United States District Court, Southern District of New York
November 7, 2001
IN RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION.
The opinion of the court was delivered by: Scheindlin, District Judge.
OPINION AND ORDER
Over the last eleven months, plaintiffs have brought over 860
securities class actions against more than 200 companies and
approximately 40 investment banks ("underwriters") alleging, in
the broadest terms, that these defendants violated federal law
by manipulating the prices of stocks that the companies had
issued to the public. Because the hundreds of complaints share
some common issues, Chief Judge Michael B. Mukasey ordered them
consolidated for pretrial purposes and assigned the cases to
this Court on August 9, 2001. See Order, In re Initial Public
Offering Sec. Litig., 21 MC 92 (Aug. 9, 2001).
Many, but not all, of the underwriters have moved to recuse
this Court for various reasons under 28 U.S.C. § 455 (the
"moving defendants"). In support of their motion, the moving
defendants have proffered the affidavits and declarations of
Professors Geoffrey Hazard and Charles Wolfram as experts in
judicial ethics. For the reasons that follow, these declarations
must be precluded.*fn1
I. LEGAL STANDARD
"It is well-established that `the trial judge has broad
discretion in the matter of the admission or exclusion of expert
evidence.'" Boucher v. United States Suzuki Motor Corp.,
73 F.3d 18, 21 (2d Cir. 1996) (quoting Salem v. United States
Lines Co., 370 U.S. 31, 35, 82 S.Ct. 1119, 8 L.Ed.2d 313
(1962)). Nonetheless, "[i]n evaluating
the admissibility of expert testimony, this Court requires the
exclusion of testimony [that] states a legal conclusion."
United States v. Feliciano, 223 F.3d 102, 121 (2d Cir. 2000)
(quotation marks and citation omitted) (alteration in original);
see also Marx & Co. v. Diners'. Club Inc., 550 F.2d 505, 510
(2d Cir. 1977). Indeed, "[t]his circuit is in accord with other
circuits in requiring exclusion of expert testimony that
expresses a legal conclusion." Hygh, v. Jacobs, 961 F.2d 359,
363 (2d Cir. 1992) (emphasis added).
At a conference held on September 26, liaison counsel*fn2
for the underwriters informed this Court that certain
underwriters had decided to seek recusal based on this Court's
purchases and sales of particular stocks. Over the next two
weeks, the Court held several conferences to discuss the
On October 3, without permission of the Court, the moving
defendants submitted a fifteen-page declaration by Professor
Geoffrey C. Hazard, Jr. According to the declaration, the moving
defendants had asked Professor Hazard to "give [his] opinion
concerning whether 28 U.S.C. § 455 requires recusal of the
presiding district court judge, Honorable Shira A. Scheindlin."
10/3/01 Hazard Decl. ¶ 2. Throughout his nine-page opinion,
Professor Hazard "relied upon the Statement of Facts prepared at
[his] request by counsel for defendants in this action and
attached hereto as Exhibit A," id. ¶ 3, which accounted for an
additional six pages (single-spaced) of the declaration.
On Friday afternoon, October 12, the Court received a letter
from the underwriter liaison firm requesting permission "to file
a thirty-five page memorandum of law and an approximately
forty-page supporting declaration from Charles W. Wolfram, the
Charles Frank Reavis Sr. Professor Emeritus at the Cornell Law
School." 10/12/01 Letter from Penny Shane of Sullivan &
Cromwell. The letter further stated, "we also plan on submitting
an affidavit attaching approximately twenty-five
exhibits. . . ." Id. After considering the request, the Court
issued the following order by email:
The page limit on the memorandum of law is extended
to 35 pages. A 40-page declaration is excessive in
length and will not be considered by the Court.
Counsel should submit a list of the proposed
exhibits. Until such list is reviewed by the Court,
no exhibits will be considered.
After reviewing the e-mail, the liaison law firm contacted a
law clerk by phone and asked whether there was some page number
between zero and forty that the Court would accept. See
10/15/01 (11:00 a.m.) Tr. at 7. In response, the Court
instructed the clerk to say it would allow fifteen pages to be
submitted. See id. The Court also had the clerk notify the
liaisons with the following email: "At the request of the
counsel for the defendant-underwriters, the Court will accept a
declaration from Professor Wolfram that is not to exceed
15-pages in length."
On Monday, October 15, 2001, the Court convened a telephone
conference to discuss the proposed exhibit list and the
declarations of Professors Hazard and Wolfram. At that
conference, the Court raised the issue of whether the affidavits
declarations by Professors Hazard and Wolfram were admissible.
See 10/15/01 (11:00 a.m.) Tr. at 19-20. Specifically, the
Court stated that, in its view, affidavits "are supposed to put
in factual material, but they're not suppose to in essence, make
an additional legal argument." Id. at 19. After encouraging
the moving defendants to share the declarations with the
plaintiffs and discuss whether they should be admitted, see
id. at 26, the Court adjourned the conference until later that
day. See id. at 30.
At the reconvened conference, the plaintiffs informed the
Court that they had reviewed the declaration by Professor
Wolfram and believed it was "nothing more than an attempt to
camouflage what is clearly an opinion as a matter of law on a
legal issue by just using some facts as background for his
conclusion." 10/15/01 Tr. (5:35 p.m.) at 8. The Court then
instructed the parties to submit letter-briefs on whether the
declarations of Professors Hazard and Wolfram should be
admitted. See id. at 10, 12-13.
A. Should the Court Accept Expert Opinion on a Recusal
"This Court has repeatedly held that the testimony of an
expert on matters of domestic law is inadmissable for any
purpose." Music Sales Corp. v. Morris, 73 F. Supp.2d 364, 381
(S.D.N.Y. 1999) (emphasis added). The law of this circuit is
that while an expert may provide an opinion to help a jury or a
judge understand a particular fact, "he may not give testimony
stating ultimate legal conclusions based on those facts."
United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir.
1991); see also Andrews v. Metro North Commuter R.R. Co.,
882 F.2d 705, 708 (2d Cir. 1989) (holding that engineer's testimony
that defendant was negligent was an improper legal conclusion);
United States v. Scop, 846 F.2d 135, 140 (2d Cir.), modified
on other grounds, 856 F.2d 5 (2d Cir. 1988) (holding that
expert's statements that defendants violated securities law and
"drew directly upon the language of the statute" were legal
conclusions that "went well beyond his province as an expert").
The rule prohibiting experts from providing their legal
opinions or conclusions is "so well — established that it is
often deemed a basic premise or assumption of evidence law-a
kind of axiomatic principle." Thomas Baker, "The Impropriety of
Expert Witness Testimony on the Law," 40 U. Kan. L.Rev. 325,
352 (1992).*fn3 In fact, every circuit has explicitly held
that experts may not invade the court's province by testifying
on issues of law. See Nieves-Villanueva v. Soto-Rivera,
133 F.3d 92, 100 (1st Cir. 1997) (excluding expert legal opinion
"because the judge's expert knowledge of the law makes any such
assistance at best cumulative, and at worst prejudicial");
Weston v. Washington Metro. Area Transit Auth., 78 F.3d 682,
684 n. 4 (D.C.Cir. 1996) ("An expert witness may not deliver
legal conclusions on domestic law, for legal principles are
outside the witness' area of expertise under Federal Rule of
Evidence 702."); Snap-Drape, Inc. v. Comm'r of Internal
Revenue, 98 F.3d 194, 198 (5th Cir. 1996) ("We have repeatedly
held that this rule does not allow an expert to render
conclusions of law."); United States v. Sinclair, 74 F.3d 753,
757-58 n. 1 (7th Cir. 1996) ("Federal Rules of Evidence 702 and
704 prohibit experts from offering opinions about legal issues
that will determine the outcome of a case. That is, they cannot
testify about legal
issues on which the judge will instruct the jury."); Peterson
v. City of Plymouth, 60 F.3d 469, 475 (8th Cir. 1995) ("To that
end, his testimony was not a fact-based opinion, but a statement
of legal conclusion. The legal conclusions were for the court to
make. It was an abuse of discretion to allow the testimony.");
Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994)
("We also believe this testimony was received in violation of
the Federal Rules of Evidence. . . . It is the responsibility of
the court, not testifying witnesses, to define legal terms. The
expert's testimony in this regard invaded the province of the
court."); Aguilar v. Int'l Longshoremen's Union Local # 10,
966 F.2d 443, 447 (9th Cir. 1992) ("Here, the reasonableness and
foreseeability of the casual workers' reliance were matters of
law for the court's determination. As such, they were
inappropriate subjects for expert testimony."); United States
v. Leo, 941 F.2d 181, 196 (3rd Cir. 1991) (stating that "it is
not permissible for a witness to testify as to the governing
law"); Montgomery v. Aetna Cas. & Sur. Co., 898 F.2d 1537,
1541 (11th Cir. 1990) ("A witness also may not testify to the
legal implications of conduct; the court must be the jury's only
source of law."); Specht v. Jensen, 853 F.2d 805, 807 (10th
Cir. 1988) (en banc) ("There being only one applicable legal
rule for each dispute or issue, it requires only one spokesman
of the law, who of course is the judge. . . . To allow anyone
other than the judge to state the law would violate the basic
concept.") (quotation marks and citation omitted); Adalman v.
Baker, Watts & Co., 807 F.2d 359, 368 (4th Cir. 1986) ("From
beginning to end, it is obvious that Appellants proffered [the
person] as an expert witness to testify in substantial part to
the meaning and applicability of [law]. This flies squarely in
the face of the precedent — and the logic of that
precedent. . . .").
Courts make one exception to this strict rule — when
interpreting foreign law, expert legal opinion may be allowed.
See Nieves-Villanueva, 133 F.3d at 99; Marx & Co., 550 F.2d
at 510. Experts may also give limited testimony on mixed
questions of law and fact, but the testimony must remain focused
on helping the jury or judge understand particular facts in
issue and not opine on the ultimate legal conclusion. See,
e.g., In re Air Disaster at Lockerbie, Scotland, 37 F.3d 804,
826-27 (2d Cir. 1994) (holding that expert's testimony that
defendants engaged in "fraud" and "deceit" was admissible
because the words were used in colloquial fashion, but statement
that defendants violated federal regulations was inadmissible as
a legal conclusion); Specht, 853 F.2d at 809-10 (discussing
The question presented on the recusal motion is whether
28 U.S.C. § 455 requires this Court to disqualify itself. This
decision involves nothing more than interpreting the statute
given certain undisputed facts; it is solely a question of law.
See Jefferson County v. Acker, 92 F.3d 1561, 1581 (11th Cir.
1996) (en banc), vacated on other grounds, 520 U.S. 1261, 117
S.Ct. 2429, 138 L.Ed.2d 191 (1997) ("Whether a judge is
disqualified, that is, must not take part in deciding a case, is
a question of law."); In re City of Houston, 745 F.2d 925, 927
(5th Cir. 1984) ("The issue of
judicial disqualification is solely one of law.").*fn5 Given
that expert opinion may not address issues of law, it follows
that expert opinion on a recusal motion cannot be admitted
unless it involves the rare case where a fact is in dispute. As
defendants concede, this is not such a case. See Moving
Underwriters' Memorandum of Law in Support of Motion to Submit
Declarations of Professors Hazard and Wolfram ("Def.Mem."), at 6
n. 3 ("Here, of course, the Declarations are based on undisputed
facts. . . .").
The only opinion that this Court has found addressing the
issue of expert testimony on a recusal motion reached the same
conclusion. See United States v. Eyerman, 660 F. Supp. 775, 781
(S.D.N.Y. 1987) (Pollack, J.). In Eyerman, Judge Milton
Pollack considered a recusal motion made under 28 U.S.C. § 455
by the defendant, a Vice-President of underwriter First Jersey
Securities. Id. at 781. In support of the motion, Professors
Geoffrey Hazard and Monroe Freedman furnished affidavits as
"experts on ethics" and supported "their submission with a
weighty compendium of their extracurricular activities to give
verisimilitude to their sworn legal conclusions." Id. Judge
Pollack rejected the affidavits and stated: "Supplying such
affidavits under these circumstances seems rather presumptuous,
considering that the affiants have not been asked by the Court
for their views on the law and how the motion should be
Despite the weight of authority against admitting expert
opinion on an issue of law, the Court has nonetheless — at the
request of the defendants — reviewed the declarations by
Professors Hazard and Wolfram. This Court's careful review
reveals what will always be the case in a recusal motion when
the facts are undisputed: The declarations offer — indeed, they
only purport to offer — legal opinions and analyses on the
question of whether the statute requires recusal. As Professor
Hazard's declaration states: "I have been asked to give my
opinion concerning whether 28 U.S.C. § 455 requires recusal of
the presiding district court judge. . . . In reaching the
following opinions, I have
relied upon the Statement of Facts prepared at my request by
counsel. . . ." Hazard Decl. ¶¶ 2, 3. Likewise, Professor Wolfram
begins his declaration: "In summary, my opinion is that the
facts compel her to recuse herself." Wolfram Declaration ¶ 1.
Throughout both declarations, the refrain is the same: In their
expert opinion, section 455 requires recusal.
Although this Court certainly has respect for Professors
Hazard and Wolfram, they are only offering opinions based on
undisputed facts. It is beyond dispute that "although an expert
may opine on an issue of fact ___ he may not give testimony
stating ultimate legal conclusions based on those facts."
Bilzerian, 926 F.2d at 1294.
B. The Arguments of the Moving Defendants
Despite the weight of the authority that precludes admitting
expert opinion on this motion, I shall nonetheless briefly
address the arguments made by the moving defendants in support
of their motion to accept the experts' declarations. First,
they argue that the Federal Rules of Evidence do not apply to a
recusal motion and that "all available guidance" should be
received. See Def. Mem. at 5. Second, they contend that even
if the Federal Rules of Evidence do apply, in particular
Rule 702, the declarations should be admitted because Professors
Hazard and Wolfram are experts in ethics. See id. at 7-10.
Both of these arguments fail.
1. Should the Court Accept "All Available Guidance" on a
The moving defendants first argue that:
[T]he record on recusal motion is not limited to
material that would be admissible under the Federal
Rules of Evidence. See Hodgson v. Liquor Salemen's
Union Local No. 2, 444 F.2d 1344, 1349 (2d Cir.
1971). Therefore, a declaration that might otherwise
be inadmissible under the Federal Rules of Evidence
should still be considered on a recusal motion, even
if an evidentiary flaw reduces the declaration's
Id. at 6. Based on this argument, the moving defendants
conclude that "[o]n a recusal motion, the Court should receive
all available guidance." Def. Mem. at 5 (emphasis added).
The moving defendants' reliance on Hodgson is inapposite and
easily addressed. In that case, as well as in the other cases
cited by the moving defendants, the hearsay statements were
offered by the parties as the grounds for the recusal
motion.*fn7 See Hodgson, 444 F.2d at 1347 (rejecting a
recusal motion based on an attorney's statements "that he was
very close to [the judge]" and "he could get favored treatment
from her"). Accordingly, these courts were willing to consider
the hearsay statements in deciding the recusal motions.
Similarly, this Court will consider hearsay regarding its own
financial transactions when it decides the recusal motion.
The moving defendants' assertion that "[o]n a recusal motion,
the Court should receive all available guidance" is far too
broad. Def. Mem. at 5 (emphasis added).
No court can accept all available guidance on any matter. It
would be unwise, if not impossible, for this Court to allow
anyone that has a thoughtful opinion on a matter to submit a
Moreover, this Court has the inherent authority "to manage
[its] own affairs so as to achieve the orderly and expeditious
disposition of cases." Chambers v. NASCO, Inc., 501 U.S. 32,
43, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (quotation marks
omitted).*fn9 In this case, for example, the Court has
extended its page limits on briefs as well as convened six
conferences to discuss the recusal motion. But there is no
reason to think that this Court, or any court, should accept
"all available guidance" when a recusal motion is made.
2. Do the Proposed Expert Opinions Fall Under Rule 702?
The moving defendants' second argument is that "[e]ven if the
Federal Rules of Evidence did apply in proceedings on recusal,
the Wolfram and Hazard Declarations would be admissible" because
"expert testimony is allowed from those with `scientific,
technical, or other specialized knowledge.'" Def. Mem. at 7
(quoting Fed.R.Evid. 702). This argument fares no better than
the first one.
Rule 702 states in pertinent part:
If scientific, technical, or other specialized
knowledge will assist the trier of fact to
understand the evidence or to determine a fact in
issue, a witness qualified as an expert by
knowledge, skill, experience, training, or education,
may testify thereto in the form of an opinion or
otherwise. . . .
Fed.R.Evid. 702 (emphasis added). As Rule 702's plain language
shows, the opinion of an expert witness is only admissible if
it (1) assists the trier of fact in (2) understanding the
evidence or determining a disputed fact.
The moving defendants' argument that Rule 702 allows the
declarations to be admitted fails for two reasons. First, this
motion does not call for a trier of fact; a motion to recuse is
not a trial. Second, even if this Court could be properly
labeled a "trier of fact," there is no fact or evidence in
issue. The moving defendants concede as much when they state:
The Declarations' reliability flows from the
unquestioned expertise of their authors in matters of
judicial ethics. It is enhanced by the authors'
review of factual material that is itself not
subject to dispute, including transcripts of
proceedings, court orders, and notices to counsel.
Def. Mem. at 7 (citation omitted) (emphasis added); see also
id. at 6 n. 3 ("Here, of course, the Declarations are based on
undisputed facts. . . .") (emphasis added). Because these two
statutory requirements are not satisfied, the declarations may
not be admitted under Rule 702.*fn10
When discussing expert opinion, Judge Learned Hand once warned
trial courts: "Argument is argument whether in the [witness] box
or at the bar, and its proper place is the last." Nichols v.
Universal Pictures Corp., 45 F.2d 119, 123 (2d Cir. 1930). The
same can be said here because the declarations of Professors
Hazard and Wolfram only advocate a particular interpretation of
a statute and the ultimate outcome of the motion.
In our adversarial system, lawyers make arguments, judges
write legal opinions — and there is no such thing as an expert
opinion when it comes to interpreting a statute unless that
opinion belongs to a court.*fn11 Professors Hazard and
Wolfram are free to consult with the moving defendants, sign
their brief, or both. They may attend the conferences and argue
on their behalf. They could have submitted an amicus brief
arguing how the law should be interpreted, although the time
for such a submission has passed. But it remains this Court's
exclusive duty and province "to say what the law is." Marbury
Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803).
The moving defendants' motion to submit the declarations of
Professors Hazard and Wolfram as expert opinion is therefore