Fed. Sec. L. Rep. P 98,948 in Re Sam M. Antar, Securities and Exchange Commission, Plaintiff-Respondent v. Sam M. Antar, Allen Antar, and Benjamin Kuszer, and Rori Antar, Sam A. Antar, Michelle Antar, Adam Kuszer, Sam Kuszer, Simon Kuszer, Rose Antar and Sam M. Antar, Relief Hon. Nicholas H. Politan, United States District Judge for the District of Newark, Nominal
Docket: 95-5283
Court: Court of Appeals for the Third Circuit; November 27, 1995; Federal Appellate Court
Petitioner Sam M. Antar seeks a Writ of Mandamus for the disqualification of a district judge overseeing a civil action by the Securities and Exchange Commission (SEC) against him and other family members. This petition arises after the same judge presided over a previous criminal case involving Antar's sons, Eddie and Mitchell, who were convicted of conspiracy related to securities and mail fraud; their convictions were later overturned, leading to the judge's disqualification due to perceived bias. The appellate court found that the judge's remarks during the criminal proceedings suggested a prejudice against the Antar family, particularly relating to the judge's intentions to recover funds from them.
The court must evaluate whether the earlier disqualification impacts the current SEC case, which similarly seeks to recover funds from the Antar family and involves allegations of a longstanding fraudulent conspiracy linked to their electronics retail business, Crazy Eddie. The court concludes that due to the prior ruling and the judge’s comments regarding family involvement in the conspiracy, disqualification is warranted in the SEC proceedings to ensure fairness and avoid any appearance of bias.
Eddie and Mitchell Antar, central figures in the Crazy Eddie case, had their criminal convictions overturned due to the district judge's failure to recuse himself amid concerns of bias. The current SEC civil action involves Sam Antar, their father, who faces charges linked to the same conspiracy. Sam Antar contends that the alleged judicial bias affecting his sons' convictions necessitates the judge's recusal in his case as well. He references the judge's comments during a hearing regarding the bail money posted for Mitchell Antar, where the judge indicated that all aspects of the case are interconnected and expressed skepticism about Sam's claim of innocence, stating he cannot ignore evidence suggesting Sam's involvement in the conspiracy. The judge emphasized the importance of comprehensive discovery before making decisions about the execution of financial claims, asserting a commitment to ensuring that rightful ownership of the funds is determined. Sam's counsel expressed concern over the judge's statements, but the judge reiterated the relevance of prior testimony in the case.
The court acknowledges that it has not made a factual finding but is aware of the testimonies provided by the brother and nephew of the defendant, Sam Antar. The court emphasizes that it cannot ignore the evidence presented during the trial, which includes relationships and financial matters relevant to the case. Sam Antar argues that the judge's comments indicate a predetermined stance regarding his involvement in the fraudulent activities associated with Crazy Eddie, especially based on statements made during the sentencing of Eddie Antar, where the judge expressed a desire to recover funds taken through fraud. This perception of bias led to the reversals of Eddie and Mitchell Antar's convictions, as the judge's intent to recover what was taken seemed to implicate them both.
The court has jurisdiction to review a petition for writ of mandamus under the All Writs Act, and while it is cautious in granting such writs, it recognizes that mandamus can be a means to review a judge's refusal to recuse themselves. The review of a judge's decision to hear a case after a recusal challenge is conducted under an abuse of discretion standard. The focus of this review is on the objective appearance of bias rather than the judge's subjective feelings. The court notes the importance of maintaining public confidence in the judiciary while being aware that claims of bias may sometimes be attempts to evade unfavorable rulings. Thus, the court approaches the evaluation of the judge's impartiality with caution, considering all circumstances to determine whether the refusal to disqualify was an abuse of discretion.
Sam Antar invokes the federal recusal provision under 28 U.S.C. § 455(a), without referencing other disqualification bases like those in § 455(b). Previous rulings indicate that mandamus is not suitable for reviewing challenges under 28 U.S.C. § 144. Consequently, the analysis will focus on § 455(a), which mandates a federal judge to recuse themselves if their impartiality could reasonably be questioned. The Supreme Court's interpretation in Liteky v. United States emphasizes that the pivotal issue for recusal is the appearance of bias or prejudice, independent of the source of that bias. The Court clarified that the judge's ability to render a fair judgment is paramount, rather than the origin of their prejudicial knowledge.
In relation to the current case, prior decisions, particularly Antar II, illustrate that indications of improper purpose from a judge can undermine their obligation to provide a fair trial. The judge's biased remarks about the Antar family establish a conflict with due process rights, which guarantee a trial by an impartial judge. This bias is recognized in the context of an SEC proceeding, where the SEC seeks to compel the Antars to return funds obtained through fraudulent activities. The judge's statements demonstrate a wrongful bias against the Antar family, necessitating his disqualification in the SEC matter, as they indicate a strong antagonism that could affect the fairness of the judicial process.
The district judge's intention to recover funds for the investing public from the Antars' schemes created an impression of bias, suggesting an alignment with the SEC in a civil case. This perception of favoritism undermined the fairness of the judgment, as established by precedents in Liteky and Bertoli. The combination of the judge's comments during Eddie Antar's sentencing and the bail proceedings for Sam Antar indicated a level of bias that necessitates recusal. Consequently, the Petition for Writ of Mandamus is granted, mandating that all future proceedings in SEC v. Antar be conducted by a different district judge appointed by the Chief Judge of the District of New Jersey. The petition includes Sam Antar and his co-defendants, who do not present further arguments. The court refrains from determining whether the judge should be disqualified based solely on the bail proceeding comments, as the decision is already warranted by the sentencing hearing remarks.
