Sharkey v. J.P. Morgan Chase & Co. et al

Filing 228

MEMORANDUM AND OPINION re: 215 MOTION to Disqualify Judge, MOTION to Reassign Case filed by Jennifer Sharkey: I have been a United States District Court Judge for 39 years. Impartiality and the appearance of impartiality are requir ed to resolve difficult competing claims and to seek just result. This standard applies in all cases, including this one. Based on the findings and conclusions set forth above, Plaintiff's motion to reassign the case under 28 U.S.C. §§ 144 and 455 is denied. (Signed by Judge Robert W. Sweet on 4/14/2017) (jwh)

..

"

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

JENNIFER SHARKEY,
Plaintiff,
-against-

10 Civ. 3824
OPINION

J.P. MORGAN CHASE & CO., JOE KENNEY,
ADAM GREEN, and LESLIE LASSITER, in
their official and individual
capacities,
Defendants.

-----------------------------------------x
A P P E A RAN C E S:

Attorneys for Plaintiff
WIGDOR LLP
85 Fifth Avenue
New York, NY 10003
By:
Douglas H. Wigdor, Esq.
Lawrence M. Pearson, Esq.
Michael J. Willemin, Esq.

Attorneys for Defendants
ARNOLD & PORTER LLP
399 Park Avenue
New York, NY 10022-4690
By:
Michael D. Schissel, Esq.
Kathleen A. Reilly

Sweet, D . J .

Plaintiff Jennifer Sharkey ("Plaintiff" or "Sharkey " ) has
moved pursuant to 28 U.S.C. §§ 144 and 455 for recusal and
reassignment of this action to another judge .
Morgan Case & Co .
("Green")

Defendants J.P .

("JPMC") , Joe Kenney ( " Kenney") , Adam Green

and Leslie Lassiter ("Lass i ter")

" Defendants") oppose the motion .
conclusions set forth below ,

(collectively ,

the

Upon the findings and

Pl a i ntiff ' s motion is denied .

Prior Proceedings

The parties are familiar with the prior proceedings ,
including the motions to dismiss , motions for summary judgment ,
and other motions since the case was filed i n this Court on May
1 0 , 2010 .

This mot i on was first in i tiated by Plaintiff ' s January 26 ,
2017 letter requesting a conference to discuss the Court ' s bias
aga i nst the Plaint i ff i n order to " not draw further attention to
this matter. "

The l etter was treated as a motion to reassign

the case , was fu l ly br i efed and heard on March 2 , 2017 .
date ,

On that

Plaintiff requ ested an adjournment to fi l e a more formal
1

motion under 28 U.S.C. §§ 144 and 455, which was heard and
marked fully submitted on Apr il 12, 2017.

Applicable Standard

Under 28 U.S.C. § 144:
Whenever a party to any proceeding in a district court
makes and files a timely and sufficient affidavit that
the judge before whom the matter is pending has a
personal bias or prejudice either against him or in
favor of any adverse party, such judge shall proceed
no further therein, but another judge shall be
assigned to hear such proceeding.
The affidavit sha ll state the facts and the reasons
for the belief that bias or prejudice exists , and
shall be filed not less than ten days before the
beginning of the term at which the proceeding is to be
heard , or good cause shall be shown for failure to
file it within such time. A party may file only one
such affidavit in any case . It shall be accompanied by
a certificate of counsel of record stating that it is
made in good faith.
The text of Section 144 establishes that another district
court judge shall be assigned to hear the matter if the movant
establishes that the motion is timely and the party's affidavit
is suff i cient.

The district judge whose personal bias or

prejudice is in question "must review the facts included in the
affidavit for their legal sufficiency and not recuse himself or
herse lf unnecessarily."

Williams v . New York City Housing
2

Auth ., 287 F . Supp . 2d 247 , 249 (S .D. N. Y. 2003)

(quoting Rosen

v . Sugarman , 357 F.2d 794 , 797

"T o be legally

(2d Cir . 1966) .

sufficient under Section 144 , an affidavit must show 't he
objectionable i nclination or disposition of the judge'

[and] it

must give 'fair support to the charge of a bent of mind that may
prevent o r impede impartiality of judgment.'"
United States , 333 F. Su pp. 2d 166, 1 71
Rosen , 357 F . 2d at 798

Hoffenberg v.

(S . D. N. Y. 2004)

(quoting

(quot i ng Berger v . United States , 255

U. S . 22 , 33 - 35 (1921)).

Under 28 U.S.C .

§

455(a) , "Any justice , judge , or

magistrate judge of the United States shall disqualify himself
in any proceeding i n which his impartiality might reasonably be
questioned. "

The Second Circui t applies this standard by asking

whether "' an objective , dis in terested observer fully informed of
the underlying facts ,

[wou l d] entertain significant doubt that

justice would be done absent recusa l,' or alternat i vely , whether
' a reas onable person , knowing all t h e facts ,' would questi on t he
judge ' s impartiality." United States v. Yousef , 327 F . 3d 56 , 1 69
(2d Cir . 2003)

(quoting United States v. Lovaglia , 954 F.2d 8 11,

8 1 5 (2d Cir . 1992)

(citations omitted)) .

3

Plaintiff's Affidavit Fails to Meet the Requirements under
Section 144

This Court must determine whether the Plaintiff ' s affidavit
is sufficient under Section 144 .

" On ly after a judge finds that

the facts asserted estab l ish a l ega ll y suff i c i ent c l a i m of
personal bias or pre j ud i ce must the manda t e of section 1 44 be
followed that such judge shall proceed no further therein , but
another judge shall be assigned to hear such proceeding . "

United States v . International Business Machines Corp .

( " IBM " ) ,

475 F . Supp . 1372 , 1 379 (S . D. N. Y. 1979) , aff ' d , In re

International Business Machines , 618 F .2d 923 (2d Cir . 1980) .
For the reasons that follow , Plainti f f ' s affidavit under Section
1 44 fails to meet the r equ i red standard .

Defendants make two arguments regarding why the Plaintiff ' s
affidavit is insufficient :

it i s untimely and the aff i dav i t

does not allege the actua l bias required by the statute .

First , Defendants argue that the motion is untime l y because
some of the decisions it cha ll enges concern dispositive motions
that this Court decided as early as 2013 , 2014 , 2015 , and 2016 .
However , Pla i nt i ff argues that th i s applicat i on i s time l y
4

because Plaintiff ' s January 26 , 2017 letter motion was based , in
large part, on two comments made by the Court during a January
17 , 2017 argument .

Subsequent letters and the formal motion

papers submitted on March 20 , 2017 take issue with the January
26 , 2017 opinion , in which Defendants prevailed on some of the
motions and Plaintiff prevailed on several other motions .
However , the motion also concerns opinions going back several
years .

There are concerns that this motion under Section 144 is
untimely because here the Pl aintiff formed the belief that the
Court was biased against her because "recent decisions and
orders by the court have caused them only now to reach an
awareness that prior actions of the court were due to bias or
prejudice ."

IBM, 475 F . Supp. at 1379.

While Plaintiff ' s

affidavit raises "'the risk that a party is holding back a
recusal application as a fall - back position in the event of
adverse rulings on pending matters ,' "

Da Silva Moore v.

Publicis Groupe , 868 F. Supp . 2d 137 , 154 (S.D.N.Y. 2012)

(quoting In re IBM Corp ., 45 F . 3d 641 , 643 (2d Cir. 1995) ) ,
ultimately this motion is timely because Plaintiff filed her
letter after the allegedly prejud i cial comments and initial oral

5

rulings, but very shortly before the Court ' s written decision
about those claims was docketed on the same day.

However , the September 2016 comment was untimely , as
discussed in the Section 455 ana l ysis be l ow .

Whi l e there are

concerns that January 17 , 2017 comments were not the reason
Plaintiff formed the belief that earlier written decisions on
other issues demonstrated bias , Plaintiff did ra i se this motion
just over a week after the comments, mak i ng her motion timely
with respect to those comments.
F.3d 493 , 497

Locascio v . United States,

473

(2d Cir. 2007), cert. denied , 552 U.S. 1010 (2007)

(finding a motion untimely when it was filed after the Court ' s
decision was issued) .

Next , Defendants argue that Plaintiff ' s affidavit under
Section 144 is facially insufficient to show the Court "has a
personal bias or prejudice " against her.

"The requirement of

lega l sufficiency [under Section 144] has been interpreted to
mean a judge must rule whether the reasons and facts stated in
the affidavit ' give fair support to the charge of a bent of mind
that may prevent or impede impartiality of judgment .'"
F . Supp. at 1379 (S.D . N.Y. 1979)

IBM,

(quot i ng Berger v . United

6

475

States, 255 U.S. at 33 - 34).

Further, the affidavit "mu st show a

true personal bias , and must allege specific facts and not mere
conclusions or generalities ."

IBM, 475 F. Supp. at 1379.

"Moreover , the judge is presumed to be impartial and a
substantial burden is imposed on the aff iant to demonstrate that
such is not the case ."

Id.

"Generally, claims of judicial bias must be based on
extrajudicial matters, and adverse rulings, without more, will
rarely suffice to provide a reasonable basis for questioning a
judge's impartiality."
552 F.3d 218, 227

Chen v . Chen Qualified Settlement Fund,

(2d Cir. 2009) .

The Supreme Court has

articulated that for Section 144 cases, "The alleged bias and
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 ."
(1966) .

United States v . Grinnell Corp ., 384 U.S. 563 , 583

It is undisputed that the affidavit does not allege an

extrajudicial source of prejudice in this case.

However, there

is an exception to the extrajudicial source ru l e for comments by
the judge that reveal "such a high degree of favoritism or

7

antagonism as to make fair judgment impossible."
United States,

Liteky v.

510 U.S. 540, 556 (1994).

Here the allegations in the affidavit concern three
"surrounding comments" which Plaintiff argues "reveal such a
high degree of favoritism or antagonism as to make fair judgment
impossible."

Id. at 555.

The Supreme Court in Berger v. United

States found that a District Court judge demonstrated bias when,

in a World War I espionage case against German-American
defendants, the judge stated, "One must have a very judicial
mind, indeed, not [to be] prejudiced against the German
Americans" because their "hearts are reeking with disloyalty."
Berger v. United States,

255 U.S. 22, 28

(1921).

However, the comments in this case fall short of the burden
Plaintiff must meet and the high degree of "antagonism as to
make fair judgment impossible" as exhibited in Berger.
510 U.S. at 556.
case:

Li teky,

The three extrajudicial comments made in this

(1) "I would do anything to get rid of this case;" (2)

wouldn't wish this case on my worst enemy;" and,

(3)

"I

"I've lived

with [the case] and I suppose I can say I'll probably die with
it" do not establish bias against the Plaintiff.

8

As the Supreme

Court held in Liteky, comments such as the ones in this case are
merely "expressions of impatience, dissatisfaction, annoyance,
and even anger, that are within the bounds of what imperfect men
and women, even after having been confirmed as federal judges,
sometimes display.

A judge's ordinary efforts at courtroom

administration-even a stern and short-tempered judge's ordinary
efforts at courtroom administration-remain immune."
U.S. at 555-56.

Liteky, 510

In context, these comments were attempts at

humor with counsel in dealing with complex issues surrounding
scheduling for what has been a complicated, intensely litigated
case that has involved issues difficult to resolve for seven
years.

The latter two comments occurred after Plaintiff's counsel
suggested reassigning the case to another district court judge
because there was a conflict with the Court's calendar for the
scheduled date of January 26, 2017.

As this is a complicated

case involving a long history of motion practice, I did not want
to place the burden o f trying a two-week trial on a colleague on
one week's notice.

Further, Plaintiff's counsel during the same

colloquy noted that he was not available for the second half of
the second week of the scheduled trial, which meant the case

9

could not have been tried by another judge starting on the
original dates.

The "expressions of impatience" concerning the

resolution of longstanding and difficult litigati on fall far
short of the required "antagonism as to make fair judgment
impossible."

Liteky, 510 U.S. at 555. The reluctance to

reassign was not directed at the Plaintiff but rather at the
imposition of a difficult burden on a brother or sister judge.
My remark was regrettable but not prejudicial.

Plaintiff's motion under Section 144 is denied because the
affidavit is facially insufficient to allege the required bias
and prejudice.

Plaintiff's Affidavit Fails to Meet the Standard under Section
455

Under 28 U.S.C.

§

455(a), a judge shall disqualify himself

if "his impartiality might reasonably be questioned."

The

Second Circuit applies this standard by asking whether "'a
reasonable person, knowing all the facts,' would question the
judge's impartiality."
169 (2d Cir. 2003)

United States v. Yousef,

327 F.3d 56,

(quoting United States v. Lovaglia,

811, 815 (2d Cir . 1992)

(citations omitted)).
10

954 F.2d

"Section 455(a)

requires a showing that would cause 'an objective, disinterested
observ~r

fully informed of the underlying facts

[to] entertain

significant doubt that justice would be done absent recusal.'"
In re Aguinda, 241 F.3d 194, 201
States v. Lovaglia,

(2d Cir. 2001)

954 F.2d at 815).

(quoting United

As much as a district

judge is required to recuse themselves if they are biased,
"where the standards governing disqualification have not been
met, disqualification is not optional; rather, it is
prohibited."

In re Aguinda, 241 F.3d at 201.

Here, Plaintiff raises two categories of bias that she
claims the district court has demonstrated.

The Court made

several comments discussed above that raised concerns with the
Plaintiff that the Court's previous decisions had been based on
the bias and prejudice displayed in the several comments.

Plaintiff also takes issue with two summary judgment
opinions, the motions in limine that were not decided in
Plaintiff's favor, and a decision to allow Defendants to amend
their pleading in order to add an affirmative defense.

However,

"adverse rulings, without more, will rarely suffice to provide a
reasonable basis for questioning a judge's impartiality," Chen

11

v. Chen Qualified Settlement Fund, 552 F .3d at 227 , and "only in

the rarest circumstances evidence the degree of favoritism or
antagonism required," Liteky, 510 U.S. at 555.

The rulings in

this case are not reasonable grounds for questioning the Court's
impartiality.

Plaintiff points to the Second Circuit's rulings

as proof of bias.

However, the Second Circuit's first ruling

noted that, "In the time since the district court issued its
opinion , we have discarded this standard as too strict."
App ' x 28 , 29 (2d Cir . 20 1 4) .

580 F.

The Circuit's opinion was not "a

clear message" that the district court was biased as the
Plaintiff claims, but demonstrated that in the interim time
period, the Circuit had changed the applicable standard.

Plaintiff believes that this is a rare case in wh i ch an
adverse decision is proof of bias because the Court allowed
Defendants to amend their answer.

The opinion weighed whether

to apply one of two conflicted legal standards, whether the
motion was governed by Federal Rule of Civil Procedure 15(a) (2)
to amend a pleading or a motion to modify the Court's February
15, 2013 scheduling order , governed by Rule 16(b) (4).
did not move for reconsideration.

The decision to consider the

motion to amend Defendants answer under Rule 15(a) (2)

12

Plaintiff

is an

example of why "adverse rulings, without more, will rarely
suffice to provide a reasonable basis for questioning a judge's
impartiality." Chen v. Chen Qualified Settlement Fund,

552 F.3d

at 227.

Plaintiff also raises the possibility that the Court's
motion in limine written opinion is evidence of bias and
prejudice.

That opinion resolved six motions that had not been

finally decided from the bench.

The Plaintiff concludes bias

with the three motions that it lost, though does not account for
the other three motions discussed in that opinion.

An

"objective, disinterested observer" would not find that recusal
was necessary in this case in order for justice to be
accomplished.

In re Aguinda, 241 F.3d 194, 201

(2d Cir. 2001)

In addition to the perceived bias from written decisions,
Plaintiff argues that the three comments discussed above
necessitate recusal under Section 455(a) because they
demonstrate that the Court's "impartialit y might reasonably be
questioned."

However, the Court 's oral comments in this case do

not meet that standard.

Judicial remarks "that are critical or

disapproving of , or even hostile to, counsel, the parties, or
13

their cases, ordinarily do not support a bias or partiality
challenge."

Liteky, 510 U.S. at 555.

As discussed under Section 144, the three extrajudicial
comments made in this case, though mistakenly made, uniformly
and without reflection, do not demonstrate bias against the
Plaintiff but rather frustration at irresolution of the action.

The first comment was made during a pretrial conference on
September 29, 2016, approximately four months before Plaintiff
made her motion for recusal. The comment "I would not wish this
case on my worst enemy" is an overstatement of the difficulties
presented and an unfortunate hyperbole. It was not directed at
either party as the source of the frustration with a seven-year
case with many motions, and not equal to stating about a German
American litigant that all German Americans' hearts "are reeking
with disloyalt y ."

Berger v. United States,

255 U.S. at 28.

The

difference between the comments in Berger from this case is that
one speaks to general frustration, and the other describes
actual prejudice against a particular litigant.

14

The second comment that "I would do anything to get rid of
this case" also expressed frustration with the case and not
prejudice against a particular party.

Likewise, the third comment does not amount to a statement
enabling a reasonable person to question the Court's
impartiality, only his age.

It speaks to the number of motions

filed by both parties and the delay in completing this case. The
comment does not on its face raise any animus or prejudice
against either party, which distinguishes this comment from
United States v . Antar in which the district judge "in stark,
plain and unambiguous language, told the parties that his goal
in the criminal case, from the beginning, was something other
than what it should have been."

53 F.3d 568, 576 (3d Cir.

1995), overruled on other grounds , Smith v. Berg, 247 F. 3d 552
(3d Cir. 2001) .

The comments , though unfortunately inf orma l, do

not call into question impartiality because the comments do not
favor one party over the other .

15

Conclusion

I have been a United States District Court Judge for 39
years . Impartiality and the appearance of impartiality are
required to resolve difficult competing claims and to seek just
result. This standard applies in all cases, including this one .

Based on the findings and conclusions set forth above ,
Plaintiff's motion t o reassign the case under 28 U. S.C . §§ 144
and 455 is denied .

It is so ordered .

New York, NY
April /
2017

f'

U.S.D.J.

16