Judge in N.Y. Trump Fraud Civil Case Refuses to Recuse

From Thursday's decision in People v. Trump, by N.Y. trial judge Arthur Engoron:

This action, familiarity with which the Court assumes, arises out of a years-long investigation that plaintiff, the Office of the Attorney General of the State of New York ("OAG"), conducted into certain business practices that defendants engaged in from 2011 through 2021. OAG alleged that the individual and entity defendants committed repeated and persistent fraud by preparing, certifying, and submitting to lenders and insurers false and misleading financial statements, thereby violating New York Executive Law § 63(12).

In a Decision and Order dated September 26, 2023, this Court granted plaintiff summary judgment only on liability and only on the first cause of action.

On February 16, 2024, following a three-month trial, this Court issued a Decision and Order After Non-Jury Trial finding defendants liable on the remaining six causes of action. The Court ordered certain injunctive relief, including the continuation of the Hon. Barbara Jones (ret.) as an Independent Monitor of the Trump Organization, which obligates the Court to maintain jurisdiction over this action despite the trial's conclusion.

On May 8, 2024, NBC New York reported that Adam Leitman Bailey, Esq., a lawyer with no connection to this case, boasted that several weeks before I issued the Decision and Order After Non-Jury Trial, he "approached the judge presiding over Donald Trump's civil fraud case to offer unsolicited advice about the law at issue in the case."

On July 11, 2024, this Court so-ordered, in part, defendants' subpoena to Bailey, directing him to disclose any documents or communications in his possession that involve, discuss, or in any way refer to this action.

Defendants now move, pursuant to 22 New York Administrative Code § 100.3(E)(1), for me to recuse myself, or, in the alternative, for an evidentiary hearing before another justice on the communications and their potential impact on the Court's decision.

The Unsolicited Ex-Parte Communication

Sometime in or about February of this year, several weeks before I issued the Post-Trial Decision and Order, at the end of the business day, I left my robing room in the courthouse at 60 Centre Street and rode an elevator down to the main floor. There, on the outskirts of the famous rotunda, Bailey accosted and started haranguing me about Executive Law § 63(12). He did not relay any alleged facts.

{Of course, the irony here is that defendants, whose position Bailey was ostensibly promoting, is moving for me to recuse myself, and plaintiff, whose position Bailey was ostensibly controverting, opposes the motion. This suggests that defendants are not motivated by ethical concerns but, rather, seek an opportunity to reverse the trajectory and outcome of this case.}

Prior to that time, I considered Bailey a professional acquaintance and a distant friend. His sudden appearance and vehement speech took me aback, and I simply told him that he was wrong. He trailed after me, still droning on, as I descended the Judge's stairs to the street level. I entered my vehicle without saying another word (except, perhaps, "goodbye") and departed.

For approximately three and a half years prior to this unpleasant occurrence, starting in September 2020, I had researched § 63(12) intensely and had issued many rulings, including preliminary injunction and summary judgment decisions, based on it. I certainly did not need a landlord-tenant lawyer ranting about it. I did not initiate, welcome, encourage, engage in, or learn from, much less enjoy, Bailey's tirade. I did not base any part of any of my rulings on it, as Bailey has outlandishly, mistakenly, and defamatorily claimed. The entire 90-second incident, after three and a half years of studying and being immersed in § 63(12), was, to use the vernacular, a "nothingburger." I would have forgotten all about it by now had Bailey not attempted to burnish his reputation as someone who could influence judges (which would be unethical, and possibly illegal, but of which Bailey nonetheless publicly boasts).

Due to extensive news coverage of the subject trial, passersby often recognize and confront me on the street, at parties, in parks, in restaurants, and on public transportation. Sometimes their unsolicited words are complimentary. Sometimes they are derogatory. Never do they affect my rulings. As with my forced encounter with Bailey, I feel no need to report these fleeting incidents.

Defendants purport to rely on the rule that a judge may consult an expert only under certain conditions. I did not consult Bailey, and I certainly do not consider him an expert on Executive Law § 63(12)….

Defendants' Arguments

In support of their motion, defendants cite to an array of opinion editorials and blogs (from The Wall Street Journal OpEd, National Review, Newsmax, New York Post, YouTube videos, and The Volokh Conspiracy) critiquing this Court's legal rulings, which defendants collectively use as "evidence" that "this Court's final judgment has certainly imperiled public confidence in the integrity of the New York legal system." As this Court has already detailed in a prior order denying defendants request for a mistrial, "editorial opinions that denounce plaintiff's case … are irrelevant and of no evidentiary value."

Further, the cases defendants cite in support of recusal do not advance their cause.

Defendants purport to rely on Matter of George (N.Y. 2013), to support their claim that the conduct alleged here is "antithetical to the role of a judge." There, the judge presided over a matter in which he had close personal, professional, and financial ties to a party, without disclosing the relationship. As with each case defendants cite on recusal, the facts are wholly distinguishable from these herein.

Defendants also purport to rely on Matter of Levine (N.Y. 1989), in which the judge adjourned proceedings in favor of one party, and "by his conduct … conveyed the impression in an ex-parte communication that his rulings would not be based on merit but on his allegiance and loyalty to [a] former political leader." Here, the Court based its rulings on the law and the facts, not politics, and nothing in Bailey's ill-advised statements to the media indicate otherwise.

Defendants also cite to Matter of Ayres (N.Y. 2017), in which the presiding judge repeatedly initiated ex-parte conversations in an attempt to influence a favorable disposition of his daughter's traffic ticket. I did not initiate the encounter, I did not converse, and neither I nor any of my family members have a personal interest in this case.

In People v Lester (N.Y. Just. Ct. 2002), the judge received an ex-parte communication at his home from a party to the proceeding.

In Matter of VonerHeide (N.Y. 1988), the judge routinely sought out and interviewed witnesses outside of court and ruled based on their unsworn communications.

Defendants' reliance on Matter of Fuchsberg (N.Y. Jud. Ct. 1978), is misplaced, as in that case the judge presided over a matter in which he had an undisclosed financial interest, and in which the Judge consulted with law professor colleagues on at least 12 cases pending before him.

In Matter of Murphy (N.Y. 1993), the judge was "careles[s] in handling public moneys" deposited into Court….

In sum, all of defendants' cases are manifestly distinguishable, simply inapposite, or denied recusal.

Finally, defendants emphasize their claim that "this Court, based on public reporting, is also now apparently under investigation by the Commission on Judicial Conduct." However, the Commission has not contacted me, nor I am aware of any such investigation. An unsubstantiated allegation of an investigation cannot require disqualification.

Discussion

"It is settled that 'absent a legal disqualification under Judiciary Law § 14, a Trial Judge is the sole arbiter of recusal.'"

As no grounds for mandatory recusal exist here, it is up to me and my conscience to determine whether this 90-second, unsolicited diatribe about a law with which I was fully familiar and in which I was fully immersed, by a non-party and non-expert who conveyed no facts, in any way affected my adjudication of a dispute over which I had presided for three and a half years, during which time I had already issued several dispositive decisions. I hereby definitively state that it did not.

Directly on point, the Advisory Committee on Judicial Ethics has opined that a judge is not ethically obligated to disclose an attempted ex-parte communication from a non-party who alleges no relevant facts, but merely expresses a view as to how a matter should be decided, and which is not considered by the judge. Advisory Opinion 98-144, available at https://www.nycourts.gov/ipjudicialethicsopinions/98-144_.htm

Additionally, "[n]o judge may recuse based upon wrongful acts allegedly committed by some other person." R&R Capital LLC v Meritt (N.Y. Sup. Ct. 2008) (stating "[b]ecause this Court holds no bias for or against any party to this dispute, but has expressed in our determination of the issues put before us who shall be the prevailing side, there is no basis upon which recusal may be granted"). Accordingly, recusal based on the sole actions of Bailey, which did not influence my decisions, is unwarranted.

Moreover,

[W]hen there is no ground for recusal, recusal should not be ordered, especially when prejudice will result. Indeed, "'[a] judge has an obligation not to recuse himself or herself, even if sued in connection with his or her duties, unless he or she is satisfied that he or she is unable to serve with complete impartiality, in fact or appearance.'"

I have been presiding over this action, and the special proceeding that preceded it, for over three and a half years. The two dockets have a combined 2,624 separate entries. I have reviewed tens of thousands of documents in camera (and out), throughout extensive disclosure, motion practice, and the trial. To recuse myself now would result in immense prejudice to the parties, the public, and the judicial process.

I am supremely confident in my ability to continue to serve, as I always have, impartially.

Alternative Relief Sought

As an alternative to recusal, defendants request an evidentiary hearing, before another justice of the Court, "on the veracity of Mr. Bailey's allegations and the Court's and [the Office of Court Administration's] denial." In support of their request, defendants cite to a string of cases that, by defendants' own description, have "held that an attorney accused of professional misconduct must have an opportunity to confront the witnesses and subject them to cross-examination." However, such a rule would give standing only to Bailey, who is accused of wrongdoing, to confront witnesses against him in an inquiry into his alleged professional misconduct. These cases do nothing to advance the relief defendants seek herein….