Reports Reveal Conflicts in U.S. Judges’ Cases

A number of federal appellate judges have ruled on cases involving companies in which they own stock, despite a federal law designed to prevent judges from taking part in any case in which they have a financial interest.

An examination of financial disclosure reports and court records shows that in 1997 eight appeals court judges took part in at least 18 cases in which they, their spouses or trusts they helped manage held stock in one of the parties.

In interviews, the judges acknowledged that they should not have participated in the cases but stressed that their holdings did not affect their rulings. The judges attributed their participation to innocent mistakes or memory lapses about their financial portfolios.

The judges said the rulings were unlikely to affect their stock values. In some cases, the judges ruled against the companies’ interests.

In one instance, Judge Alice Batchelder of the 6th Circuit in Ohio sat on a case involving Wal-Mart Stores Inc. even though her husband held up to $50,000 worth of stock in the company. Batchelder and two other judges ruled that the retailer could not be held responsible for selling a 19-year-old man a revolver that he used to commit suicide.

Batchelder said she did not realize her husband’s retirement account owned stock in Wal-Mart and other companies. “I’m extremely chagrined to discover it.”

The conflicts were uncovered by Community Rights Counsel, a public-interest law firm that concentrates on land use issues. The group reviewed 1997 personal financial disclosure reports, the most recent available at the time, filed by about 150 active judges.

The Administrative Office of the U.S. Courts said the conflicts involved a surprisingly small percentage of about 52,000 cases.