Liljeberg v. Health Services Acquisition Corp. , 108 S. Ct. 2194 ( 1988 )

ChieF Justice Rehnquist,

with whom Justice White and Justice Scalia join, dissenting.

The Court’s decision in this case is long on ethics in the abstract, but short on workable rules of law. The Court first finds that 28 U. S. C. § 455(a) can be used to disqualify a judge on the basis of facts not known to the judge himself. It then broadens the standard for overturning final judgments under Federal Rule of Civil Procedure 60(b). Because these results are at odds with the intended scope of § 455 and Rule 60(b), and are likely to cause considerable mischief when courts attempt to apply them, I dissent.

I

As detailed in the Court’s opinion, § 455(a) provides that “[a]ny justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” Section 455 was substantially revised by Congress in 1974 to conform with the recently adopted Canon 3C of the American Bar Association’s Code of Judicial Conduct (1974). Previously, a federal judge was required to recuse himself when he had a substantial interest in the proceedings, or when “in his opinion” it was improper for him to hear the case.¹ Subsection (a) was drafted to replace the subjective standard of the old disqualification statute with an objective test. Congress hoped that this objective standard would promote public confidence in the impartiality of the judicial process by instructing a judge, when confronted with circumstances in which his impartiality could reasonably be doubted, to disqualify himself and allow another judge to preside over the case.² The amended statute also had the effect of removing the so-called “duty to sit,” which had become an accepted gloss on the existing statute.³

Subsection (b) of § 455 sets forth more particularized situations in which a judge must disqualify himself. Congress intended the provisions of § 455(b) to remove any doubt about recusal in cases where a judge’s interest is too closely connected with the litigation to allow his, participation. Subsection (b)(4), for example, disqualifies a jurist if he knows that he, his spouse, or his minor children have a financial interest in the subject matter in controversy. Unlike the more open-ended provision adopted in subsection (a), the language of subsection (b) requires recusal only in specific circumstances, and is phrased in such a way as to suggest a requirement of actual knowledge of the disqualifying circumstances.

The purpose of § 455 is obviously to inform judges of what matters they must consider in deciding whether to recuse themselves in a given case. The Court here holds, as did the Court of Appeals below, that a judge must recuse himself under § 455(a) if he should have known of the circumstances requiring disqualification, even though in fact he did not know of them. I do not believe this is a tenable construction of subsection (a). A judge considering whether or not to re-cuse himself is necessarily limited to those facts bearing on the question of which he has knowledge. To hold that disqualification is required by reason of facts which the judge does not know, even though he should have known of them, is to posit a conundrum which is not decipherable by ordinary mortals. While the concept of “constructive knowledge” is useful in other areas of the law, I do not think it should be imported into § 455(a).

At the direction of the Court of Appeals, Judge Schwartz of the District Court for the Eastern District of Louisiana made factual findings concerning the extent and timing of Judge Collins’ knowledge of Loyola’s interest in the underlying lawsuit. See ante, at 851. Judge Schwartz determined that Judge Collins had no actual knowledge of Loyola’s involvement when he tried the case. Not until March 24, 1982, when he reviewed materials in preparation for a Board meeting, did Judge Collins obtain actual knowledge of the negotiations between petitioners and Loyola.

Despite this factual determination, reached after a public hearing on the subject, the Court nevertheless concludes that “public confidence in the impartiality of the judiciary” compels retroactive disqualification of Judge Collins under § 455(a). This conclusion interprets § 455(a) in a manner which Congress never intended. As the Court of Appeals noted, in drafting § 455(a) Congress was concerned with the “appearance” of impropriety, and to that end changed the previous subjective standard for disqualification to an objective one; no longer was disqualification to be decided on the basis of the opinion of the judge in question, but by the standard of what a reasonable person would think. But the facts and circumstances which this reasonable person would consider must be the facts and circumstances known to the judge at the time. In short, as is unquestionably the case with subsection (b), I would adhere to a standard of actual knowledge in § 455(a), and not slide off into the very speculative ground of “constructive” knowledge.

II

The Court then compounds its error by allowing Federal Rule of Civil Procedure 60(b)(6) to be used to set aside a final judgment in this case. Rule 60(b) authorizes a district court, on motion and upon such terms as are just, to relieve a party from a final judgment, order, or proceeding for any “reason justifying relief from the operation of the judgment.” However, we have repeatedly instructed that only truly “extraordinary circumstances” will permit a party successfully to invoke the “any other reason” clause of § 60(b). See Klapprott v. United States, 335 U. S. 601, 613 (1949); see also Ackermann v. United States, 340 U. S. 193, 199 (1950). This very strict interpretation of Rule 60(b) is essential if the finality of judgments is to be preserved.

For even if one accepts the Court’s proposition that § 455(a) permits disqualification on the basis of a judge’s constructive knowledge, Rule 60(b)(6) should not be used in this case to apply § 455(a) retroactively to Judge Collins’ participation in the lawsuit. In the first place, it is beyond cavil that Judge Collins stood to receive no personal financial gain from the transactions involving petitioner, respondent, and Loyola. Judge Collins’ only prior tie to the dealings was as a member of Loyola’s rather large Board of Trustees and, although Judge Collins was a member of at least two of the Board’s subcommittees, he had no connection with the Real Estate subcommittee, the entity responsible for negotiating the sale of the Monroe Tract. In addition, the motion to set aside the judgment was made by respondent almost 10 months after judgment was entered in March' 1982; although relief under Rule 60(b)(6) is subject to no absolute time limitation, there can be no serious argument that the time elapsed since the entry of judgment must weigh heavily in considering the motion. Finally, and most important, Judge Schwartz determined that Judge Collins did not have actual knowledge of his conflict of interest during trial and that he made no rulings after he acquired actual knowledge.⁴ I thus think it very unlikely that respondent was subjected to substantial injustice by Judge Collins’ failure to recuse himself, and believe that the majority’s use of Rule 60(b)(6) retroactively to set aside the underlying judgment is therefore unwarranted.

1 The predecessor statute, which had been part of the United States Code for 60 years, stated:

Ҥ 455. Interest of justice or judge.

“Any justice or judge of the United States shall disqualify himself in any case in which he has a substantial interest, has been of counsel, is or has been a material witness, or is so related to or connected with any party or his attorney as to render it improper, in his opinion, for him to sit on the trial, appeal, or other proceeding therein.” 28 U. S. C. §455 (1970 ed.).

2 See H. R. Rep. No. 93-1453, p. 5 (1974). See also Bloom, Judicial Bias and Financial Interest as Grounds for Disqualification of Federal Judges, 35 Case W. Res. L. Rev. 662, 670-676 (1985); Comment, Disqualification of Federal Judges for Bias or Prejudice, 46 U. Chi. L. Rev. 236, 238-242 (1978).

3 While § 455 provides guidance to a judge when he is considering recus-ing himself, 28 U. S. C. § 144 supplies a litigant with the opportunity to file an affidavit that the judge before whom the matter is pending has a personal bias or prejudice sufficient to mandate disqualification. Respondent filed no affidavit or motion under § 144 in this case.

4 The majority’s opinion suggests a number of troubling hypothetical situations, only one of which will demonstrate the difficulties inherent in its decision. Suppose Judge Doe sits on a bench trial involving X Corp. and Y Corp. The judge rules for X Corp., and judgment is affirmed on appeal. Ten years later, officials at Y Corp. learn that, unbeknownst to him, Judge Doe owned several shares of stock in X Corp. Even in the face of an independent factual finding that Judge Doe had no knowledge of this ownership, the Court’s construction of § 455(a) and Rule 60(b) would permit the final judgment in X Corp.’s favor to be set aside if the “appearance of impartiality” were not deemed wholly satisfied. Such a result will adversely affect the reliance placed on final judgments and will inhibit developments premised on their finality.