Bernard, In re

• Decision Date: 29 July 1994
• Docket Number: No. 93-55255,93-55255
• Citation: 31 F.3d 842
• Parties: In re Alan BERNARD; Linda Bernard, Debtors. Alan BERNARD; Linda Bernard, Plaintiffs-Appellants, v. Jeffrey C. COYNE, Chapter 7 Trustee; Clement Sheaffer; Mary Sheaffer, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 842

31 F.3d 842

63 USLW 2131

In re Alan BERNARD; Linda Bernard, Debtors Alan BERNARD; Linda Bernard, Plaintiffs-Appellants, v. Jeffrey C. COYNE, Chapter 7 Trustee; Clement Sheaffer Mary Sheaffer, Defendants-Appellees.

No. 93-55255.

United States Court of Appeals Ninth Circuit.

July 29, 1994.

Richard M. Moneymaker, Moneymaker & Kelley, Los Angeles, CA, for plaintiffs-appellants.

William C. Sias, Epstein Becker & Green, Jamie R. Schloss, Los Angeles, CA, for defendants-appellees.

ORDER

KOZINSKI, Circuit Judge.

The parties to this appeal are the Bernards, debtors in a Chapter 7 bankruptcy proceeding pending in the Central District of California; creditors Clement and Mary Sheaffer; and Jeffrey C. Coyne, the Chapter 7 trustee. The central question presented in the case (which will not be answered here) is whether the trustee's objection to certain exemptions claimed by the debtors was timely.

Shortly after oral argument on June 8, 1994, the Bernards filed a motion asking that I disqualify myself under 28 U.S.C. Sec. 455, ¹ based on the fact that I am married to Marcy J.K. Tiffany, who is the United States Trustee for the Central District of California. ²

1. Who Rules on the Motion?

The initial decision whether or not to sit in a case rests with the individual judge. Under the canons of judicial ethics, every judicial officer must satisfy himself that he is actually unbiased toward the parties in each case and that his impartiality is not reasonably subject to question. To assist judges in carrying out this bias-check the parties are required to list those entities that have an interest in the case. See Fed.R.App.P. 26.1 & advisory committee's note. For the same reason, judges must file yearly financial disclosure reports, listing the entities in which they have an interest. 5 U.S.C. app. Secs. 101-102. The court also has various internal mechanisms--invisible to the litigants--to reduce the risk of conflict. For example, a judge may give the clerk of court a list of parties in whose causes he may not sit; the assignment of cases is then monitored to ensure that the judge is not assigned to cases involving those parties. If a judge notices a conflict in a case already assigned to him, he usually removes himself long before the parties learn of the assignment.

Despite these precautions, parties occasionally come to believe that a judge who has not disqualified himself should do so. They are entitled to file a motion for disqualification, as the Bernards have done here. Such a motion is filed in the case docket and referred to the full panel. However, the somewhat surprising (and not entirely comfortable) reality is that the motion is addressed to, and must be decided by, the very judge whose impartiality is being questioned. See, e.g., United States v. Sibla, 624 F.2d 864, 868 (9th Cir.1980); United States v. Balistrieri, 779 F.2d 1191, 1202-03 (7th Cir.1985) ("Section 455 clearly contemplates that decisions with respect to disqualification should be made by the judge sitting in the case, and not by another judge."). Neither section 455, nor the Federal Rules of Appellate Procedure, nor our local rules contain a mechanism for referring disqualification motions to someone else. ³ See Schurz Communications, Inc. v. FCC, 982 F.2d 1057 (7th Cir.1992) (Posner, J.) (other judges on panel decline to consider petition to disqualify third judge). Like it or not, therefore, the responsibility for ruling on the Bernards' motion devolves on me alone.

2. Do I Disqualify Myself?

The Bernards contend that my impartiality is subject to question because my wife has a stake in the outcome of the proceedings. In support of this claim they argue that my wife is Mr. Coyne's supervisor and therefore has an interest in the outcome of the case. They also point out that, by statute, the U.S. Trustee may herself participate as a party in every bankruptcy case; this potential participation, the Bernards argue, is enough of an interest to require my recusal.

Section 455 requires not only that a judge be subjectively confident of his ability to be evenhanded, but also that an informed, rational, objective observer would not doubt his impartiality. United States v. Winston, 613 F.2d 221, 222 (9th Cir.1980). After careful examination of the circumstances of this case, I have determined that my wife's position as U.S. Trustee does not affect my impartiality, as I do not feel any bias for or against any of the parties here.

The question of appearances is more difficult; human nature being what it is, we would all like to believe that no objective observer would ever doubt our impartiality. See SCA Servs., Inc. v. Morgan, 557 F.2d 110, 116 (7th Cir.1977) ("Because a judge must apply the standard [of section 455] both as its interpreter and its object, the general standard is even more difficult to define. [There is a] philosophical dilemma created by this objective-subjective conundrum...."). Fortunately, there is a source of objective advice for federal judges confronting sensitive disqualification questions. The Judicial Conference of the United States has established a committee, consisting of federal judges, "[t]o provide advice on the application of the Code of Conduct for United States Judges." Jurisdictional Statement of the Committee on Codes of Conduct of the Judicial Conference of the United States. Although judges are neither required to consult the committee nor bound by its rulings, the committee provides invaluable guidance and a detached viewpoint.

Mindful of the possibility that an objective observer might question my participation in this appeal, I wrote to the Committee on Codes of Conduct on April 28, 1994. I advised the committee of the role played by the United States Trustee in bankruptcy cases, and particularly in those brought under Chapter 7 of the Code. I noted that the U.S. Trustee and her staff are routinely involved in the administration of all Chapter 7 cases. The U.S. Trustee screens a panel of potential Chapter 7 trustees, 28 U.S.C. Sec. 586(a)(1), and is responsible for the assignment of panel members to individual cases, although the trustee is formally appointed by the bankruptcy court. The U.S. Trustee sets guidelines for Chapter 7 trustees, but she has no control over the legal positions taken in a case by an individual trustee. Once appointed, a Chapter 7 trustee can be removed from a case only by order of the bankruptcy court. 11 U.S.C. Sec. 324. The U.S. Trustee can, however, remove or suspend trustees from the panel for performance or other reasons.

I also noted that, from time to time, the U.S. Trustee's office participates substantively in individual cases. The U.S. Trustee can "convene and preside at" the initial creditors' meeting (the "341(a) meeting"). 11 U.S.C. Sec. 341(a); Fed.R.Bankr.P. 2003(a). She may herself serve as the trustee in a case, 28 U.S.C. Sec. 586(a)(2), although she rarely does. She may also intervene and appear at any level of the proceedings from the bankruptcy court on, 11 U.S.C. Sec. 307, as either a party or an amicus. Because the U.S. Trustee has no control over the legal positions taken by the Chapter 7 trustee, she occasionally takes positions before the court that are different from those of individual trustees.

On May 27, 1994, the Committee on Codes of Conduct responded to my inquiry. Commenting on the U.S. Trustee's supervisory role over Chapter 7 trustees, the committee focused on the

difference between supervisory control which is clerical as opposed to supervisory control which is discretionary. Clerical matters include the issuance of operating instructions to the debtors, the appointment of creditors committees, etc.

These ... perfunctory administrative tasks ... involve the United States Trustee in such a tangential way that you would not be required to recuse.

The committee then noted two circumstances where recusal would be advised. First, it wrote that

[u]nder ... circumstances where the United States Trustee is actually a party or where she has chosen to appear as amicus, we agree with your conclusion that you should recuse yourself.

Second, the committee advised that "in a high profile case involving your wife which could significantly aid or hinder her career, you would naturally be required to recuse."

I am persuaded by the committee's analysis, and conclude that I need not disqualify myself. The Bernards' case is a low-profile case where the U.S. Trustee's office has performed only routine administrative functions. Compare Katrina M. Dewey, Moral Bankruptcy, California Lawyer, July 1994, at 35. Although the U.S. Trustee is required to convene and preside at the 341(a) meeting, 11 U.S.C. Sec. 341(a), she may assign these functions to a designee. See id. Sec. 102(9) (" 'United States trustee' includes a designee of the United States trustee"). The Bernards don't allege that anyone from the U.S. Trustee's office actually conducted the 341(a) meeting in this case; instead, the Chapter 7 trustee was automatically designated and presided at the meeting. The Bernards don't allege that the U.S. Trustee or her staff have been involved in the case in any other substantive way, nor does the record disclose any such involvement.

The Bernards cite a memorandum from the U.S. Trustee to all Chapter 7 trustees as evidence of her direct involvement in their activities. ⁴ The administrative or managerial interest expressed in the memorandum is not the sort of substantive involvement in a particular case the committee suggested might warrant my recusal. Instead, it is precisely what the committee described as "clerical" supervisory control.

The Bernards also make what I understand to be a formalistic argument in support of their disqualification motion. They argue that because their brief, as well as that of the trustee, listed Marcy J.K. Tiffany as an interested party, everyone is estopped from denying that she is. Not so. Parties are...