Law Prof Says Justices Should Sell Stock
A law professor has some advice for U.S. Supreme Court justices: Sell your sell individual stock holdings and invest in mutual funds.
The advice by Ronald Rotunda of George Mason University is not meant to boost the justices’ financial bottom line. Instead, Rotunda contends his advice would help avoid a repeat of yesterday’s recusals that prevented the Supreme Court from considering an appeal involving the legal rights of apartheid victims.
Rotunda told the Washington Post the justices could sell their stock under a law passed in 2006 that allows judges to defer capital gains on stock sold to avoid conflicts of interest. Three out of four justices who recused themselves from the case apparently did so because they held stock in companies sued for aiding apartheid.
“What judges ought to do is sell their stock and invest in mutual funds,” he said.
While Rotunda likes the idea of justices avoiding conflicts by selling stock, he doesn’t think they should do so if they have already indicated they will recuse themselves in a specific case. Theoretically, he says, a judge could sell a company’s stock to cure a conflict, then rule in the company’s case, and then buy back the stock at a lower price, ABAJournal.com noted in a prior post.
A New York Times story recounts other recent instances of justices’ recusals that were apparently motivated by stock holdings.
Chief Justice John G. Roberts Jr. did not participate in a case that asks whether companies may be sued for damages caused by medical drugs that received federal approval, leaving a 4-4 split. He owned stock in the parent company of one of the litigants.
Justice Samuel A. Alito Jr. has recused himself from a punitive damages case against the Exxon Valdez, raising the possibility of another tie vote.
Updated at 2:44 p.m. to include link and reference to prior coverage.
