The opinion of the court was delivered by: Scheindlin, District Judge.
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
"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 ...