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Bankruptcy Services, Inc. v. Ernst & Young (In re CBI Holding Co.)

Citations: 424 F.3d 265; 2005 WL 2335185Docket: Docket Nos. 04-5972-BK(L), 04-6300-BK(XAP)

Court: Court of Appeals for the Second Circuit; September 26, 2005; Federal Appellate Court

Narrative Opinion Summary

The case involves considerations of judicial ethics related to employment negotiations and recusal. In late spring 2000, a conversation took place between Circuit Judge Winter and a member of a law firm representing a party in an ongoing legal matter. The discussion was about Judge Winter's potential retirement and interest from the law firm in employing him, though specifics were not discussed. Shortly after, Judge Winter decided to continue his judicial duties. According to the United States Judicial Conference’s Committee on Codes of Conduct, judges may explore employment opportunities while contemplating retirement, provided they recuse themselves from related cases during negotiations and for a reasonable time afterward. Judge Winter decided not to recuse himself from the current case, reasoning that five years had elapsed since the general conversation and thus recusal was not warranted. The decision underscores the application of recusal requirements in situations where potential employment discussions with a law firm occur but do not result in employment or further negotiations.

Legal Issues Addressed

Application of Recusal Guidelines Post-Negotiations

Application: Judge Winter determined that recusal was unnecessary in the current matter as five years had elapsed since the general employment discussion, deeming the recusal period reasonable given the nature of the discussions.

Reasoning: Judge Winter concluded that since five years had passed and discussions were general, he was not required to recuse himself from the current matter.

Judicial Recusal under Employment Negotiations

Application: A judge is permitted to explore employment with law firms while considering retirement but must recuse themselves from cases involving those firms during ongoing negotiations and for a reasonable period thereafter.

Reasoning: The United States Judicial Conference’s Committee on Codes of Conduct permits judges to explore employment with law firms while considering retirement, provided they recuse themselves from cases involving those firms during negotiations and for a reasonable period thereafter, contingent on the nature of discussions.