By Karon Fowler
On Thursday in Kolon Industries Inc. v. DuPont, the Fourth Circuit affirmed the district court’s grant of summary judgment in favor of Defendant-Appellee DuPont as well as the district court’s denial of Plaintiff-Appellant Kolon’s recusal motion. The appeal arose from Kolon’s claim that DuPont attempted to exercise, or did exercise, monopoly power over the U.S. para-aramid fiber market in violation of the Sherman Antitrust Act. DuPont initially sued Kolon alleging the theft and misappropriation of its trade secrets. Kolon’s answer included the antitrust counterclaim, alleging that DuPont had monopolized and attempted to monopolize the U.S. para-aramid market through it supply agreements with high-volume para-aramid customers.
After a series of legal maneuvers, the district court tried the trade secrets claim separately, resulting in a multi-million dollar jury verdict for DuPont. The district court formally severed the two claims and issued several rulings against Kolon in the antitrust case. The court denied Kolon’s motions to compel DuPont’s production of certain sales and cost data. The court also denied Kolon’s motions for recusal and disqualification in both the antitrust and trade secrets cases. In all, the district court granted summary judgment to DuPont on the antitrust claims and dismissed them with prejudice. This blog entry will focus on the recusal issue.
Kolon’s recusal motion was based on the district court judge’s involvement prior to taking the bench in litigation involving DuPont. The judge’s employer during that time served as counsel in the present case. However, when notice of this point was given to the parties, neither party filed a motion or otherwise objected to the judge’s continued participation in the case. It was not until two months after the jury verdict in the trade secrets case and two days before the summary judgment motions in the antitrust case that Kolon filed its recusal motion, which the district court denied.
The Fourth Circuit concluded that following Owens, recusals under 28 U.S.C. § 455(b) include a judicially implied timely-filing requirement. The pertinent portion of the statute provides that any judge of the U.S. shall disqualify himself “[w]here in private practice he served as a lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it.”
Kolon argued that the district court erred in relying on the Fourth Circuit’sOwens case in which the Circuit stated that “[t]imeliness is an essential element of a recusal motion,” and that notwithstanding the absence of an express timely-filing requirement in § 455, the requirement is instead “judicially implied.” Kolon’s argument rests on an attempt to distinguish § 455(a) and § 455(b) to say that (a) involves a situation in which the judge’s impartiality might have reasonably been questioned while (b) involves a situation implicating personal bias or prejudice. Thus, Kolon argued, a time requirement for (b) would run contrary to the statute’s design that indicates (b) cannot be waived by the parties in the same manner that (a) may be waived.
Nevertheless, the Circuit held that both provisions include a timely-filing requirement under Owens and Kolon failed to comply with it. Owens did not distinguish between the two provisions but instead addressed § 455 recusals generally. The importance of preventing waste and delay applies equally to the two scenarios. Moreover, a timeliness requirement prohibits parties from knowing concealment of an ethical issues for purposes of trial strategy. The court rejected Kolon’s waiver argument because waiver and timeliness are distinct issues. Although the inability to waive the recusal right is vital to the ethics of a trail, that value must be balanced against the values of fairness and efficiency that are served by the timeliness requirement. Furthermore, the court explains that the judge still has a duty to recuse himself or herself when aware of a grounds for recusal under § 455. The court only addresses the situation in which a judge independently determines that recusal is unnecessary and a party fails to affirmatively seek recusal until an adverse decision has been handed down. In such a case, the responsibility does indeed rest with the litigants.
This approach aligns with the approach taken by the 8th, 2d, 3d, 9th, 11th, and 5th Circuits as well. Two circuits, however, have refused to enforce a timelines requirement: the 7th and the Federal Circuit. The Fourth Circuit points out that the 7th Circuit has since questioned the decision to forgo a timeliness requirement and the Federal Circuit has instead created what amounts to a de facto filing obligation under principles of equity.
In sum, the Fourth Circuit held that the district court acted within its discretion by denying Kolon’s recusal motion on timeliness grounds. The district court’s judgment was affirmed.
