Calderon v. Conagra Brands Inc

Filing 19

ORDER REGARDING CORPORATE DISCLOSURE The undersigned concludes there is no conflict of interest requiring the undersigned to recuse from this action. Ordered by Judge Brian C. Buescher. (Copy mailed to pro se party) (LRM)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
RAMIRO CALDERON,
Plaintiff,

8:22CV231

vs.
ORDER REGARDING CORPORATE
DISCLOSURE

CONAGRA BRANDS INC,
Defendant.

It has come to the Court’s attention that defendant Conagra Brands, Inc., has filed a
Disclosure of Corporate Affiliations, Financial Interest, and Business Entity Citizenship (the
Disclosure) that may appear to raise a potential judicial conflict of interest for the undersigned.
Filing 14. For the reasons set forth below, the undersigned concludes there is no conflict of interest
requiring the undersigned to recuse from this action.
Conagra filed its Disclosure on November 11, 2022. In response to the requirement to
“Check the applicable box or boxes, and fill in any required information,” Conagra checked a box
indicating “[t]his party is a publicly held corporation or other publicly held entity.” Filing 14 at 1.
Concerning whether “[t]en percent or more of the stock of a party is owned by a publicly held
corporation or other publicly held entity,” Conagra did not check the box. Filing 14 at 1. However,
Conagra did add the following notation: “As of the last public filing of stock ownership prior to
this filing, 10% or more of Conagra’s stock is held by The Vanguard Group, Inc., a private
company.” Filing 14 at 1. In response to an email inquiry from a member of the undersigned’s
staff about whether Conagra should have checked the box before the pertinent statement,
Conagra’s counsel responded, “We did not check the box because The Vanguard Group is not
publicly-held. Nonetheless, we opted to make the disclosure for the sake of full transparency.”

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The disclosure of The Vanguard Group’s 10% ownership of Conagra’s stock was not
required under the plain terms of the Disclosure or under the authority the Disclosure cites, Rule
7.1 of the Federal Rule of Civil Procedure and GMAC Commercial Credit LLC v. Dillard
Department Stores, Inc., 357 F.3d 827, 828 (8th Cir. 2004). Furthermore, Conagra’s counsel’s
response indicates that Conagra knew such a disclosure was not required under the plain terms of
the Disclosure. In this instance, opting for “transparency” could potentially create an issue
concerning a financial conflict of interest that is not there. This is because the undersigned has
invested in some of The Vanguard Group’s mutual funds and exchange traded funds (ETFs). It is
clear, however, that there is no conflict requiring recusal under Canon 3C of the Code of Conduct
for United States Judges or under the Committee on Codes of Conduct Advisory Opinion No. 106.
Further, the undersigned’s investment in The Vanguard Group’s funds falls squarely within the
“safe harbor” under Canon 3C(3)(c)(i).
As the Committee on Codes of Conduct explained,
Consistent with the “safe harbor” concept, the Committee has advised that
investment in a mutual fund does not convey an ownership interest in the companies
whose stock the fund holds. We also have advised that a judge who invests in a
mutual fund has no duty to affirmatively monitor the underlying investments of the
fund for recusal purposes. For these reasons, it is important for a judge to determine
whether a particular proposed investment is a “mutual or common investment fund”
and, therefore, qualifies under the safe harbor provision of Canon 3C.
Committee on Codes of Conduct Advisory Opinion No. 106, Guide to Judiciary Policy, Vol. B,
Ch. 2, at 201. The undersigned has made the required determination.
The undersigned notes that The Vanguard Group’s funds are registered with the Securities
and Exchange Commission (SEC). See Vanguard Group Inc, SEC CIK #0000102909 (available at
https://sec.report/CIK/0000102909). Thus, they are “likely” to meet the criteria identified in
Advisory Opinion No. 106. Guide to Judiciary Policy, Vol B, Ch. 2, at 201. The undersigned has
also conducted the determination of whether The Vanguard Group’s funds in which the
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undersigned has invested qualify as “mutual or common investment funds” within the “safe
harbor” based on the considerations stated in Advisory Opinion No. 106 and has determined that
they do qualify. Id.
The undersigned then considered the “additional factor” set out in Advisory Opinion No.
106 for determining whether owning a particular mutual fund will effectively avoid recusal
considerations related to that fund. Id. at 202. That “additional factor” is whether the judge has an
“interest that could be affected substantially by the outcome of the proceeding” under Canon
3C(1)(c). Id. at 202. Using the guidance provided by Advisory Opinion No. 106, the undersigned
concludes that The Vanguard Group’s ownership of 10% of Conagra’s stock among the funds’
hugely diversified investments has no potential effect on the undersigned’s financial interest in the
mutual funds. Id. at 203. For the same reasons, the undersigned’s investments in any of The
Vanguard Group’s ETFs have no potential effect on the undersigned’s financial interests in those
funds and do not require recusal. Id. (“We conclude that such [ETF] funds normally should be
treated as mutual or common investment funds under the Code, and are subject to the same recusal
analysis as other funds.”). Finally, considering Canon 3C(1)’s direction to judges to disqualify if
their impartiality might reasonably be questioned, id., the undersigned does not believe that his
impartiality might reasonably be questioned in the present circumstances.
In short, the undersigned concludes that Conagra’s disclosure of The Vanguard Group’s
ownership of 10% of its stock was gratuitous and does not require the undersigned’s recusal.
In a time when the press frequently reports purported financial and other conflicts of
interest of politicians, public officials, and most recently judges, careful adherence to the financial
disclosure rules is important. Erroneous or gratuitous disclosures not called for by those rules, even
in the name of “transparency,” may generate misperceptions of the motivations of decisionmakers

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and improperly erode confidence in our judicial and political institutions for spurious reasons. All
parties would do well to complete required disclosures with the due care they invest in other
aspects of litigation.

Dated this 18th day of November, 2022.
BY THE COURT:

___________________________
Brian C. Buescher
United States District Judge

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