Alaska Employment Law

U. S. District Judge Timothy Burgess has rejected a litigant’s request to recuse himself because of financial interest. 

Rabbit Creek Community Church has sued the Municipality of Anchorage, arguing that a zoning ordinance (AMC § 21.45.235) that applies solely to churches violates the Free Exercise Clause and the Religious Land Use and Institutionalized Persons Act of 2000.  The Church promptly asked Burgess to determine whether he had a “financial interest in the subject matter” sufficient to require recusal under 28 USC § 455(b)(4).  The Church argued that any decision to uphold or overturn the ordinance could potentially affect the value of Burgess’ property within municipal limits.  Burgess treated the request as a motion to disqualify.

According to Burgess’ Order, § 455 does not require disqualification when the judge’s financial interest in the outcome of the litigation is only indirect.

it is important to distinguish between two types of financial interests: direct and indirect. While a judge should recuse himself upon discovering that he has even the smallest “financial interest” in the subject matter in controversy, disqualification is warranted only when that interest is a direct interest – not when it is remote, contingent, or speculative. Herrington v. Sonoma County, 834 F.2d 1488, 1503 (9th Cir. 1987). This explains why a judge must disqualify himself when he owns stock in the companies before him (since his ruling could affect their stock price and provide a direct and immediate benefit to his finances), but why the possibility that a judge might ultimately benefit from lower gas bills “as a public utility consumer and member of the general public, depending on the outcome of the litigation before him, [is] not a substantial or disqualifying ‘financial interest.’”  McCann v. Communications Design Corp., 775 F.Supp.1535, 1541 (D.Conn. 1991)(quoting In re New Mexico Natural Gas Antitrust Litigation, 620 F.2d 794 (10th Cir. 1980)). “Such a remote and contingent interest has been described as “closely analogous to what is known as a ‘bare expectancy’ in property law,” which has no “legal significance.”” Id. at 366-67.

After representing that he didn’t own property near the Church, and had no contractual relationahip with the Church, Burgess concluded:

any “interest” I have in this litigation is simply aligned with that of the eneral public, all of whose properties would potentially be affected by a change in zoning laws.  In evaluating this type of potential conflict, courts have consistently held that a judge’s interest in common with many others in a public matter is not sufficient to disqualify him. See In re City of Houston, 745 F.2d 925, 929-30 (5th Cir. 1984)(collecting cases). “Where the interest of a judge as a resident, taxpayer, or property owner is not direct or immediate but remote or contingent, such interest ordinarily is not sufficient per se to disqualify him.” Id. This justification applies with even more force where the impact would not be direct, but rather speculative. Judges’ “speculative interest as members of large groups” are “too attenuated to warrant disqualification.” U.S. v. Ala., 828 F.2d 1532, 1541-42 (11th Cir. 1987). Likewise, any potential effects of this suit upon the value of my property are remote, contingent, and speculative, and provide no legitimate basis for recusal.

Rabbit Creek v. Mun. of Anchorage, Case No. 3:08-cv-00122 TMB (D.Alaska Order of July 16, 2008)

Ron Baird represents the Church; Pamela Weiss represents the Municipality.

Note: Judge John Sedwick earlier construed the “appearance of partiality” prong of 28 USC § 455(a) in his April 14, 2008, Order in U. S. v. Victor Kohring, Case No. 3:07-00055 JWS (D.Alaska)(see pp. 14-28).  The Order also addresses the timing of a § 455 motion.