Steven C. Fustolo v. The Patriot Group, LLC, et al.

Should the national standard of review for a denial of a motion to recuse be abuse of discretion of de novo? This case presents a clean and universal circuit split on a portentous, salient issue: how federal courts sitting on appeal should review a denial of a motion to recuse. All known Circuit Courts of Appeals in the United States have weighed in on the issue and have come to a three-way split: (1) the Seventh Circuit applies pure de novo review; (2) the Tenth Circuit applies a hybrid abuse of discretion-de novo review standard; and (3) all other Circuits, including the First Circuit, hold to an abuse of discretion standard. Before trial in this case, petitioner Stephen Fustolo (Mr. Fustolo) moved to recuse the bankruptcy court judge (Bankruptcy Judge) for both bias in fact and bias in appearance under 28 U.S.C. §455. The grounds for his recusal motion were statements made in writing by the Bankruptcy Judge, wherein she reversed her own previous decision and implied that her previous erroneous decision was due to her personal views of Mr. Fustolo. However, despite this admission, the Bankruptcy Judge summarily denied Mr. Fustolo’s motion to recuse with no hearing. The case ultimately went to bench trial, wherein the Bankruptcy Judge found against Mr. Fustolo. Mr. Fustolo appealed the denial of his motion to recuse to both the United States District Court for the District of Massachusetts (District Court) and later the United States Court of Appeals for the First Circuit Court (First Circuit). These courts, sitting in