Legal Brief for July, 2022

Judicial Bias?

An important feature of a court system is that the litigants must receive as far as possible a fair and impartial hearing from the judge presiding over the case.  It is of course known that judges may have personal values and biases, including political ones, which may have an influence on how they decide cases.  It is however critical that judges not have a financial interest that may result in a bias in how they rule on a trial.  A recent decision from the U.S.  Federal Circuit Court of Appeals illustrates how scrupulous courts are to try to ensure that there is no taint or perception of bias that affects court decisions.

The parties were Centripetal Networks Inc., a company based in Virginia that provides internet security for businesses, and Cisco Systems Inc., a large U.S. corporation which provides computer networking services.  Centripetal sued Cisco for damages and royalties for allegedly copying, and using, five cybersecurity patents owned by Centripetal.  The trial Judge, namely Judge Henry Morgan of Norfolk, Virginia, found Cisco had infringed on the Centripetal patents.  He awarded a judgment against Cisco for $2.75 billion.  That was a massive win for Centripetal.  End of story?  Not quite.  

At some point during the trial Judge Morgan had learned that his wife owned 100 shares of Cisco, which were worth $4,688.00.  From the news reports of the case it appears that Judge Morgan disclosed this fact to the parties during the course of the trial, at which point he had advised the litigants that this "did not and could not influence" his handling of the case.

Cisco's lawyers thought otherwise, and they filed an appeal with the Court of Appeal, claiming that the Judge had a bias in the case.  That argument seems a little odd given that the Judge had just issued a huge verdict against Cisco, which would potentially have had the effect of lowering, albeit minutely, the value of his wife's shares.  Apparently that argument was of little concern to the Court of Appeal, as they based their decision on the concern that any perception of bias, however slight or unlikely to be of effect, must not be permitted to be present during the Court's handling of a case.  The decision of the Appeal Court stated:

• "It is seriously inimical to the credibility of the judiciary for a judge to preside over a case in which he has a known financial interest in one of the parties and for courts to allow those rulings to stand."

The case has been sent back to the trial court for another hearing of the original claim, likely much to the chagrin of Centripetal.  Not surprisingly a new judge has been assigned to the case.