When Linda Wolicki-Gables and her husband appealed a lawsuit all the way to the second-highest court in the nation against Johnson & Johnson over a malfunctioning medication pump that had been implanted in her body, the couple had no idea that one of the judges who decided their case had a financial stake in the giant multinational company.
Eleventh U.S. Circuit Court of Appeals Judge James Hill owned as much as $100,000 in Johnson & Johnson stock when he and two other judges ruled against the Gables’ appeal in the precedent-setting case.
For the Gables, a different decision in the 2011 appeal could have helped them win a verdict for as much as $20 million, a sum that would have vastly improved the quality of her care, according to their attorney, T. Patton Youngblood Jr. Today, the Florida woman is a partial paraplegic, he said, largely confined to her home with only her husband to care for her.
The Center also found that Hill ruled on three other appeals involving companies in which he owned stock, violating clear rules governing the federal courts. In all four instances, the court rulings favored his financial interest. In a statement released by the court, Hill said he was not aware of those stock holdings at the time due to the complexity of his family’s trusts.
“You like to think that people will be above board but we all know that’s not the case. You can’t presume that,” said Youngblood, the Gables’ attorney. “I don’t think it’s fair that he was able to preside over this thing. I just don’t think that’s right. That’s why they ask you for disclosures so that you don’t end up presiding over cases where you have a financial or other conflict.”
The Center for Public Integrity uncovered Hill’s conflicts by examining the three most recent years of financial disclosure reports filed by 255 of the 258 judges who sit on the nation’s 13 appellate circuits. In all, the Center identified 24 cases where judges owned stock in a company with a case before them. In two other instances, judges had financial ties with law firms working on cases over which they presided, bringing the total to 26 conflicts.
After the Center notified the judges of its findings, 16 judges had letters sent to the parties in all of those cases uncovered by the Center during the months-long investigation. The letters are the first step in possibly reopening the cases.
The violations occurred even though clear rules regarding conflicts of interest exist. Federal judges may not sit on cases in which they have a financial interest, according to a federal law. A similar rule is also in place in the code of conduct established by the court system. Judges have been warned before about participating in such cases. Following a Washington Post investigation in 2006, the courts even added a computerized screening process to help judges avoid conflicts.
Yet the problems continue.
The Center’s findings point to a larger issue of accountability — or lack thereof — in the federal court system. Judges face no formal punishment for breaking these rules.
Appellate judges can affect a company’s stock price — or even an entire industry sector — with their rulings. They are also far more likely to own stock than the average American, making it all the more important for them to avoid the perception that their holdings could influence their rulings.
Some judges don’t own individual stocks at all to avoid the risk of conflicting with their cases. Many judges are extremely careful in reviewing their holdings. Yet the Center’s findings show that some judges do not keep track of their own investments, even with the help of computerized databases. Sometimes they have failed to do so repeatedly, like Hill.
“Come on guys, this is your obligation,” said Youngblood. “You tell us all the time about ignorance being no excuse.”
William G. Ross, a Samford University law professor in Alabama who specializes in judicial ethics, said such failures undermine public confidence in the judiciary.
“Considering the importance of judicial integrity and avoidance of conflicts of interest, I don’t think it is asking too much of a judge to expect him or her to know what his or her holdings are,” he said. “Even judges with significant portfolios should be familiar with their own holdings.”