Federal Judge Steps Aside From High-Profile Amazon Case, Citing Financial Conflict

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Businesshala informs judge of his family’s Amazon stockholding; A new judge has been appointed

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In December, Judge O’Grady informed the parties in the case in Virginia federal court that his wife owned approximately $22,000 in Amazon stock. Following the Journal’s questions about Amazon Holdings, his wife’s investment advisor sold the stock on December 3. Judge O’Grady’s struggle in the case was the subject of a December 30 Journal article.

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In an order on Monday, Judge O’Grady said he was reluctant to set aside because his wife no longer had the stock and that the defendants in the case, who asked her to relinquish them, provided no evidence that she was on Amazon. were biased in favor of Judge O’Grady previously told the Journal that he did not know his wife owned shares of Amazon.

“However, the notion of a fair administration of justice—both by the public and the parties in the case—is of paramount importance to the Court,” Justice O’Grady wrote.

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The separation by Judge O’Grady, who has been on the bench since 2007, means a new judge will handle a hectic case with nearly 500 docket entries and more than 4,000 legal filings, which could lead to costly delays for litigants.

The case was handed over on Monday to Judge Michael Nachmanoff, who took his seat in the US District Court for the Eastern District of Virginia late last year.

The Amazon suit is one of 66 cases since 2010 that Judge O’Grady has heard in Alexandria, Va., Federal Court while his wife was invested in the plaintiff or defendant, a Journal review found. Judge O’Grady said in an email that he is reviewing his case lists and disclosure forms and will notify the parties to the conflict.

Their involvement in those cases violated a 1974 federal law that requires judges to disqualify themselves from cases involving parties in which they, their spouses, or their minor children have a financial interest, such as individual stock. Investments in mutual or index funds are exempt.

In a hearing in response to the defense’s request on January 6, Judge O’Grady said he had mistakenly believed his wife’s account was a mutual fund and “was not familiar with it.” He said a Georgia investment advisor handles all the business for his wife.

At the hearing, Judge O’Grady lamented an ethics arrangement in which “my docket is entirely dependent on the decisions of some Atlanta brokers as to which stock to buy and sell at any time when I have to wait for it until the end of the year.” No notice is received about it.” He termed it as a ‘trap’ for the district judges.

Federal law mandates that judges make reasonable efforts to inform themselves of their spouse’s financial interests. They are required by the federal judiciary to maintain a resale list of companies in which they or their families invest and update it regularly.

“Up-to-date recusal lists are the most effective tool for conflict screening,” Justice Roslyn Mauskoff, director of the US Courts of Administrative Office, said in an October memo sent to all judges.

Judge O’Grady, 71, is among 136 judges for whom the Journal has identified stock conflicts as part of a year-long investigation. Investigations and further reviews by judges contacted by the Journal have identified more than 950 cases since 2010 with contravention violations.

The Amazon case, filed in April 2020, focused on more than $400 million in development projects in northern Virginia, where Amazon has set up huge data farms. They are Amazon Web Services Inc., the cloud-computing arm of the retailer. of life.

The racketeering lawsuit alleges that two former employees awarded contracts to a developer, Northstar Commercial Partners, in exchange for a bribe of millions of dollars. Former employees and the developer have denied the allegations.

At last week’s hearing, Judge O’Grady said that “the idea that I would run the case in Amazon’s favor because I thought my wife’s $22,000 investment in Amazon stock would be at risk if I didn’t really — Almost insane.” He said he ruled against Amazon in a counterfeiting case in May.

An Amazon spokesperson, which opposed Judge O’Grady’s request for eviction, did not respond to a request for comment.

“We look forward to solving this case on merits,” said Stanley Garnett, attorney for Northstar founder Brian Watson. Former employees declined to comment.

Write Joe Palazzolo [email protected] . Feather

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