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Judge's Stock Broker's Flub Led to Conflict in Unremarkable Case

By William Peacock, Esq. on May 07, 2014 | Last updated on March 21, 2019

The Center for Public Integrity recently completed an audit of federal appeals courts, checking financial disclosures against panel assignments for missed conflicts. On the surface, the results were worrisome: twenty-six definite conflicts over three years throughout the system. These were cases where a judge had a financial interest in one of the parties, or one of the law firms that represented the parties, and should've recused.

Well, so far, from our review of the conflicts, it's been much ado about nothing, with nearly all of the conflicts coming in unanimous decisions, most of which were nonprecedential and unpublished. Don't expect much more from the Tenth Circuit, as there was only one conflict unearthed -- an understandable mistake from a stock broker that led to a conflict in another unanimous decision.

In short, even if Judge Stephanie K. Seymour's stock broker had informed her of his purchase of Boeing stock, it wouldn't have made a difference, as two other judges on the panel were already voting in favor of the company in a clear cut case.

The Mistake

In a letter to the parties, the court's clerk explained that Judge Seymour and her husband have an arrangement with a stock broker who is allowed to purchase a limited amount of stock without prior authorization. However, according to a protocol set up by the judge, the broker is supposed to notify her of these purchases, whether for her or for her husband.

Judge Seymor was assigned to Allison v. Boeing on June 23, 2011. Oral arguments in were held on September 15. The Boeing stock purchases occurred on June 17 and 19, 2012, without the judge's knowledge. The unanimous opinion was circulated on July 27, and filed on August 10.

Clearly, there was a conflict, but the letter emphasizes that the judges were already in agreement before the purchase occurred, and again, even if Judge Seymour had been taken off the case, and another judge had subbed in and held the other way, it'd still be a 2-1 decision, which makes this pretty much a non-issue.

The Decision

If you're curious about what Allison v. Boeing entailed, it's about as anticlimactic as the conflict.

As we recapped in our previous coverage of the case, the federal enclave doctrine states that once a state has given land to the federal government, all state law in effect at that time applies to that land, but any future laws don't -- basically, the applicable state law is frozen at the time of transfer, unless the federal government explicitly adopts a state law passed after the transfer.

A Boeing employee was suing the company under state law causes of action that didn't exist as of the time of transfer in 1954.

Case closed.

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