Fredonia Broadcasting Corp., Inc. v. RCA Corp.
| Decision Date | 08 March 1978 |
| Docket Number | No. 75-2702,75-2702 |
| Citation | 569 F.2d 251 |
| Parties | FREDONIA BROADCASTING CORPORATION, INC., Plaintiff-Appellee, v. RCA CORPORATION, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
James E. Coleman, Jr., Marvin S. Sloman, Earl F. Hale, Jr., Dallas, Tex., for defendant-appellant.
Joseph Jamail, John Gano, Houston, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Eastern District of Texas.
Before TJOFLAT and HILL, Circuit Judges, and MAHON *, District Judge.
This diversity case is before us for the second time. Briefly, RCA Corporation (RCA) entered into a contract with Fredonia Broadcasting Corporation (Fredonia) to sell to Fredonia UHF color television broadcasting equipment for the operation of a television station in Lufkin, Texas. This station began broadcasting on July 30, 1969, and ceased operation on March 18, 1970. Fredonia then sued RCA for fraud, for breach of the sales contract, and for breach of warranty, seeking actual and exemplary damages totalling $2,650,000. RCA counterclaimed for $506,333.80, the amount not yet paid for the equipment, plus interest and attorneys' fees. The jury, in a special verdict, 1 found in favor of Fredonia and awarded $850,000 in actual damages and $150,000 in exemplary damages. As for the counterclaim, the jury's response to the court's questions required the court to enter judgment in favor of Fredonia.
RCA appealed, claiming error in the trial court's treatment of both the liability and the damages issues involved in Fredonia's claims. RCA also asserted that the district court erred in not granting it a directed verdict on the counterclaim. A panel of this court found reversible error in the instructions under which the district court had submitted Fredonia's claim of fraud to the jury and remanded the case for a new trial. 2 The panel also set aside Fredonia's judgment on the counterclaim. 3
On remand, Fredonia, following pretrial conferences in which the liability issues were narrowed, proceeded to trial on its claim of fraud. The jury again found for Fredonia, awarding $1,000,000 in actual damages and $750,000 in exemplary damages. On RCA's counterclaim, the court awarded $511,182.11, the amount due for the equipment on the date of Fredonia's default in payment and the costs awarded on the first appeal. In this second appeal, RCA seeks reversal of the judgment against it on two principal grounds. The first stems from the trial judge's disposition of RCA's pretrial motion for disqualification of either Fredonia's counsel or the trial judge from further involvement in the case. The second concerns, once again, the judge's instructions to the jury on damages. With respect to the counterclaim, RCA asserts error in the court's failure to include in the judgment an amount representing the interest accumulated on the balance due on the equipment. 4
The principal issue in this appeal involves the trial judge's course of action when faced with RCA's oral motion, made at a pretrial hearing on April 1, 1974, for the disqualification of either Fredonia's counsel or the judge. That motion formally brought to the trial judge's attention the appearance of impropriety created by the participation in the case of one of his former law clerks, an associate in the law firm representing Fredonia. Apparently, the judge had already known of the former law clerk's association with Fredonia's counsel because the judge had previously written to him and RCA's counsel of record about a pending pretrial matter. The former law clerk was present at the April 1 hearing. During the hearing, it was pointed out that he had been on the judge's staff during the first trial of the action. RCA suggested that the former law clerk had therefore acquired intimate knowledge of the case and of the judge's inclinations about the issues involved. RCA's counsel consequently questioned the propriety of allowing the case to go forward without the withdrawal from the case of either the trial judge or Fredonia's counsel.
On April 26, 1974, the district judge denied RCA's motion. In its order denying the motion, the court acknowledged that the former law clerk, had, as law clerk, "worked on the case when it was tried for the first time" and that he had "participated in the recent proceedings in the case," but was of the opinion that this was not a sufficient ground to disqualify Fredonia's counsel from further participation in the case. The order also recited that the former law clerk, according to Fredonia's counsel, would "participate no further in this case." The court thus determined that the recusal of the trial judge would serve no useful purpose.
In deciding not to disqualify Fredonia's counsel, the district judge considered the ethical canons and the rules promulgated by the Supreme Court and the Court of Appeals for the First Circuit. 5 Although these rules explicitly forbid a former law clerk from participating in a case which was pending before the court during his term of service, the district judge found the absence in this Circuit of a formal rule of that nature to be important. This was an erroneous assumption by the district judge. These rules are express safeguards of the integrity of the judicial process, a concern of all courts. The district judge correctly noted that the canons and rules do not require disqualification of an entire law firm when the propriety of a former law clerk's participation in a case is drawn in question. Under the facts presented in this case, however, we need not delve into the problems involved in disqualifying a party's counsel.
The question here centers instead on the disqualification of the trial judge. Once it appeared that Fredonia might have an unfair advantage in the litigation because its counsel included a lawyer who had been exposed to the trial judge's innermost thoughts about the case, the trial judge had no alternative to disqualifying himself. No matter how many assurances were given by Fredonia's counsel that the former law clerk would withdraw from the case, we think it clear that the propriety of continuing the proceedings before this district judge had been irrevocably tainted, and the impartiality of the judge had been reasonably questioned.
In order fully to appreciate the role of a law clerk and to evaluate the taint of impropriety that occurred in this case, we consider it appropriate to note briefly the role of law clerks in our judicial system. Historically, the practice of employing federal judicial law clerks began in 1882 when Justice Horace Gray was appointed to the Supreme Court. Justice Oliver Wendell Holmes, who continued this practice when he succeeded Justice Gray, termed law clerks "puisne judges." Congress has provided that "district judges may appoint necessary law clerks." 28 U.S.C. § 752 (1970). The law clerk has no statutorily defined duties but rather performs a broad range of functions to assist his judge. A judicial clerkship provides the fledgling lawyer insight into the law, the judicial process, and the legal practice. The association with law clerks is also valuable to the judge; in addition to relieving him of many clerical and administrative chores, law clerks may serve as sounding boards for ideas, often affording a different perspective, may perform research, and may aid in drafting memoranda, orders and opinions. 6
This general knowledge and experience is an invaluable asset to the law clerk and his subsequent utilization of the knowledge is to be encouraged. See generally K. Llewellyn, The Common Law Tradition: Deciding Appeals, 321-23 (1960). A law clerk, by virtue of his position, is obviously privy to his judge's thoughts in a way that the parties cannot be. We are not holding that a former law clerk may never practice before the judge for whom he clerked. Such a holding would clearly be unwarranted and would cast an undue burden on the law clerk. Moreover, it would hinder the courts in securing the best qualified people to serve as law clerks. What is offensive here is that the district judge seemed to countenance the notion that the law clerk could improperly use the specific knowledge gained from working with him on this particular case. The impartiality of a trial judge is seriously open to question when the judge refuses to recuse himself after being made aware that his former law clerk is actively involved as counsel for a party in a case in which the law clerk participated during his clerkship.
In addition to the possibility that Fredonia might have an unfair advantage because of its counsel's former association with the trial judge, we are concerned with the "purity of the judicial process and its institutions." Kinnear-Weed Corp. v. Humble Oil & Refining Co., 403 F.2d 437, 439-40 (5th Cir. 1968), cert. denied, 404 U.S. 941, 92 S.Ct. 285, 30 L.Ed.2d 255 (1971). The Supreme Court has repeatedly stated that "justice must satisfy the appearance of justice." Offutt v. United States, 348 U.S. 11, 14, 75 S.Ct. 11, 13, 99 L.Ed. 11 (1954); accord, In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 625, 99 L.Ed. 942 (1955); Tumey v. Ohio, 273 U.S. 510, 532, 47 S.Ct. 437, 444, 71 L.Ed. 749 (1927). The Code of Judicial Conduct for United States Judges, approved by the Judicial Conference of the United States, expresses concern that the judicial system be protected from the appearance of impropriety in the eyes of both the parties and the general public.
A judge should avoid impropriety and the appearance of impropriety in all his activities.
A. A judge . . . should conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary.
Code of Judicial Conduct for United States Judges, Canon 2 & 2 A. The Commentary to Canon 2 states that
(p)ublic confidence in the judiciary is eroded by irresponsible or improper...
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