Dispatches from the Creation Wars

Alito’s Conflict of Interest?

A potential glitch in the Alito nomination has arisen. He is taking some criticism for not recusing himself from a 2003 appeals court case involving the Vanguard Group, a mutual fund company. In his 1990 confirmation hearing for the appeals court, he promised to recuse himself from any cases involving this company, with whom he has over $400,000 invested in a mutual fund. But 13 years later, he heard a case involving a woman’s claim against that company, a claim that had been dismissed by a lower court.

He and two other judges from that appeals court upheld the lower court’s dismissal in a 3-0 decision. The plaintiff then asked for a vote of the full court (called an en banc rehearing) of appeals and complained of Alito’s involvement on the basis of his investments with Vanguard, and Alito then recused himself from the en banc proceedings. Is this a big deal? Not really. He doesn’t own stock in Vanguard itself, or any part of the company, he invests money in other companies through them. The case under consideration involved money in the thousands of dollars for a company with billions in assets and investments, so there is no reasonable connection between his own financial interest in the outcome of the case. And given that the rest of that court’s judges agreed with him in upholding the lower court ruling, there is no evidence that any consideration swayed his opinion. This is a tempest in a teapot at worst.


  1. #1 Skemono
    November 11, 2005

    Hmm… what about the other two times he did this?

  2. #2 Ed Brayton
    November 11, 2005


    You’ll have to provide some more detail. I am only aware of this particular situation.

  3. #3 Ed Brayton
    November 11, 2005

    Ah, now I know what Skemono is referring to. The Smith-Barney case was virtually identical to the Vanguard case. There simply isn’t any reasonable link between the outcome of the case and any interest he might have. At worst, he can be accused of not erring on the side of avoiding a false perception of a conflict of interest, and that’s not much.

    The other case involved his sister’s law firm, but Alito did not hear that case. Her firm won the case, a unanimous panel of the 3rd circuit ruled on it, and the plaintiffs asked for an en banc rehearing. That means the judges from the entire circuit decide whether or not to rehear the case collectively, and in this case they denied that rehearing as they almost always do in cases not involving constitutional law questions. Alito is listed as one of the 15 judges who were present when that motion was considered, but there is no recording of how anyone votes in such cases, nor even any record of whether he did vote, only that he was present at the time. It would be highly unusual if he was not present. Again, there just isn’t anything to it. Had he actually presided over the case and not recused himself, that would be a problem. Being present when a motion for en banc rehearing was denied by the full court is not.

  4. #4 raj
    November 11, 2005

    It strikes me that the Vanguard issue would be considered what lawyers refer to as “de minimus.” Alito was one of three judges who formed the majority, and the entire 3d circuit panel refused an en banc hearing.

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