Patterico's Pontifications

11/10/2005

Alito and Vanguard

Filed under: Judiciary — Patterico @ 7:25 am



Since Democrats appear to be heavily pursuing the charge that Judge Alito failed to recuse himself from a case involving Vanguard and other companies, it might be worth investigating. I haven’t had a chance to look into it independently, but Baseball Crank has. As a good place to start, I recommend his analysis of the controversy.

Questions: does anyone know if Senators have money invested in Vanguard? If so, have any of them voted on legislation that might affect Vanguard? Might such legislation have a bigger effect on Vanguard than a legal dispute over $170,000?

These seem like relevant questions. Let’s find out the answers. I’ll link any post that provides useful and accurate information that sheds light on the matter.

UPDATE: Why limit it to Vanguard? Let’s look at any financial holdings that Senators might have that could be affected by their votes. Since Russ Feingold seems hot to trot on the issue, his most recent financial disclosure might be a good place to start.

UPDATE x2: Here is an opinion letter from a George Washington Mason law professor saying that Alito had no duty to recuse himself. (Via Howard Bashman.) One significant point: the law in this area has been clarified substantially since 1990, when Judge Alito said he would recuse himself from Vanguard cases. This is important because, as the professor explains:

It is not reasonable to argue that, in 1990, Judicial Nominee Alito was “promising” never to hear a case involving Carpenter, Bennett & Morrissey, or Vanguard, no matter what was the state of the law or the facts in the ensuing years. His 1990 statement, in context, can only mean that based on the law and the facts at the time as he understood them, he would — out of an overabundance of caution — not hear cases involving Smith Barney, Vanguard, or the law firm of Carpenter, Bennett & Morrissey. If the facts or the law would change, then the result would change. For example, if his sister no longer was working at Carpenter, Bennett & Morrissey, then he would no longer disqualify himself from hearing cases from that firm.

Similarly, if the law subsequently became clear that recusal was not necessary — and the professor argues that it did — that would change the context of Alito’s promise as well. If the professor’s analysis is right, then there was no need for him to recuse himself at all. Still, as the professor says, Alito later recused himself anyway in an abundance of caution, because

it was his personal practice to recuse himself when a party raised an issue and “any possible question might arise.”

Thereafter, “[t]he case was sent to a new panel and it came out the same way.”

Big deal.

I predict that this issue will not gain much traction.

UPDATE x3: Here is a letter from Geoffrey Hazard, which says that Judge Alito had no duty to recuse himself, but that he made an “insignificant” mistake in making the 1990 promise to recuse himself from Vanguard cases when it wasn’t necessary. Prof. Hazard says this should lead to no more than “mild criticism” and was handled properly by Judge Alito’s subsequent decision to recuse himself.

UPDATE x4: Still more support for Alito’s position here.

31 Responses to “Alito and Vanguard”

  1. More effective than the actual conflict possibility is the fact that, in 1990, Alito had promised to recuse himself from any cases involving Vanguard should he be confirmed.

    That’s going to hurt a lot more than “you unethical pig!” charges.

    Angry Clam (fa7fff)

  2. The threads over at RedState have some good followup on this. The promise was in a list of parties as to which he would expect to recuse himself, buried in a big form. It’s possible that he forgot 13 years later what he’d written in all the forms he filled out. A few people are also pointing to similar instances with Breyer and Ginsburg, as well as the fact that Vanguard never had title to the funds (the case was more in the nature of an interpleader) and wasn’t going to pay damages anyway.

    In retrospect, he should have recused himself, but this is really a tiny molehill of an objection.

    Crank (5f5694)

  3. I agree that it’s probably not much. It does merit a few questions, but it’s not going to go anywhere.

    The only thing that strikes me is how this could slip under the radar. Dude has $3-400K with Vanguard–the name should have at least rung a bell when he saw it on his calendar.

    I’m guessing the press is making a bigger deal of this than the Dems plan to.

    Geek, Esq. (5dd2be)

  4. Crank:

    Can you provide links to those threads?

    Patterico (f6cc56)

  5. Hmm. Well as you said Crank’s analysis is thorough. The biggest problem with it would appear to be that he said he would recuse but didn’t.

    I don’t know why he’d say that in the first place though. While, as Crank points out, technically you are a shareholder when you hold mutual funds, I doubt most people think of it that way. I certainly never have. Whatever, pretty thin gruel from where I sit.

    Dwilkers (a1687a)

  6. Geek, he did see it, and he wrote a long memorandum on why he didn’t believe recusal was necessary.

    Angry Clam (a7c6b1)

  7. Angry Clam:

    That seems worse, doesn’t it? It doesn’t make sense for him to put up such a fight over the issue.

    Geek, Esq. (5dd2be)

  8. Uh, that’s what judges are supposed to do when a party has moved for recusal.

    Angry Clam (fa7fff)

  9. Clam,

    Are there any links to his opinion? I didn’t see any in Crank’s post. Also, didn’t he later recuse himself?

    I’d really like to see the opinion. Such opinions often shed a lot of light on such subjects. For example, any fair-minded person who read Justice Scalia’s opinion on the Cheney recusal couldn’t help but come away with a different view than you got from the press — even if you disagreed with him (and I did mildly disagree with Scalia on that point, if I recall correctly).

    Patterico (7a8159)

  10. Let’s hold off premature conjecture. Patterico’s looking into it, and the Clam is on the job too. If Alito’s memo deals with the issue forthrightly, there is little cause for concern, other than the usual Lefty delusional caterwauling.

    Black Jack (ee9fe2)

  11. See UPDATE x2: a law professor has opined that there was no ethical violation, and explained his reasoning in an opinion letter. It addresses Alito’s promise as well.

    Patterico (7a8159)

  12. Isn’t Vanguard a _Mutual Fund_?

    That is ‘a company that buys hundreds of stocks, then pays out based on their _average_ performance’?

    In other words, any case involving practically any Fortune 500 company will influence one’s stock. Indirectly.

    And ‘the Senators’ as a group outperform the market by a scandalous amount, which can’t possibly be due to either insider trading or ignoring their conflicts of interest.

    Al (00c56b)

  13. I read through it earlier, I can try to find it again for you, Patterico.

    How it went was like this: Alito on panel. Gets motion to recuse, which he denies with the memo I mention.

    Later on, in a petition for rehearing, the party once again complains of the conflict. Alito recused himself from that, which, I think, is the right decision- even if his non-recusal was valid, it seems oddly conflicting for him to remain involved in a case where an issue to be decided is his own potential misconduct.

    As far as Vanguard goes, Al (and I’ve been a happy client of theirs for over ten years now), generally, the ethical/conflict rules for attorneys is limited to parties actually before them, rather than just generalized problems. This makes sense too- if attorneys who even indirectly gained from a decision had to recuse themselves, we’d soon have no conflict-free lawyers left, on either side of the litigation.

    Angry Clam (fa7fff)

  14. As I said, I don’t see this as any kind of scandal or corruption or anything like that.

    It also seems that this interpretation of his promise seems a lot like the same logic used by those advocating dynamic interpretation/living constitution jurisprudence.

    Geek, Esq. (5dd2be)

  15. “UPDATE: Why limit it to Vanguard? Let’s look at any financial holdings that Senators might have that could be affected by their votes”

    Also look into how ‘blind’ their ‘blind trusts’ are.

    And also check if, like alito, they promised to congress they would not preside over vanguard cases.

    actus (ebc508)

  16. ‘Here is an opinion letter from a George Washington law’

    That should be George Mason.

    actus (ebc508)

  17. The big issue is he flat-out broke a promise, and then dug in his heels. That’s tough to spin.

    Geek, Esq. (4f9d48)

  18. It also looks bad when compounding it with the fact he heard a case involving his sister’s law firm.

    In that case, she had changed firms. So technically he had never promised to avoid cases involving that particular firm.

    But, if you’re going to depart from the text of his promise in the Vanguard matter and rely on intent, that would seem to work against him in the case involving his sister’s law firm.

    I’ll stress that I don’t think this indicates any lack of ethics or honesty–I believe he even held against his sister’s law firm. But, he’s going to have to explain this better than “oops.”

    Geek, Esq. (4f9d48)

  19. What the hell are you talking about? I don’t know what situation you’re referring to, but you seem to be saying that hearing a case involving a firm that his sister used to work for, which he promised not to hear because his sister worked there, and which he held against the firm, somehow indicates something negative about his intent.

    It makes no sense, at all.

    The rule is: you bow out when there’s a reason to, and you don’t when there’s not. And if you promised to when there was a reason to, but the reason no longer exists, then context counts.

    And no, originalism and textualism don’t require you to pretend that context doesn’t exist. Look at the famous “use” of a firearm case for an example.

    Patterico (4e4b70)

  20. I’m talking about this Boston Globe story.

    What happened is that he said that he wouldn’t hear cases involving “my sister’s law firm Carpenter, Bennett & Morissey.”

    His sister switched firms, and joined the firm of McCarter & English in 1994.

    In 1995, Alito heard and decided a case involving McCarter & English.

    Now, if we’re going to use context instead of formal language as the primary determinant, it would seem that he ought to have recused himself.

    For the record, I’m not buying the Professor’s spin on his promise not to hear cases involving Vanguard.

    He stated:

    I do not believe that conflicts of interest relating to my financial interests are likely to arise. I would, however, disqualify myself from any cases involving the Vanguard companies . . .

    Geek, Esq. (4f9d48)

  21. Gotcha on the sister thing. Now it makes sense.

    I’d like to hear his explanation of that, though it sure seems innocuous if he ruled against the firm.

    Patterico (4e4b70)

  22. I don’t think this is a big deal but Alito hasn’t handled it very well. He needs to find a graceful way of saying he made a mistake.

    You shouldn’t start out blaming a computer glitch and then say you didn’t have to recuse at all.

    The suggestion in the law professor’s opinion that the difference between Vanguard’s structure and that of other mutual fund companies like T. Rowe Price is just a marketing ploy is untrue and irritating. Shareholders in Vanguard funds have an indirect interest in the Vanguard management company and any loss to the management company as a result of this lawsuit would ultimately be borne by the mutual fund shareholders. This is different from T. Rowe Price where the loss would be borne by shareholders in the T. Rowe Price company not by shareholders in the funds managed by T. Rowe Price.

    Having said he would recuse himself from Vanguard cases Alito should at a minimum have explained why he wasn’t before hearing the case.

    And Patterico, I don’t think looking for ethical violations by Senators is a wise defensive tactic. We expect higher ethical standards from Supreme Court justices. If the public gets the idea that Alito’s ethical standards are similar to those of US Senators this will do him no good at all.

    James B. Shearer (fc887e)

  23. “The rule is: you bow out when there’s a reason to, and you don’t when there’s not. ”

    So his original promise had been to simply follow the law on conflicts of interest? What a nice thing to promise. What other laws will he be promising to follow?

    actus (c9e62e)

  24. Just to be clear, I don’t think he’s done anything unethical.

    But, he needs to do a better job of explaining this stuff. And the WH needs to get in front of this and defuse it. Calling it a “smear” ain’t gonna cut it.

    Geek, Esq. (4f9d48)

  25. And Patterico, I don’t think looking for ethical violations by Senators is a wise defensive tactic. – James in #23

    Exactly. It was also a “you too” (tu quoque) argument.

    Here is a good explanation: “whether the accuser is guilty of the same, or a similar, wrong is irrelevant to the truth of the original charge.” So surely that doesn’t fly. (Quote from http://www.fallacyfiles.org/tuquoque.html )

    But this makes me wonder – will judges allow such arguments or on what grounds would a good attorney object to that kind of fallacious argument?

    Tillman (1cf529)

  26. It’d be allowed because it goes to the bias or credibility of a witness, I’d imagine.

    Angry Clam (fa7fff)

  27. Is there a list somewhere of what cases he did recuse himself from (and why). From what I’m reading he seems to have recused himself a number of times but _maybe_ he should have either done so a couple more times or explained more clearly why not.

    Also on that note does he recuse himself more often than others? or not? or …. I don’t know enough about the US court system to know whether his recusal memo and record is normal or exceptional

    Francis (05e807)

  28. Clam, there is a good example of a tu quoque argument on the site I referenced above.

    Here’s the nickel version:

    If bin Laden was on the stand in the U.S., then he could simply say: “Well, your country has killed civilians too since you’ve used for example, atomic bombs that kill children, women and elderly civilians.” Then that would be a legitimate argument in court? Surely not.

    Tillman (1cf529)

  29. Well, it depends on where it came up.

    As I mentioned, it would actually be rather effective in a witness examination. Say you have a whistleblower for some corporate ethics violations up on the stand, and you start going into his own (fairly extensive) violations. That’s usually permissible, since it can show (1) bias of the witness (2) unreliability of the witness’ testimony, as they have a propensity to be false themselves.

    I’d say that, in probably 75% or so of all cases (to be conservative), that will be entirely admissible at trial, and most judges would also let the attorneys make tu quoque arguments to the jury.

    Apart from that, consider the equitable doctrine of “unclean hands” – that is, essentially, a full endorsement of the argument.

    So, yes, I think that there are a wide array of instances where a tu quoque argument would not only be admitted, but be very useful in trial.

    Angry Clam (fa7fff)

  30. Thanks for the explanation Clam. I’ve often wondered about questions like this.

    Tillman (1cf529)


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