Mavis v. Commercial Carriers, Inc., 408 F. Supp. 55 (C.D. Cal. 1975)
November 21, 1975
v.
COMMERCIAL CARRIERS, INC., a corporation, Defendant.
COMMERCIAL CARRIERS, INC., a corporation, Counterclaimant,
v.
Paul A. MAVIS et al., Counterdefendants.
United States District Court, C. D. California.
*56 *57 Walter H. Young and Young & Young, Los Angeles, Cal., for plaintiff.
James L. Hunt, Lynn H. Pasahow and McCutchen, Doyle Brown & Enersen, and Martin J. Rosen and Silver, Rosen, Fischer & Stecher, San Francisco, Cal., for defendant, Commercial Carriers, Inc.
FINDINGS, CONCLUSIONS AND ORDER DENYING PLAINTIFF'S REQUEST FOR DISQUALIFICATION OF TRIAL JUDGE
HAUK, District Judge.
This matter came on for hearing Monday, November 17, 1975, at 1:30 p. m., before the Honorable A. Andrew Hauk, United States District Judge, to whom the case, cause and proceedings herein[1] were heretofore assigned by lot under the rules, regulations and orders of this United States District Court for the Central District of California, and particularly, General Order No. 104 thereof, upon the following papers and pleadings:
1. A letter addressed to said Judge Hauk, dated October 28, 1975, by Walter H. Young, attorney for plaintiff, with copies sent to defendant's counsel and to Chief Judge Stephens of this Court enclosing a copy of "REQUEST TO HON. A. ANDREW HAUK, JUDGE, TO EXCUSE HIMSELF FROM THE TRIAL OF THIS ACTION AND RETURN THE CAUSE FOR REASSIGNMENT." The letter further stated:
"I have not actually scheduled a Motion on this Request as it is my understanding that it is proper to call the facts to the attention of the Court in this matter, rather than in the form of a formal Motion.
If your Honor feels that this Request should be made in the form of a formal Motion, I will schedule the same accordingly."
This letter was received on October 28, 1975, and at that time the Court made its Order to the Clerk to file the letter and its enclosure and put it on the calendar as a "motion" under the Court's "17-day" Rule, Local Rule 3(e). Whereupon the Clerk, by Minute Order of October 30, 1975, set the matter for hearing on November 17, 1975, at 10:00 a. m., when it was continued to 1:30 p. m., because of the crowded motion calendar for that morning. See Appendix A attached.
2. Thereafter plaintiff's counsel filed Points and Authorities in Support of the "Request" for Disqualification, and a Supplemental Declaration of Plaintiff's Counsel, Walter H. Young (Appendix B attached).
3. In reply thereto, defendant filed a Response with Points and Authorities, and Affidavits of R. G. Furse and Edward T. Bowers, Executives of Texas Gas Transmission Corporation, the parent company of a corporation, American Commercial Lines which owns all of the stock of defendant Commercial Carriers, Inc. (Appendix C attached).
After full consideration of each and all of said pleadings and points and authorities therein contained, and the oral arguments made before the Court on Monday, November 17, 1975, and good cause appearing, the Court orally discussed the various contentions and made its oral order refusing to disqualify, recuse or excuse itself from further *58 proceedings in this case, and noted that it would make and enter written Findings, Conclusions and Order, which it now does, as follows:
FINDINGS AND CONCLUSIONS
(1) The Letter and Request of Plaintiff's Attorney For Disqualification of the Court Are, and Each of Them Is, Legally Insufficient Under Local Rule 1.8, as well as 28 United States Code 144.
The letter of plaintiff's said counsel, Walter H. Young, with its enclosure was submitted in violation of Local Rule 1.8 of the Central District of California, which provides as follows:
"1.8 Correspondence and Communications with the Judge:
Attorneys or parties to any action or proceeding should refrain from writing letters to the Judge or otherwise communicating with the Judge unless opposing counsel is present. All matters to be called to a Judge's attention should be formally submitted as hereinafter provided."
For this reason it is legally insufficient, but rather than waste time and paper, the Court ordered the Clerk, as stated above, to put it and its enclosure on the motion calendar under Local Rule 3(e) and it was so held on Monday, November 17, 1975. Counsel's failure to abide by Local Rule 1.8 was, therefore, permitted in this instance, and while it is legally insufficient, we are treating the letter as a motion.
However, since 28 U.S.C. § 144 requires that any party seeking to disqualify a Federal Judge must file a "timely and sufficient affidavit" of "the party" (not the attorney) and further that the affidavit of the party (not the attorney) must be accompanied by a certificate of counsel of record stating that it is made in good faith, it is clear beyond any doubt that the letter and request (or declaration, or affidavit whichever it may be) are both legally insufficient to meet the requirements of 28 U.S.C. § 144.[2] The same legal insufficiency is found in the Supplemental Declaration of Attorney Walter H. Young. (Appendix B) All three are signed by the attorney (Walter H. Young) for the party and not by the party, and the affidavit, if it be such, as well as the supplemental declaration were not accompanied by a certificate of counsel of record stating that they were made in good faith. See Appendices A and B.
The Court is obliged to determine their legal sufficiency under 28 U.S.C. § 144. Berger v. United States, 255 U.S. 22, 33, 41 S. Ct. 203, 65 L. Ed. 481 (1921); Botts v. United States, 413 F.2d 41 (9th Cir. 1963); United States v. Tropiano, 418 F.2d 1069 (2d Cir. 1969); Lyons v. United States, 325 F.2d 370 (9th Cir. 1963), cert. den., 377 U.S. 969, 84 S. Ct. 1650, 12 L. Ed. 2d 738 (1964). Since they are not legally sufficient, being signed and filed solely and only by the attorney, Walter H. Young, and not by the party, Paul A. Mavis, they are obviously legally insufficient.
(2) Assuming the Papers in Appendix A Had Been Signed and *59 Filed By The Party, Paul A. Mavis, They Are Still Legally Insufficient Under 28 United States Code 144 and 28 United States Code 455.
While we believe that the points already made would be sufficient in and of themselves to require this Court to deny a request by plaintiff's counsel that the Court disqualify itself in this case, we will, for the purpose of the following discussion, assume that the "Request" (Appendix A) is the affidavit of the party, and further that the failure to accompany it with a certificate of good faith by counsel of record for the party is not fatal. Nevertheless, even assuming these to be the facts, which they obviously are not, it is just as certain that neither the letter, nor the request (see Appendix A) nor the Supplemental Declaration of the attorney, Walter H. Young, (Appendix B) nor any of them, is or are legally sufficient under 28 U.S.C. § 144 and 28 U.S.C. § 455.
We note that in the "Request" (Appendix A) plaintiff's counsel sets forth two contentions for disqualification of the Court:
(i) That since the Court admittedly owns substantial common stock in Union Oil Company of California, and since defendant Commercial Carriers, Inc., is wholly owned by American Commercial Lines, which is, in turn, wholly owned by Texas Gas Transmission Corporation, which has engaged in joint ventures in offshore oil and gas exploration in the Gulf of Mexico with Union Oil Company of California, and has purchased gas from said Union Oil Company of California, the Judge has some sort of interest in defendant Commercial Carriers, Inc., which would serve to disqualify him under 28 U.S.C. § 455.
(ii) That certain statements of defendant's counsel made to plaintiff's counsel outside the presence, hearing and knowledge of the Judge, apparently at depositions and in other meetings of counsel out of Court, somehow constitute a circumstance which should disqualify the Judge under 28 U.S.C. § 455.
Let us analyze these two contentions by taking the second one up first.
It is absolutely clear from all of the papers filed, as listed hereinabove and set forth in Appendices A, B and C, that the Court was not present, did not hear and had absolutely no knowledge whatsoever of any statements made out of court by any counsel to any other counsel. It is perfectly plain that any such statements could not constitute grounds for disqualification of the Judge under 28 U.S.C. § 455.[3]
*60 Turning now to the first contention of plaintiff's counsel, namely, that the Judge should have disqualified himself, because he owns stock in Union Oil Company of California which has engaged in joint ventures with and sold gas to Texas Gas Transmission Corporation, which wholly owns American Commercial Lines which, in turn, wholly owns defendant Commercial Carriers, Inc. Somehow, what plaintiff's counsel seems to say is that because the Judge owns stock in Union Oil Company, he cannot preside over, but must disqualify himself from, any and all proceedings which may involve a subsidiary, twice removed, of a corporation which has done business with Union. To state the contention is to refute it as legally insufficient on any sound or reasonable basis.
But let us be more specific and analyze each subsection of 28 U.S.C. § 455, assuming, once again, contrary to the facts, that a proper affidavit and certificate of probable cause were filed in this matter. With that assumption, there is no doubt that it is the duty of the Judge sitting in the case to make the decision as to whether or not the affidavits are sufficient. In doing so, the Judge cannot pass upon or dispute the truth of the factual allegations set forth in the affidavits. Berger, 255 U.S. 22, 33, 41 S. Ct. 230, 65 L. Ed. 481 (1921); Botts, 413 F.2d 41 (9th Cir. 1963); Tropiano, 418 F.2d 1069 (2d Cir. 1969); Lyons, 325 F.2d 370 (9th Cir. 1963), cert. den., 377 U.S. 969, 84 S. Ct. 1650, 12 L. Ed. 2d 738 (1964), supra.
For the record, we feel constrained to affirm that the Judge does not now have nor did he ever have any personal bias or prejudice in the slightest degree for or against any of the parties to this case, cause and proceeding herein, and more particularly, does not have now, nor did he ever have any such personal bias or prejudice in the slightest degree against the plaintiff, Paul A. Mavis.
The question we must turn to then, is whether or not the allegations set forth in the Request and Supplemental Declaration (assuming for the moment *61 that they are appropriate affidavits of a party, and that the appropriate certificate by counsel of good faith has been filed as required by 28 U.S.C. § 144, which allegations the Court must accept as true, and in the absence of any contradictory evidence which as has been noted is absolutely impermissible under 28 U.S.C. § 144), are legally sufficient to show any one of the disqualifying grounds set forth in the new Federal statute on disqualification of Judges, 28 U.S.C. § 455, and in the new "Code of Judicial Conduct for United States Judges" which was promulgated and enacted by the United States Judicial Conference at its semi-annual session, March 7 and 8, 1974, and amended at its March 6 and 7, 1975 session.
Now today, 28 U.S.C. § 455 and the Code of Judicial Ethics, Canon 3 C are virtually identical, with only one difference, and that is that the Judicial Conference has ruled in eliminating former Canon 3 D that there cannot be a waiver of any of the grounds for disqualification, whereas 28 U.S.C. § 455(e) provides that waiver can be accepted as to the ground for disqualification, under subsection (a).
Let us take up the first ground for disqualification in 28 U.S.C. § 455(a). It provides that:
"Any . . . judge . . . of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned."
Canon 3 C (1) states the same ground, but then adds additional grounds which are set forth in subsections (b) and (c) of 28 U.S.C. § 455.
Thus it is incumbent upon us first to determine whether this is a proceeding in which the Judge's impartiality might reasonably be questioned. Disqualification or recusal certainly is not automatically required merely upon the filing of the letter request, declarations or affidavits. If there were support for this line of reasoning, the floodgates would be opened to "judgeshopping" and the impressive body of precedents which we have heretofore cited in Berger and its progeny would be wiped out.
In any event, while the new and revised statute on judicial disqualification, 28 U.S.C. § 455, broadens the grounds for recusal or disqualification and is intended to eliminate the "duty to sit" concept of the old statute, it has not changed the law to the extent plaintiff's counsel attempts to suggest. The standard of the general disqualification provision, Section 455(a) of 28 U.S.C., is still one of reasonableness and should not be interpreted to include a spurious or loosely based charge of partiality.
The legislative history of the new Section 455 makes this abundantly clear in House Report No. 93-1453, adopting Senate Report No. 93-419, 3 U.S.Cong. & Admin.News, 93rd Cong., 2d Ses. 1974, pp. 6351-6363. In particular, this Report concludes at Page 6355:
"While the proposed legislation would remove the `duty to sit' concept of present law, a cautionary note is in order. No judge, of course, has a duty to sit where his impartiality might be reasonably questioned. However, the new test should not be used by judges to avoid sitting on difficult or controversial cases.
At the same time, in assessing the reasonableness of a challenge to his impartiality, each judge must be alert to avoid the possibility that those who would question his impartiality are in fact seeking to avoid the consequences of his expected adverse decision. Disqualification for lack of impartiality must have a reasonable basis. Nothing in this proposed legislation should be read to warrant the transformation of a litigant's fear that a judge may decide a question against him into a `reasonable fear' that the judge will not be impartial. Litigants ought not have to face a judge where there is a reasonable question *62 of impartiality, but they are not entitled to judges of their own choice.
Finally, while the proposed legislation would adopt an objective test, it is not designed to alter the standard of appellate review on disqualification issues. The issue of disqualification is a sensitive question of assessing all the facts and circumstances in order to determine whether the failure to disqualify was an abuse of sound judicial discretion."
Having these thoughts in mind, we have approached each and all of the allegations of plaintiff's counsel sensitively and utilizing sound judicial discretion, having in mind at all times that judge shopping is "out." We have measured the allegations by all of the grounds set forth in the new 28 U.S.C. § 455(a) and Code of Judicial Conduct, Canon 3 C and find that the allegations are not legally sufficient.
First of all, there are no allegations of fact showing that the Court's impartiality might reasonably be questioned. If the contentions of the plaintiff's attorney are given any credence in this regard it would mean that this Court would be forced to disqualify itself in any case in which a party has had any kind of business transactions with Union Oil Company of California, which would include banks and investment companies, stock transfer agents, lenders, borrowers, service stations, employees and anyone and anybody else who had any kind of business dealings with Union Oil Company. Here, Union Oil Company of California is not a party to the proceedings, nor is there any allegation of any kind that the defendant Commercial Carriers, Inc. itself ever had any business dealings of any kind with Union Oil Company of California. There is simply no basis at all on which the Court's impartiality might reasonably be questioned.
Having the same thoughts in mind, and with the same sensitivity that we have disposed of the ground stated in Section 455(a), let us examine the other grounds in Section 455 of 28 United States Code:
"(b) He shall also disqualify himself in the following circumstances:
(1) [Canon 3 C (1) (a)] Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding."
There is absolutely no allegation of any kind stating facts to show this ground.
"(2) [Canon 3 C (1) (b)] Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it."
There are no allegations concerning this ground whatsoever.
"(3) [Canon 3 C (1) (e)] Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy."
This is, obviously, not involved.
"(4) [Canon 3 C (1) (c)] He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding."
It is true, as alleged, that the Court holds stock in Union Oil Company of California, but that does not constitute any financial interest in the subject matter in controversy, or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding. This proceeding could not possibly affect the Court's stocks in Union Oil or its value.
*63 "(5) [Canon 3 C (1) (d)] He or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:
(i) Is a party to the proceeding, or an officer, director, or trustee of a party;
(ii) Is acting as a lawyer in the proceeding;
(iii) Is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding;
(iv) Is to the judge's knowledge likely to be a material witness in the proceeding."
There is no allegation as to this.
"(c) [Canon 3 C (2)] A judge should inform himself about his personal and fiduciary financial interests, and make a reasonable effort to inform himself about the personal financial interests of his spouse and minor children residing in his household."
The Court has informed itself and knows that the only stock held in Union Oil Company of California is held by the Judge and his spouse in joint tenancy.
We will not go into the other subsections, (d) [Canon 3 C (3)] which are merely definitions, or (e), which provides for partial waiver which is not permitted under the Code of Judicial Conduct, except to point out that the term "financial interest," which is a ground for disqualification under Section 455(b) (4), is defined as follows in Section 455(d) (4):
"`[F]inancial interest' means ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party . . .."
Obviously the business relationships in which Union Oil sells gas to Texas Gas Transmission Corporation, and in which they engage in a joint venture for off-shore oil and gas drilling and exploration in the Gulf of Mexico cannot, and will not be permitted to, transmogrify or pervert a stock ownership in Union Oil into a "financial interest in the subject matter in controversy or in a party [defendant] to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding" 28 U.S.C. § 455(b) (4). Moreover, it is beyond doubt that here the only claim by plaintiff's attorney and the only fact of the matter is that the parent corporation of defendant, once removed, that is Texas Gas Transmission Corporation, the parent of American Commercial Lines, the parent of defendant Commercial Carriers, Inc., has some contracts with Union Oil involving commercial ventures in gas sales, drilling and exploration all of which are completely and entirely unrelated in any way, either to the proceedings herein or to any party, including the defendant herein, or any issue of any kind involved herein. There is no such claim, and there can be no such claim, if we deal in fact and not fantasy or fancy of plaintiff's counsel.
(3) The Authorities Cited by Plaintiff's Counsel Do Not Demonstrate that Plaintiff's Alleged Grounds for Disqualification are Legally Sufficient.
Plaintiff's counsel relies entirely on three cases to support his claim of the alleged and imaginary "financial interest" or other interest, precluded by 28 U.S.C. § 455. As we shall now demonstrate, none of these three cases has any applicability whatsoever.
(i) Adams v. Minor, 121 Cal. 372, 53 P. 815 (1898)
This was an action involving the question of the validity of certain bonds issued by an irrigation district, a portion of which bonds were held by a bank in which the Superior Court Judge owned stock. The Supreme Court of California naturally held that the Judge should be disqualified as "interested" within the meaning of CCP 170. But *64 here in our case, there is no showing that the Judge has any interest in any company holding anything belonging to the defendant party.
(ii) Texaco, Inc. v. Chandler, 354 F.2d 655 (10th Cir. 1965)
In this case, under the old 28 U.S.C. § 455, the Tenth Circuit properly held that a District Judge should not sit in a case in which the attorney for the plaintiff was a lawyer who represented the Judge in another case, and accordingly, properly granted mandamus to disqualify the Judge. In our case here, the Judge has never had any kind of relations with counsel for plaintiff or counsel for defendant, nor has he ever utilized or employed either set of counsel in any way, shape or form.
(iii) In Re Honolulu Consolidated Oil Co., 243 F. 348 (9th Cir. 1917)
In this case, it appeared that District Court Judge Bledsoe had stock in an oil company that was involved in another case as part of a scheme or plan of unitary litigation brought by the United States in numerous suits against various oil companies concerning oil lands ownership. In this Honolulu suit also brought by the United States against Honolulu Consolidated Oil, but in Judge Bledsoe's Court and as part of the same unitary scheme or plan of litigation, Judge Bledsoe refused to disqualify himself, because he did not hold any interest in Honolulu Consolidated. However, it was obvious that any decision he would render in the Honolulu case would (because it was part of the same unitary scheme or plan of litigation brought by the United States in numerous cases against various oil companies, including the other case involving the oil company in which Judge Bledsoe did hold stock ownership), affect his interest as a shareholder in the company in which he did hold stock, even though the case involving it was not before him. Accordingly the Ninth Circuit properly held that Judge Bledsoe "is sufficiently related to the litigation to impel the conclusion that he is concerned in interest, and therefore should not sit." 243 F. 348, 353. And so a Writ of Mandamus was issued requiring him to disqualify himself.
But here again this case has no possible application to the proceeding herein, since there is no unitary scheme or plan of litigation at all. Here, as far as we know or are informed, there is no Union Oil litigation of any kind related in the slightest degree to the litigation herein. Certainly plaintiff's counsel has made no showing whatsoever of any such scheme or plan of unitary litigation.
ORDER
Upon the Findings and Conclusions set forth above, and the Court being convinced that the allegations of plaintiff's attorney (Appendices A and B) are not legally sufficient to raise any ground or issue of disqualification or recusal under 28 U.S.C. § 144, 28 U.S.C. § 455, the Code of Judicial Conduct for United States Judges, Canon 3 C, or the long-standing case law of Berger and its progeny, and this Judge knowing of the heavy burdens already borne by the other Judges on this Court which would be greatly exacerbated by the reassignment of this proceeding to another Judge of this Court,
It is hereby ordered:
1. That the letter, request and supplemental declaration of plaintiff's counsel that this Judge be disqualified and recuse himself from the case, cause and proceedings herein, be, and the same hereby are, denied.
2. The Clerk is directed to file and enter these Findings, Conclusions and Order forthwith and serve copies thereof upon counsel for all parties herein.
*65 APPENDIX A
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*108 APPENDIX C
RESPONSE OF COMMERCIAL CARRIERS, INC., TO MOTION TO DISQUALIFY
I
PRELIMINARY STATEMENT
Twenty days before the scheduled pretrial conference in this matter, plaintiff and counterdefendants filed this motion to disqualify Judge A. Andrew Hauk and reassign this matter to another judge. The motion is made pursuant to 28 U.S.C. § 455 on the grounds that: (1) Union Oil of California ("Union Oil"), a corporation in which Judge Hauk has a financial interest, has certain financial dealings with Texas Gas Transmission Corporation ("Texas Gas Transmission"), the parent corporation of Commercial Carriers, Inc.[1]; and, (2) Commercial Carriers' counsel have on occasion indicated to counsel for plaintiff and counterdefendants that positions taken by him are wholly contrary to governing law, and if pursued, would be rejected by the court. When these matters have been presented to the court, the court has recognized the clear lack of merit in the positions taken by plaintiff and counterdefendants, and in accordance with the governing law, the court has ruled against them.
II
THERE IS, AND CAN BE, NO SHOWING THAT BUSINESS DEALINGS BETWEEN TEXAS GAS TRANSMISSION AND UNION OIL REQUIRE DISQUALIFICATION OF THE TRIAL JUDGE
In 1974 section 455 of the Judicial Code, which governs disqualification of judges, was substantially amended by Congress. In doing so Congress expressly sought to replace the vagueness of prior section 455 with definite, objective standards. See House Report No. 93-1453, 93d Cong., 2d Sess. (1974), quoted in 1974-3 U.S.Code Cong. & Ad.News 6351, 6354-55. This was done in order to preclude litigants from challenging impartiality when actually the litigant fears an adverse decision:
"[I]n assessing the reasonableness of a challenge to his impartiality, each judge must be alert to avoid the possibility that those who would question his impartiality are in fact seeking to avoid the consequences of his expected adverse decision. Disqualification for lack of impartiality must have a reasonable basis. Nothing in this proposed legislation should be read to warrant the transformation of a litigant's fear that a judge may decide a question against him into a "reasonable fear" that the judge will not be impartial. Litigants ought not have to face a judge where there is a reasonable question of impartiality, but *109 they are not entitled to judges of their own choice." Id., 1974-3 U.S.Code Cong. & Adm.News at 6355 (emphasis in original).
In order to achieve this goal of an objective standard, Congress very carefully defined the type of personal interest in a case that requires disqualification. In that regard, subsection 455(b) (4) provides that:
"[The judge shall disqualify himself where] [h]e knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding."
The central term, "financial interest" is specifically defined in subsection 455(d) (4):
"`[F]inancial interest' means ownership of a legal or equitable interest, however small, or a relationship as director, advisor, or other active participant in the affairs of a party . . . ."
It is clear that any business relationship between Union Oil and Texas Gas Transmission can, in no way, turn a stock ownership in Union Oil into a "financial interest" or other interest such as would require disqualification pursuant to section 455(b) (4). There is no indication whatsoever that Judge Hauk has "ownership of either a legal or equitable interest" in either the "subject matter" of this case or any "party to the proceeding." Moreover, there is no indication that any interest of Judge Hauk in Union Oil "could be substantially affected by the outcome" of this suit (emphasis added). To the contrary, it is only claimed that the parent corporation of a party to this suit is involved in some contracts with Union Oil involving commercial ventures wholly unrelated both to this suit and to Commercial Carriers. No theoretical chain of events is suggested as to how the outcome of this case could affect even Union Oil, much less "substantially" affect the shareholders of Union Oil.
Because even the worst claims of plaintiff and counterdefendants concerning Union Oil's contracts with Texas Gas Transmission do not warrant disqualification under the statutory standards, no inquiry into those contracts should be necessary. Commercial Carriers counsel, however, have inquired of Texas Gas Transmission, a nonparty, as to the details of the contracts between it and Union Oil, and will forward to the Court affidavits explaining the nature of those contracts at the earliest opportunity.[2]
*110 III
STATEMENTS OF DEFENDANT'S COUNSEL DO NOT JUSTIFY DISQUALIFICATION OF THE TRIAL JUDGE
Whatever the court's conclusion concerning the propriety of disqualification based upon financial interest, it is patently clear that the comments of Commercial Carriers' counsel do not justify disqualification. In fact, this appears to be simply another the third of a series of attacks on the perseverence, the competence, and indeed, the integrity of Commercial Carriers' counsel. First, plaintiff moved to disqualify Commercial Carriers' counsel for breaching ethical considerations precluding representation of a party in opposition to a prior client.[3] This motion was rejected by the court after Commercial Carriers demonstrated that its counsel had never represented Mr. Mavis. Plaintiff and counterclaimants next sought to preclude Commercial Carriers from completing its legitimate discovery, in part, by accusing its counsel of perjury.[4] This claim was disproved by various records of this court and correspondence of counsel, and the court allowed the discovery. Now, quoting statements out of context, plaintiff and counterdefendants apparently seek to charge Commercial Carriers with either improper communications with or improper influence upon the court. This claim, made only by innuendo, has absolutely no basis in fact.
It is a fact that Commercial Carriers' counsel have, during the course of this litigation, expressed confidence in the legal position of their client. It has been and continues to be their position that plaintiff has sought by various means to avoid his clear and legally binding contractual obligations, and that in doing so, he has passed far into the zone of tortious conduct. Moreover, it is and has been the view of Commercial Carriers' counsel that throughout discovery in this matter plaintiff and counterdefendants have consistently sought to avoid a full and fair inquiry that would disclose the truth concerning the claims and counterclaims made in this matter. Whether the case is tried to judge or jury, and plaintiff is presently requesting a jury, Commercial Carriers continues to have confidence that when the evidence is in, its position will be sustained. Such confidence, however, imputes or implies no bias or interest to the trial court.
It is likewise true that Commercial Carriers has pointed out to counsel that the legal positions taken by him in the numerous motions he has filed in the case were contrary to applicable law, and would be denied. It is not, and should not be, surprising that each such motion has been denied.
*111 Finally, it has frequently occurred during depositions in this matter that conduct of opposing counsel has so inhibited relevant interrogation that it seemed the only recourse was to place the matter before the Court. On those occasions, we have so stated, usually with little effect. Such statements are not uncommon in contested litigation such as this,[5] and certainly no imputation of bias on the part of the trial court can be drawn from them.
Nor does it justify disqualification of the presiding judge that plaintiff and counterdefendants have lost various motions filed. Commercial Carriers believe that, in the main, the motions were wholly without merit and against clear governing authority. Indeed, with respect to one such motion, counsel cited and relied upon an overruled case.[6] The motion record simply reflects plaintiff and counterdefendants' refusal to accept this governing law and to conduct pretrial and discovery proceedings in accordance with it.
IV
CONCLUSION
A motion to disqualify is addressed to the sound discretion of the court. Commercial Carriers, however, seriously questions whether the present motion even approaches the statutory basis for disqualification. Lacking such statutory basis, plaintiff's motion rather obviously is merely an effort to shop for what plaintiff hopes will be a sympathetic judge. Congress has specifically admonished that motions to disqualify should not be used for such purpose. We submit the motion should be forthwith denied.
Dated: November 11, 1975. McCUTCHEN, DOYLE, BROWN & ENERSEN William W. Schwarzer James L. Hunt Lynn H. Pasahow By (s) James L. Hunt James L. Hunt Attorneys for Defendant Commercial Carriers, Inc.*112 AFFIDAVIT OF ROBERT G. FURSE RE PLAINTIFF'S MOTION TO DISQUALIFY JUDGE HAUK
AFFIDAVIT STATE OF TEXAS | > ss. COUNTY OF HARRIS |
Affiant, R. G. Furse, being duly sworn, deposes and says that he is a Vice President of Texas Gas Exploration Corporation ("Exploration"), a Louisiana corporation, and a division of Texas Gas Transmission Corporation ("Transmission"); that Exploration and Transmission were participants in certain joint ventures formed by Mobil Oil Company, Union Oil Company of California, Amoco Production Company, and Northwestern Mutual Life Insurance Company to submit joint bids on oil and gas leases covering certain offshore acreage in the federal domain adjacent to the states of Louisiana and Texas offered for sale to the highest bidder by the United States Department of the Interior at public sales held in 1973 and 1974; that the attached Exhibit A is a true and correct summary of the amount of acreage acquired by the joint ventures, the respective division of ownership of working interest in the leases acquired by the joint ventures and the total amount of money extended for the acquisition, exploration and development of the said federal leases to date.
(s) R. G. Furse R. G. FurseSUBSCRIBED AND SWORN TO, before me, this the 12th day November, 1975.
(s) Lynda Hughes Notary Public in and for Harris County, Texas*113 EXHIBIT A
BLOCK 237 - OCS-G-2833, WEST CAMERON AREA - Offshore Louisiana
Acquired: December 1, 1974
Gross Acres: 5,000.00
Net Acres: 2,500.00
Ownership of Working Interest:
Texas Gas Exploration Corporation 50%
Union Oil Company of California 50%
Total amount expended on prospect: $7,109,473.00
BLOCK A-464, OCS-G-2364, HIGH ISLAND AREA, SOUTH ADDITION-Offshore
Texas
Acquired: August 1, 1973
Gross Acres: 5,760.00
Net Acres: 639.36
Ownership of Working Interest:
Mobil Oil Company 33-10/30%
Union Oil Company of California 11- 3/30%
Amoco Production Company 22- 7/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Total amount expended on prospect: $49,248,732.00
BLOCK A-488 - OCS-G-2371, HIGH ISLAND AREA, SOUTH ADDITION-Offshore
Texas
Acquired: August 1, 1973
Gross Acres: 5,760.00
Net Acres: 2,880.00
Ownership of Working Interest:
Texas Gas Exploration Corporation 50%
Union Oil Company of California 50%
Total amount expended on prospect: $13,747,755.00
BLOCK A-572 - OCS-G-2392, HIGH ISLAND AREA, SOUTH ADDITION, Offshore
Texas
Acquired: August 1, 1973
Gross Acres: 5,760.00
Net Acres: 639.36
Ownership of Working Interest:
Mobil Oil Company 25%
Union Oil Company of California 19-13/30%
Amoco Production Company 22- 7/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Total amount expended on prospect: $49,400,838.00
*114
BLOCK A-573, OCS-G-2393, HIGH ISLAND AREA, SOUTH ADDITION, Offshore
Texas
Acquired: August 1, 1973
Gross Acres: 5,760.00
Net Acres: 639.36
Ownership of Working Interest:
Mobil Oil Company 33-10/33%
Union Oil Company of California 11- 3/30%
Amoco Production Company 22- 7/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Total amount expended on prospect: $79,790,369.00
BLOCK A-595, OCS-G-2721, HIGH ISLAND AREA, SOUTH ADDITION, Offshore
Texas
Acquired: July 1, 1974
Gross Acres: 5,760.00
Net Acres: 639.35
Ownership of Working Interest:
Mobil Oil Company 33-10/30%
Union Oil Company of California 11- 3/30%
Amoco Production Company 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Total amount expended on prospect: $17,228,550.00
BLOCK A-596, OCS-G-2722, HIGH ISLAND AREA, SOUTH ADDITION, Offshore
Texas
Acquired: July 1, 1974
Gross Acres: 5,760.00
Net Acres 639.35
Ownership of Working Interest:
Mobil Oil Company 33-10/30%
Union Oil Company of California 11- 3/30%
Amoco Production Company 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Total amount expended on prospect: $20,771,595.00
*115
BLOCK A-334, OCS-G-2423, HIGH ISLAND AREA, EAST ADDITION, SOUTH
EXTENSION, Offshore Texas
Acquired: August 1, 1973
Gross Acres 5,760.00
Net Acres: 639.36
Ownership of Working Interest:
Mobil Oil Company 33-10/30%
Union Oil Company of California 11- 3/30%
Amoco Production Company 22- 7/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Total amount expended on prospect: $36,645,054.00
BLOCK 335, OCS-G-2738, HIGH ISLAND AREA, EAST ADDITION, SOUTH
EXTENSION, Offshore Texas
Acquired: July 1, 1974
Gross Acres: 5,760.00
Net Acres: 639.36
Ownership of Working Interest:
Mobil Oil Company 33-10/30%
Union Oil Company of California 11- 3/30%
Amoco Production Company 22- 7/30%
Northwestern Mutual Life Insurance Co. 22- 7/30%
Texas Gas Exploration Corporation 11- 3/30%
Total amount expended on prospect: $27,831,613.00
BLOCK A-382, OCS-G-2757, HIGH ISLAND AREA, EAST ADDITION, SOUTH
EXTENSION, Offshore Texas
Acquired: July 1, 1974
Gross Acres: 5,760.00
Net Acres: 639.36
Ownership of Working Interest:
Mobil Oil Company 29.924%
Union Oil Company of California 14.510%
Amoco Production Company 22.233%
Northwestern Mutual Life Insurance Co. 22.233%
Texas Gas Exploration Corporation 11.100%
Total amount expended on prospect: $5,492,766.00
*116 AFFIDAVIT OF JAMES L. HUNT STATE OF CALIFORNIA | > ss. CITY AND COUNTY OF SAN FRANCISCO |
JAMES L. HUNT, being first duly sworn, deposes and says:
1. My name is James L. Hunt and I am an attorney at law, licensed to practice law in the State of California and before this Court and am one of the attorneys for defendant Commercial Carriers, Inc. This affidavit is made in opposition to plaintiff's motion to disqualify Judge A. Andrew Hauk.
2. I received in my office on October 30, 1975, plaintiff's counsel's letter dated October 28, 1975, requesting information with respect to certain of the business affairs and transactions of Texas Gas Transmission Corporation, a non-party to this action.
3. I immediately forwarded this letter by United States mails to E. Phillips Malone, Esq., staff attorney for Texas Gas Transmission Corporation in Owensboro, Kentucky. I requested Mr. Malone to review the letter, and to determine what information responsive to the letter could be obtained and in what manner it could be produced for inspection by the Court.
4. Since that date, I have spoken to Mr. Malone on at least three occasions as he has endeavored to gather the requested information. He has disclosed to me that this has been a somewhat difficult task in view of the fact that it has involved inquiries not only to Texas Gas Transmission Corporation employees, but also to employees of other subsidiaries. Furthermore, there has existed the question as to whether certain of the information being gathered is competitively sensitive and thus, whether it should be submitted to the court for in camera review.
5. I am informed now by Mr. Malone that one or more affidavits concerning this information are now in the mails on their way to me.
6. In the course of his investigation Mr. Malone has found that Texas Gas Transmission Corporation purchases certain of its gas requirements from Union Oil, but that these purchases amount to a rather small percentage of its overall volume. Information with respect to these purchases will be provided.
7. Mr. Malone has also discovered that, although Texas Gas Transmission Corporation is not presently involved in any joint ventures or partnerships with Union Oil, that one of its subsidiaries, Texas Gas Exploration Corporation, of Houston, Texas, is involved in a consortium of four other companies, including Union Oil, in bidding for offshore oil leases with the United States Government. Data with respect to this matter will also be provided.
* * * * * * * * * *
8. To the extent that plaintiff's motion to disqualify implies, or, by innuendo, suggests, that counsel for Commercial Carriers, Inc. has *117 engaged in any improper conduct with respect to Court, I wish here to assert and testify that at no time throughout this litigation or in any other litigation, have I or, to my knowledge, my associates or partners, made any ex parte contacts on the Court. All meetings with the Court have been in the courtroom and on the record.
Dated: November 12, 1975.
(s) James L. Hunt JAMES L. HUNTSUBSCRIBED and SWORN to before me this 12th day of November, 1975.
(s) Barbara P. Melquist Notary Public My Commission Expires: July 21, 1979ACKNOWLEDGEMENT OF SERVICE
I hereby acknowledge that a copy of the attached document was personally served upon me at the offices of Young & Young, 606 South Olive, Suite 2104, Los Angeles, California, on November 12, 1975 at 3:15 P.M.
(s) Walter H. Young For Plaintiff and Counter-defendants, Paul A. Mavis, Robertson Truck-A-Ways, Inc., and Louis AdkinsAFFIDAVIT OF EDWARD T. BOWERS RE PLAINTIFF'S MOTION TO DISQUALIFY JUDGE HAUK
AFFIDAVIT STATE OF KENTUCKY | > ss. COUNTY OF DAVIESS |
Affiant, Edward T. Bowers, being duly sworn, deposes and says that he is the Comptroller of Texas Gas Transmission Corporation, a Delaware corporation ("Texas Gas"); that during the twelve months ending September 30, 1975, $35,538,638 was paid to Union Oil as a producer and an operator for natural gas delivered to Texas Gas which amounted to 14.08% of the total cost of all natural gas purchased during the same period from all producers and operators delivering natural gas to Texas Gas.
(s) Edw T. BowersSubscribed and sworn to before me by Edward T. Bowers, this 11th day of November, 1975.
(s) Vicki C. Bowers Notary Public Kentucky State at LargeMy commission expires: 2-15-79
*118 CERTIFICATE OF SERVICE BY MAIL
I am a citizen of the United States and am employed in the City and County of San Francisco; I am over the age of eighteen years and not a party to the within above-entitled action; my business address is 601 California Street, San Francisco, California 94108. On the 14th day of November, 1975, I served the document to which this certificate is attached on the following named person, by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid in the United States mail at San Francisco, addressed as follows:
Walter H. Young, Esq. Young & Young 606 South Olive Street Suite 2104 Los Angeles, California 90014I certify under penalty of perjury that the foregoing is true and correct.
Executed on November 14, 1975, at San Francisco, California.
(s) Patricia Peake Patricia PeakeSUBSCRIBED and SWORN to before me this 14th day of November, 1975.
(s) Helen Railsback Notary Public My Commission Expires: 1-21-76 NOTES[1] This is a civil contract action and counterclaim concerning an alleged agreement for sale by plaintiff Mavis to defendant Commercial Carriers, Inc., of certain assets of another corporation, Robertson Truck-A-Ways, Inc., a wholly owned subsidiary of Dallas and Mavis Forwarding Company whose stock is wholly owned by plaintiff Mavis. Originally filed in the Superior Court of the State of California in and for the County of Los Angeles, No. C 97574, it was removed to the United States District Court, Central District of California on the grounds of diversity of citizenship of the parties. 28 U.S.C. § 1332.
Numerous pretrial motions, and two amended complaints as well as a counterclaim, utilizing four files in the Clerk's Office, have been before the Court prior to the filing of the Request for disqualification being ruled upon herein.
[2] 144. Bias or prejudice of judge
Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding.
The affidavit shall state the facts and the reasons for the belief that bias or prejudice exists, and shall be filed not less than ten days before the beginning of the term at which the proceeding is to be heard, or good cause shall be shown for failure to file it within such time. A party may file only one such affidavit in any case. It shall be accompanied by a certificate of counsel of record stating that it is made in good faith. June 25, 1948, c. 646, 62 Stat. 898; May 24, 1949, c. 139, § 65, 63 Stat. 99.
[3] 455. Disqualification of justice, judge, magistrate, or referee in bankruptcy
(a) Any justice, judge, magistrate, or referee in bankruptcy 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;
(2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it;
(3) Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy;
(4) He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;
(5) He or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:
(i) Is a party to the proceeding, or an officer, director, or trustee of a party;
(ii) Is acting as a lawyer in the proceeding;
(iii) Is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding;
(iv) Is to the judge's knowledge likely to be a material witness in the proceeding.
(c) A judge should inform himself about his personal and fiduciary financial interests, and make a reasonable effort to inform himself about the personal financial interests of his spouse and minor children residing in his household.
(d) For the purposes of this section the following words or phrases shall have the meaning indicated:
(1) "proceeding" includes pretrial, trial, appellate review, or other stages of litigation;
(2) the degree of relationship is calculated according to the civil law system;
(3) "fiduciary" includes such relationships as executor, administrator, trustee, and guardian;
(4) "financial interest" means ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, except that:
(i) Ownership in a mutual or common investment fund that holds securities is not a "financial interest" in such securities unless the judge participates in the management of the fund;
(ii) An office in an educational, religious, charitable, fraternal, or civic organization is not a "financial interest" in securities held by the organization;
(iii) The proprietary interest of a policyholder in a mutual insurance company, of a depositor in a mutual savings association, or a similar proprietary interest, is a "financial interest" in the organization only if the outcome of the proceeding could substantially affect the value of the interest;
(iv) Ownership of government securities is a "financial interest" in the issuer only if the outcome of the proceeding could substantially affect the value of the securities.
(e) No justice, judge, magistrate, or referee in bankruptcy shall accept from the parties to the proceeding a waiver of any ground for disqualification enumerated in subsection (b). Where the ground for disqualification arises only under subsection (a), waiver may be accepted provided it is preceded by a full disclosure on the record of the basis for disqualification.
As amended Dec. 5, 1974, Pub.L. 93-512, § 1, 88 Stat. 1609.
1 U.S.Code Cong. and Admin.News, 93rd Cong.2d Ses.1974, pp. 1852-1854.
[1] In actuality, Commercial Carriers, Inc. is a wholly-owned subsidiary of American Commercial Lines, which is, in turn, wholly owned by Texas Gas Transmission.
[2] Commercial Carriers had sought to obtain the information early enough to include it with this response, and had delayed filing the response for that purpose. In spite of due diligence, however, Texas Gas Transmission has been unable to supply reasonably detailed information concerning its business dealings, and those of the Texas Gas Exploration subsidiary, with Union Oil on such notice. (See Affidavit of J. L. Hunt attached)
[3] Motion to Disqualify Silver, Rosen, Fischer & Stecher and Martin J. Rosen, filed December 4, 1974, denied by Order, January 27, 1975.
[4] Affidavit of Walter H. Young in Opposition to Continuance of Pre-Trial, filed September 10, 1975, continuance granted by Order, September 23, 1975.
[5] Indeed, Mr. Young, attorney for plaintiff and counterdefendants, has made almost identical statements himself. For example, during the deposition of William F. Sand, he commented:
"MR. YOUNG: If I am going to be harassed this way, I might as well go down and get an order from the Judge and recess the deposition and stop this harassment by you." Transcript at 106.
[6] See Commercial Carriers, Inc's Memorandum of Points and Authorities in Opposition to Motions to Dismiss, to Strike, and For a More Definite Statement, p. 12, filed December 9, 1974.
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