UPDATE: Judge who ruled against moratorium owned stock in Exxon, other drilling companies

The federal judge who presided over a challenge to the Obama administration’s six-month moratorium on deepwater oil drilling simultaneously owned stock in an oil company affected by the ban, according to a financial disclosure statement released Friday.
U.S. District Judge Martin L.C. Feldman sold the stock in Exxon Mobil 14 days after the case was filed in New Orleans by a group of oil service firms — and less than five hours before he struck down the moratorium.
I had previously reported “Judge who ruled against offshore drilling moratorium invests in oil industry” based on his 2008 financial disclosure.  You can now see his latest financial disclosure report “” for calendar year 2009, via TP.
The WashPost explains Feldman’s questionable ethics:
U.S. law requires judges to withdraw from any lawsuit in which they have a direct financial interest, however small. Rules also forbid them from hearing cases in which their impartiality might reasonably be questioned or in which their financial interests would likely be substantially affected.

The judicial canons require that judges be aware of their investments. Judicial ethicists said that, had he been aware of his holdings, Feldman should have disclosed the ownership or recused himself at the case’s outset if he thought it posed a conflict or raised questions about his impartiality. The court docket indicates that Feldman signed several orders before the sale.

“I’ve never heard of a situation like this,” said Jeffrey M. Shaman, a judicial ethics specialist and law professor at DePaul University.

The judge may have thought the stock did not create a substantial conflict, legal analysts said, but the fact that he apparently felt compelled to sell the stock and disclose it could be seen as indicating otherwise.

“The fact he sold his holdings in Exxon does not somehow cleanse what he did in the case,” Shaman said. “If he made [earlier] rulings in the case, those rulings are subject to question.”

TP lists some of Feldman’s other energy holdings

Ocean Energy
Provident Energy Trust
Peabody Energy Corp
Atlas Energy Resources
EV Energy Partners
Basic Energy Services
Petrohawk Energy Corp
Boardwalk Pipeline Partnership
Valero Energy Corp
Crosstex Energy
Noble Corp (a leading offshore drilling company)

TP notes:

Judge Feldman’s energy-investment income suggests a bias in favor of sustaining the fossil fuel energy industry. Recall that the question that Feldman was asked to rule on was whether Obama’s drilling moratorium inflicts an undue harm to the public interest.

Feldman ruled that the suspension of deepwater drilling “simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.” The energy companies who filed suit against the administration arguing the importance of oil drilling for the economy probably didn’t have to do much to convince Feldman.

The judge should have withdrawn from the case.  The ruling should be overturned.

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12 Responses to UPDATE: Judge who ruled against moratorium owned stock in Exxon, other drilling companies

  1. mike roddy says:

    It’s obvious that Feldman’s rulings on these matters should be set aside
    and brought before a new judge. Feldman should also be asked to resign, and disciplinary proceedings initiated, to include the possibility of criminal penalties.

    This opinion is hardly draconian, and flows directly from existing statutes. As we watch this play out, we will learn a lot about the integrity of our courts.

    Please stay on top of this for us, Climate Progress. We have come to depend on you for these kinds of developments, since you won’t learn much on the nightly news or in the major newspapers.

  2. Chad says:

    Why are judges so stupid as to own stock in individual companies, especially ones that are strongly tied to their jurisdiction?

    Tip to all the judges out there: index funds.

    Not only do the vast majority of investors do better with these, but it solves your conflict of interest problems.

  3. Leland Palmer says:

    The sale of the stock just a few hours before the ruling suggests he was aware of the conflict of interest. This is, of course, a breach of judicial ethics.

    Good catch, Joe and TP.

    Investigate, investigate, investigate.

  4. Chris Dudley says:

    I agree with Mike. There should be a new opening in that district right away.

  5. Peter Mizla says:

    Is this surprising?

    Such hypocrisy boggles the mind.

  6. Colorado Bob says:

    If this guy had owned a shrimp boat, and ruled the other way, Joe Barton’s head would be auto – rotating.

  7. Colorado Bob says:

    More numbers from than ongoing event in China –

    According to the national meteorological centre, rains continued to fall Saturday on the hard-hit provinces and regions of Zhejiang, Jiangxi, Fujian, Guangdong and Guangxi.

    The Southern Daily said over 600 millimetres (24 inches) of rain fell in Guangdong’s Huilai county over a six-hour period on Friday, a 500-year record.

  8. BP on risk in its Annual Review 2009: “We do the difficult things that others either can’t do or choose not to do”

  9. Devon Smith says:

    I am sure we can find judges that don’t eat fish or buy fuel for their car that can meet the conflict of interest tests. Ooops. It was a TRSO and not a trial.

  10. BobSmith says:

    Umm… are those energy holdings individual stocks or part of something like a mutual fund? If they are stocks… then he should really diversify his portfolio! lol

  11. Duncan says:

    Does the right of an individual to profit supersede the values and health of a community?

    I’m going to keep asking this point as I see it being central to what is going on in the world. Our “rights” to have more and better than our neighbors (world wide) is in conflict with the reality of the world around us. The resources that are being consumed, the environment that is being muddied, and the people being destroyed emotionally and physically are immense and (generally speaking) are not being accurately being reported.

    So I’ll ask it again…

    Does the right of an individual to profit supersede the values and health of a community?

    (ps… WW-III is not Iran, Afghanistan, Korea or such… it is the corporations vs humans… and humans are losing!)

  12. gulogordo says:

    Oil-soaked legal systems on the Gulf Coast are a much bigger problem than just Judge Feldman. Most of the Louisiana, East Texas, and even Alabama federal district court judges have ties to the oil and gas industry that go even deeper than being personally invested in energy stocks. (And how do they figure out which stocks to buy and sell, anyway?)

    It’s so bad that the big energy bucks just basically won an appellate rehearing by default in the Hurricane Katrina/ greenhouse emissions case, when the 5th Circuit Court of Appeals couldn’t muster a quorum of its 16 judges – 8 recused themselves almost cert b/c of energy investments.

    That bile in your throat is just the taste of our corporate future. More good coverage on KCRW’s To The Point on 6/25.