Monday, December 14, 2020

U.S. Eleventh Circuit Judge Gerald Bard Tjoflat gets away with protecting his financial interests, in part, because laws on financial conflicts are a jumbled mess

Gerald Bard Tjoflat

One of the fundamentals of American law is this: A federal judge automatically is disqualified from hearing a case in which he or an immediate family member has a financial interest. So, how does Judge Gerald Bard Tjoflat, of the U.S. 11th Circuit Court of Appeals (Alabama, Georgia, and Florida) get away with routinely hearing cases that involve JPMorgan Chase (JPMC) and Bank of America (BOA), two financial monoliths in which he has a financial stake, according to public records? One answer might be that Tjoflat, an 89-year-old GOP appointee from the Richard Nixon era, is a poorly policed crook, who just happens to have a robe. Another answer might be that U.S. law on this subject is not nearly as concise and straightforward as it should be -- opening cracks for snakes like Tjoflat to crawl through.

Perhaps most alarming is, according to our research, Tjoflat has a perfect record of favoring his financial interests in court proceedings -- 15-0 in favor of JPMC and 24-0 in favor of BOA. How did this happen? Americans would not tolerate such blatant cheating by sports officials. Well, the relationship between federal judges and their investments, and how that might affect the judges' role as "impartial arbiters," is governed by a jumbled (even contradictory) mish mash of law -- statutory law, case law, U.S. Supreme Court opinions, ethics advisories, and so on.

This should matter to all Americans, and it certainly matters to my wife, Carol, and me. Tjoflat was on a three-judge panel that violated all kinds of precedent to rule against us in an appeal of "The House Case," a lawsuit over the theft of our Birmingham home of almost 25 years via a wrongful foreclosure. Who initiated the foreclosure on our home? Why, that would be Chase Mortgage, a subsidiary of JPMC and part of Tjoflat's financial portfolio. In other words, Tjoflat cheated us by protecting his own pocketbook.

If Tjoflat was disqualified from hearing our appeal -- and there is little doubt he was -- that means the panel's ruling is void and can be attacked as such at any time. It also means we might have a path for getting our house back, and we intend to pursue that with all the gusto we can muster.

That will mean traversing a jumble of laws that should be simple, but is unnecessarily complex. Let's take a brief tour of the relevant law:

I. 28 U.S. Code 455(a)(b)(4)

(A) What it says: "(a) Any justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.

(b) "He shall also disqualify himself in the following circumstances:

(4) "He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding."

(B) Is this the last word? It should be, but it isn't.

II. 28 U.S. Code 455(d)(4)(i)

(A) What it says: "(4) 'financial interest' means ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, except that:

(i) "Ownership in a mutual or common investment fund that holds securities is not a 'financial interest' in such securities unless the judge participates in the management of the fund."

(B) What the hell? Doesn't this contradict everything stated in section I. above? Heck, doesn't (i) contradict (4)?

(C) Answer: Yes, it sure does. It also does not square with case law, U.S. Supreme Court rulings, and ethics opinions. I told you this was jumbled.

III. Tatham v. Rogers, 283 P. 3d 583 (Wash: Court of Appeals, 3rd Div., 2012)

(A) What it says: "The due process clause incorporated the common law rule that judges must recuse themselves when they have "a direct, personal, substantial pecuniary interest" in a case. Tumey v. Ohio, 273 U.S. 510, 523, 47 S.Ct. 437, 71 L.Ed. 749 (1927)."

(B) What does this say about Tjoflat's actions? That's not fully clear, but he clearly has a pecuniary interest in JPMC and BOA, and the record shows that he rules in their favor every chance he gets. Are his interests "direct, personal, and substantial." We don't know from the public record, but that is an area for further inquiry.

IV. Aetna Life Ins. Co. v. Lavoie, 475 US 813 (U.S. Supreme Court, 1986)

(A) What it says: This case originated in Alabama, and SCOTUS found: "The record in this case presents more than mere allegations of bias and prejudice, however. Appellant also presses a claim that Justice Embry had a more direct stake in the outcome of this case. In Tumey, while recognizing that the Constitution does not reach every issue of judicial qualification, the Court concluded that "it certainly violates the Fourteenth Amendment . . . to subject [a person's] liberty or property to the judgment of a court the judge of which has a direct, personal, substantial, pecuniary interest in reaching a conclusion against him in his case." More than 30 years ago Justice Black, speaking for the Court, reached a similar conclusion and recognized that under the Due Process Clause no judge "can be a judge in his own case [or be] permitted to try cases where he has an interest in the outcome." In re Murchison, 349 U. S. 133, 136 (1955). He went on to acknowledge that what degree or kind of interest is sufficient to disqualify a judge from sitting "cannot be defined with precision." Ibid. Nonetheless, a reasonable formulation of the issue is whether the "situation is one `which would offer a possible temptation to the average . . . judge to . . . lead him not to hold the balance nice, clear and true.' " Ward v. Village of Monroeville . . . .

We conclude that Justice Embry's participation in this case violated appellant's due process rights as explicated in Tumey, Murchison, and Ward. We make clear that we are not required to decide whether in fact Justice Embry was influenced, but only whether sitting on the case then before the Supreme Court of Alabama " `would offer a possible temptation to the average . . . judge to . . . lead him not to hold the balance nice, clear and true.' " Ward, 409 U. S., at 60 (quoting Tumey v. Ohio, supra, at 532). The Due Process Clause "may sometimes bar trial by judges who have no actual bias and who would do their very best to weigh the scales of justice equally between contending parties. But to perform its high function in the best way, `justice must satisfy the appearance of justice.' " Murchison, 349 U. S., at 136

(B) What does this say about Tjoflat's actions? As noted above, Tjoflat has favored JPMC and BOA, combined, in 39 of 39 cases. Can anyone seriously argue that satisfies "the appearance of justice."

V. Committee on Codes of Conduct Advisory Opinion: No. 106: Mutual or Common Investment Funds

(A) What it says: "Although the Code does not define “mutual or common investment fund,” determining whether a fund qualifies for the safe harbor contemplated under Canon 3C(3)(c)(i) involves several related considerations, including: (1) the number of participants in the fund; (2) the size and diversity of fund investments; (3) the ability of participants to direct their investments; (4) the ease of access to and frequency of information provided about the fund portfolio; (5) the pace of turnover in fund investments; and (6) any ownership interest investors have in the individual assets of the fund. . . .

Recusal considerations related to mutual or common investment funds

"As discussed above, investment in a mutual fund normally will avoid recusal concerns because the judge is not considered to have a direct financial interest in the securities that the fund holds. However, there is an additional factor for a judge to consider in determining whether owning a particular mutual fund will effectively avoid recusal considerations related to that fund. In unusual circumstances, recusal may be required under Canon 3C(1)(c) because the judge has an “interest that could be affected substantially by the outcome of the proceeding.”

(B) What does this tell us? I have three takeaways: (1) The committee cannot define a "mutual or common investment fund," so litigants, such as Carol and me, have little way of knowing the nature of Tjoflat's investments in JPMorgan Chase, whose subsidiary held the mortgage on our home; (2) Even if all of Tjoflat's investments are in mutual funds -- and we don't know that they are -- he should recuse if his interest "could be affected substantially by the outcome of the proceeding;" (3) Can Tjoflat direct his investments in any fund that includes Chase? How frequently does Tjoflat receive information about the fund portfolio? What ownership interest does Tjoflat have in individual assets of the fund -- such as those involving Chase? Those three questions should be central to any inquiry about whether Tjoflat was disqualified from hearing our case.

Could our alleged wrongful foreclosure hit Tjoflat in the pocketbook? To the extent that I was wrongfully arrested and jailed for five months, blocking us from correcting issues with our mortgage --  and that would point to Chase being involved in a criminal conspiracy to deprive Carol and me of our civil rights -- that seems to be the kind of grotesque misconduct that could indeed cause the value of Chase stock to take a hit.

Of more importance, in my mind, is Tjoflat's 39-0 record of protecting his big-bank investments. Also key in our case is that the Tjoflat panel blatantly butchered circuit precedent, so as to not even address substantive issues in our appeal. A Tjoflat panel took a similar approach in another Alabama case, Jackson v. Bank of America.

The Committee on Judicial Conduct essentially leaves it to judges to make disqualification decisions. But we believe it's past time to pull back the curtain and inform the public of evidence that Gerald Bard Tjoflat, the nation's longest serving federal judge, has made it a habit to cheat everyday Americans by providing cover for banking behemoths -- violating Due Process rights at every turn. 

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