Let’s set aside Fix the Court’s unreliable data and consider its proposed solutions to the supposed problem of Supreme Court justices deciding cases in which they own stock in companies that take part as amici. Fix the Court “calls on the justices to:
1. Work with Congress to clarify the term “party” in the law that governs recusals to include amici and make the 2012 STOCK Act binding to the justices;
2. Establish blind trusts into which they place their securities during their tenure on the court; and
3. Should the first two solutions not be implemented immediately, sit out the cases in which a company that they hold a stake greater than $15,000 in submits an amicus brief in favor of one of the parties.
I’ll address these proposed solutions in order:
1. If the term party in 28 U.S.C. § 455 were defined to include amici, any justice or lower-court judge would be required to disqualify himself in any proceeding in which he held stock in an amicus. That rule would invite all sorts of gamesmanship, both at the Supreme Court and in the lower courts, as the primary parties would solicit amicus participation from certain corporations for the specific purpose of triggering a disqualification.
To be sure, such a rule might have the effect of inducing many justices and judges not to hold any shares of stock. But if that effect is desirable, why not legislate it directly and uniformly instead (with deferral of capital gains for any shares that need to be sold off)?
Fix the Court’s solution—indeed, its definition of the supposed problem—also seems underinclusive. Fix the Court excludes “retirement accounts” and “index funds” from its concern on the ground that such holdings “consist of more than one publicly traded company.” I don’t understand that proposition. If a retirement account is heavily invested in, say, five stocks, why shouldn’t Fix the Court have exactly the same concerns about the influence of those stocks on a justice’s decisionmaking that it has about stocks not held in retirement accounts? (Fix the Court is also wrong to think that retirement accounts must have more than one stock holding.) Likewise, if an index fund is focused on a particular sector of the economy (e.g., Vanguard’s Health Care Index Fund), why isn’t Fix the Court concerned that a justice who owns shares in that fund might be affected when he rules on a case that affects that sector?
As for extending the so-called STOCK Act to Supreme Court justices: That Act (redundantly, I gather) prohibits members of Congress from engaging in insider trading, and it requires them to file reports on their trading. Supreme Court justices, like all other Americans, are already barred from engaging in insider trading, and I don’t see what is supposed to be achieved by imposing the reporting requirement on justices. (Fix the Court musters only the weak statement that the reporting requirement “would assist the public … in understanding why a justice may be recused in a certain case one minute but then, post-stock sale, sits on the case the next.”)
2. Fix the Court’s proposal for blind trusts for justices (and justices only) is incompatible with its insistence that “Supreme Court justices should be bound by the same code of ethics that all other federal judges are required [sic: see point 1 here] to follow.”
The Code of Conduct for lower-court judges forbids blind trusts. Canon 3C(2) provides: “A judge should keep informed about the judge’s personal and fiduciary financial interests and make a reasonable effort to keep informed about the personal financial interests of the judge’s spouse and minor children residing in the judge’s household.” (Emphasis added.) And Advisory Opinion 110 of the Judicial Conference’s Committee on Codes of Conduct states: “The Committee has consistently advised that the use of a blind trust would be incompatible with a judge’s duty to ‘keep informed’ about financial interests under Canon 3C(2).” (Emphasis added.)
(I thank Russell Wheeler of Brookings for calling this point to my attention.)
3. Fix the Court’s interim proposal of having justices recuse from any case in which a company in which they hold a stake greater than $15,000 submits an amicus brief in favor of any party would invite the same gamesmanship in the Supreme Court that I discuss in connection with the first proposal.
In sum, Fix the Court offers ill-considered solutions to a supposed problem that it has poorly defined and hasn’t demonstrated.