meetings that Judge Collins received.
Continuous in the sense that it wasn't just January.
It wasn't just December 24, 1980.
Unidentified Justice: Yes, but your submission is that even if when he judged the case, he had absolutely forgotten it.
Absolutely, which people do; nevertheless, you win the case.
Mr. Lucas: If the average--
Unidentified Justice: Well, that is your position.
Mr. Lucas: --Yes, it is, Justice White.
If the average reasonable person, and this is what the court meant--
Unidentified Justice: Wouldn't believe that he had forgotten it.
Mr. Lucas: --That's correct.
Unidentified Justice: Despite what a judge has found?
Mr. Lucas: That's correct.
That is correct.
Based on the facts of this case, if you please.
Not just any case, but based on the strong compelling facts of this case.
This is what the courts found.
Unidentified Justice: Your are willing to accept as eliminating your right to get the case set aside, just a belief by the public, the generality of belief by the public that he might have forgotten it or that he would have forgotten it, but you are not willing to accept for the same purpose a finding by a Federal judge that he in fact forgot it.
Mr. Lucas: I think that is what the statute says, Justice Scalia.
All we are doing is interpreting this statute.
Unidentified Justice: Well, in a case like this, then, knowledge or not, it is just what you should try out is: What would a reasonable person in the community have believed.
And I am not sure that that would even be a triable issue.
The judge just ought to rule on it, like the Court of Appeals or the Fifth Circuit did.
Mr. Lucas: Well, let's accept one fact to begin with.
This was a rare occurrence, because most judges do recuse themselves.
Most judges say, "I have a conflict here".
Most judges... when Judge Collins had actual knowledge by his own admission on the 24th--
Unidentified Justice: He recused himself.
Sure, he did.
Mr. Lucas: --No, sir.
On January 24th, when he had actual knowledge--
Unidentified Justice: Yes, but he felt there wasn't any longer any conflict then.
Mr. Lucas: --The case was still--
Unidentified Justice: He was wrong.
Mr. Lucas: --The case was still under his control because it was two days before the judgment was entered.
It's March 24th.
Unidentified Justice: And this wasn't in the discovery?
Mr. Lucas: Discovery didn't take place until after we learned of this fact and then filed the motions to vacate.
Unidentified Justice: No discovery before that?
Mr. Lucas: No reason to discover because we didn't know it until 10 months after the Court of Appeals decision was filed.
Unidentified Justice: Well, that is the reason for discovery is to discovery.
Mr. Lucas: That's right.
We had no reason to believe that Judge... we didn't know that Judge Collins was on the Board of Loyola.
Unidentified Justice: Were you interested in what transactions went on about your property?
Mr. Lucas: Justice Marshall, the property was not involved in this case.
All that was involved was the ownership of a corporation.
We had no knowledge that Judge Collins was a member of the Board of Trustees or that Loyola was involved.
Unidentified Justice: I didn't say that.
But weren't you looking up... there was nothing involved in minutes that required you to read the minutes?
Mr. Lucas: I had never seen the minutes.
We didn't even know about Loyola.
Because at the time, you understand, the tract involved was a different tract, not the Loyola tract.
It was a tract that HAI had acquired prior to its merger with HCA.
Unidentified Justice: You didn't find out until after you lost?
Mr. Lucas: That's correct.
Ten months after we lost.
Unidentified Justice: One little detail about the case I am puzzled about.
The judge who tried the question of whether Judge Collins knew the facts.
He tried it on the basis of deposition; didn't he?
Mr. Lucas: Yes.
Unidentified Justice: Or did the judge actually testify in front of the other judge?
Mr. Lucas: We agreed to submit it on depositions, yes.
Judge Collins' deposition, Mr. Steeg's deposition and the deposition of the Chairman, Vice President in Charge of Business and Finance for Loyola University.
Unidentified Justice: I see.
Mr. Lucas, I take it that you are satisfied that we address only Section 455(a) as governing this case?
Mr. Lucas: Justice O'Connor, I was interested in the question you addressed to Mr. Farr with regard to 455(b)(4).
It is our opinion, the first court on remand... the first Fifth Circuit panel on remand, cited (d)(4)ii, saying that this was securities.
I don't think it is securities.
And if it is not securities, then there would have been... then it would apply.
It is real estate, not securities.
Unidentified Justice: What you have argued this afternoon is a 455(a).
Mr. Lucas: That's our main point, Justice O'Connor.
That's our main point; but I am not prepared to say that that wouldn't apply and we would certainly urge it on the theory that real estate is not securities.
Securities referring to stocks, bonds, notes.
Unidentified Justice: Mr. Lucas, although rule 60(b) doesn't set any time limit for sub-part (6) which reads:
"Any other reason justifying relief from the judgment. "
It does for (1), (2) and (3).
(3) for example, includes fraud.
But even if the judgment had been obtained by fraud, and it does set a time limit for that, which is one year.
Can you think of any reason why there should be more than one year for... why just a year for fraud?
And then the other things, (4), (5) and (6), the judgment is void.
There is no time limit for that, but a void judgment is a void judgment anyway.
It could be attacked collaterally.
So, there is no reason to set a time limit on that.
The judgment has been satisfied, relieved or discharged.
Likewise, it is just inoperative once it has been satisfied.
So, why should we set more than a year for this, although for fraud by one of the parties, we would only allow it to be challenged within a year afterwards.
Mr. Lucas: Justice Scalia, I can only answer you in this fashion.
We all know that the Justice Department suggested to Congress that a time limit be put in.
Congress, in its wisdom, legislated without a time limit.
It is impossible to say why they did it, but they did it.
No time limit was affixed to 455(a).
That is the only answer I can really, truthfully give you.
Unidentified Justice: Well, 455(a) also doesn't say anything about setting aside judgments.
It wasn't addressing the subject of setting aside judgments.
Mr. Lucas: Well, that, of course, is a procedural matter, the setting aside of the judgment.
Unidentified Justice: It is not a procedural, it has to do with what Congress was addressing.
There is no reason to expect a time limit to be set forth in 455 because it is not addressing the setting aside of judgments.
I thought you agreed that your effort to set aside a judgment was made under rule 60(a) and (b).
Mr. Lucas: That's correct, Mr. Chief Justice.
Unidentified Justice: May I ask you just the opposite of the question I asked Mr. Farr.
He wouldn't say... he wasn't quite prepared to say you could never set aside a judgment under 455(a).
Do you take the position that we should always set aside a judgment when there is a violation of 455?
Mr. Lucas: When there is a violation of 455(a)?
Unidentified Justice: Yes.
Mr. Lucas: Yes.
I take the position that the judgment is not void, but voidable.
Unidentified Justice: And every such judgment, no matter how trivial.
Say, the judge forgot he owned two shares of stock.
Mr. Lucas: Oh, no.
No, Justice Stevens.
The key words are "firmly expect".
Whether a "reasonable person would firmly expect" that the judge lacked impartiality.
They have got to firmly expect it.
It is going to take a strong set of facts.
I think we cited in our brief to you, we found 38 cases in 10 years in the whole Fifth Circuit: four cases a year.
Unidentified Justice: Where does the phrase, "firmly expect", come from?
Mr. Lucas: It comes form the interpretation... it comes from Hall v. SBA, the Fifth Circuit decision.
Unidentified Justice: It is not in the statute, then?
Mr. Lucas: No.
It is not in the statute.
It is not in the statute.
Hall v. SBA, which was followed in Liljeberg and I don't recall.
It may have also been in Patacia.
But I think Hall was the one.
Unidentified Justice: But, of course at the time this case was going on here and at the time the judgment was rendered, the public wouldn't have firmly expected that there was any impropriety because the public knew no more than you did about the connection to Loyola; right?
So, what you are saying is now would the public firmly expect?
You want to apply it retroactively; right?
Mr. Lucas: Right.
Unidentified Justice: But if you apply it retroactively, then it seems to me only fair to take into account that we now have a determination by a Federal judge who says, "The man didn't know about".
And with that, you say even with that judgment, the public would firmly expect that he wasn't impartial.
I mean it seems to me you have to be retroactive or not retroactive, but don't suck back part of what we later know and not all of what later know.
Mr. Lucas: Let me answer you question in this manner.
First of all, you keep talking about the judge didn't know.
The judge did know.
He did know.
Unidentified Justice: I understand that.
Mr. Lucas: The court found that he knew.
Now, that was a finding of fact of the court.
He knew, but he forgot.
Unidentified Justice: He had known.
Let's keep our tenses correct.
He had known.
Mr. Lucas: All right.
He had known, but he forgot.
Unidentified Justice: All right.
Mr. Lucas: He had known, but he forgot.
Now, in terms of the evidence an important part of this statute is objectively ascertainable facts.
In other words, if the public, given objectively ascertainable facts, which are what?
Which are that Judge Collins was in attendance at a number of Board meetings, three in a very short period of time, that he attended one Board meeting that was held in close proximity to the time he first ruled in this case.
Not his judgment in this case, not the trial of this case.
But he denied an injunction.
The second entry on page 1 of the joint appendix.
A very short period of time.
Then he read all of these things.
And Mr. Steeg said that every member of the Board of Trustees... these are all facts, which if presented to the public, to the average reasonable person, to the objective observer, would make them believe, firmly expect... not just believe, not just speculate: firmly expect that that judge was impartial.
Unidentified Justice: Had they known all of this, which they didn't.
Mr. Lucas, there is one other thing.
You keep emphasizing the prior knowledge and saying he had known.
As I read Judge Clark's opinion, I didn't notice this before, he seems to hold that they had constructive knowledge.
Mr. Lucas: They did.
Unidentified Justice: He calls this the constructive knowledge rule.
Mr. Lucas: Yes.
Unidentified Justice: And so that as a matter of law the case should be treated as though he had actual knowledge.
Mr. Lucas: That's correct.
Unidentified Justice: Because the facts tending to indicate knowledge are so strong that most people would disbelieve the judge.
And rather than trying to actually decide whether the judge was entirely candid or not, it would be better to adopt a constructive knowledge rule.
Judge Clark doesn't make the same concession that you make.
Mr. Lucas: I think, though, Justice Stevens, Judge Clark did not speak in terms of a general type of constructive knowledge.
A very limited type of constructive knowledge.
Unidentified Justice: But your firmly expect language is the test for determining whether there are enough facts to justify a finding of constructive knowledge which he, in effect, seems to make.
Mr. Lucas: That is correct.
And he knew he had knowledge before the judgment was final and did not make it known to the attorneys.
That was on the 24th of March 1982 and the case was under his control until the 26th of March 1982.
Had he made it known, the motion to vacate could have been filed then.
I mean the motion for recusal could have been filed then.
Or it could have been raised on appeal.
It wouldn't have reached this stage.
In summation, I would simply like to say that the facts of this case exude an aroma of the appearance of impropriety.
We feel that 455(a) was intended to cover factual situations such as this case presents.
And, accordingly, we respectfully request that the judgment of the United States Court of Appeals for the Fifth Circuit be affirmed.
Chief Justice William H. Rehnquist: Thank you, Mr. Lucas.
Mr. Farr, you have two minutes remaining.
ORAL ARGUMENT BY H. BARTOW FARR, III, ESQ., ON BEHALF OF PETITIONER -- REBUTTAL
Mr. Farr: Thank you, Mr. Chief Justice.
Just very briefly: I would like to just address the question of exactly what the fact findings in this case are.
On page 28-A of the Petition for Certiorari, this is the District Court finding by Judge Schwartz.
"Judge Collins did not have actual knowledge of Loyola's potential interest in the HSA-Liljeberg controversy until March 24, 1982. "
On page 30, he then discusses that previous to that time at several of the Board meetings that there was available to the judge information and that would be sufficient to charge him with constructive knowledge.
But the only finding of actual knowledge made by Judge Schwartz is on page 28-A and it says that he had that at March 24, 1982, after all of his rulings in the case had been made.
The very rulings that Respondent wants to set aside.
Unidentified Justice: But I suppose you would be making the same argument if it were perfectly clear that he at one time knew it, but had just forgotten.
Mr. Farr: If, indeed there had been a finding, we would be making the same argument.
But I just think it is important for the record to point out that there was no such finding of actual knowledge at that time.
It was simply that he was present at Board meetings and had access to minutes from which he could have gotten knowledge, but no finding that he actually had that knowledge.
Now, the one other point I would just very briefly like to address is the (b)(4) point which was referred to by counsel.
(b)(4), as I said before, specifically... regardless of the question of the definition of securities under (b)(3) specifically requires knowledge.
And it seems to me that on the face of that provision that there is no constructive knowledge standard there.
What is being done here is to take that specific language that Congress included in (b)(4) and try in (a) to make a negligence standard out of it, to say that even if you didn't know, but should have known, we still would be entitled to the same relief.
It has nothing to do, I should point out, with prospective recusals.
There is no way in the world a judge can actually step aside and let another judge handle the case, which is really what Congress was aiming at, if he doesn't know of any grounds to do so.
Chief Justice William H. Rehnquist: Thank you, Mr. Farr.
The case is submitted.
ORAL ARGUMENT OF H. BARTOW FARR, III, ESQ. ON BEHALF OF PETITIONER
Chief Justice William H. Rehnquist: Mr. Farr, you may proceed whenever you are ready.
Mr. Farr: Mr. Chief Justice, and may it please the Court:
Our disagreement with the Fifth Circuit decision in this case rests upon two basic grounds.
First, we think that final judgments should not be set aside because of after the fact recusal motions, unless there is a showing of actual judicial impropriety.
Second, we think that such relief is particularly inappropriate when at the time of judgment that the district judge did not even know of possible grounds for recusal.
Because a judge without knowledge cannot possibly favor one side or the other, it is in fact is more unfair in this case to throw out the judgment than it is to give it effect.
Now I would like to just spend a few minutes at the outset on the facts of the case.
The findings made by a separate district judge showed that at the time that he rendered his judgment and at the relevant time that the case was before him, that Judge Collins had no recollection of and no knowledge of any discussions between Petitioner and Loyola University regarding the possible purchase of some Loyola land.
The judge found that there were numerous individuals who had been discussing the possible purchase with Loyola, and that Judge Collins did not have any recollection that Petitioner was among them.
Now the Court will recall that this case did not involve Loyola University in any way.
Loyola was not a party to the case.
Its land was never mentioned in the case, and its interest was never mentioned in the case.
There was some discussion of land in the opinion, but that is completely different land that has nothing to do with Loyola University.
Judge Collins was said to have known at an earlier time, because he was present at some board meetings where the matter was discussed and after his judgment, but the specific finding is that at the time of his judgment that he did not know.
Now I should take this opportunity to correct a statement that I did make at the first argument, which is that he did not have earlier knowledge either.
The Court did find that he had had earlier knowledge, but said that at the time that the case was before him that he did not have any knowledge of these discussions.
Unidentified Justice: Was the finding that he did not know or that he did not remember?
Mr. Farr: I am sorry.
Unidentified Justice: Was the finding that he did not know or that he did not remember?
Mr. Farr: Well, I think both.
I think that the specific finding actually is stated in terms of knowledge.
But I think that it is implicit in that that he would not have remembered any earlier information that he might have had by virtue of having attended the board meetings.
Now the Fifth Circuit did not reverse its finding.
In fact, it reaffirmed that Judge Collins did not know at the time of his judgment about the discussions.
What it held was simply that the judgment had to be set aside, because in effect he should have known.
Now in discussing this decision, I would like to begin with what I think is an obvious but important point.
That the question here is not simply one of getting another judge at the beginning of the case, which is what Section 455 is basically aimed at.
The question here is one of setting aside a final judgment based on a motion that was made after the judgment was entered.
Now usually, this Court has set a high threshold for claims raised for the first time after judgment.
There are, of course, plain error rules on appeal and things like that.
And for Rule 60(b)(6), which is the rule under which this particular motion has been made, usually the Court has required a showing of exceptional circumstances before it would find a basis for a judgment being set aside.
Unidentified Justice: Mr. Farr, can I interrupt you.
If you draw the line at when the judgment was entered.
Can you refresh my recollection, what was the date on which this judgment was entered?
Mr. Farr: The judge signed the judgment on the 12th of March, and the judgment was entered formally on the 16th.
Unidentified Justice: And what was the date when he found out about the possible appearance of impropriety arising?
Mr. Farr: The date that the Court is using is the 24th of March, perhaps the 25th, but I think the 24th.
Unidentified Justice: And my question is what in your view was the Trial Judge's duty under the statute at that point in time?
Mr. Farr: I do not think that the judge in the case after the judgment essentially had been entered had any specific duty under the statute.
I think, frankly, that it would have been better practice, since it was so close to the time of judgment, if he had informed the parties, but it would not make any difference to our position in this case even if he had.
Unidentified Justice: And what would you say if a motion had been made on say the 26th or 27th of March, whatever the dates were?
Mr. Farr: We would take exactly the same position, Justice Stevens.
Unidentified Justice: That it was too late?
Mr. Farr: That is right.
I mean what we are talking about here is essentially a situation where he enters a judgment and he decides a case, and he has no reason to favor one party or the other.
And although, as I say, that I think that it would have been better practice had he made that clear eight days later, it would not have made any difference to the decision.
Unidentified Justice: And if he had happened to open his mail three of four days earlier.
I guess that there were just a couple of days before he got those letters.
And that would have been a critical difference too, I guess.
Mr. Farr: Your Honor, I am not sure that it would have.
I guess that it depends whether we are talking a couple of days meaning before he had entered judgment.
I think in that case, because the case would have still have been before him, that he would have not entered a judgment.
I think that at that point that he might well have had a duty to step aside and let another judge take over at that point.
Unidentified Justice: I mean "might well", he would have knowledge, would he not?
Mr. Farr: That is right.
That would be my understanding of the statute.
The only reason in fact that I used the phrase "might well" is that there is the unusual circumstance in this case that he did announce his ruling from the bench.
Unidentified Justice: Well, then he had no authority on the 60(b) motion, did he, or the new trial motion?
Mr. Farr: What happened in fact when the Rule 60(b) motion was filed and it was filed approximately a year and a half after the time that we are talking about now, he sought to reassign it to another judge for decision.
However, they sent it back to him.
At that time, he was no longer a trustee of Loyola University.
Unidentified Justice: But as of March 24th, he was mandatorily disqualified from this case under any view, was he not?
Mr. Farr: That is correct.
Unidentified Justice: And he had no authority to make any further rulings in the case.
Mr. Farr: As long as he was a trustee of Loyola University, that is correct.
At the time that the motion was made, the Rule 60(b) motion, in fact he was no longer a trustee of Loyola University.
So for example, if the case had been filed the first time at that point, then he might well not have had an obligation to recuse himself.
Unidentified Justice: Suppose that he did not remember the fact that his wife owned this property.
Let us just assume that his wife owned the adjoining property.
And as a result of his judgment, his wife is greatly enriched.
Is that grounds for recusal, mandatory recusal?
Mr. Farr: If there was a finding that he did not know about his wife's interest, Your Honor, I do not think that there would be grounds for recusal.
Unidentified Justice: The same case?
Mr. Farr: The same case.
The specific statutory provision that we would be dealing with in terms of the wife's interest in Section (b)(4), which specifically requires that he know of the interest before he is disqualified.
Now the question then would be if he did not in fact know, if he sat in perfect good faith in ignorance of this interest that his wife had, and that was part of the factual findings of the case, would that then have been a disqualifying interest.
I think not.
Unidentified Justice: Suppose that you add the fact that he was negligent in not knowing, is there any difference?
Mr. Farr: No.
I think that the point that we are making here is that the remedy of throwing out a final judgment for something which is merely negligence is too strong a remedy.
That there is no indication that in a situation like that that Congress intended that at any time that a judge inadvertently did not know about something that could be grounds for recusal if he had known about it, that the judgments automatically ought to be thrown out.
Unidentified Justice: Well, does the court below have discretion to set aside the judgment; did the Fifth Circuit say that this was automatic, that it had no choice?
Mr. Farr: Well, it accepted the finding, and then said that it found that there was an appearance of impropriety.
Our position certainly is that we do not see how there is an appearance of impropriety; if a judge is sitting without knowledge of a possible disqualifying interest.
Under those circumstances, what possible ground would he have to favor one side or the other.
In that particular case, there is not the kind of temptation, which in the words that the Court has used, which would lead him to hold the balance other than straight and true.
It is only if he has knowledge.
Unidentified Justice: Again the same argument if he is negligent?
Mr. Farr: That is correct, that is correct.
And we think that Congress in fact specifically framed Subsection (b) in terms of knowledge for just that reason.
Because if you say that as long as you can show that a judge should have known of something, just to take the negligence standard.
Unidentified Justice: You are not ignoring appearances, are you?
Mr. Farr: Your Honor, I am not ignoring appearances.
What I am saying is that here you have a specific finding that he did not know.
And I think that that is a very important aspect of the question of how this appears.
Unidentified Justice: Everybody but him.
Mr. Farr: He understood that he was a trustee.
What he did not know that there was any interest in the case before.
Unidentified Justice: I know, but it seems to me that appearances are there.
Mr. Farr: Well, Your Honor, what I am submitting here is that when you are talking about a situation where he in fact did not have knowledge, you can only create the appearance essentially by doubting the fact that he did not have knowledge.
Unidentified Justice: Mr. Farr, is that not the very point of the appearance of impropriety, that the public really does not know exactly what the judge's state of mind was, or whether he remembered, or deliberately forgot or what.
And the appearance concept is designed to take care of in part of public perceptions of act when you do not in fact until months later have a finding of fact that he did not actually know.
Mr. Farr: Can I make two points about that, Justice Stevens.
First of all, of course, the appearance standard is something which is supposed to be used on going forward basis.
That is the normal intent of it.
And the expectation is--
Unidentified Justice: On a what kind of standard?
I did not understand.
Mr. Farr: --On a going forward basis, on a prospective basis.
That the facts will be known, and that essentially will be a guideline for a judge to use in deciding whether to sit or in fact to transfer the case to another judge.
And I think that the question here is a somewhat more difficult one, which is in a situation where he did not know, would we just apply the same rule.
Unidentified Justice: Would you say that 455(a), which I think is the relevant provision here, can never be violated if the judge is not aware of a disqualifying fact.
Judges do this.
They have portfolios of stock, and they forget that they own a hundred shares of some stock, but the newspapers check this up.
Would you say that there was no violation of that section, if the judge has honestly forgot about it, if there was no appearance of impropriety?
Mr. Farr: I would say so in the example that you have given me, Justice Stevens.
I have not been able to think of an example in which I think if a judge honestly did not know of any reason to be partial, that that would legitimately create an appearance of partiality.
Unidentified Justice: Wait a minute.
Let us suppose in this case that he is a big booster for Loyola and has been, and everybody in town knows that he is a trustee of Loyola.
And this is a big case and the caption is Loyola versus somebody else.
And he for some very strange reason forgets that he is a trustee, and he continues to sit in that case.
Do you not think that that would create an appearance of impropriety.
The only reason that I thought that you could argue that there was not one here is that the impropriety did not at all consist about the fact, that is was very hidden, even the other side did not realize that this land or that this company had a bid in on land, and if the company went under that the land would not be bought by that company, and that the land belonged to Loyola.
I can understand that that is no appearance of impropriety, because the public at large would not know that.
But the other example that I just gave you, would that not be an appearance of impropriety?
Mr. Farr: But of course, in that case, Justice Scalia, I cannot imagine that there would be a determination that he did not about it.
To begin with, just to give you a technical answer.
Unidentified Justice: It is my hypothetical.
I mean there is a determination that he did not know about it.
Mr. Farr: And that finding is made on the basis of a record as accepted by the Court of Appeals.
Unidentified Justice: Then there is no appearance of impropriety?
Mr. Farr: I think that in a situation where he does not know about the particular grounds to give rise to recusal that the appearance can only be achieved essentially by not accepting the finding.
But the problem is that while that may be a situation that happens in lots of cases where people looking at it say here is a particular finding that a judge has made and I personally do not accept it, if you follow that course with Section 455(a) or even 455(b), you are going to open up all sorts of situations where the findings are controlling.
Unidentified Justice: Yes.
But under your view, as I understand you, you really will not know whether there was an appearance of impropriety until you have had a finding of fact on the judge's state of knowledge.
Mr. Farr: Well, Justice Stevens, I think that that occurs in lots of cases, whether it is something that the judge knew, or whether it is something that the judge did, or something that the judge said.
Unidentified Justice: Well, I am not disagreeing with you that that is not true, but that is a little different from one's normal concept of what an appearance of impropriety is.
It seems to me that the appearance either exists or it does not exist, and sometimes there is a wholly innocent explanation for it.
But it seems to me that that does not really affect the public perception.
The public sometimes is suspicious of us, even though they really should not be.
Mr. Farr: Except, I think, that 455(a) talks in terms of reasonable suspicion.
Now I suppose that the public may be suspicious, even after a judge has said that there is no basis here for believing that this judge did anything wrong.
The public looks at it and says, gee, if we had been the judge, we think that something looks worse than that, we are troubled about that.
Unidentified Justice: Mr. Farr, how does Subsection (c) enter into this.
It says that the judge should inform himself about his personal and fiduciary financial interests, and make a reasonable effort, and so forth.
Does that enter into the picture at all?
Mr. Farr: I do not think that it enters into this picture, Justice O'Connor, and let me try to explain why.
At the first argument, I indicated why I thought that that particular section did not really apply here.
Because Section (b)(4) says knows, not should know.
And there is nothing in (c) about a conclusive presumption.
But I would like to supplement that answer by pointing to the particular language of Subsection (c).
Because I think that under any reading of Subsection (c) that the knowledge that we are talking about here is not the kind of knowledge that he would be conclusively presumed to know under (c), even if it does have the conclusive presumption.
What Judge Collins is said not to have known in this case is the names of possible purchasers of land from Loyola University.
And if you look at what he is required to know under (c) or what he is required to inform himself about are fiduciary financial interests.
And financial interests are defined in terms of ownership of a legal or an equitable interest.
Unidentified Justice: Well, then what about the hypothetical that you were asked about the spouse owning shares of stock, I mean he deals with a case involving that company, do you not think that (c) suggests that he should know that his wife owns the stock?
Mr. Farr: Let me say that (c), of course, in the hypothetical of his wife, that there is a reasonable efforts clause under (c), not a specific knowledge clause.
The legislative history gives an example which Justice Traynor gave of the difficulty of asking one's spouse about his or her investments, and indicates that they particularly had a lower threshold in that situation.
But anyway to answer your question, Justice O'Connor, I think that there might be a possible reading under (c) which says that the way that we are going to enforce the provisions of Subsection (c) is to assume that a judge knows at least about what he is required to inform himself about, and perhaps what he is supposed to make reasonable efforts about.
But even if that were so, that still would not mean that he would have to know not just what he owned, what his wife owned, what any private trust that he served as a trustee owned or any university, but also anybody who might buy that.
Unidentified Justice: But in the case of other than this one then, do you concede that (c) affects (a) in the sense at least to the extent that the judge is supposed to inform himself about his own personal interests?
Mr. Farr: I guess that I think that it is possible, Justice O'Connor.
I do not believe that I need to win those cases, so I think that the easy thing to do would be just to say yes.
But I am quite honestly not sure that even in that situation that the remedy of invalidating a final judgment of all prior rulings would be proper, just because he did not carry out the duty under (c).
(c) essentially is an ethical requirement.
It is in the Code of Judicial Ethics.
Unidentified Justice: Was there a finding that he did comport with his duties under (c) in this case?
Mr. Farr: Your Honor, there was no specific finding about that at all.
Unidentified Justice: It seems to me that there could not very well have been.
He is a fiduciary, and he has an obligation to make sure of what his beneficiaries' interests are.
And this was not a small potatoes deal, as I understood it.
Did not Loyola stand to have its adjacent land increase tremendously in value if this hospital went through?
Mr. Farr: That was the finding of the Court, that this was an important interest to Loyola.
But let me explain again the situation.
Unidentified Justice: And does not the judge have the duty to inquire as a fiduciary into all of the interests of Loyola, just to make sure that this does not happen?
Mr. Farr: Well, what I would like to point out here is that even if the judge had carried out that duty to its fullest degree, at least that I think is contemplated by (c), had learned everything that Loyola owned, that still would not have been enough to put him on notice necessarily about the case that was in front of him.
I mean obviously if Loyola University had been a party or its land had been mentioned in the case, then you could say, well, he is supposed to know that they owned the land, and then he should recognize when it was mentioned.
But what we are talking about here is a series of board meetings.
We are really talking about I guess three board meetings over a period of several years, in which the name of the petitioner and the corporation that he owns are mentioned on a couple of occasions.
Unidentified Justice: But not only that, but the hospital project.
You would think that that would stick in his mind.
Mr. Farr: Well, except that was one of numerous things that they were talking about doing with this particular piece of land.
I think that to some extent that you have to put yourself in the position that a trustee is in in these board meetings, where you are talking about numerous items that come up, for example.
And any report by the real estate committee, for example, is one of ten, a dozen, or twenty things that are discussed at a meeting.
And even then, the idea of using this as a hospital was one idea.
The idea of using it as a shopping center was another idea.
There is a part in the minutes about somebody wanting to use it for parking.
Unidentified Justice: That was what I was going to mention.
There were minutes of all of these meetings.
Mr. Farr: There were minutes.
Unidentified Justice: Which he was supposed to have read.
Mr. Farr: He said that what he did is that he scanned the minutes.
Unidentified Justice: Anybody in the public assumes that a trustee reads the minutes.
Mr. Farr: He said that he scans the minutes of the meeting, but that he took no particular interest in these financial dealings.
And one of the things that I think is important to note--
Unidentified Justice: How can you convince the public of that, that a judge does not understand what he is reading?
Mr. Farr: --Well, the public has to understand the position that a judge is in, particularly as a fiduciary of an institution like a university.
The Code of Judicial Ethics in fact prohibits a judge from taking an active interest in the financial affairs of Loyola University.
He is not allowed to do that ethically.
He can a trustee for certain kinds of private trusts, and he can serve in a fiduciary capability for a public institution, but he cannot take an active role in the financing.
Unidentified Justice: Well, did he in this case make his position clear?
Mr. Farr: He did not take an active role in Loyola's finances.
In fact, that is precisely what he said.
Unidentified Justice: Did he make that clear to the public, did he make that clear to the public or anybody else?
Mr. Farr: He testified under oath to that effect; yes, he did.
Unidentified Justice: He made it clear to whom?
Mr. Farr: When a Rule 60 motion was filed a year and a half afterwards.
Unidentified Justice: That is not what I am talking about.
You said that under the law that he has to do this.
But did he do that, did he make it clear that he was not interested in the fiduciary doings of that place, did he?
Mr. Farr: Your Honor, I am not sure that I understand your question quite honestly.
Unidentified Justice: Did he say that I pursuant to the laws of the State of California am not allowed to participate in the fiduciary business of this corporation?
Mr. Farr: Your Honor, I do not know that he did that.
But I do know that he did not serve on the real estate committee, that he did not serve on the investment committee, that he did not serve on the executive committee.
Unidentified Justice: Did he disqualify himself from every vote on every financial transaction that came before the board of trustees?
Mr. Farr: The Code of Ethics allows you to vote as a general trustee on financial matters.
What it does not allow you to do, however, is to actually participate in making the financial decisions.
And I think that what is happening is that in a sense that we are looking to impose.
Unidentified Justice: Do you think that it is appropriate for a judge to vote on a financial matter which is also appearing before his court?
Mr. Farr: Do I think that it is appropriate?
Unidentified Justice: Do you think that it is appropriate for a judge to vote on a financial matter and financial transaction that is being reviewed in his court?
Mr. Farr: No, I do not.
I think that if he knows that there is a financial matter either at the board meeting or in his court, that he should not vote on it if it is in his court, or that he should recuse himself if the matter is before him in his courtroom.
But those are cases, of course, where we are talking about knowledge.
And what we are talking about here is a situation where Judge Collins could not reasonably have had any reason to favor one party or another.
And the question really then is is it appropriate--
Unidentified Justice: Was that finding made by the lower court?
Mr. Farr: --Pardon me.
Unidentified Justice: Was that finding made by the lower court?
Mr. Farr: Not that specific finding.
But the finding that he had no knowledge, it seems to me, that it follows naturally from that that if you do not know about any reason to be partial, that there is no reason that you would favor one party over the other.
And the court below accepted his testimony to the effect that he did not know at the time that he sat on the case.
Now I would just like to make one brief point, and then save the remainder of my time, if I may.
The type of thing that we are talking about, the issue of allegations about a judge and what is determined, and then what the public believes, does come up in several different kinds of cases.
And in response to Justice Stevens' question, I wanted to say that there are cases, for example, where there is an allegation made that a judge made an out of court statement to a third party which indicates some sort of bias or prejudice.
And in each of those cases, there is then a question as to whether in fact the judge made the statement.
And there have been fact findings.
There is a case in the Seventh Circuit, Balastrue; the Ninth Circuit, Conford; and the Fifth Circuit, Brown, which are examples of this.
Sometimes the fact finding is not favorable to the judge.
That was the situation in the Brown case.
And sometimes it is.
But it is that finding, whether he said it or what he said, that is then used as the basis for application of the statutory provision.
Unidentified Justice: Yes, but Mr. Farr, the facts that give rise to the violation of 455(a), if there was a violation of 455(a), would exist before the finding occurred.
Whereas the ones that you described depend on whether the statement was made, which is an objective fact yes or no.
What you in effect are saying is that later on you want to know the subjective state of mind of the judge here to determine whether there is an appearance.
And I would suggest that the appearance might well have existed, even though he did not realize that there was a disqualifying fact.
Mr. Farr: Well, I guess that I do at some point part company on that.
Unidentified Justice: Is it your position that 455(a) was not violated, or that the vacation of a judgment is an impermissible remedy for a violation of 455(a)?
Mr. Farr: It is both.
Unidentified Justice: It is both.
Mr. Farr: Our initial position, as I meant to indicate, was that this is not a permissible remedy or not an acceptable remedy, simply for an appearance of impropriety, when you are talking about a motion filed after the fact.
That is what the Seventh Circuit's rule is.
What I am saying in addition though is that because of the finding of lack of knowledge, I think that if you credit that, there is not even an appearance of partiality in this case.
I will reserve my time for rebuttal.
Chief Justice William H. Rehnquist: Thank you, Mr. Farr.
We will hear now from you, Mr. Lucas.
ORAL ARGUMENT OF WILLIAM M. LUCAS, JR., ESQ. ON BEHALF OF RESPONDENT
Mr. Lucas: Mr. Chief Justice, and may it please the Court:
We submit to Your Honors that the single most important finding of fact by the Fifth Circuit was its finding that the public would not believe the Judge Collins forgot.
If the public would not believe that Judge Collins forgot, it would therefore believe that his impartiality might reasonably be questioned.
And it would therefore believe that the judgment was tainted.
And the requirements of 455(a) would then have been met.
And that was basically, I believe, the foundation of the Fifth Circuit's holding.
The Fifth Circuit also said that the judge erred in failing to recuse himself.
Unidentified Justice: Excuse me.
That would show that he should disqualify himself in any proceeding in which his impartiality might reasonably have been questioned.
And this says might reasonably be questioned.
The proceeding was over.
At the time that it was conducted, there was no reason for the public to question his impartiality.
What you are saying is that the public will not believe that his colleagues' finding that he did not know about it was true later.
Mr. Lucas: At the time of the hearing, I believe that the public would question his impartiality, yes.
If the public knew that he was a member of the board then.
Unidentified Justice: The public did not know.
But the public did not know.
At the time of the proceeding, even the parties did not know, who were much more familiar with all of the land involved in the case and all of that.
It is hard to believe that the public would have known.
Mr. Lucas: The public, I believe, for purposes of 455(a) is presumed to know objective facts.
The objective facts were that before that hearing and during that trial, this man, this judge, was a member of the board of trustees of Loyola University.
At that time, the public is expected to know that, yes.
I do not think that it matters when he learned it, Justice Scalia.
Unidentified Justice: The public is deemed to know every little detail, even though he is unaware of those details, and even though he has no obligation to inform himself of those details?
Mr. Lucas: No, I do not think that the public is deemed to know every little detail, and that is where the importance comes in.
I think that the public is to know that if Loyola owns a 530 acre tract of land, which is what this is, the equivalent of about seventeen square city blocks, that if it is going to sell a piece of that land and it is going to have rezoned 115 acres around it which will increase the value by $9 million, I think those facts that the public would expect to be important and would know.
Unidentified Justice: The public did not know the connection between this company and that land any more than the judge here did.
Do you seriously contend that at the time that the judgment was rendered that there was an appearance of impropriety?
Mr. Lucas: Yes.
Unidentified Justice: There was.
To whom was this appearance manifest, since your client did not find out about it until how much later?
Maybe you are guilty of laches then.
Mr. Lucas: Well, then, too, maybe the court is guilty of not having revealed it, as it is required to do and mandated to do.
When it knew it, it did not tell the parties.
It did not tell the attorneys.
I do not think that under those circumstances that we should look back and say.
In other words, it seems to me, Justice Scalia, that if a judge could just keep to himself some interest that would require his recusal under 455(a), if he could just keep it to himself under after the judgment is rendered, all is well.
Unidentified Justice: Because then he would come under another provision where he has personal bias or prejudice, or where he actually knows of a financial interest.
But here, you are just saying that he did not know of it.
I mean that is quite different.
Here you are saying that this judgment was bad, because it appeared that he was biased.
And I find it hard to say that at the time of the judgment that there was any appearance of impropriety.
Mr. Lucas: Justice Scalia, we do not say that he did not know.
The judge himself said that he did not remember.
He knew on January 24, 1980.
The court found that as a finding of fact.
He knew on September 25, 1981.
He knew on November 12, 1981, and that is an important date.
Because on that date, he attended a meeting, and he voted on a motion that was passed unanimously or presumably he voted.
He was there, and the motion passed unanimously, to resume negotiations with Mr. Liljeberg.
Eighteen days later, the suit was filed.
And twenty-nine days later, he denied a TRO and refused a stay and injunction that suit, twenty-nine days after that meeting.
Unidentified Justice: You tried this and lost, did you not?
Mr. Lucas: Sir?
Unidentified Justice: Did you not argue this to the District Court?
Mr. Lucas: And lost on the merits.
Unidentified Justice: And lost on the merits.
Mr. Lucas: Yes, sir.
Unidentified Justice: We do not want to try that again here.
Do we not have to accept the fact that he did not know, is that not the posture in which this case is going forward?
Mr. Lucas: No, I do not think.
I think that what is before the Court is the Fifth Circuit, Judge Collins particularly saying that he did not remember.
I think that there is a difference between he did not remember and he did not know.
He did know initially.
Now we are in the area of did he know and then forget.
That is really what we are saying.
Unidentified Justice: When did you or your client find out that he was on the board?
Mr. Lucas: We found out, sir, ten months after the judgment was rendered by the Fifth Circuit Court of Appeals.
Unidentified Justice: You mean that you tried that case against the corporation, and you never examined its minutes; did you ever examine the minutes of Loyola?
Mr. Lucas: Loyola was not a party to the suit, Your Honor.
Unidentified Justice: I know, but it was involved.
Mr. Lucas: No, it was not involved.
It was not involved in the suit.
The suit was over the ownership of a corporation, which in turn owned a certificate of need to build a hospital, a hospital which was going to be built if Mr. Liljeberg was successful on Loyola property.
Unidentified Justice: But was it property of Loyola?
Mr. Lucas: On which it would be built; yes, sir.
Unidentified Justice: And you did not look at the minutes?
Mr. Lucas: Did not even know of any connection between Loyola and Mr. Liljeberg.
Unidentified Justice: Wait a minute, do not say that you did not even know that there were minutes.
Mr. Lucas: No, sir.
Did not know of any connection between Mr. Liljeberg and Loyola.
Unidentified Justice: But you never looked at the minutes, you said.
I just think that it is strange.
If you had looked at the minutes, you would have known that he was a trustee, would you not?
Mr. Lucas: Well, sir, I am perhaps not making myself clear.
I had no reason to look at Loyola's minutes.
Because Loyola was not a party to the suit, and I have no idea at that time that a hospital would be built on Loyola's property.
It could have been built anywhere.
So there was no reason to suspect.
Loyola played no part in this case.
Unidentified Justice: You no more than the general public had any reason to believe that there was any impropriety.
I mean that seems to me very telling.
And yet you assert that there was an appearance of impropriety, although you did not see any.
Mr. Lucas: I can see impropriety in the fact that the judge knew on March 24th, two days before he lost jurisdiction of this case, and did not inform anyone and did not tell anyone.
He had a mandatory duty to recuse himself at that point.
Unidentified Justice: That might be actual bias or actual impropriety, but it would not be an appearance of impropriety, which is what I thought that we were talking about.
The discovery did not disclose that St. Jude was negotiating with Loyola as a prospective seller of the land?
Mr. Lucas: No, sir, it did not.
The discovery on the merits of the case, you mean?
Unidentified Justice: Yes.
Mr. Lucas: No, sir, it did not.
Unidentified Justice: You just assumed that a hospital would be built somewhere?
Mr. Lucas: Where the hospital was going to be built was really of no concern.
You see, this was a contest between HSAC, which is a subsidiary of Hospital Corporation of America, and Mr. Liljeberg, who was negotiating with other companies.
HSAC had land on which to build the hospital, and which the state had approved the site for the hospital.
So where the hospital was going to be built was really of no concern to us, even if Mr. Liljeberg won.
We were concerned with him not winning.
Unidentified Justice: When the judge failed to disclose his interest on March 24th, how did that prejudice you.
I take it that counsel for the Petitioner and Appellant argues that it really did not make any difference at that point, that the trial was over anyway.
Mr. Lucas: Well, again, looking back on it, a number of things could have happened.
Number one, the judge on his own motion under Rule 59 could have declared a new trial right then and there.
On the night of March 25th, the last date, on March 25th of 1982, the last date that it was still under Judge Collins' jurisdiction, he attended a meeting at which the details, the details of this land transaction were discussed.
Those minutes are before Your Honors.
No phone calls, certainly not to me, and certainly not to anyone else that I know about, to say, even on March 26th, 27th, or 28th, hey, I hear you are appealing this case, I think that you ought to know.
And the onus is not on the lawyers, Your Honors, as I read the statute and jurisprudence.
The onus is on the judge.
Unidentified Justice: What conclusion do we draw from that, (a) that it would have been easier to make your motion, but does it tell anything about what the substantive ruling on the motion would have been.
We are back in the same box that we are in now, that is to say that the trial is over.
Mr. Lucas: No.
Except, of course, one of the arguments that is raised is the question, the opposing counsel's question is timeliness.
And of course, it is directly involved there.
We were in a position where it was ten months after the court ruled.
Unidentified Justice: What about the merits?
Mr. Lucas: The merits?
Unidentified Justice: The merits about the recusal motion or the new trial motion.
Those are the same, are they not, on March 24th or ten months later, or are they?
Mr. Lucas: Yes, I think that they are, sir.
I think so, sir.
Now one of the points that this Court, of course, is well aware of is that a judge should not act as a judge in his own case.
And this Court in Aetna v. Lavoie established that principle.
Also the law does not look at just actual bias, but it looks at the question of the appearance of bias or the appearance of impropriety.
And this was an important holding by the Court in the Commonwealth Coatings case back in 1968.
In fact, it was that case that was used as a source of 455(a) in the Senate and House hearings.
Therefore, in the absence of a designation of a remedy in Section 455, the remedy applied by this Court in Commonwealth Coatings is reasonable.
I was asked before at the earlier hearing as to the basis for any remedy under 455.
And I think that the basis for that remedy is the Commonwealth Coatings case.
I do not think that I or anyone else will ever know what is only known to Judge Collins.
I think that a terrible situation would face this Court and this nation under this statute if we ever got into a position where a judge stands in the position of the person being tried.
And I would cite the Court to U.S. v. Brown in the purview of a fair trial, that it is the judge himself who is on trial.
If we ever get to a situation where the judge can say I forgot or I do not remember and completely exculpate himself from any finding of impartiality, then I think that we would do violence under those circumstances to the congressional intent of 455(a).
I think that the cases have clearly established that we must rely upon on objectively ascertainable evidence rather than the judge's memory or the judge's professing of not remembering.
Unidentified Justice: Mr. Lucas, such a holding would not stretch as far as you are suggesting.
I mean if the thing that he claims not to have remembered is something obvious to all of the public and he is the only one in the world who did not remember, then you could say whether he remembered it or not, that there was an appearance of impropriety, because the whole public knew that this land was involved in litigation and that he was a trustee of Loyola.
But it is a much narrower situation when you say that it is a little thing that the public would not know about, and that it is that he claims not to remember.
What is so bad about letting that be adjudged by a separate court.
And if the court is persuaded that he did not remember it, there has neither been an appearance of impropriety nor any actual impropriety.
Mr. Lucas: Well, Justice Scalia, I think that we get back to the question of is it a little thing or is it a big thing.
Here, it was a big thing.
Here, it was a case of a judge who attended three meetings where this matter was discussed apparently in detail.
And the suggestion has made that he only heard it one, or two, or three times.
Unidentified Justice: Well, you are mistaking what I mean by a little or big thing.
I mean a thing that is evident at the time of the trial.
This was not evident at the time of the trial.
Your client did not pick it up.
It was a very remote connection.
Now maybe he should have remembered it, but he did not, or at least it was found that he did not.
Mr. Lucas: But I believe that it is presumed that the public knew whatever the facts were at that time, not later.
Whether the public finds out later or not is inconsequential.
So we look at the facts at that time.
The facts at that time were that he had any number of meetings and he got any number of minutes.
Unidentified Justice: I think that is the essence of what we are debating about here.
Whether you use what the public reasonably knew at the time, or what ever detail of the fact was at the time.
I think that you are right that if you say that that is the basis on which you do it, then there was an appearance of impropriety.
Mr. Lucas: I think that is it.
Unidentified Justice: Were there findings on when both parties knew, when Liljeberg knew?
Mr. Lucas: I am sorry.
Unidentified Justice: Were there any findings as to when Liljeberg knew of the judge's trustee position?
Mr. Lucas: That never entered the case, and that is another point.
Presumably, he was negotiating for quite awhile, as later developed at depositions taken after the motion to vacate was filed, yes.
That was never revealed to us.
He was negotiating the whole time.
Unidentified Justice: May I ask you along that line, Mr. Lucas, something that has always puzzled me.
In the minutes of the January 22nd meeting.
What was the date of the trial, it was right at about the time?
Mr. Lucas: The trial was January 21 and 22; yes, sir.
Unidentified Justice: The minutes of the real estate committee on January 22 refer to the negotiations with St. Jude Hospital Corporation, and that Mr. Eckholdt report that the Federal Courts have determined that the certificate of need will be awarded to the St. Jude Corporation.
That quite obviously refers to the judge's oral rule from the bench in this case.
But is there anything in the record that tells us how the Loyola trustees came to be aware of that fact?
Mr. Lucas: No, sir, I do not know.
Unidentified Justice: Or whether they perhaps warned the judge that he should not be sitting in a case like this or anything like that?
Mr. Lucas: No, I do not know.
Unidentified Justice: That did not come out in discovery?
Mr. Lucas: I do not know.
Obviously, they were keeping track of the case.
Unidentified Justice: The Loyola people were keeping track of the case?
Mr. Lucas: Yes.
But again, I must stress the fact that we did not know.
When I say we, HSAC did not know of Loyola's connection with this proceeding until ten months after the Court of Appeals, the U.S. Fifth Circuit.
I would also like to point out one thing that I think also is very worthy of consideration.
And that is that 455 applies to criminal cases as well as applying to civil cases.
I think that if we were to give the interpretation that Petitioners wish to give to 455, then in U.S. v. Brown, the Defendant would still be in jail, or at least he would have served out his sentence.
Because despite the fact that there was a great impropriety in that case, the judgment had already been rendered.
It was some time eight years later between the time that the man was tried and the time of the reversal.
He would still be in jail.
Because it was not a case of actual bias, he could not proceed that way.
It was a remark that the judge made that did not come to light until after the trial, four years I believe it was after the trial was over.
So if we give the construction to this statute that once judgment is rendered that that is it, or once an appeal is exhausted that that is it, then I submit to Your Honors that an injustice in the criminal field as well as the civil could well take place.
Unidentified Justice: Do you think that if you apply a preponderance of the evidence standard in a criminal case to determine whether the judge in fact knew of the biasing factor, do you not think that you would have to apply a beyond a reasonable doubt standard?
Mr. Lucas: I do not know, Your Honor.
I confess that I am out of my field when we are talking about criminal law.
Unidentified Justice: If there is more than a fifty percent chance that the judge was not biased, we are going to let the person go to jail.
I doubt that.
Mr. Lucas: This judge in effect acted as a judge in his own case, once simply by saying I do not remember or I forget is taken as the basis for saying that he would not be responsible under 455(a).
To the contrary, the Fifth Circuit finding that the public would not believe that he was impartial said that he because of constructive knowledge, things that he should have known, that he had a duty to inquire into, Justice O'Connor, under (c), requires that he be found to have had the requisite knowledge to indicate his impartiality under 455(a).
The record clearly establishes that Justice Collins attended board meetings on these three occasions that I mentioned.
Again I wish to particularly stress the November 21, 1981 board meeting, twenty-nine days before he ruled on a preliminary matter in this case, which you will find on page one of the joint appendix, within twenty-nine days.
We, and when I say we, the members of the public have to ask ourselves if we were on a board of trustees that was getting ready to sell a piece of property that had discussed at a number of meetings that we attended, that was one of the principal assets of this institution that we serve, and the surrounding land was going to be increased in value by $9 million, and we voted on the motion to renew the negotiations with these people, Liljeberg and St. Jude, would be twenty-nine days later remember that.
I think that we would.
And I think that under that construction, that the court properly found that the public would not believe Judge Collins forgot.
Thus, it is not a question really of whether he knew or he did not know, or whether he forgot or he did not forget.
It is a question of whether the public would find that based upon the relevant objective facts that it appeared that the judge was not impartial.
From the beginning, this Court has said that justice must satisfy the appearance of justice.
And that the imprimatur must be placed on a sound judicial system that has the support of the people.
And I believe that that was the purpose of 455(a).
455(a) is not to be applied in a speculative manner, not just any situation.
Not just something, Justice Scalia, that it seems to me involves something quite minor should be used to try to set aside a judgment.
I certainly do not think that that was the meaning that was ever intended to be given to it.
But in a situation of extreme facts, strong facts, compelling facts, as we have in this case, that is the only vehicle by which we can preserve our right to a fair trial, if you will, a fair trial in a fair tribunal, which after all is the purpose of the statute.
Thank you for your attention.
Chief Justice William H. Rehnquist: Thank you, Mr. Lucas.
Mr. Farr, you have three minutes remaining.
ORAL ARGUMENT OF H. BARTOW FARR, ESQ. ON BEHALF OF PETITIONER -- REBUTTAL
Mr. Farr: Thank you, Mr. Chief Justice.
Counsel talked briefly about Aetna Life Insurance v. Lavoie.
And I think that the decision of this Court in that case points out what I think is a very important part of this case, which is that there is a difference between a judge who sits knowing of a possible interest and a judge who sits when he does not know it.
In Lavoie, the Court did hold that one of the Justices of the Alabama Supreme Court should be disqualified, because he sat knowing of an interest.
The Court was also asked, however, to disqualify all of the other judges of the Court because they were class members.
And in discussing that claim, this Court pointed out that they were not even aware of any interest in the case when they sat on it up until the time of the rehearing.
And the Court assumed, and I think correctly, that they could not have had any reason to be biased, at least up to the time that they knew about it.
I think that what this case really is coming down to from the gist of Respondent's argument is the question as to whether you believe Judge Collins or not, and he says that reasonable people in this case will not believe him.
And if in fact he did something wrong, certainly the judgment should be thrown out.
But the question is what facts do you have to follow through on in order to reach that conclusion.
You have to assume, first of all, that Judge Collins sat in a case violating his judicial oath, knowing that a university that he served as a trustee had an interest, and yet sat to favor that interest.
When it was called to his attention eighteen months later in a motion, he falsely denied that he knew about it.
Unidentified Justice: Yes, but it was called to his attention very much more promptly than eighteen months.
Mr. Farr: It was called to his attention.
But at that time, as he testified, he said that the case was disposed of.
Unidentified Justice: Do you not agree at that point that he had a duty to do something more than he did?
Mr. Farr: I agree at that time that it would have been better practice.
Unidentified Justice: Do you not think that he had a duty to do something more than he did?
Mr. Farr: I do not agree, Justice Stevens.
Unidentified Justice: You do not think that he had a duty to disclose to the parties what the true facts were?
Mr. Farr: As the Fifth Circuit said in addressing that issue, it would have been better had he done so.
Unidentified Justice: I understand that everybody knows that it would have been better.
If it just would have been better, then you are saying that he had no duty to disclose at that point?
Mr. Farr: At that point, I do not believe that he had a duty to do so.
But let me return.
Even if he did, I think at that point that it just would have been a matter of recusing himself from any motions, and there were none made at that time.
But let me again go back to these facts.
The motion was made to Judge Collins.
Judge Collins said I did not know about it.
His deposition is taken under oath, and he says I did not know about it.
Judge Schwartz makes a finding that says that he did not know about it.
And three judges on the Fifth Circuit say we accept that finding, we do not believe that Judge Collins knew about it either.
Unidentified Justice: And in each of those instances, you can substitute the word "remember" for the word "know"?
Mr. Farr: That is correct, that is correct.
Unidentified Justice: It is rather for one Federal Judge to call another one a liar, is it not?
Mr. Farr: Well, as I have indicated before, Your Honor, there is a procedure set up for disciplining judges, which Congress set up six years after it amended 455 that depends on judges taking responsibility for the conduct of other judges.
Chief Justice William H. Rehnquist: Thank you, Mr. Farr.
The case is submitted.