Kansas Public Employees Retirement System, In re

• Decision Date: 11 June 1996
• Docket Number: No. 95-4061,95-4061
• Citation: 85 F.3d 1353
• Parties: In re KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM, Petitioner.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1353

85 F.3d 1353

In re KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM, Petitioner.

No. 95-4061.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 11, 1996.

Decided June 11, 1996.

James W. Jeans, Sr., argued, Platte City, Missouri, for appellant.

Charles Walter German, argued, Kansas City, Missouri, for appellee.

Before McMILLIAN, JOHN R. GIBSON, and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

On December 7, 1995, Kansas Public Employees Retirement System (KPERS) filed a petition seeking a writ of mandamus directing the district judge ¹ to disqualify himself under 28 U.S.C. § 455(a), (b)(1), and (b)(5)(iii). In addition, KPERS filed a motion to stay the pending district court proceedings until this court ruled on the mandamus petition. After hearing oral arguments, we denied the stay. We now deny the petition.

I.

KPERS filed the basic underlying suit in which recusal is sought in Kansas state court in 1991, seeking damages allegedly sustained in 1986 in connection with KPERS' investments in Home Savings Association. Much of the litigation has involved attempts to control the choice of forum, with KPERS preferring a Kansas state court forum and the defendants preferring to bring this case to and keep it in federal court. After forging a winding trail, the case has again arrived at our doorstep. We set forth only those facts bearing on the issue before us--whether we should direct the district court to disqualify himself under 28 U.S.C. § 455. ²

On October 18, 1994, approximately two years after the case had been removed from Kansas state court to federal district court in the Western District of Missouri and assigned to the Honorable D. Brook Bartlett, United States District Judge, ³ three parties filed motions to intervene. These parties were Boatmen's First National Bank of Kansas City, Missouri (Boatmen's) and the law firms of Blackwell Sanders Matheny Weary and Lombardi, L.C. (Blackwell) and Shook Hardy & Bacon, P.C. (Shook). ⁴ Judge Bartlett immediately informed the parties that attorneys in Blackwell's trust, estate, and taxation departments had provided him routine estate planning advice, had probated his deceased father's estate, and were probating his mother's estate, of which Judge Bartlett was a primary beneficiary. Judge Bartlett explained that the estate planning work for him was substantially complete ⁵ and that he was seeking no further legal advice from the firm. The court asked the parties to anonymously submit in writing any objections to his presiding over the case by noon, November 3, 1994.

On October 26, 1994, Judge Bartlett sua sponte disqualified himself from presiding over the applications to intervene and had them reassigned to another federal district judge. ⁶ Judge Bartlett recused himself from deciding Boatmen's application because he owned stock in Boatmen's parent company. His disqualification from deciding Shook's and Blackwell's applications stemmed from a concern that his rulings on these applications would affect Boatmen's application. Boatmen's motion to intervene was eventually stayed, and Boatmen's then filed a separate declaratory judgment action over which Judge Bartlett does not preside. See Boatmen's First Nat'l Bank v. KPERS, 57 F.3d 638 (8th Cir.1995).

Noon, November 3, 1994, came and went, and no one, including KPERS, objected to the potential conflict involving Blackwell. That afternoon, however, another potential conflict arose. Shook advised the parties that it had offered a summer associate position to Judge Bartlett's daughter, Ms. Amanda Mook.

The following day, November 4, 1994, the court informed the parties that his daughter had accepted the offer from Shook and also that his son was probably a member of KPERS because he was the assistant city manager of the City of Hays, Kansas. The judge asked for comments on these matters, but no one offered any at that time.

The court followed up with a letter to the parties on November 9, 1994, restating the facts regarding his son and daughter and inviting anonymous objections to be submitted by November 21, 1994. KPERS, in a letter of November 18, 1994, expressing concern about Judge Bartlett's continued participation in the case because of his daughter's relationship with Shook, stated:

Previously, we expressed no objection to Judge Bartlett's continued role as judge in this litigation by reason of his involvement with the estate and probate attorneys at Blackwell Sanders. By itself, we did not believe that Judge Bartlett's involvement with the Blackwell firm warranted significant concern.

(App. Pet'r at 195.) In KPERS' letter of November 21, 1994, it stated:

Judge Bartlett previously notified the parties that he had retained Blackwell, Sanders for personal estate matters. The court required the parties to file by 12:00 p.m., November 3, 1994 notice of objections to Judge Bartlett continuing to preside over the case. All parties notified the court that they did not object.

(App. Pet'r at 173.) The letter then refers to the hiring of Judge Barlett's daughter by Shook, and continues:

Despite their previous waiver, the parties should not be precluded from asserting the Judge's retention of Blackwell, Sanders in conjunction with Shook, Hardy's hiring of Judge Bartlett's daughter or the matters related to Boatmen as grounds for recusal. While each situation alone might not constitute sufficient grounds, all situations considered together might.

Id.

The court addressed the pending objection at KPERS' specific request at a hearing on December 16, 1994. At that time, KPERS volunteered that it had submitted the November 18 and 21 letters, and asked the court to recuse himself. KPERS noted that, although Shook was not yet a party, a partner of Shook was, and the partner had brought an indemnity claim against Shook. Judge Bartlett declined to disqualify himself, because he was persuaded by KPERS' original argument that consideration of recusal was premature until Shook's motion to intervene had been granted.

On December 29, 1994, Judge Whipple granted Shook its motion to intervene. KPERS took no action to renew its recusal request. In denying Blackwell's motion to intervene, Judge Whipple, considering the question of whether Judge Bartlett would have to recuse if Blackwell were allowed to intervene, made the following statement: "Considering the intervention of Blackwell Sanders, KPERS has expressly waived any objection to Judge Bartlett continuing to preside over the pending litigation." (App. Pet'r at 210.) In the appeal to this court by Blackwell on the issue of intervention, KPERS in its brief made no issue as to whether Judge Bartlett would be required to recuse, or to request that he do so. We reversed the district court's denial and permitted Blackwell to intervene by our decision filed July 27, 1995. No motion for rehearing or suggestion for rehearing en banc was filed. So, by the end of July 1995, Blackwell's intervention was assured, and Judge Bartlett's daughter was working at Shook as a summer associate. Still, KPERS took no action to renew its recusal request. During the ten-month period between December 1994 and October 1995, the parties engaged in full-blown discovery, deposing more than 60 witnesses, disclosing dozens of expert witnesses, and producing millions of pages of documents. Although the parties participated in several pretrial conferences with the court, no one reasserted any issue of any potential conflict of interest on the part of Judge Bartlett during this period involving Boatmen's, Blackwell, or Shook.

In the meantime, on July 27, 1995, we reversed the district court's ruling on the applicable statute of limitations for this case. Our ruling held that the ten-year statute of limitations did not apply to this case, and we remanded for a determination of which of two shorter Kansas statutes of limitations applied. KPERS v. Reimer & Koger Assocs. Inc., 61 F.3d 608 (8th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 915, 133 L.Ed.2d 845 (1996). Shortly thereafter, KPERS filed a motion asking the district court to reconsider its April 1994 holding that KPERS was acting in a proprietary capacity and was thus subject to the statute of limitations--a decision KPERS did not attempt to appeal to this court. In addition, KPERS filed duplicative suits in Kansas state court and filed its third motion to remand this case back to state court. In response, the defendants filed motions seeking preliminary injunctions prohibiting KPERS from filing additional suits against the defendants. The district court granted the preliminary injunctions ⁷ and set a hearing for October 18, 1995, to address several issues, including KPERS' motion to remand the case to state court and KPERS' motion for reconsideration on issues relating to the statute of limitations.

On October 5, 1995, Shook notified the parties that it had offered Judge Bartlett's daughter a permanent position commencing September 1, 1996. On October 16, 1995, two days before the scheduled hearing, KPERS filed a motion requesting that Judge Bartlett disqualify himself, asserting the Blackwell, Boatmen's, and Shook employment issues. Defendants opposed the motion, stating that KPERS had filed the motion as a dilatory tactic to prevent the case from moving forward. The district judge postponed the hearing and denied KPERS' motion to disqualify on December 5, 1995.

On December 7, KPERS filed this petition, seeking a writ of mandamus ordering Judge Bartlett to disqualify himself from this case. KPERS also filed a motion to stay the district court proceedings pending our decision on the mandamus petition. After hearing oral arguments, we denied the motion for the stay. During the time between oral arguments and our decision on the petition, Judge Bartlett's daughter withdrew her acceptance of the associate position at Shook, deciding to reside and obtain employment in another city. We now decide the petition for a...