The federal judge presiding over the Silk Road trial stepped aside from an upcoming case stemming from that same court. A former US attorney said the move was unusual, and some have speculated it’s because Judge Katherine Forrest is one of nine people scheduled to hear a challenge to President Trump’s authority on immigration restrictions.
The “federal judge salary” is a piece of news that came out on the 4th of October. A federal judge has stepped aside from the case because of her involvement in the case.
After a Wall Street Journal exposé regarding his family’s Amazon stockholdings, a federal judge recused himself from a nearly two-year-old Amazon.com Inc. lawsuit, alleging a financial conflict.
During the 20 months that he presided over the civil case, U.S. District Judge Liam O’Grady found in favor of Amazon, accusing two former workers of receiving bribes from a real-estate developer and breaking Amazon’s conflict-of-interest laws.
Judge O’Grady informed the parties in the lawsuit in federal court in Virginia in December that his wife held around $22,000 in Amazon shares. His wife’s financial advisor sold the shares on Dec. 3 in response to the Journal’s concerns about the Amazon holdings. A Journal piece published on Dec. 30 detailed Judge O’Grady’s conflict in the case.
Judge O’Grady stated in a Monday decision that he was hesitant to recuse himself since his wife no longer held the stock and the defendants in the lawsuit who had requested him to recuse themselves had shown no proof that he was prejudiced in favor of Amazon. Judge O’Grady previously admitted to the Journal that he was unaware that his wife had Amazon stock.
“However, the Court places a premium on the public’s sense of fairness in the administration of justice, as well as the perception of the parties in the case,” Judge O’Grady stated.
According to a WSJ investigation, Judge Liam O’Grady has presided over 66 cases at the federal courtroom in Alexandria, Virginia, since 2010, while his wife was involved in either plaintiffs or defendants.
Judge O’Grady’s recusal means a new judge will take over a busy case with almost 500 docket entries and more than 4,000 pages of legal papers, which will most certainly result in expensive delays for the plaintiffs.
Judge Michael Nachmanoff, who assumed his seat on the United States District Court for the Eastern District of Virginia late last year, was reassigned the case on Monday.
According to a Journal analysis, Judge O’Grady has handled 66 cases in the federal courtroom in Alexandria, Virginia, since 2010, when his wife was involved in plaintiffs or defendants. In an email, Judge O’Grady said that he was checking his case lists and disclosure forms and that he would alert parties of any potential conflicts.
His involvement in such matters was in violation of a federal statute established in 1974 that compels judges to recuse themselves from cases involving parties in whom they, their wives, or their young children have a financial interest, such as individual stocks. Mutual and index funds are free from the tax.
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Judge O’Grady claimed he mistook his wife’s account for a mutual fund and had “no knowledge with it” during a Jan. 6 hearing in response to the defendants’ request for his recusal. He stated his wife’s transactions are handled by a Georgia-based financial advisor.
Judge O’Grady lamented an ethical system in which “my docket is wholly reliant on some Atlanta broker’s judgment on what stock to purchase and sell at any given moment when I receive no notification about it until the end of the year,” according to the hearing transcript. It’s a “trap” for district judges, he says.
Judges are required by federal law to make a reasonable attempt to learn about their spouses’ financial interests. The federal court requires them to keep and update recusal lists of corporations in which they or their families have investments.
In an October letter addressed to all judges, Judge Roslynn Mauskopf, head of the Administrative Office of the United States Courts, noted, “Up-to-date recusal lists are the most effective instrument for conflict screening.”
Judge O’Grady, 71, is one of 136 judges whose stock conflicts were discovered after a year-long examination by the Journal. Since 2010, more than 950 instances involving recusal breaches have been found by the inquiry and subsequent examinations by judges who were contacted by the Journal.
The action against Amazon, which was launched in April 2020, is about more than $400 million in development projects in northern Virginia, where Amazon has set up massive data farms. They are vital to Amazon Web Services Inc., the retailer’s cloud computing division.
In 2019, an Amazon data center is being built in Manassas, Virginia.
Two former workers are accused of steering contracts to a developer, Northstar Commercial Partners, in exchange for millions of dollars in payments, according to the racketeering case. The charges have been refuted by the former workers and the developer.
“The notion that I would tilt this case in Amazon’s favor because I believed my wife’s $22,000 investment in Amazon’s stock would be at jeopardy if I didn’t is literally—is nearly absurd,” Judge O’Grady stated during last week’s hearing. He said that in a counterfeiting case in May, he had decided against Amazon.
Amazon’s representative did not reply to a request for comment after the company objected to Judge O’Grady’s recusal.
Stanley Garnett, a lawyer representing Northstar founder Brian Watson, stated, “We look forward to settling this issue on the merits.” Former workers did not respond to requests for comment.
—This article was co-written by James V. Grimaldi and Coulter Jones.
Joe Palazzolo can be reached at [email protected]
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