Opinion
Case No. 01-02853
April 4, 2002
MEMORANDUM OF DECISION (RE: RECUSAL, JURY TRIAL)
1. BACKGROUND AND FACTS
On September 25, 2001 Eric and Selina Jones ("Debtors") filed a voluntary chapter 7 petition as pro se debtors. On that same date, a disclosure of compensation was filed by attorney Tom Hale reflecting that $250.00 was paid to him by the Debtors for "limited" legal services. F.R.Bankr.P. 2016(b).
On September 27, the Court issued an order to Mr. Halo requiring itemization and justification of the reasonableness of his charges pursuant to § 329(b) and F.R.Bankr.P. 2017(a). Shortly thereafter, on October 10, the U.S. Trustee issued a notice of intent to seek sanctions against Mr. Hale for his failure to sign the petition.
On October 15, Mr. Hale filed an itemization. Two weeks later, on November 1, attorney Bart Green appeared on behalf of the Debtors and filed his Rule 2016 disclosure indicating that his services would be charged at an hourly rate of $150.00. The next day, November 2, Mr. Green filed Debtors' amended schedules A, B, C, D, F, G, I, and J and an amended mailing matrix.
On November 7, the Court issued a "Preliminary Order" regarding the October 15 itemization of Mr. Hale. The Court found the same insufficient to fully explain and justify the services rendered and therefore required further supplementation. On November 21, Mr. Hale filed his "Supplemental Itemization" See Doc. No. 20.
On November 28, 2001 this Court issued a decision in the matter of In re Castorena, 270 B.R. 504, 01.4 I.B.C.R. 153 (Bankr. D. Idaho 2001). Castorena addressed the question of Mr. Hale's limited representation of putatively pro se debtors.
Debtors in the instant case, Mr. and Mrs. Jones, received their discharge on December 26, 2001.
On January 8, 2002, the Court issued a "Supplemental Order." Doc. No. 23. This Order required additional explanation as to which individual(s) performed each of the specifically described services in the Supplemental Itemization. Doc. No. 20.
On January 22, 2002, Mr. Hale filed a "Motion to Recuse, Vacate, and Amended Jury Trial Demand (Not all Inclusive)." See Doc. No. 24 (the "First Motion").
The Court set a hearing on the question of Mr. Hale's compliance with the original Order to Attorney, the Preliminary Order, and the Supplemental Order. Such hearing was set for February 27.
On February 22, 2002, Mr. Hale filed a pleading entitled "Motion and Affidavit to Recuse, Vacate Hearing, and Jury Trial Demand (Not all Inclusive)" See Doc. No. 27 (the "Second Motion"). The Second Motion reiterates many of the contentions of the First Motion, but it is not identical.
The U.S. Trustee appeared at the hearing on February 27. Mr. Hale did not. The Court continued the matter for further evidentiary hearing. The Court indicated an intention to address certain preliminary motions as raised by Mr. Hale. The U.S. Trustee and Mr. Hale were provided an opportunity for further submissions in regard to those matters. See Doc. No. 28 (Minutes), and Doc. No. 29 (Minute Entry and Scheduling Order). The Court deems these aspects of the case fully presented and ripe. They are addressed by this decision.
The Minute Entry and Scheduling Order allowed three weeks for briefing by the U.S. Trustee and ten days thereafter for any reply briefing by Mr. Hale. The U.S. Trustee's brief was filed March 18. Mr. Hale has not filed reply briefing.
II. DISCUSSION AND DISPOSITION
A. Motion to Recuse
Mr. Hale asserts in both the First Motion and the Second Motion that the undersigned judge should recuse himself from further hearing in this matter. The Court deems it appropriate to resolve this matter before further hearing on the merits of Mr. Hale's compliance with the Code, Rules and the several orders previously issued by the Court.
1. Asserted Bases of Motion
Both the First Motion and the Second Motion present matters and issues in the form of a lengthy narrative. The alleged bases, or apparent bases, of Mr. Hale's motion are peppered throughout. It serves little purpose to attempt to identify each contention and restate them in this Decision. Both those Motions are a matter of record and speak for themselves. The Court has carefully reviewed both submissions by counsel.
The essence of the recusal contention is that the undersigned Judge harbors a personal bias against Mr. Hale. The First Motion indicates that such bias is evidenced by what Mr. Hale refers to as the "54 page Memorandum," a reference to the Court's decision in Castorena. Id. at p. 2. The First Motion also asserts several "arguments" which Mr. Hale says are "gleaned from the extra judicial comments" of the undersigned Judge. Mr. Hale then asserts a list of 13 such arguments. Id. at p. 4-5. Some appear to assert or repeat comments from unnamed and unidentified individuals, which purportedly describe extra judicial comments. And several others, e.g., items 8 through 13, reflect Mr. Hale's beliefs or contentions regarding matters addressed in the Castorena decision.
The Second Motion contains what is encaptioned an "Affidavit to Recuse." Id. at p. 1. Mr. Hale states "the following facts are gleaned from large number of communications I have received as a result of the I.B.C.R. January 2, 2002 publication of Judge Terry Myers' Opinion [in Castorena], and many received previously to that date." Id. What follows is again a list of comments from unidentified individuals which Mr. Hale seemingly relies upon as the objective facts which allegedly show bias.
The submissions in the Second Motion are not properly in the form of an affidavit nor does Mr. Hale establish the requisites for consideration of his assertions as an affidavit. See Esposito v. Noyes (In re Lake Country Investments, LLC), 255 B.R. 558, 594-95, 00.4 I.B.C.R. 175, 177 (Bankr. D. Idaho 2000), quoting Grzybowski v. Aquaslide `N' Dive Corporation (In re Aquaslide `N' Dive Corporation), 85 B.R. 545, 548 (9th Cir. BAP 1987).
2. Legal Authority
Neither the First Motion nor the Second Motion identifies the statutory basis upon which the recusal motion is brought. There are two provisions of the U.S. Code addressing this subject, 28 U.S.C. § 144 and 28 U.S.C. § 455. The decision of the Bankruptcy Appellate Panel of the Ninth Circuit in Seidel v. Durkin (In re Goodwin) 194 B.R. 214 (9th Cir. BAP 1996) establishes that § 144 is inapplicable to recusal of a bankruptcy judge. The Panel held that § 144 applies only to district court judges. Id. at 221, citing Liteky v. United States, 510 US. 540, 548, 114 S.Ct. 1147, 1153 (1994). The Panel held that the analysis of such motions or requests directed to bankruptcy judges must be under § 455. Id.
Section 455 of Title 28 states in relevant part:
(a) Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.
(b) He shall also disqualify himself in the following circumstances:
(1) Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding; . . .
Goodwin held:
The test for disqualification under section 455(b)(1) is the same as under section 144: "whether `a reasonable person with knowledge of all the facts would conclude that the judge's impartiality might reasonably be questioned.'" Ronwin, 686 F.2d at 700-01 (quoting United States v. Winston, 613 F.2d 221, 222 (9th Cir. 1980)). All evaluations of bias or prejudice under section 455 are made using an objective standard. Liteky, 510 U.S. at ___, 114 S.Ct. at 1153-54. "Scienter is not an element of a violation of § 455(a)." Liljeberg v. Health Serv. Acquisition Corp. 486 U.S. 847, 859, 108 S.Ct. 2194, 2202, 100 L.Ed.2d 855 (1988).
In a motion to recuse under section 455, the judge is not required to take the factual allegations as true. American Ready Mix, 14 F.3d at 1501.
194 B.R. at 222. The Panel proceeded to apply these tests to a contentious dispute and found that no basis for recusal was established. Id. at 222-227.
3. Evaluation and Disposition of the Motion
It is evident that Mr. Hale takes great exception not just to the process of review under § 329(b) and Rule 2017(a) but also to this Court's decision in Castorena. The First Motion and Second Motion are replete with references to the differences in Mr. Hale's view and the Court's view of the law. In fact, both the First Motion and the Second Motion address matters such as Mr. Hale's asserted "right to contract for a flat fee," his perception that the Court did not in Castorena provide a "fair and impartial statement of the facts" and discussions of whether the Court was correct in Castorena in refusing to allow lawyers to "unbundle" their services.
Issues regarding the correctness of the Court's ruling in Castorena are not a sufficient basis for recusal. As stated in Goodwin:
. . . even if [the judge] erred, that does not constitute bias. A judge may be wrong without being prejudiced. See Liteky, ___ U.S. at ___, 114 S.Ct. at 1157 ("[J]udicial rulings alone almost never constitute [a] valid basis for a bias or partiality motion. . . . Almost invariably, they are proper grounds for appeal, not for recusal.").
Id. at 224. See also, id. at 226 (a judge's rulings on matters properly before him, including statements regarding credibility or character, did not establish bias).
This approach was later reconfirmed by the Panel in American Express Travel Related Services Company, Inc. v. Fraschilla (In re Fraschilla), 235 B.R. 449, 459 (9th Cir. BAP 1999), aff'd, 242 F.3d 381 (9th Cir. 2000), in which the Court recognized that judicial rulings and remarks not based on extrajudicial sources almost never constitute a valid basis for recusal. See also, In re Womack, 253 B.R. 245, 246 (Bankr. E.D. Arkansas 2000) (neither adverse rulings nor even remarks the party believes to be critical support a bias or partiality challenge); In re Alpern, 246 B.R. 578, 581-82 (Bankr. N.D. Ill. 2000).
This decision also noted that the timing of a party's assertion of impartiality can affect the weight ascribed to the evidence which is allegedly indicative of bias or prejudice, with less weight given to such contentions which, as here, follow adverse rulings. 235 B.R. at 459.
As noted, the standard applied under § 455 is an objective one. It requires an analysis of what a reasonable person with knowledge of all the facts would conclude regarding the possibility of impartiality.
The nature and character of the allegations in the two motions speak for themselves. But whatever else might be said of them, they are not assertions of fact which can be measured or weighed in an objective sense. The discussion in Murray v. Internal Revenue Service, 923 F. Supp. 1289 (D. Idaho 1996), is helpful in dealing with this issue. There, the District Court adopted the report and recommendation of United States Magistrate Judge Larry M. Boyle. Judge Boyle in part addressed a motion for his recusal. Id. at 1292-1294. Judge Boyle's disposition stated, in regard to § 455:
In In Re San Juan Dupont Plaza Hotel Fire Litigation, 129 F.R.D. 409 (D. Puerto Rico 1989) the district court interpreted 28 U.S.C. § 455 (a) to require the judge to apply a reasonable person standard to questions of recusal.
Thus, it was Congress' clear intention — as the federal courts have consistently held — that a Section 455 disqualification should not be allowed on the bases of rumors, innuendos, unsupported allegations, or claims that like blind moths, flutter aimlessly to oblivion when placed under the harsh light of the full facts. In short, the strategic maneuvering of counsel cannot divert the true course of the judicial process already navigated by an impartial judge. . . .Id. at 414.
The relevant test for a Section 455(a) recusal is whether the charge of impartiality is sufficiently grounded on facts to create in the mind of the fully informed objective disinterested observer of our community a reasonable or significant doubt concerning the judge's impartiality.Id. at 416.
Id. at 1293.
The sorts of arguments regarding bias found in the First Motion and Second Motion could be characterized by the objective reader as many things, including "rumors, innuendos [and] unsupported allegations." But the key is that their assertion alone is not sufficient to support recusal. Id. at 1293-94. Accord, United States v. Bray, 546 F.2d 851, 858 (10th Cir. 1976) (prior written attacks upon a judge are legally insufficient to support a charge of bias or prejudice). See also, In re Alpern, 246 B.R. 578 (Bankr. N.D. Ill. 2000):
Moreover, there is no basis for recusal when a motion does not contain any detailed information to explain the claimed bias or prejudice and instead provides a barrage of conclusory personal attacks.
This Court concludes the motion is factually and legally insufficient to support recusal.
In addition, the Court has conducted a second inquiry. The above cases, and the dozens of others this Court has reviewed in the course of evaluating the present recusal motion, indicate that the Court has the duty to carefully evaluate the entirety of the situation to determine the existence or absence of bias or prejudice. See, e.g., 923 F. Supp. at 1293. This obligation is independent of the evaluation of the movant's submissions. The undersigned has undertaken that evaluation, and can and does conclude without hesitation that no such bias or prejudice presently exists.
The Court therefore finds and concludes that grounds for recusal have not been established under the objective factual standard of § 455, and that the self-executing evaluation required of the Court similarly supports denial of the recusal aspects of the First Motion and Second Motion.
It is further noted that the case law has also developed a countervailing policy to recusal. One recent case described the policy in the following terms:
"The judge to whom a recusal motion is addressed is presumed to be impartial . . . and there is substantial burden on the moving party to show that the judge is not impartial . . . ." McCann v. Communications Design Corp., 775 F. Supp. 1506, 1522 (D. Conn. 1991). While the judge must be mindful of the objective test under § 455(a), she or he must also consider the policy that "[A] judge once having drawn a case should not recuse himself on a unsupported, irrational, or highly tenuous speculation; were he or she to do so, the price of maintaining the purity of appearance would be the power of litigants or third parties to exercise a negative veto over the assignment of judges." In re United States, 666 F.2d 690, 694 (1st Cir. 1981). The U.S. Court of Appeals for the First Circuit has also set forth the following ground rules:
First, a charge of partiality must be supported by a factual basis. . . . Second, disqualification is appropriate only if the facts provide what an objective, knowledgeable member of the public would find to be a reasonable basis for doubting the judge's impartiality. Were less required, a judge could abdicate in difficult cases at the mere sound of controversy or a litigant could avoid adverse decisions by alleging the slightest of factual bases for bias.
In re United States, 666 F.2d at 695; see also In re Allied-Signal, Inc., 891 F.2d 967, 969-70 (1st Cir. 1989).
In re Melendez, 224 B.R. 252, 277 (Bankr. D. Mass. 1998). See also, Womack, 253 B.R. at 246 ("Although the Court has the duty to recuse where [§ 455] factors exist, there is a concomitant duty not to recuse on unsupported, irrational or tenuous speculation").
A judge's responsibility to refrain from unnecessarily recusing himself was thoroughly and articulately discussed by the Honorable Marion J. Callister of this District in State of Idaho v. Freeman, 507 F. Supp. 706 (D. Idaho 1981). District Judge Callister was subject to a recusal motion in a suit involving the Equal Rights Amendment. The motion was based upon contentions related to his religious beliefs and his position of leadership in his church. Among many observations, salient and pertinent here, Judge Callister noted that the possibility for misuse of recusal statutes is ever present. Absent a cautious approach to such issues, litigants may urge recusal not in situations of actual bias or partiality but, rather, to obtain a jurist with a possibly different legal view on a given issue.
The Court has given due and serious consideration to its obligation and duty to sit. Where, as hero, there is no credible objective basis for concluding that bias or partiality exists, and the Court through its self-executing evaluation is convinced that the matter can be fully and impartially heard, it would be improper to recuse.
For the foregoing reasons, the request for recusal in the First Motion and the Second Motion will be denied.
B. Motion/Demand for Jury Trial
Both the First Motion and Second Motion assert that Mr. Hale has a right to jury trial in regard to the issues raised under § 329(b) of the Bankruptcy Code and F.R.Bankr.P. 2017(a). Similar arguments regarding a perceived right to jury trial have been repeatedly advanced, and have been consistently rejected. Inasmuch as the present matter will be proceeding to an evidentiary hearing, the Court deems it appropriate to address, once again, this issue.
In support of the claimed right to a jury trial on these issues, Mr. Hale relies upon the case of In re Rheuban, 124 B.R. 301 (C.D. Cal. 1990) (hereafter " Rheuban II"). This case is but one of three related cases arising in the Central District of California. See In re Rheuban, 121 B.R. 368 (Bankr. C.D. Cal. 1990) (hereafter " Rheuban I"), and In re Rheuban, 128 B.R. 551 (Bankr. C.D. Cal. 1991) (hereafter " Rheuban III"). Rheuban I, considered at length questions under § 329(b) and Rule 2017(a). In evaluating the fees received by an attorney in connection with or in contemplation of a bankruptcy, the bankruptcy court concluded that there was no right or entitlement to a trial by jury. Id. at 379-383.
All three decisions involve the same chapter 11 debtor, Carl Rheuban, who had paid more than two million dollars to eight different legal professionals in contemplation of his bankruptcy. 121 B.R. at 372. The decisions all address the propriety of the legal fees paid by Mr. Rheuban under § 329(b) and each examines the issue of the attorney's right to a jury trial on such issues. Each decision addressed that question in regard to a separate attorney.
In Rheuban II, the district judge held that the determination of the reasonableness of attorneys' fees under § 329(b) is legal rather than equitable in nature, therefore entitling attorneys to jury trials for the resolution of such matters. Id. at 302-303.
The author of Rheuban I thereafter issued Rheuban III. In this decision, following an extensive analysis of the law and expanding on what had been said in Rheuban I, the bankruptcy court held again that there was no right to a jury trial in regard to issues raised under § 329(b) of the Code. In reaching this decision, the court considered and rejected the decision of the District Court in Rheuban II upon which Mr. Hale here relies.
In considering these three cases and addressing the issue raised by Mr. Hale, this Court must first observe that the decision of the district judge in Rheuban II is not binding authority. While this Court is bound to follow the pronouncements of the Ninth Circuit Court of Appeals, the decision of a single district court within the Ninth Circuit does not attain the same rank or status. See, Rheuban III, 128 B.R. at 554-555; see also, In re DeBoer, 99.3 I.B.C.R. 101, 102-03 (Bankr. D. Idaho 1999) (discussing questions of binding authority and scare decisis).
The Court is always at liberty to adopt and follow decisional law, even if such decisions are not binding, based upon the cogency and persuasiveness of their reasoning. The Court has therefore evaluated the case upon which Mr. Hale relies. But it has also considered the extended critique on the "persuasive force" of that decision contained in Rheuban III. See 128 B.R. at 555-560. Without belaboring the point further in this Decision, this Court agrees with and expressly adopts the reasoning and conclusions of Bankruptcy Judge Zurzolo in Rheuban I and Rheuban III. Those decisions clearly establish the reasons why the decision of the district court in Rheuban II is in error and should not be followed.
The Court concludes, therefore, that Mr. Hale is not entitled to a trial by jury in regard to the issues presently before the Court. This conclusion moots the question, which he also raises, as to whether bankruptcy judges may constitutionally preside over jury trials and, if so, under what circumstances or conditions.
C. Other "Motions"
Numerous other assertions are made in the First Motion and Second Motion which might be deemed to be separate requests for relief. Some simply resurrect issues Mr. Hale takes with Castorena and would therefore be no more than impermissible collateral attacks thereupon. This approach is no substitute for appeal.
The Court is aware, from its files and records, that an appeal was taken in one of the nineteen cases addressed in Castorena.
Certain other contentions appear to be anticipatory attacks upon a decision not yet rendered in the instant matter. As such, they too are improper. The Court has yet to hold the hearing concerning Mr. Hale's compliance with the three orders seeking clarity of his itemization of services rendered to Mr. and Mrs. Jones or concerning the reasonableness of the fees he charged them.
The Court concludes that there are no additional cognizable requests for relief contained in the First Motion or Second Motion which are properly before this Court at the present time upon which ruling can be made.
III. CONCLUSION
Upon the foregoing, Mr. Hale's Motion for Recusal will be denied and his Motion or Request for Jury Trial will be denied. An Order will issue.
ORDER
Based upon the Memorandum of Decision entered this date and for the reasons set forth therein, the Court being fully advised and good and sufficient cause appearing;
IT IS ORDERED, AND THIS DOES HEREBY ORDER:
1. The Motion or Request of Counsel, Tom Hale, for recusal is DENIED.
2. The Motion or Request of Counsel, Tom Hale, for trial by jury is DENIED.