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Firm Successfully Argues That Two Rulings From The U.S. Court of Appeals For The First Circuit Be Vacated Due To A Conflict of One of The Judges On The Panel

  • July 06, 2018 Update - U.S. Court of Appeals Issues Notice in Both cases stating that despite being ordered for "re-hearing", neither matter will be allowed oral argument, see the Hayden notice here
     
  • June 28, 2018 Update Massachusetts Lawyers Weekly Interviewed our Firm Regarding this developing story,

1st Circuit Pulls Opinions After Judges Conflict Surfaces - MA Lawyers Weekly - June 28, 2018

On May 18, 2018, the Firm received two cryptic notices from The First Circuit involving two different appeals that went against the Firm's clients.

These notices from the First Circuit stated that it was disclosed to the Clerk of the Court that a Judge on the panel of both of these matters just recently learned that he had a conflict due to a financial interest in Wells Fargo Bank, N.A., [a named Defendant in both matters]. that would have required recusal during the pendency of the appeal.

The two cases are Dyer v. Wells Fargo Bank, N.A., et al, Appeal No. 15-2421 [decided November 14, 2016] [oral argument can be heard here]; and Hayden, et al v. HSBC Bank USA. N.A., et al, Appeal No. 16-2274 [decided August 08, 2017]. In Hayden, one of the issues also involved a first impression argument under G.L. c. 260, Section 33, yet the Court denied the Firm from even presenting oral argument

In the May 18, 2018 Notice from the First Circuit, the Clerk of the Court also stated that the parties had two weeks to submit a response [June 01, 2018] as to their position to this disclosure of a conflict.

The Firm set forth a detailed memorandum of law explicating that this was an unprecedented occurrence at the Circuit level, and successfully relied upon Liljeberg v. Health Svcs. Acq. Corp., 486 U.S. 847 (1988), and 28 USC 455(a), to argue that the analysis should turn on 28 USC 455(a) [not 455(b)(4) which requires scienter]. Indeed, 455(a) requires an examination of the "appearance of impartiality". Thus, the Firm did not base any argument upon any intentional wrongdoing by the Judge, and actually specifically stated this in its Memorandum. Thus, the Firm argued that the impartiality of the panel would be reasonably put into question, where such disclosure of the requirement of recusal came some 10 and 18 months after the rulings in these matters.

Lijeberg involved the post judgment disclosure of a single US District Court Judge. The Defendant's law firm [K&L Gates] argued that 455(b)(4) controlled the analysis, and that because the Judge was not aware of the conflict at the time the disclosure had no bearing on the outcome. K&L Gates further argued that because the decisions were unanimous 3-0 decision, the affected Judge made no difference in the outcome. The Firm argued that the appearance of partiality could be reasonably be imputed to the panel itself [despite both decisions being unanimous], where the affected judge may have been the dominant member of these panels and influenced the other two panel members

Indeed, in Dyer, the affected Judge authored the opinion in Dyer, and Hayden relied on Dyer in the Opinion for some of its ruling. In addition a second Judge was a member of both panels.

This is an unprecedented event at the Circuit level that in the Firm's Opinion, would have been granted Certiorari before the U.S. Supreme Court.

However, on June 14, 2018, the First Circuit issued Orders in both matters stating that upon review of both parties submissions in both matters, the Court sided with the Firm's position, and Ordered that the Mandate in both matters be withdrawn, and the Judgments and Orders be vacated, with new argument to be had before a completely new Panel.

We will keep you abreast of this developing story