Risk Update

DQs, Relationships & Judicial Recusal Drama — (Baseball Metaphor Here) and An Alleged Judicial Recusal Squeeze Play

Posted Dan Bressler

“SUPPLEMENTAL MEMORANDUM IN SUPPORT OF MOTION TO DISQUALIFY COZEN AND O’CONNOR LAWYERS” —

  • “Moments ago, Judge Baylson issued a Supplemental Memorandum faithfully disclosing additional facts of his relationship with Stephen Cozen and the Cozen firm. In light of those facts,it strains credulity that Mr. Cozen and his firm did not enter this case for any reason other than to trigger Judge Baylson’s recusal.”
  • “As recently as May 17, 2024, Mr. Cozen and other members of his firm socialized with Judge Baylson at Mr. Cozen’s invitation to a box at a Phillies game.”
  • “In accepting the invitation, Judge Baylson had no way of knowing that doing so might impact these cases since, for four years, Cozen has had absolutely nothing to do with this litigation. But, Mr. Cozen and his firm certainly knew about hosting Judge Baylson at theirPhillies outing when the Cozen attorneys entered their appearances.”
  • “The conclusion is regrettably unavoidable that the Cozen lawyers entered their appearances either to force Judge Baylson’s recusal or, in the absence of recusal,to raise the appearance of their favored status in the eyes of the Court because of personal relationships.”
  • “Whether or not that was their intent, those are undeniable facts.1That is highly improper and their appearances should be rejected.For the foregoing reasons and those set forth in their opening Memorandum of Law, Plaintiffs respectfully submit that the Court should enter an Order disqualifying Stephen A. Cozen, Elizabeth A. Malloy and Cozen O’Connor from representing the Defendant in these cases and that their entries of appearance be stricken.

“Texas Bankruptcy Scandal Draws Judge’s Concerns Over No-Recusal” —

  • “A Texas court case involving two major law firms, a disgraced ex-bankruptcy judge, and the judge’s live-in attorney girlfriend left a federal judge deeply concerned, she said Thursday during the first hearing in the evolving scandal.”
  • “Alia Moses, chief judge of the US District Court for the Western District of Texas, said that it was ‘mandatory’ for Jones disqualifying himself on any case his girlfriend, former Jackson Walker partner Elizabeth Freeman was involved in.”
  • “At one point, Moses cut off Freeman’s lawyer who said Jones didn’t have to recuse because the two weren’t married, saying, ‘this should have been very clear to any judge.'”
  • “The hearing marked the first court proceeding for the ex-judge in the scandal since a bombshell lawsuit rocked the bankruptcy world in October, unearthing a tightly-guarded romantic relationship between Judge David R. Jones of the US Bankruptcy Court for the Southern District of Texas and Freeman, his one-time clerk.”
  • “Moses said Jones failing to disclose the relationship gives her ‘heartburn just a little bit.'”
  • “The scandal has seemingly impacted Houston as a popular destination for bankruptcy firms—a reputation Jones helped establish through rule changes aimed at resolving complex cases with fast, consistent decisions. Jackson Walker regularly represented clients before Jones while it employed Freeman, who raked in $1.1 million in fees the judge approved while they kept their relationship under wraps.”
  • “Michael Van Deelen, the plaintiff, was a shareholder in a bankruptcy case that played out in Jones’ court. He’s alleging a conspiracy that wiped out his entire investment of 30,000 shares in McDermott International, Inc. stock. He’s seeking at a minimum costs he incurred as a pro se litigant to challenge Jones’ authority to hear the case.”
  • “Moses didn’t rule from the bench. She said Jones should’ve disqualified himself from cases that Freeman worked on, but that she’s not convinced that his failure to do so impacted Van Deelen in the bankruptcy.”
  • “‘That’s a difficult part about this case,’ she said, adding the bankruptcy proceeding was “no doubt unfair.” Moses said she lacks authority to toss the McDermott judgment but it gives the potential for a judge to ‘misbehave, walk into court, issue an order, then be completely absolved’ gives her pause, she said.”
  • “Moses questioned why Kirkland & Ellis, which maintains a Houston office, needed Jackson Walker’s assistance to litigate dozens of bankruptcy cases in Jones’ Houston court. ‘The need was for that one connection, Mrs. Freeman, wasn’t it?’ she said.”
  • “Kirkland portrayed Van Deelen as unhinged, saying his lawsuit advances a baseless conspiracy and continues a pattern of irrational behavior. The firm showed through court records Van Deelen was suspended from coaching a little league team for using profanity, and also barred from school property for using inappropriate language and obscene hand gestures at a wrestling match.”
  • “The hearing came two weeks after Jackson Walker dropped a blockbuster allegation shifting blame from the firm to Jones. A partner at the firm, Matthew Cavenaugh, said he was asked by Jones to file a potentially false court disclosure about his relationship with Freeman, the firm said in court papers.”