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A Judicial Canon? Judge Feldman’s Decision To Halt the Moratorium June 26, 2010

Posted by legalethicsemporium in Law, Ethics & Society.
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The publicity has been nonstop since Judge Feldman’s order that granted a preliminary injunction to prevent the Interior Department from imposing a six month moratorium on deep water drilling.  The media and bloggers have been incessantly discussing the fact that Judge Feldman has owned  stock in oil companies, but have failed to adequately explain the legal basis upon which he issued the order.

Apparently, Judge Feldman has received  death threats  as his order has resulted in a media explosion.  So, let’s “unwrap” the issues….The easier, first issue (and probably the more “sexy” one for media purposes) is whether Judge Feldman should have recused himself from the case so that it could be assigned to another  judge who did not own any related industry stock.  The second, and arguably more important, issue is  whether Judge Feldman applied the correct legal standards to issue a valid and legally defensible opinion in the case.

So, issue one pertains to the  Code of Conduct for United States Judges.  This code prohibits a judge from engaging in behavior that creates an appearance of impropriety and from hearing a case in which the judge has a financial interest. (See Canons 2 & 3 of the Code) Generally, the appearance of impropriety is a somewhat vague standard that is designed to promote the public confidence in the fair administration of justice. 

 The financial conflict of interest standard is more specific and requires the judge to disqualify himself if he has any specific financial interest in the outcome of the case.  This requirement contemplates that a judge will defer the case to another judge even if the interest is as  a result of a sole share of stock, owned by the judge’s spouse,  in a company that is a party to the action.  On the other hand, an investment in a mutual fund that owns securities does not constitute a financial interest in those securities unless the judge participates in the management of the fund.

It is a bit difficult to ascertain exactly what Judge Feldman has owned since he has become a judge, but the relevant question is whether he owned any stock in a company implicated in his ruling.  All reports seem to indicate that he did not own stock in any of the companies that  are parties to the case, but did realize before he ruled that he owned a small amount of Exxon Mobile stock.  He instructed his broker to sell the stock before ruling on the case because Exxon does operate a rig in the Gulf of Mexico and is affected by the moratorium even though not a party to the case.

Thus, while legal ethics scholars may debate whether Judge Feldman should have disqualified himself or sold his stock earlier, it seems clear that Judge Feldman engaged in a thoughtful approach and does not appear to have decided the case based upon personal gain.   But, what about his decision?  Now, that we have gotten beyond his stock holdings, why did Judge Feldman issue an injunction to prevent the start of the moratorium?

The answer lies in an analysis of the application of administrative law and the standards for judical review of an agency action. Administrative law professors should be all over this case as soon as school starts this fall.   Huh? What?  Okay, so that’s why you are not reading much about the actual decision.   It is a tedious subject with lots of moving parts. As a veteran student and novice instructor, let me try to simplify….

Essentially, the Administrative Procedure Act, along with other statutes, governs various federal agencies’ conduct and when and how that conduct is reviewable by a federal court.  Judge Feldman acknowledges in his order that he must uphold the Interior Department Secretary’s decision unless there is a showing that it is  “arbitrary, capricious,an abuse of discretion,or not otherwise in accordance with the law.”  An agency decision may fall into this category when it is not supported by the agency’s own record, is implausible, and/or lacks a “rational connection between the facts found and the choice made.” (The legal cites that support these quotes are available in the order linked above.)

Judge Feldman applied this standard in his opinion and was dismayed by the lack of specific evidence presented to support the need to halt 31% of our domestic oil production and impact over 150,000 jobs by a widespread moratorium.  If you read the opinion, it becomes clear that even some of the experts that the Interior Department relied upon did not see the final draft of the report relied upon by the Secretary of Interior and do not support a wide spread moratorium.   There are other discrepancies noted such as the fact that the report and the experts talk about the complications of deep water drilling and define deep water as 1000 feet, while the Secretary’s moratorium order defines deep water as 500 feet.

While the media is reporting that Judge Feldman ruled against President  Obama ,and that is perhaps technically correct because the agency is part of the executive branch, Judge Feldman actually ruled against the Interior Department by telling it to get some more specific support for its desire to institute such a drastic action. In other words,  Judge Feldman concluded that there isn’t a rational connection between the facts presented and the choice made by the Interior Department.

Come to think of it… Judge Feldman is not the only one that has recently questioned the competence of the Interior Department and its bureau, the Mineral Management Service.  Actually, the Interior Department called for its own internal investigation before the BP accident and released a report recently detailing activities that its own Secretary Salazar called “deeply disturbing.”  An inspector negotiating for employment from the company that he was inspecting, illegal drug use, and inappropriate gifts and use of government equipment just to name a few of the activities noted.

It is not clear yet whether any of these activities directly contributed to the BP disaster, or whether Judge Feldman’s order will be upheld on appeal,  but what is clear is that Judge Feldman’s concerns and order are entitled to consideration beyond the context of his stock holdings.  So, please, before contributing to the media rant about Judge Feldman, read his order, read the administrative record and then let’s continue the conversation.


1. Ruth - June 27, 2010

This matter is extremely complicated. It seems to me that Judge Feldman should have recused himself at the get-go. That action would have simplified one of the issues but would not have solved them all.

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