U.S. v. Jordan

• Decision Date: 24 March 1995
• Docket Number: No. 93-2376,93-2376
• Citation: 49 F.3d 152
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Betty JORDAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 152

49 F.3d 152

UNITED STATES of America, Plaintiff-Appellee, v.Betty JORDAN, Defendant-Appellant.

No. 93-2376.

United States Court of Appeals Fifth Circuit.

March 24, 1995.

Jack B. Zimmermann and Michael C. Gross, Zimmermann & Lavine, Houston, TX, for appellant.

Richard A. Friedman, D.R. Millard, III, and Lawrence D. Finder, U.S. Atty., Crim. Div., Dept. of Justice, Washington, DC, for appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before REYNALDO G. GARZA, WIENER and EMILIO M. GARZA, Circuit Judges.

REYNALDO G. GARZA, Circuit Judge:

Defendant appeals her convictions of wire fraud and money laundering.We find that the district judge abused her discretion for failing to recuse herself pursuant to 28 U.S.C. Sec. 455(a), as the facts underlying this case create an appearance of impropriety.After reviewing the record we have concluded that the conviction should stand.The sentence, however, must be vacated in order to maintain the integrity of the judicial system.Accordingly, we ask the Chief Judge of the Fifth Circuit to designate a judge outside of the Southern District of Texas to resentence Appellant and hold any other appropriate proceedings necessary to effectuate this opinion.

Background

Defendant and her husband owned the Houston-based trucking company, Irish & Cherokee Transportation, Inc.(ICT).Defendant directed the financial operations of ICT.Redex, a Salt Lake City-based corporation, was engaged in the business of factoring trucking company's freight invoices.¹ ICT executed an agreement with Redex in February of 1987 to sell its overdue accounts receivable to Redex.

Defendant fabricated invoices by creating forty-five company names to identify purported shippers with which ICT did business.These fictitious invoices were then combined with legitimate invoices and sent to Redex.ICT factored over 500 invoices through Redex during the period alleged in the indictment.The total loss suffered by Redex due to the fictitious accounts totalled approximately $800,000.00.Defendant transferred the factored funds through several banks in different states by wire transfer.

On June 25, 1992, in the United States District Court for the Southern District of Texas, Defendant was indicted for wire fraud and money laundering.After a jury trial, Defendant was convicted of two counts of money laundering and nine counts of wire fraud.The Honorable Judge Melinda Harmon sentenced Defendant to concurrent terms of five years' imprisonment for each wire fraud conviction, and to consecutive terms of twenty years' imprisonment for the money laundering convictions.²Defendant was also ordered to pay the unpaid balance of $418,921.00.This appeal ensued.

I.

The substance of Appellant's complaint is that, because of the relations between Judge Melinda Harmon and Michael Wood, the publicity and bad feelings arising from a series of legal incidents that occurred several years earlier, and the lengthy sentence term imposed, a reasonable person would question Judge Melinda Harmon's impartiality.Courts have repeatedly expressed the importance of an impartial judiciary: "[o]ne of the fundamental rights of a litigant under our judicial system is that he is entitled to a fair trial in a fair tribunal, and that fairness requires an absence of actual bias or prejudice in the trial of the case."United States v. Wade, 931 F.2d 300, 304(5th Cir.)(quotingUnited States v. Brown, 539 F.2d 467, 469(5th Cir.1976)), cert. denied, 502 U.S. 888, 112 S.Ct. 247, 116 L.Ed.2d 202(1991);In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 625, 99 L.Ed. 942(1954).The right to a fair and impartial trial is fundamental to the litigant; fundamental to the judiciary is the public's confidence in the impartiality of our judges and the proceedings over which they preside."Justice must satisfy the appearance of justice."In re Murchison, 349 U.S. at 136, 75 S.Ct. at 625.This is the very purpose of 28 U.S.C. Sec. 455(a);Section 455(a) provides that a judge shall recuse herself from any proceeding in which her impartiality might reasonably be questioned.The Supreme Court, in Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847, 860-61, 108 S.Ct. 2194, 2203, 100 L.Ed.2d 855(1988), described the standard as whether a reasonable and objective person, knowing all of the facts, would harbor doubts concerning the judge's impartiality.³"The goal of section 455(a) is to avoid even the appearance of partiality."Id. at 860, 108 S.Ct. at 2203.Put simply, avoiding the appearance of impropriety is as important in developing public confidence in our judicial system as avoiding impropriety itself.

In 1989, Appellant owed a judgment in state court.⁴Michael Wood was appointed receiver over ICT, Appellant's company.Both sides concede that a hostile relationship developed between Michael Wood and Appellant due to the receivership appointment.On November 21, 1989, Appellant allegedly attempted to drive a truck off ICT property in violation of the receivership arrangement.Michael Wood attempted to stop her.Appellant's daughter interposed her car between Michael Wood and Appellant, effectuating Appellant's escape.On November 29, 1989, Michael Wood filed a motion for contempt in the civil bankruptcy receivership case.The state district court granted the motion and Appellant was placed in custody.On appeal the order was overturned.On January 5, 1990, Michael Wood filed theft charges against Appellant and her daughter.On February 1, 1990, ⁵Appellant's daughter filed criminal assault charges against Michael Wood for slapping and threatening her as well as for running into her car.Michael Wood was arrested and incarcerated.Francis Harmon, Judge Melinda Harmon's husband, represented Michael Wood in this criminal proceeding.Finally, in 1992, Appellant was indicted for wire fraud and money laundering involving ICT, the same company for which Michael Wood was appointed receiver.

Michael Wood and Judge Sharolyn Wood, Michael Wood's wife, were law school classmates of Judge Melinda Harmon and her husband.They were friends of twenty-two years as of the time of the above-mentioned incidents.In fact, Francis Harmon is quoted as stating that he did not visit the district attorney concerning the assault charges as Michael Wood's attorney but as his friend.Francis Harmon and Michael Wood had been law partners for six years.

It is clear that there exists no small amount of resentment and animosity, if not blind hatred between Michael Wood and Appellant.The question is whether Judge Melinda Harmon's friendship with Michael Wood might cause a reasonable person, who knew of the underlying facts, to harbor doubts about Judge Melinda Harmon's impartiality; whether their long and continuous friendship and the above-discussed incidents raise a Section 455(a) appearance.Because recusal motions are committed to the sound discretion of the district court, the issue on appeal is whether the court abused its discretion by answering the above question in the negative.

II.

We hold that the reasonable person would harbor doubts about Judge Melinda Harmon's impartiality.Liljeberg held that Section 455(a) is an objective inquiry.This is essential when the question involves appearance.Therefore, we ask how things appear to the well-informed, thoughtful and objective observer, rather than the hypersensitive, cynical, and suspicious person.SeeIn re Mason, 916 F.2d 384, 386(7th Cir.1990).The Seventh Circuit recognized the problem with implementing this objective standard.Id.Judges must ascertain how a reasonable person would react to the facts.Problematic is the fact that judges do not stand outside of the judicial system; they are intimately involved in the process of obtaining justice.Judges who are asked to recuse themselves are reluctant to impugn their own standards.Likewise, judges sitting in review of others do not like to cast aspersions."Yet drawing all inferences favorable to the honesty and care of the judge whose conduct has been questioned could collapse the appearance of impropriety standard under Sec. 455(a) into a demand for proof of actual impropriety."Id.Accordingly, we are mindful that an observer of our judicial system is less likely to credit judges' impartiality than the judiciary.

The Fifth Circuit has established a body of case law applying the Section 455(a) standard.Unfortunately, but not surprisingly, no case is precisely on point; after all, each Sec. 455(a) case is extremely fact intensive and fact bound, and must be judged on its unique facts and circumstances more than by comparison to situations considered in prior jurisprudence.This Court has ruled, in factually limiting circumstances, that friendship between the judge and a person with an interest in the case is not sufficient grounds to reverse a judge's failure to recuse.⁶ Nevertheless, the facts before us create a Section 455(a) appearance.The judges's close personal friend, a prominent and successful Houston lawyer, was accused of criminal assault; it appears that he was the subject of an abuse of criminal process through charges brought by Appellant.⁷Michael Wood and Appellant were embroiled in a series of vindictive legal actions resulting in a great deal of publicity, potentially besmirching Michael Wood's name.Some of that publicity brought out the fact that Michael Wood's wife was a state district judge, and brought out the relationship between Michael Wood and Judge Melinda Harmon's lawyer-husband.Under these particular circumstances, is what happened to Michael Wood enough to cause a reasonable person to doubt the impartiality of Judge Melinda Harmon--Michael Wood's good friend, Michael Wood's wife's good friend, and Michael Wood's lawyer and former partner's wife--as she plays no small part in determining the fate of the person who caused Michael Wood to be incarcerated?We...