Risk Update

Class Action Conflict Allegation — Judicial Stock Stokes Strife

StarKist to 9th Circuit: Trial judge’s stock ownership dooms class cert rulings” —

  • “StarKist counsel Gregory Garre of Latham declined to provide a statement, but there were two important developments after oral argument before the en banc court.”
  • “The first was The Wall Street Journal’s bombshell Sept. 28 report that 131 federal judges – including Sammartino – broke disqualification rules and the judicial ethics code by presiding over cases involving companies in which they or family members owned stock. Based on the Journal’s reporting and subsequent online postings of judges’ financial disclosures by Free Law Project, a legal-research non-profit, StarKist identified five MDL plaintiffs in which Sammartino or family members owned shares, in addition to the two companies previously disclosed.”
  • “StarKist said in its new brief that four of the companies in which Sammartino or family members owned shares supplied data that assisted plaintiffs experts in creating damages models. Those models, StarKist said, informed the judge’s class certification decisions.”
  • “In its new brief to the 9th Circuit, StarKist said the risk to public confidence is even more acute in the tuna antitrust case. Tuna purchasers are alleging hundreds of millions of dollars in damages, StarKist said, and the en banc appeal has been closely watched by the entire class action bar and business lobby.”

The motion argued: “Allowing Judge Sammartino’s class certification decision to stand would deny defendants a fair and impartial resolution on this important threshold issue and create an impermissible and unacceptable risk of undermining the public’s confidence in the integrity of the judicial process… Indeed, the high profile nature of this case and the fact that Judge Sammartino had multiple conflicts of interest in this case only magnify the concerns identified.”