Downing et al v. Goldman Phipps PLLC et al

Filing 101

MEMORANDUM AND ORDER re:( 65 in 4:13-cv-00206-CDP, 5107 in 4:06-md-01811-CDP) (see order for details) IT IS HEREBY ORDERED that defendants' motion to disqualify [# 65 ] is denied. Signed by District Judge Catherine D. Perry on 05/13/2013. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DON M. DOWNING, et al.,
Plaintiffs,
vs.
GOLDMAN PHIPPS PLLC, et al.,
Defendants.

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) Case No. 4:13CV206 CDP
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MEMORANDUM AND ORDER
Plaintiffs (“the Downing Group”) filed this case alleging claims of unjust
enrichment, quantum meruit, and interpleader stemming from a multidistrict
litigation case pending in this district, In re Genetically Modified Rice Litigation,
4:06MD1811 CDP (“Rice MDL”). Defendants (“the Phipps Group” and “the
Murray Group”),1 who served as counsel for many of the plaintiffs in the related
Rice MDL case and similar state court cases, have filed a motion seeking my
disqualification from this case pursuant to 28 U.S.C. §§ 144 and 255. Because I
find that the motion for disqualification is without merit, I will not recuse myself
from this case.

1

References to the “Phipps Group” include the following defendants: Goldman Phipps PLLC,
Goldman Pennebaker & Phipps, P.C., Mikal C. Watts, P.C., Keller Stolarczyk PLLC, Martin J.
Phipps, Mikal C. Watts, Banks Law Firm PLLC, and Charles A. Banks. References to the
“Murray Group” include defendants Stephen B. Murray, Sr. and Murray Law Firm.

As an initial matter, the parties have presented arguments regarding whether
this court is divested of jurisdiction over these matters because of the pending
appeal of the consolidation order issued on March 26, 2013. Under 28 U.S.C. §
1291, a Court of Appeals has jurisdiction over final orders of the district courts.
An order of consolidation is not a final order,2 and so the only basis for appeal of
the consolidation order must be the collateral order doctrine. However, the
consolidation order in this case – which explicitly states that it is limited to pretrial
matters and that its extent will not be fully determined until after scheduling
conferences have been conducted with the parties – is not one of the narrow
decisions that “finally determine claims of right separable from, and collateral to,
rights asserted in the action, too important to be denied review and too independent
of the cause itself to require that appellate consideration be deferred until the whole
case is adjudicated.” Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546
(1949). Thus, the consolidation order does not appear to have been properly
appealable. Although district courts are normally divested of jurisdiction over
matters that are appealed by a party, a district court “does not normally lose

2

See, e.g., Alpine Glass, Inc. v. Country Mut. Ins.Co., 686 F.3d 874, 877 (8th Cir. 2012) (holding
that an order consolidating claims for arbitration was not a final order under § 1291); In re
Macon Uplands Venture, 624 F.2d 26, 27 (5th Cir. 1980) (“Orders of transfer and consolidation
are interlocutory and not appealable.”); Levine v. Am. Export Indus., Inc., 473 F.2d 1008, 1009
(2d Cir. 1973) (holding that absent exceptional circumstances, an appellate court lacks
jurisdiction to hear an interlocutory appeal of a consolidation order); Nolfi v. Chrysler Corp., 324
F.2d 373, 374 (3d Cir. 1963) (declining to hear an interlocutory appeal of an order denying
consolidation).

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jurisdiction to proceed with the case when one party appeals a non-appealable
order.” Missouri ex rel. Nixon v. Coeur D’Alene Tribe, 164 F.3d 1102, 1106 (8th
Cir. 1999). Therefore, I conclude that the appeal of the consolidation order in this
case did not divest this court of jurisdiction over the pending matters in this case,
including this motion to disqualify and the motions to dismiss filed by the Phipps
Group and the Murray Group. Accordingly, I will consider the motion to
disqualify on its merits.
Under 28 U.S.C. § 144, a judge must recuse herself from hearing a
proceeding upon the filing of a “timely and sufficient affidavit that the judge
before whom the matter is pending has a personal bias or prejudice against him or
in favor of any adverse party.” 28 U.S.C. § 144. “A judge is presumed to be
impartial, and the party seeking disqualification bears the substantial burden of
proving” that “the judge had a disposition so extreme as to display a clear inability
to render a fair judgment.” Am. Prairie Const. Co. v. Hoich, 560 F.3d 780, 790
(8th Cir. 2009) (internal quotation marks and citations omitted).3

3

The Phipps Group and the Murray Group argue that this court shall transfer this disqualification
motion to another judge for disposition. However, “[w]hen an affidavit does not meet the
requirements imposed by law, the judge should not disqualify himself.” United States v. Faul,
748 F.2d 1204, 1210 (8th Cir. 1984). “To be legally sufficient, an affidavit must allege bias or
prejudice, and such „bias or prejudice to be disqualifying must stem from an extrajudicial source
and result in an opinion on the merits on some basis other than what the judge learned from his
participation in the case.‟” Id. at 1211 (quoting United States v. Grinnell Corp., 384 U.S. 563,
583 (1966)). Because I have determined that the affidavit is not legally sufficient, as discussed
herein, I need not recuse myself from this case.

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As grounds for recusal under § 144, the Phipps Group and the Murray Group
rely on the affidavit of defendant Mikal G. Watts as evidence of personal bias. The
affidavit (Doc. No. 66-7) cites numerous statements that plaintiff Don Downing
allegedly made to Mikal Watts regarding my alleged support of co-lead counsel‟s
position in the Rice MDL case, my alleged bias against defendant Martin Phipps,
and alleged ex parte conversations that took place between Don Downing and
myself. None of these allegations amounts to a sufficient showing of bias or
prejudice to warrant recusal from the case.4
None of the statements that were allegedly made – the truth of which
plaintiff Don Downing contests in his own affidavit – shows that I am unable to
fairly preside in this matter. The statements appear to have been mere puffery by
an attorney regarding the strength of his case and his certainty that his side would
prevail. I have no doubt that lawyers frequently brag or predict that judges are sure
to rule in a certain way, but this does not mean that they actually have inside
knowledge about the judge‟s intentions in a case. If one lawyer‟s posturing of this
sort could be cause for disqualification, we would certainly see many more

4

In addition to arguing that the affidavit is insufficient under the state, the Downing Group also
argues that it is untimely. In order to be considered timely, a party must file its motion “at the
earliest possible moment after obtaining knowledge of facts demonstrating the basis for such
claim.” Am. Prairie Const. Co., 560 F.3d at 790. In this case, all of the alleged statements by
Downing were made years before this recusal motion was filed. However, they were made
during the pendency of the Rice MDL case, and this recusal motion was filed only 9 days after
the consolidation order transferring this civil case to this court. Therefore, the motion appears to
have been timely filed in this case – even if not in the Rice MDL case.

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recusals. The affidavit does not contain any statements that allegedly came from
this court, but it concludes that ex parte conversations must have occurred for
Downing to have this kind of purported inside knowledge. In fact, I have not
engaged in any improper ex parte conversations with any of the attorneys in this
case. Additionally, other than statements I made to all counsel and on the record, I
never told Downing or any other lawyer my intentions on any subject.
Accordingly, the affidavit is not legally sufficient to show personal bias or
prejudice by this court, and I will not recuse myself pursuant to 28 U.S.C. § 144.
The Phipps Group and the Murray Group additionally argue that recusal is
appropriate under 28 U.S.C. § 455. Under 28 U.S.C. § 455, a judge should
disqualify herself “in any proceeding in which his impartiality might reasonably be
questioned.” This applies to circumstances involving the appearance of bias, rather
than actual bias or prejudice by the court. Section 455 also enumerates specific
circumstances that may require removal, two of which are invoked by the
defendants here: “personal bias or prejudice concerning a party,” and “personal
knowledge of disputed evidentiary facts concerning the proceeding.” 28 U.S.C. §
455(b)(1).
As discussed above, this case does not involve personal bias or prejudice
concerning a party, and so I will not recuse myself on that basis under § 455. As to
the appearance of bias by the court, the Phipps Group and the Murray Group argue

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that prior judicial actions in the Rice MDL case demonstrate the appearance of bias
in favor of the Downing Group and against the Phipps Group and the Murray
Group. Specifically, they cite my decision to appoint many of the plaintiffs in this
case as co-lead counsel in the Rice MDL case; my order creating the common
benefit fund and denying the Phipps Group and the Murray Group‟s objections to
its creation and disbursement; and my statement that the Phipps Group and the
Murray Group were “unjustly enriched” because of my inability to order holdbacks
for the common benefit fund in the state court cases.
These rulings are merely rulings made against the Phipps Group and the
Murray Group, on the merits of the facts and legal arguments presented to the court
at that time. These rulings were made after extensive briefing and set forth in
lengthy opinions by this court. See White v. Luebbers, 307 F.2d 722, 730 (8th Cir.
2002) (“So long as the court‟s expressed views come from the record of the case
itself, or from representations properly made by the parties or their lawyers,
nothing improper has occurred.”). Furthermore, the Phipps Group and the Murray
Group fail to acknowledge opinions that were issued in their favor and against the
Downing Group. For example, I ruled in favor of the Phipps Group and the
Murray Group when I concluded that holdbacks were not appropriate in state court
cases, when I denied class certification, and when I declined to issue sanctions

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against Martin Phipps in the Rice MDL case. My prior judicial rulings would not
create the appearance of judicial bias to a reasonable person.
As to my statement in the common benefit order that the Phipps Group and
the Murray Group – as well as all of the other state court plaintiffs in related cases
– would be unjustly enriched by being excluded from the requirement to contribute
to the common benefit, this was a statement based on knowledge gained from
presiding over the Rice MDL, and was not a legal judgment of liability. I intended
the term to have the general meaning of the words – in no way was it a finding that
the tort of unjust enrichment had occurred. “[O]pinions formed by the judge on the
basis of facts introduced or events occurring in the course of the current
proceedings, or of prior proceedings, do not constitute a basis for a bias or
partiality motion unless they display a deep-seated favoritism or antagonism that
would make fair judgment impossible.” Liteky v. United States, 510 U.S. 540, 555
(1994). Therefore, this is not a proper basis for recusal under § 455.
Regarding the final argument of the Phipps Group and the Murray Group in
support of recusal, there is no basis for the allegation that I have personal
knowledge of disputed evidentiary facts concerning this proceeding. As noted
above, there have not been any ex parte conversations between this court and any
member of the Downing Group. Rather, all of my knowledge regarding this case
has been gained solely by presiding over the Rice MDL case and related civil

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cases. “Facts learned by a judge in his judicial capacity cannot be the basis for
disqualification.” Hale v. Firestone Tire & Rubber Co., 756 F.2d 1322, 1329 (8th
Cir. 1985). Accordingly, there is no merit to the arguments by the Phipps Group
and the Murray Group in favor of disqualification, and so I will not recuse myself
from this case pursuant to § 455.
Accordingly,
IT IS HEREBY ORDERED that defendants‟ motion to disqualify [#65] is
denied.

_________________________________
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 13th day of May, 2013.

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