"California Justice Participated In Wells Fargo Case Despite Owning Company Stock"
CREDIT: AP Photo/Paul Sakuma, Pool
California Supreme Court Justice Kathryn M. Werdegar owns between $100,000 and $1 million worth of Wells Fargo stock. But despite the clear conflict of interest, she did not recuse herself from a petition asking her court to hear an appeal of a case in which the bank was accused of predatory lending, according to a new report by the Center for Public Integrity. The court ultimately decided not to hear the case.
Werdegar was appointed to the state’s high court by then-Gov. Pete Wilson (R) in 1994. Last December, she and five colleagues voted to deny a petition for review in the Krasch v. Wells Fargo Bank, N.A. case. Plaintiffs Steven and Lori Krasch had asked the high court to consider their case against the bank for alleged violation of the state’s Unfair Competition Act, wrongful foreclosure, and predatory lending.
Justice Marvin R. Baxter, who also owned Wells Fargo stock, recused himself; Werdegar did not. A court spokesman told the Center for Public Integrity that Werdegar “regrets the error” and the court has pledged to review its internal conflicts-of-interest procedures.
The report notes 14 recent instances of state justices participated in cases in which they or their spouses owned stock in companies involved in the litigation. But, it points out, the conflict of interest was only detectable because California is one of a very small number of states with robust financial disclosure for their state judiciaries.