Centripetal Networks, Inc. v. Cisco Systems, Inc.

28 U.S.C. §455(f) aims to preserve judicial resources and avoid the harsh consequences of recusal when a minor financial interest is discovered after a federal judge has already invested substantial time and effort into a matter. Specifically, it provides that a judge who “discover[s]” an insubstantial financial interest in a party “after substantial judicial time has been devoted to [a] matter” need not “disqualif[y]” himself as long as he “divests … the interest that provides the grounds for the disqualification.” Here, the district judge discovered, years into this complex patent litigation, after a 22-day bench trial, and on the eve of granting judgment for the plaintiff, that his spouse owned 100 shares of the defendant’s stock, worth $4,687.99 in total. The judge recognized the need to redress the interest and that “the simplest thing would be to sell the stock.” But as he knew that he would shortly issue an opinion which would adversely affect the defendant’s stock, he concluded that selling the stock at that point would create appearance problems and “undermine the purpose of section 455.” The judge instead decided to divest the stock into a blind trust. He later entered judgment for the plaintiff. The Federal Circuit wiped out that judgment and years of judicial effort without ever addressing the merits, holding that employing a blind trust is not “divest[ment]” under §455(f) and that the district judge’s use of the former was not harmless error. The question presented is: Whether placing stock in a blind trust satisfies §455(f)and, if not, whether placing trivial amounts