Justice Breyer Unloads Stocks To Avoid Recusals

By Anne Urda

Law360, New York (October 06, 2008) -- U.S. Supreme Court Justice Stephen G. Breyer will shed a majority of his stocks in an effort to avoid conflicts of interest so that he can potentially hear more cases on the court's docket.

A Supreme Court spokeswoman confirmed Monday that Justice Breyer would unload stocks after the court was forced to reject a few appeals for the 2008-2009 term that would have represented a conflict for the judge.

Judge Breyer has more stock holdings than any of his colleagues, including holdings in Procter & Gamble Co., Wal-Mart Stores Inc., Cisco Systems Inc., Exelon Corp., BP Plc and Nestle SA.

While U.S. Supreme Court justices continued to slowly whittle away at their stock holdings in 2007, the move did little to prevent recusals from major cases in the latest high court term.

The court’s largest stockholders — Chief Justice John G. Roberts, Justice Samuel A. Alito and Breyer — each reported sales of stock in 2007, though each of the judges still recused himself from cases in the last term, evidently because of other stock holdings.

The justices have recused themselves from more cases in recent years than any of the other justices on the current court.

Despite selling stock in Becton Dickinson and Co., Cisco Systems Inc., Citigroup Inc. and Merck & Co. Inc. in 2007, Chief Justice Roberts still held stock in 13 companies, including holdings worth more than $100,000 each in Time Warner, Dell Inc. and Texas Instruments Inc.

Justice Alito sold his shares of Intel Corp. in 2007, but still owned stock in four companies: Walt Disney Co., Bristol-Myers Squibb Co., McDonalds Corp. and Exxon Mobil Corp.

Justice Breyer held stock in nearly 40 companies in 2007, and sold shares in only two, Alltel Corp. and PartnerRe Ltd.

The other justices held stock in two or fewer, if any, companies in 2007.

Chief Justice Roberts removed himself from the equation in the 4-4 split decision in Warner-Lambert v. Kent. Justice Roberts noted in his 2007 financial disclosure statement that he owns less than $15,000 worth of Pfizer stock.

The recusal resulted in the high court’s affirmation of a lower court's ruling allowing Michigan residents to advance claims against Pfizer unit Warner-Lambert over the diabetes drug Rezulin. An evenly split court automatically upholds a lower court's ruling and offers no guidance for lower courts.

Chief Justice Roberts and Justice Breyer’s stock holdings also likely played a role in their respective recusals in several cases that were denied review in the last term, including California Public Employees’ Retirement Corp. v. New York Stock Exchange; Christiansen v. Bank of America; Motionless Keyboard v. Microsoft; Eichorn v. AT&T Corp.; Balal v. BP America; and Heath v. Lowe’s Home Centers.

Justice Alito’s stock holdings in ExxonMobil also apparently led to his recusal in the high court’s Exxon Shipping v. Baker case, in which the court in a 5-3 decision cut punitive damages imposed on the oil company over the 1989 Exxon Valdez oil spill by $2 billion.

Justice Alito’s decision to step aside also led to the court’s 4-4 split on the issue of whether ExxonMobil could be held liable for punitive damages as the corporation that employed allegedly liable managers. As a result of the split, the Supreme Court affirmed a lower court ruling that ExxonMobil was not exempt from punitive damages.

--Additional reporting by Ron Zapata