[Congressional Record Volume 140, Number 102 (Friday, July 29, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: July 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
NOMINATION OF STEPHEN G. BREYER, OF MASSACHUSETTS, TO BE AN ASSOCIATE
JUSTICE OF THE SUPREME COURT OF THE UNITED STATES
The ACTING PRESIDENT pro tempore. The clerk will report the
nomination.
The assistant legislative clerk read the nomination of Stephen G.
Breyer, of Massachusetts, to be an Associate Justice of the Supreme
Court of the United States.
The ACTING PRESIDENT pro tempore. The Chair recognizes the Senator
from Utah.
Mr. HATCH. Mr. President, with the permission of the distinguished
chairman of the Judiciary Committee, I will proceed first on the Breyer
nomination. Part of the reason for that is that I am also the only non-
Banking-Committee member on the Whitewater committee, and that
investigation starts at 10 this morning. So my dear friend and
colleague from Delaware suggested that I go first on the statements on
the Breyer nomination to the Supreme Court.
The ACTING PRESIDENT pro tempore. Under the previous order, the
debate on the nomination is limited to 6 hours and is equally divided
and controlled in the usual fashion.
The Senator from Utah may proceed.
Mr. HATCH. Mr. President, I will vote for the confirmation of Judge
Stephen Breyer to be Associate Justice of the Supreme Court. Let me
briefly outline the reasons why.
President Clinton and I are unlikely ever to agree on the ideal
nominee to be a Supreme Court Justice. Indeed, there have been many
prominently mentioned potential nominees whom I would in all likelihood
have vigorously opposed. But I do believe that a President is entitled
to some deference in the selection of a Supreme Court Justice. If a
nominee is experienced in the law, is intelligent, has good character
and temperament, and gives clear and convincing evidence of
understanding the proper role of the judiciary in our system of
government, I can support that nominee. I am satisfied that Judge
Breyer meets this test.
For the past 14 years, Judge Breyer has distinguished himself on the
U.S. Court of Appeals for the first circuit. Known for his careful,
scholarly opinions on a range of difficult issues, he has earned a
reputation as a moderate pragmatist. His hearing testimony reinforced
this reputation.
A danger of judicial pragmatism is that it may give short shrift to
formal or institutional constraints on judicial action. Indeed, some of
Judge Breyer's own jurisprudential musings present, in my view, an
unduly open-ended approach to judicial decisionmaking--an approach that
is open to manipulation and abuse by judges less moderate and less
conscientious than Judge Breyer. My confidence that Judge Breyer will
not himself succumb to the siren calls of judicial activism rests on
his overall judicial record and on my high regard for his intelligence
and integrity.
Several features of Judge Breyer's hearing testimony and judicial
record warrant highlighting:
First, while I and other Senators were concerned by Judge Breyer's
Free Exercise ruling in New Life Baptist Church Academy v. Town of East
Longmeadow (885 F.2d 940 (1st Cir. 1989)), I took comfort from judge
Breyer's recognition that ``[t]here is nothing more important to a
person or to that person's family than a religious principle, and there
is nothing more important to a family that has those principles than to
be able to pass those principles and beliefs on to the next
generation.'' (Unofficial transcript, July 12, 1994, at 73:12-16.)
It was precisely because I share this view that I was the lead
sponsor, along with Senator Kennedy, of the Religious Freedom
Restoration Act, and Judge Breyer stated that he understood the strong
protections that Congress intended to give to religious liberty under
that act.
Second, on the subject of the establishment clause, Judge Breyer
rejects the extreme secularist view that the establishment clause
mandates an absolute wall of separation between church and state. Judge
Breyer instead recognizes that there are ``vast areas'' where religious
institutions can neutrally receive benefits from the Government.
(Unofficial transcript, July 14, 1994, at 102:12.)
He adopts a pragmatic, not an ideological, approach to these issues.
Third, Judge Breyer recognizes that the death penalty is
constitutional. He rejects the activist position taken by Justices
Brennan and Marshall, and more recently by Justice Blackmun, that the
death penalty violates the eighth amendment.
Fourth, although Judge Breyer's jurisprudence regarding so-called
unenumerated rights is in key respects open-ended and manipulable, he
gives every indication of being cautious and restrained in this area.
He testified that he remains open to the historical evidence showing
that the ninth amendment is best understood not as a font of
affirmative rights but as a reminder that people's rights are
residually protected by virtue of limitations on the Federal
Government's enumerated powers. (Unofficial transcript, July 13, 1994,
at 228:21-229:19.) He further stated that the ninth amendment was not
incorporated into the 14th amendment and therefore does not apply
against the States. (Id., at 229:20-230:6.)
In addition, he agreed that the reasoning and methodology of Justice
Goldberg's concurrence in the Griswold case would not, and I emphasize
``would not,'' extend constitutional protection to such things as
abortion and homosexual conduct. (Id., at 230:7-24).
Fifth, regrettably, President Clinton has announced a litmus test on
abortion. I note that there were many persons on the other side of the
aisle who falsely accused President Reagan and President Bush of
adopting a litmus test on abortion. That this accusation was false is
proven by the fact that three Justices appointed by Presidents Reagan
and Bush comprised part of the majority in the Planned Parenthood
versus Casey decision. In any event, there has been an embarrassing
silence about President Clinton's avowed litmus test. I am disappointed
that only 2 years after the 5 to 4 ruling by the Supreme Court in
Casey, Judge Breyer stated that he views ``some kind of'' right to
abortion as settled. (Unofficial transcript, July 13, 1994, at 178:22).
But his record indicates that he will be far more understanding of
society's power to protect the rights of the unborn than the Justice
whom he will replace. In fact, in his one case directly involving State
regulation of abortion, Judge Breyer voted to uphold a parental consent
statute. Alone in dissent, he voted to bar the abortion clinics from
offering more evidence in support of their claim that the statute was
unconstitutional. His view was that even if the evidence to be offered
was taken as true, that would not alter the conclusion that the statute
was constitutional. (Planned Parenthood League of Massachusetts v.
Bellotti, 868 F.2d 459, 469 (1st Cir. 1989) (Breyer, J., dissenting)).
Judge Breyer's academic writings also reflect a sensitivity to the
rights of the unborn. For example, in an article on genetic
engineering, Judge Breyer emphasized that ``one must be particularly
sensitive to the risk of injury to the fetus, who cannot look after
himself.'' (Breyer & Zeckhauser, ``The Regulation of Genetic
Engineering,'' 1 Man and Medicine 1, 9 (1975).)
Sixth, I find it curious that many of the same people who are so
adamant about protecting so-called rights that are not set forth in the
Constitution are dismissive of economic rights that are expressly
provided in the Constitution--as, for example, in the takings clause.
While I do not put Judge Breyer in this category, I am concerned that
certain of his comments could be read as demoting the takings clause
and other economic rights to second-class status. As Chief Justice
Rehnquist stated in a recent opinion for the Court in Dolan v. City of
Tigard (No. 93-518 (U.S. June 24, 1994)), there is ``no reason why the
takings clause of the fifth amendment, a much a part of the Bill of
Rights as the first amendment or fourth amendment, should be relegated
to the status of a poor relation.'' (Slip op., at 17.)
There is no need here to explore other areas, such as Judge Breyer's
fine opinions in such areas as antitrust and administrative law and the
fourth amendment. Suffice it to say that while I do not agree with all
his opinions and views, I am confident that he will be a fair and very
able Justice.
Finally, let me note that the committee thoroughly investigated Judge
Breyer's background, including charges relating to his Lloyd's
investment. While I do not question the good faith of those making
these charges, the committee's investigation has satisfied me that
these charges are meritless.
For these reasons, I am going to support Judge Breyer's confirmation
to the Supreme Court.
I might mention there are other reasons as well. Let me just add, as
a postscript, that I have known Judge Breyer now for approximately 15
years. I knew him when he was an aide to Senator Kennedy on the
Judiciary Committee, and I knew him when he was chief counsel of the
committee.
I have to say, in those days, as a younger man, as somebody who
worked for Senator Kennedy--who is a very strong Democratic leader in
this body--he proved himself to be a person who would help to develop
consensus, who would work with both sides, who worked in a primarily
bipartisan way, who did things that were intelligently accomplished,
and who, of course, served not only Senator Kennedy well but the
committee as a whole well.
I have tremendous respect for that. I followed his career since. I
remember when President Carter was defeated and it looked as though the
Judiciary Committee was going to deny Judge Breyer, or should I say,
then Stephen Breyer, the staffer, the judgeship opportunity on the
First Circuit Court of Appeals.
I can remember what happened then. After President Reagan was
elected, of course, a number of us were willing to put him on that
court because of his sterling reputation because we knew him well and
we thought he would make a great judge, which has proven to be true
over the last 14 years.
So I feel very strongly about Judge Stephen Breyer. I feel very
strongly that he will make a fine Justice on the Supreme Court, and I
have a personal high regard for him and his family. I wish him well. I
hope that as many of our Senators as possible will vote for this judge
to be Justice on the Supreme Court because I think he deserves it.
Finally, I would like to compliment the President because I have
worked with a number of Presidents with regard to Supreme Court
nominations, all of whom have been good to work with. But President
Clinton has been especially considerate of his particular
responsibility of appointing Supreme Court Justices. I think part of
that probably comes from the fact that President Clinton is a lawyer
himself, has taught constitutional law, has been a Governor and, of
course, has had to work around constitutional principles for most of
his professional life.
So he has a high regard for this position. He has a high regard for
the Supreme Court of the United States of America and, in my
conversations with him, he had a very high regard for doing what is
right in this area. There were pushes and pulls, as there always are in
these constitutional battles over who is going to sit on the Court,
among other things, and there were pushes and pulls on this President.
I found in every instance that his desire was to get the very best
person he could who would have a reasonable chance of being accepted by
the Senate and confirmed by the Senate and who would bring distinction
and ability to the Supreme Court of the United States of America.
I want to compliment the President for that. I compliment him for
working very strongly with the majority and Senator Biden, and others,
Senator Kennedy in particular. I compliment him for working with the
minority as well and to make us part of that equation. I think it has
paid off for the President because almost everybody has acclaimed this
nominee and, frankly, I hope that he will be confirmed overwhelmingly
on the floor today.
I do not want to disparage the feelings of some who have expressed
opposition to Judge Breyer in this body or in the media. Some of the
issues that have been raised are certainly issues that we have
considered in the committee, and we have considered them a lot more
significantly and in much greater detail than some in the media have
indicated.
We have found that there are no justifications for the criticisms of
Judge Breyer in these areas. I suppose we all make mistakes, and I
suppose we can all be criticized.
In the case of Lloyd's, it may have been an investment mistake, but
keep in mind Judge Breyer's wife is from Great Britain; her family is a
prominent family over there. Lloyd's of London was considered to be, at
the time, the finest insurance company in the world by many in England
and elsewhere, even in this country, and it has fallen on harder times.
That, nobody, including myself, could possibly foresee.
So there are many other things that can be said on that issue. I do
not intend to get into it. Suffice it to say that this is an honest
man. He is a man of immense qualifications. He is a man of immense
integrity. He is a person who has a tremendous judicial and legal mind.
He is a person who is fair and open. He is a person who, I think, will
have an appropriate temperament for the Court, and he is a person in
whom I have a great deal of confidence. I think he should be confirmed.
I do not know of anybody in this body who takes nominations to the
Supreme Court any more seriously than I do. Certainly, I think all
Senators take these nominations very seriously. But this is very
important to our country. This is the third branch of Government. This
is a coequal branch of Government, and we have to get the very best
people we can to serve in these positions. In this case, with this
President and this administration, I find that Judge Stephen Breyer is
an excellent choice, and I will support him with everything I have.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. HATCH. Mr. President, counsel to me has indicated that--I do not
think I said this--but they felt that I said the investment in Lloyd's
of London was a clear-cut mistake. If I did say that, that is not what
I meant. It may have been an investment that did not turn out well.
But, in all honesty, it was not a mistake.
Lloyd's of London was considered to be one of the finest insurance
institutions in the world by almost everybody, including people in this
country, but especially people from Great Britain. We cannot impose a
standard that people cannot make bad investments. People do. I have
been known to make a few myself, although pittances in comparison. The
fact is that my wife feels that almost all my investments have been
bad.
I did not mean to convey that. If I did, I want to correct the Record
at this time so that no one will misconstrue what I am saying.
Our investigation of that certainly went into all the details
pertaining to it. Frankly, I think Judge Breyer has been candid about
the investment and about what has happened, and he has done everything
in his power to contain any damage that could possibly come to him and
to his particular estate. And according to experts, he has backed up
his approach to it by having acquired insurance that should cover any
potential exposure that he may have.
But even if it does not, an investment turning sour is not
necessarily a disqualifying event with regard to a judgeship
nomination.
So I want to make sure that the Record is clear because if I did say
that, I did not mean to say that.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. HATCH. Mr. President, is the time equally divided?
The ACTING PRESIDENT pro tempore. The Senator would need consent.
Mr. HATCH. I suggest the absence of a quorum but the time be equally
divided.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. HATCH. I ask unanimous consent that Lisa Heinzerling and Bill
Banks be given the privileges of the floor throughout the Breyer
nomination.
The ACTING PRESIDENT pro tempore. Is there objection? The Chair hears
none, and it is so ordered.
Mr. HATCH. I suggest the absence of a quorum with the time divided
equally.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KENNEDY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. KENNEDY. Mr. President, I yield such time as I might use.
The ACTING PRESIDENT pro tempore. The Senator from Massachusetts is
recognized.
Mr. KENNEDY. Mr. President, it is a great honor and privilege to
support the nomination of Judge Stephen G. Breyer to be an Associate
Justice of the Supreme Court.
The Constitution establishes our democracy and protects the basic
freedoms of all our citizens. The Framers recognized that an
independent judiciary was necessary to enforce the individual liberties
guaranteed by the Constitution, and they created the Supreme Court as
the ultimate guardian of our rights and liberties. Few responsibilities
we have as Senators are more important than our responsibility to
advise and consent to the nominations by the President to the Supreme
Court.
Judge Breyer is extraordinarily well qualified to serve on the
Nation's highest court. Throughout his long and distinguished career,
he has demonstrated an outstanding intellect, unquestioned integrity
and temperament, and a deep and abiding commitment to the Constitution
and the rule of law.
He compiled an outstanding academic record as an undergraduate at
Stanford University, as a Marshall Scholar at Oxford, and as a student
and member of the Law Review at Harvard Law School. After serving as a
law clerk to Supreme Court Justice Arthur Goldberg, he joined the
Antitrust Division at the Department of Justice, where he pioneered
innovative approaches to enforcing the antitrust laws, not only to
protect consumers from unfair practices, but also to prohibit housing
discrimination.
He then joined the faculty at Harvard Law School, where he became one
of the Nation's leading experts on economic regulation and
administrative law, devoting his energy and talent to improving our
free enterprise system and our democracy.
In 1973, he took a leave of absence to assist Watergate Special
Prosecutor Archibald Cox in that historic investigation.
The following year, he became Special Counsel to the Senate Judiciary
Committee's Administrative Practices and Procedures Subcommittee when I
was chairman of the subcommittee. I have known Judge Breyer well ever
since, and I have no doubt that he will be an outstanding member of the
Supreme Court.
His brilliance and skill at working productively with Senators from
both political parties were indispensable to our bipartisan effort in
the 1970's to deregulate the airline industry and the trucking
industry. Judge Breyer dedicated himself to assuring that all Americans
would have safe and efficient air travel at the lowest possible prices
for the public, and that shippers and consumers alike would have the
benefits of lower prices in the trucking industry.
Judge Breyer returned to Capitol Hill in 1979 as chief counsel of the
Judiciary Committee, when I was chairman. He gained the respect and
affection of every member of the committee--Republicans and Democrats--
because he was scrupulously fair, and because he consistently and
creatively sought to find common ground to achieve the greatest good
for the American people.
The bipartisan admiration for Judge Breyer was apparent in 1980, when
his appointment to the Court of Appeals for the First Circuit was the
only judicial nomination confirmed during the lame duck session of
Congress at the end of the Carter administration.
As a member and later as chief judge of the court of appeals, Judge
Breyer has distinguished himself as a preeminent jurist. His opinions
are brilliantly reasoned and clearly written. They construe the law in
a practical fashion to protect the fundamental rights and liberties of
all Americans.
As one of the first members of the Sentencing Commission, Judge
Breyer is widely credited with developing tough but fair guidelines to
assure that criminals who commit similar crimes receive similar
sentences. He excelled at the tough and thankless task of forging
consensus on these difficult issues.
As a judge, he has also continued his commitment to legal education
and legal scholarship. He has continued to teach courses at Harvard Law
School, and he has also continued to write and publish important
articles and books analyzing questions of law and government.
Judge Breyer is one of the Nation's foremost scholars of the
regulatory process, and his expertise in this complex area will be a
major asset to the Supreme Court.
His recent book on regulation drew praise from leading experts on all
sides of the debate. He has sought to assure that the public health and
safety are protected, while avoiding needless inefficiency and waste in
government. Not everyone agrees with all his views, but I believe
everyone will agree that his views have contributed immensely to our
understanding of these complex issues in our modern society.
In addition, Judge Breyer is one of the leading exponents of the view
that laws should be construed in the manner that Congress intended. If
confirmed, he will add a needed and practical perspective to the many
important questions of statutory interpretation that come before the
Supreme Court.
Judge Breyer's 3 days of testimony before the Judiciary Committee
earlier this month revealed to the Nation what we in Massachusetts have
known for decades. Judge Breyer is a brilliant and fair-minded judge,
dedicated to construing our laws to enhance the lives and protect the
basic rights of every citizen.
He views the Constitution as a living charter to protect the
individual against excessive government intrusion.
He is respectful of the religious traditions of the American people
and committed to ensuring that all Americans remain free to follow
their conscience, free from governmental interference.
He recognizes the key role of the Federal courts in remedying
discrimination in all its forms.
He views the antitrust laws as important statutes designed to promote
and enhance economic competition, so that consumers enjoy the highest
quality goods and services at the lowest possible prices.
And he believes in the importance of environmental health and safety
laws to protect the lives of all Americans. On that point, I would like
to introduce into the Record a letter from Mr. Douglas Foy, the
executive director of the Conservation Law Foundation, the leading
public interest environmental law group in New England. Mr. Foy writes:
Stephen Breyer has fashioned a remarkable record on
environmental matters that have come before the First Circuit
Court of Appeals. His opinions reflect an unusual sensitivity
to natural resource concerns, whether in matters involving
air and water pollution, offshore oil and gas drilling, the
clean-up of Boston Harbor, or protection of the Cape Cod
National Seashore. The Court's line of decisions on the
obligations imposed by NEPA are leading precedents,
reflecting a penetrating understanding of the law's
requirements and of agencies' cavalier efforts to avoid its
application. Judge Breyer brings a New Englander's common
sense to natural resource matters, and couples that common
sense with an impressive understanding of administrative
procedure and agency foibles. * * *
My only regret is that Judge Breyer cannot sit on the
Supreme Court and the First Circuit at the same time.
I would like to address myself very briefly to the questions raised
and belabored in some quarters regarding Judge Breyer's investment in
Lloyd's of London. The Judiciary Committee thoroughly examined the
Lloyd's issue.
The committee's investigators reviewed hundreds of pages of documents
relating to it, and Judge Breyer was extensively questioned about it
during the committee's hearings.
The Judiciary Committee obtained opinions from leading experts on
judicial ethics and environmental insurance litigation. The
overwhelming majority of those consulted concluded that Judge Breyer
violated no ethical rules.
Judge Breyer publicly disclosed his Lloyd's investments each year, so
that litigants could decide for themselves whether to seek his recusal
in any particular case. He always recused himself from any case where
Lloyd's was a party, or where it appeared from the court papers that
Lloyd's insured a party in the litigation or otherwise had a direct
interest in the outcome. He has never sat in any such case.
After carefully reviewing the evidence, every member of the Judiciary
Committee concluded that Judge Breyer had acted in full compliance with
the ethics rules, and every Member voted in favor of his nomination.
The Bar Association of the city of New York and the American Bar
Association each found that Judge Breyer had unquestionable integrity.
Indeed, the ABA gave Judge Breyer its highest rating. Its letter to the
Judiciary Committee attests to the high esteem in which Judge Breyer's
integrity is viewed by those who have served with him on the Federal
courts. I would like to read an excerpt from the ABA letter:
Chief Judge Breyer has earned and enjoys an excellent
general reputation for his integrity and character. No one
interviewed by the Committee had any question or doubt in
this regard. His colleagues in the First Circuit, where he
has served for fourteen years, the last four as Chief Judge,
commented on his character and integrity in terms such as
these: ``He is absolutely first rate, a remarkable
combination of one who has character and is intelligent, yet
is a personable and likeable human being''; ``He combines
acute intelligence and a deep sense of humanity. He is a down
to earth human being who is very smart. This is simply a
superb appointment.''
In closing, I would like to read briefly from a letter by Judge Leon
Higginbotham, who recently retired from the Court of Appeals for the
Third Circuit after a distinguished career as one of the most respected
jurists of his generation.
I write on the basis of my having served for 29 years as a
federal judge on either the District Court or the Court of
Appeals, before my resignation in March 1993. * * * I served
on the Judicial Conference of the United States with Judge
Breyer. Upon special designation prior to my retirement, I
had the pleasure of sitting with him and some of his
colleagues on the United States Court of Appeals for the
First Circuit. I have read with care and relied on many of
his opinions.
On the basis of these total experiences, I am confident
that he is one of the most prominent, insightful and
responsible federal judges I have ever met. He will bring to
the United States Supreme Court an extraordinary intellect, a
high respect for precedent and the rule of law, a sensitivity
to patent injustices, and remarkable collegial skills to
cause the Supreme Court to function with as much public
institutional harmony as is possible. I feel certain that,
after five years, he will be regarded as one of the most
outstanding justices in the history of the United States
Supreme Court.
Joseph Story, Oliver Wendell Holmes, Louis Brandeis, Felix
Frankfurter--for nearly two centuries, Massachusetts has sent brilliant
justices to the Supreme Court who have combined outstanding legal
scholarship with a commitment to making the law work to enhance the
lives of ordinary Americans.
I have every confidence that Stephen Breyer will join that
illustrious list of the finest justices ever to serve on our highest
court.
I congratulate President Clinton in this outstanding appointment, and
I urge my colleagues to vote to confirm the nomination.
Mr. President, I ask unanimous consent that the letter dated June 30,
1994, from Douglas Foy, executive director of the Conservation Law
Foundation be printed on the Record, along with the letter from the
American Bar Association Standing Committee on Federal Judiciary dated
July 11, 1994, a letter dated July 11, 1994, from A. Leon Higginbotham,
Jr., and a brief discussion and a series of letters regarding Judge
Breyer's investment in Lloyd's be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Conservation Law Foundation,
Boston, MA, June 30, 1994.
To Whom It May Concern: Stephen Breyer has fashioned a
remarkable record on environmental matters that have come
before the First Circuit Court of Appeals. His opinions
reflect an unusual sensitivity to natural resource concerns,
whether in matters involving air and water pollution, off-
shore oil and gas drilling, and clean-up of Boston Harbor, or
protection of the Cape Cod National Seashore. The Court's
line of decisions on the obligations imposed by NEPA are
leading precedents, reflecting a penetrating understanding of
the law's requirements and of agencies' cavalier efforts to
avoid its application.
Judge Breyer brings a New Englander's common sense to
natural resource matters, and couples that common sense with
an impressive understanding of administrative procedure and
agency foibles. Much of the development of environmental law
in the next decade will revolve around the application and
enforcement of pivotal federal laws (such as the Clean Air
Act, National Energy Act, Magnuson Act, and ISTEA), by
agencies, in the states and regions. Stephen Breyer is
precisely the kind of judge to whom we should entrust review
of agency compliance with those laws. My only regret is that
Judge Breyer cannot sit on the Supreme Court and the First
Circuit at the same time.
Sincerely,
Douglas I. Foy,
Executive Director.
____
American Bar Association, Standing Committee on Federal
Judiciary,
July 11, 1994.
Hon. Joseph R. Biden, Jr.,
Chairman, Committee on the Judiciary, Washington, DC.
Re: Hon. Stephen G. Breyer.
Dear Mr. Chairman: This letter is submitted in response to
the invitation from the Senate Committee on the Judiciary to
the Standing Committee on Federal Judiciary of the American
Bar Association (the ``Committee'') to present its report
regarding the nomination of the Honorable Stephen G. Breyer
to be an Associate Justice of the Supreme Court of the United
States.
The Committee's evaluation of Chief Judge Breyer is based
on an investigation of his professional qualifications, that
is, his integrity, judicial temperament and professional
competence. Consistent with long standing policy, the
Committee did not undertake any examination or consideration
of Chief Judge Breyer's political ideology or his views on
any issues that might come before the Supreme Court.
To merit the Committee's evaluation of Qualified or Well
Qualified the Supreme Court nominee must be at the top of the
legal profession, have outstanding legal ability and wide
experience and meet the highest standards of integrity,
professional competence and judicial temperament. The
evaluation of Well Qualified is reserved for those found to
merit the Committee's strongest affirmative endorsement.
I am pleased to report that the Committee finds Chief Judge
Breyer to be Well Qualified for appointment as an Associate
Justice of the Supreme Court of the United States. This
determination was unanimous.
In conducting the investigation members of the Committee
personally interviewed more than 300 federal judges,
including present and retired members of the Supreme Court of
the United States, members of the Federal Courts of Appeals,
members of the Federal District Courts, Federal Magistrate
Judges, Federal Bankruptcy Judges, and members of State
Courts. The investigation included all colleagues of Chief
Judge Breyer on the United States Court of Appeals for the
First Circuit, all Federal District Court Judges from the
District of Massachusetts, and all the justices on the
Supreme Judicial Court of Massachusetts. Numerous federal and
state court judges from the other states in the First Circuit
were also interviewed.
Members of the Committee personally questioned several
hundred other individuals, including practicing lawyers
throughout the United States, former law clerks and lawyers
who have appeared before Chief Judge Breyer. Committee
members also interviewed law school deans, faculty members of
law schools and constitutional scholars throughout the United
States, including professors at Harvard Law School, where
Chief Judge Breyer has served on the faculty since 1967.
The Committee also had available the report prepared in
1980 by the Committee in connection with the investigation of
Chief Judge Breyer for appointment to the United States Court
of Appeals for the First Circuit. He was at that time found
by a majority of the Committee to be Qualified and by a
substantial minority Well Qualified for appointment to that
Court.
It has been the practice of the Committee to ask groups of
distinguished legal scholars and Supreme Court practitioners
to review independently all of the opinions written by
nominees for the Supreme Court. This practice was followed
again here and Chief Judge Breyer's opinions were reviewed
by: (1) a Reading Group of distinguished lawyers chaired by
Rex E. Lee, formerly Solicitor General of the United States
and presently President of Brigham Young University,
consisting of a diverse group of 10 lawyers, all of whom have
practices and argued cases in the Supreme Court; and (2) a
Reading Group chaired by Professor Nicholas S. Zeppos of
Vanderbilt University School of Law, consisting of 26 members
of that law school's faculty. Members of the two Reading
Groups who participated are listed on Exhibit A to this
letter.
The two Reading Groups reported to the Committee their
independent analyses of Chief Judge Breyer's opinions and
other writings. These reports were evaluated by the members
of our Committee, who also read opinions of Chief Judge
Breyer and his published writings on a variety of legal
subjects.
Evaluation
Integrity
Chief Judge Breyer has earned and enjoys an excellent
general reputation for his integrity and character. No one
interviewed by the Committee had any question or doubt in
this regard. His colleagues in the First Circuit, where he
has served for fourteen years, the last four as Chief Judge,
commented on his character and integrity in terms such as
these: ``He is absolutely first rate, a remarkable
combination of one who has character and is intelligent, yet
is a personable and likeable human being''; ``He is eminently
well qualified, of the highest character''; ``He combines
acute intelligence and a deep sense of humanity. He is a down
to earth human being who is very smart. This is simply a
superb appointment.''
Temperament
Chief Judge Breyer's judicial temperament also meets the
highest standards set by the Committee for appointment to the
Supreme Court.
His colleagues on the First Circuit and on the Harvard Law
School faculty who have worked with him for up to twenty-five
years, Federal District Court judges, former law clerks, his
secretary of almost fourteen years, and counsel who have
argued cases before him, uniformly give Chief Judge Breyer
the highest praise for his demeanor, temperament, and manner
of treating people. The Court of Appeals Judges in the First
Circuit universally credit Chief Judge Breyer for the strong
collegiality that exists in the Circuit, for his remarkable
ability to build consensus, for his sensitivity and good
grace, and for his outstanding leadership skills.
Represenstative comments from his colleagues on the First
Circuit Court of Appeals include these: ``He does not
browbeat, and he is a genius at forging consensus and
compromise''; ``He has a wonderful temperament''; ``He is
universally well liked and respected by all of us on the
Court''; ``He can soften rigid positions with gentle humor'';
``He is a master at getting consensus on court decisions'';
``He has very good judgment, is stimulating to be around,
and is not arrogant.''
District Court Judges in the First Circuit also praised
Chief Judge Breyer's judicial temperament: ``He is a great
leader''; ``He is humane, not impressed with his own
intelligence, which is extremely powerful''; ``He has great
sensitivity toward lower court judges . . . he doesn't hold
anyone up to ridicule, as other appellate judges do
sometimes''; ``As Chief Judge of the First Circuit he has
been superb, a true leader''; ``He is very well liked by all
the members of the First Circuit community. The Court's
strong collegiality is directly attributable to Steve
Breyer's wonderful personal skills''; ``He is a brilliant
judge''; ``He conducts himself beautifully on the bench--
bright and a perfect gentleman.''
To the same effect are the comments of his colleagues on
the Harvard Law School faculty, his former law clerks and the
lawyers who have argued cases before him. Chief Judge Breyer
clearly possesses and exhibits the highest level of judicial
temperament.
Professional Competence
Chief Judge Breyer's educational background amply prepared
him for service on the Supreme Court of the United States. He
attended public schools in San Francisco, graduated from
Stanford University in 1959 with highest honors in
philosophy, attended Oxford University as a Marshall Scholar,
receiving First Class Honors, and graduated from Harvard Law
School in 1964, Magna Cum Laude. He served as Articles Editor
of the Harvard Law Review. After law school he served as Law
Clerk to Supreme Court Justice Arthur J. Goldberg.
Following his Clerkship on the Supreme Court, Chief Judge
Breyer began a career with the Federal Government and then an
academic career at Harvard Law School, where he has been a
member of the faculty since 1967.
His service with the Federal Government included the
positions of Special Assistant to the Assistant Attorney
General (Antitrust); Assistant Special Prosecutor, Watergate
Special Prosecution Force, U.S. Department of Justice;
Special Counsel, Administrative Practices Sub-Committee, U.S.
Senate Committee on the Judiciary; and Chief Counsel, U.S.
Senate Judiciary Committee. He was appointed to the First
Circuit Court of Appeals in 1980, and became Chief Judge in
1990. During the years 1985-89 he was a Member of the United
States Sentencing Commission, and played a major role in the
drafting of the Sentencing Guidelines. His twenty-seven year
affiliation with Harvard Law School has included the
positions of Assistant Professor, Professor, and, since
becoming a Judge on the First Circuit Court of Appeals,
Lecturer.
He has developed and maintained broad interests. Throughout
his career he has participated actively in legal
organizations and has lectured extensively about legal
education. He is an active Member of the American Law
Institute, and has also been a Member of a Carnegie
Commission group studying the relation of science and the
courts (Task Force on Science and Technology in Judicial and
Regulatory Decision Making). He has participated actively in
the work of the American Bar Association (ABA), in particular
as a Member of the Council of the ABA Administrative Law
Section and the select ABA Committee on Ethics in Government.
During his fourteen years as a Judge on the First Circuit
Court of Appeals he has written approximately 600 opinions
and numerous books, monographs, and articles which are most
impressive, and which establish quite clearly that he is a
scholar of the first rank. In addition to his extensive
writings, he has delivered numerous Honorary Lectures during
the past eleven years, including the prestigious Holmes
Lectures at Harvard University which were published in book
form by Harvard University Press in 1993 in a volume entitled
``Breaking the Vicious Circle: Toward Effective Risk
Regulation.''
The legal opinions that he has written during his fourteen
years on the First Circuit Court of Appeals cover wide-
ranging subjects. He has taken special interest in
Administrative Law (which he has taught at Harvard Law
School), in government regulatory matters, most notably
airline deregulation, and the Sentencing Guidelines. Chief
Judge Breyer was praised repeatedly during the Committee's
investigation for his excellent writing skills. His
colleagues on the First Circuit call him ``brilliant'' and
``a genius'' in crafting legal opinions. Federal District
Court Judges, even those he has reversed in appellate
opinions, praise highly Chief Judge Breyer's writing and
analytical skills. Numerous Federal District Court Judges
remarked that Chief Judge Breyer writes so clearly (without
footnotes) that a District Court Judge knows precisely what
is expected of him or her in an appellate opinion written by
Chief Judge Breyer. Chief Judge Breyer's writings reflect a
high level of scholarship required of a Justice of the
Supreme Court of the United States.
The comprehensive reports submitted to the Committee by the
two Reading Groups of scholars and Supreme Court
practitioners confirm the Committee's own conclusions
concerning the scholarship and writing ability of Chief Judge
Breyer. The Chairman of one of the two reading groups
summarized his colleagues' assessment of Chief Judge
Breyer's opinions and other writings as follows:
``Judge Breyer is a person of enormous intellectual ability
with an outstanding ability to write clearly and
persuasively. His opinions reflect a wide breadth of
knowledge about the law and an overriding commitment to
deeply principled and objective decision making. His work is
evidence of a judge keenly aware of the power and
corresponding responsibility that go with his office.''
The Chairman of the other Reading Group summarized his
colleagues' assessment of Chief Judge Breyer's writings as
follows:
``Judge Breyer's scholarly ability was praised by virtually
every Committee member. He was found to `display the
intellectual habits associated with the most respected
thinking of our times: a preference for the complex over the
simple and the particular over the general, a willingness to
suspend judgment, and a robust tolerance of conceptual
ambiguity.' His opinions, furthermore, repeatedly demonstrate
`a realistic assessment' of `evolving case law,' and `are
generally well-researched and complete without being
pedantic.' `Whenever there is a significant debate about . .
. applicable legal principles, Judge Breyer exhibits a
determined effort to analyze and apply the governing doctine
. . . his work product is not only scholarly, it is also free
from recrimination or insinuation, even when he seems plainly
skeptical. Judge Breyer's opinions are careful . . . ,
tolerant and polite.'''
The same Reading Group Chairman perhaps best summarized the
reasons why both Reading Groups have praised the excellence
of Chief Judge Breyer writing and scholarship in the
following words:
``He is a lawyer's lawyer and a judge's judge. He is
careful, scholarly, dispassionate, and objective.
Furthermore, he recognizes that there are limits to his own
abilities, as a jurist, to resolve every dispute engendered
by the contentious press of modern life.''
Our Committee is fully satisfied that Chief Judge Breyer
meets the highest standard of professional competence
required for a seat on the Supreme Court. His academic
training, his broad experience in the Federal Government, his
service on the faculty of a distinguished law school, his
scholarly writings and his distinguished service for fourteen
years (four as Chief Judge) on the Court of Appeals dealing
with many of the same kinds of matters that will come before
the Supreme Court, fully estabish his professional
competence.
conclusion
Based on the information available to it, the Committee is
of the unanimous opinion that Chief Judge Breyer is Well
Qualified for appointment to the Supreme Court of the United
States. This is the Committee's highest rating for a Supreme
Court nominee.
The Committee will review its report at the conclusion of
the public hearings and notify you if any circumstances have
developed that would require a modification of these views.
On behalf of our Committee, I wish to thank you and the
Members of the Judiciary Committee for the invitation to
participate in the Confirmation Hearings on the nomination of
the Honorable Stephen G. Breyer to the Supreme Court of the
United States.
Respectfully submitted,
Robert P. Watkins,
Chair.
____
Paul, Weiss, Rifkind,
Wharton & Garrison,
New York, NY, July 11, 1994.
Hon. Joseph R. Biden,
Chairman, Senate Judiciary Committee, Dirksen Building,
Washington, DC.
Dear Senator Biden: On my own volition, I write this letter
to note my great professional and personal admiration for
Judge Stephen G. Breyer and to express my wish that your
Committee promptly affirm his nomination for the position of
Associate Justice of the United States Supreme Court.
I am presently a professor at Harvard University and of
counsel with Paul, Weiss, Rifkind, Wharton & Garrison. I
write on the basis of my having served for 29 years as a
federal judge on either the District Court or the Court of
Appeals, before my resignation in March 1993. Prior to my
appointments to the federal courts, I served as a
Commissioner of the Federal Trade Commission, a Commissioner
of the Pennsylvania Human Relations Commission, a partner in
a small private practice law firm--consisting of solely
African American lawyers--and, in the early 1960s, I was
President of the Philadelphia Branch of the NAACP.
I served on the Judicial Conference of the United States
with Judge Breyer. Upon special designation prior to my
retirement, I had the pleasure of sitting with him and some
of his other colleagues on the United States Court of Appeals
for the First Circuit. I have read with care and relied on
many of his opinions.
On the basis of these total experiences, I am confident
that he is one of the most prominent, insightful and
responsible federal judges I have ever met. He will bring the
United States Supreme Court an extraordinary intellect, a
high respect for precedent and the rule of law, a sensitivity
to patent injustices and remarkable collegial skills to cause
the Supreme Court to function with as much public
institutional harmony as is possible.
I feel certain that, after five years, he will be regarded
as one of the most outstanding justices in the history of the
United States Supreme Court. I urge the Committee's prompt
confirmation of his nomination.
With warmest regards and highest esteem, I am
Respectfully,
A. Leon Higginbotham, Jr.
____
Judge Breyer and Lloyd's--Background and Facts
Numerous misleading statements have been made in recent
weeks about Judge Stephen Breyer's investments in Lloyd's,
the London insurance company. The Judiciary Committee
thoroughly investigated all aspects of this complex issue and
concluded that there is no reasonable basis to question Judge
Breyer's integrity or his qualifications for the Supreme
Court. There is no factual basis for assertions that Judge
Breyer is likely to suffer massive losses from the
investment, that he will be unable to escape from the
investment for many years, or that the investment reflects
poor judgment. To the contrary, as the following five points
make clear, the facts are entirely inconsistent with any such
assertions.
1. Judge Breyer is not trapped in the Lloyd's investment
for a long period of time. Judge Breyer withdrew from his
Lloyd's investment in 1988, with the single exception of a
1985 syndicate (Merrett 418) which remains ``open.'' All
current indications are that Judge Breyer will be able to
terminate his last remaining involvement with Lloyd's in the
near future. The Merrett Syndicate is expected to close in
approximately one year. According to Lloyd's General Counsel,
an entity known as ``NewCo'' is being formed to assume the
remaining liabilities of syndicates like Merrett 418 in
exchange for their retained reserves. Even if it becomes
necessary to ask for additional modest contributions from
investors, the establishment of NewCo is expected to
terminate--absolutely and finally--all of Judge Breyer's
remaining exposure for Merrett 418's liabilities.
2. Judge Breyer is not even likely to face substantial
personal financial losses from his investment in Lloyd's.
Demonstrating the very prudence that critics suggest he
lacks, Judge Breyer took the precaution of purchasing
personal stop-loss insurance to cover any losses he might
realistically incur because of his Lloyd's investment. The
$37,000 deductible has already been paid. The policy will
cover all further losses up to $225,000. According to the
underwriter's current projections, Judge Breyer's total
liability will be approximately $44,000. Even the ``worst
case'' losses of $168,000 to $187,000 projected by Chatset's
Guide, a leading independent authority on syndicate
liabilities, are well within Judge Breyer's insurance
coverage. In addition to his $225,000 stop-loss insurance,
Judge Breyer has approximately $220,000 in profits from his
investments in Lloyd's. Thus Merrett 418's losses would need
to be more than double even the most pessimistic current
projections before Judge Breyer incurs any net additional
personal loss whatever.
3. Assertions that Lloyd's investors have unlimited
liability are highly misleading. Investor's losses (or
profits) are always directly proportional to the size of
their contributions to the total pool of money invested in
the syndicate. In light of Judge Breyer's relatively modest
initial investment in Merrett 418, he would be responsible
for only 1/5600 of the total losses. With his stop-loss
insurance and his substantial retained earnings, Judge Breyer
will not incur any additional personal loss unless his share
of the syndicate's liability exceeds $445,000. Thus, for
Judge Breyer to suffer even another penny of loss, the total
liability of the syndicate must exceed approximately $2.5
billion (5600 $445,000). Losses at that level are far beyond
even the largest estimate. In fact, the total loss of all the
hundreds of Lloyd's syndicates in Lloyd's worst year in
history (1990) amounted to $5.5 billion. For Judge Breyer to
lose all of his remaining personal assets, Merrett 418's
losses would have to exceed $8 billion--a figure that has no
credibility whatever in light of the known facts.
4. At the time Judge Breyer invested in Lloyd's, it was
considered a stable and prudent investment. During the late
1970's and 1980's, when Judge Breyer invested in Lloyd's,
sophisticated investors considered Lloyd's a sound, prudent,
and--based on its historic track record--conservative
investment. For most of its 300-year history, Lloyd's has
returned substantial profits to its members. Given this
established reputation as a sound and prudent investment, it
is no surprise that Lloyd's attracted a large number of
highly prominent investors in Great Britain, including many
senior British judges and more than forty members of
Parliament. In addition, over 3000 Americans, many of whom
also are in positions of prominence, have invested in
Lloyd's.
5. Judge Breyer's investment in Lloyd's will require his
recusal from only a small number of cases on the Supreme
Court, if any. As Judge Breyer testified before the Judiciary
Committee, he will be required to recuse himself from any
case which is likely to have a ``direct and predictable''
effect on his investment, but not from cases having only
remote or speculative effects. Even a broad application of
this standard is unlikely to require his recusal from all but
a very few cases before the Supreme Court.
In light of these facts, Judge Breyer's investment in
Lloyd's does not detract from his impeccable qualifications
to serve on the Supreme Court. He will serve with outstanding
distinction as a member of that Court, and he deserves to be
confirmed by the Senate.
____
July 25, 1994.
Lloyd Cutler, Esq.,
Counsel to the President, The White House, Washington, DC,
USA.
Judge Stephen Breyer's membership of the Corporation of Lloyds
Dear Mr. Cutler: A mutual friend has suggested that it
might be helpful if I were to write to you in connection with
Judge Breyer's membership of Lloyds, particularly in a
relation to its relevance to the suitability of Judge
Breyer's nomination as a Justice of the U.S. Supreme Court.
This I am pleased to do.
As a former member of the British diplomatic service, an
investment banker for fifteen years with two of the UK's most
prestigious merchant banks, an executive director of the Bank
of England in charge of international affairs for nine years
and currently a non-executive director of two insurance
companies, I have been acquainted in general terms with the
affairs and reputation of Lloyds for most of my working life.
Furthermore, my wife was an external name at Lloyds for much
the same period of time as Judge Breyer; as her financial
advisor I have taken a particular interest in the fortunes of
Lloyds over the past two decades, which includes both good
times and bad times.
I understand that two assertions have been made in relation
to Judge Breyer's Lloyds membership: that it was an error of
judgement on his part for have joined Lloyds in the first
place, and to have joined the Merrett Syndicate 418 in 1985;
and that there must be doubt about the effect on Judge
Breyer's financial situation of the potential future losses
from Syndicate 418 since its 1985 underwriting year has
remained open.
This letter addresses both those points.
Over a great many years Lloyds has been regarded as a sound
and prudent investment. Losses have been recorded in the past
but generally over its long history Lloyds has returned good
profits.
Many members of the British establishment have been and
still are members of Lloyds. It is a well-known and accepted
fact that membership of Lloyds is not inconsistent with the
highest judicial, political or other public office. A number
of judges and politicians continue to be members of Lloyds.
There was no reason in 1976 for anyone to believe that
joining Lloyds as an external name would not prove over the
long-term a sound a profitable investment.
Likewise, in relation to joining Merrett Syndicate 418 in
1984 (in order to underwrite business in 1985), due diligence
would have shown that the syndicate was regarded as being
under experienced and competence management. It could not
have been viewed as careless or unwise to join it at that
time, whatever misfortunes may have befallen the syndicate
subsequently.
Judge Breyer has acknowledged that this Syndicate 418 has
recorded heavy losses, which may increase as long as the
Syndicate's 1985 underwriting year remains open.
Nevertheless, Judge Breyer has stop-loss cover of 125,000
which, in my judgement, should afford him adequate protection
from future losses in this syndicate, as they have been
projected on a worst case basis by the most widely used and
reputable commentator on the affairs of run-off syndicates.
Incidentally, the taking of stop-loss cover in itself
demonstrates a prudent and responsible approach to the risk-
taking that is an inevitable part of membership of Lloyds or
indeed of most other kinds of investment.
I trust that the foregoing will be of assistance. Please do
not hesitate to let me know if I can be of further help.
Yours sincerely,
A.D. Loehnis.
____
LeBoeuf, Lamb, Greene & MacRae,
New York, NY, July 25, 1994.
Re Judge Stephen G. Breyer.
Lloyd Cutler, Esq.,
White House Counsel, The White House, Washington, DC.
Dear Mr. Cutler: You have asked whether Judge Breyer's
present stop loss coverage of $225,000 and his funds and
deposits at Lloyd's of $220,000 would be sufficient to cover
any further losses that Merrett's Syndicate 418 for 1985 year
of account might incur. I believe that it is highly unlikely
that his share of losses on that syndicate for that year of
account could exceed this combined total of $445,000. He had
a $25,000 share of the syndicate's total syndicate capacity
of approximately K140 million, 04 .000178. Thus, for Judge
Breyer to suffer any loss in excess of $445,000, the total
liability of the syndicate would need to exceed $2.5 billion.
Mr. Merrett indicates that total losses to date and reserves
for future losses for Judge Breyer's proportionate share of
the syndicate would be approximately $44,000. For these
losses to increase more than 10 times, or 1,000%, after the
syndicate has been in existence for more than nine years,
would be an unprecedented event in the history of the Lloyd's
market.
Lloyd's is in the process of forming NewCo, a limited
liability reinsurance company, which will accept the
liabilities of all syndicates at Lloyd's for the 1985 and
prior years of account. It is planned that NewCo will be
operational no later than the end of 1995. It is not yet
known what, if any, additional premium, other than a
syndicate's present reserves, will be charged by NewCo. Once
NewCo is established, and Syndicate 418 has transferred its
liabilities for the 1985 account to it, Judge Breyer's
relationship with Lloyd's will be terminated.
If you need anything further, please let me know.
Sincerely yours,
Sheila H. Marshall.
____
New York University School of Law,
New York, NY, July 8, 1994.
Lloyd Cutler, Esq.,
Counsel to the President, White House Counsel's Office,
Washington, DC.
Dear Mr. Cutler: You have asked me to answer the following
question: Did Judge Stephen Breyer violate section 455 of
title 28 of the United States Code (``Sec. 455'') by sitting
on eight cases involving CERCLA when he was a ``name'' in a
Lloyd's of London syndicate that insured against
environmental pollution among other risks?
I have been asked to assume (a) that Judge Breyer did not
know and could not have known the identities of the
syndicate's insureds or the terms of their policies; (b) that
Judge Breyer did know or could have known that environmental
pollution was one of the risks against which the syndicate
insured; and (c) that Judge Breyer was exposed to a possible
loss of 25,000 pounds, had insurance against additional loss
of up $188,000, and that reasonable estimates are that his
actual loss will not exceed the insurance coverage though
they could.
In answering your question, I am going to disregard the
assumption in (c) and assume instead that at the time Judge
Breyer sat on the eight CERCLA cases he had at least 25,000
of financial exposure and possibly more.
I have reviewed the eight CERCLA cases. In my opinion,
Judge Breyer did not violate Sec. 455.
A judge may not sit in a case in which the judge or certain
family members have a ``financial interest, however small''
in a ``party'' or in the ``subject matter in controversy.''
Sec. 455(b)(4), (d)(4). Judge Breyer had no financial
interest in the parties to the CERCLA case nor in their
subject matter. An example of the latter would be a judge's
stock ownership in a company that, though not a party to a
proceeding, was the subject of control between the actual
parties.
Where the judge has an interest other than a ``financial
interest'' in a party or in the subject matter in
controversy, different rules apply. The judge is not then
disqualified ``however small'' his or her interest. The size
of the judge's ``other interest'' then matters: It must be
``substantia[l].'' Sec. 455(b)(4).
This difference recognizes two truths: the public is less
likely to suspect a judge's impartiality when the judge's
interest is other than in a party or the subject matter in
controversy; and if any ``other interest,'' even
insubstantial ones, could disqualify judges, the scope of
disqualification would be too broad with no public gain.
``[W]hen an interest is not direct, but is remote,
contingent, or speculative, it is not the kind of interest
which reasonably brings into question a judge's
impartiality.'' In re Drexel Burnham Lambert Inc., 861 F.2d
1307, 1313 (2d Cir. 1988) (construing Sec. 455(a), discussed
below).
Section 455(b)(4) and (b)(5)(iii) recognize the different
policies when a judge's interest is not in a ``party'' or in
the ``subject matter in controversy.'' These provisions
require recusal only when the judge (or certain family
members) have ``any other interest that could be
substantially affected by the outcome of the proceeding.''
Sec. 455(b)(4).
This different standard has two distinguishing elements.
First, the effect on the judge's interest must be
substantial. Second, the word ``could'' has been repeatedly
construed to require that the effect of ``the outcome of the
proceeding'' on the judge's interest must not be ``indirect''
or ``speculative.'' In re Placid Oil Co., 802 F.2d 783, 786-
77 (5th Cir. 1986). Construing Sec. 455(b)(4) in Pacid Oil,
the Court wrote: ``A remote, contingent, and speculative
interest is not a financial interest within the meaning of
the recusal statute . . . nor does it create a situation in
which a judge's impartiality might reasonably be
questioned.'' Id. at 787.
The Court's last reference, to ``impartiality,'' brings us
to Sec. 455(a), which requires recusal when a judge's
``Impartiality might reasonably be questioned.'' While
Sec. 455(a) and Sec. 455(b) overlap, they are not congruent.
Liteky v. United States, 114 S.Ct. 1147 (1994). Nevertheless,
here, I reach the same conclusion under both provisions.
Placid Oil is an instructive case. It was brought against
23 banks, seeking recision of credit agreements and other
relief ``based on a number of alleged wrongful acts of the
Banks.'' Id. at 786. Plaintiffs sought recusal of the
district judge, who was alleged to have ``a large investment
in a Texas bank that may be affected by rulings in this
case.'' Plaintiffs argued that ``any rulings adverse to the
Banks will have a dramatic impact on the entire banking
industry and thus on [the judge's] investment as well,''
thereby giving the judge a ``financial interest in the
litigation.'' Id. The Circuit rejected the recusal effort:
``We find no basis here for requiring recusal. We are
unwilling to adopt a rule requiring recusal in every case in
which a judge owns stock of a company in the same industry as
one of the parties to the case. * * *'' Id.
This position was followed in Gas Utilities Co. of Alabama,
Inc. v. Southern Natural Gas Co., 996 F.2d 282 (11th Cir.
1993), cert. denied, 114 S.Ct. 687 (1994).
I see no evidence that the decisions in Judge Breyer's
CERCLA cases ``could'' have a direct and substantial effect
on his interest in a syndicate that has insured against the
risk of liability for environmental pollution. Without
parsing every case here, I found their holdings to be
relatively narrow, some quite limited. For most of the cases,
it would be impossible to say how the holding could affect
Judge Breyer's own interests or those of the syndicate in
which he invested. For all of the cases, the Judge's interest
is '`not direct, but is remote, contingent, or speculative.''
In re Drexel Burnham Lambert, supra at 1313.
Given the twin requirements of substantiality and the
caselaw definition of ``could'' as used in Sec. 455(b), Judge
Breyer did not have to recuse himself in the eight CERCLA
cases. He did not violate Sec. 455.
Sincerely yours,
Stephen Gillers.
____
Geoffrey C. Hazard, Jr., Law School, University of
Pennsylvania,
Philadelphia, PA, July 11, 1994.
Hon. Lloyd N. Cutler,
Special Counsel to the President, White House, Washington,
DC.
Re: Judge Stephen Breyer.
Dear Mr. Cutler: Your have asked for my opinion whether
Judge Stephen Breyer committed a violation of judicial ethics
in investing as a ``Lloyd Name'' in insurance underwriting
while being a federal judge. In my opinion there was no
violation of judicial ethics. In my view it was possibly
imprudent for a person who is a judge to have such an
investment, because of the potential for possible conflict of
interest and because of possible appearance of impropriety.
However, in light of the facts no conflict of interest or
appearance of conflict materialized. I understand that Judge
Breyer has divested from the investment so far as now can be
done and will completely terminate it when possible.
1. I am Trustee Professor of Law, University of
Pennsylvania, and Sterling Professor of Law Emeritus, Yale
University. I am also Director of the American Law Institute.
I have been admitted to practice law since 1954 and am a
member of the bar of Connecticut and California. I am engaged
in an active consulting practice, primarily in the fields of
legal and judicial ethics, and have given opinions both
favorable and unfavorable to lawyers and judges. I was
Consultant and draftsman for the American Bar Association
Model Code of Judicial Conduct promulgated in 1972, on which
the rules of ethics governing federal judges are based. I
have also been Reporter and draftsman of the American Bar
Association Model Rules of Professional Conduct, promulgated
in 1983, and before that consultant to the project for the
ABA Model Conduct of Professional Responsibility. I am author
of several books and many articles on legal and judicial
ethics and write a monthly column on the subject.
2. I am advised that Judge Breyer made an investment as a
``Lloyd's Name'' some time in 1978. He has since terminated
that investment except for one underwriting, Merrett 418,
that remains open. He intends to terminate that commitment as
soon as legally permitted. I have further assumed the
accuracy of the description of a Lloyd's Name investment set
forth in the memorandum of July 3, 1994, Godfrey Hodgson. My
previous understanding of the operation of Lloyd's insurance,
although less specific than set forth in the memorandum,
corresponds to that description.
3. I have assumed the following additional facts:
(a) As a ``Name'' Judge Breyer did not have, and could not
have had, knowledge of the particular coverages underwritten
by the Merrett 418 syndicate. It would have been possible for
a Name to discover through inquiry that environmental
pollution as a category was one of the risks underwritten by
the syndicate.
(b) Judge Breyer had ``stop-loss'' insurance against his
exposure as a Name, up to $188,000 beyond an initial loss of
25,000 pounds. This is in substance reinsurance from a third
source against the risk of actual liability.
(c) A reasonable estimate of the potential loss for Judge
Breyer is approximately $114,000, well within the insurance
coverage described above. However, there is a theoretical
possibility that his losses could exceed that estimate.
(d) The Merrett 418 syndicate normally would have closed at
the end of 1987. It remains open because of outstanding
liabilities to the syndicate that were not later adopted by
other syndicates. These outstanding liabilities include
environmental pollution and asbestos liability.
4. I am advised that Judge Breyer as judge participated in
a number of cases that one way or another involved the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), commonly known as the Superfund
statute. None of these cases involved Lloyd's as a party or
by name in any respect. None appear to have involved issues
that would have material or predictable impact on general
legal obligations under the Superfund legislation. Most of
the cases are fact-specific and all involve secondary or
procedural issues. I have assumed that the description of
these cases in the attached list is fair and accurate.
5. In my opinion, Judge Breyer's participation in the
foregoing cases did not entail a violation of judicial
ethics. None of the cases involved Lloyd's as a party or as
having an interest disclosed in the litigation. None could
have had a material effect on Judge Breyer's financial
interests. None had a connection direct enough with Judge
Breyer as to create a basis on which his impartiality might
reasonably be questioned, as that term is used in Section 455
and in the Code of Judicial Ethics.
6. There is a close analogy between the kind of investment
as a Name and an investment in a mutual fund. A mutual fund
is an investment that holds the securities of operating
business enterprises. Ownership in a mutual fund is
specifically excluded as a basis for imputed bias under
Section 455 and the Code of Judicial Ethics. This exclusion
was provided deliberately, in order to permit judges to have
investments that could avoid the inflation risk inherent in
owning Government bonds and other fixed income securities but
without entailing direct ownership in business enterprises. A
Names investment is similarly an undertaking in a venture
that in turn invests in the risks attending business
enterprise. Just as ownership in a mutual fund is not
ownership in the securities held by the fund, so in my
opinion, is investment as a Name not an assumption of direct
involvement in the risks covered by the particular Lloyd's
syndicate.
7. In my opinion it could be regarded as imprudent for a
judge to invest as a Lloyd's Name, withstanding that no
violation of judicial ethics is involved. The business of
insurance is complex, sometimes controversial, and widely the
subject of public concern and suspicion. The insurance
industry is highly regulated and insurance company liability
often entails issues of public importance. In my opinion it
was therefore appropriate for Judge Breyer to have withdrawn
from that kind of investment so far as he could legally do
so, simply to avoid any question about the matter. That said,
I see nothing in his conduct that involves ethical
impropriety.
Very truly yours,
Geoffrey C. Hazard, Jr.
____
Wiley, Rein & Fielding,
Washington, DC, July 11, 1994.
Lloyd Cutler, Esquire,
Counsel to the President, White House Counsel's Office,
Washington, DC.
Dear Mr. Cutler: You have asked us to evaluate whether any
case decided by Judge Stephen Breyer under the Comprehensive
Environmental Response, Compensation, and Liability Act
(``CERCLA''), 42 U.S.C. Sec. 9601 et seq., could have
substantially affected the financial interests of insurers.
We represent insurers extensively in connection with
insurance coverage matters arising under CERCLA. In addition
to representing individual insurers, we and our colleagues
represent the Insurance Environmental Litigation Association
(``IELA''), a trade group of 21 large property/casualty
insurers that appears as amicus curiae in numerous
environmental coverage cases at the appellate level.\1\ Mr.
Brunner has over a decade of direct experience in
representing the interests of insurers in disputes arising
under CERCLA. Ms. Sawtelle, in addition to representing
insurers, has an extensive background in CERCLA and
environmental matters generally, having served as an EPA
official (as Special Assistant to the Director, Office of
Solid Waste, from 1985 to 1987) with responsibility in this
area, and having represented numerous potentially responsible
parties (``PRPs'') in private practice since 1981. As a
consequence, we are able to provide you with a realistic
appraisal of the significance of CERCLA cases for insurers
generally and Lloyds of London syndicates specifically, based
on a great deal of experience evaluating CERCLA matters for
insurers and others.
---------------------------------------------------------------------------
\1\Footnotes at end of article.
---------------------------------------------------------------------------
We have reviewed all eight cases in which Judge Breyer has
passed on CERCLA issues.\2\ In our opinion, none of these
cases had a material or predictable financial impact on
insurers generally or on Lloyds syndicates in particular. Any
consequences for insurers were highly speculative and
dependent on many independent intervening factors. Any
conceivable impact on the financial interests of insurers
from these cases resulted only from the court assuring that
PRPs received proper procedural protections, or that the
statute's provisions were applied properly, before parties
were held liable for costs that might possibly be determined
to be insured by some insurer. None of the cases determined
the obligation of any insurer nor of any PRP for which an
insurer might be liable. In real world terms, Judge Breyer's
financial interest in these cases as a result of his status
as a Lloyd's investor was probably more attenuated than his
interest as a federal taxpayer in numerous cases involving
financial claims against the Federal Government. In both
circumstances, the interest is so diluted, so contingent and
so indirect as to be of no consequence.
Of the eight CERCLA cases on which Judge Breyer has sat,
four did not involve even potentially insurable interests of
PRPs. Maine v. Department of the Navy, 973 F.2d 1007 (1st
Cir. 1992), involved a claim for civil penalties sought by
Maine against the (uninsured) Federal Government. Similarly,
Reardon v. United States, 947 F.2d 1509 (1st Cir. 1991) (en
banc), involved the constitutionality of CERCLA's
procedures for attaching liens to real property and in no
way addresses the extent of financial liabilities under
CERCLA. All Regions Chemical Laboratories v. EPA, 932 F.2d
73 (1st Cir. 1991), concerned the imposition of a civil
penalty on a chemical company for failure to report a
chemical release; such penalties clearly are uninsured. In
much the same vein, Johnson v. SCA Disposal Services,
Inc., 931 F.2d 970 (1st Cir. 1991), applied the doctrine
of res judicata, precluding relitigation of matters
already determined by a court, to a case that happened to
involve CERCLA claims but without any distinctive
precedential significance for CERCLA cases.
Only four cases on which Judge Breyer has sat have even
considered the rights or obligations of potentially insured
PRPs under CERCLA. In each instance, the significance for
insurers has been, at most, highly indirect. United States v.
Kayser-Roth Corp., 910 F.2d 24 (1st Cir. 1990), cert. denied,
498 U.S. 1084 (1991), addressing the potential liability of a
parent company for its subsidiary's waste disposal practices,
is likely irrelevant to insurers in most instances but, if
not, could be either ``good'' or ``bad'' for a particular
insurer, depending on the circumstances of the later case.
Indeed, the likelihood of a perceptible impact on insurers is
both speculative and remote.
Similarly, the potential impact on the insurance industry
of the issues in United States v. Ottati & Goss, Inc., 900
F.2d 429 (1st Cir. 1990), was de minimis. The case
principally involved whether a court must, in an injunctive
relief context, adopt any cleanup remedy selected by EPA
unless it found that selection to be arbitrary or capricious
or, alternately, whether it may itself decide what the remedy
should be. Judge Breyer, writing for the unanimous panel,
upheld the decision of the court below that the court may
fashion the remedy. This holding did not make any
determination of a PRP's obligations but merely prescribed
the procedure and degree of deference due to certain
preliminary EPA actions. There was only an attenuated impact
on PRPs and an even more attenuated connection to insurers.
Waterville Industries Inc. v. Finance Authority of Maine,
984 F.2d 540 (1st Cir. 1993), involved the application of
CERCLA's so-called ``secured creditor exemption.'' Judge
Breyer joined in the court's unanimous opinion holding that
this provision--which exempts from the class of liable
``owners or operators'' those who, without participating in
the management of a contaminated facility, hold indicia of
ownership primarily to protect a security interest--applied
to a particular sale-and-leaseback arrangement. The court's
opinion, which was consistent with a number of other courts'
rulings, was highly fact-specific and thus not likely to have
a material or predictable impact on the insurance industry.
Moreover, this dispute involved private parties only, each of
whom is no more likely than the other to have insurance.
Finally, in Dedham Water Co. v. Cumberland Farms Dairy,
Inc., 889 F.2d 1146 (1st Cir. 1989), Judge Breyer joined in
the court's unanimous decision that CERCLA liability arises
when the release of hazardous substances from the defendant's
facility cause the plaintiff to incur response costs, rather
than when the releases cause contamination on the plaintiff's
property. This case did not present an issue that would have
a material impact on the insurance industry's CERCLA
obligations because in a wholly private dispute such as this,
either or both sides might have insurance. (In a subsequent
opinion in the Dedham case, Judge Breyer dissented from the
majority regarding whether a new trial was required; this
opinion was unrelated to the provisions of CERCLA. See In re
Dedham Water Co., 901 F.2d 3 (1st Cir. 1990).)
In sum, then, our review makes clear that no case in which
Judge Breyer participated had any substantial or predictable
effect on his interest as an investor in Lloyd's of London or
on the financial position of insurers generally.
Sincerely,
Thomas W. Brunner,
Susan D. Sawtelle.
footnotes
\1\The views expressed herein are our own and are not stated
on behalf of IELA or any other client of our law firm. We do
not represent any syndicate participating in Lloyds of
London.
\2\Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d
1146 (1st Cir. 1989); United States v. Ottati & Goss, Inc.,
900 F.2d 429 (1st Cir. 1990); United States v. Kayser-Roth
Corp., 910 F.2d 24 (1st Cir. 1990), cert. denied,498 U.S.
1084 (1991); Johnson v. SCA Disposal Services, Inc., 931 F.2d
970 (1st Cir. 1991); All Regions Chem. Labs. Inc. v. United
States EPA, 932 F.2d 73 (1st Cir. 1991); Reardon v. United
States, 947 F.2d 1509 (1st Cir. 1991); Maine v. Department of
Navy, 973 F.2d 1007 (1st Cir. 1992); Waterville Indus., Inc.
v. Finance Auth. of Me., 984 F.2d 549 (1st Cir. 1993).
____
Lewis and Roca Lawyers,
July 12, 1994.
Lloyd N. Cutler, Esq.
Counsel to the President, The White House Counsel's Office,
Washington, DC.
Re: Judge Stephen G. Breyer.
Dear Mr. Cutler: In connection with the pending hearings on
Judge Stephen G. Breyer for the Supreme Court, I submit the
attached statement requested by you on a problem of
disqualification of judges.
Yours very truly,
John P. Frank.
Enclosure.
____
Judge Stephen G. Breyer Disqualification Matter
i. identification--john p. frank
Mr. Frank is a partner at the Law firm of Lewis and Roca,
Phoenix, Arizona, who has been heavily involved in
disqualification matters over the decades. He is the author
of the seminal article on that subject in the 1947 Yale Law
Journal. He was subpoenaed by the Senate Judiciary Committee
to testify as an expert on disqualification in connection
with the nomination of Judge Haynsworth to the Supreme Court
in 1969. In the aftermath of that episode, the Congress took
to rewrite the Disqualification Act, creating the present
statute, 28 U.S.C. Sec. 455. Simultaneously, a commission
under the chairmanship of Chief Justice Roger Traynor of
California for the American Bar Association was rewriting its
canon of judicial ethics. Mr. Frank became, informally,
Senate representative in negotiations with the ABA Traynor
Commission to achieve both a canon and a new statute which
would be nearly the same as possible, Senator Bayh and Mr.
Frank appeared before the Traynor Commission. Mr. Frank
worked out a mutually satisfactory canon/bill with Professor
Wayne Thode of Utah, reporter for the Traynor Commission. The
canon was then adopted by the Traynor Commission and
essentially put into bill form by Senators Bayh and Hollings,
major witnesses for the bill on the Senate side were Senators
Bayh and Hollings, and Mr. Frank. On the House side, Judge
Traynor and Mr. Frank jointly lobbied the measure through.
Mr. Frank is intimately acquainted with the legislative
history and well acquainted with subsequent developments.
The foregoing outline is my final conclusion on this
subject. I am aided not merely by numerous attorneys in my
own office, but also by Gary Fontana, a leading California
insurance law specialist of the firm of Thelan, Marrin,
Johnson & Bridges of San Francisco.
ii. issue
In his capacity as an investor, Judge Stephen G. Breyer has
been a ``Name'' on various Lloyds syndicates up to a maximum
of 15 at any one time over an 11-year period from 1978
through 1988. This means, essentially, that he is one of a
number of investors who have put their credit behind the
syndicates to guarantee that claims arising under certain
insurance policies directly written or reinsured by the
syndicates are paid. If the premiums on the policies and
the related investment income outrun the losses, expenses
and reinsurance, there is payment to the Names. If there
is a shortfall, the Names must make up the difference. For
an extensive description of the Lloyds system, see Guide
to the London Insurance Market, BNA 1988, and particularly
chapter 3 on underwriting syndicates and agencies. As the
full text shows, this is a highly regulated enterprises, a
matter of consequence in relation to views of Chief
Justice Traynor expressed below.
The syndicates commonly reinsure North American companies
against a vast number of hazards. Among these probably are
certain hazards arising in connection with pollution which
may relate to the ``superfund,'' a financing mechanism of the
United States for pollution clean-up. A question has been
raised as to whether, in any of the various cases in which
Judge Breyer has sat involving pollution, he may have been
disqualified. The identical question could arise in
connection with any number of other cases in which Judge
Breyer has sat because the syndicates have infinitely more
coverage than pollution. The selectivity of the current
interest is probably due to nothing but the colorful nature
of pollution or the failure of some inquiring reporter to see
the problem whole.
A very significant factor is that the Lloyds syndicates are
not merely insurers or re-insurers. They are also investment
companies and much of their revenue comes from investments in
securities.
iii. answer
Should Judge Breyer have disqualified in any pollution
cases in which he participated because of his Name status?
Answer: No.
iv. disqualification standards as applied to this situation
A. Party Disqualification
Under the statute, if a judge has an interest in a party,
no matter how small, he must disqualify. Knowledge is
immaterial; a judge is expressly required to have such
knowledge so that he can meet this responsibility. Since the
statute, judges have had to narrow their portfolios; ``I
didn't know'' is not even relevant.
We may put this strict criteria of disqualification aside
because neither Lloyds nor any of the syndicates is a party
to any of these cases. This is of vital importance because
this is the one strict liability disqualification
criterion in this situation.
B. The common fund exception
Congress in Sec. 455 did not mean to preclude judges from
investing; this was fully recognized both in Sec. 455 and the
cannons; H.R. Rep. 1453, 93d Cong., 1st Sess. at 7 (Oct. 9,
1974). Judges have a range of income expectations and an
investment is quite appropriate. Investment is restricted
only where it would lead to needless perils of
disqualification.
In that spirit, Sec. 455(d)(4)(i) recognizes that judges
may invest in funds which are themselves investment funds and
while the judge cannot sit in any case which involves the
fund, he is exempted from a duty of disqualification in
matters involving securities of the fund unless he
participates in the management of the fund, Sen. Hrg. 1973 at
97, which Judge Breyer did not do. ``Investments in such
funds should be available to judges,'' id. This section was
intended to create ``a way for judges to hold securities
without needing to make fine calculations of the effect of a
given suit on their wealth,'' New York Develop. Corp. v.
Hart, 796 F2d 976, 980 (7th Cir. 1986). As Chief Justice
Traynor said of this exception, it is ``because of the
impossibility of keeping track of the portfolio of such a
fund,'' Sen. Hrg. 1973, House of Rep. Subcomm. Jud. Com. on
S. 1064, May 24, 1974 (hereafter H.R. Hrg. 1974), p. 16.
The relevant section is as follows:
``(i) Ownership is a mutual or common investment fund that
holds securities is not a `financial interest' in such
securities unless the judge participates in the management of
the fund;''
1. A large Lloyds syndicate is a ``common investment
fund.'' There is a definition in Reg. Sec. 230.132 of
``common trust fund,'' which is a particular type of bank
security specifically exempted from the Securities Act of
1933 pursuant to Section 3(a)(2). The only useful portion of
that definition is ``maintained exclusively for the
collective investment and reinvestment of monies contributed
thereto by one or more [bank] members . . .'' A ``common
enterprise'' is one of the four elements of an ``investment
contract'' as set forth in the Howey case:
``[A]n investment contract for purposes of the Securities
Act means a contract, transaction or scheme whereby a
person [1] invests his money, [2] in a common enterprise,
and [3] is led to expect profits, [4] solely from the
efforts of a promoter or third party . . .''
SEC. v. W.J. Howey Co., 328 U.S. 293, 298 (1946). The common
enterprise requirement is usually satisfied by a number of
investors who have a similar stake in the profitability of
the venture.
2. While the precise form of common fund involved here was
not contemplated in the statute, functionally a Lloyds
investment is the same as any other common fund investment.
It is an investment in a common fund in which the judge has
no practical way of knowing on what he may make a return.
v. the non-party exception criteria
Under Sec. 455(d)(4), ``financial interest'' covers
``ownership of a legal or equitable interest, however small''
and then moves on to an additional thing, ``or a relationship
as director, advisor, or other active participant in the
affairs of a party.'' This, too, is under the ``however
small'' criterion, Sen. Hrg. 1973 at 115. This disqualifies
the judge if he is a creditor, debtor, or supplier of a party
if he will be affected by the result; but this only applies
to a party, id. 115. A different standard is applied under
Sec. 455(d)(4)(iii) to any ``proprietary interest'' similar
to mutual insurance or mutual savings. Here the disqualifying
interest must be ``substantial''; the ``however small''
standard is inapplicable. There is more latitude here than in
the other relationships and these can be usefully described
as the ``non-party'' involvement of the judge. I have
elaborated on this topic in Commentary, 1972 Utah Law Review
Sec. 77, which has reflected the views of Professor Thode of
the Utah Law School, reporter on the canon, and which is
referenced in the legislative history of Sec. 455, Sen. Hrg.
1973 at 113.
This covers the relationship of the judge not in terms of
his direct financial interest in a party (as to which his
disqualification is absolute and unawareness is not
relevant)\1\ but rather covers non-party interest. For
classic illustration, if the home of a judge is in an
irrigation district and if he is passing on the validity of
the charter of the irrigation district itself, the answer to
that * * *.
* * * * *
---------------------------------------------------------------------------
\1\See, In re Cement Antitrust Litigation (MDL No. 296), 688
F. 2d 1297, 1313 (9th Cir. 1982) (judge was disqualified when
his wife had a minor investment in a party, ``After five
years of litigation, a multi-million dollar lawsuit of major
national importance, with over 200,000 class plaintiffs,
grinds to a halt over Mrs. Muecke's $29.70.'').
---------------------------------------------------------------------------
In Department of Energy v. Brimmer, 673 F.2d 1287 (Temp.
Emerg. Ct. of Apps. 1982) the court held a judge hearing a
case involving an Entitlement Program, who had stock
ownership in other Entitlement Programs, was not
disqualified. In reaching this conclusion the court used a
two step analysis; 1) did the judge have a financial interest
in the subject matter in controversy, and, if not, 2) did the
judge have some other interest that could be substantially
affected by the outcome of the litigation.
The court held the judge did not have a financial interest
in the subject matter of the litigation, with a brief
analysis:
``The use of the term `subject matter' suggests that this
provision of the statute will be most significant in in rem
proceedings. See E. Wayne Thode, Reporters Notes to A.B.A.
Code of Judicial Conduct, 56 (1973). We hold that the judge
does not have a direct economic or financial interest in the
outcome of the case, and thus could hear it without
contravening the constitutional due process.''
Here is where Judge Breyer drops completely out of the
disqualification circle. In the financial relationship of any
of his cases to the totality of his dividend potential, his
Name is utterly trivial and, in any case, he not only does
not know that a litigant is insured with the syndicates but,
realistically, has no practical way of finding out. As the
legislative history clearly shows, it is intended in these
situations, generally speaking, that for a judge not to be
kept currently informed is an affirmative virtue, or else the
persons controlling the investments, as in a common fund
situation, would have the power to disqualify a judge by
making an investment and forcing the knowledge on the judge.
This was deliberately considered in the legislative history
as a hazard and was guarded against. An opinion, closely
analogous, shared by several district judges, is whether
Alaskan district judges must disqualify in cases claiming
``amounts for the Alaska Permanent Fund, from which dividends
can flow to, among others, district judges. Held, no
disqualification; the amounts are too remote and speculative,
Exxon Corp. v. Heinze, 792 F. Supp. 77 (D. Ala. 1992). For
perhaps the leading case that a judge should not disqualify
for a contingent interest where he is not a party but,
speculatively, might get a small dividend some day, see In re
Va. Elec. Power Co., 539 F.2d 357 (4th Cir. 1976).
VI. Appearance Of Impropriety
This leaves the generalized provision of Sec. 455(a) that a
judge shall disqualify where ``his impartiality might
reasonably be questioned.'' This is commonly caught up in the
phrase which has a long history, pre-Sec. 455 ABA and U.S.
Supreme Court opinions. The amorphous quality of the phase
makes it hard to deal with decisively. However, the phrase
has gained technical meaning in both the legislative
history and the cases; categorically it does not mean that
pointing a finger and expressing dismay is enough.
Moreover, when, as developed above, certain types of
investment are expressly allowed under the statute, it
will be difficult to make them ``improper.''
The 1974 Act eliminated the ``duty to sit,'' permitting the
judge to disqualify where his impartiality may reasonably be
questioned. Both Justice Traynor and Mr. Frank advised the
Senate committee that this disqualification was to be
determined by ``what the traditions and practice have been,''
Sen. Hrg. 1973 at 15. These do not authorize disqualification
for ``remote, contingent, or speculative interest,'' or
``indirect and attenuated interest''; In re Drexel Burnham
Lambert Inc., 861 F.2d 1307, reh'g den. 869 F.2d 116, cert.
den. 490 U.S. 1102 (1988); TV Communications Network, Inc. v.
ESPN, Inc., 767 F. Supp. 1077 (D. Colo. 1991).
It is here that the common fund exception has great bearing
by analogy. Such an investment involves the same factors
which motivated the common fund exception. That is to say,
the statutes mean to preserve the right of judges to invest
and clearly except from the rigorous disqualification
standards investments in common funds where the judge has no
effective way of knowing precisely what interests may be
within the scope of the investments. Functionally an
investment in Lloyds is the same as an investment in any
common fund with general holdings. In these circumstances,
there cannot be an ``appearance of impropriety'' in an
investment which is just the same, functionally, as those
expressly protected.
vii. the disqualification claim, if accepted, would produce
unreasonably and unintended results
As noted in the preliminary observations to this
memorandum, the concern here is grossly excessive. The
syndicates have a broad reach. The returns to the Names could
be affected by numerous other matters beside pollution
claims. For a comprehensive discussion of the proposition
that there is no ground for disqualification because a case
may affect general rules of law, see New York City Develop.
Corp. v. Hart, 796 F.2d 976, 979 (7th Cir. 1986) (``Almost
every judge will have some remote interest of this sort.'')
Almost any case relating to the business community could
relate to Lloyds in some remote way, and any number of cases
can relate to other reaches of the business community. Even
the criminal cases, in at least some instances, can have
significant business fallout, as for example, the RICO cases.
To say that Judge Breyer should have recused himself from all
pollution cases would logically be to say that judges
should not invest in a business generally.
I reiterate that neither the canon nor Sec. 455 meant to
preclude investment by judges. The focus on the pollution
cases is excessively sharp because, if there were
disqualification here, there would necessarily be
disqualification as to too many other aspects of investment.
This would defeat the purpose of the canons and the statute.
VIII. Conclusion
Judge Breyer properly did not disqualify in the pollution
cases which came before him.
John P. Frank.
____
July 13, 1994.
Hon. Joseph R. Biden,
Chairman, Committee on the Judiciary, U.S. Senate, Dirksen
Office Building, Washington, DC.
Dear Senator Biden: As one who has worked in the field of
lawyers' and judges' ethics for almost three decades, I write
to oppose the confirmation of Chief Judge Stephen Breyer as a
member of the Supreme Court. My opposition is based upon
Judge Breyer's violation of the Federal Disqualification
Statute, 28 U.S.C. Sec. 455.
We have heard much in recent years about a ``litmus test''
for judges. The reference has been to the nominees' positions
on substantive issues, and the test has fluctuated with the
politics of the moment. If there is one test that should be
constant, however, it is that the record of a nominee for
judicial office should not be tainted by a serious violation
of judicial ethics. Judge Breyer fails that test.
the disqualification statute (Sec. 455)
The Federal Disqualification Statute (Sec. 455) was enacted
by Congress to ensure respect for the integrity of the
federal judiciary. Discussing the statute in the Liljeberg
case, the Supreme Court said that ``We must continuously bear
in mind that to perform its high function in the best way,
`justice must satisfy the appearance of justice.'''\1\
---------------------------------------------------------------------------
Footnotes at end of article.
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The problem, the Supreme Court explained, is that ``people
who have not served on the bench are often all too willing
to indulge suspicions and doubts concerning the integrity
of judges.''\2\ Section 455(a) was therefore adopted to
``promote confidence in the judiciary'' and to eliminate
those ``suspicions and doubts.''
Accordingly, Sec. 455(a) expressly requires that every
federal judge ``shall'' disqualify himself from any case in
which his impartiality ``might'' reasonably be
``questioned.''\3\ This statutory language is intentionally
broad, requiring the judge to avoid the ``appearance of
impropriety whenever possible.''\4\
Writing for the Supreme Court just this year, Justice
Scalia said that Sec. 455(a) covers all forms of partiality,
and ``require[s] them all to be evaluated on an objective
basis, so that what matters is not the reality of
[partiality] but its appearance.''\5\ And Justice Scalia
added: ``Quite simply and quite universally, recusal was
required whenever `impartiality might reasonably be
questioned.'''\6\
This objective standard--which is to be applied
``universally'' and ``whenever possible,''--means that the
judge cannot remain in a case on the ground that he,
personally, is a person of integrity who would not be
affected by a personal financial concern. Rather, the
question is whether the ``average judge'' would be offered a
``possible temptation'' not to ``hold the balance nice, clear
and true.''\7\
That last quotation goes back to cases decided even before
Sec. 455 was enacted--cases like Tumey, Murchison, and
Lavoie.\8\ Those cases hold that constitutional due process
requires the judge to disqualify himself unless his interest
is ``so remote, trifling, and insignificant'' as to be
``incapable of affecting'' an individual's judgment.\9\
judge breyer's violation of the statute.
I have quoted at some length from controlling Supreme Court
cases like Liteky, Liljeberg, Tumey, Murchison, and Lavoie,
because, so far, they have been virtually ignored in these
hearings. Neither Professor Stephen Gillers nor Professor
Geoffrey Hazard has discussed these cases in their letters to
the Committee in which they conclude that Judge Breyer did
not violate the Statute.\10\
Judge Breyer was a member, or Name, in the Lloyd's Merrett
syndicate 418 in 1985, insuring asbestos and pollution
losses.\11\ His exposure to liability continues to this day.
As of 1993, the total losses on that account were $245.6
million. Other Names have had their fortunes wiped out in
total Lloyd's liabilities approaching $12 billion. For years,
therefore, the Names have been understandably jittery.
The New York Times has described Judge Breyer's membership
in Lloyd's as ``A Tricky Investment.''\12\ Although Judge
Breyer has assured this Committee that he will get out of his
membership as soon as possible, this is a questionable
pledge. He himself has testified that he has been trying to
extricate himself for years. And according to Richard
Rosenblatt, who heads a group of hundreds of American Names
who are ``afraid of being wiped out,'' it would cost Judge
Breyer more that $1 million to insure himself against his
personal share of his syndicate's losses.\13\ Even then, he
would remain liable if his insurer could not pay.\14\
Judge Breyer and the White House have assured this
Committee and the public that Judge Breyer's reasonably
anticipated liability is negligible. And the ethics experts
who have ``cleared'' Judge Breyer have based their opinions
on just such misleading assumptions. As Professor Hazard
says, he was told to assume that Judge Breyer's possible
losses are well within ``stop-loss'' insurance coverage that
the Judge already has. For similar reasons, Professor Gillers
has commented that his own opinion is ``rather narrow.''\15\
But consider Mr. Rosenblatt's estimate that insurance
coverage of Judge Breyer's liability would cost more than $1
million. That reflects the calculation of hard-headed
actuaries, not overly optimistic politicians eager to
minimize the true dimensions of the Judge's difficulties.
Having said that, let me emphasize that my opinion is not
dependent upon the precise size of Judge Breyer's
liability.\16\ As Professor Hazard said in his opinion, the
business of insurance is complex, sometimes controversial,
and ``widely the subject of public concern and suspicion.''
Unfortunately, Professor Hazard did not recognize that his
own description of Judge Breyer's position as an insurer
echoes the Supreme Court's description of the purpose of
Sec. 455--to avoid public ``suspicion and doubts.''
Predictably, and properly, ``public concern and suspicion''
have been focused on the integrity of the judiciary because
of Judge Breyer's failure to disqualify himself when the
Statute required him to do so.
As the White House has admitted, Judge Breyer ``knew'' or
``could have known'' that environmental pollution was one of
the risks he was insuring as a Name. (In fact, he was
notified of this by his syndicate.) But, they contend, he did
not know precisely which of his cases involved those risks.
In effect, they argue that Judge Breyer could not know for
sure whether a particular pollution defendant standing before
him was carrying the Judge's blank check in his pocket.
But under Sec. 455(c) of the Disqualification Statute, the
Judge had an absolute responsibility to ``inform himself
about his personal . . . financial interests.''\17\
(Professors Gillers and Hazard ignore this requirement in
their opinion letters.) Thus, the bizarre defense of Judge
Breyer is that he violated his statutory duty to know the
details of this personal financial interest, and therefore he
didn't violate his statutory duty to disqualify himself.
In fact, Judge Breyer did violate the statute in failing to
disqualify himself. Take, for example, United States v.
Ottati & Goss, Inc.\18\ Two years after Liljeberg explained
the broad scope of Sec. 455(a), Judge Breyer failed to
disqualify himself from Ottati & Goss--even though the case
involved the Environmental Protection Agency's powers to
impose liability on polluters like those the Judge knew he
was insuring.
In Ottati & Goss, the issue was whether the EPA could
impose remedies against polluters, subject to judicial
revision only on a finding that the EPA had arbitrarily and
capriciously abused its powers. Lower court decisions were
split on the issue. A decision by the First Circuit would be
on important precedent.
Judge Breyer expressly recognized this in his opinion in
Ottati & Goss, saying that the case raised a question with
``implications for other cases as well as this one.'' And he
said again: ``The EPA's * * * argument [has] implications
beyond the confines of this case.''
That was enough to require that Judge Breyer disqualify
himself. In effect, he was in the position of deciding his
own case, or, at least, of setting a precedent that could
affect his own liability.
How the Judge ultimately decided the case has no effect on
his duty to disqualify himself. His decision in Ottati & Goss
compounds the appearance of impropriety that the Statute
forbids, because the Judge wrote an opinion weakening the
power of the EPA to impose liability on polluters. And his
opinion, predictably, has been influential, causing the EPA
to change its own regulations.
Similarly, Judge Breyer participated in Reardon v. United
States,\19\ where the First Circuit again made it more
difficult for the EPA to impose liability on Polluters. In
Reardon, the EPA had removed tons of contaminated soil and
put a lien on the property to secure payment of its costs.
The loss represented by that lien is the same kind of loss
that Judge Breyer was liable to reimburse as an insurer.
And the decision held that the EPA did not have the power
to impose the lien.
Is it not clear that Judge Breyer's impartiality ``might''
reasonably be ``questioned'' in Ottati & Goss and in Reardon?
Would not his participation cause ``suspicions and doubts''
about the integrity of judges? In that not precisely the
problem that the Congress intended to resolve with
Sec. 455(a) of the Disqualification Statute?
One contention put forth by the White House is that Judge
Breyer was not asked to disqualify himself by a litigant.
That is irrelevant. The Statute does not permit a judge to
wait to see whether a litigant has smoked out his interest
and makes a motion for disqualification. Rather, the Statute
is ``self-executing,'' requiring the judge to take the
initiative. As Justice Scalia said for a unanimous Court in
Liteky, the Statute ``placed the obligation to identify the
existence of those grounds upon the judge himself, rather
than requiring recusal only in response to a party
affidavit.''\20\
Another contention is that the Judge's membership in
Lloyd's is ``analogous'' to being an investor in a mutual
fund, and therefore is exempt from the statute under
Sec. 455(d)(4). There are two important differences between
being a name in Lloyd's and being an investor in a mutual
fund. One is that mutual funds are typically highly diverse.
But Lloyd's is solely involved in insurance, and the Judge
knew that one or more of his insurance liabilities related to
environmental pollution. Another major difference is that an
investor in a mutual fund cannot lose more than the principle
invested. In Lloyd's, on the contrary, one's entire fortune
is at risk, as hundreds of Names have found to their dismay
in recent years.
It has also been argued that Sec. 455(a) is not the right
section to apply. The contention is that the correct section
is Sec. 455(b)(4), which (on one reading) requires that the
judge's interest ``could'' be ``substantially affected by the
outcome of the proceeding.'' There are three answers to that
argument.
First, those who make that contention have been assuming,
contrary to fact, that the Judge's potential liability is
negligible. (See discussion above).
Second, Sec. 455(b) does not require that the Judge's
interest be ``substantial'' if it is an interest in the
``subject matter in controversy.'' In that event, the judge
must disqualify himself ``however small'' his interest might
be. Sec. 455(b)(4). And some read the phrase ``subject matter
in controversy'' to include the remedy--such as the lien in
Reardon--if that is what the litigation is about. One could
similarly say that the subject matter of the controversy in
Ottati & Goss was the enforcement powers of the EPA. Thus,
Judge Breyer was required to disqualify himself under
Sec. 455(b)(4) in both those cases ``however small'' his
financial interest in the outcome might be.
Third, the ``substantially affected'' provision of
Sec. 455(b)(4) does not preclude application of the basic
provision, Sec. 455(a). and Sec. 455(a) can require
disqualification when the Judge's impartiality ``might
reasonably be questioned'' even when the amount of financial
interest is not in fact substantial. In Liljeberg, for
example, the Supreme Court relied principally upon
Sec. 455(a) even while recognizing that Sec. 455(b)(4) also
applied.
Ignoring the Supreme Court cases in point, Professor
Gillers has placed his primary reliance on In re Placid Oil
Company.\21\ But Placid Oil is obsolete, having been decided
two years before Liljeberg (discussed above). With no
analysis whatsoever, the appeals court in Placid Oil said
in a single conclusory sentence that the judge's interest
in that case did not create a situation in which a judge's
impartiality might reasonably be questioned. The court
also said that the judge's interest at issue was, in fact,
``remote, contingent, and speculative''--unlike Judge
Breyer's position in Ottati & Goss and Reardon. Professor
Gillers' reliance upon the obsolete and limited holding in
Placid Oil, while ignoring Liljeberg and all of the other
Supreme Court authorities, renders his opinion highly
questionable.
The court in Placid Oil also says that a judge is not
automatically disqualified if he has any stock at all in a
company that is in the same industry as a litigant. That
certainly remains true. But Judge Breyer has much more than a
minor interest in a company in the same industry. He is an
insurer with a potential liability that he cannot avoid for
less than $1,000,000.
In addition, Judge Breyer, with his wife, holds investments
of over $250,000 in chemical and pharmaceutical companies.
Moody's Investors Service says that these are ``among the
highest risks'' for Superfund liability.\22\
Judge Breyer has also held significant long-term
investments in several liability insurance carriers that,
according to the Financial Times, have been ``haunted by the
prospect of big claims for environmental liability,''
especially Superfund.\23\
In 1994 his biggest single U.S. investment is American
International Group. According to Best's Review--an industry
trade magazine and investment adviser--A.I.G. is ``depending
on * * * judicial trends'' on Superfund for its future
financial health.\24\
The Judge also owns stock in General Re Corporation. That
company's 1994 annual report warns investors that their
future earnings could be affected by ``new theories of
liability and new contract interpretations'' by judges on
Superfund.\25\
Judge Breyer appears to have been accommodating these
concerns. And his investments in such companies--unlike that
in Lloyd's--are investments that a judge with ethical
sensitivity could, and would, have gotten out of and stayed
away from.
CONCLUSION
Chief Judge Stephen Breyer has more than once violated the
Federal Disqualification Statute--a Statute that was designed
to ensure the constitutional requirement that ``justice must
satisfy the appearance of justice.'' In violating that
Statute, he has, predictably, caused the very ``suspicions
and doubts'' about the integrity of judges that the Statute
was enacted to avoid.
These violations of his judicial responsibilities raise
serious doubts about how Judge Breyer would conduct himself
as a Justice of the Supreme Court. And his refusal to
recognize anything more serious than ``imprudence''
reinforces those doubts.
In addition, Judge Breyer's violations, and his insistence
that he has done nothing improper, raise the concern that as
a member of Supreme Court, Judge Breyer would vote to weaken
the Federal Disqualification Statute, thereby encouraging
other federal judges to disregard the intent of Congress in
enacting that law.
For these reasons, I oppose confirmation of Judge Stephen
Breyer to the Supreme Court of the United States.
Very truly yours,
Monroe H. Freedman,
Howard Lichtenstein Distinguished Professor of Legal
Ethics.
footnotes
\1\Liljeberg v. Health Services Acquisition Corp., 108 S.Ct.
2194, 2205 (1988), quoting In re Murchison, 75 S.Ct. 623, 625
(1955).
\2\Id.
\3\28 U.S.C. 455(a).
\4\Liljeberg at 2205, citing legislative history.
\5\Liteky v. U.S., 114 S.Ct. 1147, 1153-1154 (1994) (emphasis
in the original).
\6\Id. The Supreme Court was unanimous on these points.
\7\Liljeberg, at 2205, n. 12, quoting previous cases.
\8\Tumey v. State of Ohio, 47 S.Ct. 437 (1927); In re
Murchison, 75 S.Ct. 623 (1955); Aetna Life Insurance Co. v.
Lavoie, 106 S.Ct. 1580 (1986).
\9\The quote goes back to Justice Cooley's treatise,
Constitutional Limitations.
\10\Professor Gillers cites Liteky only for the point (which
is immaterial to his conclusion) that ``[w]hile Sec. 455(a)
and Sec. 455(b) overlap, they are not congruent.''
\11\The information was first revealed publicly in an article
in Newsday on June 24, 1994.
\12\N.Y. Times A:1, A16, July 13, 1994.
\13\Id.
\14\Id.
\15\Gillers to Freedman, Lexis Counsel Connect E-mail, July
10, 1994.
\16\See the original article in Newsday, June 24, 1994.
\17\This is in contrast to the second clause of the same
subsection, which requires only that he make a ``reasonable
effort'' to inform himself about the financial interests of
members of his household.
\18\900 F.2d 429 (1990).
\19\947 F.2d 1509.
\20\Liteky at 1153.
\21\802 F.2d 783 (5th Cir., 1986).
\22\I am relying here upon the reporting and analysis of
Bruce Shapiro in The Nation, p. 76, July 18, 1994.
\23\Id.
\24\Id.
\25\Id.
New York University,
School of Law,
New York, NY, July 15, 1994.
Hon. Joseph R. Biden,
Chairman, Committee on the Judiciary, U.S. Senate, Dirksen
Office Building, Washington, DC.
Dear Chairman Biden: The White House Counsel's Office has
given me a copy of Professor Monroe Freedman's letter to you
of July 13, 1994, and asked me to reply to it. Since the
letter takes issue with my July 8, 1994 letter to the White
House Counsel, I appreciate having this opportunity to do so.
The issue, of course, is whether Chief Judge Stephen Breyer
violated 28 U.S.C. Sec. 455 when he sat in certain pollution
cases while he was also a ``Name'' in a Lloyd's syndicate. I
will assume general familiarity with the facts and the prior
correspondence.
Professor Freedman is in my opinion in error when he
charges Judge Breyer with illegal conduct. Professor Freedman
has misconstrued the governing rules and ignored governing
precedent. I shall explain how presently. First, though the
Committee should be aware of a critical doctrine that has not
yet been identified.
Section 455, which derives from the 1972 ABA Code of
Judicial Conduct, states the Congressional rules for recusal
of a federal judicial officer. The section has two kinds of
rules: categorical rules and standards. The categorical rules
require no judgment. They either apply or they do not. The
standards, by contrast, require judgment.
An example of a categorical rule is Sec. 455(b)(5)(i),
which would require a judge to step aside if the judge's
``spouse, or a person within the third degree of relationship
to either of them. . . . Is a party to the proceeding. . .
.'' This circumstance either exists or it does not. If it
does, recusal is required.
The two provisions of Sec. 455 that have been cited in
connection with Judge Breyer (until Professor Freedman
injected a third, discussed below) contain standards, not
categorical rules. The first standard is that part of
Sec. 455(b)(4) that requires recusal if the judge (as an
individual of fiduciary) or certain relatives of the judge
have ``any other interest that could be substantially
affected by the outcome of the proceeding.'' The second
standard is Sec. 455(a), which requires recusal if the
judge's ``impartiality might reasonably be questioned.''
As should be clear, these two standards require a judge to
interpret imprecise words like ``could,'' ``substantially
affected,'' ``might'' and ``reasonably.'' The meaning of
these words (and the standards that contain them) are, of
course, clarified as cases construe them, but they have
never, and were not intended to, become fixed categories.
When we deal with standards, we deal with a continuum. In
some matters, it will be self-evident that a judge's
``impartiality might reasonably be questioned'' or that a
proceeding's ``outcome'' could ``substantially'' affect a
judge's interests. In other matters, the opposite will be
clear. But in many cases, different judges will apply the
standards differently.
That doesn't mean that one judge is right and the other
judge wrong. It means only that as with all flexible
standards there will be room for disagreement. The way that
the judicial system accommodates this reality is pertinent to
the questions before the Judiciary Committee.
Appellate courts routinely defer to a judge's decision
regarding application of a standard by upholding the decision
unless it was an ``abuse of discretion.'' Town of Norfolk v.
U.S. Army Corps of Engineers, 968 F. 2d 1438, 1460 (1st Cir.
1992); Pope v. Federal Express Corp., 974 F.2d 982, 985 (8th
Cir. 1992). This test recognizes that there is significant
room for disagreement in the application of a standard.
Reasonable minds may differ and neither will be wrong.
While Professor Freedman holds that Judge Breyer should
have recused himself in certain of his pollution cases, I and
others who study the law of judicial disqualification have
reached an opposite conclusion. That difference of opinion is
rather strong evidence that the situations confronting Judge
Breyer did not self-evidently require his recusal, but were
instead situations in which reasonable minds might differ on
the application of the standard. Judge's Breyer's conduct was
not, therefore, an abuse of discretion and Judge Breyer did
not violate Sec. 455 notwithstanding that another judge might
have elected differently.
Not only do I believe that Judge Breyer's decision to sit
in the pollution cases was reasonable, I believe it was
right. In the balance of this letter, I will explain why
Sec. 455 did not disqualify Judge Breyer and where I think
Professor Freedman goes wrong.
I have already quoted from Sec. 455(b)(4). A judge must not
sit if the judge (including certain relatives) has ``any
other interest that could be substantially affected by the
outcome of the proceeding.'' The words ``any other interest''
are to be distinguished from a separate basis for recusal if
a judge has a ``financial interest in the subject matter of
the proceeding or in a party to the proceeding.'' Such a
``financial interest'' requires recusal ``however small.''
Section 455(d)(4).
No one has suggested that Judge Breyer had a ``financial
interest'' in a party to proceedings before him. Professor
Freedman has rhetorically asked, however, whether Judge
Breyer had a ``financial interest'' in the ``subject matter''
of proceedings before him. (Freedman letter at p. 8.) This
suggestion is wrong, as I shall discuss below.
In order to trigger Sec. 455(b)(4)'s reference to ``any
other interest,'' several facts must be true (and the judge's
failure to recognize their truth must be an abuse of
discretion). These facts are that the (i) the judge has an
``other interest'' that (ii) ``could be'' (iii)
``substantially affected'' by (iv) ``the outcome of
the proceeding.''
Judge Breyer had an investment in Lloyd's. I assumed in my
letter to Mr. Cutler that he had unlimited financial exposure
on that investment. That satisfies factor (i). However, it
does not satisfy factor (iii), even though I am assuming that
Judge Breyer's financial exposure is unlimited.
The word ``substantially'' refers to the effect on the
``interest'' that the ``outcome of the proceeding'' ``could''
have. Professor Thode, the Reporter for the ABA Judicial
Conduct Code from which this part of Sec. 455(b)(4) was
drawn, has written: ``Here the issue is not whether a judge
has a `substantial interest,' but whether the interest he has
could be substantially affected by a decision in the
proceeding before him.'' E. Thode, Reporter's Notes to Code
of Judicial Conduct 66 (1973) (hereafter ``Thode'').
In measuring the possible effect of the ``outcome of the
proceeding'' on the judge's interest, we must construe the
word ``could.'' As stated, ``could'' is not a precise word.
``Could'' could mean ``could conceivably'' or it could
require a closer nexus between the outcome of the proceeding
and the effect on the judge's interest. The courts have
construed ``could'' to require a closer nexus.
My letter to Mr. Cutler cites two cases that require a
``direct'' connection between the outcome of a proceeding and
the judge's interest. By contrast, a ``remote, contingent,
and speculative interest'' will not suffice. In re Placid Oil
Co., 802 F.2d 783, 786-77 (5th Cir. 1986); Gas Utilities Co.
of Alabama, Inc. v. Southern Natural Gas Co., 996 F.2d 282
(11th Cir. 1993), cert. denied, 114 S.Ct. 687 (1994).
While Professor Freedman suggests (p. 9) that Placid Oil is
``obsolete,'' because of the Supreme Court's decision in
Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847
(1988), two year later, this is wrong. First, the Eleventh
Circuit, cited Placid Oil in 1993 for the very point made
here. Other courts have cited it, too, after Liljeberg. See,
e.g., McCann v. Communications Design Corp. 775 F. Supp. 1535
(D. Conn. 1991).
Second, the facts of Liljeberg are dramatically different
from those in Placid Oil. In Liljeberg, a university with
which the judge had a fiduciary relationship would (as a
result of contractual obligations and real estate values)
gain millions of dollars if the judge awarded the rights to a
certificate of need for a hospital to the defendant. That
gave the judge, as fiduciary, an interest ``however small''
in the subject of the litigation (the certificate) and also
an interest that could be substantially affected by the
outcome of the proceeding. The facts of Liljeberg show a
``direct'' effect on the judge's interest as a fiduciary, and
of course the effect was substantial.
Permit me to make this clearer with an example. Assume that
the outcome of a case will nearly certainly cause a $100
decline in the value of the judge's stock interest. The
effect, then, is ``direct,'' but the judge's financial
interest is not ``substantially affected'' because the amount
is too small. Now assume an omniscient observer could tell us
that the outcome of a proceeding will have 1/1000th of a
chance of causing the judge's stock interest to decline by
$100,000. There, the effect is substantial but it is not
``direct.''
Professor Freedman cites two cases in which he concludes
Judge Breyer should not have participated. Did the Judge
abuse his discretion by concluding that the decisions in
these cases could not have a direct and substantial affect on
his financial interest in Lloyd's? That is the question.
One issue in United States v. Ottati & Goss, Inc., 900 F.2d
429 (1st Cir. 1990), the issue Professor Freedman cites, was
whether a federal judge had to grant the EPA the precise
injunction it requested (so long as the request was not
arbitrary) or whether instead the judge had broader
discretion. Judge Breyer held that the judge had broader
discretion.
Professor Freedman writes that Judge Breyer should not have
properly decided that case because it ``involved the [EPA's]
powers to impose liability on polluters like those the Judge
knew he was insuring.'' (Freedman letter at p. 6.) This is
just wrong. It is not the standard. Professor Freedman cannot
say with any degree of confidence that the decision in Ottati
& Goss would have a direct and substantial effect on the
judge's interests. Furthermore, Professor Freedman leaves
out an important part of the case. The EPA had two routes
for seeking judicial injunctions. It had proceeded under
one of them. Judge Breyer expressly acknowledged that if
it had proceeded via the other route (seeking enforcement
of a nonarbitrary EPA order), ``the court must enforce
it.'' Id at 434.
Now think about the chain of events one would have to
envision to get from the holding in Ottati & Goss to the
conclusion that Judge Breyer's interests could be directly
and substantially affected. One would have to say that
because a trail judge will have discretion whether to grant
an EPA injunction when the EPA proceeds along one route
rather than another, it could happen that in another case the
EPA would elect the first route in an action against an
insured of Judge Breyer's Lloyd's syndicate, that the judge
in that case will deny EPA the injunction it seeks (relying
on the discretion Judge Breyer's opinion affords), that the
syndicate would not have to pay to comply with the particular
injunction EPA wanted, and that the effect from all this on
Judge Breyer's pro rata financial interest in the syndicate
would be ``substantial.'' That chain of events is what the
caselaw means when it uses the words ``remote, contingent,
and speculative.''
Professor Freedman also cites Reardon v. United States, 947
F.2d 1509 (1st Cir. 1991) Reardon is even a more farfetched
example than Ottati & Goss. Judge Breyer sat on an en banc
court that held that, absent exigent circumstances, due
process required ``notice of an intention to file a notice of
lien and provision for a hearing if the property owner
claimed that the lien was wrongfully imposed.'' Id. at 1522.
Professor Freedman wrongly says that the decision ``held that
the EPA did not have the power to impose the lien.'' (letter
at p.7.) It did, so long as it gave notice of its intention
to do so and afforded a hearing thereafter.
Professor Freedman connects Reardon to the situation at
hand this way: ``The loss represented by that lien is the
same kind of loss that Judge Breyer was liable to reimburse
as an insurer.'' (letter at p. 7.) This is beyond
``speculative.'' What ``loss'' is Professor Freedman
referring to? Think about the extended chain of events one
should have to describe to get from the Reardon holding to
Judge Breyer's interests. The EPA would have to give
notice of an intent to impose a lien on property of an
insured of the Judge's Lloyd's syndicate. Then, before the
EPA could file its lien, the recipient of the notice would
have had to defeat that effort by making a quick
disposition of the property, thereby defeating the EPA's
security interest. As a result of that disposition somehow
(I'm not clear how) the syndicate would escape its
insurance responsibility and the pro rata savings to Judge
Breyer in particular would have to be substantial. Reardon
simply does not support Professor Freedman's conclusion.
Before I leave Sec. 455(b), I want to recognize that a
``remote, contingent, and speculative'' interest is not the
same as no conceivable interest whatsoever. A system of
judicial recusal must balance between the risk of real or
apparent personal interest, on the one hand, and an unduly
broad standard that disqualifies a large number of judges (or
severely limits their investments), on the other. A broad
standard would lead cautious judges to step aside no matter
how improbable an effect on their interests. I believe the
courts have struck the right balance. But the line will
sometimes be unclear, calling on the judge to exercise
discretion.
On occasion, by definition , even a remote interest will
become a reality. Today's issue of Newsday reports that a
loser in a case before Judge Breyer sued a Lloyd's syndicate
for reimbursement of its expenditures under an insurance
policy the loser had with Lloyd's. The syndicate may or may
not have been Judge Breyer's syndicate. Let's assume it was
Judge Breyer's syndicate. That is part of the price of a
balanced rule. A rule that prohibited a judge from sitting if
a decision could have any conceivable effect on his or her
interests would have its own (in my view less appealing)
price.
In addition, I have been asked to assume that Judge Breyer
did not and could not have known the particular insureds
under his Lloyd's syndicate. Section 455(b) quite clearly
requires knowledge.
Professor Freedman also relies on Sec. 455(a), which
requires recusal if a judge's ``impartiality might reasonably
be questioned.'' Apparently, Professor Freedman believes it
to have been an abuse of discretion for Judge Breyer not to
recuse himself under this provision.
Section 455(a) requires recusal when an ``objective,
disinterested, observer fully informed of the facts
underlying the grounds on which recusal was sought would
entertain significant doubt that justice would be done'' in
the particular case. Union Carbide Corp. v. U.S. Cutting
Service, Inc., 782 F. 2d 710, 715 (7th Cir. 1986). I do not
believe that conclusion can be reached on the facts of the
cases in which Judge Breyer sat. Certainly, it was not an
abuse of discretion to reject application of Sec. 455(a) as
so defined.
A stronger objection to Sec. 455(a) exists. As I mentioned
in my letter to Mr. Cutler, while not congruent, Sec. 455(a)
and Sec. 455(b) do overlap. As a matter of statutory
interpretation, it is improper to resort to Sec. 455(a) when
Congress has specifically legislated criteria for recusal in
the particular circumstances described in Sec. 455(b) and
these criteria are absent. As the Court wrote in Liteky v.
United States, 114 S. Ct. 1147, 1156 n.2 (1994), ``it is poor
statutory construction to interpret (a) as nullifying the
limitations (b) provides, except to the extent the text
requires.''
Here, Sec. 455(b)(4), as construed in caselaw, requires
that the outcome of the proceeding before the judge have both
a direct and substantial effect on the judge's interests.
Liteky tells us that we should not use Sec. 455(a) to
``nullify'' these requirements. Specifically, here, we should
not use Sec. 455(a) to require recusal where the effect is
``remote'' or ``speculative'' or ``contingent.'' In any
event, the same test is employed to reject recusal under
Sec. 455 (a). In re Drexel Burnham Lambert, Inc., 861 F.2d
1307, 1313 (2d Cir. 1988) (remote, contingent, or speculative
interest does not reasonably bring judge's impartiality into
question.)
Let me conclude by addressing two other of Professor
Freedman's points. First, he suggests that Judge Breyer might
have had a ``financial interest'' in the ``subject matter''
of the cases before him because the legal issue he decided
could arise in a case involving his Lloyd's syndicate.
Professor Freedman does not even adopt this view himself.
He says merely that ``some have read'' the phrase
``subject matter in controversy'' to include the remedy,
like the lien at issue in Reardon. He also writes that
``[o]ne could similarly say'' that EPA enforcement powers
in Ottati & Goss were the ``subject matter'' of that
controversy.
``One'' could, of course, ``say'' many things, just as
``some'' may have ``read'' the statute a variety of ways. But
the fact is that no authority supports the view that a judge
can have a ``financial interest'' in a question of law. As
Professor Thode explained, the ``subject matter'' language
``becomes significant in in rem proceedings.'' Thode at 65.
Another example is Liljeberg, where the university on whose
board the judge sat had a financial interest riding on the
holder of the certificate of need, which was the subject
matter before the judge. This is not a case like Tumey v.
State of Ohio, 273 U.S. 510 (1927), cited by Professor
Freedman, where the adjudicator had a financial interest in
the very fine he imposed on the defendant because he would
receive part of it.
Professor Freedman suggests (p. 5) that Judge Breyer
violated his duty to keep himself informed of his financial
interests. Section 455(c). My letter was premised on two
assumptions about what Judge Breyer knew or could have known
and what he did not know and could not have known. I charged
him with knowledge of what he could have known but he can't
be faulted with not knowing what he could not have known.
Thank you for this opportunity.
Sincerely,
Stephen Gillers.
Mr. KENNEDY. Mr. President, I withhold the remainder of the time. I
suggest the absence of a quorum, and ask unanimous consent that the
time be equally divided.
The PRESIDING OFFICER (Mr. Mathews). Without objection, it is so
ordered.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BIDEN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BIDEN. Mr. President, it has been a number of years now that I
have had the privilege and responsibility, as chairman of the committee
or ranking member of the Judiciary Committee, to be involved in the
confirmation hearings of Supreme Court nominees. One of the things that
always impresses me after it is all over is that my staff and I spend
so much time--usually months--reading every single solitary document
the nominee has ever written. I do not mean that figuratively, I mean
that literally--at least every one we are aware of; interviewing
individuals, listening to testimony--in the case of Judge Breyer, 22
hours of his testimony--before the committee. I do not talk to my
brother that long, and he is my best friend. I am always amazed at what
a broad and deep picture we get of an individual when that process is
over.
Quite frankly, the only aspect of being chairman of the Judiciary
Committee I do not like is the nominating process, because I almost
feel like I am being too intrusive, almost learning too much about an
individual--not so much about their personal lives, but about what they
think, and how they have acted in their adult life, and how they have
conducted themselves professionally.
I must say that in the case of Judge Breyer, after this long and
detailed process, where I personally will have spent literally hundreds
of hours in detail roaming through his writings, asking him questions,
discussing constitutional methodology and theory with him and cases, I
came away from the hearing--and I come to the floor--with the same
feeling that the entirety of the Judiciary Committee left those
hearings and the process with: That this is a man of high integrity,
unblemished achievement, and consistent, constant, relentless
excellence in whatever he undertook. This guy was everything from,
literally, an Eagle Scout to--I think he was, if not the editor in
chief--the article editor with the Law Review at Harvard law school.
I am sure he--like everyone in this country--has had his share of
personal pain, travail, and trouble, but you would not know it from
this man's record. He has succeeded at everything he has undertaken.
So I approach this nomination, as I approached the five other
nominations that preceded it during my tenure as chairman of the
Judiciary Committee, with two goals in mind. The first goal is to meet
the committee's formal obligation given to it by the Senate to
scrutinize the nominee's credentials, abilities, and to make
recommendations to the full Senate about the nominee's worthiness to
sit on the Supreme Court.
That sounds a bit presumptuous, for all of us to talk about the
worthiness of someone to sit on the Court. But I will remind all of us
that this is one of the three branches of Government, and it is
incredibly powerful. A woman or man placed on the Court, as we all
know, is there for life, assuming good behavior. It requires an
impeachment to get a person off the Court.
Everything the Court does affects our daily lives. This is the only
opportunity the public at large has to try to look into the background,
philosophy, attitude, judicial temperament, and moral standing of the
individual, just like they look into us, as they should, every 6 years,
and House Members every 2 years, and the President every 4 years. We
stand for election. And people say to us, well, we like you or we do
not like you. We like this about you or do not like this about you.
That is what a democracy is about. When you think about it, there is
no such undertaking other than this process for a branch of Government
that has affected the lives of the people over 200-plus years, equally
as the Senate, House or President of the United States has. And so it
is, in one sense, in a personal sense, a high responsibility, and not a
particularly welcome one on all of our parts, to look into the
background of someone. But it is a responsibility. Under the advice and
consent clause, it is one that we do, must, and should take seriously.
That was the first goal of the committee to do, look into and
examine--the minority staff, majority staff, and the investigators, and
I will not even guess how many hours they put in. If I put in a couple
hundred, I am confident, without exaggeration, they put in thousands of
hours in figuring out--if you take all the staff who worked on this--
what this man is about, and what his philosophy is, and what the
likelihood is for him to be able to perform his duties well for the
Court. It is like an election. We are about to have an election, like
we have in a democracy for a President or a Member of Congress. This is
the election.
The Founding Fathers decided we are the electors, the ones who
decide. The President nominates, like a party nominates a candidate. A
man or woman is nominated by the President and comes before the
electors, the people that sit in here. Again, it is not a job we
relish, but it is a job we have been constitutionally assigned.
So that was my first goal, to do that thoroughly and well, so we can
come back to this body and say to all of you who served in the body,
that after our intensive and extensive look at this man, this is what
we think he is about.
My second goal in each of these hearings and nominations has been a
larger one, to consider the work of the Supreme Court as a whole by
conducting a public hearing about how the Court affects and determines
the values by which our Nation defines and redefines itself over time
and the means by which Government can act to express and defend those
values.
So, as nominees have appeared before me, I have tried to engage them
in a dialog about the most important issues facing the Supreme Court
and, consequently, facing the Nation.
I found, over the years, that the urgency of the issues has waxed and
waned from one nomination to the next, but none has ever disappeared
entirely.
Thus, I have added new concerns even as I have continued to press on
others more familiar to everyone. So that it was with Judge Breyer. I
pressed him on the same areas I have pressed other of his predecessors
and on new areas as well, because there are new areas of concern and
there are new areas of activity on the part of the Supreme Court
affecting the lives of Americans.
In the late 1980's, the Nation watched to see whether the Supreme
Court would limit the right of the individual to make certain highly
intimate decisions free from Government interference or, as one former
Justice said, the ``right to be let alone.''
In considering the nomination of Judge Robert Bork, therefore, I
focused on the scope of personal rights not named in the Constitution,
so-called unenumerated rights. As the Chair will recall, Judge Bork, a
brilliant jurist and a brilliant professor, argued with some degree of
intellectual consistency and with some power of persuasion that there
were no constitutionally guaranteed rights--I am
oversimplifying it in the interest of time--there were no
constitutionally guaranteed rights any individual had unless the
Constitution named them, unless they were enumerated, named in the
Constitution.
And if that were so, then many of the rights we take for granted and
we assume are protected by the Constitution, everything from who we can
marry, to whether or not a married couple can choose to have a child or
not by using birth control, very intimate personal decisions not
named--there is no place in the Constitution that uses the word
``marriage'' or ``husband'' or ``wife,'' no place in the Constitution
that uses the phrase ``birth control,'' but the Constitution in its
interpretation by the Supreme Court in the past has been read to say,
yes, these are rights that are protected constitutionally.
And as to Judge Bork, whether he viewed those should not be read that
way, his basic philosophy and the principle he espoused was, if it is
not named, it does not exist and it should be left to the democratic
institutions to determine whether to guard those rights or not.
So it was a big deal. It was a big deal because one of the leading
intellectuals in American jurisprudence was before the U.S. Senate
seeking to go on the Court espousing this view.
More recently, in the late eighties, we have seen new challenges
mounted to the rights of individuals as protected or nonprotected
within the Constitution. In the early 1990's, we have seen new
challenges mounted by the most power economic interests in America to
reduce the ability of Government to protect the rights and interests of
the vast majority of the American people. Obviously, that is my
characterization.
Thus, in the hearings on Justice Clarence Thomas's nomination, I
pressed Judge Thomas on his view about the ``takings clause.'' Everyone
now knows what it was. When I kept using the phrase back then, he said,
why is Biden asking the thing about the takings clause, the takings
clause of the fifth amendment. Every time anyone hears the fifth
amendment, they think of someone raising the right hand and saying, ``I
take the fifth,'' meaning ``I do not want to say anything.''
There is another noninconsequential clause within that fifth
amendment, and it is called the takings clause, and it defines the
circumstances under which any government entity can, in fact, impact
upon your right to use your property.
A case in point: The State of Delaware wants to widen the highway, a
2-lane highway, a crown top road, to a 4-lane highway. Well, under the
right of eminent domain they can come along and take some of your
farmland or some of your front yard, but they have to make a showing
that the reason they are taking your property is for the public good.
They are taking this little road, making it a big road, and that is
what the public wants and needs. So, they take your property to build a
road. When they do that, they have to pay you for the value of the
property they have taken.
But over the centuries what has developed in our English
jurisprudence system was the notion about how, if you are using your
property in a way that is a nuisance to your neighbors--in modern
terms, about how you are using your property, if your oil is seeping
out of your underground oil tank that heats your home and it is
contaminating the pool water of your next door neighbor or contaminates
the property of your neighbor--now you are a ``nuisance'' as they used
to refer to it in the English common law. You are a nuisance. You are
bothering me by the use of your property.
Can the Government come along and say--in addition to your being able
to sue the person who is creating the nuisance--``By the way, people
cannot have a tank that leaks or people cannot have factories that spew
out of the factories choking dust or carcinogenic substances or bad
things?''
What happens when the Government comes along and says in that
circumstance, ``By the way, factory owner, all factory owners in the
State of Delaware are required to make sure what they have coming out
of their smokestack is not harmful, because you have something coming
out of your smokestack that is harmful?''
So the Government says, ``Fix it or we shut down your factory.'' And
that could cost you millions of dollars. We have taken your property.
If we shut down your factory, we have not physically taken title to it,
but we have taken your property. We have taken value. Or we say, ``Put
a scrubber on that smokestack, collect all that terrible stuff before
it goes into the air.'' That costs you, say, $1 million. Well, we have
taken a million dollars out of your pocket, made you put it on that
smokestack. Now, we have taken your property.
Under the Constitution, what does that mean? You have a taking
problem.
I will not go into a lot of detail on this. But the Court basically
has said over the years, over the centuries, ``Look, when we take your
property that way, that is really not taking your property. That is
legitimate regulation.'' I am not using legal terms now in terms of art
but trying to explain the concept here. And it is a dangerous thing to
do to try to condense it this way. It will not do full justice to the
theory here. But I am taking your property. The State of Delaware
passed this law. The United States of America has passed this law.
Now, the landowner says: ``Wait a minute. You took my farmland
because you widened the road, and you paid me for that.'' And they say:
``Yes, we took it because it was for the public good, and it was not
because you were doing anything bad.'' But, you say, ``That was only
worth $200,000, and you paid me for that, but now you took 1 million
bucks out of my pocket making me put all these pollution control
devices on my chicken houses and on my compost piles, and all these
things. That cost me a million bucks. So you paid me $200,000 for the
land you took, but you are not going to give me any money for the
million bucks you made me spend?''
The Court says: ``No, we are not going to do that because there is a
legitimate purpose that the Government has for the common good of the
people to regulate for your public health and safety of the folks out
there.''
So, the debate. All of a sudden these folks who used to use the 14th
amendment in the so-called Lochner era to give excessive rights to
property owners and people who wanted to contract--remember back in the
days when they struck down all those New Deal laws saying you cannot
have child labor laws, you cannot have laws that protect people in the
work environment, and the Supreme Court kept striking those down? The
Supreme Court kept using a thing called the 14th amendment to say,
``Hey, you know, the 14th amendment says you have a right to your
property, a right to due process, and by the way, if you want to
contract with that 14-year-old kid or you want to contract with that
baker or that baker wants to open up a shop and wants to work 18 hours
a day, you cannot pass a law saying bakers cannot work but 12 hours a
day because the dust they inhale is bad for their health. You cannot do
that. You cannot regulate the public health and safety that way. You
are violating their 14th amendment rights.
By the mid-1930's they came along and said that is crazy; that does
not make sense. We ought to be able to help people with their health
and their safety without it being a constitutional violation.
Well, we thought that was gone. We thought the monster had been
buried. Guess what. It is back.
The use of the l4th amendment that way in Lochner, it is back. It is
back in the guise of the fifth amendment and the takings clause.
Because now there is a new school of thought that basically says,
``Let's go back and relook at that fifth amendment and that takings
clause thing where it says you can't take somebody's property without
paying them. We ought to count all regulations within that category.''
So now if I tell you you have to put a scrubber on your smokestack
that is going to cost a $1 million, a lot of new legal scholars of the
Chicago School of Economics are coming along, saying, ``I'll tell you
what. The Government can tell me not to spew that stuff out--I do not
argue with that--but if it costs me money to keep the air clean, you
have got to pay me. Just like you pay me for my farmland, you have got
to pay me to keep the air clean.''
And that is a big deal. That is a big deal, because that for the
taxpayers is billions of dollars.
Can you imagine what happens if we say, OK, in a Clean Water Act, we
are going to have the water clean and here is the standard of what
constitutes clean?
Let us take my State. We have farmers plowing their fields. And that
is the big industry in my State. I know my friend from Iowa is here. He
has some farms almost as big as my State. But it is the biggest
industry in my State, farmers, bigger than the chemical industry,
bigger than anything else in my State.
And so you have a farmer down in Dover, DE, and he has a field or she
has a field that she is working that is right next to the Playtex
factory. There is a Playtex factory down there; or, right next to the
General Foods factory, which is down there. And General Foods, they are
not, but let us assume they are spewing stuff out of the processing
plant that was leaching on to the fields of the farmer. Right now, the
farmer has the county council and the State which says, ``By the way,
you can't do those kinds of things.'' So the farmer is protected.
But the way this new school of thought would have it--and, granted, I
am oversimplifying this, but the principle is accurate. What a lot
folks want to say now is, ``Ah ha, farmer, the State can't do that and
regulate that factory from spewing onto your field. You have got to do
one of two things: You sue them. You prove that you have been hurt by
that and you sue them. It is between you and that big factory. Or, the
State can go ahead and tell them they can't spew this stuff onto your
field but you have got to pay them the cost of keeping them from doing
that, which means everybody's taxes, including yours, gets raised. We
are going to raise your taxes to pay that factory for not polluting
your field.''
It is a big deal in terms of dollars. And so that is this whole new
debate which, I promise you, you all are going to hear a lot more
about.
It is the intellectual and practically most important debate engaged
in in the last 20 years in American jurisprudence. And it is just
starting.
And, by the way, I am not suggesting there is anything nefarious
about those who are on the other side of this debate. I mean, the
intellectuals and the leading scholars, I am not saying they are bad
folks. It is just a different way of how do you read that little old
thing called the takings clause. It is a multibillion decision. If you
read it the way I read it, you come out one way. If you read it the way
some folks want to read it, it has multibillion dollar implications for
the taxpayers of America.
So the reason I bothered to go into that is to show you that these
esoteric things that we sit in the committee spending hundreds of hours
preparing for and scores of hours asking witnesses about have
overwhelming consequences on how average Americans can live their
lives, just by reading the takings clause a different way. All the
folks here in Washington today, tourists, can have their lives
radically affected--not necessarily all bad.
If you own a big factory, you are in good shape. By the way, if you
are a small property owner, you could, in certain circumstances, be in
good shape, too. It could help you.
But the bottom line, to use that trite expression, is we are talking
about moving billions of dollars.
Zoning regulations. You live in a residential neighborhood. How many
people who live in a residential neighborhood want the owner of the
next door property to buy up the guy's property next door to him, and
now he owns two houses, to say, ``I'm going to tear them down and build
a 32-story building?''
``You can't do that and live here. This is my neighborhood. We all
know you have got zoning laws. You can't build a 32-story building in
my neighborhood. They are all four-bedroom houses here. We have kids
running around.''
What do you do? Up to now, we have said the county which comes along
and says, as long as they apply to everybody, nobody in these kinds of
circumstances can build 32-story buildings. But there are a lot of
people now arguing that is a taking, those zoning regulations are
takings.
``You are taking my property. I have a two-story building on it. But
if I can build a 32-story building on it, I will make 16 times as much
money when I sell it. I can charge people rent to come into this
building. I can make a lot of money. And you are telling me I cannot
make money. It is my property, is it not? I live here. If I want to put
a 32-story building on it, it is none of your business.''
Well, under these new standards that are evolving in the minds of
many right now, all the county has to do is say, ``No. Can't build that
kind of building in this section of the county.''
Well, these folks say, ``Well, OK, you can tell me I can't build a
32-story building, but you have to pay me. Pay me. If I can prove to
you I could have built a 32-story building and make my property worth
$20 million and with a two-story house on it, it is only worth
$510,000, you owe me the difference between $20 million and $510,000.
So, taxpayers, pay me.''
So, when people say you do not want the Government to take your
property without paying you, I do not know of any red-blooded American
who would not say, ``That's right. Don't want the Government taking my
property. They better pay me.''
So all my friends on the right say, you know that mantra is used and
everybody goes, ``You're right.''
But if I look at you and say, ``By the way, do you want a 32-story
building on your property next door to your house? That is OK, you can
keep it from being next to your house. But, by way, pay them not to
build it,'' I imagine their attitudes would change substantially.
Again, I have used extreme examples to make the point, but that is
the nature of the debate.
And so, my concerns changed from unenumerated rights and privacy with
the Bork hearings, which was what was the onslaught at the time.
We got to the Clarence Thomas hearings and it was all about this new
theory that was being proffered. Some of the press said--which is
true--about me: ``Biden: Boring.'' I am boring a lot. ``But why is
Biden asking a lot of these questions about the takings clause?'' Then
I noticed the same newspapers saying 3 years later, headline: ``Major
Takings Clause Case.''
You know, the Supreme Court has decided cases along the lines I am
worried about.
Well, I am here to tell you there is another concern coming our way,
and that is the concern about the expansion of so-called ``economic
rights'' at the expense of important rights that we have thought to be
sort of sacrosanct. The hearing about balancing the takings clause, the
balance between the rights of all people versus the economic rights of
few.
My concerns about the expansion of ``economic rights'' at the expense
of other important rights have, unfortunately, proven well-founded, as
demonstrated by the recent decision of the Supreme Court in Dolan
versus Tigard and other cases.
So in questioning Judge Breyer, I pressed him with renewed urgency on
the question of how much protection should be afforded the economic
rights of the few.
These are issues--the scope of personal freedoms and the assault on
the public welfare in the name of economic rights--that have concerned
me before and where I have pressed other nominees.
These concerns are, if you will, ``constitutional'' concerns--
concerns that certain elements would use constitutional interpretation
to restrict important personal rights and, at the same time, expand the
economic rights of the few powerful folks in America.
This year I have had, also, new concerns, concerns that these same
elements may try to restrict our freedom and demean our personal
dignity and moral values, not through constitutional interpretation but
through the interpretation of statutes passed by Congress and signed by
the President.
For example, in recent years Congress has sought to define and
enforce the constitutional guarantee of equal protection of the laws
through legislation. But in the last decade the Supreme Court has
turned toward a grudging interpretation of those statutes we pass.
By ``grudging'' I mean, when we say we want to protect that liberty,
the Court says, ``Wait a minute. They want to protect the liberty
rights, equal rights of the handicapped?'' And instead of looking at
it, the Court says, ``We understand they want handicapped people to
have these basic rights,'' because that is how we say it here. They,
under new rules of interpretation, canons of interpretation they call
it--and they are cannons in effect--take out a magnifying glass and
say, ``Wait a minute. I am not sure they really wanted to protect that
right. Because if they really wanted to protect that right they would
have said it. If they wanted to protect this right under this
circumstance they would have dotted that `i,' crossed those two `t's,
and put in two extra commas. So we are going to interpret the statute
to say they really did not mean to protect the equality rights of that
group of people.''
In the last decade the Supreme Court has tended toward this grudging
interpretation of statues passed by the Congress and signed by the
President, and in my view ignoring the intent of Congress, and instead
developing restrictive, judge-made rules for reading the statutes. So I
asked Judge Breyer about two Supreme Court decisions that seemed to me
to illustrate this grudging trend, the Patterson case and the Dellmuth
case. In both cases the Court refused to apply the civil rights
statutes, passed by us, signed by Presidents--Democrat and Republican--
in a commonsense manner that gave full effect to the intent of Congress
in ensuring equal treatment for black Americans and for handicapped
children. That is what these two cases were about. One about a black
American; one about a handicapped child. In the hearings I also had a
second related concern.
By the way, to illustrate this, in the Patterson case there was a
Civil War statute that had been passed after the Civil War that said
when you are going to hire somebody, as an employer you cannot go out
and say, ``You know, you have on a gray suit. I do not like gray suit
people. And, by the way, I do not like people who can type that fast.
And, by the way, I do not like the color of your eyes. So I am not
going to hire you.'' Or, ``You are black and because you are black I am
not going to hire you.''
We said that is wrong. A former Congress, 100 years ago, said that is
wrong. You cannot do that.
So they said, ``When you contract with somebody you have to contract
with black folks the same way as you contract with white folks.'' It is
a pretty good idea. It was revolutionary in 1877, but commonplace
today.
To oversimplify the case, along came this case, the Patterson case
just a little while ago. And a black person said, ``They hired me, but
once I got hired, they harassed me, they treated me with no dignity
because I was black. They made no bones about that.''
And so they said, ``Under this statute that was passed, I am entitled
to have them stop doing that and make them hire me and make them keep
me and make them treat me right.''
And the Court came up with one of these. It took out a microscope--a
magnifying glass, ``Let us see, now. What did they really mean by
that?'' And they came up with the following interpretation, which I
think in a commonsense way is perverse.
It said, ``You know, you are right. When you look at that statute you
cannot say you will not hire that man because he is black. You have to
hire him if he is otherwise qualified, just like you would a white
person. But once you hire him, he is on his own. You can fire him
because he is black. You can harass him because he is black. All the
statute means is you just cannot `not hire him.'''
And people said, wait a minute, how did you get that?
And the Court said, with their magnifying glass, ``The canons of
interpretation.''
We have the following, but I will not go into it. I will put it in
the Record. I ask unanimous consent that a more scholarly dissertation
on this case be printed in the Record, but it is important everybody
understand it.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. BIDEN. They took out their magnifying glass and in a grudging way
said, ``Wait a minute. This statute only means hire.''
Think about that. Think about anybody in this place writing the
statute saying, ``you cannot * * * not * * * deny someone employment
because they are black. But once you hire them you can pull them in the
office and say you black SOB, you are fired because you are black.''
Does that make any sense? Could anybody possibly have meant that?
But what the Court recently has been saying is, if you mean you
cannot fire them, if you mean that you cannot harass them on the job,
you should say: ``By the way, it is wrong to deny someone employment
because they are black. And then once they are hired it is wrong to
treat them badly. And if you want to fire them you cannot fire them
because they are black, so help me God.''
That is the only thing that seems to satisfy this bunch across the
street, now. So the point I am trying to make is the last 10 years in
these hearings we have been focusing on: Are judges who are about to go
on the bench, through the way in which they interpret the Constitution,
going to be able to deny people basic human rights? And the Senator
from Illinois, myself, and others have been scrutinizing nominees to
make sure that is not their view.
But I say to my friend from Illinois, he is on the floor and he is a
member of the committee and he knows it, now we have to scrutinize it
another way. We beat that back but now they come at it through another
door. ``We are not interpreting the Constitution here, Senator. We are
merely interpreting a statute,'' they say. ``And we want to make sure
precisely what you mean, and therefore you say precisely what you mean.
Because we know you folks in Congress, you women and men, you just let
your staff do this stuff anyway,'' according to Judge Scalia. ``You do
not know anything.'' In that sense he shares a lot in common with the
American people, about what they think about us. But the point is, they
say, ``You men do not know much, you women do not know much, so we are
going to look at language and make sure it says precisely.''
What are those rulings called? ``The clear statement.'' But one of
the leading scholars in the area has another phrase. He calls them,
``superstrong clear statements.'' Translated: You better say everything
you mean, even if it is clear from the words you use that you mean
exactly the same thing. You better say it.
It is a little bit like saying, as one of my staff members, a
professor at Georgetown, said to me--she said when she was explaining
this to me, we were going through these cases: ``It is like my turning
to you, Senator, and saying, `Can you tell me the time?' And you
interpreting that to mean is she asking me, do I know how to tell time?
And I would look at her and I would say, `Well, yes, I could tell you
the time.' When obviously the reason she is looking at me and saying,
`Can you tell me the time?' she means I do not have a watch; I do not
know what time it is; would you please tell me what time it is, if you
know.''
But the way the Supreme Court is interpreting these statutes, they
are interpreting like, if I said can you tell me the time, some on the
Supreme Court are saying, ``Yes, we can.'' That is the difference. So
now, through interpretation of statutes, some on the Court are setting
up these canons and rules that have the same effect that some before
have wanted to obtain through the Constitution, constricting the rights
we value so much. That did not work too well, not very much in favor.
So now those who are looking at constricting those rights that the
Congress, by the Constitution through the 14th amendment, section 5 is
being told, ``Look, we are guaranteeing these rights and you implement
how to guarantee these rights,'' say: You, the Congress, you come up
with a mechanism that says this is how we are going to guarantee them,
this is how we are going to give life to this notion of equality.
So in these hearings, we spent a lot of time talking about that.
In recent years, a very influential group of scholars and judges,
known as the law and economics movement, has proposed legal problems
should be resolved from a purely economic perspective so that the only
values that count are economic values and not the sort of moral values
and norms that we, as a people, often prefer, like the high value we
place on human life even when it does not make good sense in a purely
economic sense.
These new rules of interpretation, I say to the Presiding Officer,
are used in a way to say what the Congress must have really meant is
what makes economic sense. Let me give you an example--and I see
colleagues on the floor wishing to speak. I will put the rest of my
statement in the Record.
The Senator from Iowa, the best nonlawyer I have ever run across--
this man is not a lawyer but you will not be able to tell that from the
way he discusses the Constitution and the law. I mean that sincerely.
He is also, I think, on the Labor Committee----
Mr. GRASSLEY. And Agriculture Committee.
Mr. BIDEN. And the Finance Committee. In the Finance Committee, he
deals with subjects that relate to Social Security, entitlement
programs and the like. And my friend from Illinois is on the Labor
Committee.
I will bet you they can each, in their involvement with issues in
their committees, tell you times they have voted for and proposed
maintaining programs that on a purely economic basis do not make any
sense, if you run just pure, raw economics, an economic model.
Case in point: In health care, as I understand it--and my friend from
Illinois knows so much more about the health area than I do, and the
health industry--but if I am not mistaken, an incredibly large
percentage of all the dollars Americans spend on health care is spent
in the last couple months of a person's life. So that means people who
are 70, 75, 80, 85 years old who only lived in many cases 2, 3, 5, 7,
10 months longer because of heroic, and serious, expensive medical
procedures and undertakings, they--to put it in the negative sense--eat
up a significant portion of all the money that is spent on health care.
So if you want to be a sharp-pencil, eyeshade guy who is going to sit
there and tap out just the raw numbers, you can say, now wait a
minute--I think it is 26 percent in the last how many months?
Mr. SIMON. Last few weeks.
Mr. BIDEN. In the last few weeks of an individual's life, we spend 26
percent of all the money we have spent in health care. If you are
utilitarian, which is not a bad thing, per se, to be, and you say,
``How can we help most people most of the time?'' we would say, ``OK,
doesn't it make more sense to take that 26 percent that only keeps
people alive a couple more weeks--doesn't it make sense to take that 26
percent--and spend it on kids who are between the age of 1 day old and
6 years old? Because if you get them on the right track then, their
health is going to be maintained better their entire life. Or does it
not make more sense to take that money and spend it on immunization
programs? Will not more people, on balance, live longer if we did
that?''
And the answer is yes, it is true.
But what is our Judeo-Christian ethic? We say we will do all we can
to keep our parents and our grandparents, who have made this country,
alive as long as we can within reason.
The day these hearings started, there was a big front-page article in
my statewide newspaper at home. It had nothing to do with Judge Breyer
or the law. It had to do with health care and this issue.
It quoted a man who had to spend $67,000, I think it was, out of his
pocket above his health insurance to keep his grandmom alive an extra,
I think it was, 6 days. I will put in the Record the exact article. But
I think it was 6 days. So this reporter asked: ``Was it worth it for
you to spend $67,000, hock your house, your car, get a second mortgage
to keep your grandmother alive only another 6 days?'' Do you know what
the man's response was? ``Yes, it was worth it to keep her alive long
enough to see her great granddaughter born.''
That is a value that does not lend itself to an economic analysis. I
do not criticize those who say economically we should disregard that. I
do not. But as a society, at least up to now, we have adopted a value
system, and we who serve in this body are supposed to reflect that
value system. Under our system, the value is it is worth paying a
disproportionate amount of money to keep our parents and grandparents
alive.
I have been corrected. There is no amount of money listed in the
article. They just imply there was a lot of money spent. So I do not
know the exact amount.
But what do we do? We have this new school of law and economics. They
are a bunch of very bright women and men, and they are sitting in
offices that look like ours and they are doing something worthwhile.
They are trying to figure out how we deal with these major problems
facing us.
They have come up with a theory. The theory says: Look at the
economic impact, and if it does not make economic sense, then--I am
overstating it in the interest of time--then adopt a rule of
interpretation. If the Congress did not specifically say we want to
waste this money for this value, assume that they meant that if it does
not add up economically, they did not mean it. That is what these
interpretive rules are now. That is the direction they are going.
Is it for a judge through interpretation to tell us here that just
because it does not make economic sense it does not reflect a basic
value?
It is a basic value that the American people within this democracy
have a right to say, ``Yeah, we're going to waste that money, if that's
what you call it; yeah, we're not going to be economically sound, if
that's what you call it, because it is important to us.''
I spent 59 days in an intensive care unit hooked up to all those
machines. I want to tell you something: Had someone walked in and said,
``You know, from purely an economic standpoint, Senator, it doesn't
make a lot of sense for us to be spending this exorbitant amount of
money out of your insurance to keep you hooked up to all these
machines. You have been hooked up 57 days. We are going to give you 1
more day,'' I doubt I would have said, ``By the way, you are right.
Where do I sign? This does not make economic sense, and my chances are
not that good,'' which they told me they were not. ``Let me sign right
here.''
If they came to you and said, ``By the way, your''--child, husband,
wife, your son, daughter, mother, father--``the prospects of us making
it work for them are 30 percent and the cost is the following, you only
have a 30 percent chance of keeping your child alive, do you want to
hock your house to try?'' I wonder how many of you would say, ``Let me
sit down with my wife and look at the economic impact of this. Yes,
well, let me see, only a 30 percent chance, we have an equity of X
amount in the house, we can sell it today at the market value of such
and such. I think maybe it is not economically sound, so don't try.''
That is not how we think. But that is how these folks think. They are
not bad folks. They are not uncaring folks. They just see these massive
problems we have--and they are--and they say we ought to look at these
things from the lens of law and economics.
That is OK as long as they are political scientists, as long as they
run for office. I do not think anybody should not be able to go out in
Davenport, IA, and Wilmington, DE, and say, ``Elect me because I
believe in this new theory''--not new--``I believe in this theory that
before I spend a dollar of your money, before I vote for anything, I am
going to be satisfied it makes pure economic sense, whether it relates
to the health of your children, whether it relates to your farm.''
It does not make any sense from an economic standpoint to build those
levies and dikes, in my view--I support building them, by the way,
because I think it makes broader sense. It does not make economic sense
to the folks in Delaware--we are going to let you have beach insurance
to let you build all those houses on the beach. God sends those
nor'easters every year, and every year it takes away all that sand. A
couple years later it shifts it back. But in the meantime your house is
gone.
But I run for office and say, ``I am not going buy into any of that
stuff. If it does not make pure economic sense, I am not going to vote
for it. Elect me.'' I respect that. If that is what the people want,
fine.
But what I do not respect is a judge who sits up there on a dais,
like you do, and when we make those imprudent economic decisions here
in this body, saying, ``Now, let me look at this. I acknowledge that
Congress may have done this. But the way I am going to do this is I am
going to make a canon of interpretation. I am going to come up with a
new rule of how I look at legislative language. And the rule is I am
going to assume that Congresspersons would not possibly have passed a
law that was not just purely economically sound. And so I am going to
look at that statute. And it does not seem economically sound to me to
do it this way, so I am going to assume that they must not have meant
that is what they wanted.''
What is the effect? The effect is the exact same if they disregard
the statute. The effect is the right, the value, the thing that we, the
elected officials, say we think is worth protecting at such and such a
cost or any cost is wiped away.
So my point is I questioned Judge Breyer a lot about it, because that
is the new wave here; that is where the fight is going to be in the
next 15 years on the Supreme Court--statutory interpretation. So I
wanted to know whether Judge Breyer, who has written some things that
were he running for office I would never vote for him--there is not a
shot in the world I would vote for Judge Breyer if he were running for
the U.S. Congress, Senate, and/or county councilman, because he wrote
this book, and this book says theoretically this is how we should
handle these very difficult problems.
Well, I would like him as a political science professor, but I do not
want him as a judge if he is going to take that little book--do we have
a copy of the book? Bring the book down for me, please.
If I walked into his class at Harvard and he had this little old
book, ``Breaking the Vicious Cycle,'' sitting on his desk, I would say
this is going to be a fascinating class. I am going to like this class.
It is going to be interesting. Or if he ran for public office and he
said the values I stand for are in this book, I vote no. If he is a
judge and he sits there while he is judging and, figuratively speaking,
has that book sitting at his right hand on the bench, I am not voting
for him either.
So I questioned him a lot about this little book--a brilliant piece
of work by the way. I am not being facetious. It really is. It makes a
very strong case for how we should more intelligently deal with these
economic dilemma. And I think it is a serious contribution to the
public debate. But it is a serious breach in my view, if he takes this
book from the public debate to the bench and says, ``This is how I am
going to rule. I am going to look through this prism, and I am going to
interpret what Paul Simon and the rest of his colleagues did in the
Senate based on whether it comports to the theories I put forth in this
book.''
So I spent a lot of time asking him about that, and I am convinced he
understands the distinction between the theories in this book and what
he is appropriately able to do as a judge.
The one big safeguard--and I will yield now--the one big safeguard
built in here is Judge Breyer has also written a lot on another item,
on statutory interpretation. And he has written a lot--580 cases he has
decided as a circuit court judge, many of them relating to this kind of
issue as well.
He has taught as a professor--one of the leading professors in
America. He has judged--one of the leading judges in America. He has
said, ``Look, I understand the congressional process. I understand the
legislative process.'' And he does. He worked here. And he says, and he
has shown, and he has argued, and he has debated with Judge Scalia and
others, that we should let the people's will, their values--whether or
not they make economic sense at the moment--prevail; that as a judge he
has no right to take what he believes he would do were he sitting here,
and superimpose that on what he will do from the bench like the one you
are sitting at.
And so after 22 hours of testimony, of him speaking, and after those
500-some cases being read by me and/or a synopsis of them being given
to me, I am convinced that there is a firewall between this, what I
call economic elitism, and his judging and his view as to how he is
obliged to interpret statutes here.
I think he also revealed himself to be an enthusiastic and engaging
interpreter of the law and Government, who understands that there are
people behind every legal dispute, whether describing the thick coal
columns supporting the cities and those who live in them above the
surface of a mine, or in discussing a property rights case, or in
noting that there is nothing more important to a family than the
freedom to be able to pass on religious beliefs from one generation to
the next, in discussing the first amendment's establishment clause.
Whatever he discussed and whatever he has written about and whatever
his life has been, it has always been formed by the impact on
individuals.
That is a very important ingredient for me. And it I think bodes well
for all of us. These qualities will serve judge Steve Breyer very well
on the Supreme Court. He has proved himself a thoughtful academic, well
known to the Harvard community; a practical problem solver, well known
to those who have worked with him here in Congress. He is a man who has
unparalleled respect from those in his community, those with whom he
has worked, and with those--and by the way, this is not cronyism. You
have 18 members of the Senate Judiciary Committee, about half of whom
have worked with Judge Breyer when he was on the committee, Democrats
and Republicans. And one thing everyone--everyone--has spoken to who
has worked with him, Democrat or Republican, is his fine temperament,
his judicial temperament, his fairness, his equanimity and his
brilliance.
Mr. President, it is without any reservation that I recommend, after
22 hours of hearings on the Senate Judiciary Committee, testimony by
Judge Breyer and a number of witnesses, some who have testified
against, some who were for, that I, without reservation, recommend
Judge Breyer to this Senate and strongly encourage my colleagues to
vote ``yes'' when the vote is called on confirming Judge Breyer to be
an Associate Justice of the Supreme Court.
I yield the floor.
Mr. GRASSLEY addressed the Chair.
The PRESIDING OFFICER. The Senator from Iowa [Mr. Grassley], is
recognized.
Mr. GRASSLEY. Mr. President, I would ask to defer to the Senator from
Illinois without losing my right to the floor for a period up to 3
minutes.
The PRESIDING OFFICER. Is there objection? The Chair hears none, and
it is so ordered.
The PRESIDING OFFICER. The Senator from Illinois is recognized.
Mr. SIMON. I thank my colleague from Iowa.
Mr. President, I join the chairman of the Judiciary Committee in
urging a favorable vote. I might add that being chairman of the
Judiciary Committee is not an easy spot in these things, and Joe Biden
does a superb job of chairing these hearings.
Just several qualities. I speak with a little bit of prejudice
because I have known Judge Breyer from back in 1973, a year and a half
before I came to Congress. I had the chance to get acquainted with
Judge Breyer and his family. In terms of fairness, I do not think there
is any question he is going to do a good job. In terms of just
intrinsic ability, as Senator Biden says, those who have worked with
him up on Capitol Hill know that he has that ability.
In terms of compassion, feeling for people, I think that is important
so you do not make those kinds of economic judgments. But the chairman
of the committee was talking about just on pure economics, and an
indication of that is his daughter is an editor of a publication that I
confess I never heard of before the hearing, called ``Who Cares?''--
trying to encourage those of us who are more fortunate to be helpful to
those who are less fortunate in our society.
Then finally, just one other point. It may seem like a small point,
but I think it is important in the long run. That is, he writes with
clarity. It is often discouraging to read a Supreme Court decision and
wonder how the Justices reached a certain decision because the clarity
is simply lacking. He is a wordsmith who writes with clarity. And I
think he will add an important ingredient to the Court in that way.
So I am pleased to support him. I think it is a good appointment, to
the credit of President Clinton. I think he will bring credit to the
Court.
I thank my colleague from Iowa.
Mr. GRASSLEY. Mr. President, I think and hope that I have applied a
consistent set of criteria in evaluating the nominees to the Supreme
Court. After making that evaluation, I have made the same determination
that I did in the committee to support Judge Breyer.
In this process, I consider whether the nominee exhibits the
necessary intellect and integrity required of a Supreme Court Justice,
and also whether that individual understands the role of a Judge within
our constitutional system.
Judge Steven Breyer has served as an appellate judge for 14 years. He
has great knowledge of the law, and obviously, as he demonstrated so
well before the committee, a superior intellect.
I also believe that Judge Breyer has the integrity necessary for
public confidence in the judiciary, and it is necessary for us to
maintain that confidence. Integrity is an integral part of the
credibility of the system. I think the committee properly inquired into
matters that go to Judge Breyer's character. Some of those have been
highlighted, and will be highlighted yet in this debate, particularly
as they relate to some issues that Senator Lugar will be addressing.
The committee investigated fully the nature of Judge Breyer's
investments, and in all respects those investments were legal and
ethical, as they related to Judge Breyer's official duties.
I believe that our examination shows that Judge Breyer possesses the
integrity required of a member of our highest Court.
In his testimony, Judge Breyer addressed a wide range of legal
issues. I was gladdened to find that he views the constitutionality of
the death penalty as settled law, because the person he replaces has
all of a sudden had a change of heart on that issue.
Of course, on another matter, I am not pleased that he considers the
right to abortion to be settled law. Regardless of these two issues,
one I agree with him on, one I do not agree with him on, I recognize
that a President--in this case, a newly elected President--has with his
mandate from the people a right to select the nominee to the Supreme
Court. Judge Breyer maybe would not have been nominated by a Republican
President. I doubt if he would have been. But I do believe that a
President, Republican or Democrat, is entitled to some level of
deference, particularly if the person has integrity, judicial
temperance, and the ability to read the Constitution and the law as the
writers intended it. Then, as far as I am concerned, a President has
deference who to select.
Judge Breyer's constitutional opinions are good evidence that he
generally practices judicial restraint. But in his testimony before the
committee, he expressed a more expansive view of the Constitution than
maybe I would like to have had him express. For instance, he testified
that the
Constitution was written to protect basic freedoms, which
are basic values, which are related to the dignity of the
human being. The dignity of the human being is not something
that changes over time.
There are Judges who take this view that the Constitution protects
human dignity, strictly in the abstract, you cannot find any fault with
that. But there is connected with this premise a reasoning that is very
expansive of the Constitution, way beyond what our writers intended,
that anything, almost anything, that furthers human dignity is a
constitutional right. I certainly do not read the history of our
Constitution as being anything so expansive intended on the part of our
writers. And I hope that Judge Breyer does not. But his testimony in
this regard is cause for concern.
I was more pleased with his response to my question on the issue of
illegitimacy. I believe that the Court misinterpreted the Constitution
when it held that classification systems that various States had prior
to the sixties based on illegitimacy are normally invalid. The
inability of the law to discourage illegitimacy in this way, I believe,
has played a direct role in the increase of out-of-wedlock births in
the last 25 years, and all those negative consequences that go with
that.
Judge Breyer told me that changes in the factual basis for the
earlier decisions would be relevant to him if earlier precedents were
challenged. There are now large amounts of sociological evidence that
this trend in the family is creating a lot of social pathologies that
have terrible human and economic consequences.
So I am glad to hear what Judge Breyer said: that maybe the Courts
could have been wrong in the sixties. I believe this is the first time,
at least in my years in the Senate, that a Supreme Court nominee has
testified that he would be open to overruling a particular line of
constitutional decisions.
Judge Breyer and I agree on another matter, that legislative
history--this is something that Senator Biden addressed with great
thoroughness--that legislative history is important in interpreting
statutes. Judge Breyer agrees, but I am surprised that he views canons
of construction so hostilely. Such rules allow courts to reach uniform
decisions on the meaning of statutes. These rules also make sure that
Congress does its job of legislating as clearly as possible, as we
ought to.
I do not think we give enough attention to that. But those rules
discourage us, I imagine, from passing the buck on very tough social
questions, maybe even economic questions, to the Court. Without these
rules, the likelihood of judicial disagreement as to the meaning of
statutes will increase, and so will circuit splits. I hope Judge Breyer
will reconsider his view on this subject.
During my questioning, I was concerned about some of Judge Breyer's
record in the circuit court on the issue of child pornography. As a
member of the sentencing commission, Judge Breyer was the only
dissenting vote against a proposal to increase the base level offense
for child pornography. And that made me wonder whether Judge Breyer was
sufficiently committed to fighting child pornography. I wondered
whether he knew of the harm that comes to children who are the victims
of this crime, and I wondered whether he would accept the well-
established rule that child pornography is not entitled to any
constitutional protection.
I asked Judge Breyer at the confirmation hearing about his vote as a
member of that sentencing commission. He told me that his vote against
the motion to increase the base-level offense for child pornography did
not rest on a view that child pornography was not a serious crime.
Instead, he had a pattern throughout that process of the sentencing
commission to apply a general sentencing principle to all crimes
relating to base level for offenses. And once Judge Breyer explained
his vote, my concerns were alleviated.
Additionally, I am satisfied that Judge Breyer accepts the well-
established view that child pornography is not protected by the first
amendment. And based on his answers at the hearing, those of us who are
strongly opposed to child pornography, and the victimization of the
child that goes with it, can be comfortable with Judge Breyer.
Judge Breyer was asked by several Members--not myself, but I did
follow up with a written question--about his view on home schooling.
There was an attitude expressed at the grassroots that he is very
hostile to a growing form of education in America called ``home
schooling,'' although home schooling has been protected by the Supreme
Court under the Constitution since the 1920's. In each of his oral
answers, Judge Breyer stressed that the constitutional protection for
home schooling was based upon the free exercise clause of the first
amendment. In short, his answers based constitutional protection for
home schooling on the right of parents to pass religious beliefs on to
their children. He tended to answer those questions in the very narrow
scope of a relationship of home schooling to religious freedom. Well,
of course, this troubled me, as I stated, because thousands of parents
educate their children at home for reasons unrelated to religious
beliefs.
Judge Breyer's oral answers, I think, might have been read to exclude
constitutional protection for home schooling that is not based on
religious belief, despite longstanding constitutional precedent to the
contrary.
So I submitted a written question to determine his view on whether
all forms of home schooling are constitutionally protected. His
response in the affirmative, which cited the relevant cases of
longstanding and of a constitutional nature, satisfied me. I hope it
will satisfy those out there at the grassroots who are concerned about
that subject.
I am also generally pleased with Judge Breyer's decision on
constitutional criminal law cases. Judge Breyer has applied the law. He
has not let criminals off based on a generalized sympathy for
defendants. For instance, he does not interpret exceptions to the
warrant requirement in a narrow way. Although some of my colleagues
criticized Judge Breyer's opinion that permitted a warrantless search
of a ceiling alcove adjacent to a motel room, even though the suspects
were handcuffed, I thought he applied clearly established law. Under
fourth amendment law, a search may be conducted incident to an arrest
without a warrant. The police did that. While the scope of a search is
limited to the reach of the suspect, the entire residence may be
searched where there is a specified belief that dangerous conditions
exist elsewhere in the residence. In this case, the fact that the
police had a gun pointed at them that was unaccounted for provides
those dangerous conditions, even if a suspect might have been
handcuffed.
So this case shows to me that Judge Breyer is within the mainstream
in constitutional criminal law.
Judge Breyer's criminal statutory opinions are a little more mixed,
Mr. President. His decision in a case involving the meaning of
``inhabitant,'' which I asked him about, is virtually a textbook model
of how statutes should be interpreted. Judge Breyer examined the
history of the statute; he examined the way the word was used at the
time; as compared to language in other statutes; the purpose of the
statute; and the fact that no source ever found that someone who
planned to be in this country for only a few hours was an
``inhabitant.''
That whole series related to the interpretation of the word
``inhabitant'' and how thoroughly Judge Breyer went on to evaluate it
through legislative history, not just through wording in the statute.
Judge Breyer properly evaluated the legislative history, refusing to
credit statements of individual legislators that flatly contradicted
the statutory language.
On the other hand, Judge Breyer's decision in the Paleo case is
troubling. There, Judge Breyer found that criminals could challenge
their prior convictions that made them eligible for enhanced penalties
under the Armed Career Criminal Act. This was true, he found, because
the Government has no interest in punishing people for unconstitutional
prior convictions. Judge Breyer thus engaged in a frequent technique
that is used by judicial activists: he wanted to minimize the
Government's interest in passing legislation so as to avoid the plain
meaning of the statute.
To me, in this particular instance, it is about as plain as plain can
be. It is very clear. In essense, we said ``three previous
convictions'' means ``three previous convictions.'' And the
Government's interest in getting dangerous criminals off the street
without those criminals delaying the imposition of enhanced sentences
by challenging prior convictions, I think, is very substantial and was
very substantial in this case.
Judge Breyer reached his result in this Paleo case without addressing
the fact that other enhancement statutes explicitly permit defendants
to challenge their prior convictions. We in Congress know how to draft
statutes that permit challenges and those that do not. He also did not
address the Supreme Court cases that distinguish between the absolute
denial of counsel and the ineffective assistance of counsel. And he did
not discuss a Supreme Court precedent on a prior version of the
statute.
Judge Breyer's view of the statute was rejected by the Supreme Court
in the Custis case in May. I hope that Judge Breyer will come to
realize that the Supreme Court's interpretation of the statute was the
correct one. His responses to my questions regarding Paleo do not
provide me with very much comfort in this area, albeit maybe a limited
area of criminal law. I stress the issue because of its importance to
what we are going to be dealing with very shortly in the crime bill
because of the ``three strikes" provision that is within that crime
bill.
Mr. President, in view of this nomination being before us and how I
have discussed it, and all the considerations that have been brought to
date, including my reconsideration of some points that Senator Lugar
addressed and mailed to us and that we have read about in the media on
his view on this, because I have a great deal of respect for Senator
Lugar, I wanted to give those issues some further thought.
But I still stay with a positive view of Judge Breyer, and even
though I have some concerns that I have addressed here, I view this
nomination with hope. I suppose my concerns are not related to the
issues that Senator Lugar has brought up so much as there are some
areas in some aspects of the law.
But I think overall this nominee, at least for those of us on this
side of the aisle, is much less of a judicial activist than we would
expect for a President of the other party to nominate.
For that reason, I want to vote for him in the sense that I do not
consider him to be a judicial activist. So I support this nomination
even though I do it with some reservation.
After he gets on the Supreme Court, then I want to see more of the
judge who wrote the 14 years of well-crafted opinions than the judge
who testified about a so-called expansive view of the Constitution.
I yield the floor.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Mr. President, I wish to speak in opposition to the
confirmation of Judge Stephen Breyer, and I would like at the outset of
this statement to outline the case that I will make in order that
Senators may follow the argument and then I will supplement these
initial contentions with data from the press, from books, written on
Lloyd's of London and in specific terms and correspondence involving
Judge Breyer.
Let me just say at the outset, Mr. President, as my colleagues
pointed out in opening this debate, confirmation of a Supreme Court
Justice is for a lifetime term. There are no further opportunities for
reevaluation after the vote that we have at 3 o'clock this afternoon.
Unlike our terms of 6 years and those of our colleagues in the House
of 2 years, or many terms for Governors of 4 years, at that point there
can be and are reevaluation of how things worked out not only in terms
of our demeanor, but specific issues that come before the country.
Clearly, the Founding Fathers saw a lifetime term as a basic point of
the independence of the judiciary. I do not argue with that. I commend
that. But I remind Senators that this is forever. This is for the
lifetime of this nominee so long as he may wish to serve. Therefore, if
there are reservations they need to be spoken now.
The most important activity of a Justice of the Supreme Court is the
exercise of good judgment in his deliberation and in his votes on
issues before the courts.
I will speak, Mr. President, to the issue of the good judgment of
Judge Breyer this morning. That I think is a central point at issue.
Furthermore, Mr. President, there are human predicaments in which
past judgments and financial affairs of a candidate should preclude
that candidate from seeking to perform a specific form of public
service.
My argument, Mr. President, is not that Judge Breyer lacks
qualifications for significant public service. Indeed, the record is
replete with that service, and many have commended it. But Judge Breyer
is not necessarily entitled to this specific role of public service,
that is a lifetime career on the Supreme Court, beyond reservation and
reevaluation, given the facts of his judgment and of his investments,
which I will outline in due course.
Specifically, Judge Breyer is trapped in a troubled Lloyd's of London
insurance syndicate from which he is unlikely to escape for a long
period of time. It is beyond contention that the judge has been
trapped, Mr. President. There is clearly an argument as to how the
escape might be made and how either Judge Breyer's losses might be
terminated or what are bound to be a long string of necessary recusals
from various cases that will come before the Court, plus discovery of
all of the ways in which Judge Breyer might have a conflict of interest
in these cases.
The judge's affiliation with the specific Lloyd's syndicate, Merrett
418, will mean substantial personal financial losses for him and his
family over several years and will force him necessarily to recuse
himself from many cases that come before the Supreme Court of the
United States involving insurance, pollution, asbestos suits, other
issues, surrounding broad reinsurance of Lloyd's syndicates. He
exercised extraordinarily bad judgment in signing documents that placed
him under the jurisdiction of English law and exposed him and his
estate to unlimited liability.
I will go further into unlimited liability, Mr. President, but it
means just what it says--unlimited, down to the last button, an
extraordinary misjudgment for someone reportedly as astute, as
intelligent, with a worldly view, as many of my colleagues have pointed
out this morning, as he has looked at issues of commerce.
He entered agreements with underwriters that he did not know,
involving matters clearly beyond his expertise and perhaps beyond the
knowledge of what the underwriters were doing and yet pledged to them
unlimited liability of his resources.
The growing troubles of Lloyd's of London should have been known to
him as a sophisticated lawyer and investor. I make this point, Mr.
President, because early in the debate this morning the distinguished
Senator from Massachusetts, Senator Kennedy, has pointed out that
Lloyd's of London was a pillar of strength, a remarkable institution,
and clearly the many years of its history do bear out that general
statement.
But, Mr. President, by the early 1980's Lloyd's was troubled, and I
shall point out circumstances occurring in the world, both in the
United States and in England, that had already led to anxiety by those
in Lloyd's and those who were investing in Lloyd's's about the future.
Acceptable investment alternatives should have been known to Judge
Breyer, if they were known to anyone, as specified under Section 455 of
the United States Code, title 28. That, Mr. President, is the section
that deals with conflicts of interest with recusal, with the very
specific ways in which a judge must take a look scrupulously at his
personal finances and those of his spouse and his children to make
certain there can be no complaint of conflict of interest.
Senators have asserted that Judge Breyer was not challenged by others
demanding his recusal. But that is not the point, Mr. President. The
obligation is on the judge. He himself must recuse himself. He must
make the examination. This is not left to the good fortune of others
who may discover a potential conflict of interest and demand conduct of
the judge.
Judge Breyer's examination of the insurance documents he signed with
Lloyd's of London was negligent. His poor judgment now places him in an
unnecessarily embarrassing predicament which erodes public trust.
But, Mr. President, and this is the heart of my case this morning,
whatever may have been Judge Breyer's faulty judgment, the problem now
shifts to each of us who must vote on this nominee this afternoon. And
Senators will have to bear in mind whatever else may be said in support
of Judge Breyer, and his qualifications for service are substantial,
each Senator who votes this afternoon should know that Judge Breyer has
serious financial entanglements with the Lloyd's syndicate that will
continue for years.
The Supreme Court sits at the pinnacle of the United States court
system, and that system contains thousands of plaintiffs in cases
involving litigation over pollution, asbestos, insurance and investment
failures. If the financial resources of insurance companies, including
Lloyd's of London, are insufficient to meet claims and court judgments
in the future, the only recourse will be a monumental court or
congressional rescue of a failing international insurance system. I
make that point, Mr. President, because that is fairly predictable.
Senators have spoken this morning about the takings clause of the
Constitution, about the ideas of property and person, about a number of
issues, but issues that are clearly headed in our way in this body or
to the Supreme Court are those involving the fact that claims still
unknown, in addition to claims now known, add up to more reserves than
international insurance companies appear to have.
And specifically in the case of Lloyd's of London, officials there
have been rather direct in anticipating what they call a congressional
fix.
Now, Senators ought to understand that, as we were thinking in
humanitarian terms earlier this morning about individual plaintiffs who
might face injury, the depiction they have in mind is that you cut off
the liability, that you limit the exposure, that you save the
reinsurance operation in the world by denying claims.
The contention would be that judges and juries and courts and perhaps
Congress in the Superfund legislation, various EPA statutes, simply
went well beyond the bounds of the resources available for all of the
things that we were attempting to cure. And so, a rather large amount
of law is likely to be involved in this monumental undertaking which
rumbles clearly through the court system of the United States. It is
not only predictable, it is observable.
Now, in the face of that, Mr. President, to confirm Judge Breyer to
the Supreme Court, with this public knowledge that I am discussing this
morning and will discuss for a while longer, that we as Senators now
have of his financial quandary and of potential Supreme Court cases,
that step would be imprudent on our part. My advice, respectfully given
to the President of the United States, would be that he should have
nominated someone else of equal qualifications as Judge Breyer--and
such persons can be found in the United States--but who did not have
the financial and very difficult investment baggage carried by the
judge.
I appreciate in a very poignant way this is a personal tragedy for
Judge Breyer. His ambition to be on the Supreme Court is obvious and
his qualifications are substantial. But there is no entitlement to
serve in this specific capacity if one bears these specific burdens.
Mr. President, I sent that outline to colleagues so they might
examine it, and I hope they all have. But yesterday I issued another
statement which begins to fill in a part of the outline.
I said, Mr. President, after a series of U.S. court decisions in
1980--and I cite 1980, Mr. President, because Judge Breyer's insurance
underwritings as a Lloyd's name, as a person who shares in the
underwriting of Lloyd's syndicates--these decisions of Judge Breyer
took place between 1978 and 1988, in which apparently he attempted to
terminate the relationship, unsuccessfully as I will point out, but he
made that attempt. So between 1978 and 1988, on several occasions, not
just in the final, fatal Merrett 418 syndicate, Judge Breyer was
involved in signing his name to unlimited liability.
But in 1980, U.S. court decisions found that insurance policies must
be strictly construed in favor of the injured and to promote coverage.
The Court of Appeals of the District of Columbia held that all periods
of insurance coverage were liable from inhalation of the first harmful
asbestos fiber to incidents of asbestos-related diseases 30 years
later.
That was a very significant decision, because this has led to what
are known as the long-tailed liabilities of Lloyd's; long-tailed
because the difficulty for the asbestos victim may be of 30 years'
duration.
And once the courts had ruled that you cannot simply cut off the
victim after the first year and before, really, the totality of the
damage is done, but, rather, all periods are involved, that changed the
actuarial rules of the game very substantially.
The California Supreme Court in 1980 had decided to shift the burden
of proof from plaintiffs, who had been required to show that they had
been harmed, to the defendant manufacturer. That is a very sizable
shift. And in the case of Sindell versus Abbott Laboratories,
plaintiffs were allowed to plead that they had been harmed by the drug
DES, which had proved to be carcinogenic, even if they could not prove
which manufacturer was responsible. The courts, therefore, were left to
sort out who should pay and the period of exposure. The awards were
very substantial from that exercise and occupied the courts in a very
conspicuous way, Mr. President.
A substantial share of the financial burden of these claims, and the
claims from other cases similar to these that came along in those days,
fell on Lloyd's of London under its broad reinsurance policies. Lloyd's
of London came into play because it is the reinsuring agent.
To take a very specific example, Mr. President, in the event that a
company believes that it might have any kind of insurance liability and
it insures with a company in the United States for that liability, as
every commercial firm in this country must do, the insurance firm that
takes that insurance may very well say, ``We want to potentially limit
our losses. We don't want unlimited liability.'' And, therefore, they
assign or they buy a policy for a premium from Lloyd's of London to
cover everything, say, over $10 million or everything over $1 million,
depending on the size of the firm. In short, the insurance companies
went to Lloyd's, and Lloyd's wrote premiums for the most extraordinary
of cases. It had a reputation of doing this for over two centuries.
But if you should ask why should the asbestos cases or problems of
DES have impacted upon Lloyd's of London or Judge Breyer, it is because
the Lloyd's of London took the liability, and the Lloyd's of London
files, like Judge Breyer, took on the liability, thus providing the
capital with which the insurance company reached out to take on these
cases.
Now, American lawyers were quick off the mark and they were vigorous
in pursuit of asbestos victims in particular, with some setting up x
ray equipment, vans parked outside of factories, and others using
direct mail to mention recent asbestos victim awards in the six- and
seven-figure range.
By the early 1980's--and I stress again the time period, Mr.
President, because my point is that Judge Breyer, as a judge, as a
sophisticated legal observer, as certainly a reader of the newspapers,
would have been aware by 1980 that things had shifted markedly; the
burdens to the company, not to the victim in terms of being a
defendant; long suits, 30 years mentioned for asbestos in particular;
long lines of attorneys, vans parked outside asbestos victims' places
of employment. And by the early 1980's, U.S. courts have logged more
than 25,000 asbestos cases awaiting hearings.
Now, in the midst of all of this legal and insurance change and
turmoil, Judge Stephen Breyer repeatedly--repeatedly--signed on as a
Lloyd's name from 1978 to 1988, assuming, on each occasion and with
documents clearly in front of him, unlimited liability ``down to the
last short button,'' as the Lloyd's people point out.
Furthermore, he signed documents acknowledging that British law would
pertain in any disputes arising from his obligations, an unusual thing
for an American judge, a sitting judge, after his confirmation in the
late 1980's to the Federal bench, to do.
In fact, the U.S. Court of Appeals for the Second Circuit ruled in
1991, and I quote from the ruling of that court:
Plaintiffs went to England to become members of a
distinctly British entity, invested in syndicates operating
out of London, and entered numerous contracts, all of which
stated plainly that Lloyd's affairs and plaintiffs'
investments would be administered in England and subject
exclusively to British law.
That was a part of their judgment which denied Lloyd's name who now
were injured and were suing trying to get relief and that was denied by
the U.S. Court of Appeals for the Second Circuit.
I would contend at the very least prudence would demand that a U.S.
circuit court judge stop investing in such a troubled and complex
enterprise. He should, instead, have followed section 455 of United
States Code, title 28, which gives American judges clear guidelines for
acceptable investments which do not get into conflict-of-interest
allegations. And acceptable investments include mutual funds, for
example.
A Lloyd's of London underwriting with unlimited personal liability
and a very specific field of endeavor, namely insurance or reinsurance,
is not by any stretch of the imagination a mutual fund--or a prudent
investment. Section 455 does not come close to this. Judges that have
had much less exotic responsibility than Judge Breyer have understood
section 455 very clearly.
I contend that Members of this body, if not bound by section 455,
ought to have a very clear understanding of what is involved here. I
come at this debate this morning as a person who was involved in
business and in farming. I am not an attorney. I have never consulted
section 455 prior to this debate on Judge Breyer.
But at a very early point--and I suspect that point arrived for many
of us--as a candidate in the Republican primary for mayor of
Indianapolis, I was advised, thank goodness, by people who had pretty
sound judgment, that if I had any, even New York Stock Exchange
securities, I ought to dispose of those--even the small number of
shares that I had in General Motors because Alison Division was a local
firm and I admired and respected and had worked for that firm in the
summertime. I disposed of those because at some point someone would
say, ``In your public judgments you are guided by the investment you
have in a firm for gain. You have an equity position in a firm for
gain.'' I disposed of those securities as a matter of common sense.
I would say most judges have done so a long time ago. This is an
exotic case, a sitting Federal judge signing Lloyd's of London
underwritings for 10 years and finally getting caught in a disaster for
him and, I believe, for us in terms of the involvement that continues
on in this predicament.
It has been suggested by some that no convincing explanation has been
offered of how Judge Breyer's environmental rulings could have
benefited him. But I suspect that is hardly the question. It is a much
cleaner ethics situation than that. Judge Breyer has to find out in
advance his investment situations and his potential difficulties. For
us, at least, we must look toward the future, and the international
situation hovering over Lloyd's is a very bleak future.
This judge will not be out of Lloyd's for a long time, and as I
pointed out earlier, the Supreme Court sits at the pinnacle of those
difficulties.
Mr. MURKOWSKI. I wonder if my friend would yield for a question?
Mr. LUGAR. I will yield briefly to the distinguished Senator from
Alaska.
Mr. MURKOWSKI. I thank my friend from Indiana. I compliment him for
bringing out the significance of that guarantee in the case of Judge
Breyer.
It is my understanding that the implications of the guarantee are
unlimited, and could carry on beyond his lifetime and into his estate
and his heirs, whatever the ultimate liability associated with the
claims that are outstanding?
Mr. LUGAR. The Senator is correct.
Mr. MURKOWSKI. If I may follow up, could the judge transfer those
assets that he currently has in his estate to his wife or his family to
shield them from the possible claim? Or is that prohibited under the
arrangement that he has with Lloyd's, covering the current guarantee,
which I would assume may be joint and several?
Mr. LUGAR. I would defer answer to that, really needing more legal
advice of what the judge's options are. He has been exploring them
substantially. But I am not certain what his research may be and I will
not speculate on that.
Mr. MURKOWSKI. But, if I may follow up, one might assume that Lloyd's
would require a guarantee substantive enough to ensure that there was
an actual claim on his assets or his estate, and he would not have the
flexibility of simply transferring those assets, if indeed it appeared
that those assets might be threatened?
Mr. LUGAR. That is fully possible. Lloyd's has been aggressive in
pursuing the amounts that are due under these reinsurance contracts.
The courts are filled, really, with these suits.
Mr. MURKOWSKI. And I would assume that one would recognize the
significance of giving an unlimited guarantee associated with an
investment. While, obviously, the potential return is perhaps
significant and very difficult to measure, nevertheless a prudent
person would consider the risks and the implications of an unlimited
guarantee.
Has there been or does the Senator from Indiana have any knowledge of
Judge Breyer's explanation of why he, perhaps, did not think that this
was as significant as the risk turns out to be?
Mr. LUGAR. To my knowledge, the judge was not asked during the
committee hearings or in any literature that I have seen.
As I will point out as I proceed through my speech, an article by Mr.
Jim Glassman of the Washington Post drew my attention, and perhaps that
of other Senators, to the nature of this investment and how imprudent
it appears.
Mr. MURKOWSKI. I thank my colleague from Indiana for allowing me to
interrupt his presentation. I am very concerned about this as well,
because I think it shows where the judge perhaps became an insider in
this investment, as is often the case where you depend on other
sophisticated partners to guide you. Nevertheless, one would expect a
nominee to the Supreme Court to have that extra perception to
understand the implications of an unlimited guarantee. I look forward
to hearing my colleague's continued evaluation of this.
I do want to say this Senator from Alaska is very uneasy about this
nominee, not on the basis of his qualifications on the bench or his
record on cases, but because of the lapse of judgment associated with
entering into an agreement involving unlimited liability. Having been
in the banking business a long time I can tell you, once you give your
unlimited guarantee you have given it until the obligation is
satisfied. And if you are on joint and several, it does not make any
difference whether there are four or five others. One might think you
would have to share proportionately. They can go after your assets and
exhaust them in any manner or form. And of course that may affect the
judge having to recuse himself on issues before the Supreme Court.
It is a very troubling issue. I commend the Senator from Indiana for
the depth of his analysis. I wish him well.
Mr. LUGAR. I thank the Senator. Mr. President, while on that subject
the Senator from Alaska has raised, let me just point out that Judge
Breyer's unlimited liability pertains only to precisely his share of
the underwriting.
White House counsel has pointed out it is approximately one-five-
thousandths of the Merrett 418 syndicate. Even though it is unlimited
for that one-five-thousandths, he at least does have that limitation.
Likewise, White House counsel has pointed out that Judge Breyer has
stopped loss insurance as deposits on tap there with Lloyd's
anticipating losses and that Tetsat, the accounting firm in Great
Britain that tries to make estimates of what kind of long-tailed losses
are going to occur, estimated that Judge Breyer's losses will be 3\1/2\
to 4 times what they have been at the present time, based upon their
best guess, which takes him up somewhere around $180,000, in the worst
case scenario that the White House sees.
The dilemma is that the White House may not have seen far enough. The
common idea cast about, not in hearings but I think informally among
Senators, is that Judge Breyer is going to work very hard to get
himself out of this predicament in 1995, next year. Indeed, there is a
firm or an idea of a firm called NewCo, which is to be a vast
reinsurance firm in which those who are in a predicament like Judge
Breyer try to fence in the dilemma. It is a Lloyd's idea because they
are finding it very difficult to get investors for the future, with the
thought that reinsuring and rolling over all of this means a
compounding problem for them, literally a snowball out of control.
The dilemma for Judge Breyer specifically, and for the American Names
who are active along with Judge Breyer, and others, is that it is
doubtful that those who have a stake in this will want to invest that
much more money in reinsurance to stake out the unknown. In other
words, how could these investors have any idea ultimately of the last
asbestos suit or the last Superfund suit? As a matter of fact, they do
not.
Senators ought to understand that. There has been a rather bland
assurance by White House counsel and by others soothing about Judge
Breyer's predicament that he really cares about this, and he sure does.
He got out in 1988, and I will recite a letter in my testimony shortly
from Judge Breyer to his agent in London--trying to figure out what in
the world to do--last December long before he came to this nomination.
But he has a horrendous problem because the nature of reinsurance is
that you keep trying to reinsure the unknowable. As the flood waters
come up over the dike, you have to reinsure again. The problem for
Lloyd's is there may not be, in all of Lloyd's, enough reserves to face
the claims that are on the horizon for them.
That is what led me to make a comment which really requires a lot
more explanation. Lloyd's, and many other people in the insurance
business, are looking to this body--us--in addition to the Judge
Breyers of this world, and the Court, for a fix. How do you ever stop
the flood set in motion by the number of suits that are out there, as
well as those still to come?
Mr. MURKOWSKI. Mr. President, one would assume, if I may just follow
up on the point of reinsurance, if the judge were successful in
attempting to negotiate some type of reinsurance, his personal
guarantee, unlimited as it is now, would follow because they certainly
would take no less than what they have now, and that is an unlimited
guarantee.
So the judge would not be getting out of the extended liabilities
associated with this unlimited guarantee.
Mr. LUGAR. When the reinsurance scheme fails, you are back to square
one again with Merrett 418. The idea is that somehow this is fixable.
The judge has explored, as we know, on public record, various ways of
trying to buy out of the situation; one scheme for $250,000. I have
correspondence from Mr. Rosenblatt of the American Names, which says it
might cost the judge $1 million. But even then, you do not know, until
these long-tailed claims have come in, whether the reinsurance thing
itself failed.
Mr. MURKOWSKI. Who would want to buy out the judge's position for a
million dollars, and be saddled with the unlimited liability associated
with the guarantee, which is an ongoing unlimited guarantee? No one
would buy that unless there was a tremendous price paid for it.
Mr. LUGAR. Mr. President, that is why I come to the conclusion that
the analysis of how Judge Breyer is going to get out of this has almost
the same faults as Judge Breyer's analysis of getting into it.
This is one of these horrendous predicaments overtaken, and I cited a
few cases of how the law changed. The defendant became the firm, not
the plaintiff or the individual person who is suffering. We took a 30-
year view of liability, not a very short run. The courts simply found,
in fact--and the most conspicuous failure clearly known to Judge Breyer
was the bankruptcy of Johns Manville in 1982. That really opened it up
for the world. It may have been an insider game before that time. Johns
Manville, a very large American corporation, went under and is still
under. Lloyd's of London is almost going to go under because of the
Johns Manvilles of this world, and everybody else involved in these
sorts of businesses.
When we passed Superfund, we set in motion a whole series of
predicaments that ricochet out there, and will do so for a long time.
In this body, we are discussing reform of Superfund. Reform gets to
some of these issues: How do you cap the losses and the liabilities
that are out there? Hard to do, as the papers are replete with stories
of how it is hard for us, the 100 of us, to renegotiate that very
important point.
Let me say, for most Members--and I would acknowledge these articles
specifically--the Lloyd's Superfund business came to our attention in
two articles in the Washington Post, one by Mr. Benjamin Weiser in the
June 17, 1994, edition in which he entitled it: ``Lloyd's of London's
Big Losers, Some American `Names' Face Financial Ruin.''
Very specifically, Judge Breyer's predicament came to our attention
in an article in the Washington Post of July 20, 1994, written by James
K. Glassman, entitled, ``For High Court Nominee Breyer, an Injudicious
Investment.''
Mr. Glassman, in his summation, said:
But something about Breyer worries me more. How smart and
judicious can someone really be if he invests in a mess like
Merrett 418? Is he dumb or merely oblivious? Or does he just
love to gamble with his family's fortune? Also, imagine the
prospect of a Supreme Court Justice facing bankruptcy because
of Superfund and asbestos claims. Even if he recuses himself
from such cases on the High Court, he'll be embarrassing not
only to himself but the institution.
Mr. President, in favor of Judge Breyer, I will say, at least on
paper, his net worth and that of his wife is apparently in the $6
million to $8 million range, we are advised. White House counsel has
said, surely even if the judge's payments to Lloyd's mount upward and
upward and go on for years, he is not going to run through $6 million
or $8 million. I have no idea, as the distinguished Senator from
Alaska, how the Breyers have arranged their affairs as to the liability
of family members in this respect.
My question is not the bankruptcy of Judge Breyer, and I pray that
will never come to pass; it is the judgment of the judge, his judgment
that we ask of somebody on the Supreme Court of the United States, and
preferably not a judgment entangled in any way by the monumental
looming problems of Superfund and the asbestos claims.
The New York Times, in its lead editorial of June 26, 1994, just this
week, starts out with a headline: ``A Cloud on the Breyer Nomination.''
The New York Times editorial said:
Eager for swift confirmation of the Supreme Court nominee
Stephen Breyer, Senators of both parties are rushing to a
floor vote without fully investigating significant ethical
issues connected to the nominee's investments. This
irresponsible failure by the Senate leaves Judge Breyer with
a cloud still hanging over his nomination.
Judge Breyer, who is Chief Judge of the U.S. Court of
Appeals in Boston, answered the Senate Judiciary Committee's
questions for 3 days and won unanimous clearance for a floor
vote scheduled for tomorrow. But the committee failed to
fully explore the judge's participation in pollution cases,
despite his investment in a Lloyd's of London venture that
heavily insured asbestos and toxic pollution risks in this
country.
At issue is Judge Breyer's compliance with the Federal
recusal statute, which requires judges and justices to
disqualify themselves when their impartiality ``might
reasonably be questioned.''
Mr. President, members of the Judiciary Committee have cited a number
of legal scholars who wrote to the committee, I presume at the
invitation of the committee, to discuss the ethics of Judge Breyer.
But not all of those legal authorities reached the same conclusions.
I wish to read from the letter written to Chairman Biden on July 13,
1994 by Prof. Monroe H. Freedman, Howard Lichtenstein Distinguished
Professor of Legal Ethics at Hofstra University.
He says:
Dear Senator Biden. As one who has worked in the field of
lawyers' and judges' ethics for almost three decades, I write
to oppose the confirmation of Judge Stephen Breyer as a
Member of the Supreme Court. My opposition is based upon
Judge Breyer's violation of the Federal Disqualification
Statute, 28 U.S.C. Section 455.
We have heard much in recent years about a ``litmus test"
for judges. The reference has been to the nominees' positions
on substantive issues, and the test has fluctuated with the
politics of the moment. If there is one test that should be
constant, however, it is that the record of a nominee for
judicial office should not be tainted by a serious violation
of judicial ethics. Judge Breyer fails that test.
The Federal disqualification statute (Section 455) was
enacted by Congress to ensure respect for the integrity of
the federal judiciary. Discussing the statute in the
Liljeberg case, the Supreme Court said that ``We must
continuously bear in mind that to perform its high function
in the best way `justice must satisfy the appearance of
justice.'''
The problem, the Supreme Court explained, is that ``people
who have not served on the bench are often too willing to
indulge suspicions and doubts concerning the integrity of
judges.'' Section 455(a) was therefore adopted to ``promote
confidence in the judiciary'' and to eliminate those
``suspicions and doubts.''
Let me just say, Mr. President, the professor continues:
I have quoted at some length from the controlling Supreme
Court cases * * * because, so far, they have been virtually
ignored in these hearings.
He is speaking of the judiciary hearings and is speaking of the cases
Liteky, Liljeberg, Tumey, Murchison, and Lavoie.
Neither Professor Stephen Gillers nor Professor Jeffrey
Hazard--
These were also professors who wrote to the Committee--
discussed these cases in their letters to the Committee in
which they conclude that Judge Breyer did not violate the
Statute.
Judge Breyer was a member, or Name, in the Lloyd's Merrett
syndicate 418 in 1985, insuring asbestos and pollution
losses. His exposure to liability continues to this day. As
of 1993, the total losses on that account were $245.6
million. Other Names have had their fortunes wiped out in
total in Lloyd's liability $12 billion. For years, therefore,
the Names have been understandably generated.
The New York Times has described Judge Breyer's membership
in Lloyd's as ``A tricky investment.'' Although Judge Breyer
has assured this committee that he will get out of this
membership as soon as possible, this is a questionable
pledge. He himself has testified he has been trying to
extricate himself for years. And according to Richard
Rosenblatt, who heads a group of hundreds of American Names
who are ``afraid of being wiped out,'' it would cost Judge
Breyer more than $1 million to insure himself against his
personal share of the syndicate's losses. Even then, he would
remain liable if his insurer could not pay.
Judge Breyer and the White House have assured this
committee and the public that Judge Breyer's reasonably
anticipated liability is negligible. And the ethics experts
who have ``cleared'' Judge Breyer base their opinions on just
such misleading assumptions. As Professor Hazard says, he was
told to assume that Judge Breyer's possible losses are well
within ``stop-loss'' insurance coverage that the Judge
already has. For similar reasons, Professor Gillers has
commented that his own opinion is ``rather narrow.''
But consider Mr. Rosenblatt's estimate that insurance
coverage of Judge Breyer's liability would cost more than $1
million. That reflects the calculation of hardheaded
actuaries, not overly optimistic politicians eager to
minimize the true dimensions of the judge's difficulties.
Having said that, let me emphasize that my opinion does not
depend upon the precise size of Judge Breyer's liability. As
Professor Hazard said in his opinion, the business of
insurance is complex, sometimes controversial and ``widely
the subject of public concern and suspicion.'' Unfortunately,
Professor Hazard did not recognize that his own description
of Judge Breyer's position as an insurer echoes the Supreme
Court's description of the purpose of Section 455--to avoid
public ``suspicion and doubts.'' Predictably, and properly,
``public concern and suspicion'' have been focused on the
integrity of the judiciary because of Judge Breyer's failure
to disqualify himself when the statute required him to do so.
But under Section 455(c) of the Disqualification Statute,
the Judge had an absolute responsibility to inform himself
about his personal * * * financial interests * * *. Thus, the
bizarre defense of Judge Breyer is that he violated his
statutory duty to know the details of his personal financial
interest, and therefore he didn't violate his statutory duty
to disqualify himself.
In fact, Judge Breyer did violate the statute in failing to
disqualify himself. Take, for example, United States v.
Ottati & Goss, Inc. Two years after Liljeberg explained the
broad scope of Section 455(a), Judge Breyer failed to
disqualify himself from Ottati & Goss--even though the case
involved the Environmental Protection Agency's powers to
impose liability on polluters like those the Judge knew he
was insuring.
In Ottati & Goss, the issue was whether the EPA could
impose remedies against polluters, subject to judicial
revision only on a finding that the EPA had arbitrarily and
capriciously abused its powers. Lower court decisions were
split on the issue. A decision by the First Circuit would be
an important precedent.
Judge Breyer expressly recognized this in his opinion in
Ottati & Goss, saying the case raised a question with
``implications for other cases as well as this one.'' And he
said again: ``The EPA's * * * argument [has] implications
beyond the confines of this case.''
That was enough to require Judge Breyer to disqualify
himself. In effect, he was in the position of deciding his
own case, or, at least, of setting a precedent that could
affect his own liability.
And I quote the professor further:
How the Judge ultimately decided the case has no effect on
his duty to disqualify himself. His decision in Ottati & Goss
compounds the appearance of impropriety that the Statute
forbids, because the Judge wrote an opinion weakening the
power of the EPA to impose liability on polluters. And his
opinion predictably has been influential, causing the EPA to
change its own regulations.
Now, Mr. President, I will not go through the additional analysis of
the professor. But let me just say that one other point I suspect needs
to be made about the nature of Judge Breyer's investment under Section
455, and I quote Professor Freedman further:
Another contention is that the Judge's membership in
Lloyd's is ``analogous'' to being an investor in a mutual
fund, therefore exempt from the statute under 455(d)(4).
There are two important differences between being a Name in
Lloyd's and being an investor in a mutual fund. One is that
the mutual funds are typically highly diverse. But Lloyd's is
solely involved in insurance, and the Judge knew that one or
more of his insurance liabilities related to environmental
pollution. Another major difference is that an investor in a
mutual fund cannot lose more than the principle invested. In
Lloyd's, on the contrary, one's entire fortune is at risk, as
hundreds of Names have been found to their dismay in recent
years.
In a rather colorful description, Mr. President, of this predicament
Lance Gay writes in the Washington Times of today, July 29, 1994, a
lead paragraph:
Here is a deal of a lifetime. I dug a large hole in my
backyard and invited friends and strangers alike to come and
throw all of their savings and deeds and their homes into it.
The best investment opportunity you will find, too good to
pass up, Lloyd's of London, and just your cup of tea. All you
have to do is commit all of your worldly belongings to
Lloyd's, and you can become a Lloyd's name and member of one
of the most exclusive clubs.
I point out that it has become a lot less exclusive throughout the
1980's. As a matter of fact, the cachet attached to that was
irresistible. And the Lloyd's names rose to over 30,000. They are
disappearing by the thousands as rapidly as people are able to jump
ship fully knowledgeable that they are unable to explicate themselves.
Mr. President, all of this, of course, comes to Judge Breyer's
attention at various stages. He wrote on December 13, 1994, last year
to the Director of L. W. Stearns, Limited, who served as an agent for
Judge Breyer apparently with regard to his more recent Lloyd's under
writings.
Judge Breyer is asking first of all if it is possible for the agency
to release the letter of credit, that he deposited 5,000 pounds already
in Lloyd's hoping that somehow that this can release, as he puts, more
money. But the poignant paragraph is on the second page, fourth
paragraph. I quote from Judge Breyer's letter to them.
What are the prospects of my leaving Lloyd's? I resigned in
1987. My reasons * * * are related to my job, namely, Federal
Judge, and the disqualification that membership requires, to
any Lloyd's losses (for there then seemed to be none) yet,
apparently--
In Judge Breyer's language--
I am captured for the rest of my life, despite the small
likelihood that losses will exceed my stop loss. Is anyone
proposing to do anything about this kind of problem? Should
it not be possible, for example, to buy a reasonably priced
policy promising to pay any excess liability arising say a
decade from now over and above my 125,000 pound stop loss
coverage, and, having done so, leave Lloyd's? I should very
much appreciate any help you can give me with these
questions. Since I must respond about the settlement offered
before the end of January, I should be particularly grateful
for a speedy reply.
The poignant aspect of this are not only Judge Breyer's difficulties
here, but it is the fact that he really does have a situation he still
does not apparently understand.
Let me, Mr. President, try to bring more understanding of that.
I received a letter from the law firm of Robbins and Keating, Mr.
A.R. Robbins, writing this letter, and he writes:
Richard Rosenblatt, the President of the American Names
Association--
That is Lloyd's name.
Requested that I send you a copy of the Lloyd's of London
General Undertaking required to be signed by Names of Lloyd's
during the 1983-1988 period by the justice bars and
underwriting members. The attached form was adopted by the
Council of Lloyd's, the governing body, for application in
1987 underwriting years, and subsequently all names required
to sign the document, as well as the standardized document,
or to continue or to commence underwriting at Lloyd's for the
1987 underwriting year, and subsequent * * *.
And so forth.
In the course of this letter, Mr. Robbins points out:
Once committed, the name cannot cancel or withdraw from
these commitments until they are paid, adequate reserves are
fully reinsured. If reinsurance, however, cannot be provided
with specific syndicates in which named participant pays,
then it must remain open until the claims run off; until they
are paid, which may take many years, and involve very large
liabilities, specifically if the syndicate had inherited
reinsurance of old policies which were written on a current
basis with unlimited liability, and with the agent of the
Lloyd's policies--
That is, an agent of policy; broad language.
construed to cover asbestos, and long-tailed claims which
date back as early as 1939. It has been reputed that
Merrett is meritorious to respond to one of the worst
syndicates. These provisions are intended to operate in
tandem to deny U.S. names access to U.S. courts giving
them recourse only to the courts of England.
As I point out, Mr. President, the remedy for Judge Breyer,
therefore, does not lie in the courts of the United States. It lies in
England. But still it is a very unusual thing for an American judge to
sign with some sophistication, at least in the American system.
Mr. President, let me quote from a letter dated July 13, 1994, by Mr.
Rosenblatt of the American Names Association. He says:
I have no personal opinion as to whether or not Judge
Breyer should be confirmed by the Senate. The purpose of this
letters is to clarify some misunderstandings about Lloyd's.
There are few people in this country, or anywhere else who
understand Lloyd's and the calamity which has befallen the
entrapped innocent American Names. It has been said that
there are two kinds of Names: those who are ruined, and those
do not know they are ruined. Possibly, Judge Breyer falls
into the latter category.
His statement tend to show that he doesn't understand the
nature or scope of his predicament. According to the New York
Times he stated that he can get out and that he ``in February
* * * wrote to lawyers in London emphasizing his strong
desire to get out Merrett 418, saying he wanted to avoid
syndicates involved in American tort liability * * *''. He is
in for life, and his heirs are in unless something is done by
U.S. courts, regulatory bodies, or legislation.
Mr. President, back to the fixes that I have indicated earlier on,
widely contemplated by many:
The American Names Association, of which I am Chairman, has
almost 700 members, and all are in the same dilemma as Judge
Breyer, with the exception that they understand the nature of
their dilemma. There is no way to get out of Merrett 418, or
any of the other hundreds of open years syndicates. There
are, inside Lloyd's, some schemes where, ostensibly, a Name
could buy unlimited reinsurance for an extremely high price.
The problem with this is that the syndicate which might sell
such insurance may be himself in danger of collapse, as is
all of Lloyd's. In that case, Judge Breyer would find itself
back with all of his unlimited liabilities for the rest of
his life, is children's lives, and so on, having also lost
the cost of this expensive reinsurance. One does not get out
of Lloyd's by dying, as the estate remains liable. Bankruptcy
would be the only sure way to get out of Lloyd's.
Judge Breyer has referred to the possibility of getting out
in 1995.
Judge Breyer is not the only one. Lloyd Cutler, White House counsel,
and other persons are trying to reassure the Senate that 1995 is the
time to finally bring an end to this.
This would be in connection with a scheme developed by the
brokers and agents who have gained control of Lloyd's, and
which is called ``NewCo''.
I would point out, Mr. President, that Lloyd's no longer is entirely
financed by these unlimited liability names, like Judge Breyer. But, in
fact, one-sixth of the capital now comes from corporations who have
prudently taken limited liability. So you have this odd mixture of
corporations with pretty hardheaded managers limiting their liability,
along with the amateurs, the names.
This is a theory that the worst hit Names would deposit
large sums of money in order to form a ``ring fence'' around
all of the old open syndicates, and then this entity would
take care of all of the losses up to that time. It is a
fantasy that the worst hit Names would be in a position to
voluntarily raise the kind of money which would cover all of
the asbestos, pollution, product liability, and all of the
possible losses from the past, which could amount to hundreds
of billions of dollars. The principal beneficiary of such a
structure, would be the future members of Lloyd's,
They would be the beneficiaries,
rather than those making this gigantic sacrifice. The theory
is not practical, and has been raised purely to satisfy
current needs to get past Government authorities, and to
impress gullible future investors.
Lloyd's was opened up to American investors, purely to
shift unquantifiable future losses away from the insider
controlling group. Our organization--
In speaking of the American Names,
has accumulated tens of thousands of documents which prove
that Lloyd's has become a giant ponzi, which includes
misrepresentation and multi-level marketing schemes, all of
which violate our state and federal securities laws as well
as insurance laws.
I make that point, Mr. President, and I underline Mr. Rosenblatt's
rather poignant plea, as one of the Names, to point out that the idea
cast about this Senate debate that an investment in Lloyd's was a
sound, prudent investment, is disastrously wrong. Members really need
to understand the nature of that type of a situation.
Lloyd's enjoys immunity--
Mr. Rosenblatt continues:
from suit by Act of Parliament. Americans did not know, and
were not informed by Lloyd's. Our organization is commencing
a lawsuit in the U.S. challenging the fraudulent nature of
these agreements. This case may well reach the Supreme Court.
The problem with Marine Syndicate 418--
and the one the nominee belongs to,
stems from the fact that it is not really a marine syndicate.
It is a ``long-tail'' syndicate, which means it may be many
years before the true nature of the losses will be known.
Since there is no way for a Name to get out of these latent
liabilities, short of bankruptcy, the situation is termed
``unquantifiable loss.''
Mr. President, in the course of this statement, I have tried to
establish that I doubt the good judgment of Judge Breyer when I survey
the wreckage that I have laid before the Senate this morning. But it is
not simply a personal tragedy for Judge Breyer, of which he may still
not understand the nature of his dilemma; if Judge Breyer is naive, we
as Senators have a responsibility for something more. The bland
assurance that Judge Breyer invested in a sound institution--Lloyd's of
London--and has some bad luck, Senators have pointed out that we have
all had investments that did not work out. Who here has guessed right
all the time? This was not simply an unsound investment, or two or
three; Judge Breyer signed away everything--unlimited liability--in a
foreign land, subject to foreign law. And now, as I have quoted from
his letter to his agent last year, he wonders what can keep him from
being a captive to this situation forever. A very tough predicament for
an American judge.
I have cited Professor Freedman's testimony that there is at least
contention by some legal counsel that Judge Breyer already violated
section 455. In any event, if he were to come onto the Supreme Court,
he has a rigorous job of scholarship to do. He must find out what all
Merrett 418 does, in short, very broadly, and how many cases are coming
through the courts and through appeals now that are touched by that. He
has an absolute obligation to do that. I simply ask, is it useful for
the Senate to confirm somebody who must recuse himself from a
substantial body of law and judgments? Would it be useful for the
Members of the Senate to come to the Senate burdened with situations,
and on the first day recuse themselves from votes on this floor? That
is not very substantial representation for our States, and I contend
that Judge Breyer must give some thought to whether he can give really
a full measure of devotion to the task he seeks.
Finally, Mr. President, I come back to my plea that even at this late
date, the President of the United States surely ought to consider the
record that is before us. If Judge Breyer made difficult judgments,
they are in the past. We must make a difficult judgment today. Senators
cannot claim that they did not know of all of this. For at least the
past hour, I have tried to recite it in the most concise way that I
can. I cite to Senators the book, ``Ultimate Risk,'' by Adam Raphael.
Unfortunately, it was published only recently in London and is not
available, I gather, to most Senators. But, clearly, it is a book that
goes definitively into the Lloyd's problem and specifically the
dilemmas facing Judge Breyer.
I am hopeful that even if Senators read ``Ultimate Risk'' after the
vote, they will be knowledgeable about what we face, because the
problem is not just Judge Breyer, it will be the Senate and the
catastrophes and Superfund and all of the case law involving asbestos
claims and all of the problems of reinsurance that are coming along the
trail. They are going to hit us as well as the Court. I hope that when
they do, the team on the field is able to enter with clean hands,
without allegations of conflict of interest, and certainly with more
confidence in the judgment of the American people.
Mr. SPECTER addressed the Chair.
The PRESIDING OFFICER (Mr. DeConcini). The Senator from Pennsylvania
[Mr. Specter] is recognized.
Mr. SPECTER. Mr. President, the Senator from Indiana has given a very
detailed statement on his concerns. When the Senator from Indiana
speaks in this Chamber, he is listened to very carefully. Although I
could not be here for the opening of his presentation because we had a
caucus on the health care legislation, I was here for most of his
presentation. I am on the Judiciary Committee, and I did hear Judge
Breyer's testimony, including the closed session. There are a few
comments which I would like to make in response to what the Senator
from Indiana has had to say.
I think that, fairly, Judge Breyer has to be evaluated on the
totality of his record. He has to be evaluated on his academic record,
which is outstanding--Stanford and Harvard Law School. He has to be
evaluated on the basis of his work with the Law Review at Harvard, his
scholarly writings in law journals, his books, and his work for the
Judiciary Committee, where he came into personal contact with many
members of the committee--not this Senator, because I was elected in
1980, his last year of service--and then his work on the court of
appeals for the first circuit. I have read many of his opinions, and,
in my judgment, he is a very, very distinguished legal scholar. So that
his activities with Lloyd's of London and the investment which the
Senator has detailed, I think, fairly have to be considered in the
total context of his record, which is extraordinary in terms of
scholarship, ability, and intellectual capacity.
On the issue of prudence, we must consider that Lloyd's of London has
had a very profitable 300-year history, but as the Senator from Indiana
has outlined in his account, there have been losses. A question arises
as to what could be anticipated by someone like Judge Breyer, who made
an investment.
The laws on asbestos were unfolding and Johns Manville was a big red
flag. But what was a man in Judge Breyer's position to know about the
specifics of Lloyd's investments, or what was he to inquire upon?
When you talk about the Superfund law, which the Congress passed in
1986, if someone made an investment in the late 1970's and into the
1980's, it is hard to figure out what the Congress will do next. We
ourselves do not know what we will do next. So that when liability is
imposed as a result of Superfund, which imposes liability going far
beyond the time of an investment, really on the land itself, how can
Judge Breyer's prudence be questioned for not anticipating what the
Congress of the United States would do at some future date?
Judge Breyer testified to this effect:
When I went into Lloyd's, I viewed it as a very
conservative investment in which in fact you were exposed to
insurance companies that sell and insure and buy anything in
the world.
He went on to say:
As a practical matter and as a theoretical matter, I
believed, and I still believe, that my risks and benefits
would consist of several thousand dollars of income each
year, and sometimes several thousand dollars. By that I mean
under $10,000 or $12,000, certainly possibly having to write
a check. There was a deposit at Lloyd's that possibly was
even meant for the worst case that went up to about $150,000.
As the Senator from Indiana has stated, the liability of Judge Breyer
is one five-thousandths of what would happen to his Lloyd's syndicate.
There has been a statement on the floor by the Senator from Alaska
about joint and several liability, and unlimited liability, which do
not apply in this case. Joint and several liability means that any
individual who is liable jointly and severally could be liable for
whatever Lloyd's might be involved in. But I think there is agreement
that in this case Judge Breyer's liability is not joint and several,
but it is pegged at one five-thousandths of what losses this particular
investment might incur.
What are the facts? As best we know them in the estimates that have
been given by authorities who presented the evidence to the Judiciary
Committee, in the worst case scenario Judge Breyer's exposure is
$187,000. The underwriter projects the losses for his share at
substantially less than that, at $50,000. He has personal loss
insurance of $188,000. He has already paid the $37,000 deductible, and
insurance will cover the next $225,000 in losses, and Judge Breyer has
retained earnings of $220,000 held by Lloyd's.
Now, beyond that, as the Senator from Indiana himself has noted, the
assets of Judge Breyer and his wife are very, very substantial, as
Senator Lugar articulated, in the $6 million to $8 million category.
It is important to know that Judge Breyer's wife's assets could not
be reached. He could retain both his home and his pension fund, and his
future earnings would be beyond reach.
So even projecting the very, very speculative considerations here,
there is an outward limit realistically as to what Judge Breyer would
have to pay, and it is far, far less than his assets. And he does have
insurance to cover those losses.
You can always say that the insurance company which is covering his
losses might be insolvent, but that raises another level of
speculation. And the question is whether it is reasonable to deny Judge
Breyer confirmation by the U.S. Senate based on this one factor alone.
The Senator from Indiana has spoken at some length about the issue of
conflict of interest, and that was a subject which the committee
inquired into in some detail. The provisions of the relevant statute as
to conflict of interest I submit clearly have not been violated, and
that is the opinion given by the legal scholars who made an evaluation
on the issue of ethics and on the evaluation of the statute.
But rather than rely on the experts, I think the Senate Judiciary
Committee and the individual Senators have an independent duty to take
a hard look at the law and evaluation as to what the facts are. The
relevant provision of section 455 of title 28 of the United States
Code, the recusal statute, makes it a conflict if there is any interest
that could be substantially affected by the outcome of the proceedings.
I questioned Judge Breyer on decisions handed down by the First
Circuit which could affect Superfund liability, where even though
Lloyd's was not an insurer in that particular case, the case might
establish a principle which could have an effect on Lloyd's liability
in some other case.
I think that that is always a risk which is involved when a judge
sits on a case, even though none of his investments may be a direct
party, that the ruling could affect some other potential party that he
might not even know about. And as I said at the hearing, I believe that
there ought to be further legislative consideration as to whether the
standards of section 455 are adequate, whether it is necessary to have
a broader exclusion so that judges or other Federal officials would not
make such investments.
But I think on the face of this statute, which is defined as any
other interest that could be substantially affected by the outcome of
the proceeding, that in the cases on which Judge Breyer sat there is
reasonable certainty that this section was not violated, not only by
the terms of the experts who testified and submitted letters, but by an
examination of the cases on which Judge Breyer sat.
When the Senator from Indiana refers to his own personal experience
when he was sworn in as mayor of Indianapolis in 1967 and decided not
to have any stocks on the New York Stock Exchange, not even General
Motors, I think that is a judgment that an individual may choose to
make.
From my own perspective, the forms are so complicated that they are
not worth the time and effort. But I think it would be an undue
restriction to say that someone who had an investment in General Motors
ought to be compelled to give that up if he is to be a Federal judge,
or if he is to be a U.S. Senator. And I state that I do not have an
investment in General Motors or any similar company or in any company
except an investment which was made in a small retirement fund that I
had from my former law firm.
It is not easy to encourage people to come into public life with all
of the problems which are attendant to being in public life. The
microscopes are very high powered, and I think it is fair that they
ought to be for a nominee to the Supreme Court of the United States.
But to say that there cannot even be an investment in something like
General Motors, while it might be the personal preference of the
Senator from Indiana, my own view at this moment is that that goes too
far.
But I do believe, by way of brief repetition, that the
disqualification provisions of the statute ought to be reexamined, that
we ought to take a look to see if there is some remote benefit to stock
interest that a judge may have even though that interest is not
represented by any specific party in the litigation.
The totality of the issue on Lloyd's of London, Mr. President, I
think boils down to at least my conclusion that when Judge Breyer made
his investment, based on the 300-year history of the case, it was
understandable that he would think it was a conservative investment, as
he testified, and that he did try to extricate himself in the mid-
1980's, to leave the investment, and that he cannot be held accountable
for the additional liability which may be imposed or was imposed by the
Congress in 1986, long after he made the investment.
If you take a look at the hard facts of the case, there is a very,
very remote possibility that his liability would exceed his insurance,
and that his overall assets will not be jeopardized even under the
worst-case scenario, as outlined by the Senator from Indiana, and that
there are assets which are beyond the reach of the Lloyd's of London
liability if in fact the sky were to fall in.
The totality of Judge Breyer's record, Mr. President, I think has to
be evaluated in deciding whether we choose to confirm Judge Breyer. My
conclusion is that he ought to be confirmed. I say that based upon his
capability and his record and the way he responded to questions at the
Judiciary Committee hearing.
We have had a practice in the past several years that nominees have
answered only as many questions as they have to. We saw a situation
with Justice Scalia where he would not even say that the bedrock case
of Marbury versus Madison was beyond reconsideration by the Court. That
is the case which gave the Supreme Court the authority to be the final
arbiter of the Constitution.
When Justice Scalia appeared before the Judiciary Committee, his
confirmation was virtually assured because of the facts of that
particular year. We had just gone through a very tough confirmation
hearing with Chief Justice Rehnquist and it was prudent for Justice
Scalia not to respond to much, and he responded to virtually nothing.
We had Judge--later Justice--Souter come before the committee. He
responded to very few questions. I asked him a question about whether
the Korean situation was a war, and he said he did not know. He
declined to answer. That, I think, is an important question.
When Judge Breyer was asked the question, he responded in a direct
way that the Korean incident was a war. Why is that important? Because
the Supreme Court may be in a position of being the final arbiter on
conflicts between the Congress and our sole and exclusive authority to
declare, and the President's powers as Commander in Chief.
This floor, which is empty at the moment, has been filled in recent
days on very lively debate about whether we ought to invade Haiti.
There is a sense-of-the-Senate resolution that the President ought not
to invade Haiti. I and others have said that if the President wants to
retain that option, he ought to come to the Congress and ask for it;
that his powers as Commander in Chief are really for an emergency
situation only; and that if he wants authority, it ought to be the
Congress which grants that authority, just as the Congress passed a
resolution authorizing the use of force in Kuwait.
So on a question which really has very, very serious ramifications,
Judge Breyer was forthcoming.
When it came to the issue of the death penalty, which is a subject of
really great concern--some 37 States in the United States have the
death penalty--there are many who believe, myself included, that the
death penalty is a very valuable weapon in the arsenal against criminal
violators. And I have concluded that based on the experience that I had
as district attorney of Philadelphia for some 8 years.
When we asked Justice Ginsburg whether she had any conscientious
scruples against the death penalty, in a context where her confirmation
was virtually assured, so many Senators having spoken in advance, she
in fact said it was none of the Senate's business and she would apply
the law. But then we see later opinions coming out where the impact of
the death penalty is cut back. So I think that is a fair question to
ask.
And Judge Breyer was forthcoming on that issue.
We asked him questions on the critical matter of the separation of
church and state. He said that he agreed with Jefferson's statement
that there is a wall of separation between church and state. That is a
matter of tremendous importance, as is the free exercise clause, in
light of the case of Smith versus Oregon, where the Supreme Court of
the United States did not impose the highest standard of strict
scrutiny on the free exercise of Congress, and Congress had to
legislate on the subject. There are some today who say that the
constitutional doctrine of separation of church and state is a lie of
the left; that there is no such doctrine.
So it is very important in evaluating the qualifications of a nominee
and the reliance on precedents to have that kind of a question
answered. And Judge Breyer was forthcoming on that question and many,
many others, without reviewing the full transcript.
I had expressed some concerns or some reservations about the
nomination process generally. It seems to me that the Supreme Court
would be better served if there were members of the Court who had a
broader background; if someone like Bruce Babbitt, who has experience
as a Cabinet officer, a Governor, and a Presidential nominee, who was
considered for the Court, would be nominated, or some Members of the
Senate had been considered for that position; that there is a certain
uniformity in the Court today, with eight of the nine Supreme Court
Justices having come from other appellate courts, seven of them from
Federal courts of appeals, and one from a State court of appeals. And
Judge Breyer is right in that line. So some greater diversity would be
useful. But that is certainly not a disqualifier.
So that on the totality of the record, it is my view that Judge
Breyer is qualified for confirmation.
He came through the Judiciary Committee with a unanimous 18-to-0
vote. Everybody on the Judiciary Committee felt that he was qualified.
The issue of Lloyd's of London was a subject of very substantial
inquiry by the Judiciary Committee. When the Senator from Indiana
speaks on a subject, I--and I think uniformly in this Chamber, we--
listen to what he has to say very, very carefully.
But on the issue of prudence and whether Judge Breyer is sufficiently
prudent to be a Supreme Court Justice, I am confident that the fair way
to evaluate the Lloyd's of London's investment is on one state of the
record, combined with the balance of his record, which is outstanding.
And even on the Lloyd's issue, there was substantial reason for him to
believe at the time he made the investment, as he testified, that it
was a conservative investment and his liability was limited.
With respect to the future issue of conflict of interest, the number
of cases which reach the Supreme Court which might even remotely or
speculatively involve that issue, I think, would be very, very minimal.
Judge Breyer has outlined a protocol, if confirmed--and I think he
will be confirmed--which he will leave with the clerk's office so that
he can recuse himself or disqualify himself if that should become
necessary.
On the issue as to whether this is going to wreck him financially, it
is very, very, speculative that any losses would exceed what he is
insured for. And if they would exceed what he is insured for, there are
substantial assets that he has to cover them, and substantial assets
beyond which would not be subject to reach for the Lloyd's of London
liability, at the very worst.
So on this state of the record, I intend to vote for Judge Breyer for
his confirmation, and I urge my colleagues to do the same.
I thank the Chair and I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. CRAIG addressed the Chair.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, I rise this afternoon to express my intent
to vote for the confirmation of Judge Stephen Breyer to the U.S.
Supreme Court.
My decision on a Supreme Court nominee's fitness is based on my
evaluation of three criteria--character, competence, and philosophy--by
which I mean the nominee's judicial philosophy, when I speak of
philosophy, Mr. President; in other words, how the nominee views the
duty of the Court and the scope of the authority.
It is my strong belief the judiciary should hold to its original
purpose, neither to rubberstamp legislative decisions, nor to be
overreaching to act as substitute legislators.
Judge Breyer satisfies my criteria and I think satisfies the concerns
of a majority of the Senators. However, I do have some concerns that I
want to express about issues that arose during the confirmation
hearings.
I think it is important they be on the record, for I hope it is
important that the judge, when he is confirmed, will take note of some
of these concerns.
My concerns relate to private property rights.
One article about the confirmation hearings reported that Judge
Breyer said Government clearly can impose some legitimate regulations
without compensation, while other rules could go too far. He said there
are no fixed legal rules on where to draw the line. ``You always come
back to a kind of human judgment--what is too far,'' he said.
The report goes on to say that Judge Breyer stated property rights
cannot be elevated to the same plane as fundamental liberties, such as
free speech.
This is a judge who talked about respecting the precedent of the Roe
versus Wade decision on abortion.
I certainly hope he is equally respectful of the Supreme Court's
private property rights case, including the recent Dolan versus Tigard
decision.
Chief Justice Rehnquist wrote:
We see no reason why the Takings Clause of the Fifth
Amendment, as much a part of the Bill of Rights as the First
Amendment or the Fourth Amendment, should be relegated to the
status of a poor relation in these comparable circumstances.
In other words, Judge Rehnquist was saying that certainly takings of
private property in this instance are every bit as important, while
Judge Breyer says they may not be. I hope he would come to believe in
the Dolan versus Tigard decision.
The war to reclaim private property rights in America is not just
being fought in the Supreme Court. For the people of my State of Idaho
and other parts of the American West, this is literally a matter of
life and death--whether their traditional livelihoods will be destroyed
by the stroke of a regulator's pen.
I am not saying we should give less weight to the fundamental
liberties of free speech and the like. Just give equal, fair
consideration to all rights preserved under the Bill of Rights, as our
Founders obviously intended them. To attempt to downgrade the taking
clause of the fifth amendment is to ignore history. If any of the
rights guaranteed in the Bill of Rights were less important, they would
not have been enumerated as they were.
There is one other point I would like to raise about the confirmation
hearings. We have tremendous problems in the West with arbitrary,
painful regulatory decisions of a number of agencies. The Bruneau Hot
Springs snail and the northern spotted owl, as it related to the
Endangered Species Act, are creating tremendous problems in the West. I
do not believe any Member of the U.S. Senate voting for the Endangered
Species Act ever believed that these kinds of things would occur. But
the law is now being used, and these are very real problems that have
resulted. Even Interior Secretary Bruce Babbitt has admitted there are
problems associated with the bureaucracy. He announced administrative
changes in June that he hoped would make the endangered species
listing, for example, less arbitrary.
I applaud Judge Breyer's interest in cost/benefit analysis in
regulatory decisions. However he takes his point too far. One article
summarized a proposal from Judge Breyer's book on regulations as
follows:
He proposes creating an elite corps of regulators to assess
risk and apportion resources accordingly.
I do not think we need an elite corps. We need fewer and more clear
laws. That becomes part of the judge's responsibility in delineating
that. We do not need the kind of arbitrary decisionmaking that has been
allowed.
I think, though, the quote from his book clearly reflects a complete
lack of understanding for the way regulations affect the real people in
the real world. We do not need regulators drawn into a tighter circle,
given more authority and power. Certainly the citizens of Idaho would
say just the reverse.
Frankly, we need what even Bruce Babbitt says he is pursuing: Better
oversight by regulators and by the Congress; more input from States and
local authorities and private property owners. You know, this is a
Government of the people and by the people, and not of regulators and
by regulators. I am afraid maybe Judge Breyer might need to learn a few
lessons in that area--if he continues in his service on the Court--to
be more evenhanded.
My point is the rights guaranteed in our Constitution are the only
protection we have against bureaucrats overstepping their authority.
We, the Senate, stand in between by making good law. But when it goes
beyond that, we do need courts with a clear vision of what the intent
of the Constitution is, and I hope the judge would come down in that
way. Unless jurists in the high court, like Judge Breyer, are
consistent in recognizing private property equally with other rights in
the Bill of Rights, none of our constituents can be assured any of
their rights will be adequately protected.
So I hope in the judge's confirmation and his service on the Court he
will take in a much more serious vein, private property rights as an
extension of human rights, the right of the citizens as spoken to so
clearly in our Constitution. But with that admonishment and that
concern, I do believe the judge meets my three criteria of character,
competence, and philosophy as it relates to the Court. And for those
reasons I will vote for his confirmation.
Mr. President, I suggest the absence of a quorum and ask that the
time be evenly divided.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. WARNER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WARNER. Mr. President, I rise to join others to speak in support
of the nomination of Judge Stephen G. Breyer to be an Associate Justice
of the Supreme Court of the United States.
The Senate's advise-and-consent responsibility for Presidential
nominees to the judicial branch, most particularly to the Supreme
Court, is one of the most important responsibilities given to this body
by the U.S. Constitution. I, like others, take this responsibility very
seriously.
This constitutional responsibility as applied to the judicial branch,
I believe, is unique. It is distinguished from our responsibility with
nominees for Cabinet posts, senior military, or ambassadorial posts.
Judicial nominees are in a separate category because they form the
third branch of our Government, a branch created by joint effort
between the executive branch, the President nominating the members of
the judiciary, and the legislative branch, namely, the Senate
exercising constitutional authority under the advise-and-consent
clause.
Mr. President, I have followed the proceedings of Judge Breyer's
nomination and confirmation hearings very carefully. I also reviewed
the briefing material available to Senators on Judge Breyer's personal
background and his extensive legal career. Using this information, I
made an analysis of the various calls and letters and other
communications directed to me by my constituents from Virginia. I also
reviewed, given the nature of the calls, the testimony of Mr. Michael
Farris, a Virginian and the president and founder of Home School Legal
Defense Association, who spoke in opposition to this nominee.
This area of home schooling and religious schools was of particular
concern to a great many of my constituents as manifested by the
testimony of Mr. Farris. These constituents asked me to determine:
``What are Judge Breyer's views on home schooling and private religious
schools?''
Constituents specifically referred to Judge Breyer's opinion in the
case of New Life Baptist Church Academy versus The Town of East
Longmeadow in the Federal Circuit Court of the First Circuit in 1989.
Given the seriousness of these questions, I proceeded as follows:
First, I studied the opinion just enumerated in the Longmeadow case.
The next step was to prepare for the Judiciary Committee, during that
committee's review of Judge Breyer, a series of questions.
At the hearing, the nominee, on my behalf, was asked--that is July
21, 1994--to give the committee his views on home schooling and private
religious schools and his interpretation of how the Constitution
protects these schools, most specifically under the First Amendment.
With his response in the official record, I then scheduled a meeting
with Judge Breyer in my office to further inform myself about the
nominee, his overall qualifications and, specifically, to discuss the
issues of concern raised by Virginia constituents. I asked Judge Breyer
to expand on the questions relating to home schooling and religious
schools and to put them in a letter, which he most respectfully
forwarded promptly.
Mr. President, I ask unanimous consent that a letter addressed to me
by Judge Breyer on the subject of the Longmeadow case be printed in the
Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
July 22, 1994.
Hon. John W. Warner,
Senate Russell Office Building, Washington, DC.
Dear Senator Warner: Thank you for your questions about the
rights of parents to determine how to educate their children,
and in particular about the opinion in New Life Baptist
Church Academy v. Town of East Longmeadow, 885 F.2d 940 (1st
Cir. 1989).
I did listen carefully to the criticisms of the New Life
Baptist Church Academy opinion, and I recognize that they
have been made in good faith. As I understand them, the
criticisms are that the opinion endorses government
prohibitions of home schooling, and gives government too much
leeway to regulate religious education. In my judgment, these
criticisms misstate the meaning and effect of the New Life
Baptist Church Academy case.
The opinion does not endorse the view that government may
prohibit home schooling. It is well established that the
``liberty'' guarantee of the Fourteenth Amendment ensures
parents' right to ``direct the upbringing and education of
children under their control.'' Pierce v. Society of Sisters,
268 U.S. 510, 534-35 (1925). As I stated during the Judiciary
Committee hearings, I regard this principle as settled and I
have no bias whatsoever against home schooling. The opinion
in New Life Baptist Church Academy expresses no disagreement
with this principle. The case did not involve home schooling
at all; it involved the accreditation of a private religious
school.
The case did raise a difficult issue of balancing a
religious organization's freedom under the Free Exercise
Clause of the First Amendment to educate their children
according to their beliefs and the government's need to
ensure that all students receive a basic education in
subjects such as reading and math. In deciding the issue, the
court applied a test substantially more protective of
religious liberty than the current Supreme Court test
established in Employment Division v. Smith, 494 U.S. 872
(1990). Recognizing the Academy's ``sincere, relevant
religious belief,'' our court in New Life Baptist Church
Academy required the state to show that its interest in
regulation was ``compelling'' and that there was no practical
``less restrictive'' way of achieving the state's objectives.
The particular question was whether the state could
evaluate the secular education provided through occasional
classroom visits or, instead, was required to evaluate the
secular education through a system of voluntary testing of
each child. Our court held that the latter system (a system
that, in the court's view, no state had previously used) was
not practical, threatened to entangle the court in religious
matters, and offered only comparatively minor benefits to
religious schools generally. Consequently, the court held
that the Constitution permitted the school board's ``school
visit'' evaluation system. While people of good faith can
disagree about the merits of the case's outcome, I should
hope that most would see it as a close and difficult case,
which might have come out either way. I should also hope that
the case would be evaluated in the context of my overall
record, which is quite protective of religious liberty.
I hope that this has been helpful. My best wishes.
Sincerely,
Stephen G. Breyer
Mr. WARNER. Mr. President, a review of this letter with constituents
who continue to call seems to meet most of their major concerns.
Accordingly, Mr. President, I find Judge Breyer a highly qualified
professional to become a member of the U.S. Supreme Court. His
financial problem raised today by one of our most distinguished
colleagues, is a problem, indeed. But in my judgment, it is an
investment, perhaps unwisely made in hindsight, but that is separable
and a single issue from his overall, very extensive and commendable
accomplishments throughout his professional career as a lawyer.
Accordingly, I will vote in favor of Judge Breyer when this body
turns to the vote later today.
Mr. President, I would like, at this point, to read into the Record
briefly from the letter sent to me by Judge Breyer on July 22:
Dear Senator Warner: Thank you for your questions about the
rights of parents to determine how to educate their children,
and in particular about the opinion in New Life Baptist
Church Academy v. The Town of Longmeadow.
I did listen carefully to the criticisms of the New Life
Baptist Church Academy opinion, and I recognize that they
have been made in good faith. As I understand them, the
criticisms are that the opinion endorses Government
prohibitions of home schooling, and gives Government too much
leeway to regulate religious education. In my judgment, these
criticisms misstate the meaning and effect of the New Life
Baptist Church Academy case.
The opinion does not endorse the view that Government may
prohibit home schooling. It is well established that
``liberty'' guarantee of the fourteenth amendment ensures
parents' right to ``direct the upbringing and education of
children under their control.''
He cites the Pierce case of the Supreme Court in 1925.
As I stated during the Judiciary Committee hearings, I
regard this principle as settled and I have no bias
whatsoever against home schooling.
Mr. President, I would like to repeat that:
I regard this principle as settled and I have no bias
whatsoever against home schooling.
I read into this letter the word ``settled,'' that is settled by
judicial opinion.
The opinion in New Life Baptist Church Academy expresses no
disagreement with this principle. The case did not involve
home schooling at all; it involved the accreditation of a
private religious school.
The case did raise a difficult issue of balancing a
religious organization's freedom under the free exercise
clause of the first amendment to educate their children
according to the beliefs and the Government's need to ensure
that all students receive a basic education in subjects such
as reading and math. In deciding the issue, the court applied
a test substantially more protective of religious liberty
than the current Supreme Court test established in Employment
Division v. Smith.
A Supreme Court case of 1990.
Recognizing the academy's ``sincere, relevant religious
belief,'' our court in New Life Baptist Church Academy case
required the State to show that its interest in regulation
was ``compelling'' and that there was no practical ``less
restrictive'' way of achieving the State's objectives.
The particular question was whether the State could
evaluate the secular education provided through occasional
classroom visits or, instead, was required to evaluate the
secular education through a system of voluntary testing of
each child. Our court held from the latter system (a system
that, in the court's view, no State had previously used) was
not practical, threatened to entangle the court in religious
matters, and offered only comparatively minor benefits to
religious schools generally. Consequently, the court held
that the Constitution permitted the school board's ``school
visit'' evaluation system. While people of good faith can
disagree about the merits of the case's outcome, I should
hope that most would see it as a close and difficult case,
which might have come out either way. I should also hope that
the case would be evaluated in the context of my overall
record, which is quite protective of religious liberty.
I hope this has been helpful. My best wishes. Sincerely,
Stephen G. Breyer.
Mr. President, when I reviewed that letter, together with a number of
facts from other persons who continue to call, the letter, in my
judgment, relieves the concern that they had. I thank them for calling
me.
I yield the floor.
Mr. GRAMM addressed the Chair.
The PRESIDING OFFICER (Mr. Wellstone). The Senator from Texas is
recognized.
Mr. GRAMM. Mr. President, I want to speak a moment on the Breyer
nomination. For 12 years, I stood on the floor and listened to debate
as many of my colleagues on the left sought to win in the Senate what
they could not win at the ballot box by opposing nominees by President
Reagan and President Bush with whom they disagreed philosophically. I
want to make it very clear to my colleagues, and obviously to the folks
back home in Texas, why I am going to vote for Judge Breyer and why I
think it is the only proper vote.
Elections have consequences. When people in America voted for Bill
Clinton they knew, or they should have known, that when it came time
for him to nominate a justice for the Supreme Court of the United
States and for lower courts and for other positions of authority, that
he was going to nominate liberals; that he was going to nominate people
who reflected his views and the views of the Democratic Party.
I have voted against Presidential nominees during the Clinton
administration but only under very limited circumstances. I voted
against those that I believed were not qualified and those that I
thought were not credible. I have also voted against those who hold
views that are outside the mainstream of liberal Democratic thinking. I
have opposed those nominees who hold views that Americans who voted for
Bill Clinton could have never conceived that by voting for him, they
were setting the foundation for the nomination of people who held views
that were contrary to the Constitution or contrary to the basic
American principle of the rule of law in private property.
I would never have nominated Judge Breyer had I been President. No
Republican would have nominated Judge Breyer because his views are
fundamentally different than ours. Judge Breyer came very close to at
least hinting that he viewed the protections of property in the fifth
amendment as not being as strong or as clearly defined as the
protection of speech. I do not agree with that. If we are not secure in
our right to property, then we are not secure in our right to free
speech.
Certainly in terms of an expansive definition of the Constitution, I
have no doubt that Judge Breyer is going to make rulings that represent
a different interpretation of the great document that I have and that
people who share my values have.
But I also believe that Judge Breyer's views are mainstream liberal
views. I believe that anyone who voted for Bill Clinton knew or should
have known that the chances that anyone more conservative than Judge
Breyer being nominated by Bill Clinton were almost zero.
So my view is, Mr. President, that elections have consequences. Those
who are unhappy with this nomination will have an opportunity to say
something about it this November, and they will have a bigger
opportunity to say something about it 2 years from now. But when we
held the election for President, the American people spoke, and Bill
Clinton was elected. I am not going to try to win, on the basis of
philosophy, victories in the Senate that my party could not win at the
ballot box. Elections have consequences. The election that we held in
1992 had consequences, and one of those consequences is Judge Breyer.
Within the constraints that Bill Clinton was going to nominate a
liberal to the Court, the person he has chosen is as good as any of us
had any right to expect him to be. The President came down to a
decision between a politician and a jurist. He chose a jurist. I cannot
very well lament that this is not someone that I would have chosen.
So I am going to vote for this nominee, not because I agree with him
philosophically but because I believe he is qualified. I believe he is
credible. I believe his views, though they are different from mine, are
within the mainstream of the thinking of his political party. And
whether I like it or I do not--and I do not--the American people put
Bill Clinton into the White House. This nomination is a result of that,
and I am not going to stand in the way of it because I differ
philosophically with this nominee.
I yield the floor.
Mr. McCAIN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCAIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCAIN. Mr. President, as we all know, we will soon vote on the
nomination of Judge Stephen Breyer. I think we all also are aware that
Judge Breyer will be confirmed by the Senate by an overwhelming vote.
I believe he has received a fair hearing from both sides, and,
clearly, as my friend from Texas just stated, he would not have been
the choice if there had been a different result of the 1992 election.
The fact is that the results of the election indicate that the
President of the United States not only has the right to select, in his
view, the best qualified members of the Supreme Court but also many
other positions in Government. And with rare exceptions, I have tried
to give the President of the United States the benefit of the doubt.
I have had serious concerns about Judge Breyer's role in the $500
million Boston Courthouse project, a project that I still believe is an
exercise in extravagance, arrogance and a callous disregard for the
taxpayer. As we all know, Mr. President, being a Justice of the Supreme
Court is all about good judgment and discretion, qualities that have
been sorely lacking in the development of the Boston Courthouse.
Allegations about the extent of Judge Breyer's involvement in this
matter have been quite troubling to me.
Mr. President, when Judge Breyer was asked at the hearings by one of
the members of the Judiciary Committee, Judge Breyer rolled his eyes,
acted as if it was somewhat of a tiresome issue, and then proceeded to
basically blame the General Services Administration for any problems
that might have arisen concerning the Boston Courthouse. That, frankly,
Mr. President, does not really coincide with Judge Breyer's comments
that he made to the Washington Post, and I quote from the article that
was on the front page of the Washington Post that said:
The courthouse that Stephen G. Breyer built will stand on a
spectacular stretch of Boston Harbor, a 10-story, $200
million block room of courtrooms and offices turned into
something more by a vast public atrium. On the outside, there
will be parks and a boating dock; on the inside a day-care
center, a theater, a community meeting hall, a restaurant and
an art gallery.
This, Boston's new Federal courthouse, has been Breyer's
responsibility as chief judge of the First U.S. Circuit Court
of Appeals, and the unusual shape it will take says much
about the philosophy and temperament of the man who may
become the next Supreme Court Justice.
I continue the quote from the Washington Post article, Mr. President:
Breyer personally interviewed the architects applying for
the project. He consulted with community and environmental
groups. While cycling through the countryside of France three
years ago, Breyer stopped, gazing at the buildings he
encountered, talking animatedly with the locals about their
design. He called his aunt in San Francisco about how to make
the building more accessible to children. He visited
courthouses around the country, mining for ideas, and pored
over the original plans for the Supreme Court in Washington,
all the while insisting on a Boston complex that would expand
the definition of courthouse from legal to civic, a place
open in the evenings and weekends, a place inviting to the
community.
``This most beautiful site in Boston,'' he said at the time
the project was unveiled, ``does not belong to the lawyers.
It does not belong to the Federal Government. It does not
belong to the litigants. It belongs to the people.''
Mr. President, that really does not coincide with Judge Breyer's
comments in response to questions before the Judiciary Committee. And
there is something interesting about this also; in Judge Breyer's
commitment to beauty and all of the things, ``the most beautiful site
in Boston,'' never once did Judge Breyer mention any concern about the
cost, which is now around $500 million for a courthouse, to the point
where, Mr. President, the courthouse now has to have a $270 million
subway built to reach it so it will be accessible to the people.
It has a 6-story atrium, 63 private bathrooms, 37 law libraries, 33
private kitchens, custom-designed private staircases, a half-million
dollar boat dock, nearly $800,000 for original artwork, and $1.5
million for a floating marina. All of this and more to be built on the
most expensive and least functional site that was considered.
The pricetag to the taxpayers, as I mentioned, is $500 million, $300
million for the courthouse and $200 million to extend the Boston subway
system to the new facility.
I think it is well to note, too, Mr. President, that somehow State
and local courthouses are not required to have this kind of ``belonging
to the people at the most beautiful site in Boston.'' In fact, the cost
of the Boston Federal Courthouse is three times the cost of building a
new State courthouse that is in the same area. Private bathrooms,
libraries, and kitchens are certainly nice perquisites, but State
judges seem to be able to do without the expense of these items. Why is
the Federal judiciary so needful and deserving of palatial
accommodations? The answer is that they are not.
I also noticed, Mr. President, that Judge Breyer is a man of some
wealth. I did not see Judge Breyer in his desire to have everything for
``the most beautiful site in Boston. It does not belong to the lawyers.
It does not belong to the Federal Government,'' et cetera, willing to
spend any of his substantial wealth in order to make this a beautiful
project.
As chief judge of the First Circuit Court of Appeals, Judge Breyer
was the liaison on the Boston project between the judges and the
General Services Administration.
How can such a project possibly be justified at a time when we are
asking every sector of our society to tighten the budgetary belt, to do
more with less, and to help reign in our monstrous public debt? Not
just certain Senators, but the public finds such extravagance at the
expense of the taxpayer to be simply outrageous.
I wish I could say that Boston was an exception, but such excesses
have been uncovered in a number of projects, from New York to my own
State of Arizona.
The good news is that the sunlight of public scrutiny on this issue,
and a more enlightened and responsible leadership at the General
Services Administration, is improving the situation. The GSA has
implemented a program of time-out and review to reassess Federal
building projects, including courthouses, to better protect the
taxpayer. But, we must continue to be vigilant.
I am greatly disturbed that it took the weight of congressional
inquiries and the force of public outrage to wake up the judiciary and
the administration to the abuses involved with the courthouse
construction program. I'm even more troubled that judges upon whom we
depend for their good judgment and unswerving advocacy for the public
interest have been party to this pattern of excess and abuse at Boston
and elsewhere.
For the record, not all judges have allowed that to happen, such as
the Federal judges in Louisiana who sought to cut the costs of their
facility. Regrettably such vision and accountability was not the case
in Boston. Again, that is why I have been so concerned about Judge
Breyer's role, and the reason I submitted a series of questions to the
judge to determine the precise level of his involvement.
I want to thank the judge for his cooperation in responding to my
questions. I would be less than candid if I did not acknowledge that I
still have some lingering concerns. However, Judge Breyer has assured
me that all appropriate procedures and ethical standards were observed
in the site selection, scoping and development of the project, and that
as chief judge of the circuit he acted properly. Despite my nagging
concern, I will accept his word.
I might add that the inquiry into the Judge's role at the Boston
Courthouse has been extremely helpful in the effort to curb future
abuses by highlighting a serious problem regarding the responsibilities
of the Judiciary and the executive branch for the development of
courthouse projects.
Judicial officials claim that their role is merely advisory and that
the General Services Administration is the absolute authority on the
site selection, scope, and design of building projects. General
Services Administration officials claim that due to the separation of
powers they defer significantly to the wishes of the judiciary. Ill-
defined and misunderstood division of responsibilities, and the lack of
clear accountability is a recipe for waste and inefficiency. The
Administrator of the GSA has made significant progress in addressing
this situation, and we must continue efforts to define clearly the
responsibilities of the two branches, and ensure that there is
accountability to Congress and, most importantly, to the taxpayer.
Again, I thank Judge Breyer for his cooperation. I wish him success,
and I hope that good judgment and discretion will mark his tenure on
the Supreme Court.
I do not believe that he was candid and forthcoming in his answers
concerning the courthouse, particularly in light of the comments that
he made to the Washington Post. I do not believe that is sufficient
reason for me to oppose his nomination. But I think that there will be
questions that are going to be asked about this project in the future
as the costs continue to escalate, and the expense to the taxpayer
remains unjustified.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. METZENBAUM. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Bradley). Without objection, it is so
ordered.
Mr. METZENBAUM. Mr. President, I yield myself such time from Senator
Biden's time as I may need.
As I have stated throughout the nomination process, Judge Breyer is
clearly a man of exceptional legal skill and high intellectual ability.
However, I am disturbed about this nomination for a number of reasons.
I am concerned and bothered that Judge Breyer was not sensitive about
his holdings in Lloyd's. He did not realize that his holdings could
subconsciously affect his thinking when he decided cases dealing with
environmental law.
I believe that Judge Breyer has the potential to become a good
Justice.
Will he become a good Justice? I am not sure.
However, to do so he will have to develop a big heart and become more
sensitive to the economic concerns of ordinary people, small
businessowners and the little guy. He will also have to display better
judgment about when to recuse himself from cases in which there could
be a conflict with his personal investments, or even the appearance of
a conflict.
I have made no secret of the fact that I am extremely disappointed
that Judge Breyer failed to recuse himself from the Ottati case. At the
time he was sitting in judgment on the EPA's superfund clean up
policies, Judge Breyer had a large investment in environmental
liability insurance through a Lloyd's of London syndicate.
Most of us Americans have very little knowledge about Lloyd's. I must
confess that I learned more about Lloyd's during the Judge Breyer
confirmation process than I had learned in my entire lifetime. But
Judge Breyer knew what Lloyd's was about.
It should have been clear to Judge Breyer that his decision to make
it more difficult for EPA to force polluters to clean up hazardous
waste sites would be criticized. Because of his Lloyd's investments,
Judge Breyer could have spared himself, and the rest of us, a great
deal of soul searching and debate if he had used better judgment.
He saw fit to recuse himself from all cases having to do with
asbestos because somehow the Lloyd's investment of his might be
involved. But he did not see fit to recuse himself from the
environmental cases.
There is no doubt in my mind that Judge Breyer's Ottati decision
favors polluters over the EPA. It reduces the EPA's ability to move in
quickly and force polluters to clean up the Hazardous waste sites they
left behind. In my view, reducing EPA's ability to clean up Superfund
sites threatens the health of every man, woman, and child who lives or
works nearby.
The sixth circuit was extremely critical of the way in which Judge
Breyer substituted his own judgment for that of EPA officials. The
court stated that it is ``not the job [of the reviewing court to]
reformulate a scientific clean-up program developed over the course of
months or years.''
Frankly, I would have agreed with the sixth circuit's criticism of
Judge Breyer under any circumstances. However, his Lloyd's investment
makes the situation worse. The fact is that Judge Breyer's investment
in Lloyd's of London's Merrett 418 syndicate includes extensive
environmental pollution coverage that could have been affected by the
Ottati Decision.
As I have learned, Lloyd's insurance syndicates are not like
conventional investments. To join a syndicate, investors must pledge
their entire net worth to cover future losses. So, even though Judge
Breyer has pledged to get out of Lloyd's as soon as possible, it may
not be possible for him to do so. There is no way that he can step
forward and sign a piece of paper or put up so much money and feel that
under those circumstances he can get out of his Lloyd's obligation.
Even Judge Breyer has said that his Lloyd's investments may have
``captured'' him for life. Judge Breyer's prediction has been confirmed
by a legal expert on American investors in Lloyd's. He wrote to me that
``There is no way to get out of Merrett 418. One does not get out of
Lloyd's by dying * * * bankruptcy would be the only sure way to get out
of Lloyd's.''
In other words, this albatross hanging over his head, this albatross
of an investment, is going to be around Judge Breyer's neck for years
and possibly for decades. He has suggested to us that he was buying a
reinsurance policy to cover over his losses in Lloyd's, or that he
could do so. But the fact is that if that new insurance policy goes
belly up and does not have the money to meet its obligation, then the
obligation falls back on everybody who was in the Merrett 418
syndicate. According to this same Lloyd's expert, Merrett 418 is a
``long-tail syndicate, which means that it may be many, many years
before the true nature of the losses will be known.''
Claims against Lloyd's Merrett 418 syndicate can expose Judge Breyer
to costly liability claims from asbestos lawsuits and environmental
pollution cases, including Superfund cleanup, for many years, and an
indeterminate number of years into the future. Merrett 418 investors
face claims and losses that are currently estimated at between $725
million and $825 million, but the situation could get worse.
The fact is that Judge Breyer should have recused himself from the
Ottati case because of his investments in the Lloyd's of London
insurance syndicate. It is not enough to say, well, he just did not
think of it that way. It is not enough to say: Well, I got out of the
asbestos cases, but I did not get out of the pollution cases. Even if
it was not a violation of ethical standards, it was simply bad judgment
for a man of Judge Breyer's intellect not to have done so. And it would
be inexcusable if he did not recuse himself in the future.
On that point of recusing himself in the future, Judge Breyer told
the committee that he had some idea about posting at the Supreme Court,
if he were confirmed, a list of what his holdings were, and that if any
lawyer on either side felt he should recuse himself by reason of
possible conflict of interest, he would do so. I thought that over for
a number of days, and that is a totally unrealistic approach. It is
totally unrealistic to expect some lawyer to go in and ask a Supreme
Court Justice to recuse himself. The decision and the determination of
whether he should recuse himself belongs in the heart and head of Judge
Breyer, and I am not sure at this point that he will recuse himself. I
am not sure that he does not think that, just as in the Ottati case, he
could hear the case and still, in spite of his holdings in Lloyd's
Merrett 418 syndicate, go ahead and adjudicate that case.
I am also concerned about Judge Breyer's views on the fair
competition laws which affect the day-to-day lives of all Americans. To
date, his record has not been impressive for a judge who is supposed to
have a big heart. He almost always votes against the very people the
antitrust laws are supposed to protect. A 1991 study in the Fordham Law
Review reported that in all 16 of his antitrust decisions, Judge Breyer
voted against the alleged victim of antitrust abuse. At that time,
Judge Breyer had the worst antitrust record of any Federal judge
appointed by President Carter. It was even worse than most of the
judges appointed by President Reagan--and that is going a long way.
Let me give you an example. In a controversial decision, Judge Breyer
overturned a $39 million verdict for the consumers of a small electric
company. A jury had found that these consumers had been overcharged
because of the anticompetitive tactics of an electric conglomerate that
controlled the market. Instead of relying on the jury's judgment, based
on 13 days of expert testimony, Judge Breyer made up his own graph and
chart. It was a graph to explain why consumers should not get the $39
million verdict.
But Judge Breyer did not convince me or the consumers who lost the
$39 million verdict that a hypothetical graph and chart did justice in
this case. Frankly, I am not sure that legendary trustbuster, Teddy
Roosevelt, or the father of our antitrust laws, Republican Senator John
Sherman, would have approved of Judge Breyer's view of protecting
consumers.
I regret to say that Judge Breyer's antitrust record has not improved
much since that decision. In response to my antitrust questions during
the nomination hearing, Judge Breyer told me that he does not keep
track of the number of times he rules in favor of the defendant. That
may be so. But the facts speak for themselves. I am concerned that
unless Judge Breyer stops seeing antitrust law in terms of abstract
economic theories displayed in complicated charts and graphs about
widgets, he will continue to favor big business over mom-and-pop
operations and everyday consumers. Small businessmen and women and
consumers want justice under the antitrust laws, not a graph on supply
and demand theory.
My goal during the committee hearings was to sensitize Judge Breyer
to the law's impact on ordinary people. I hope I have been successful,
because that is how history will measure whether he becomes the big-
hearted Supreme Court Justice that President Clinton believes he can
be. Usually around here, I pretty much know which way to vote. I pretty
much come down on one side or the other, and I say that is it, and I am
not going to worry about what the consequences are. But in this
instance, I have mixed feelings--not about the consequences, but about
what is the right decision. I do not think this was a great appointment
for our President. I think that Judge Breyer is far less of a jurist
than we should accord a position on the Supreme Court.
I want to say publicly that I take off my hat to Senator Lugar. He
has made a strong case against confirming Judge Breyer. I am sorely
tempted to vote with him. I am frank to say that even as I am speaking
here, I am having concerns as to which is the right vote, despite the
fact that I voted for Judge Breyer's confirmation in the Judiciary
Committee. I have mixed feelings as to what is the right vote. One of
the things that bothers me much is that I did vote in favor of
confirming Justices Scalia, Kennedy, and O'Connor, and how do I
reconcile that with a vote against Judge Breyer?
It is with serious reservations and a heavy heart that I will vote to
confirm him. But it is not a vote that will make me particularly proud.
I hope that Judge Breyer, as he ascends to the Supreme Court, will
become more of a jurist, more of a judge, more fair, more sensitive to
the concerns of the little people that come before the Court, those who
do not always have the high-powered lawyers, those who are not part of
the corporate world.
They come before him, and when they come before him, I hope that
Judge Breyer will be far more sensitive than he has been in the past.
Frankly, I think that is what this country expects of him. Whether or
not he will reach that goal, whether or not he will be the jurist that
some of us had hoped for the next Supreme Court jurist, only time will
tell. But I will vote for him. It is not my proudest day.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. THURMOND. Mr. President, I rise in support of the nomination of
Judge Stephen Breyer to serve as Associate Justice of the Supreme Court
of the United States.
The Senate Judiciary Committee recently held 4 days of hearings,
including a closed session to comprehensively consider the
qualifications of Judge Breyer to sit on the Supreme Court.
It is unlikely that I would be in accord with President Clinton on
every nominee that he puts forth to serve on the Federal bench. In
fact, I recently opposed one nominee which he nominated to sit on the
Eleventh Circuit Court of Appeals. However, I believe in granting the
President some deference pursuant to his constitutional authority to
fill Supreme Court vacancies.
I had a favorable impression upon learning of Judge Breyer's
nomination to the Supreme Court because I have known him for almost 20
years. Judge Breyer came to my attention when he began work on the
Senate Judiciary Committee, serving later in a most capable manner as
chief counsel of the committee, and in 1980 he was nominated to serve
on the U.S. Court of Appeals for the first Circuit. Judge Breyer has
served with distinction on the first circuit and has been chief judge
of that circuit since 1990. Additionally, Judge Breyer was nominated by
President Reagan and served ably on the U.S. Sentencing Commission to
address disparities in sentencing under Federal law.
Mr. President, I was encouraged by a number of Judge Bryer's
responses to questions during his confirmation hearing. Specifically,
when questioning Judge Breyer on the death penalty, I pointed out that
if confirmed, he would succeed Justice Blackmun who recently stated his
belief that the death penalty is inherently flawed under the
Constitution. I was pleased when Judge Breyer stated that he would take
no such bias on capital punishment to the Supreme Court. Judge Breyer
did not hesitate in his recognition that the death penalty is settled
constitutional law.
On another matter, questions were raised concerning Judge Breyer's
ruling in the New Life Baptist Church case which dealt with religious
schooling. During his hearing, Judge Breyer made it clear that he has
no bias against home or religious schooling. He remarked:
[t]here is nothing more important to a persons or to that
person's family than a religious principle, and there is
nothing more important to a family that has those principles
than to be able to pass those principles and beliefs on to
the next generation.
Judge Breyer said that the religious freedom protection under the
first amendment of the Constitution protected the right of parents to
pass along their religion to their children free from State
interference. It was his belief that anyone attempting to prevent home
schooling would face ``very, very serious constitutional challenges.''
Mr. President, it was encouraging to receive Judge Breyer's thoughts
on judicial precedent, stare decisis, and judicial activism. Judge
Breyer stated at the hearing: ``A judge should be dispassionate and try
to remember that what he is trying to do is interpret the law that
applies to everyone, not enunciate a subjective belief or preference.''
His comments on this matter reflect my own views on the separation of
powers between the judicial and the legislative branches of government.
At one point during my questioning of Judge Breyer, he stated
succinctly and appropriately, ``a judge should not legislate from the
bench.'' I was pleased to hear those remarks and it is a good
indication that Judge Breyer will show appropriate deference to laws
passed by the Congress.
Mr. President, Judge Breyer does not appear to have an ideological
bent to move the Supreme Court in one direction or the other. Judge
Breyer expressed his desire to administer justice according to the law
while being mindful that even archaic judicial decisions ultimately
impact upon the lives of individuals.
Based on my knowledge of Judge Breyer for almost 20 years, I am
satisfied that he is a man of keen intellect, a capable jurist, and
qualified to serve as an Associate Justice on the Supreme Court of the
United States.
I yield the floor.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. BROWN. Mr. President, I rise out of concern for Judge Breyer's
nomination to be an Associate Justice of the Supreme Court. I have
listened with interest as other Members have expressed opinions of the
judge and his record, and I would like to share a few thoughts in this
regard.
First of all, Mr. President, let me say that I come to this debate
with concerns about Judge Breyer in a couple of areas. He has indicated
that he is comfortable with Supreme Court rulings which give second-
class protection to property rights. Judge Breyer has also indicated
that he recognizes as settled law the restrictions that the Court has
placed on religious expression. I strongly disagree with Judge Breyer
on both of these issues. But I will end up voting for his confirmation,
and I would like to explain the reasons why.
As I listened to the judge articulate his judicial philosophy and his
approach to issues, I found that he displayed a keen sense of
objectivity and willingness to look at facts and make an honest
inquiry.
If there were one quality I would like our Supreme Court Justices to
have, it is a willingness to listen to the facts and be objective and
independent. I came away convinced that Judge Breyer has that quality--
he has a willingness to listen and an objectivity that we need so
desperately in our judges. In addition, he has not only a very keen
mind but a willingness to use it in scientific inquiry.
Some Senators have come to the floor and expressed concern about the
ideas expressed in his most recent book ``Breaking the Vicious Cycle.''
The book itself is a compilation of lectures that he has given. As I
read that book, I found not an expression of political opinion, but an
objective inquiry, using logic, facts and scientific evidence to
examine the way government regulates. The book suggests that we can
achieve a better fulfillment of our desires and a better use of our
limited resources by looking at the facts and examining the best, most
efficient way of allocating our resources.
How some Members can find this a disqualification for service on the
Supreme Court defies my imagination. We need a Justice who is willing
to look at the facts, and who is willing to make a decision based on
those facts.
Any fair reading of the book ``Breaking the Vicious Cycle'' will
reveal that he did not advocate a particular political philosophy and,
more assuredly, that he did not advocate shortchanging environmental
concerns. Instead, the book suggests that we ought to analyze
everything and maximize the use of the resources that we have.
I find that willingness to look at facts and that willingness to
maximize our resources as laudable, and an excellent contribution for
the Court, not a disqualifying factor.
Last, Mr. President, let me comment on the concerns that some Members
have raised regarding ethics. Some have looked at the Lloyd's of London
investment and thought of it as being simply irreconcilable with proper
service on the Court.
The committee did a very thorough job of examining this area. I think
most Members would be interested to know that there was not a single,
solitary case pointed out where Judge Breyer had ever exhibited a bias,
much less had any direct interest. Second, I think Members were
impressed with the almost unbelievably meticulous method that the judge
followed to ensure not only that he had no interest in any case that
came before him, but that there was no indirect, minor connection to
any of his interests.
Thus, whether he was associated with a company or an entity or an
individual that was affected by the direct rulings of the court or
whether it was something that could be indirect, I think we came away
with a feeling that he had been meticulous in trying to avoid any
conflict.
Moreover, Mr. President, my assessment of Judge Breyer is that he
possesses the kind of personal and individual integrity that indicates
he will do all he can to be objective and avoid bias or conflict. After
all, is that not what we are worried about? Not whether someone has
made a good investment or bad investment, not whether he has an
investment that is far-reaching in its potential liability, but whether
or not Judge Breyer is the kind of person who would allow their
personal investments to influence their decision making. The record is
quite clear. Judge Breyer has not done that.
We have become so focused on the process, we have forgotten what
ethics are all about. Ethics are about proper behavior. I think we
would be remiss if we did not note that Judge Breyer has gone to
extraordinary lengths to conduct his life in an ethical manner.
Mr. President, I am going to vote for soon-to-be Justice Stephen
Breyer. I am going to vote for him not because I agree with him on all
the issues, because I do not. I am going to vote for him because I am
convinced he is a person of great ethical commitment, he is a person of
remarkable and sparkling wit, he is a person of extraordinarily
intellectual capability and, most important, I am going to vote for him
because I believe he has the commitment to objective analysis that will
lead him to objective, fair decisions about our Constitution.
As we search for people to serve on the highest court, that the
quality of objectivity and independence is one that we ought to prize
and it is one I believe Stephen Breyer possesses.
I yield the floor, Mr. President
Mr. LOTT addressed the Chair.
The PRESIDING OFFICER (Mr. Heflin). The Senator from Mississippi.
Mr. LOTT. Mr. President, I yield myself 10 minutes of the time
available on this side.
The PRESIDING OFFICER. Senator Hatch's time has expired.
Mr. LOTT. Mr. President, I ask unanimous consent that I be permitted
to have 10 minutes from the remainder of time on the other side.
I am asking for unanimous consent that I have 10 minutes to speak on
the nomination.
Mr. BIDEN. Mr. President, the distinguished Senator is welcome to
have 10 minutes of our time.
The PRESIDING OFFICER. The Senator from Mississippi is recognized.
Mr. LOTT. Thank you very much. I appreciate the distinguished Senator
from Delaware yielding me this time.
Mr. President, I feel very strongly that, in the case of nominations,
the President of the United States should have the benefit of the
doubt. And even though I have been the one who has had to do a lot of
investigating in some of the nominations, I think the record will show
that I have voted for most of them. And I believe it is correct when I
say, in my years in the Senate, I know it is correct, I have never
voted against a Supreme Court nominee and I do not think I have voted
against any Federal court nominees; maybe just one, I have not checked
the record.
But I do believe in giving the President the benefit of the doubt. I
tried to do that in this instance. But these are super-important
appointments when people are confirmed for life for the Supreme Court,
and so I put an even higher emphasis on making my decisions on the
Supreme Court nominees than I do on other administration appointments.
I have done that in this case. I think the Judiciary Committee did a
thorough job. I think there is no doubt that this judge, Stephen G.
Breyer, is a good man, with outstanding credentials.
But for a number of reasons, which will I will try to outline
briefly, I have come to the conclusion that I cannot support his
confirmation to serve on the United States Supreme Court for the rest
of his life and I will oppose that nomination.
Judge Breyer has certainly lived a laudable and I would say a charmed
life. He graduated from Stanford University in 1959. He went onto a
Marshall Scholarship at Oxford, England. After Oxford, he graduated
from Harvard Law School in 1964. He spent almost all of his life in
academia and Government. He has been a Supreme Court clerk, Senator
Kennedy's chief counsel for the Senate Judiciary Committee, and a U.S.
Court of Appeals judge since 1981.
He is married to the former Ms. Joanna Freda Hare, daughter of Lord
John Hare, Viscount of Blakenham. Judge Breyer's total net worth is
about $6.5 million. He is an investor in the Lloyd's of London or, as
they say, I believe, in England he is a ``name'' in Lloyd's of London.
That particular investment is a major concern to me, as I will point
out in a moment.
I list this information because I believe if you look back over Judge
Breyer''s record, I feel that he will have great difficulty in relating
to the everyday life of Americans who are not millionaires, who do not
have his background and who cannot afford to take time off to go bird-
watching, one of Judge Breyer's favorite pastimes.
I fear Judge Breyer is a technocrat, who is more comfortable dealing
with economic theories than with real people and their problems.
Judge Breyer has big problems. Judge Breyer's commitment to
fundamental rights such as the right to property and religious freedom
is dubious, as seen from his decisions and his comments at his
confirmation hearing. Judge Breyer's commitment to parental consent for
a minor's abortion--which the Supreme Court ruled constitutional in
Webster--and his views on abortion in general are questionable. Also,
Judge Breyer's investments in Lloyd's of London insurance syndicates
raises conflicts-of-interest questions and the possibility of huge
future losses. Lastly, Judge Breyer's involvement in the $47 million
sinkhole called the Boston Federal Courthouse shows he is not a good
steward of taxpayer funds.
Though I respect Judge Breyer and what he has achieved in his life,
he is not the right man for the job of Associate Justice for the rest
of his life. The law is more than balancing tests and economic
theories. Law affects people and how they live. Law provides protection
for people's rights.
Judge Breyer has shown he has little regard for common people. He
seems to feel that the Government has the right to take private
property on a whim and heavily interfere with religious expression.
In his comments to the Senate Judiciary Committee July 13, Judge
Breyer seemed to disagree with the High Court on the status of property
rights. In the recent Dolan case, the Court stated that the takings
clause has the same status, weight and force as the first or fourth
amendment. Simply, the right to property is as fundamental as the right
to freely exercise religion or the right to be safe from illegal search
and seizure.
Judge Breyer in his hearings seemed to disagree with this. On page 56
on the July 13 transcript, Judge Breyer states that the Constitution
gives the Government more authority to regulate property than to
regulate in other areas like free speech. Thus Judge Breyer believes,
in contradiction to the Supreme Court, that property rights have a
lower status and are less protected than speech rights or religious
rights. This is against the view of the Court, and against the plain
reading of the Constitution. Under Judge Breyer's formulation,
Government should be able to, as it has done in the recent past, take
private property. Americans everywhere should have shuddered when they
heard Judge Breyer--he has little regard for the safety of private
property.
Judge Breyer in his opinion New Life Baptist Church Academy v. Town
of East Longmeadow, 885 F.2d 940 (1st Cir. 1989), turns Supreme Court
precedents concerning religious freedom on their heads. Mr. President,
I ask unanimous consent that a memorandum from the Judicial Selection
Monitoring Project be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered. (See
exhibit 1.)
Mr. LOTT. The New Life Baptist Church Academy claimed that town
regulations for teacher and curricula certification did not apply to
religious schools. The Academy did offer to voluntarily submit
information about its curriculum, students, teachers and activities.
The academy under the Supreme Court acting at the time didn't even have
to offer this.
Judge Breyer, writing for the U.S. Court of Appeals, approved of the
town's regulations. Judge Breyer decided that the town's regulations
were ``valid by default,'' that presumes the Government is acting
constitutionally unless the supposed aggrieved party can find some
better, more constitutional alternative.
This turns what the Supreme Court had said up until that time on its
head. Judge Breyer put the burden of proof not on the Government, where
it belongs, but on the person or group whose rights were obviously
violated.
The First amendment, Mr. President, was meant to protect citizens
from Government infringement of certain inalienable rights. Judge
Breyer decided to turn this around. Judge Breyer's view of the first
amendment is a recipe from tyranny. Either he misread the Constitution,
or he meant to twist the Constitution. Either way, it is disturbing.
On the abortion issue, Judge Breyer in Planned Parenthood League of
Massachusetts versus Bellotti, 1989, dissented in a case that struck
down a challenge to Massachusetts' parental consent law. Though Judge
Breyer did not call for striking down the State law, his dissent, I
think, shows that he is not in tune with the parents of this country,
who overwhelmingly want to make such a tough decision with their
children. In another case, Judge Breyer voted to overturn Bush
administration regulations that barred workers in Federally-funded
clinics from promoting abortion. Again, I think this shows a disregard
for national opinion--most Americans do not want the Government
promoting abortion. Judge Breyer thinks otherwise.
Judge Breyer's investments in Lloyd's of London insurance syndicates
raises serious questions about conflicts-of-interests, and Judge
Breyer's future financial liabilities.
Mr. President, I ask unanimous consent that an article from the
Washington Post, entitled ``For High Court Nominee Breyer, an
Injudicious Investment'' by James K. Glassman be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 2.)
Mr. LOTT. The article talks about the fact that these investments
have bankrupted many people over the years. The syndicate that Judge
Breyer is involved in already has been forced to pay about $245 million
in cash for asbestos and environmental pollution. The eventual
liability could be in the billions of dollars.
Judge Breyer says that he has enough to cover further losses. The
potential losses though, are not known--Judge Breyer could be facing
bankruptcy within the next few years. As the article I just mentioned
states so well, it would be an embarrassment for a Supreme Court
Justice to go bankrupt because of financial liabilities. Judge Breyer
says that he will be out of the syndicate ``soon.'' How soon though?
Probably not soon enough--maybe it is too late. Richard Rosenblatt,
head of an association of American investors in Lloyd's, was quoted in
the Washington Post saying that Judge Breyer is ```captured for life,'
as is his estate after his death.'' We can't have an Associate Justice
held hostage by future financial losses.
Another point to mention is that Judge Breyer wold probably have to
recuse himself from the various Superfund and environmental cases that
might come before the High Court. Judge Breyer has, unfortunately, not
recused himself in the past from environmental cases, such as United
States versus Ottati & Goss Inc., which dealt with penalties against
polluters.
Lastly, Judge Breyer, who as Chief Judge of the First Circuit Court
of Appeals, took part in the site selection, procurement, and planning
of the new Boston Federal Courthouse. The courthouse has yet to be
finished, but the General Services Administration has already spent $34
million on buying the site and $13 million for design. The current site
for the courthouse was rated the least desirable, yet a panel chaired
by Judge Breyer chose the site anyway. The design of the courthouse,
which Judge Breyer actively took a part in, includes lavish design
elements like a six-story atrium; 63 private bathrooms; 37 different
law libraries; 33 private kitchens; $789,000 for original artwork;
$450,000 for a boat dock, and $1.5 million for a floating marina.
And all this for one courthouse? Judge Breyer has not adequately
explained why tax dollars should go to a dock and 63 private bathrooms
for a courthouse. This disdain for accounting for taxpayer dollars, I
think, shows that Judge Breyer does not care about the people who earn
the tax dollars to pay for that lavish Boston spread.
These questions I have raised are troubling--they're troubling enough
to disqualify Judge Breyer from sitting on the High Court. Because of
these problems, I will vote against his confirmation.
Exhibit 1
Judicial Selection
Monitoring Project,
Washington DC, June 7, 1994.
nomination memorandum
To: Interested Parties.
Re Judge Stephen Breyer on the free exercise of religion.
From: Thomas L. Jipping, M.A., J.D.
The opinion in New Life Baptist Church Academy v. Town of
East Longmeadow, 885 F.2d 940 (1st Cir. 1989), written by
Judge Stephen Breyer, President Clinton's choice to replace
retiring Supreme Court Justice Harry Blackmun, reflects a
disturbingly narrow view of the enumerated fundamental right
to freely exercise religion. He created what might be called
a ``valid by default'' standard that is both unprecedented
and incorrect. It turns traditional Supreme Court free
exercise jurisprudence on its head and gives the government
wide latitude in infringing on this fundamental enumerated
right. This decision was mentioned in our Nomination
Memorandum of June 1, 1994, but deserves separate treatment
here.
I. Facts
Massachusetts law requires school attendance. For students
to satisfy this requirement through attendance at a non-
public school, a local school committee must approve non-
public education ``when satisfied that the instruction . . .
equals . . . that in the public schools . . . but shall not
withhold such approval on account of religious teaching.''
The Town of Longmeadow's school committee's approval process
involves gathering written information about the school's
pupils, texts, class schedules, and curricula; reviewing the
academic credentials of teachers; and school visits ``to
observe the quality of the teaching.''
Citing the First Amendment's free exercise clause,\1\ New
Life Baptist Church Academy objected both to the general
requirement that a secular authority must approve a religious
school and to the particular procedures used by the
Longmeadow school committee.\2\ The Academy offered to
administer standardized pupil tests and voluntarily submit
information about activities, curriculum, students, and
teachers. The Academy was not legally required to propose an
alternative approach; it may have been a sincere attempt to
settle the controversy.
---------------------------------------------------------------------------
Footnotes at end of article.
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ii. decision
The U.S. District Court ``held the School Committee's
proposed evaluation methods unconstitutional, as violating
both the `free exercise' and `establishment' clauses of the
First Amendment.''\3\
The U.S. Court of Appeals, in an opinion written by Judge
Breyer, first said that the government does have the power to
enforce, ``through appropriate means, a state law that
requires `approval' of the Academy's secular education
program.'\4\ Judge Breyer then reviewed and upheld the school
committee's approval procedures. He did so, however, after
creating an unprecedented and incorrect legal standard which
gives short shrift to the fundamental enumerated right to
freely exercise religion. The apparent explanation is that he
did what was necessary to achieve his own preferred policy
result rather than what the law required.
iii. analysis
The First Amendment is directed at government. It assumes
and protects individual liberty and puts the burden on the
government affirmatively to justify its burden on enumerated
freedoms. The Supreme Court's standard in free exercise cases
reflects this set of priorities. The standard prevailing at
the time of Judge Breyer's decision\5\ was as follows:
``The state may justify an inroad on religious liberty by
showing that it is the least restrictive means of achieving
some compelling state interest.''\6\
In this case, Judge Breyer ultimately applied a rule which
turns this standard on its head. He started by outlining four
questions which must be answered:
``Whether the Academy's religious beliefs are sincerely
held.''\7\
``Whether . . . the relevant regulation burdens the
exercise of those beliefs.''\8\
``Whether the regulation nonetheless serves a compelling,
or overriding, governmental interest.''\9\
``Whether the School Committee might nonetheless adequately
serve that interest in a `less restrictive,' i.e., less
burdensome, way.''\10\
Judge Breyer cited the Supreme Court's landmark decision in
Wisconsin v. Yoder\11\ for the first three questions. They
are unobjectionable and obviously reflected in the Supreme
Court's Thomas v. Review Board standard quoted above.
The fourth question set up a false comparison between two
choices--the government's approach and the Academy's
alternative approach--which, in turn, created a false
standard. This fourth question asks whether the school
committee can serve its compelling interest in a ``less
restrictive'' way. What other way could that be? The Supreme
Court's Thomas v. Review Board standard would say any other
way, since it required the government to show its action is
the ``least restrictive'' way. Judge Breyer, however, looked
only at one other way--the Academy's alternative--and
insisted that this one alternative literally be
``constitutionally mandated''\12\ or the government's action
is constitutionally valid by default.
This comparison between only two alternatives is obvious
throughout Judge Breyer's opinion. He wrote of ``our effort
to determine whether [the school's alternative] is,
constitutionally speaking, a `less restrictive alternative'''
than the government's approach.\13\ He wrote that ``the
question remains whether or not [the school's alternative] is
a `less restrictive' way to achieve the state's legitimate,
`compelling' goals.''\14\ He put the ultimate legal question
this way: ``does the Free Exercise Clause forbid the School
Committee to follow its proposed approval procedures rather
than the [school's alternative]?''\15\
This is a false comparison. Judge Breyer's standard did not
focus, as the Supreme Court required, on the government's
action to determine whether it was the ``least restrictive
means.'' Rather, his standard focused on the Academy's
alternative to determine whether it was less restrictive
(i.e., more constitutional) than the government's approach.
He concluded that the government's approach did not violate
the free exercise clause because the school's alternative was
no less burdensome on religion.\16\
Put simply, even if the Academy's particular alternative
approach--one which it did not need to present at all--were
not less restrictive than the government's approach, it does
not follow at all that the government's approach is the least
restrictive means of achieving its end. Under the Supreme
Court's clear precedents, this burden remains on the
government whether the Academy has offered a more restrictive
alternative or no alternative at all. The government must
affirmatively justify its burden on the free exercise of
religion.
Here, Judge Breyer created a ``valid by default'' standard
that presumes the government's action is constitutional
unless the individual whose right to freely exercise religion
has been violated can offer an alternative that is more
constitutional. This standard turns the Supreme Court's free
exercise jurisprudence on its head and has no precedent or
parallel. It is a prescription for wholesale violation of the
right to freely exercise religion.
Neither of the Supreme Court decisions Judge Breyer cited
as the source of his ``less restrictive'' fourth question
uses those words. Thomas v. Review Board, as quoted above,
requires that the government prove that its approach is the
``least restrictive'' means of achieving a compelling end.
The other decision cited by Judge Breyer, Sherbert v.
Verner,\17\ makes the same point in different words: ``[I]t
would plainly be incumbent upon the [government] to
demonstrate that no alternative forms of regulation would
combat such abuses without infringing First Amendment
rights.''\18\
Judge Breyer went to unusual lengths to distinguish this
case from what he called ``the leading case in which the
courts have upheld a `free exercise' claim against a state
effort to control secular education provided by a religious
institution,''\19\ Wisconsin v. Yoder.\20\ Judge Breyer cited
with approval the statement by the U.S. Court of Appeals for
the Sixth Circuit that ```Yoder rested on such a singular set
of facts that we do not believe it can be held to announce a
general rule.'''\21\
This is a bizarre way to characterize a landmark Supreme
Court decision. Judge Breyer himself cited Yoder at least
nine times in his opinion and offered it as a foundation for
three of the four parts of the legal standard he said applied
to free exercise cases generally. It is strange, then, after
citing that decision all along, for Judge Breyer suddenly to
declare that ``this case [is] quite unlike Yoder,''\22\ As of
June 3, 1994, Yoder had been cited 806 times in state court
cases and 758 times in federal court cases, 43 of them by the
court on which Judge Breyer currently sits.
iv. conclusion
Judge Breyer's opinion in New Life Baptist Church Academy
is judicial activism writ large. He misquoted a clear Supreme
Court standard and eventually turned that standard on its
head. His standard means that the government does not have to
affirmatively justify its infringement on the free exercise
of religion as ``least restrictive'' as the Supreme Court
requires. Rather, the individual whose constitutional rights
have been infringed must offer a more constitutional
alternative. Otherwise, the government's action is
constitutional by default, without the government ever having
to meet the Supreme Court's standard of proving it is the
least restrictive means of achieving a compelling government
end. That approach turns the Constitution's priorities
exactly backwards and puts Americans' first liberty largely
at the mercy of the government.
footnotes
\1\The First Amendment to the U.S. Constitution states in
part: ``Congress shall make no law . . . prohibiting the
free exercise [of religion].'' The Supreme Court has held
this provision also applies to the states. See Cantwell v.
Connecticut, 310 U.S. 296 (1940).
\2\New Life Baptist Church Academy, 885 F.2d at 941.
\3\Id.
\4\Id.
\5\In Employment Division v. Smith, 110 S. Ct. 1595 (1990),
the Supreme Court dramatically changed the standard for
justifying government infringement on the free exercise of
religion from the ``least restrictive means'' of achieving a
``compelling state interest'' to a rational means of
achieving a ``legitimate'' state interest. Congress enacted
the Religious Freedom Restoration Act, which President signed
into law in 1993, to restore the old standard.
\6\Thomas v. Review Board, 450 U.S. 707, 718 (1981).
\7\New Life Baptist Church Academy, 885 F.2d at 944. The
court concluded: ``We concede that the Academy has a sincere,
relevant religious belief that it ought not participate in
any such secular approval process.'' Id.
\8\Id. The court concluded: ``We agree with the Academy that
the very existence of a state approval requirement will
burden the exercise of its religion.'' Id.
\9\Id. The court concluded that ``the state's interest in
making certain that its children receive an adequate secular
education is `compelling'.'' Id.
\10\Id.
\11\406 U.S. 205 (1972).
\12\New Life Baptist Church Academy, 885 F.2d at 947.
\13\Id. at 946.
\14\Id.
\15\Id. at 944.
\16\Id. at 944.
\17\374 U.S. 398 (1963).
\18\Id. at 407.
\19\New Life Baptist Church Academy, 885 F.2d at 951.
\20\406 U.S. 205 (1972).
\21\New Life Baptist Church Academy, 885 F.2d at 951, quoting
Mozert v. Hawkins County Board of Education, 827 F.2d 1058,
1067 (6th Cir. 1987).
\22\Id.
Exhibit 2
[From the Washington Post, July 20, 1994]
For High Court Nominee Breyer, an Injudicious Investment
(By James K. Glassman)
Ten years ago, a lively young Southern heiress confided to
me that she had found a sensational investment--Lloyd's of
London. ``They just send you checks,'' she explained. ``You
should get into it too.''
She described how Lloyd's works: You join a syndicate that
insures ships, planes or businesses. You don't have to put up
any money, just present a fairly modest letter of credit from
a bank. Than, after commissions and losses are deducted, you
get the profits from the premiums. She made $35,000 her first
year--an infinite return on an investment of zero!
And besides, a Lloyd's investor--called by the archaic term
``Name''--joins a distinguished roster that includes
Princesses Michael and Alexandra of Kent, golfer Tony Jacklin
and former prime minister Edward Heath. It's just the ticket
for Anglophile Americans.
There is, however, a catch. If things go sour, your
liability is unlimited. ``You go to London,'' said my friend,
``and they bring you into this room and sit you down at a
huge table, and this dude sitting across from says, `Do you
realize you can lose everything you own?'
``They tell you this so many times you get sick of it. And
then you sign the papers and go drink Bloody Marys and have a
big lunch.''
What she was describing seemed to me, on reflection, to be
the Worst Investment in the World--a form of Russian roulette
in which some catastrophe you could not possibly foresee can
take away your house, car, retirement funds and (as Lloyd's
puts it) your ``last shirt button.''
To make matters worse, Lloyd's investors rarely have any
idea what they're insuring; they are completely at the mercy
of the underwriter who manages their particular syndicate.
At least four British investors, ruined by Lloyd's
investments, have committed suicide in recent years. But the
irony is that you can't even get out of Lloyd's by dying.
In ``Ultimate Risk,'' a book about Lloyd's just published
in Britain, the author described how Harold Weston, a 51-
year-old solicitor, hanged himself in April 1993 after
Lloyd's ``asked for more and more money'' to meet leases.
His wife, writes the author, ``while trying to recover from
the trauma of her husband's death, has had to meet his
continuing Lloyd's losses.''
By contrast, nearly every other investment in the world is
structured to prevent this sort of personal, unlimited
liability. For example, if you put $100,000 into a high-tech
stock and it goes bankrupt, the most you can lose is
$100,000. But a Lloyd's investor worth $6.5 million can lose
all $6.5 million.
That figure is not snatched from the air. It is roughly the
net worth of Judge Stephen Breyer and his blue-blood British
wife, Joanna. Breyer's nomination to the Supreme Court was
cleared by the Senate Judiciary Committee yesterday.
Breyer, a typical Lloyd's investor, earned an average of
$50,000 a year from the British insurer from 1988 to 1991,
according to his financial disclosure statements. Now,
however, he faces losses because one syndicate he joined,
called Merrett 418, is in deep, deep trouble.
Thanks to damage claims stemming from asbestos and
environmental pollution, investors in Merrett 418 already
have been forced to cough up about $245 million in cash.
Chatset Ltd., an insurance consulting firm, estimates that
final calls will be 3.5 to 4 times as much.
And that's just a guess. Actual liability could run into
the billions. For example, Merrett 418's latest report
admits, ``We have not been able to assess with any accuracy
the number of individuals injured [by asbestos], and the
falling off in the number of new claims long predicated on
logical grounds * * * has yet to occur.''
What about Breyer himself? In a letter last December he
said he had about $160,000 on deposit at Lloyd's, plus
insurance coverage for nearly the same amount. Will that be
enough? No one knows.
With so much at stake in his insurance investments, Breyer
has been criticized by some scholars of legal ethics for not
disqualifying himself from cases like United States v. Ottati
& Goss Inc., which involved the government's power to impose
liability on polluters.
But something about Breyer worries me more: How smart and
judicious can someone really be if he invests in a mess like
Merrett 418? Is he dumb, or merely oblivious? Or does he just
love to gamble with his family's fortune?
Also, imagine the prospect of a Supreme Court justice
facing bankruptcy because of Superfund and asbestos claims.
Even if he recuses himself from such cases on the high court,
he'll be embarrassing not only himself but the institution.
Breyer has been trying to extricate himself from Lloyd's
since 1988, when he stopped investing in its syndicates. But
he can't resign from Merrett 418. It's like the Cosa Nostra.
They decide who leaves.
``I will be out of it as absolutely soon as I possibly
can,'' Breyer told the Judiciary Committee last week. But the
choice is not his anymore.
In September 1990, Seascope Special Risks Ltd. offered
Breyer a deal: If he would pay the firm about $250,000, it
would assume all his future liabilities in Merrett 418. But
Breyer turned down the bargain, and it's unclear whether
he'll ever be offered an escape like this one again.
``Apparently,'' Breyer said in a letter to his agent in
London, ``I am `captured' for the rest of my life.''
The PRESIDING OFFICER. The Senator from Arizona is recognized.
Mr. DeCONCINI. Mr. President, I support the nomination of Judge
Stephen Breyer to be an Associate Justice of the Supreme Court. During
his recent confirmation hearings, I had the opportunity to question
Judge Breyer on a range of subjects, and I was repeatedly impressed
with the forthcoming nature in which he discussed a number of topics.
His candor is something which has been notable absent from many of the
recent confirmation hearings. While he did not compromise his ability
to hear any cases which might come before the Court, he did offer
substantial insight into his judicial philosophy and the constitutional
principles that guide his decisions.
I believe that Judge Breyer will be a very positive addition to the
Supreme Court. His career distinguishes him as a highly-qualified
jurist, whose achievements reflect his commitment to excellence. As a
lifelong public servant, he has shown himself to be dedicated to the
law and the service of others. His work in all three branches of our
Government gives Judge Breyer a unique and important perspective on our
democracy--it is a perspective that I believe will serve him well on
the High Court.
His understanding of the importance of legislative history will help
to ensure that congressional intent, and not judicial fiat, is utilized
in interpreting statutes. His tenure as a professor will allow him to
craft and communicate opinions which can be understood by the people
they truly affect, and not just the lawyers. His many years of the
first circuit have allowed Judge Breyer to develop and refine his keen
understanding of American jurisprudence. These factors, and many
others, led President Clinton to nominate Stephen Breyer, and they
combine again today to result in what I believe will be his
conformation later today.
However, the responsibility awaiting Judge Breyer as a Supreme Court
Justice is enormous.
It requires making difficult decisions that affect millions of people
throughout this Nation. It requires dedication to upholding and
preserving the fundamental rights which are granted to each of us by
the Constitution of this country.
Throughout his confirmation hearing, Judge Breyer repeatedly stressed
the importance of ensuring that the ``promise of basic fairness'' in
the Constitution is upheld. While a technical grasp of the law is
important, it is the dedication of each Justice to the principles of
fairness which defines their tenure on the Court. I will vote for Judge
Breyer.
Having said that, there have been questions raised. First of all, the
courthouse. It is interesting that now that the money has been
authorized and appropriated, and this body has voted on the money for
that courthouse, that now, all of a sudden, it becomes Judge Breyer's
courthouse.
The Judicial Conference has a committee that Judge Breyer sat on, and
did chair, which recommended this particular location. It so happens
that upon the request of the Appropriations Committee, it was pared
back, not as much as perhaps today we think it should have been. But
the fact is that Judge Breyer did not vote on how much money should be
spent on that courthouse. We in this body did. Those that object now
about the courthouse and criticize it, I wonder if they would go back
and look and see how they voted. If they voted against that Treasury,
postal and general government appropriations bill because of this
courthouse, then I accept their criticism. Perhaps that is a
disqualifier for Judge Breyer because those who elected to vote against
that bill because of the courthouse could see that it cost too much.
And if they could see that it cost too much, certainly Judge Breyer
could see that it cost too much as well.
I must say, that does not make a lot of sense to me, but at least it
would be a rationale for someone to come out here and say, because
Judge Breyer was the judge who was sitting on the committee that
requested, and ultimately received, money from the Congress of the
United States to build a courthouse, that he is the one who spent the
money. Of course, that is nonsense.
Now as to Judge Breyer's investments. When are we in this body going
to realize that those of us who hold public office, whether it is in
the judiciary branch, legislative branch, or the executive branch, are
not perfect individuals?
When are we going stop requiring someone who is nominated to be a
judge, whether it is in a district court, a circuit court, or the
Supreme Court, to have no investments, to have never written anything
controversial, to answer everything at their hearings, to disclose all
their decisions regarding their investments over their whole life, and
account for any of those investments that turn sour or are not so good
today?
Judge Breyer made some very positive investments before he was on the
court and during the time he was on the court. He recused himself from
the cases that were clearly brought to his attention or that he saw
might appear to have any improprieties or potential conflicts.
Yes, today we know that the insurance that he had an interest in--and
this is an interest of one out of, I believe, over 4,000 individuals,
so it is not like he is a major owner and controller of the insurance--
happened to insure some high-risk properties and enterprises that later
made a claim against the insurance and against this group of
underinsurers or guarantors. And for that we are to say, ``Well, judge,
you cannot serve on the Supreme Court because you made an investment
that it appears is going to lose money for you and maybe it will be
very costly.''
There are two schools of thought as to just how costly that
investment might be if the ultimate happened and the maximum
contribution had to be forthcoming by the individuals who were part of
this syndicate. We do not know. One school says it takes everything,
including your estate. Another says, no, there are limits to
liabilities.
But the point is, here is a person who in good faith made an
investment and had made similar investments, and repeatedly attempted
to avoid any appearance of conflict. The New York Times criticizes
Judge Breyer's investments. When is the New York Times all of a sudden
the arbiter or should determine whether or not your economic interest
is a conflict?
There is no proof whatsoever, not a scintilla of evidence, that
indicates any conflict by Judge Breyer or that he benefited by the
decisions that he made in certain cases. There is no information that
he benefited from that.
In fact, it is clear that in the cases he did know about--and they
dealt with asbestos--he recused himself. Had he known about the other
cases, certainly he would have recused himself. Why would he not? Why
would he say, ``I am going recuse myself on the asbestos case because
this syndicate I have''--which is a small part of his total investment
portfolio--``may have some conflict here or some interest in it.''
Which he did and properly so. But then with other cases, the inference
is that he knew that these cases, or should have known that these
cases, dealing with the Superfund were also insured by this syndicate.
There is no evidence that he knew that. Nobody has actually said he
knew. All we have heard is that he should have known.
Nobody would think that a judge has to be without any investments,
with no capabilities for economic support that might have come before
he was a judge. What we want is judges to have some experience, to
understand what the economic world is all about, and then to divest
themselves or recuse themselves, as the case may be, when and if there
is a case that involves this investment.
Judge Breyer, I think, did what was proper and prudent. He has
demonstrated that he is sensitive to this. He has been a public
servant. He is not afraid to admit that this was a bad investment. But
he did not know, and as I indicated, there was no evidence whatsoever,
no one has said that he knew and went ahead and acted on those cases.
They only said, ``Well, he should have known.''
That is not enough, in my judgment, to criticize this fine jurist. To
indicate that he is unqualified is to me unfair to the system of what
we are about. That is ensuring fairness, in my opinion, to anybody who
is promoted or nominated to an office of public trust.
But it is also unfair to Judge Breyer. He has been an exemplary
jurist. He was an outstanding academician. He had high marks when he
worked at the Justice Department, and many of us knew him here on the
Judiciary Committee when he was the chief of staff.
So there is no good reason that I know of, common sense or otherwise,
why this body should not overwhelmingly confirm Judge Steve Breyer, to
be an Associate Justice of the Supreme Court.
The PRESIDING OFFICER (Mr. Pryor). The Senator from Alabama is
recognized.
Mr. HEFLIN. Mr. President, I rise today in support of the nomination
of Judge Stephen G. Breyer to be an Associate Justice on the U.S.
Supreme Court. This nomination comes to the floor of the Senate after 4
days of hearings and many hours of exhaustive research into the
nominee's background. As a member of the Judiciary Committee, I have
been involved in the nomination of seven, including Judge Breyer, of
the nine sitting members of the present Court. Judge Breyer received a
unanimous vote from the Judiciary Committee recommending his
confirmation to the Supreme Court.
Judge Breyer has spent almost his entire professional career devoted
to public service. He received his undergraduate degree from Stanford
University, and his law degree from the Harvard Law School, after which
he served as a law clerk to Justice Arthur Goldberg.
His public service continued over the years in several Federal
positions, including the Antitrust Division of the Department of
Justice. He served as chief counsel to the Senate Judiciary Committee
and he was a charter member of the U.S. Sentencing Commission. Since
1970 he has served and continues to serve on the faculty of the Harvard
Law School.
Stephen Breyer became Judge Breyer with his appointment to the First
Circuit Court of Appeals in 1980. He has served for the past 14 years
on that court and as its' chief judge since 1990. It is from his
expansive opinions, numerous writings and personal actions, especially
during his years on the bench, that I have been able to discern some
insight about his judicial ability and character and his beliefs.
The clear and candid way in which Judge Breyer addressed his answers
to questions propounded by members of the Judiciary Committee during 3
days of hearings proves to me what kind of judge he will be on the
Court. I believe that he can be best described as a principled
moderate.
A principled moderate is the type of individual which can be a
consensus builder. Judge Breyer has proven his ability to build a
consensus in the decisions rendered by the first circuit, as well as on
difficult and controversial issues of a national scale, including
airline deregulation and as a member of the U.S. Sentencing Commission.
He was one of the architects of airline deregulation while working as
chief counsel to the Senate Judiciary Committee. When he served as a
member of the Sentencing Commission he helped forge key agreements that
formed the sentencing guidelines. It is through consensus which Judge
Breyer believes ``helps produce the simplicity that will enable the law
to be effective.'' I think that there is room on the Supreme Court for
this type of a consensus builder.
Some have claimed that his opinions are dry and lack heartfelt
feeling and that he is a technocrat. I believe that he addressed those
critics when he stated the reason some may find his opinions dry, is
because, ``Law is a set of opinions and rules that lawyers have to
understand, lower court judges have to understand, and eventually,
labor unions, small businesses, and everyone else in the country has to
understand how they are suppose to act or not act according to the
law.'' Judge Breyer's view that judicial opinions should be written to
be understood by all who may be affected by them is sound reasoning for
what some may see as dry, emotionless legal writings.
During the course of the hearings an issue was raised by several of
my colleagues, concerning Judge Breyer's views on the establishment
clause of the first amendment and the interests of the state in making
sure that children are receiving an adequate education in private or
home schools.
Judge Breyer was directly asked about his ruling in New Life Baptist
Church, a case in which he wrote the majority opinion while on the
First Circuit Court of Appeals. In his response to Senators questions
he voiced strong support for the rights of parents to educate their own
children. He also stated that he firmly believed that the first
amendment to the Constitution is designed to protect ``what is so
important to every American and every American family: the right to
practice your own religion, the right to pass on your beliefs to your
children.'' But he does believe there is a delicate balance the State
must weigh in making sure that quality education is taking place in
schools outside the public school system.
Critics and proponents of Judge Breyer have made an issue out of his
pragmatic approach to cases and issues on which he has written. They
say that during 3 days of hearings he reaffirmed his image as a
pragmatist unlikely to embark on ideological crusades on the high
court. If is a correct interpretation of Judge Breyer to refer to him
as a pragmatic judge. He has been a judge who prefers, in some areas of
the law, a pragmatic balancing test between competing rights rather
than fixed legal formula or new interpretations of the law. Although
this approach to legal decisions has earned him the sometimes
description of ``technocrat,'' I believe that it has enabled Judge
Breyer to make determinations on difficult and technical legal
questions, as shown in his response to a question regarding antitrust,
``we tried to focus on where the ball really is--work our way through a
very complicated area to see if antitrust law, technically would come
to that result.''
As we approach the next century more and more of the calendar of the
Supreme Court will include issues in which Judge Breyer should find
familiar ground. The environment, science, and administrative law will
be among the most important legal issues in the near future.
His extensive legal writings and opinions regarding administrative
law, I think, prove that he has the ability to understand and interpret
administrative agency rules and regulations.
An issue was raised late in the confirmation process of Judge Breyer
concerning his investments in Lloyds of London, and a possible conflict
of interest he may had in hearing certain pollution related cases. As a
former judge myself, the fact that he did not rescue himself from
hearing these cases, which could have an impact, even though a remote
one, on his investments concerned me. I directly questioned Judge
Breyer on his investments and his knowledge of them. He responded to my
questions stating, that he was personally confident that his sitting on
those cases did not represent a conflict of interest and that he had
incorporated from almost day one in his court a form of checks to
assure himself that he was not hearing cases in which he may have an
interest.
Lloyds of London, which has insured everything from oil tankers to
Betty Grable's legs, is different from typical investments because the
investor never knows exactly what his investments include, sort of like
a mutual fund. In Judge Breyer's case he stated in testimony that he
stopped hearing asbestos cases when he became aware, through news
reports, that Lloyds had exposure in U.S. cases. He further stated,
that he was not aware of the exposure in pollution related cases, but
had disclosed his investments with Lloyds in his financial disclosure
each year while serving on the First Circuit Court of Appeals.
After reviewing the pollution related cases in question, I agree with
the conclusion which eminent scholars in the field of judicial ethics
have made. They reviewed the cases in question and have held that the
``participation of Judge Breyer in the cases did not entail a violation
of judicial ethics. . . . None of the cases had a connection direct
enough with Judge Breyer as to create a basis on which his impartiality
reasonably might be questioned.''
Mr. President, at this time I would like to call the attention of the
Senate to letters, one from Geoffrey C. Hazard, Jr., of the law school
at the University of Pennsylvania, and who is the Sterling professor of
law emeritus at Yale University, who was consultant and draftsman for
the American Bar Association Model Code of Judicial Conduct promulgated
in 1972 on which the rules of ethics governing Federal judges is based.
I might say that I worked with Geoffrey Hazard at that time on
judicial ethics. It was then a matter of working on the Supreme Court
of Alabama, and my State was one of the first to adopt it.
Geoffrey Hazard has also been the reporter and draftsman of the
American Bar Association Model Rules of Professional Conduct
promulgated in 1983, and before that consultant to the project for the
American Bar Association Model Code of Professional Responsibility.
He has authored many books on legal and judicial ethics, and is known
throughout the legal profession as being the real authority on the
issue of judicial ethics and professional conduct among lawyers.
He reviewed all of the facts in the cases herein. He came to the
conclusion that his participation in a number of cases involving a
CERCLA--which is commonly known as the Superfund statute--and that none
of these cases involved Lloyd's as a party or by name in any respect.
``None appeared to be involved issues that would have a material or
predictable impact on general legal obligation under the Superfund
legislation.''
Then he also reviews and says:
Judge Breyer's participation in the foregoing cases did not
entail a violation of judicial ethics. None of the cases
involved Lloyd's as a party or as having an interest
disclosed in the litigation. None would have had a material
effect on Judge Breyer's financial interests. None had a
connection direct enough with Judge Breyer to create a basis
on which his impartiality might be questioned.
He mentions to the fact that Lloyd's of London's participation by a
name, as they are referred to, is similar to an investment in a mutual
fund. A mutual fund, of course, is one in which there are many
investments made, and it is impossible for a person to keep up and know
all of the investments because many of the investments change from day
to day in a mutual fund.
He did raise the question that there was a possibility Judge Breyer
might have been imprudent in connection with such an investment. But
the possibility or cause of a possible appearance I think does is not
raise a situation in which a judge of necessity has to recuse himself.
He acts in regard to the matters as it would appear you will never know
everything that would be involved really, such as with an insurance
company. It would mean really that in effect you ought to have a canon
of ethics that a judge ought not to invest in any insurance company.
Well, many people inherited insurance stock. They invested in insurance
stock at an early stage. They have tax problems dealing with that. But
just because they have insurance does not mean that you are going to
therefore bring about a question. If there is a named insurance
company, then they certainly ought to recuse themselves in regard to
that.
I ask unanimous consent that the letter of Geoffrey C. Hazard, Jr.,
dated July 11, 1994, to the Honorable Lloyd Cutler, special counsel to
the President, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Law School,
University of Pennsylvania,
Philadelphia, PA, July 11, 1994.
Re Judge Stephen Breyer.
Hon. Lloyd N. Cutler,
Special Counsel to the President,White House,
Washington, DC.
Dear Mr. Cutler: Your have asked for my opinion whether
Judge Stephen Breyer committed a violation of judicial ethics
in investing as a ``Lloyd's Name'' in insurance underwriting
while being a federal judge. In my opinion there was no
violation of judicial ethics. In my view it was possibly
imprudent for a person who is a judge to have such an
investment, because of the potential for possible conflict of
interest and because of possible appearance of impropriety.
However, in light of the facts no conflict of interest or
appearance of conflict materialized. I understand that Judge
Breyer has divested from the investment so far as now can be
done and will completely terminate it when possible.
1. I am Trustee Professor of Law, University of
Pennsylvania, and Sterling Professor of Law Emeritus, Yale
University. I am also Director of the American Law Institute.
I have been admitted to practice law since 1954 and am a
member of the bar of Connecticut and California. I am engaged
in an active consulting practice, primarily in the fields of
legal and judicial ethics, and have given opinions both
favorable and unfavorable to lawyers and judges. I was
Consultant and draftsman for the American Bar Association
Model Code of Judicial Conduct promulgated in 1972, on which
the rules of ethics governing federal judges are based. I
have also been Reporter and draftsman of the American Bar
Association Model Rules of Professional Conduct,
promulgated in 1983, and before that consultant to the
project for the ABA Model Conduct of Professional
Responsibility. I am author of several books and many
articles on legal and judicial ethics and write a monthly
column on the subject.
2. I am advised that Judge Breyer made an investment as a
``Lloyd's Name'' some time in 1978. He has since terminated
that investment except for one underwriting, Merrett 418,
that remains open. He intends to terminate that commitment as
soon as legally permitted. I have further assumed the
accuracy of the description of a Lloyd's Name investment set
forth in the memorandum of July 3, 1994, by Godfrey Hodgson.
My previous understanding of the operation of Lloyd's
insurance, although less specific than set forth in the
memorandum, corresponds to that description.
3. I have assumed the following additional facts:
(a) As a ``Name'' Judge Breyer Lloyd not have, and could
not have had, knowledge of the particular coverages
underwritten by the Merrett 418 syndicate. It would have been
possible for a Name to discover through inquiry that
environmental pollution as a category was one of the risks
underwritten by the syndicate.
(b) Judge Breyer had ``stop-loss'' insurance against his
exposure as a Name, up to $188,000 beyond an initial loss of
25,000 pounds. This is in substance reinsurance from a third
source against the risk of actual liability.
(c) A reasonable estimate of the potential loss for Judge
Breyer is approximately $114,000, well within the insurance
coverage described above. However, there is a theoretical
possibility that his losses could exceed that estimate.
(d) The Merrett 418 syndicate normally would have closed at
the end of 1987. It remains open because of outstanding
liabilities to the syndicate that were not later adopted by
other syndicates. These outstanding liabilities include
environmental pollution and asbestos liability.
4. I am advised that Judge Breyer as judge participated in
a number of cases that one way or another involved the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), commonly known as the Superfund
statute. None of these cases involved Lloyd's as a party or
by name in any respect. None appear to have involved issues
that would have material or predictable impact on general
legal obligations under the Superfund legislation. Most of
the cases are fact-specific and all involve secondary or
procedural issues. I have assumed that the description of
these cases in the attached list is fair and accurate.
5. In my opinion, Judge Breyer's participation in the
foregoing cases did not entail a violation of judicial
ethics. None of the cases involved Lloyd's as a party or as
having an interest disclosed in the litigation. None could
have had a material effect on Judge Breyer's financial
interests. None had a connection direct enough with Judge
Breyer as to create a basis on which his impartiality might
reasonably be questioned, as that term is used in Section 455
and in the Code of Judicial Ethics.
6. There is a close analogy between the kind of investment
as a Name and an investment in a mutual fund. A mutual fund
is an investment that holds the securities of operating
business enterprises. Ownership in a mutual fund is
specifically excluded as a basis for imputed bias under
Section 455 and the Code of Judicial Ethics. This exclusion
was provided deliberately, in order to permit judges to have
investments that could avoid the inflation risk inherent in
owning Government bonds and other fixed income securities but
without entailing direct ownership in business enterprises. A
Names investment is similarly an undertaking in a venture
that in turn invests in the risks attending business
enterprise. Just as ownership in a mutual fund is not
ownership in the securities held by the fund, so, in my
opinion, is investment as a Name not an assumption of direct
involvement in the risks covered by the particular Lloyd's
syndicate.
7. In my opinion it could be regarded as imprudent for a
judge to invest as a Lloyd's Name, notwithstanding that no
violation of judicial ethics is involved. The business of
insurance is complex, sometimes controversial, and widely the
subject of public concern and suspicion. The insurance
industry is highly regulated and insurance company liability
often entails issues of public importance. In my opinion it
was therefore appropriate for Judge Breyer to have withdrawn
from that kind of investment so far as he could legally do
so, simply to avoid any question about the matter. That said,
I see nothing in his conduct that involves ethical
impropriety.
Very truly yours,
Geoffrey C. Hazard, Jr.
Mr. HEFLIN. Mr. President, I would also like to enter into the Record
a letter from John P. Frank, who is an outstanding lawyer, who has been
involved in the matter of the American Bar Association in rewriting its
Cannons of Judicial Ethics. Mr. Frank, originally a law clerk to
Justice Hugo Black, is an outstanding lawyer in Phoenix, AZ. And he has
written in regard to this matter that in his opinion the activities
that have been brought out and brought to light in regard to this
constitute no violation of the Canons of Judicial Ethics. He clearly
says that Judge Breyer properly did not disqualify himself in the
pollution cases that came before him.
I ask unanimous consent that this letter from John Frank of the law
firm of Lewis & Roca of Phoenix, AZ, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
July 12, 1994.
Judge Stephen G. Breyer Disqualification Matter
i. identification--john p. frank
Mr. Frank is a partner at the law firm of Lewis and Roca,
Phoenix, Arizona, who has been heavily involved in
disqualification matters over the decades. He is the author
of the seminal article on that subject in the 1947 Yale Law
Journal. He was subpoenaed by the Senate Judiciary Committee
to testify as an expert on disqualification in connection
with the nomination of Judge Haynsworth to the Supreme Court
in 1969. In the aftermath of that episode, the Congress took
to rewrite the Disqualification Act, creating the present
statute, 28 U.S.C. Sec. 455. Simultaneously, a commission
under the chairmanship of Chief Justice Roger Traynor of
California for the American Bar Association was rewriting its
canon of judicial ethics. Mr. Frank because, informally,
Senate representative in negotiations with the ABA Traynor
Commission to achieve both a canon and a new statute which
would be nearly the same as possible. Senator Bayh and Mr.
Frank appeared before the Traynor Commission, Mr. Frank
worked out a mutually satisfactory canon/bill with Professor
Wayne Thode of Utah, reporter for the Traynor Commission. The
canon was then adopted by the Traynor Commission and
essentially put into bill form by Senators Bayh and Hollings.
Major witnesses for the bill on the Senate side were Senators
Bayh and Hollings, and Mr. Frank. On the House side, Judge
Traynor and Mr. Frank jointly lobbied the measure through.
Mr. Frank is intimately acquainted with the legislative
history and well acquainted with subsequent developments.
The foregoing outline is my final conclusion on this
subject. I am aided not merely by numerous attorneys in my
own office, but also by Gary Fontana, a leading California
insurance law specialist of the firm of Thelan, Marrin,
Johnson & Bridges of San Francisco.
ii. issue
In his capacity as an investor, Judge Stephen G. Breyer has
been a ``Name'' on various Lloyds syndicates up to a maximum
of 15 at any one time over an 11-year period from 1978
through 1988. This means, essentially, that he is one of a
number of investors who have put their credit behind the
syndicates to guarantee that claims arising under certain
insurance policies directly written or reinsured by the
syndicates are paid. If the premiums on the policies and
the related investment income outrun the losses, expenses
and reinsurance, there is payment to the Names. If there
is a shortfall, the Names must make up the difference. For
an extensive description of the Lloyds system, see ``Guide
to the London Insurance Market,'' BNA 1988, and
particularly chapter 3 on underwriting syndicates and
agencies. As the full text shows, this is a highly
regulated enterprise, a matter of consequence in relation
to views of Chief Justice Traynor expressed below.
The syndicates commonly reinsure North American companies
against a vast number of hazards. Among these probably are
certain hazards arising in connection with pollution which
may relate to the ``superfund,'' a financing mechanism of the
United States for pollution clean-up. A question has been
raised as to whether, in any of the various cases in which
Judge Breyer has sat involving pollution, he may have been
disqualified. The identical question could arise in
connection with any number of other cases in which Judge
Breyer has sat because the syndicates have infinitely more
coverage than pollution. The selectivity of the current
interest is probably due to nothing but the colorful nature
of pollution or the failure of some inquiring reporter to see
the problem whole.
A very significant factor is that the Lloyds syndicates are
not merely insurers or re-insurers. They are also investment
companies and much of their revenue comes from investments in
securities.
iii. answer
Should Judge Breyer have disqualified in any pollution
cases in which he participated because of his Name status?
Answer: No.
iv. disqualification standards as applied to this situation
A. Party Disqualification
Under the statute, if a judge has an interest in a party,
no matter how small, he must disqualify. Knowledge is
immaterial; a judge is expressly required to have such
knowledge so that he can meet this responsibility. Since the
statute, judges have had to narrow their portfolios; ``I
didn't know'' is not even relevant.
We may put this strict criteria of disqualification aside
because neither Lloyds nor any of the syndicates is a party
to any of these cases. This of vital importance because this
is the one strict liability disqualification criterion in
this situation.
B. The Common Fund Exception
Congress in Sec. 455 did not mean to preclude judges from
investing; this was fully recognized both in Sec. 455 and the
canons; H.R. Rep. No. 1453, 93d Cong., 1st Sess. at 7 (Oct.
9, 1974). Judges have a range of income expectations and an
investment is quite appropriate. Investment is restricted
only where it would lead to needless perils of
disqualification.
In that spirit, Sec. 455(d)(4)(i) recognizes that judge may
invest in funds which are themselves investment funds and
while the judge cannot sit in any case which involves the
fund, he is exempted from a duty of disqualification in
matters involving securities of the fund unless he
participates in the management of the fund, Sen. Hrg. 1973 at
97, which Judge Breyer did not do. ``Investments in such
funds should be available to a judge,'' id, This section was
intended to create ``a way for judges to hold securities
without needing to make fine calculations of the effect of a
given suit on their wealth,'' New York Develop, Corp. v.
Hart, 796 F.2d 976,980 (7th Cir. 1986). As Chief Justice
Traynor said of this exception, it is ``because of the
impossibility of keeping track of the portfolio of such a
fund,'' Sen. Hrg. 1973, House of Rep. Subcomm. Jud. Com. on
S. 1064, May 24, 1974 (hearafter H.R. Hrg. 1974), p. 16.
The relevant section is as follows:
``(i) Ownership in a mutual or common investment fund that
holds securities is not a ``financial interest'' in such
securities unless the judge participates in the management of
the fund;''
1. A large Lloyds syndicate is a ``common investment
fund.'' There is a definition in Reg. Sec. 230.132 of
``common trust fund,'' which is a particular type of bank
security specifically exempted from the Securities Act of
1933 pursuant to Section 3(a)(2). The only useful portion of
that definition is ``maintained exclusively for the
collective investment and reinvestment of monies contributed
thereto by one or more [bank] members . . .'' A ``common
enterprise'' is one of the four elements of a ``investment
contract'' as set forth in the Howey case:
``[A]n investment contract for purposes of the Securities
Act means a contract, transaction or scheme whereby a
person [1] invests his money, [2] in a common enterprise,
and [3] is led to expect profits, [4] solely from the
efforts of a promoter or third party . . . .''
SEC v. W.J. Howey Co., 328 U.S. 293, 298 (1946). The common
enterprise requirement is usually satisfied by a number of
investors who have a similar stake in the profitability of
the venture.
2. While the precise form of common fund involved here was
not contemplated in the statute, functionally a Lloyds
investment is the same as any other common fund investment.
It is an investment in a common fund in which the judge has
no practical way of knowing on what he may make a return.
v. the non-party exception criteria
Under Sec. 455(d)(4), ``financial interest'' covers
``ownership of a legal or equitable interest, however small''
and then moves on to an additional thing, ``or a relationship
as director, advisor, or other active participant in the
affairs of a party.'' This, too, is under the ``however
small'' criterion, Sen. Hrg. 1978 at 115. This disqualifies
the judge if he is a creditor, debtor, or supplier of a party
if he will be affected by the result; but his only applies to
a party, id. 115. A different standard is applied under
Sec. 455(d)(4)(iii) to any ``proprietary interest'' similar
to mutual insurance or mutual savings. Here the disqualifying
interest must be ``substantial''; the ``however small''
standard is inapplicable. There is more latitude here than in
the other relationships and these can be usefully described
as the ``non-party'' involvement of the judge. I have
elaborated on this topic in ``Commentary'' 1972 Utah Law
Review Sec. 77, which has reflected the views of Professor
Thode of the Utah Law School, reporter on the canon, and
which is referenced in the legislative history of Sec. 455,
Sen. Hrg. 1978 at 113.
This covers the relationship of the judge not in terms of
his direct financial interest in a party (as to which his
disqualification is absolute and unawareness is not relevant)
but rather covers non-party interest. For classic
illustration, if the home of a judge is in an irrigation
district and if he is passing on the validity of the charter
of the irrigation district itself, the answer to
that question may affect the value of this home. As owner,
he is not at all a party to the case and he has no
financial interest in the irrigation company, but he is
affected. The distinction in these non-party cases is that
here the interest, instead of being measured by the
``however small'' criteria must be ``substantial'' and
also in converse to the direct financial interest, must be
knowing. Statement of Prof. E. Wayne Thode, Hearing,
Subcomm. Sen. Jud. Com. on S. 1064, July 14 and May 17,
1973 (hereafter Sen. Hrg. 1978), pp. 95, 97, 108, and the
illustration given is shareholder a domestic bank where
decision concerning another bank will have ``substantial
in effect on the value of all banks.'' For a comprehensive
discussion of the ``direct and substantial'' approach to
nonparty interests, see Sollenbarger v. Mt. States Tel. &
Tel. Co., 706 F. Supp. 780-81 (D.N.M. 1989).
If ``a judge owns stock of a company in the same industry
as one of the parties to the case,'' he is not
``substantially affected'' by the outcome and is not
disqualified, as the Fifth Circuit held in In re Placid Oil
Co., 802 F.2d 783 (5th Cir. 1986), reh'g den., 805 F.2d 1030
(5th Cir. 1986). The judge in Placid Oil owned stock in a
bank and was not disqualified from hearing a case that could
affect the banking industry.
In Chitimacha Tribe of Louisiana v. Harry L. Laws Co., 690
F.2d 1157, 1166 (5th Cir. 1982), cert. den., 464 U.S. 814
(1983), and Ogala Sioux Tribe v. Homestake Min. Co., 722 F.2d
1407, 1414 (8th Cir. 1983), cert. den., 455 U.S. 907 (1982)
both judges' interests in land adjoining the land in
litigation was held not to be a disqualifying interest. The
parties seeking disqualification in both cases argued that
all land within the territory would be directly affected by
the outcome of the litigation, which was a title dispute.
That argument was rejected in both cases because the
disposition of the litigation would not affect the judges'
title in any way.
A rare case involving insurance in a disqualification
controversy is Weingart v. Allen & O'Hara, Inc., 654 F.2d
1096, 1107 (5th Cir. 1981). The judge in Weingart owned three
life insurance policies, ``representing mutual ownership'' in
a corporation which wholly owned the defendant corporations.
Based in part on Advisory Committee Opinion No. 62, that a
judge insured by a mutual insurance company is not
disqualified to hear cases involving that company unless he
was also a stockholder, the court held ``the judge's mere
ownership of three life insurance policies, representing
mutual ownership, in the parent corporation of a party to the
suit does not demonstrate that the outcome of the proceeding
could have substantially affected the value of the ownership
interest.'' Id. at 1107.
In Department of Energy v. Brimmer, 673 F.2d 1287 (Temp.
Emerg. Ct. of Apps. 1982) the court held a judge hearing a
case involving an Entitlement Program, who had stock
ownership in other Entitlement Programs, was not
disqualified. In reaching this conclusion the court used a
two step analysis; 1) did the judge have a financial interest
in the subject matter in controversy, and, if not, 2) did the
judge have some other interest that could be substantially
affected by the outcome of the litigation.
The court held the judge did not have a financial interest
in the subject matter of the litigation, with a brief
analysis:
``The use of the term `subject matter' suggests that this
provision of the statute will be most significant in in rem
proceedings. See E. Wayne Thode, Reporters Notes to A.B.A.
Code of Judicial Conduct, 66 (1973). We hold that the judge
does not have a direct economic or financial interest in the
outcome of the case, and thus could hear it without
contravening the constitutional due process.''
Here is where Judge Breyer drops completely out of the
disqualification circle. In the financial relationship of any
of his cases to the totality of his dividend potential, his
Name is utterly trivial and, in any case, he not only does
not know that a litigant is insured with the syndicates but,
realistically, has no practical way of finding out. As the
legislative history clearly shows, it is intended in these
situations, generally speaking, that for a judge not to be
kept currently informed is an affirmative virtue, or else the
persons controlling the investments, as in a common fund
situation, would have the power to disqualify a judge by
making an investment and forcing the knowledge on the judge.
This was deliberately considered in the legislative history
as a hazard and was guarded against. An opinion, closely
analogous, shared by several district judges, is whether
Alaskan district judges must disqualify in cases claiming
``amounts for the Alaska Permanent Fund, from which dividends
can flow to, among others, district judges. Held, no
disqualification; the amounts are too remote and speculative,
Exxon Corp. v. Heinze, 792 F.Supp 77 (D. Ala. 1992). For
perhaps the leading case that a judge should not disqualify
for a contingent interest where he is not a party but,
speculatively, might get a small dividend some day, see In re
Va. Elec. Power Co., 539 F.2d 357 (4th Cir. 1976).
VI. Appearance Of Impropriety
This leaves the generalized provision of Sec. 455(a) that a
judge shall disqualify where ``his impartiality might
reasonably be questioned.'' This is commonly caught up in the
phrase which has a long history, pre-Sec. 455 ABA and U.S.
Supreme Court opinions. The amorphous quality of the phase
makes it hard to deal with decisively. However, the phrase
has gained technical meaning in both the legislative
history and the cases; categorically it does not mean that
pointing a finger and expressing dismay is enough.
Moreover, when, as developed above, certain types of
investment are expressly allowed under the statute, it
will be difficult to make them ``improper.''
The 1974 Act eliminated the ``duty to sit,'' permitting the
judge to disqualify where his impartiality may reasonably be
questioned. Both Justice Traynor and Mr. Frank advised the
Senate committee that this disqualification was to be
determined by ``what the traditions and practice have been,''
Sen. Hrg. 1978 at 15. These do not authorize disqualification
for ``remote, contingent, or speculative interest,'' or
``Indirect and attenuated interest''; In re Drexel Burnham
Lambert Inc., 861 F.2d 1307, reh'g den, 869 F.2d 116, cert.
den. 490 U.S. 1102 (1988); TV Communications Network, Inc. v.
ESPN, Inc., 767 F. Supp. 1077 (D. Colo. 1991).
It is here that the common fund exception has great bearing
by analogy. Such an investment involves the same factors
which motivated the common fund exception. That is to say,
the statutes mean to preserve the right of judges to invest
and clearly except from the rigorous disqualification
standards investments in common funds where the judge has no
effective way of knowing precisely what interests may be
within the scope of the investments. Functionally an
investment in Lloyds is the same as an investment in any
common fund with general holdings. In these circumstances,
there cannot be an ``appearance of impropriety'' in an
investment which is just the same, functionally, as those
expressly protected.
vii. the disqualification claim, if accepted, would produce
unreasonable and unintended results
As noted in the preliminary observations to this
memorandum, the concern here is grossly excessive. The
syndicates have a broad reach. The returns to the Names could
be affected by numerous other matters beside pollution
claims. For a comprehensive discussion of the proposition
that there is no ground for disqualification because a case
may affect general rules of law, see New York City Develop.
Corp. v. Hart, 796 F.2d 976, 979 (7th Cir. 1986) (``Almost
every judge will have some remote interest of this sort.'')
Almost any case relating to the business community could
relate to Lloyds in some remote way, and any number of cases
can relate to other reaches of the business community. Even
the criminal cases, in at least some instances, can have
significant business fallout, as for example, the RICO cases.
To say that Judge Breyer should have recused himself from all
pollution cases would logically be to say that judges should
not invest in a business generally.
I reiterate that neither the canon nor Sec. 455 meant to
preclude investment by judges. The focus on the pollution
cases is excessively sharp because, if there were
disqualification here, there would necessarily be
disqualification as to too many other aspects of investment.
This would defeat the purpose of the canons and the statute.
viii. conclusion
Judge Breyer properly did not disqualify in the pollution
cases which came before him.
John P. Frank.
Mr. HEFLIN. Mr. President, I also ask unanimous consent that a letter
signed by Thomas W. Brunner and Susan D. Sawtelle of the law firm of
Wiley, Rein & Fielding in Washington, DC, in which they have written
pertaining to pollution cases be printed in the Record. They come to
the conclusion that a higher review makes clear that no case in which
Judge Breyer participated had any substantial or predictable effect on
his interest as an investor in Lloyd's of London or the financial
position of the insurers generally.
I ask unanimous consent that the material be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Wiley, Rein & Fielding,
Washington, DC, July 11, 1994.
Lloyd Cutler,
Counsel to the President, White House Counsel's Office,
Washington, DC.
Dear Mr. Cutler: You have asked us to evaluate whether any
case decided by Judge Stephen Breyer under the Comprehensive
Environmental Response, Compensation, and Liability Act
(``CERCLA''), 42 U.S.C. Sec. 9601 et seq., could have
substantially affected the financial interests of insurers.
We represent insurers extensively in connection with
insurance coverage matters arising under CERCLA. In addition
to representing individual insurers, we and our colleagues
represent the Insurance Environmental Litigation Association
(``IELA''), a trade group of 21 large property/casualty
insurers that appears as amicus curiae in numerous
environmental coverage cases at the appellate level. Mr.
Brunner has over a decade of direct experience in
representing the interests of insurers in disputes arising
under CERCLA. Ms. Sawtelle, in addition to representing
insurers, has an extensive background in CERCLA and
environmental matters generally, having served as an EPA
official (as Special Assistant to the Director, Office of
Solid Waste, from 1985 to 1987) with responsibility in this
area, and having represented numerous potentially responsible
parties (``PRPs'') in private practice since 1981. As a
consequence, we are able to provide you with a realistic
appraisal of the significance of CERCLA cases for insurers
generally and Lloyds of London syndicates specifically, based
on a great deal of experience evaluating CERCLA matters for
insurers and others.
We have reviewed all eight cases in which Judge Breyer has
passed on CERCLA issues. In our opinion, none of these cases
had a material or predictable financial impact on insurers
generally or on Lloyds syndicates in particular. Any
consequences for insurers were highly speculative and
dependent on many independent intervening factors. Any
conceivable impact on the financial interests of insurers
from these cases resulted only from the court assuring that
PRPs received proper procedural protections, or that the
statute's provisions were applied properly, before parties
were held liable for costs that might possibly be determined
to be insured by some insurer. None of the cases determined
the obligation of any insurer nor of any PRP for which an
insurer might be liable. In real world terms, Judge Breyer's
financial interest in these cases as a result of his status
as a Lloyd's investor was probably more attenuated than his
interest as a federal taxpayer in numerous cases involving
financial claims against the Federal Government. In both
circumstances, the interest is so diluted, so contingent and
so indirect as to be of no consequence.
Of the eight CERCLA cases on which Judge Breyer has sat,
four did not involve even potentially insurable interests of
PRPs. Maine v. Department of the Navy, 973 F.2d 1007 (1st
Cir. 1992), involved a claim for civil penalties sought by
Maine against the (uninsured) Federal Government. Similarly,
Reardon v. United States, 947 F.2d 1509 (1st Cir. 1991) (en
banc), involved the constitutionality of CERCLA's procedures
of this provision--which exempts from the class of liable
``owners or operators'' those who, without participating
in the management of a contaminated facility, hold indicia
of ownership primarily to protect a security interest--
applied to a particular sale-and-leaseback arrangement.
The court's opinion, which was consistent with a number of
other courts' rulings, was highly fact-specific and thus
not likely to have a material or predictable impact on the
insurance industry. Moreover, this dispute involved
private parties only, each of whom is no more likely than
the other to have insurance.
Finally, in Dedham Water Co. v. Cumberland Farms Dairy,
Inc., 889 F.2d 1146 (1st Cir. 1989), Judge Breyer joined in
the court's unanimous decision that CERCLA liability arises
when the release of hazardous substances from the defendant's
facility cause the plaintiff to incur response costs, rather
than when the releases cause contamination on the plaintiff's
property. This case did not present an issue that would have
a material impact on the insurance industry's CERCLA
obligations because in a wholly private dispute such as this,
either or both sides might have insurance. (In a subsequent
opinion in the Dedham case, Judge Breyer dissented from the
majority regarding whether a new trial was required; this
opinion was unrelated to the provisions of CERCLA. See in re
Dedham Water Co., 901 F.2d 3 (1st Cir. 1990).)
In sum, then, our review makes clear that no case in which
judge Breyer participated had any substantial or predictable
effect on his interest as an investor in Lloyd's of London or
on the financial position of insurers generally.
Sincerely,
Thomas W. Brunner.
Susan D. Sawtelle.
Mr. HEFLIN. Mr. President, I commend President Clinton on his
excellent selection of Judge Stephen G. Breyer as his nominee. I will
support Judge Breyer with my vote for his confirmation to serve as an
Associate Justice on the U.S. Supreme Court. I believe that he will be
a voice of moderation guided by principles and will work unfailing to
preserve the Constitution in a manner which will guarantee that the
laws of this land are interpreted in a faithful and fair manner for all
citizens.
I yield the floor.
Mr. SIMPSON addressed the Chair.
The PRESIDING OFFICER. The Senator from Wyoming [Mr. Simpson].
Mr. SIMPSON. Mr. President, what is the status of time?
The PRESIDING OFFICER. The Senator from Delaware controls the
remaining time.
Mr. SIMPSON. How much time is remaining?
The PRESIDING OFFICER. Forty-three minutes and two seconds.
Mr. BIDEN. Mr. President, I am delighted to yield as much time as the
Senator wants.
Mr. SIMPSON. Mr. President, that is the most generous offer I have
had yet from the chairman of the Judiciary Committee. Five minutes
would be adequate.
Mr. BIDEN. I have no objection.
The PRESIDING OFFICER. The Senator is recognized.
Mr. SIMPSON. I thank my friend from Delaware.
He and I have just finished a vigorous conference on the crime bill,
were released from bondage at 2:45 in the morning, and repaired to our
chambers, rose again from the dead, and reported it at 7:30 a.m. in the
morning. We did not complete our work exactly with bankers hours.
Pardon the expression. That is not politically correct either.
Mr. President, I rise in support of the nomination of Stephen Breyer
to be an Associate Justice of the Supreme Court.
Justice Breyer's educational accomplishments are very evident to us
all. He has had varied experience in the executive branch, 14 years
experience on the circuit court of appeals, but he has also served in
the legislative branch. Several of us knew him very well, and worked
with him as chief counsel of the Senate Judiciary Committee. He was
exceedingly able. I had the personal ability to perceive and observe
his work when I was a freshman member of the Judiciary Committee. In
that position as chief counsel, he clearly demonstrated a very special
ability to work with Members of both parties, and in particular to
bring people of differing views together to resolve difficult issues.
Mr. President, those are the attributes of a skilled Justice. Judge
Breyer clearly is so very well qualified for the Supreme Court, and I
am very pleased to support the nomination.
Some Senators have expressed certain reservations regarding Judge
Bryer's investments in the Lloyd's of London syndicate. I have
expressed a view that Judge Breyer should have recused himself from all
cases before his court involving environmental issues in which
insurance possibly could have been involved. The Judiciary Committee,
during the 3 days of testimony by Judge Breyer, questioned him fully,
closely, and completely about the Lloyd's of London matter in both the
public and in the closed session.
Ethics experts were consulted as well. Based on Judge Breyer's
responses and the views of experts, I am well satisfied that Judge
Breyer acted ethically and appropriately, and I believe he will act in
a similar fashion on the Supreme Court.
One other issue of concern to the committee, and a number of my
constituents, is Judge Breyer's position on home schooling and church-
operated private schools. I discussed his views on this important right
of parents to decide exactly how their children will be educated on
four separate occasions--on two different days at the public hearing,
in a private meeting in my office, and an executive session the
committee held with the nominee.
Those discussions with Judge Breyer convinced me that he is not in
any way a foe of home schooling or private religious schools, but
rather that he clearly understands that the Constitution protects the
right of parents, not only to pass their religious beliefs on to their
children, but also to determine how they will educate them--at home, at
a private school, or in the public schools.
I think, too, that the President made a fine selection, a fine
nominee, and I believe Stephen Breyer will be a fine successor to
Justice Blackmun, a splendid gentleman who has served with great
distinction on the Court, and who I have come to admire greatly. He
will be a superb addition to the High Court.
I thank the Chair and yield the floor.
Mr. KENNEDY. Mr. President, I yield myself such time as I might use.
Mr. President, I believe we are coming to the conclusion of what I
think has been an excellent debate and discussion and presentation by a
number of our colleagues that have been on the Judiciary Committee and
have paid attention to the considerations of the Judiciary Committee. I
am enormously grateful to all of them. I know that Judge Breyer is, as
well, for the courtesies and for the way that the hearings were held.
Once again, I pay tribute to the chairman of the Judiciary Committee,
Senator Biden, and Senator Hatch, as well, and the staffs, for the way
the hearings were scheduled, the preparation that was made available to
the members of the committee and to the Senate, the way the hearings
were conducted, and the range of witnesses that were heard. I think it
was a real service to the institution and a service to the country, as
well. I think all of us are grateful to them for bringing us to where
we are this afternoon.
I know that a few Senators--very few, I believe--have expressed some
concern about Judge Breyer's judicial philosophy and about his
investment in Lloyd's of London, and certain other issues. The
Judiciary Committee hearings analyzed all of these issues thoroughly.
Judge Breyer was extremely forthcoming in his responses, and I believe
he has passed every test with flying colors.
After hearing his responses, all members of the committee voted for
the confirmation. The vote by the full Senate will not be quite as
unanimous, but I believe it should be, and I suspect it would be if all
100 Senators had the opportunity to participate in our Judiciary
Committee hearings and discuss their concerns with Judge Breyer
himself.
I, again, commend President Clinton for a truly outstanding
nomination. President Clinton is an outstanding lawyer himself, and he
knows excellence when he sees it. Judge Breyer is the epitome of
excellence in the law, and he eminently deserves the high position.
It is said that it is our laws of wise restraints that make us free.
Judge Breyer has the wisdom, experience, ability and integrity to apply
the Constitution and the laws of the United States fairly for the
benefit of all Americans. Stephen Breyer will make an outstanding
Justice of the United States Supreme Court. Future Senates will be
proud of him, and so will the country.
I urge the Senate to confirm him.
Mr. HATCH. Mr. President, just one last sentence about this
candidate. We know him. He is a man of integrity and a man of
exceptional legal ability. He is a person who understands the role of
the courts and our constitutional process. He is a student of
constitutional law and, frankly, he is a good choice.
I compliment the President for choosing him. I believe we are ready
to go to a vote. We are only waiting for the majority leader to make
his concluding remarks.
Mr. BIDEN. Mr. President, I yield myself 60 seconds to speak to one
issue--the issue of whether or not we, the committee, the majority and
minority, thoroughly looked at the potential conflict-of-interest
question raised here.
I ask unanimous consent that I may have printed in the Record a
chronology of what the committee staff and the committee did relative
to that issue.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Lloyd's of London Investment--Thoroughness of Committee Questioning
(By Senator Joseph R. Biden, Jr.)
During the Judiciary Committee's hearing on the nomination
of Judge Stephen Breyer on July 12, 13, and 14, members of
the committee asked Judge Breyer dozens of questions about
his investment in Lloyd's of London. He was asked extensively
about the cases that he participated in involving Superfund
and environmental pollution issues as well as the procedures
that he used to screen out potential conflicts of interest.
Of course, that testimony has been made available to all
Senators.
Moreover, prior to Judge Breyer's hearing, every member of
the committee was provided with hundreds of documents
relevant to the Lloyd's investment. Again, all of those
documents have been made available to all Members of the
Senate.
Judge Breyer's testimony about this investment in Lloyd's
and his standards for recusal was thoughtful and forthright.
In my view, Judge Breyer was candid with the committee about
the details of the investment and his approach to the issue
of recusal.
With respect to the recusal issue, in particular, the
committee received assessments of Judge Breyer's actions from
several well known and respected legal and judicial ethics
experts and practitioners, including University of
Pennsylvania Law School, Geoffrey Hazard, Jr., New York
University Law School Professor Stephen Gillers, and John
Frank of Lewis & Roca. Each of them has concluded that Judge
Breyer's actions fully complied with current applicable
recusal standards. I enclose those letters for the Record.
In addition, Thomas Brunner and Susan Sawtelle of Wiley,
Rein & Feilding have expressed the opinion that no case in
which Judge Breyer participated had any substantial or
predictable effect on his interest as an investor in Lloyd's
or on the financial position of insurers generally.
While one individual, Monroe Freedman, a Hofstra law
professor, was critical of Judge Breyer, the others stated
clearly that Judge Breyer had done nothing unethical.
After unlimited questioning and careful consideration of
all relevant information by each member of the committee,
Judge Breyer was unanimously reported favorably to the Senate
on July 19, 1994. Committee members were satisfied that Judge
Breyer has acted ethically and has fully complied with the
current applicable ethical standards.
____
New York University,
School of Law,
New York, NY, July 8, 1994.
Lloyd Cutler,
Counsel to the President, White House Counsel's Office,
Washington, DC.
Dear Mr. Cutler: You have asked me to answer the following
question: Did Judge Stephen Breyer violate section 455 of
title 28 of the United States Code (``Sec. 455'') by sitting
on eight cases involving CERCLA when he was a ``name'' in a
Lloyd's of London syndicate that insured against
environmental pollution among other risks?
I have been asked to assume (a) that Judge Breyer did not
know and could not have known the identities of the
syndicate's insureds or the terms of their policies; (b) that
Judge Breyer did know or could have known that environmental
pollution was one of the risks against which the syndicate
insured; and (c) that Judge Breyer was exposed to a possible
loss of 25,000 pounds, had insurance against additional loss
of up $188,000, and that reasonable estimates are that his
actual loss will not exceed the insurance coverage though
they could.
In answering your question, I am going to disregard the
assumption in (c) and assume instead that at the time Judge
Breyer sat on the eight CERCLA cases he had at least 25,000
of financial exposure and possibly more.
I have reviewed the eight CERCLA cases. In my opinion,
Judge Breyer did not violate Sec. 455.
A judge may not sit in a case in which the judge or certain
family members have a ``financial interest, however small''
in a ``party'' or in the `'subject matter in controversy.''
Sec. 455(b)(4), (d)(4). Judge Breyer had no financial
interest in the parties to the CERCLA case nor in their
subject matter. An example of the latter would be a judge's
stock ownership in a company that, though not a party to a
proceeding, was the subject of control between the actual
parties.
Where the judge has an interest other than a ``financial
interest'' in a party or in the subject matter in
controversy, different rules apply. The judge is not then
disqualified ``however small'' his or her interest. The size
of the judge's ``other interest'' then matters: It must be
``subsantia[l].'' Sec. 455(b)(4).
This difference recognizes two truths: The public is less
likely to suspect a judge's impartiality when the judge's
interest is other than in a party or the subject matter in
controversy; and if any ``other interest,'' even
insubstantial ones, could disqualify judges, the scope of
disqualification would be too broad with no public gain.
``[W]hen an interest is not direct, but is remote,
contingent, or speculative, it is not the kind of interest
which reasonably brings into question a judge's
impartiality.'' In re Drexel Burnham Lambert Inc., 861 F.2d
1307, 1313 (2d Cir. 1988) (construing Sec. 455(a), discussed
below).
Section 455(b)(4) and (b)(5)(iii) recognize the different
policies when a judge's interest is not in a ``party'' or in
the ``subject matter in controversy.'' These provisions
require recusal only when the judge (or certain family
members) have ``any other interest that could be
substantially affected by the outcome of the proceeding.''
Sec. 455(b)(4).
This different standard has two distinguishing elements.
First, the effect on the judge's interest must be
substantial. Second, the world ``could'' has been repeatedly
construed to require that the effect of ``the outcome of the
proceeding'' on the judge's interest must be not be
``indirect'' or ``speculative.'' In re Placid Oil Co., 802
F.2d 783, 786-77 (5th Cir. 1986). Construing Sec. 455(b)(4)
in Placid Oil, the Court wrote: ``A remote, contingent, and
speculative interest is not a financial interest within the
meaning of the recusal statute . . . nor does it create a
situation in which a judge's impartiality might reasonably be
questioned.'' Id. at 787.
The Court's last reference, to ``impartiality,'' brings us
to Sec. 455(a), which requires recusal when a judge's
``impartiality might reasonably be questioned.'' While
Sec. 455(a) and Sec. 455(b) overlap, they are are congruent.
Liteky v. United States, 114 S.Ct. 1147 (1994). Nevertheless,
here, I reach the same conclusion under both provisions.
Placid Oil is an instructive case. It was brought against
23 banks, seeking recision of credit agreements and other
relief ``based on a number of alleged wrongful acts of the
Banks.'' Id. at 786. Plaintiffs sought recusal of the
district judge, who was alleged to have ``a large investment
in a Texas bank that may be affected by rulings in this
case.'' Plaintiffs argued that ``any rulings adverse to
the Banks will have a dramatic impact on the entire
banking industry and thus on [the judge's] investment as
well,'' thereby giving the judge a ``financial interest in
the litigation.'' Id. The Circuit rejected the recusal
effort: We find no basis here for requiring recusal. We
are unwilling to adopt a rule requiring recusal in every
case in which a judge owns stock of a company in the same
industry as one of the parties to the case. * * * Id. This
position was followed in Gas Utilities Co. of Alabama,
Inc., v. Southern Natural Gas Co., 996 F.2d 282 (11th Cir.
1993), Cert. denied, 114 S.Ct. 687 (1994).
I see no evidence that the decisions in Judge Breyer's
CERCLA cases ``could'' have a direct and substantial effect
on his interest in a syndicate that has insured against the
risk of liability for environmental pollution. Without
parsing every case here, I found their holdings to be
relatively narrow, some quite limited. For most of the cases,
it would be impossible to say how the holding could affect
Judge Breyer's own interests or those of the syndicate in
which he invested. For all of the cases, the Judge's interest
is ``not direct, but is remote, contingent, or speculative.''
In re Drexel Burnham Lambert, supra at 1313.
Given the twin requirements of substantiality and the
caselaw definition of ``could'' as used in Sec. 455(b), Judge
Breyer did not have to recuse himself in the eight CERCLA
cases. He did not violate Sec. 455.
Sincerely yours,
Stephen Gillers.
____
New York University,
School of Law,
New York, July 15, 1994.
Hon. Joseph R. Biden,
Chairman, Committee on the Judiciary, U.S. Senate,
Washington, DC.
Dear Chairman Biden: The White House Counsel's Office has
given me a copy of Professor Monroe Freedman's letter to you
of July 13, 1994, and asked me to reply to it. Since the
letter takes issue with my July 8, 1994 letter to the White
House Counsel, I appreciate having this opportunity to do so.
The issue, of course, is whether Chief Judge Stephen Breyer
violated 28 U.S.C. Sec. 455 when he sat in certain pollution
cases while he was also a ``Name'' in a Lloyd's syndicate. I
will assume general familiarity with the facts and the prior
correspondence.
Professor Freedman is in my opinion in error when he
charges Judge Breyer with illegal conduct. Professor Freedman
has misconstrued the governing rules and ignored governing
precedent. I shall explain how presently. First, though, the
Committee should be aware of a critical doctrine that has not
yet been identified.
Section 455, which derives from the 1972 ABA Code of
Judicial Conduct, states the Congressional rules for recusal
of a federal judicial officer. The section has two kinds of
rules: categorical rules and standards. The categorical rules
require no judgment. They either apply or they do not. The
standards, by contrast, require judgment.
An example of a categorical rule is Sec. 455(b)(5)(i),
which would require a judge to step aside if the judge's
``spouse, or a person within the third degree of relationship
to either of them *** Is a party to the proceeding ***.''
This circumstance either exists or it does not. If it
does, recusal is required.
The two provisions of Sec. 455 that have been cited in
connection with Judge Breyer (until Professor Freedman
injected a third, discussed below) contain standards, not
categorical rules. The first standard is that part of
Sec. 455(b)(4) that required recusal if the judge (as an
individual or fiduciary) or certain relatives of the judge
have ``any other interest that could be substantially
affected by the outcome of the proceeding.'' The second
standard is Sec. 455(a), which requires recusal if the
judge's ``impartiality might reasonably be questioned.''
As should be clear, these two standards require a judge to
interpret imprecise words like ``could,'' ``substantially
affected,'' ``might'' and ``reasonably.'' The meaning of
these words (and the standards that contain them) are, of
course, clarified as cases construe them, but they have
never, and were not intended to, become fixed categories.
When we deal with standards, we deal with a continuum. In
some matters, it will be self-evident that a judge's
``impartiality might reasonably be questioned'' or that a
proceeding's ``outcome'' could ``substantially'' affect a
judge's interests. In other matters, the opposite will be
clear. But in many cases, different judges will apply the
standards differently.
That doesn't mean that one judge is right and the other
judge wrong. It means only that as with all flexible
standards there will be room for disagreement. The way that
the judicial system accommodates this reality is pertinent to
the questions before the Judiciary Committee.
Appellate courts routinely defer to a judge's decision
regarding application of a standard by upholding the decision
unless it was an ``abuse of discretion.'' Town of Norfolk
versus U.S. Army Corps of Engineers, 968 F.2d 1438, 1460 (1st
Cir. 1992); Pope versus Federal Express Corp., 974 F.2d 982,
985 (8th Cir. 1992). This test recognizes that there is
significant room for disagreement is the application of
standard. Reasonable minds may differ and neither will be
wrong.
While Professor Freedman holds that Judge Breyer should
have recused himself in certain of his pollution cases, I and
others who study the law of judicial disqualification have
reached an opposite conclusion. That difference of opinion is
rather strong evidence that the situation confronting Judge
Breyer did not self-evidently require his recusal, but were
instead situations in which reasonable minds might differ on
the application of the standard. Judge's Breyer's conduct was
not, therefore, an abuse of discretion and Judge Breyer did
not violate Sec. 455 notwithstanding that another judge might
have elected differently.
Not only do I believe that Judge Breyer's decision to sit
in the pollution cases was reasonable, I believe it was
right. In the balance of this letter, I will explain why
Sec. 455 did not disqualify Judge Breyer and where I think
Professor Freedman goes wrong.
I have already quoted from Sec. 455(b)(4). A judge must not
sit if the judge (including certain relatives) has ``any
other interest that could be substantially affected by the
outcome of the proceeding.'' The words ``any other interest''
are to be distinguished from a separate basis for recusal if
a judge has a ``financial interest in the subject matter of
the proceeding or in a party to the proceeding.'' Such a
``financial interest'' requires recusal ``however small.''
Section 455(d)(4).
No one has suggested that Judge Breyer had a ``financial
interest'' in a party to proceedings before him. Professor
Freedman has rhetorically asked, however, whether Judge
Breyer had a ``financial interest'' in the ``subject matter''
of proceedings before him. (Freedman letter at p. 8.) This
suggestion is wrong, as I shall discuss below.
In order to trigger Sec. 455(b)(4)'s reference to ``any
other interest,'' several facts must be true (and the judge's
failure to recognize their truth must be an abuse of
discretion). These facts are that the (i) the judge has an
``other interest'' that (ii) ``could be'' (iii)
``substantially affected'' by (iv) ``the outcome of the
proceeding.''
Judge Breyer had an investment in Lloyd's I assumed in my
letter to Mr. Cutler that he had unlimited financial exposure
on that investment. That satisfies factor (i), However, it
does not satisfy factor (iii), even though I am assuming that
Judge Breyer's financial exposure is unlimited.
The word ``substantially'' refers to the effect on the
``interest'' that the ``outcome of the proceeding'' ``could''
have. Professor Thode, the Reporter for the ABA Judicial
Conduct Code from which this part of Sec. 455(b)(4) was
drawn, has written: ``Here the issue is not whether a judge
has a `substantial interest,' but whether the interest he has
could be substantially affected by a decision in the
proceeding before him.'' E. Thode, Reporter's Notes to Code
of Judicial Conduct 66 (1973) (hereafter ``Thode'').
In measuring the possible effect of the ``outcome of the
proceeding'' on the judge's interest, we must construe the
word ``could.'' As stated, ``could'' is not a precise word.
``Could'' could mean ``could conceivably'' or it could
require a closer nexus between the outcome of the proceeding
and the effect on the judge's interest. The courts have
construed ``could'' to require a closer nexus.
My letter to Mr. Cutler cites two cases that require a
``direct'' connection between the outcome of a proceeding and
the judge's interest. By contrast, a ``remote, contingent,
and speculative interest,'' will not suffice. In re Placid
Oil Co., 802 F.2d 783, 783-77 (5th Cir. 1986); Gas Utilities
Co. of Alabama, Inc, v. Southern Natural Gas Co., 996 F.2d
282 (11th Cir. 1993), cert. denied. 114 S.Ct. 687 (1994).
While Professor Freedman suggests (p. 9) that Placid Oil is
``obsolete,'' because of the Supreme Court's decision in
Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847
(1988), two years later, this is wrong. First, the Eleventh
Circuit cited Placid Oil in 1993 for the very point made
here. Other courts have cited it, too, after Liljeberg. See,
e.g., McCann v. Communications Design Corp., 775 F. Supp.
1535 (D. Conn. 1991).
Second, the facts of Liljeberg are dramatically different
from those in Placid Oil. In Liljeberg, a university with
which the judge had a fiduciary relationship would (as a
result of contractual obligations and real estate values)
gain millions of dollars if the judge awarded the rights to a
certificate of need for a hospital to the defendant. That
gave the judge, as fiduciary, an interest ``however small''
in the subject of the litigation (the certificate) and also
an interest that could be substantially affected by the
outcome of the proceeding. The facts of Liljeberg show a
``direct'' effect on the judge's interest as a fiduciary, and
of course the effect was substantial.
Permit me to make this clearer with an example. Assume that
the outcome of a case will nearly certainly cause a $100
decline in the value of the judge's stock interest. The
effect, then, is ``direct,'' but the judge's financial
interest is not ``substantially affected'' because the amount
is too small. Now assume an omniscient observer could tell us
that the outcome of a proceeding will have 1/1000th of a
chance of causing the judge's stock interest to decline by
$100,000. There, the effect is substantial but it is not
``direct.''
Professor Freedman cites two cases in which he concludes
Judge Breyer should not have participated. Did the Judge
abuse his discretion by concluding that the decisions in
these cases could not have a direct and substantial affect on
his financial interest in Lloyd's? That is the question.
One issue in United States v. Ottati & Goss, Inc., 900 F.2d
429 (1st Cir. 1990), the issue Professor Freedman cites, was
whether a federal judge had to grant the EPA the precise
injunction it requested (so long as the request was not
arbitrary) or whether instead the judge had broader
discretion. Judge Breyer held that the judge had broader
discretion.
Professor Freedman writes that Judge Breyer should not have
properly decided that case because it ``involved the [EPA's]
powers to impose liability on polluters like those the Judge
knew he was insuring.'' (Freedman letter at p. 6.) This is
just wrong. It is not the standard. Professor Freedman cannot
say with any degree of confidence that the decision in Ottai
& Goss would have a direct and substantial effect on the
judge's interests. Furthermore, Professor Freedman leaves
out an important part of the case. The EPA had two routes
for seeking judicial injunctions. It had proceeded under
one of them. Judge Breyer expressly acknowledged that if
it had proceeded via the other route (seeking enforcement
of a nonarbitrary EPA order), ``the court must enforce
it.'' Id at 434.
Now think about the chain of events one would have to
envision to get from the holding in Ottai & Goss to the
conclusion that Judge Breyer's interests could be directly
and substantially affected. One would have to say that
because a trial judge will have discretion whether to grant
an EPA injunction when the EPA proceeds along one route
rather than another, it could happen that in another case the
EPA would elect that first route in an action against an
insured of Judge Breyer's Lloyd's syndicate, that the judge
in that case will deny EPA the injunction it seeks (relying
on the discretion Judge Breyer's opinion affords), that the
syndicate would not have to pay to comply with the particular
injunction EPA wanted, and that the effect from all this on
Judge Breyer's pro rata financial interest in the syndicate
would be ``substantial.'' That chain of events is what the
caselaw means when it uses the words ``remote, contingent,
and speculative.''
Professor Freedman also cites Reardon v. United States, 947
F.2d 1509 (1st Cir. 1991). Reardon is even a more farfetched
example than Ottai & Goss. Judge Breyer sat on an en banc
court that held that, absent exigent circumstances, due
process required ``notice of an intention to file a notice of
lien and provision for a hearing if the property owner
claimed that the lien was wrongfully imposed.'' Id. at 1522.
Professor Freedman wrongly says that the decision ``held that
the EPA did not have the power to impose the lien.'' (letter
at p. 7) It did, so long as it gave notice of its intention
to do so and afforded a hearing thereafter.
Professor Freedman connects Reardon to the situation at
hand this way: ``The loss represented by that lien is the
same kind of loss that Judge Breyer was liable to reimburse
as an insurer.'' (letter at p. 7.) This is beyond
``speculative.'' What ``loss'' is Professor Freedman
referring to? Think about the extended chain of events one
would have to describe to get from the Reardon holding to
Judge Breyer's interests. The EPA would have to give
notice of an intent to impose a lien on property of an
insured of the Judge's Lloyd's syndicate. Then, before the
EPA could file its lien, the recipient of the notice would
have had to defeat that effort by making a quick
disposition of the property, thereby defeating the EPA's
security interest. As a result of that disposition,
somehow (I'm not clear how) the syndicate would escape its
insurance responsibility and the pro rata savings to Judge
Breyer in particular would have to be substantial. Readon
simply does not support Professor Freedman's conclusion.
Before I leave Sec. 455(b), I want to recognize that a
``remote, contingent, and speculative'' interest is not the
same as no conceivable interest whatsoever. A system of
judicial recusal must balance between the risk of real or
apparent personal interest, on the one hand, and an unduly
broad standard that disqualifies a large number of judges
(for severely limits their investments), on the other. A
broad standard would lead cautious judges to step aside no
matter how improbable an effect on their interests. I believe
the courts have struck the right balance. But the line will
sometimes be unclear, calling on the judge to exercise
discretion.
On occasion, by definition, even a remote interest will
become a reality. Today's issue of Newsday reports that a
loser in a case before Judge Breyer sued a Lloyd's syndicate
for reimbursement of its expenditures under an insurance
policy the loser had with Lloyd's. The syndicate may or may
not have been Judge Breyer's syndicate. Let's assume it was
Judge Breyer's syndicate. That is part of the price of a
balanced rule. A rule that prohibited a judge from sitting if
a decision could have any conceivable effect on his or her
interests would have its own (in my view less appealing)
price.
In addition, I have been asked to assume that Judge Breyer
did not and could not have known the particular insureds
under his Lloyd's syndicate. Section 455(b) quite clearly
requires knowledge.
Professor Freedman also relies on Sec. 455(a), which
requires recusal if a judge's ``impartiality might reasonably
be questioned.'' Apparently, Professor Freedman believes it
to have been an abuse of discretion for Judge Breyer not to
recuse himself under this provision.
Section 455(a) requires recusal when an ``objective,
disinterested, observer fully informed of the facts
underlying the grounds on which recusal was sought would
entertain significant doubt that justice would be done'' in
the particular case. Union Carbide Corp. v. U.S. Cutting
Service, Inc., 782 F.2d 710, 715 (7th Cir. 1986). I do not
believe that conclusion can be reached on the facts of the
cases in which Judge Breyer sat. Certainly, it was not an
abuse of discretion to reject application of Sec. 455(a) as
so defined.
A stronger objection to Sec. 455(a) exists. As I mentioned
in my letter to Mr. Cutler, while not congruent, Sec. 455(a)
and Sec. 455(b) do overlap. As a matter of statutory
interpretation, it is improper to resort to Sec. 455(a) when
Congress has specifically legislated criteria for recusal in
the particular circumstances described in Sec. 455(b) and
these criteria are absent. As the Court wrote in Liteky v.
United States, 114 S.Ct. 1147, 1156 n.2 (1994), ``it is poor
statutory construction to interpret (a) as nullifying the
limitations (b) provides, except to the extent the text
requires.''
Here, Sec. 455(b)(4), as construed in caselaw, requires
that the outcome of the proceeding before the judge have both
a direct and substantial effect on the judge's interests.
Liteky tells us that we should not use Sec. 455(a) to
``nullify'' these requirements. Specifically, here, we should
not use Sec. 455(a) to require recusal where the effect is
``remote'' or ``speculative'' or ``contingent.'' In any
event, the same test is employed to reject recusal under
Sec. 455(a). In re Drexel Burnham Lambert, Inc. 861 F.2d
1307, 1313 (2d Cir. 1988) (remote, contingent, or speculative
interest does not reasonably bring judge's impartiality into
question.)
Let me conclude by addressing two other of Professor
Freeman's points. First, he suggests that Judge Breyer might
have had a ``financial interest'' in the ``subject matter''
of the cases before him because the legal issue he decided
could arise in a case involving his Lloyd's syndicate.
Professor Freedman does not even adopt this view himself.
He says merely that ``some have read'' the phrase
``subject matter in controversy'' to include the remedy,
like the lien at issue in Reardon. He also writes that
``[o]ne could similarly say'' that EPA enforcement powers
in Ottati & Goss were the ``subject matter'' of that
controversy.
``One'' could, of course, ``say'' many things, just as
``some'' may have ``read'' the statute a variety of ways. But
the fact is that no authority supports the view that a judge
can have a ``financial interest'' in a question of law. As
Professor Thode explained, the ``subject matter'' language
``becomes significant in in rem proceedings.'' Thode at 65.
Another example is Liljeberg, where the university on whose
board the judge sat had a financial interest riding on the
holder of the certificate of need, which was the subject
matter before the judge. This is not a case like Tumey v.
State of Ohio, 273 U.S. 510 (1927), cited by Professor
Freedman, where the adjudicator had a financial interest in
the very fine he imposed on the defendant because he would
receive part of it.
Professor Freedman suggests (p. 5) that Judge Breyer
violated his duty to keep himself informed of his financial
interests. Section 455(c). My letter was premised on two
assumptions about what Judge Breyer knew or could have known
and what he did not know and could not have known. I charged
him with knowledge of what he could have known but he can't
be faulted with not knowing what he could not have known.
Thank you for this opportunity.
Sincerely,
Stephen Gillers.
____
Law School,
University of Pennsylvania,
Philadelphia, PA, July 11, 1994.
Re Judge Stephen Breyer.
Hon. Lloyd N. Cutler,
Special Counsel to the President,
White House,
Washington, DC.
Dear Mr. Cutler: You have asked for my opinion whether
Judge Stephen Breyer committed a violation of judicial ethics
in investing as a ``Lloyd's Name'' in insurance underwriting
while being a federal judge. In my opinion there was no
violation of judicial ethics. In my view it was possibly
imprudent for a person who is a judge to have such an
investment, because of the potential for possible conflict of
interest and because of possible appearance of impropriety.
However, in light of the facts no conflict of interest or
appearance of conflict materialized. I understand that Judge
Breyer has divested from the investment so far as now can be
done and will completely terminate it when possible.
1. I am Trustee Professor of Law, University of
Pennsylvania, and Sterling Professor of Law Emeritus, Yale
University. I am also Director of the American Law Institute.
I have been admitted to practice law since 1954 and am a
member of the bar of Connecticut and California. I am engaged
in an active consulting practice, primarily in the fields of
legal and judicial ethics, and have given opinions both
favorable and unfavorable to lawyers and judges. I was
Consultant and draftsman for the American Bar Association
Model Code of Judicial Conduct promulgated in 1972, on which
the rules of ethics governing federal judges are based. I
have also been Reporter and draftsman of the American Bar
Association Model Rules of Professional Conduct,
promulgated in 1983, and before that consultant to the
project for the ABA Model Conduct of Professional
Responsibility. I am author of several books and many
articles on legal and judicial ethics and write a monthly
column on the subject.
2. I am advised that Judge Breyer made an investment as a
``Lloyd's Name'' some time in 1978. He has since terminated
that investment except for one underwriting, Merrett 418,
that remains open. He intends to terminate that commitment as
soon as legally permitted. I have further assumed the
accuracy of the description of a Lloyd's Name investment set
forth in the memorandum of July 3, 1994, by Godfrey Hodgson.
My previous understanding of the operation of Lloyd's
insurance, although less specific than set forth in the
memorandum, corresponds to that description.
3. I have assumed the following additional facts:
(a) As a ``Name'' Judge Breyer did not have, and could not
have had, knowledge of the particular coverages underwritten
by the Merrett 418 syndicate. It would have been possible for
a Name to discover through inquiry that environmental
pollution as a category was one of the risks underwritten by
the syndicate.
(b) Judge Breyer had ``stop-loss'' insurance against his
exposure as a Name, up to $188,000 beyond an initial loss of
25,000 pounds. This is in substance reinsurance from a third
source against the risk of actual liability.
(c) A reasonable estimate of the potential loss for Judge
Breyer is approximately $114,000, well within the insurance
coverage described above. However, there is a theoretical
possibility that his losses could exceed that estimate.
(d) The Merrett 418 syndicate normally would have closed at
the end of 1987. It remains open because of outstanding
liabilities to the syndicate that were not later adopted by
other syndicates. These outstanding liabilities include
environmental pollution and asbestos liability.
4. I am advised that Judge Breyer as judge participated in
a number of cases that one way or another involved the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), commonly known as the Superfund
statute. None of these cases involved Lloyd's as a party or
by name in any respect. None appear to have involved issues
that would have material or predictable impact on general
legal obligations under the Superfund legislation. Most of
the cases are fact-specific and all involve secondary or
procedural issues. I have assumed that the description of
these cases in the attached list is fair and accurate.
5. In my opinion, Judge Breyer's participation in the
foregoing cases did not entail a violation of judicial
ethics. None of the cases involved Lloyd's as a party or as
having an interest disclosed in the litigation. None could
have had a material effect on Judge Breyer's financial
interests. None had a connection direct enough with Judge
Breyer as to create a basis on which his impartiality might
reasonably be questioned, as that term is used in Section 455
and in the Code of Judicial Ethics.
6. There is a close analogy between the kind of investment
as a Name and an investment in a mutual fund. A mutual fund
is an investment that holds the securities of operating
business enterprises. Ownership in a mutual fund is
specifically excluded as a basis for imputed bias under
Section 455 and the Code of Judicial Ethics. This exclusion
was provided deliberately, in order to permit judges to have
investments that could avoid the inflation risk inherent in
owning Government bonds and other fixed income securities but
without entailing direct ownership in business enterprises. A
Names investment is similarly an undertaking in a venture
that in turn invests in the risks attending business
enterprise. Just a ownership in a mutual fund is not
ownership in the securities held by the fund, so, in my
opinion, is investment as a Name not an assumption of direct
involvement in the risks covered by the particular Lloyd's
syndicate.
7. In my opinion it could be regarded as imprudent for a
judge to invest as a Lloyd's Name, notwithstanding that no
violation of judicial ethics is involved. The business of
insurance is complex, sometimes controversial, and widely the
subject of public concern and suspicion. The insurance
industry is highly regulated and insurance company liability
often entails issues of public importance. In my opinion it
was therefore appropriate for Judge Breyer to have withdrawn
from that kind of investment so far as he could legally do
so, simply to avoid any question about the matter. That said,
I see nothing in his conduct that involves ethical
impropriety.
Very truly yours,
Geoffrey C. Hazard, Jr.
____
Judge Breyer's ``CERCLA'' (Superfund Statute) Cases
Judge Breyer has participated in eight cases involving the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), the Superfund statute. None involved
Lloyds as a party or by name in any other respect. Moreover,
none involved the kind of issue that would have a direct or
predictable impact on the insurance industry's Superfund
obligations, much less on Lloyd's itself.
The cases address a variety of matters. Most are highly
fact-specific. Included among them are decisions that enforce
an EPA penalty against a chemical company; apply the judicial
doctrine of res judicata (which bars relitigation of the same
matter); and confirm the federal government's sovereign
immunity from state requests for civil penalties on CERCLA
claims.
A summary of the cases is attached.
1. Waterville Industries, Inc. v. Finance Authority of
Maine, 984 F.2d 540 (1st Cir. 1993). The issue in this case
was the ``security interest exception'' in CERCLA, which
exempts from the statute's definition of ``owner'' a ``person
who, without participating in the management of a vessel or
facility, holds indicia of ownership primarily to protect his
security interest in the vessel or facility.'' In an opinion
by Judge Boudin, joined by Judge Breyer, the court
interpreted the provision and unanimously agreed with the
Finance Authority of Maine that it met the requirements of
the provision.
Particularly because there is no reason to think that a
lender, a borrower, or a property owner is more or less
likely to have insurance, the case does not present the kind
of issue that would have a direct or predictable impact on
the insurance industry's Superfund obligation.
2. State of Maine v. Dept. of Navy, 973 F.2d 1007 (1st Cir.
1992). In this case, the state of Maine sued the United
States Navy because one of the Navy's shipyards had not
complied with Maine's federally-approved hazardous waste
laws. The only CERCLA-related issue was whether the CERCLA
statute waives the federal government's traditional sovereign
immunity against suits by states for civil penalties. Judge
Breyer's opinion held that the CERCLA statute does not waive
the federal government's sovereign immunity.
3. Reardon v. United States, 947 F.2d 1509 (1st Cir. 1991)
(en banc). The issue in this case was whether landowners are
entitled to notice and an opportunity to be heard before the
EPA is allowed to place a lien on their property. In an
opinion by Judge Torruella, joined by Judge Breyer, the First
Circuit applied a recent Supreme Court precedent, which had
found a Connecticut attachment lien statute violated due
process. The First Circuit held that CERCLA's lien provision
had a similar flaw.
The case thus gives people the right to notice and an
opportunity to be heard before a lien is put on their
property. It concerns the timing of procedures, and in no way
eliminates, lessens, or affects the liability of landowners
who are responsible for clean-up costs.
4. All Regions Chemical Labs v. EPA, 932 F.2d 73 (1st Cir.
1991). In this case, Judge Breyer's opinion upheld the EPA's
imposition of a $20,000 penalty against a chemical company
that failed to notify the EPA immediately about the release
of hazardous substances from its property.
In this highly fact-specific case, the decision upholds the
EPA's penalty, over the private company's objection.
5. Johnson v. SCA Disposal Services of New England, 931 F.
2d 970 (1st Cir. 1991). Judge Brown's opinion, joined by
Judge Breyer, applies the judicial doctrine of res judicata,
which prohibits relitigation of the same matter. It does not
address CERCLA or Superfund issues.
6. United States v. Kayser-Roth, 910 F. 2d 24 (1st Cir.
1990). In an opinion by Judge Bownes, joined by Judge Breyer,
the court agreed with EPA that a parent company could be
found to be an ``operator'' liable for clean-up costs even if
the site was nominally run by a subsidiary. The court also
agreed with the EPA that the trial court properly found that
the parent company was an ``operator'' in this case.
The decision does not present the kind of issue that would
have a direct or predictable impact on the insurance
industry's Superfund obligations. (In many CERCLA cases,
there are numerous private parties with conflicting
allocation claims, and imposing liability on parent
corporations might have different effects on different
insurers at different times).
7. United States v. Ottati & Goss, 900 F. 2d 429 (1st Cir.
1990). In this decision by Judge Breyer, the court agreed
with the district court that, when EPA requests a preliminary
injunction under a particular CERCLA provision, the district
court has discretion and is not, contrary to EPA's
submission, obliged to defer to EPA's request for an
injunction unless it is ``arbitrary or capricious.'' The
First Circuit emphasized that ``to read the statute in this
way does not significantly handicap EPA'' because the agency
may receive full administrative deference at a subsequent
stage of the proceedings. The Court of Appeals also reviewed
the district court's factual findings, agreed with EPA that
the district court should further consider one matter, and
found that the district court's other findings were supported
by the record. The court also ruled on various miscellaneous
issues, including one in which it agreed with EPA that the
district court should further consider whether EPA should be
entitled to recover certain costs.
None of the holdings in the case presents the kind of issue
that would have a direct or predictable impact on the
insurance industry's Superfund obligations. The standard for
district court consideration of requests for preliminary
injunctive relief concerns only district court discretion at
a preliminary stage of the proceedings. The factual issues,
moreover, are highly case-specific and dependent on the
record in the particular case.
8. Dedham Water Co. v. Continental Farms Diary, 889 F. 2d
1146 (1st Cir. 1989). In this opinion by Judge Bownes, the
First Circuit agreed with other courts that a plaintiff need
show only that a defendant's release of hazardous wastes
caused it to incur response costs, not that the wastes
actually contaminated the plaintiff's property. Particularly
because either side in such a dispute might have insurance,
the case does not present the kind of issue that would have a
material or predictable impact on the insurance industry's
Superfund obligations. (A subsequent opinion in the case
specified that a new trial was required. Judge Breyer
dissented, arguing that the district court should have
discretion to further consider the matter. The issue was
unrelated to CERCLA or Superfund. In re Dedham Water Co., 901
F. 2d 3 (1st Cir. 1990)).
____
Lewis and Roca Lawyers,
July 12, 1994.
Lloyd N. Cutler, Esq.
Counsel to the President, The White House Counsel's Office,
Washington, DC.
Re Judge Stephen G. Breyer.
Dear Mr. Cutler: In connection with the pending hearings on
Judge Stephen G. Breyer for the Supreme Court, I submit the
attached statement requested by you on a problem of
disqualification of judges.
Yours very truly,
John P. Frank.
____
Judge Stephen G. Breyer Disqualification Matter
i. identification--john p. frank
Mr. Frank is a partner at the law firm of Lewis and Roca,
Phoenix, Arizona, who has been heavily involved in
disqualification matters over the decades. He is the author
of the seminal article on that subject in the 1947 Yale Law
Journal. He was subpoenaed by the Senate Judiciary Committee
to testify as an exert on disqualification in connection with
the nomination of Judge Haynesworth to the Supreme Court in
1969. In the aftermath of that episode, the Congress took to
rewrite the Disqualification Act, creating the present
statute, 28 U.S.C. Sec. 455. Simultaneously, a commission
under the chairmanship of Chief Justice Roger Traynor of
California for the American Bar Association was rewriting its
canon of judicial ethics. Mr. Frank became, informally,
Senate representative in negotiations with the ABA Traynor
Commission to achieve both a canon and a new statute which
would be nearly the same as possible. Senator Bayh and Mr.
Frank appeared before the Traynor Commission. Mr. Frank
worked out a mutually satisfactory canon/bill with Professor
Wayne Thode of Utah, reporter for the Traynor Commission. The
canon was then adopted by the Traynor Commission and
essentially put into bill form by Senators Bayh and Hollings.
Major witnesses for the bill on the Senate side were Senators
Bayh and Hollings, and Mr. Frank. On the House side, Judge
Traynor and Mr. Frank jointly lobbied the measure through.
Mr. Frank is intimately acquainted with the legislative
history and well acquainted with subsequent developments.
The foregoing outline is my final conclusion on this
subject. I am aided not merely by numerous attorneys in my
own office, but also by Gary Fontana, a leading California
insurance law specialist of the firm of Thelan, Marrin,
Johnson & Bridges of San Francisco.
ii. issue
In his capacity as an investor, Judge Stephen G. Breyer has
been a ``Name'' on various Lloyds syndicates up to a maximum
of 15 at any one time over an 11-year period from 1978
through 1988. This means, essentially, that he is one of a
number of investors who have put their credit behind the
syndicate to guarantee that claims arising under certain
insurance policies directly written or reinsured by the
syndicates are paid. If the premiums on the policies and
the related investment income outrun the losses, expenses
and reinsurance, there is payment to the Names. If there
is a shortfall, the Names must make up the difference. For
an extensive description of the Lloyds system, see ``Guide
to the London Insurance Market'' BNA 1988, and
particularly chapter 3 on underwriting syndicates and
agencies. As the full text shows, this is a highly
regulated enterprise, a matter of consequence in relation
to views of Chief Justice Traynor expressed below.
The syndicates commonly reinsure North American companies
against a vast number of hazards. Among these probably are
certain hazards arising in connection with pollution which
may relate to the ``superfund,'' a financing mechanism of the
United States for pollution clean-up. A question has been
raised as to whether, in any of the various cases in which
Judge Breyer has sat involving pollution, he may have been
disqualified. The identical question could arise in
connection with any number of other cases in which Judge
Breyer has sat because the syndicates have infinitely more
coverage than pollution. The selectivity of the current
interest is probably due to nothing but the colorful nature
of pollution or the failure of some inquiring reporter to see
the problem whole.
A very significant factor is that the Lloyds syndicates are
not merely insurers or re-insurers. They are also investment
companies and much of their revenue comes from investments in
securities.
iii. answer
Should Judge Breyer have disqualified in any pollution
cases in which he participated because of his Name status?
Answer: No.
iv. disqualification standards as applied to this situation
A. Party disqualification
Under the statute, if a judge has an interest in a party,
no matter how small, he must disqualify. Knowledge is
immaterial; a judge is expressly required to have such
knowledge so that he can meet this responsibility. Since the
statute, judges have had to narrow their portfolios; ``I
didn't know'' is not even relevant.
We may put this strict criteria of disqualification aside
because neither Lloyds nor any of the syndicates is a party
to any of these cases. This is of vital importance because
this is the one strict liability disqualification
criterion in this situation.
B. The common fund exception
Congress in Sec. 455 did not mean to preclude judges from
investing; this was fully recognized both in Sec. 455 and the
canons; H.R. Rep. No. 1453, 93d Cong., 1st Sess. at 7 (Oct.
9, 1974). Judges have a range of income expectations and an
investment is quite appropriate. Investment is restricted
only where it would lead to needless perils of
disqualification.
In that spirit, Sec. 455(d)(4)(i) recognizes that judges
may invest in funds which are themselves investment funds and
while the judge cannot sit in any case which involves the
fund, he is exempted from a duty of disqualification in
matters involving securities of the fund unless he
participates in the management of the fund, Sen. Hrg. 1973 at
97, which Judge Breyer did not do. ``Investments in such
funds should be available to a judge,'' id. This section was
intended to create ``a way for judges to hold securities
without needing to make fine calculations of the effect of a
given suit on their wealth,'' New York Develop. Corp. v.
Hart, 796 F.2d 976, 980 (7th Cir. 1986). As Chief Justice
Traynor said of this exception, it is `'because of the
impossibility of keeping track of the portfolio of such a
fund,'' Sen. Hrg. 1973, House of Rep. Subcomm. Jud. Com. on
S. 1064, May 24, 1974 (hereafter H.R. Hrg. 1974), p. 16.
The relevant section is as follows:
``(i) Ownership is a mutual or common investment fund that
holds securities is not a `financial interest' in such
securities unless the judge participates in the management of
the fund;''
1. A large Lloyds syndicate is a ``common investment
fund.'' There is a definition in Reg. Sec. 280.132 of
``common trust fund,'' which is a particular type of bank
security specifically exempted from the Securities Act of
1933 pursuant to Section 3(a)(2). The only useful portion of
that definition is ``maintained exclusively for the
collective investment and reinvestment of monies contributed
thereto by one or more [bank] members . . .'' A ``common
enterprise'' is one of the four elements of an ``investment
contract'' as set forth in the Howey case:
``[A]n investment contract for purposes of the Securities
Act means a contract, transaction or scheme whereby a
person [1] invests his money, [2] in a common enterprise,
and [3] is led to expect profits, [4] solely from the
efforts of a promoter or third party. . . .''
SEC v. W.J. Howey Co., 328 U.S. 293, 298 (1946). The common
enterprise requirement is usually satisfied by a number of
investors who have a similar stake in the profitability of
the venture.
2. While the precise form of common fund involved here was
not contemplated in the statute, functionally a Lloyds
investment is the same as any other common fund investment.
It is an investment in a common fund in which the judge has
no practical way of knowing on what he may make a return.
V. The Non-Party Exception Criteria
Under Sec. 455(d)(4), ``financial interest'' covers
``ownership of a legal or equitable interest, however small''
and then moves on to an additional thing, ``or a relationship
as director, advisor, or other active participant in the
affairs of a party.'' This, too, is under the ``however
small'' criterion, Sen. Hrg. 1973 at 115. This disqualifies
the judge if he is a creditor, debtor, or supplier of a party
if he will be affected by the result; but this only applies
to a party, id. 115. A different standard is applied under
Sec. 455(d)(4)(iii) to any ``proprietary interest'' similar
to mutual insurance or mutual savings. Here the disqualifying
interest must be ``substantial''; the ``however small''
standard is inapplicable. There is more latitude here than in
the other relationships and these can be usefully described
as the ``non-party'' involvement of the judge. I have
elaborated on this topic in Commentary, 1972 Utah Law Review
Sec. 77, which has reflected the views of Professor Thode of
the Utah Law School, reporter on the canon, and which is
referenced in the legislative history of Sec. 455, Sen. Hrg.
1973 at 113.
This covers the relationship of the judge not in terms of
his direct financial interest in a party (as to which his
disqualification is absolute and unawareness is not relevant)
but rather covers non-party interest. For classic
illustration, if the home of a judge is in an irrigation
district and if he is passing on the validity of the charter
of the irrigation district itself, the answer to
that question may affect the value of this home. As owner,
he is not at all a party to the case and he has no
financial interest in the irrigation company, but he is
affected. The distinction in these non-party cases is that
here the interest, instead of being measured by the
``however small'' criteria must be ``substantial'' and
also in converse to the direct financial interest, must be
knowing. Statement of Prof. E. Wayne Thode, Hearing,
Subcomm. Sen. Jud. Com. on S. 1064, July 14 and May 17,
1978 (hereafter Sen. Hrg. 1978), pp. 95, 97, 108, and the
illustration given is shareholder a domestic bank where
decision concerning another bank will have ``substantial
in effect on the value of all banks.'' For a comprehensive
discussion of the ``direct and substantial'' approach to
nonparty interests, see Sollenbarger v. Mt. States Tel. &
Tel. Co., 706 F. Supp. 780-81 (D.N.M. 1989).
If ``a judge owns stock of a company in the same industry
as one of the parties to the case,'' he is not
``substantially affected'' by the outcome and is not
disqualified, as the Fifth Circuit held in In re Placid Oil
Co., 802 F.2d 783 (5th Cir. 1986), reh'g den., 805 F.2d 1030
(5th Cir. 1986). The judge in Placid Oil owned stock in a
bank and was not disqualified from hearing a case that could
affect the banking industry.
In Chitimacha Tribe of Louisiana v. Harry L. Laws Co., 690
F.2d 1157, 1166 (5th Cir. 1982), cert. den., 464 U.S. 814
(1983), and Ogala Sioux Tribe v. Homestake Min. Co., 722 F.2d
1407, 1414 (8th Cir. 1983), cert. den., 455 U.S. 907 (1982)
both judges' interests in land adjoining the land in
litigation was held not to be a disqualifying interest. The
parties seeking disqualification in both cases argued that
all land within the territory would be directly affected by
the outcome of the litigation, which was a title dispute.
That argument was rejected in both cases because the
disposition of the litigation would not affect the judges'
title in any way.
A rare case involving insurance in a disqualification
controversy is Weingart v. Allen & O'Hara, Inc., 654 F.2d
1096, 1107 (5th Cir. 1981). The judge in Weingart owned three
life insurance policies, ``representing mutual ownership'' in
a corporation which wholly owned the defendant corporations.
Based in part on Advisory Committee Opinion No. 62, that a
judge insured by a mutual insurance company is not
disqualified to hear cases involving that company unless he
was also a stockholder, the court held ``the judge's mere
ownership of three life insurance policies, representing
mutual ownership, in the parent corporation of a party to the
suit does not demonstrate that the outcome of the proceeding
could have substantially affected the value of the ownership
interest.'' Id. at 1107.
In Department of Energy v. Brimmer, 673 F.2d 1287 (Temp.
Emerg. Ct. of Apps. 1982) the court held a judge hearing a
case involving an Entitlement Program, who had stock
ownership in other Entitlement Programs, was not
disqualified. In reaching this conclusion the court used a
two step analysis; 1) did the judge have a financial interest
in the subject matter in controversy, and, if not, 2) did the
judge have some other interest that could be substantially
affected by the outcome of the litigation.
The court held the judge did not have a financial interest
in the subject matter of the litigation, with a brief
analysis:
``The use of the term ``subject matter'' suggests that this
provision of the statute will be most significant in in rem
proceedings. See E. Wayne Thode, Reporters Notes to A.B.A.
Code of Judicial Conduct, 56 (1973). We hold that the judge
does not have a direct economic or financial interest in the
outcome of the case, and thus could hear it without
contravening the constitutional due process.''
Here is where Judge Breyer drops completely out of the
disqualification circle. In the financial relationship of any
of his cases to the totality of his dividend potential, his
Name is utterly trivial and, in any case, he not only does
not know that a litigant is insured with the syndicates but,
realistically, has no practical way of finding out. As the
legislative history clearly shows, it is intended in these
situations, generally speaking, that for a judge not to be
kept currently informed is an affirmative virtue, or else the
persons controlling the investments, as in a common fund
situation, would have the power to disqualify a judge by
making an investment and forcing the knowledge on the judge.
This was deliberately considered in the legislative history
as a hazard and was guarded against. An opinion, closely
analogous, shared by several district judges, is whether
Alaskan district judges must disqualify in cases claiming
``amounts for the Alaska Permanent Fund, from which dividends
can flow to, among others, district judges. Held, no
disqualification; the amounts are too remote and speculative,
Exxon Corp. v. Heinze, 792 F. Supp. 77 (D. Ala. 1992). For
perhaps the leading case that a judge should not disqualify
for a contingent interest where he is not a party but,
speculatively, might get a small dividend some day, see In re
Va. Elec. Power Co., 539 F.2d 357 (4th Cir. 1976).
vi. appearance of impropriety
This leaves the generalized provision of Sec. 455(a) that a
judge shall disqualify where ``his impartiality might
reasonably be questioned.'' This is commonly caught up in the
phrase which has a long history, pre-Sec. 455 ABA and U.S.
Supreme Court opinions. The amorphous quality of the phase
makes it hard to deal with decisively. However, the phrase
has gained technical meaning in both the legislative
history and the cases; categorically it does not mean that
pointing a finger and expressing dismay is enough.
Moreover, when, as developed above, certain types of
investment are expressly allowed under the statute, it
will be difficult to make them ``improper.''
The 1974 Act eliminated the ``duty to sit,'' permitting the
judge to disqualify where his impartiality may reasonably be
questioned. Both Justice Traynor and Mr. Frank advised the
Senate committee that this disqualification was to be
determined by ``what the traditions and practice have been,''
Sen. Hrg. 1973 at 15. These do not authorize disqualification
for ``remote, contingent, or speculative interest,'' or
``indirect and attenuated interest''; In re Drexel Burnham
Lambert Inc., 861 F.2d 1307, reh'g den, 869 F.2d 116, cert.
den. 490 U.S. 1102 (1988); TV Communications Network, Inc. v.
ESPN, Inc., 767 F. Supp. 1077 (D. Colo. 1991).
It is here that the common fund exception has great bearing
by analogy. Such an investment involves the same factors
which motivated the common fund exception. That is to say,
the statutes mean to preserve the right of judges to invest
and clearly except from the rigorous disqualification
standards investments in common funds where the judge has no
effective way of knowing precisely what interests may be
within the scope of the investments. Functionally an
investment in Lloyds is the same as an investment in any
common fund with general holdings. In these circumstances,
there cannot be an ``appearance of impropriety'' in an
investment which is just the same, functionally, as those
expressly protected.
VII. The Disqualification Claim, If Accepted, Would Produce
Unreasonable and Unintended Results
As noted in the preliminary observations to this
memorandum, the concern here is grossly excessive. The
syndicates have a broad reach. The returns to the Names could
be affected by numerous other matters besides pollution
claims. For a comprehensive discussion of the proposition
that there is no ground for disqualification because a case
may affect general rules of law, see New York City Develop.
Corp. v. Hart, 796 F.2d 976, 979 (7th Cir. 1986) (``Almost
every judge will have some remote interest of this sort.'')
Almost any case relating to the business community could
relate to Lloyds in some remote way, and any number of cases
can relate to other reaches of the business community. Even
the criminal cases, in at least some instances, can have
significant business fallout, as for example, the RICO cases.
To say that Judge Breyer should have recused himself from all
pollution cases would logically be to say that judges should
not invest in a business generally.
I reiterate that neither the canon nor Sec. 455 meant to
preclude investment by judges. The focus on the pollution
cases is excessively sharp because, if there were
disqualification here, there would necessarily be
disqualification as to too many other aspects of investment.
This would defeat the purpose of the canons and the statute.
VIII. conclusion
Judge Breyer properly did not disqualify in the pollution
cases which came before him.
John P. Frank
____
Wiley, Rein & Fielding,
Washington, DC, July 11, 1994.
Lloyd Cutler, Esq.,
Counsel to the President, White House Counsel's Office,
Washington, DC.
Dear Mr. Cutler: You have asked us to evaluate whether any
case decided by Judge Stephen Breyer under the Comprehensive
Environmental Response, Compensation, and Liability Act
(``CERCLA''), 42 U.S.C. Sec. 9601 et seq., could have
substantially affected the financial interests of insurers.
We represent insurers extensively in connection with
insurance coverage matters arising under CERCLA. In addition
to representing individual insurers, we and our colleagues
represent the Insurance Environmental Litigation Association
(``IELA''), a trade group of 21 large property/casualty
insurers that appears as amicus curiae in numerous
environmental coverage cases at the appellate level.\1\ Mr.
Brunner has over a decade of direct experience in
representing the interests of insurers in disputes arising
under CERCLA. Ms. Sawtelle, in addition to representing
insurers, has an extensive background in CERCLA and
environmental matters generally, having served as an EPA
official (as Special Assistant to the Director, Office of
Solid Waste, from 1985 to 1987) with responsibility in this
area, and having represented numerous potentially responsible
parties (``PRPs'') in private practice since 1981. As a
consequence, we are able to provide you with a realistic
appraisal of the significance of CERCLA cases for insurers
generally and Lloyds of London syndicates specifically, based
on a great deal of experience evaluating CERCLA matters for
insurers and others.
---------------------------------------------------------------------------
Footnotes at end of article.
---------------------------------------------------------------------------
We have reviewed all eight cases in which Judge Breyer has
passed on CERCLA issues.\2\ In our opinion, none of these
cases had a material or predictable financial impact on
insurers generally or on Lloyds syndicates in particular. Any
consequences for insurers were highly speculative and
dependent on many independent intervening factors. Any
conceivable impact on the financial interests of insurers
from these cases resulted only from the court assuring that
PRPs received proper procedural protections, or that the
statute's provisions were applied properly before parties
were held liable for costs that might possibly be determined
to be insured by some insurer. None of the cases determined
the obligation of any insurer nor of any PRP for which an
insurer might be liable. In real world terms, Judge Breyer's
financial interest in these cases as a result of his status
as a Lloyd's investor was probably more attenuated than his
interest as a federal taxpayer in numerous cases involving
financial claims against the Federal Government. In both
circumstances, the interest is so diluted, so contingent and
so indirect as to be of no consequence.
Of the eight CERCLA cases on which Judge Breyer has sat,
four did not involve even potentially insurable interests of
PRPs. Maine v. Department of the Navy, 973 F.2d 1007 (1st
Cir. 1992), involved a claim for civil penalties sought by
Maine against the (uninsured) Federal Government. Similarly,
Reardon v. United States, 947 F.2d 1509 (1st Cir. 1991) (en
banc), involved the constitutionality of CERCLA's
procedures for attaching liens to real property and in no
way addresses the extent of financial liabilities under
CERCLA. All Regions Chemical Laboratories v. EPA, 932 F.23
73 (1st Cir. 1991), concerned the imposition of a civil
penalty on a chemical company for failure to report a
chemical release; such penalties clearly are uninsured. In
much the same vein, Johnson v. SCA Disposal Services,
Inc., 931 F.2d 970 (1st Cir. 1991), applied the doctrine
of res judicata, precluding relitigation of matters
already determined by a court, to a case that happened to
involve CERCLA claims but without any distinctive
precedential significance for CERCLA cases.
Only four cases on which Judge Breyer has sat have even
considered the rights or obligations of potentially insured
PRPs under CERCLA. In each instance, the significance for
insurers has been, at most, highly indirect. United States v.
Kayser-Roth Corp., 910 F.2d 24 (1st Cir. 1990), cert. denied,
498 U.S. 1084 (1991), addressing the potential liability of a
parent company for its subsidiary's waste disposal practices,
is likely irrelevant to insurers in most instances but, if
not, could be either ``good'' or ``bad'' for a particular
insurer, depending on the circumstances of the later case.
Indeed, the likelihood of a perceptible impact on insurers is
both speculative and remote.
Similarly, the potential impact on the insurance industry
of the issues in United States v. Ottati & Goss, Inc., 900
F.2d 429 (1st Cir. 1990), was de minimis. The case
principally involved whether a court must, in an injunctive
relief context, adopt any cleanup remedy selected by EPA
unless it found that selection to be arbitrary or capricious
or, alternately, whether it may itself decide what the remedy
should be. Judge Breyer, writing for the unanimous panel,
upheld the decision of the court below that the court may
fashion the remedy. This holding did not make any
determination of a PRP's obligations but merely prescribed
the procedure and degree of deference due to certain
preliminary EPA actions. There was only an attenuated impact
on PRPs and an even more attenuated connection to insurers.
Waterville Industries Inc. v. Finance Authority of Maine,
984 F.2d 540 (1st Cir. 1993), involved the application of
CERCLA's so-called ``secured creditor exemption.'' Judge
Breyer joined in the court's unanimous opinion holding
that this provision--which exempts from the class of
liable ``owners or operators'' those who, without
participating in the management of a contaminated
facility, hold indicia of ownership primarily to protect a
security interest--applied to a particular sale-and-
leaseback arrangement. The court's opinion, which was
consistent with a number of other courts' rulings, was
highly fact-specific and thus not likely to have a
material or predictable impact on the insurance industry.
Moreover, this dispute involved private parties only, each
of whom is no more likely than the other to have
insurance.
Finally, in Dedham Water Co. v. Cumberland Farms Dairy,
Inc., 889 F.2d 1146 (1st Cir. 1989), Judge Breyer joined in
the court's unanimous decision that CERCLA liability arises
when the release of hazardous substances from the defendant's
facility cause the plaintiff to incur response costs, rather
than when the releases cause contamination on the plaintiff's
property. This case did not present an issue that would have
a material impact on the insurance industry's CERCLA
obligations because in a wholly private dispute such as this,
either or both sides might have insurance. (In a subsequent
opinion in the Dedham case, Judge Breyer dissented from the
majority regarding whether a new trial was required; this
opinion was unrelated to the provisions of CERCLA, See In re
Dedham Water Co. (901 F.2d 3 (1st Cir, 1990.)
In sum, then, our review makes clear that no case in which
Judge Breyer participated had any substantial or predictable
effect on his interest as an investor in Lloyd's of London or
on the financial position of insurers generally.
Sincerely,
Thomas W. Brunner,
Susan D. Sawtelle.
footnotes
\1\The views expressed herein are our own and are not stated
on behalf of IELA or any other client of our law firm. We do
not represent any syndicate participating in Lloyds of
London.
\2\Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d
1146 (1st Cir. 1989); United States v. Ottati & Goss, Inc.,
900 F.2d 429 (1st Cir. 1990); United States v. Kayser-Roth
Corp., 910 F.2d 24 (1st Cir. 1990), cert., denied, 498 U.S.
1084 (1991); Johnson v. SCA Disposal Services, Inc., 931 F.2d
970 (1st Cir. 1991); All Regions Chem. Labs, Inc. v. United
States EPA, 932 F.2d 73 (1st Cir. 1991); Reardon v. United
States, 947 F.2d 1509 (1st Cir. 1991); Maine v. Department of
Navy, 973 F.2d 1007 (1st Cir. 1992); Waterville Indus. Inc.
v. Finance Auth, of Me., 984 F.2d 549 (1st Cir. 1993).
The Association of the Bar
of the City of New York,
New York, NY, July 8, 1994.
the association of the bar of the city of new york finds judge stephen
g. breyer qualified to be a justice of the supreme court
The Association of the Bar of the City of New York
announced today that it has concluded that Judge Stephen G.
Breyer is qualified to be a Justice of the United States
Supreme Court. The statement of the Association's Executive
Committee is attached.
____
Statement
the association of the bar of the city of new york finds judge stephen
g. breyer qualified to be a justice of the supreme court
The Association of the Bar of the City of New York has
concluded that Judge Stephen G. Breyer is qualified to be a
Justice of the United States Supreme Court, because he
possesses, to a substantial degree, all of the following
qualifications enumerated in the Guidelines established by
the Executive Committee for considering nominees to the
United States Supreme Court: exceptional legal ability;
extensive experience and knowledge in law; outstanding
intellectual and analytical talents; maturity of judgment;
unquestionable integrity and independence; a temperament
reflecting a willingness to search for a fair resolution of
each case before the Court; a sympathetic understanding of
the Court's role under the Constitution in the protection of
the personal rights of individuals; an appreciation for the
historic role of the Supreme Court as the final arbiter of
the meaning of the United States Constitution, including a
sensitivity to the respective powers and reciprocal
responsibilities of the Congress and Executive.
Because the Executive Committee Guidelines limit approval
to those of high distinction, the Guidelines do not provide
for gradations of ratings; qualified and unqualified are the
only ratings employed.
In reaching this conclusion, a subcommittee of the
Executive Committee read extensive materials, including all
of Judge Breyer's more than 500 written opinions as a judge
of the United States Court of Appeals for the First Circuit,
many of his articles, lectures and books, and numerous news
articles and commentaries appearing with respect to the
nomination. The subcommittee also conducted a number of
telephone interviews of former colleagues and law clerks of
Judge Breyer and attorneys who had appeared before him,
received and considered comments from the membership of the
Association, and interviewed Judge Breyer in person.
The Executive Committee also took account of recent reports
in the press which questioned whether Judge Breyer should
have recused himself in cases involving ``Superfund''
environmental liability under federal law, as a consequence
of his investments in Lloyd's of London syndicates and his
possible personal liability for underwriting losses. The
Executive Committee considered carefully the ``Superfund''
cases in which Judge Breyer has participated since 1987, none
of which involved insurance coverage issues, as well as the
available evidence concerning Judge Breyer's awareness of the
extent and nature of possible ``Superfund'' exposure by the
syndicates of which he was a member, and his ability to
evaluate the potential impact, if any, of his decisions in
``Superfund'' cases on his own financial interests.
Based on the applicable statutory standard for
disqualification of federal judges (28 U.S.C. Sec. 455) and
the evidence currently available prior to the Senate
confirmation process, the Executive Committee found no reason
to depart from its conclusions as to Judge Breyer's judgment,
integrity and independence by virtue of the fact that he did
not recuse himself in the ``Superfund'' cases.
The Association acted on the nomination under a policy that
directs the Executive Committee to evaluate all candidates
for appointment to the Supreme Court.
____
Exhibit 1
Addition to Floor Remarks of Senator Biden
In Patterson v. McLean Credit Union, 491 U.S. 164 (1989),
the Supreme Court was faced with the question whether a civil
rights statute, Section 1981, passed in the aftermath of the
Civil War protected workers from racial harassment on the
job.
This statute guaranteed to all persons within the United
States ``the same right * * * to make and enforce contracts *
* * as is enjoyed by white citizens. The Court, by a narrow
5-4 majority, agreed that this law prohibited racial
discrimination in hiring--but that it did not prohibit racial
discrimination that occurs after a contract is made--that is,
after a person is hired.
This conclusion meant that this statute did not protect
employees on the job from being insulted because of their
race, from being given demeaning work solely because of their
race, or even from being fired because of their race.
Justice Brennan, whose powerful dissent was joined by three
justices, had this to say about the majority's reasoning:
``What the Court declines to snatch away with one hand, it
takes with the other. Though the Court today reaffirms
Sec. 1981's applicability to private conduct, it
simultaneously gives this landmark civil rights statute a
needlessly cramped interpretation. The Court has to strain
hard to justify this choice to confine Sec. 1981 within the
narrowest possible scope, selecting the most pinched reading
of the phrase `same right to make a contract,' ignoring
powerful historical evidence about the Reconstruction
Congress' concerns, and bolstering its parsimonious rendering
by reference to a statute enacted nearly a century after
Sec. 1981, and plainly not intended to affect its reach. When
it comes to deciding whether a civil rights statute should be
construed to further our Nation's commitment to the
eradication of racial discrimination, the Court adopts a
formalistic method of interpretation antithetical to
Congress' vision of a society in which contractual
opportunities are equal. I dissent from the Court's holding
that Sec. 1981 does not encompass Patterson's racial
harassment claim.''--491 U.S. at 189.
Mr. GORTON. I quote Alexander Hamilton:
The person ultimately appointed must be the object of his
preference, though perhaps not in the first degree. It is
also not very probable that his nomination would be
overruled. The Senate could not be tempted by the preference
they might feel to another to reject the one proposed;
because they could not be tempted by the preference they
might feel to another to reject the one proposed; because
they could not assure themselves that the person they might
wish would be brought forward by a second or by any
subsequent nomination.
Mr. President, this explanation of the role of the Senate in the
confirmation process was eloquently described by Alexander Hamilton in
Federalist Paper No. 76. The words of our Founding Fathers are just as
relevant today as they were 200 years ago when they empowered the
President in article II, section 2 of the U.S. Constitution to nominate
``with the Advice and Consent of the Senate, * * * Ambassadors, other
public Ministers and Consuls, Judges of the Supreme Court, and all
other officers of the United States * * *.''
Both the Constitution and the Federalist Papers which were written to
advocate and explain the provisions of the Constitution clearly express
a deference to the President's choice of his administration. The
Senate's check is intended to be used only in special circumstances
and, as Hamilton wrote, ``to be an efficacious source of stability in
the administration.''
Although some may call it old-fashioned or conservative, I respect
this deference to the President that our Framers clearly intended. I
have done so even when President Clinton has sent nominations to the
Senate with whose philosophies I do not completely agree. On several
occasions, however, I have opposed a nominee based on past actions by
that nominee which illustrate a clear political agenda that is
intolerant of conflicting viewpoints and which reject fundamental
principles found in our Constitution. Other nominees whom I opposed
were simply incompetent to fulfill the responsibilities of the office
to which they were nominated.
The nomination of Judge Stephen Breyer to become an Associate Justice
of the Supreme Court of the United States does not in my view, fall
into one of the exceptions. Although he would not have been my
selection to sit on the Court, he is obviously a highly qualified,
well-regarded, and competent jurist who has proven his respect for and
obedience to the Constitution. He and I disagree on his past decisions
on the separation of church and state. That disagreement, however,
matched by other areas in which we agree, does not compel me to reject
this nominee whom the President certainly would replace with a less
suitable nominee.
While it is impossible to predict the actions taken after a Justice
is confirmed to the bench, there is reason for conservatives to be
optimistic that Judge Breyer will show more judicial restraint than has
his predecessor. As conservative constitutional scholar Bruce Fein
recently wrote in his syndicated column:
In stark contrast to Justice Blackmun, Judge Breyer
displays no quixotic impulses to employ judicial power in a
utopian quest to correct or ameliorate all social ills. It
speaks volumes on that score that Judge Breyer concurred with
Holmes' admonition to Judge Learned Hand that the overriding
judicial imperative is not to do justice, but to play the
game according to the rules.
In conclusion, I refer again to the helpful words of Alexander
Hamilton in Federalist Paper No. 76. Despite some philosophical
differences with Judge Breyer, as I have stated, that in itself is not
sufficient reason to oppose his nomination. I shall vote to confirm.
Mr. HATFIELD. Mr. President; I would like to take this opportunity to
express why I will vote in favor of the nomination of Judge Stephen
Breyer to be the next Associate Justice of the U.S. Supreme Court.
The advice-and-consent role of the Senate is something that we do not
take lightly because this is the only opportunity for the people of
this Nation to express whether or not they deem a nominee qualified to
set on the highest court in the land. After carefully scrutinizing
every aspect of Judge Breyer's personal and professional life, the
Judiciary Committee unanimously agreed that he is an ethical and
extremely well qualified candidate for this position. Matters involving
his financial investments were thoroughly investigated and determined
by experts to represent no conflicts of interest. Throughout the
hearings on this nomination, Judge Breyer demonstrated the
intelligence, integrity, and fairness necessary to excel in this
position. The Court will benefit from his intellect, from his unique
points of view, and from the strength with which he holds those views.
As with every nomination, I do not agree with all positions that
Judge Breyer has taken or will take during his years as a judge.
However, he has formed views on the economics of regulatory burdens
that I find intriguing in light of the burdens that Western States face
from natural resource regulation. In addition, Judge Breyer has
demonstrated an even-handed approach to controversial areas involving
freedom of religion, property rights, and civil rights.
In some areas of law, including the law involving abortion, I
disagree with Judge Breyer's opinions. He has indicated cautious
support for current decisions regarding abortion rights, which I view
as misguided. In addition, he stated that constitutional questions
surrounding the death penalty are settled law, and that he has no
personal opinion on the matter. It is disturbing to me that someone who
will be deciding the fate of human lives has no personal opinion for or
against State-sponsored killing. However, I have never made it a
practice to decide the fitness of a judge to serve on the bench based
upon one or two opinions that he either does or does not share with me.
I am confident that Judge Breyer will keep an open mind on these issues
and demonstrate the judicial temperament that he has shown in his
career so far.
The diverse background of Judge Breyer speaks very well for his
ability to take on this challenge. He is the highly regarded chief
judge of the First U.S. Circuit Court of Appeals, and has a reputation
as working well with others and searching for common ground on tough
issues. He attended Stanford and Oxford Universities, and graduated
from Harvard Law School. In addition, Stephen Breyer has accumulated a
variety of other legal experiences over the years including service as
a law clerk to Supreme Court Justice Goldberg, working in the Justice
Department's antitrust division, serving on the U.S. Sentencing
Commission, and serving as chief counsel to the U.S. Senate Judiciary
Committee. I am pleased to note that, as with Justice Ginsburg before
him, this nominee has been committed to teaching and education for many
years. Judge Breyer joined the faculty of the Harvard Law School in
1967 and has continued to teach even after becoming a judge.
These varied legal and educational experiences give Judge Breyer a
depth of understanding not only of the law, but of how it relates to
each of the three branches of government. These experiences combined
with his respect for the Constitution and his fair-minded approach to
issues should serve the country well as Judge Breyer takes his place on
the Supreme Court of the United States.
Mr. PRESSLER. Mr. President, I rise today to speak briefly on the
nomination of Chief Judge Stephen Breyer to be Associate Justice of the
U.S. Supreme Court. Of my colleagues, I believe I am in the unique
position of being the only former law student of Stephen Breyer when he
was a professor at Harvard Law School. I am pleased to support my
former law school professor for a position on the High Court.
Coincidentally, the class I took from him years ago dealt with Indian
law primarily, the same issue I questioned Judge Breyer about during
his confirmation hearings. Many of the cases we studied in that law
class years ago retain their significance and precedence to this day.
The class discussed the ``Cherokee Cases''--perhaps the two most
influential decisions in all of Indian law. In Cherokee Nation v.
Georgia, 30 U.S. (5 Pet.) 1 (1831), Chief Justice Marshall, writing for
the Court, determined that the Cherokee tribe was a ``state,''
``capable of managing its own affairs and governing itself.'' Marshall
went on to characterize the tribes, in a famous phrase, as ``domestic
dependent nations.''
The following year, the Court held in Worcester v. Georgia, 31 U.S.
(6 Pet.) 515 (1832), that the laws of Georgia had no force within the
boundaries of the Cherokee nation. At the time, this ruling virtually
excluded the States from exercising jurisdiction over Indian affairs,
and is said by some to have caused President Andrew Jackson to declare,
``John Marshall has made his decision; now let him enforce it.''
Jurisdictional problems regarding Indian lands are very much with us
today. Indian law cases are certain to come before the Court in the
near future. I have confidence Judge Breyer will approach these cases
with the dedication and respect for the law which he has so ably
demonstrated in the past.
Mr. President, though I will vote to confirm Judge Breyer, my vote
does not imply that I do so without reservation. Judge Breyer has been
a Federal appeals court judge for 14 years and during that time has
authored or joined many, many opinions. Certainly, I do not agree with
all of his opinions and views.
Take, for example, his 1989 ruling in New Life Baptist Church Academy
versus Town of East Longmeadow, regarding the free exercise clause of
the Constitution. Judge Breyer held that local school boards could
enforce a State law that requires ``approval'' of a religious school's
secular program. In recent weeks, I have heard from constituents
concerned that this case indicates the nominee's beliefs that it would
be constitutional for a State government to ban home schooling. Judge
Breyer's ruling also raises questions about the extent of a local
school board's ability to approve or disapprove of a private school's
secular program and whether, when making such an approval, a local
school board must use clearly articulated, objective standards.
Despite this concern, however, I take comfort from Judge Breyer's
remarks concerning this case during the confirmation hearings. He
recognized that,
[t]here is nothing more important to a person or to that
person's family than a religious principle, and there is
nothing more important to a family that has those principles
than to be able to pass those principles and beliefs on to
the next generation.
I certainly share this view. Judge Breyer further stated that he
understood the strong protections Congress intended to give to
religious liberty under the Religious Freedom Restoration Act, passed
by the Congress last year. These remarks give me hope that, if
confirmed, Judge Breyer will not further erode the right of citizens to
school their children at home or at a private school.
Notwithstanding the reservations I have mentioned, I remain confident
that Judge Breyer will be a fair and very able Justice of the Supreme
Court. I wish him well.
Mr. DODD. Mr. President, I rise to express my strong support for the
nomination of Judge Stephen Breyer to the U.S. Supreme Court. He has
already distinguished himself as a first-rate jurist, and I am
confident that he will be an extraordinary Justice.
This Nation was founded on the rule of law, and the Supreme Court of
the United States is our highest embodiment of that principle. Those
who we appoint to this court are therefore more than judges. They are
guardians of a sacred idea, the idea that our Nation is one where the
law will prevail.
Stephen Breyer is uniquely qualified to serve as a guardian of this
idea. He has dedicated his life to making the law work for people, to
making the courts accessible to American citizens, and to preserving
constitutional rights.
Judge Breyer has worked in all three branches of Government and has
distinguished himself in each. As an attorney with the Justice
Department's antitrust division, he successfully argued that an
agreement not to show property in white neighborhoods to African-
American buyers could be challenged as an antitrust violation. As chief
counsel to the Senate Judiciary Committee, he helped forge a consensus
among business and consumer groups to deregulate the airline industry.
And finally as a judge, Stephen Breyer has brought a commonsense,
reasoned approach to the cases he has handled. A survey of his major
opinions resembles a tour through the pillars of American
jurisprudence: the imperative of free speech, the rights of religious
minorities, the injustice of discrimination, a balance between the
rights of the accused and the needs of law enforcement.
Stephen Breyer has also gone beyond the confines of his judicial
robes and has brought his good judgment and keen intellect to other
tasks. He was a charter member of the U.S. Sentencing Commission, which
established fair and uniform punishment guidelines for criminals. He
has also taught at Harvard Law School since 1967, where he has
contributed to our scholarly understanding of the law and has inspired
scores of future lawyers.
Given his sterling reputation and considerable accomplishments, it is
unsurprising that Judge Breyer has drawn such wide praise from all
across the political spectrum. As Kenneth W. Starr, Solictor General
under President Bush, has said,
Judge Breyer is universally admired among his judicial
colleagues throughout the country as a judge of high
abilities and unshakable integrity. With his intellect,
wisdom, and energy, he will prove to be, I am confident, one
of the great Justices of this century.
I share Mr. Starr's assessment, and I urge my colleagues to vote for
this nomination.
Mr. KEMPTHORNE. Mr. President, it seems that ever since I began my
career as a public servant, I have been involved in the selection of
judges. In Boise, as a result of my position as mayor, I served on the
Fourth District State Court Magistrate Selection Panel.
As a group, we on the selection panel were very serious in our
decision-making process. We knew that the men and women we selected
would be perhaps the public's only contact with the judicial system.
The trust of the citizenry--their belief in the essential fairness of
the judiciary, would be given the test in our selection.
My thoughts during that selection process were that we should find
and place on the bench the best qualified individual to fit the
position. But, as with all things, there was sometimes disagreement as
the meaning of the term ``best qualified.''
By ``best qualified'' I meant that a judge should exhibit exemplary
educational and professional qualifications. They should demonstrate a
temperament and attitude of fairness. They should be dedicated to the
principles of the law and they should be willing to subject themselves
to a life of study and intellectual pursuit. On the job training is no
place for a judge.
We knew that if a well-qualified individual was lacking in some
particular qualification, but was otherwise a deserving person who
could satisfy the greater majority of the needs of the bench, that
sufficient safeguards existed to backstop our decision. In Idaho,
judges stand for public confirmation every 4 years. A competent and
watchful review process ensured that judges who failed to perform could
and would be replaced.
Now, years later, I find myself in the position of fulfilling the
high constitutional duty in the confirmation of Justices of the United
States Supreme Court.
In Federalist Paper, No. 76, Alexander Hamilton on April 1, 1788,
stated:
To what purpose then require the co-operation of the
Senate? I answer that the necessity of their concurrence
would have a powerful, though in general silent operation. It
would be an excellent check upon a spirit of favoritism in
the President, and would tend greatly to preventing the
appointment of unfit characters from State prejudice, from
family connection, from personal attachment, or from a view
to popularity. And, in addition to this, it would be an
efficacious source of stability in the administration.
There are few things we will do this year more important than confirm
lifetime appointments to the Federal bench. Any Federal judgeship is a
position not to be taken lightly. Just as I have never endorsed a
``litmus test'' for Federal judges, I cannot support a Federal
judgeship, any Federal judgeship, based on political patronage. A
Federal judgeship is a position that should not be based simply on the
slavish adherence to political philosophy. To do so diminishes the
bench and diminishes the nominator. To do so betrays our constitutional
duty. In Federalist Paper, Number 78, Hamilton stated:
For I agree, that ``there is no liberty, if the power of
judging be not separated from the legislative and executive
powers.'' And it proves, in the last place, that as liberty
can have nothing to fear from the judiciary alone, (it) would
have everything to fear from its union with either of the
other departments.
The selection of a Federal judgeship cannot be a political game to be
played by nominating legislators or a conniving executive but rather a
deadly serious business which can determine the future direction of our
Nation. The court and its nominees are, however, influenced by the
political process. A careful balancing of philosophies, as determined
by the election process, determines the direction of the court and the
direction of our Nation.
Now, as then, I believe that a Justice of the United States Supreme
Court, as with any Federal judgeship, should have the highest
educational and professional qualifications. Surely Judge Breyer has
those qualifications. Educated at Stanford, Oxford, and Harvard, Judge
Breyer has served as the chief counsel of the Senate Judiciary
Committee, law clerk for Supreme Court Justice Arthur Goldberg and
professor of law at Harvard School of Law. He currently serves as the
chief judge, of the First District U.S. Court of Appeals, having been
appointed by President Carter.
However, we expect excellent qualifications in a lifetime appointment
to any position on the Federal bench. Too many critical issues will be
decided. Too many lives will be affected.
A Justice of the U.S. Supreme Court must be a person of integrity and
values. The best way to determine if a judge represents our ideal of
judicial integrity is through their decisions. Most of the decisions of
Judge Breyer represent an incisive legal mind and a scholarly process
of thought. Some of his decisions, however, have raised controversy in
my State, particularly in his decisions on religious freedom and the
free exercise of religion. Some of my constituents are concerned about
Judge Breyer's previous rulings on home schooling.
In Idaho, and across the Nation, thousands of concerned families have
rejected the public educational system because they do not believe it
represents the values they cherish. The values and the reasons for that
belief are varied across the country. In some parts of America,
alternative schooling is preferred because of cultural or ethnocentric
values which parents may rightfully believe are not sufficiently
addressed by a public school system. In Idaho, the overwhelming
majority of alternative home schooling is done by parents who believe
that the exclusively secular education offered by the public school
system does not provide the sound religious values they hold above
everything else. Home schooling is not easy. It takes a commitment to
education and a commitment to those values which the parent feels are
not shared by our educational system. These parents have the right to
provide an alternative education to their children.
In the confirmation hearing of Judge Breyer, Senator Simpson
questioned him on his views and on whether Judge Breyer believes it is
constitutional for States to mandate testing to determine the adequacy
of secular education at religious schools. Judge Breyer answered that
the question was dependent on the particular State law and whether the
State system was the least intrusive into the rights of the individual.
Asked straight out if he had a bias against home schooling or religious
schooling he answered, ``absolutely not.'' In the light of his
qualifications and his experience I am willing to take Judge Breyer at
his word.
Senator Lugar has criticized Breyer for his involvement in 1985 with
a Lloyd's underwriting syndicate known as Merret 418. And I want to
thank my good friend and colleague Senator Lugar for bringing this
issue to the Senate. The Lloyd's syndicate insured a wide range of
risks but its main crisis involved asbestos and pollution remediation.
It is fair to ask whether this involvement raises a question of
conflict of interest over Judge Breyer's participation in environmental
pollution cases.
Furthermore, because of the rules of Lloyd's investment depending on
the results of the losses sustained, Judge Breyer may be unable to
leave the syndicate. Currently, Breyer has sustained losses of some
$30,000. The worst case scenario differs depending on your source of
information. A representative from Lloyds has said that Judge Breyer
could lose a maximum of $187,200, with his own insurance covering all
of that. Others, also familiar with the Lloyds process, say that Judge
Breyer would be harassed by this improvident investment for years to
come. They question his judgment and his judicial independence in light
of this serious entanglement. They say that he may have to recuse
himself from so many decisions that his effectiveness will be
compromised for years to come.
But, with all respect to my friend and colleague Senator Lugar, I
cannot disqualify a person to sit on the Federal bench because of a
disputed and speculative impact of a family investment. If Judge Breyer
is ineffective because of his entanglements, he should retire from the
bench.
On balance Judge Breyer is a highly qualified and experienced member
of the bench who will make the court marginally more balanced based on
the political and judicial philosophy of the Justice he is replacing.
Because of his qualifications and his judicial history I will support
Judge Breyer to be a Justice of the U.S. Supreme Court.
Mr. DOLE. Mr. President, I would like to say a few words in support
of the nomination of Judge Stephen Breyer.
In the late 1970's, I had the opportunity to work closely with Judge
Breyer, when I was a member of the Senate Judiciary Committee and Judge
Breyer--then just Stephen Breyer--was the committee's chief counsel.
Although a member of Senator Kennedy's staff, Stephen Breyer
nonetheless made a big impression on those of us sitting on the
Republican side of the committee room. Stephen Breyer was someone whose
word was good. He was always fair-minded, sharing information and
giving us the benefit of his counsel.
After three days of confirmation hearings, the American people now
know what we knew back then--that Judge Breyer's intellect is
considerable, his educational credentials impeccable, his knowledge of
the law expansive. Judge Breyer also possesses a skill that should
serve him well on the Court--an ability to communicate his knowledge of
the law in clear, unambiguous prose, making it accessible to the
ordinary American citizen. He is a recognized expert in the area of
administrative law, antitrust, and economic regulation. He was a
charter member of the U.S. Sentencing Commission. He is a proud father
and a loving husband.
Of course, I do not agree with every decision ever rendered by Judge
Breyer. For example, in the New Life Church Academy case, it appears
that Judge Breyer took too narrow a view of the free exercise clause of
the first amendment and, as a result, supported a position that undly
burdens private religious schools.
It is also clear that Judge Breyer would not have been nominated if a
Republican were sitting in the Oval Office. But, then again, it was
President Clinton--not President Bush--who won the election in 1992.
Obviously, Republicans should not give President Clinton a green
light on every judicial nomination that comes down the pike, but that
does not mean we should flash a red light on every nomination either.
Republicans will continue to examine closely the record of every
nominee, and if the record raises more questions than answers, then we
will speak out, as we did with the nomination of Judge Rosemary
Barkett.
The role of a judge is to follow precedent and apply the law
neutrally, not rewrite the law by legislating from the bench. What
matters is what the law says, not what a judge thinks the law ought to
say. Any nominee who does not understand this basic principle of
judicial restraint should not be confirmed.
I know it is fashionable in some circles to blame Republicans for
something called gridlock. But with the nomination of Justice Ginsburg,
and now with the Breyer nomination, Republicans have given the
President the benefit of the doubt. In fact, I think it is fair to say
we have been more cooperative on these two nominations than Democrats
ever were during the Reagan and Bush administrations. Just ask Judge
Bork and Justice Thomas.
Finally, Mr. President, before Judge Breyer was officially nominated,
there was a lot of talk about how important it was to put someone like
former Chief Justice Earl Warren on the Court.
This point of view is disturbing, to say the least, for as violent
crime intrudes on every community in America, the last thing we need is
another activist Warren Court that expands the rights of criminal
defendants and hamstrings law enforcement.
Unfortunately, too many Federal judges have too often viewed law-and-
order as just that--a slogan. Arizona Gov. Fife Symington, for example,
has tried to rid his State's prison system of pornography, only to be
overruled by a district court judge. Federal judges have ruled that
State prisoners suffer ``cruel and unusual punishment'' if they do not
have access to televisions and basketball courts. And Federal prison
cap orders have led to the early release of violent, vicious criminals.
According to one study, a staggering three-fourths of the State
prison systems and one-third of the 500 largest local jails are under
some form of Federal court supervision.
So, Mr. President, a judicial nomination is serious business. The
decisions of Federal judges can have important, real-life consequences.
And when you are talking about filling a vacancy on the highest court
in the land, the stakes are even higher.
Mr. President, I am proud to support the nomination of Stephen
Breyer. President Clinton has made a fine choice, and I am pleased to
join those who wish him well as the newest Associate Justice of the
Supreme Court.
Mr. MOYNIHAN. Mr. President, Judge Stephen G. Breyer, the Chief Judge
of the U.S. Court of Appeals for the first circuit, is the second
superb Supreme Court nominee presented to the Senate by President
Clinton, Ruth Bader Ginsburg having been the first. I was an early
advocate of Judge Ginsburg's nomination, and I support Judge Breyer's
nomination with equal enthusiasm.
My acquaintance with Stephen Breyer began three decades ago when I
undertook to edit the collected public papers of Justice Arthur
Goldberg. I had been Assistant Secretary of Labor in the Kennedy
administration during Arthur Goldberg's tenure as Secretary, and
Stephen Breyer was a law clerk to Justice Goldberg on the Supreme
Court. Stephen Breyer was of great help to me in the compilation of the
Justice's papers, which were published in 1964 under the title ``The
Defenses of Freedom: The Public Papers of Arthur Goldberg.''
More recently, Judge Breyer and I have found we have another common
interest--in the subject of risk regulation. I have long advocated a
more sensible Government approach to the assessment of risk; this is
described in S. 110, the Environmental Risk Assessment Act. He has
written a book on the subject entitled ``Breaking the Vicious Cycle
Toward Effective Risk Regulation.'' The book, based on the Oliver
Wendell Holmes lectures delivered by Judge Breyer at Harvard
University, makes the subject easily accessible. In it, he proposes the
creation of a Federal agency to help the President determine how best
to allocate resources and to help determine the best way to reduce
risks. This would be another bureaucracy, but a decentralized agency
whose multidisciplinary employees would serve for 2- to 3-year periods
in offices within the executive, judicial, and legislative branches,
dealing with risk assessment and management.
In addition to his broad experience as a Federal judge on the first
circuit, Stephen Breyer's other professional experience has prepared
him well to sit on the Supreme Court. He has served as a professor at
Harvard Law School and at Harvard's Kennedy School of Government; as
Chief Counsel to the Senate Committee on the Judiciary; as Assistant
Special Prosecutor for the Watergate Special Prosecution Force; and as
Special Assistant to the Assistant Attorney General here in the U.S.
Department of Justice. He is a lawyer who has examined the law from
many perspectives.
These experiences, no doubt, have contributed to Judge Breyer's deep
respect for and knowledge of the legislative process. Indeed, he is a
leading expert--and formidable advocate--on judicial use of legislative
history. His approach to this subject was described by Prof. Robert A.
Katzmann, who is the Walsh Professor of Government and Professor of Law
at Georgetown University, in a recent article which I will place in the
Record.
Mr. President, Stephen Breyer will be an outstanding Justice of the
Supreme Court, and I urge my colleagues to support his nomination when
the Senate votes later today. I ask unanimous consent that the article
about Judge Breyer by Prof. Robert Katzmann be printed in the Record
immediately following my remarks.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the Roll Call, May 30, 1994]
Guest Observer
(By Robert A. Katzmann)
Justice Breyer: A Rival for Scalia On the Hill's Intent
If confirmed as the 108th Justice, Stephen Breyer will
bring to the Supreme Court an intimate knowledge of, and
respect for, the legislative process. As former chief counsel
of the Judiciary Committee, he knows how laws are made and he
knows the people who make them.
``My experience running the staff of the Senate Judiciary
Committee,'' Breyer once observed, ``led me to conclude that
elected officials seriously consider public interest argument
and act upon them.''
As a jurist who is now the chief judge of the First
Circuit, he has been a staunch defender of judicial use of
appropriate legislative history--for example, committee
reports and floor debates--in the interpretation of unclear
statutes.
At a time when the venerable practice of looking to
legislative history has come under siege, most notably from
Justice Antonin Scalia, Breyer's appointment promises to add
an effective voice to the debate.
Those who would restrict or even totally abandon the use of
legislative history and confine judges merely to the
ambiguous words of a statute itself offer a variety of
challenges to which Judge Breyer has responded.
Critics argue that legislative history is often conflicting
and thus of no use. To that view, Breyer observes that the
federal appeals courts are often confronted with unclear
statutory provisions, which do not involve major political
controversy, and where legislative history is often clear
enough to clarify statutory meaning.
Legislative history skeptics make the constitutional
argument that the law consists only of the words of a bill
passed by both houses of Congress and signed by the president
or subject to a veto override--not of floor speeches or
committee reports.
Breyer answers that no one claims that legislative history
is any strong sense ``the law,'' but rather that it is useful
in ascertaining the meaning of the words in the statute.
Opponents of legislative history also assert that the
Constitution vests ``legislative'' power in elected Members
of Congress. For Scalia, using legislative history vests
illegitimate authority in unelected individuals--
Congressional staffers or lobbyist--who write the floor
statements, testimony, and reports. Members of Congress, the
argument continues, may not even read these materials.
Judge Breyer and Justice Scalia have taken each other on
publicly about the workings of the legislative process,
disagreeing on the matter at a colloquium of the Governance
Institute and the Brookings Institution.
To Breyer, legislators make the significant decisions and
take responsibility for the outcome.
Legislators cannot read every word of every report or
proposed statute. But in the process of interaction with
relevant interest groups, executive branch departments, and
other institutions, these words are carefully reviewed by
those whom they will likely affect and by the legislator's
own employees. The staff act at the direction of their
legislators, who, in the end, like the managers of other
large institutions, are accountable for the decisions made.
The problem with legislative history, Breyer maintains, is
with its abuse, not it use. Legislative history, he argues,
aids appellate courts to make the law itself more coherent,
workable, and fair in at least five different circumstances:
(1) Avoiding an Absurd Result. Breyer believes that a court
should look to legislative history where the literal language
of a statute would produce an absurd result. On this point,
he and Scalia agree.
(2) Preventing a Court Decision From Relying on a Drafting
Mistake. In some situations, the language of statute might
seem rather clear and the result is not apparently absurd.
But resorting to legislative history could demonstrate that
the result is in error because of a drafting mistake, one
that a court should correct.
(3) Specialized Meanings. Another relatively
noncontroversial use of legislative history that Breyer
support is when it gives meaning to a specialized term or
phrase in a statute, as understood by the community of
experts or other involved in the passage of a statute. Here,
too, Justice Scalia would apparently concur with Judge
Breyer.
(4) Identifying a ``Reasonable Purpose.'' At times, Breyer
argues, legislative history is necessary to understand the
purpose a particular statutory word or phrase has within the
broader context of a statutory scheme.
For instance, in a First Circuit case, the court had to
determine whether the word ``persons'' in a welfare statute
included a child, the child's mother, a stepfather, or all of
them. Without examining legislative history, the court might
not have appreciated that the same word ``persons,'' found
three times in the same sentence, referred in each instance
to a different group.
(5) Selecting Among Reasonable Interpretations of a
Politically Controversial Statute. A court might also use
legislative history when a politically controversial statute,
passed amidst conflicting signals, is silent or unclear about
a contested issue. Breyer contends that for reasons of
``time, the complexity and length of the overall bill, and
the difficulty of foreseeing future circumstances,'' it might
have been easier to case language in a floor statement or
report than in the statute itself.
As chief judge of the First Circuit, Stephen Breyer has
supported initiatives to promote communications between the
judiciary and Congress.
To that end, his circuit is participating in a Government
Institute project in which judicial opinions identifying
perceived noncontroversial problems in statutes are routed to
Congress for its information.
This effort, launched in 1992 with the bipartisan support
of the House and Senate leadership, is designed to stimulate
shared understanding between the branches about the drafting,
interpretation, and orderly revision of statutes.
As the product of both the courts and Congress, Justice
Breyer will most assuredly be a bridge between each, in ways
that promote the more effective workings of government.
Mr. McCONNELL. Mr. President, I am pleased to support the
confirmation of Judge Stephen Breyer for Associate Justice of the
United States Supreme Court. Judge Breyer has demonstrated he has the
necessary qualifications to become the 108th Justice.
He will come to his new position with experience in all three
branches of government and with a distinguished academic background. He
has a thorough command of the law, particularly for those areas which
increasingly occupy the Court's docket--administrative and regulatory
issues.
Judge Breyer appreciates the framework of American democracy--that
each of the three branches has separate and distinct functions. And,
most importantly he knows it is the responsibility of the Congress to
make the laws. In his 14 years as an appellate judge, he has shown
appropriate deference to the legislative branch. And he has
demonstrated restraint as a judge, avoiding the tendency of so many
judges to invent law to achieve a particular result.
During his confirmation hearings, he reviewed a number of issues. He
finds the death penalty to be constitutional in certain circumstances--
``settled law'' was what he said. On the first amendment's protection
of religion, he said the separation of church and state was not
absolute, and noted that there were ``vast areas'' in which the
government assisted religion. In discussions about the use of
statistics in death penalty cases, Judge Breyer noted that the hallmark
of our system is ``individual justice'' based on the facts and
circumstances of each case.
And, on those issues he felt he could not discuss in detail, Judge
Breyer stated clearly that he would have an open mind; he will study
the arguments on both sides of an issue, and he will not prejudge any
case. This is in stark contrast to Justices Marshall, Brennan, and
lately Blackmun, who announced their position on a key issue--the death
penalty--without regard to the particulars of a case.
Mr. President, Judge Breyer possesses a keen intellect, the necessary
integrity, as well as an appropriate judicial temperament to serve on
the Supreme Court. In addition, his record, including his testimony at
his confirmation hearing, demonstrates that he is a practitioner of
judicial restraint; he will be disciplined and he will defer to
Congress when it comes to setting out new rights or making new law.
I will cast my vote in favor of Judge Breyer's confirmation.
Mr. KOHL. Mr. President, I rise to support the nomination of Judge
Stephen Breyer to the U.S. Supreme Court, and to speak briefly--and
somewhat critically--about the process that I believe will result in
his confirmation.
Judge Breyer came before the Judiciary Committee with a reputation as
a brilliant legal scholar and a fair-minded judge.
For the most part, the committee's hearings confirmed these
judgments. Judge Breyer impressed us with his ability to simplify
complex legal doctrines and cut to the heart of fundamental
constitutional questions. His answers revealed that he is a moderate,
reasoned man of principle with a commitment to the rule of law; a man
who is likely to strengthen the center of the Supreme Court, rather
than polarize the Court.
Throughout the hearings, two main criticisms were levied against
Judge Breyer. First, many charged that Judge Breyer acted unethically
because he ruled in cases that may have indirectly affected his
investments.
I do not believe Judge Breyer acted unethically and I do not doubt
his integrity. If judges had to recuse themselves in every case that
presented a possible conflict of interest, our courts would become
paralyzed. But Judge Breyer could have taken more significant measures
to dispel any appearance of impropriety. I am pleased, therefore, that
he has promised, at the very least, to divest himself of all insurance
holdings as soon as possible, although it is not clear exactly when he
would do so.
It was also suggested that because Judge Breyer has spent most of his
life dealing with books and theories, he lacks Justice Blackmun's
empathy for ``the poor, the powerless, and the oppressed.''
Well, it is true that Judge Breyer did not have an underprivileged
upbringing. And it is true that he has spent much of his life as a
legal scholar, rather than a hands-on practitioner. But we should not
assume that because Judge Breyer has been fortunate, and enjoys the
life of the mind, he is unable to care about others.
Judge Breyer seemed to recognize during our confirmation hearings
that his actions as a judge have very real consequences for the lives
of the people the law governs. And he appears to be aware that beyond
the marble columns of the Supreme Court is a world in which the
politically powerless are entitled to as much justice as those
Americans who hire the best lawyers and lobbyists.
It may be that Judge Breyer still has to demonstrate his professed
commitment to making the law work for the average person. But I believe
our confidence in him will be justified.
Having said this, there was much we did not learn about Stephen
Breyer, and--despite my confidence in him--this concerns me. Judge
Breyer's eloquence often gave him the appearance of answering questions
when, in fact, he actually sidestepped them with sugar-coated
generalities.
For example, he would not give an opinion on whether courts should be
required, at the very least, to consider public health and safety
before allowing for secrecy in civil litigation. And he refused to
discuss many subjects, including voting rights jurisprudence, gender-
classifications, and his own decision on abortion counseling--Rust v.
Sullivan--with any degree of specificity.
Whenever Judge Breyer felt the need to avoid answering a question, he
would cloak himself in his black robe and claim that the issue was
within Congress' domain or that the question took him out of his role
as a judge. Yet at the same time, he did speak openly and freely on
other issues which were just as likely to appear before the Court, or
just as easily characterized as issues for Congress rather than the
courts.
Why? The answer is by now well known: nominees only answer questions
when they want to--or when they feel they need to.
I point all this out not to chastise Judge Breyer, whom I respect.
But I cannot ignore a nominee's unwillingness to answer reasonable
questions. Indeed, the process demands that we should not.
Mr. President, we all know that because a Supreme Court Justice has
life tenure, the confirmation process is crucial--it is the public's
only opportunity to learn what is in the heart and mind of a nominee.
Of course, we also recognize that there are limits to what a potential
Justice of the Supreme Court can say before the Senate.
But these limits do not justify the type of hedging that we have seen
from some past nominees--evasion that erodes the Senate's ability to
faithfully carry out its advise-and-consent responsibilities.
Judge Breyer was probably more straightforward with the members of
this committee than many nominees in recent history. In fact, Senator
Specter went as far as to coin a new standard for nominees to live up
to: the Breyer standard.
In my opinion, however, we still have a way to go before we achieve
the candor that the confirmation process demands and deserves. So I
would like to impose an even higher standard on future nominees than
perhaps would Senator Specter.
In the meantime, I commend President Clinton for nominating Judge
Breyer--a man of great ability, who has demonstrated an enduring
commitment to public service and to the law. I look forward to his
tenure on the Court.
Mr. SHELBY. Mr. President, I rise to express my support for the
nomination of Judge Stephen Breyer to the U.S. Supreme Court. I am
pleased to offer my support because I believe that he is exceptionally
well-qualified to serve as a Supreme Court Justice.
Judge Breyer is a native Californian who was born and raised in San
Francisco. He was educated in the public school system and received his
undergraduate degree from Stanford University. He also attended Oxford
University on a Marshal Scholarship. In addition, Judge Breyer had a
distinguished academic career at Harvard Law School where he was a
member of the Harvard Law Review. Subsequently, he spent 8 years in the
Army Reserves.
His entire adult life has been spent as a public servant working in
all three branches of the Government. He began his career after law
school as a law clerk to Supreme Court Justice Arthur Goldberg where he
received firsthand experience in the Federal judicial process. He also
served as a Special Assistant to the Assistant Attorney General in the
Antitrust Division of the U.S. Department of Justice.
As Chief Counsel to the Senate Judiciary Committee, Judge Breyer
worked well with Members of both parties and acquired a reputation for
fairness. For the past 14 years, he has served as a judge on the U.S.
Court of Appeals for the First Circuit. He is recognized throughout the
judicial community as one of this country's leading jurists. He has
rendered clear and concise decisions which have protected the
individual and civil rights of American citizens. In addition, he has
demonstrated exceptional skill in building bridges in the pursuit of
justice and this ability will serve the court and the Nation well.
Judge Breyer also has dedicated many years of service to teaching
young legal scholars at the Harvard Law School. He has shared with his
students through his instruction, as well as his writings, his
expertise in criminal law, antitrust and economic regulation, civil
rights, constitutional liberties, and environmental law. In addition,
he has emphasized to his students that the judicial system must be
accessible to everyone.
As a husband and father of three children, Judge Breyer is a well-
rounded individual with broad experiences. He has a keen appreciation
for family values and the challenges that families and young people in
America face today. He is an honest, responsible, and intelligent
jurist who possesses the credentials and wisdom needed for the Supreme
Court. It is becoming increasingly difficult to find individuals as
talented as Judge Breyer who are willing to dedicate their lives to
public service. I am very happy that Judge Breyer is involved in this
process, and I want to express again my strong support for his
nomination.
Mrs. FEINSTEIN. Mr. President, frankly, while I expected to be
impressed with Judge Breyer before the hearings, I must admit that I
was not fully prepared for what I saw and heard once they began.
In his answers to question after multipart question fired at him on
complex issues, Judge Breyer demonstrated both a deep knowledge of his
field--and a comfort with that knowledge--unparalleled in my
experience.
I am confident, however, that he will bring to the High Court not
just scholastic and intellectual ability, but--more importantly--a rare
ability to reveal the simple and elemental truth behind complex legal
theories. He will do what he said in the Rose Garden, Mr. President.
Make the law work for, and intelligible to, ordinary people.
He also satisfied this Senator that he is a man of great integrity,
judgment and good, plain common sense. I believe him to be an
outstanding appointment at a critical time in the Nation's history. As
the Supreme Court wrestles with the issues that may well define our
age: private property versus public need; access to information versus
the creation of intellectual property; and crime control versus
individual rights.
Judge Breyer will play a major role in shaping the decisions of the
Court, perhaps helping articulate a middle ground that will guide us
all.
For myself, Mr. President, I will be particularly interested to see
how Judge Breyer and the Court balance what I called the rights of the
few versus the rights of the many, particularly with respect to
criminal justice matters. Perhaps no single issue will better test the
Court's ability to strike a delicate balance than deciding what the
habeas corpus appeal rights of a convicted killer should be.
As Americans increasingly come to feel that violence is plaguing our
Nation, and the need to put laws in place to offer society the
protection that it deserves, how will we--as a nation of laws--also
protect the rights of the individual.
I, for one, am more than comfortable putting Justice's scales in
Judge Breyer's stunningly skilled hands, Mr. President. I urge my
colleagues to vote to confirm him this afternoon.
Mr. AKAKA. Mr. President, I rise in support of Judge Stephen G.
Breyer, President Clinton's nominee to be Associate Justice of the
Supreme Court of the United States.
The Constitution authorizes the Senate to give advice and consent to
such nominations made by the President. I assume this responsibility
with the utmost solemnity and diligence. I am pleased the Senate
Judiciary Committee gave its overwhelming approval to the nomination
after thoroughly reviewing Judge Breyer's suitability to serve on the
Supreme Court.
I have had the privilege now to vote on four Supreme Court
nominations, including three sitting Justices. I applied the same
criteria to evaluate Judge Breyer as I did in examining the
qualifications of his predecessors, Justices Souter, Thomas, and
Ginsburg.
Throughout Judge Breyer's appearances before the Senate Judiciary
Committee, I found him to be an engaging and knowledgeable jurist. He
possesses a keen sense of humor, a sharp mind and an obvious enjoyment
of his family, work, and community. I was most impressed with his
belief that a primary precept of the Constitution is the preservation
of individual dignity. During Judge Breyer's tenure on the U.S. Court
of Appeals for the First Circuit, he has defended constitutional
liberties such as free speech, religious freedom, and other privacy
issues.
However, it is in the arena of antitrust and economic regulation
where Judge Breyer is most widely recognized as one of the Nation's
leading authorities. He is also a leader in interpreting Federal
statutes and regulations that increasingly occupy the Supreme Court's
attention. I believe his approach to statutory interpretation is in
part shaped by his respect and understanding for the legislative
process.
Judge Breyer enjoys an excellent reputation, particularly among his
colleagues on the First Circuit Court. He also received the highest
rating from the American Bar Association and was highly praised by
those testifying on behalf of his judicial work during the recent
confirmation hearings.
Mr. President, as I stated before, I am pleased to vote in favor of
this nomination.
Mr. MURKOWSKI. Mr. President, as the Senate conducts its
constitutional duty of advising the President on the nomination of
Judge Stephen Breyer to the Supreme Court, I am reminded of the solemn
significance of the Senate's duty as a separate branch of Government to
advise the President, the executive, on the nominations of individuals
to serve in posts that are among the highest official posts in the
land. Of all nominations this body considers, nominations to the
Supreme Court are among the most critical because of the tremendous
responsibility we vest in our Supreme Court, and because the tenure of
the members of the highest judicial court in the country is limited
only by an individual justice's inclination or mortality. This is the
first and last say we will ever have on the suitability to Judge Breyer
to sit on the Supreme Court.
Judge Breyer has, by most accounts, provided reasoned, intelligent
answers to the Senate Judiciary Committee about legal issues and about
his many rulings during 14 years as a Judge on the U.S. Court of
Appeals for the First Circuit. He received the unanimous approval of
the Senate Committee on the Judiciary. That is no small feat and, in
all likelihood, will provide enough momentum to secure the consent of
the Senate to his nomination to the Supreme Court.
In fact, one of the only serious concerns raised in relation to the
Breyer nomination comes, not from the Judiciary Committee, but from the
senior Senator from Indiana who provides a measured, thoughtful
analysis of Judge Breyer's involvement in a Lloyd's of London insurance
underwriting investment. An investment that is, as I understand it, the
ultimate roll of the dice, the most important spin of the roulette
wheel a person could take with his or her assets. One bets one's entire
worth on underwriting insurance claims that other people enter into
without consulting you. If they guess wrong the investor could lose
everything. According to the Washington Post at least four investors in
similar schemes have lost all their wealth and ended their lives in
suicide. Now we are told that one of Judge Breyer's underwriting
syndicate's faces mounting losses with no end in sight.
As a banker for 25 years, I am extremely troubled by the facts that
the Senator from Indiana raises. I often encountered circumstances
where I counseled customers, even very wealthy customers, against the
advisability of taking on debt or the financial liability of another.
Sometimes, very smart people made bad decisions and, literally, had to
pay for those mistakes. But, Mr. President, in 25 years of banking, I
never saw someone enter into an agreement in which their lability was
unlimited. One's judgment is put in serious doubt when he voluntarily
enters into an agreement like this.
For these reasons, I cannot support Judge Breyer's nomination to a
position on the Supreme Court. His Lloyd's of London investment
undermines my confidence in his judgment and forces me to oppose
consenting to his nomination to one of the most critical, most powerful
positions in the Nation. I am also concerned about the number of cases
that Judge Breyer could not participate in because of the wide ranging
nature of his investments which the Senator from Indiana has already
discussed.
Mr. SMITH. Mr. President, I rise in opposition to the confirmation of
President Clinton's nomination of Judge Stephen G. Breyer to be an
Associate Justice of the Supreme Court of the United States.
Mr. President, if Judge Breyer's nomination to the Court is confirmed
by the Senate, he will serve for decades after President Clinton leaves
office. In making my decision on how I will vote with respect to his
confirmation, I had to keep in mind that every time that Judge Breyer
votes on the Supreme Court, I will be reminded of my vote in the Senate
on his confirmation.
I have carefully reviewed Judge Breyer's background, decisions, and
testimony before the Senate Judiciary Committee. As a result, I have
concluded that I cannot, in good conscience, vote to confirm a nominee
whose judicial record and confirmation hearing testimony indicates that
he will move the Supreme Court away from the conservative decisions of
Chief Justice Rehnquist and Associate Justices Scalia and Thomas.
In addition to my concerns about Judge Breyer's judicial philosophy,
I agree with Senator Lugar's criticisms about the nominee's
controversial Lloyds of London investments. I believe that Lloyds'
investments demonstrate highly questionable judgment. Moreover, they
may require Judge Breyer to recuse himself from numerous significant
cases before the Supreme Court in the years and decades ahead.
Judge Breyer's testimony before the Judiciary Committee places him on
the liberal side of the constitutional debate regarding the separation
of church and state. I believe that he is likely to vote to uphold the
Supreme Court's precedents banning prayer in the public schools and
even at public school graduation ceremonies.
Mr. President, the Founders wanted the Constitution to guarantee that
the United States would not have an official, national religion like
the Church of England. I agree. But Judge Breyer's philosophy takes
that worthy concept to an extreme.
As I studied Judge Breyer's judicial record, I was particularly
disturbed that he joined a 1990 decision of the First Circuit Court of
Appeals holding that the Reagan and Bush administrations' regulation
banning the use of Federal funds for abortion counseling is
unconstitutional.
Regardless of one's beliefs about whether elective abortions should
be legal, the American people do not want to pay for abortions with
their tax dollars. Judge Breyer's view that the Constitution requires
that the American people pay for abortion counseling in federally
funded clinics is extreme and represents an improper reading of the
Constitution.
Mr. President, I have reluctantly concluded that President Clinton's
nomination of Judge Breyer represents the second building block in his
effort to reconstruct the liberal Warren Court. I will vote against his
confirmation to the Supreme Court.
Mr. GLENN. Mr. President, one of the most significant
responsibilities of a President is the appointment of justices to the
Supreme Court. The decisions of Supreme Court justices affect all
Americans. They are on the front lines of battles over the most
controversial issues of the day. For the American people to have
respect for the law, it is imperative that Americans have confidence in
the abilities of the justices that serve on the Court.
That is why I take the advise-and-consent clause of the Constitution
so seriously. And that is why I am going to vote in support of the
nomination of Judge Stephen Breyer to the Supreme Court of the United
States.
In these days of rabid partisan bickering, President Clinton wisely
nominated an individual who is not an idealogue. Rather, Judge Breyer
has a reputation as a thoughtful jurist who carefully examines all
sides of an issue. He is a consensus builder who breaks judicial
gridlock by searching for middle ground.
Judge Breyer has devoted his life to public service. He has served
with distinction in all three branches of government. Judge Breyer was
appointed to the U.S. Court of Appeals for the First Circuit in 1980,
where he currently serves as chief judge. Prior to his appointment to
the Federal bench, Judge Breyer served as special counsel and later as
chief counsel to the Senate Judiciary Committee. And in the executive
branch, Judge Breyer was a senior official in Antitrust Division of the
Justice Department.
This will not be Judge Breyer's first experience at the Supreme
Court. Following law school, Judge Breyer served as law clerk to
Supreme Court Justice Arthur Goldberg. And Judge Breyer's commitment to
legal education did not end after law school. He joined the faculty of
Harvard Law School in 1967 and has continued teaching following his
appointment to the Federal bench.
Judge Breyer is also well known for his work as a charter member of
the U.S. Sentencing Commission and as a special prosecutor in the
Watergate investigation.
Academics, labor officials, business people, environmentalists,
conservatives and liberals alike have praised Judge Breyer's record and
abilities. Harvard Law Professor Charles Ogletree calls Judge Breyer
the ``consummate reasonable person'' who will ``bring balance,
intellectual rigor, and humility in his role as a Supreme Court
justice.'' AFL-CIO President Lane Kirkland says that Judge Breyer has
demonstrated a ``keen appreciation of the claims of working men and
women for dignity in their work and for economic fairness.'' And
Kenneth Starr, Solicitor General under President Bush, predicts
that Judge Breyer will prove to be ``one of the great Justices of this
Century.''
Judge Breyer's opinions demonstrate a real commitment to make courts
more accessible to those with limited means. But Judge Breyer is
concerned no only with accessibility, but also with ensuring that the
American people can understand the cases before the courts. In an age
when it seems you need to hire a lawyer to understand your own phone
bill, Judge Breyer writes in a clear manner that can be widely
understood by the American people.
Judge Breyer's investment in Lloyd's of London has been a subject of
some concern. It should be noted that Judge Breyer publicly disclosed
his Lloyd's investment each year so that parties could decide whether
or not any they felt that any conflict existed. And he recused himself
from cases involving Lloyd's. The American Bar Association has
investigated Judge Breyer's background and concluded that he has an
excellent reputation for integrity and character. I am satisfied with
the conclusions of the ABA on this count.
I have also heard from Ohioans regarding Judge Breyer's holding in
New Life Baptist Church Academy, a case involving the rights of parents
to teach their children at home. During the Judiciary Committee's
hearing on Judge Breyer's nomination, Judge Breyer was questioned about
this case and his views on home schooling. Judge Breyer assured the
committee that he has no bias against home schooling or religious
education. Noting that there is nothing more important to a person than
religious principles, he said that parents should have the right to
pass religion onto their children without undue State interference. I
think Judge Breyer has adequately explained his position on this issue.
Mr. President, in conclusion I want to again express my support for
Judge Breyer's nomination. I don't agree with Judge Breyer on every
issue. But what is important is that Judge Breyer approaches every
issue objectively and he rules impartially. He looks at the facts and
decides accordingly. Everyone agrees that Judge Breyer has a brilliant
legal mind. I believe we should give the American people the benefits
of Judge Breyer's legal mind and confirm him for a seat Supreme Court.
Mr. FEINGOLD. Mr. President, I cast my vote in favor of President
Clinton's nominee for the U.S. Supreme Court, Judge Stephen Breyer,
because I believe that he has the intellect, judicial temperament and
commitment to constitutional principles that are the fundamental
requirements for a Supreme Court nominee.
I do want to take a moment, however, to address the issues that were
raised by the Senator from Indiana [Mr. Lugar], regarding the issue of
Judge Breyer's investment in Lloyd's, the London insurance company. The
Senator from Indiana has made the argument that this investment
demonstrated poor judgment on Judge Breyer's part, to expose himself to
extensive personal financial liability and that he has a serious
financial entanglement with the Lloyd's syndicate that will continue
for years and might even force him into bankruptcy at some point.
The Senate Judiciary Committee investigated all aspects of this
complex issue and concluded that there was no reasonable basis to
question Judge Breyer's integrity or qualifications and there was no
factual basis for assertions that Judge Breyer is likely to suffer
massive losses from the investment or that the investment reflected a
lack of prudence or poor judgment.
According to the materials prepared in response to the allegations
regarding this investment, many of the assertions do not appear to be
factually correct. First, the record demonstrates that at the time
Judge Breyer made these investments, they were universally considered a
safe and prudent investment based upon Lloyd's historical earnings
record. Throughout its 300-year history, Lloyd's had returned
substantial profits to its members and, prior to 1989, had not suffered
an overall market loss since 1965, when Hurricane Betsy caused
extensive property damage to the Eastern United States.
Second, based upon these materials, the assertion that Judge Breyer
is exposed to unlimited liability for catastrophic losses does not
appear to be valid. Judge Breyer purchased a personal stop-loss
insurance to cover all loss insurance to cover all losses up to
$225,000. In addition, I have been advised that he has approximately
$220,000 in retained earnings held by Lloyds and that according to the
underwriter's current projections, Judge Breyer's total liability will
be approximately $44,000. Even the worst case losses of $168,000 to
$187,000 projected by one independent authority on the syndicate, would
be well within Judge Breyer's insurance coverage. The losses would have
to reach double even the most pessimistic current projects before Judge
Breyer incurred any net additional personal loss whatever. I have also
been advised that investor's losses, or profits, are directly
proportional to the size of their contributions and his investment in
the syndicate in question would render him responsible for only 1/5600
of the total losses. Thus, before Judge Breyer would suffer any loss,
the total liability of the syndicate must exceed $2.5 billion, which is
vastly beyond even the largest estimates. The total losses for the
hundreds of Lloyds syndicates in 1990--its worst year--was $5.5
billion. Finally, contrary to the assertions that Judge Breyer can
``never withdraw,'' I have been advised that Lloyd's General Counsel
has indicated that an entity known as Newco is being formed to assume
the remaining liabilities of remaining syndicates such as Judge
Breyer's. The establishment of this new entity would terminate all of
Judge Breyer's remaining exposure.
Mr. President, based upon the information I have received, I do not
believe that this issue should be the basis for opposing Judge Breyer's
nomination. I do, however, believe that these kinds of issues should be
thoroughly examined, and I think that the Senator from Indiana has done
a service in exploring this issue. On balance, however, I believe that
satisfactory answers have been provided to the concerns which have been
raised.
Mr. ROCKEFELLER. Mr. President, I am proud to have this chance to
cast my vote in support of confirming Judge Stephen G. Breyer as an
Associate Justice of the U.S. Supreme Court. Judge Breyer is an
impressive individual, not only for his obvious intellectual acumen and
professional success, but also for his long record of dedication to
public service. Judge Breyer has earned a wide array of support,
reflected in the views of the labor community, the business community,
environmentalists, academics, and the American Bar Association.
The Judiciary Committee performed an examination of his ethical
history which revealed some questions, but produced a profile of a
legal thinker and professional fully qualified for this tremendously
important position.
His history of judicial decision making reveals a man who weighs
heavily the effect of the law on human lives. He does not adhere to any
one strict legal ideology but approaches the law with a desire to shape
the law to fit human needs. From the earliest age, he was taught that
one learns more from people than books, and he has applied this lesson
not only to his professional career but also to his family life, where
he has been an exemplary husband and father, and in his community
involvement.
Mr. President, Judge Breyer is a strong candidate for the Supreme
Court because of his wisdom, intelligence, and integrity. He will bring
to the court a commitment to making the law a positive force for
achieving justice and improving the lives of human beings. No calling
is higher than that of justice, and I am confident that Judge Breyer
will rise to that responsibility.
Mr. WALLOP. Mr. President, I support the nomination of Judge
Stephen Breyer to serve as Associate Justice of the U.S. Supreme Court.
I believe that the President has the right to appoint the man of his
choosing and while Judge Breyer may not be the jurist I personally
would pick for this position, I respect that right of the President.
Judge Breyer has shown himself to be a man of keen intellect. He was
a distinguished academic and has had the experience of serving in both
the Executive and Legislative branches of government. In addition, he
has served with distinction on the U.S. Court of Appeals for the First
Circuit. However, in spite of his fine qualities and many achievements,
my support is not unqualified. I have serious reservations with regard
to statements made by Judge Breyer in recent opinions as well as, his
judgment based on evidence which came to light during his confirmation
hearings.
First of all, Judge Breyer's investment with Lloyd's of London
Syndicates raises several questions about his good judgment. Not only
has he exposed himself to far reaching potential liabilities, but he
has opened himself up to questions about conflicts of interest on prior
cases on which he sat. More importantly, he now must recuse himself on
some of the most complex and important issues that this Court will hear
dealing with insurance and the environment. This leads me to question
his prudence and his judgment.
I would also hope that Judge Breyer develops an increased awareness
of and sensitivity to the rights of private property owners. Although
he has not written about the takings clause of the fifth amendment, he
was questioned about his approach to that issue during Judiciary
Committee hearings. I will not go into depth on that at this time, but
I would like to align myself with the comments of my colleague from
Idaho, Senator Craig, who spoke earlier on that issue Mr. President. I
strongly endorse the views of Chief Justice Rehnquist who recently
stated in the case of Dolan v. City of Tigard, (U.S. June 24, 1994)
that there is ``no reason why the takings clause of the fifth
amendment, as much a part of the Bill of Rights as the first amendment
or fourth amendment, should be relegated to the status of a poor
relation.''
Finally, I followed with interest the questions posed to Judge Breyer
with regard to religious schooling and home schooling. His opinion in
New Life Baptist Church Academy versus Town of East Longmeadow, that
town authorities could conduct a review of the curriculum of a
religious school, caused me some initial concern. However, based on his
responses to Senator Simpsons questions, I am encouraged that Judge
Breyer has no bias against religious schooling or home
schooling.
Mr. LEAHY. Mr. President, when I was in the Supreme Court a few weeks
ago, I was reminded of the feel of the chamber. The courtroom itself is
more cramped than you might expect. The bench, the chairs, the lectern
and the counsels' tables are all simple in their design. There is
seating for the public.
Yet the importance of this room is enormous--one cannot enter that
room without having a feeling about what happens in it. This is where
our most precious rights and freedoms are protected through the
decisions of the justices of the Supreme Court--the right to free
speech, the right to practice one's faith, the right to a jury of one's
peers and to due process, the right to vote. Nowhere on the face of the
globe or in the history of mankind has a Nation guaranteed such
liberties.
It is no wonder that this place evokes such powerful feelings, and it
is no wonder that the American people place so much importance on the
naming of a person to take a seat behind the bench in this courtroom.
Judge Stephen Breyer has been nominated to be one of the nine persons
who will question and debate and judge in this room as one of the final
arbiters of the meaning and application of the Constitution of the
United States and the basic freedoms of us all. He will follow in the
path of John Marshall, Oliver Wendell Holmes, Jr., Louis D. Brandeis,
Hugo L. Black and Thurgood Marshall. These are very large shoes to
fill, to be sure.
I have reviewed Judge Breyer's record. It is an exhaustive record of
judicial opinions, law review articles and speeches. This record has
earned Judge Breyer the reputation of being among the Nation's leading
judges and legal scholars. I was struck by its breadth and distinction.
He is without question a person with the legal acumen necessary to sit
on the Supreme Court.
As I stated at his hearing and again when the Judiciary Committee
voted unanimously to send his nomination to the full Senate, an
essential, but sometimes overlooked, attribute of any judge is that he
or she be fair. Justice requires that all litigants, regardless of
their cause, can present their case and have it decided on the basis of
the facts and the law, not on any predisposition of a particular judge
hearing the case. My sense from reviewing Judge Breyer's record is that
he is fair--he will take each case individually and decide it on its
merits under the law. I believe that he has not and will not
prejudge the outcome on the basis of an existing notion or narrow
political goal.
I questioned Judge Breyer on a number of longstanding constitutional
matters, including freedom of speech, freedom of religion and privacy.
Judge Breyer spoke eloquently of the dignity of the person. I was
interested to hear him explain that he looks to this concept in
determining what rights the Constitution guarantees. Considering
matters as they may affect the dignity of the individual is a promising
way to make sure constitutional protections remain vigorous in the
modern age. I am hopeful that this approach will help the Court decide
issues that affect our most fundamental freedoms. I was impressed with
his responses, which revealed a sensitivity toward modern-day free
speech and censorship questions.
Finally, I wanted to mention the Lloyd's of London question only to
say that this debate seems to be headed in the direction of requiring
all judges to put their holdings in a blind trust. If that is the case,
we should discuss it openly and determine whether to impose that
requirement. I see no reason to oppose Judge Breyer. From what I have
seen, Judge Breyer did everything required of him. Indeed, he filed
exhaustive financial disclosure reports as all Federal judges are
required to do, and no questions of conflicts of interest were raised.
If Judge Breyer is confirmed, I will have participated in
confirmations for each of the nine justices serving on the High Court.
During the last 20 years we have had different sorts of Presidents and
different sorts of nominations to the Supreme Court. Some Presidents
have used Supreme Court nominees as a wedge to divide the American
people--to promote an us versus them politics. Often these types of
nominations have resulted in divisive battles, political pontificating,
and intensely personal attacks during the confirmation process.
President Clinton deserves credit for nominating Stephen Breyer. With
this nomination, like his nomination of Justice Ruth Bader Ginsburg a
year ago, President Clinton has taken a different course. He has sought
a nominee who can bring people of diverse views together and who has
been near universally praised as an excellent candidate. President
Clinton has chosen someone who people of all stripes--conservatives,
liberals, whatever--know will provide them a fair hearing and a fair
reading of the law. The President should be commended for selecting a
person who can help forge our way into a new century and a new age
through consensus based in commonly shared constitutional values.
On the day that President Clinton announced his nomination of Judge
Breyer, I was struck by Judge Breyer's comments. He said that the law
has to make practical sense to ordinary people--it has to accord with
real life. I could not agree more. He writes opinions in a style and
manner that is accessible generally rather than restricted to lawyers
or legal scholars. He stated that he will do his utmost to see that his
decisions reflect both the letter and the spirit of law that is meant
to help people and will remember the effects his decisions will have
upon the lives of Americans.
A justice is charged with making decisions that, quite literally in
some cases, are of life and death significance. The Court is not a
place for academic musings. I told Judge Breyer that I want him to be
the kind of justice who focuses on the effect his decisions have on
real people--people who may not be powerful or well-connected. I
suggest that he strive to be the kind of justice who could take the
case of Barbara Johns--a young girl who had to attend a segregated
school where classes were held in tarpaper shacks--and turn it into the
unanimous opinion that was Brown v. Board of Education. I suggest he be
the kind of justice who would take up Clarence Gideon's habeas
petition, scrawled by hand on plain paper, and affirm the right of
every citizen to due process of the law. It is a weighty
responsibility.
Mr. LAUTENBERG. Mr. President, there is a certain majesty associated
with the nomination of an individual to serve on the Supreme Court of
the United States. Only 107 men and women have served on that Court.
And during their tenure on the bench, they have a significant influence
in charting the Constitutional course of the country.
Once on the Court, each Justice sits as an independent arbitrator.
Absent an impeachable offense, they are not accountable to the
President who nominated them, the Senate that confirmed them, or the
country which lives under the decisions made by them.
There is, though, a very brief window of opportunity to look into the
mind and heart of a nominee. For a few days--before the Judiciary
Committee and the country--they must share with us their thinking on
basic issues. It is our only opportunity to get a sense of how they
reach their decisions: what values shape their views, what resources
inform their rulings, what philosophies will be reflected in their
Constitutional pronouncements.
In the past, at times I have been disturbed by those hearings. Some
nominees have gone to extraordinary lengths to avoid controversy by
avoiding substance. But short of just voting ``no,'' there really
wasn't anything the committee could do to compel a nominee to be
forthcoming if they declined to answer questions.
Stephen Breyer did not need to be compelled. He was responsive, he
answered questions forthrightly, he let the country get a sense of who
he is and what he believes.
Judge Breyer's decision to explain his values and views made his
hearings informative and satisfying, dignifying the confirmation
process for this vital post.
While I might have some disagreements with some of Judge Breyer's
positions, on balance I believe they reflect a keen understanding of
Constitutional principles and doctrine. Let me take just a few moments
to spell out some of the major factors I considered.
First, I wanted to be sure that any nominee would support the right
to privacy contained in Roe versus Wade. I have been disturbed by the
recent trend to chip away at the protections provided by the historic
decision; but I have been alarmed by those who believe that trend will
culminate in a reversal of Roe and a rejection of an expansive
Constitutional right to privacy which underlies it. Judge Breyer was
clear on this issue. He said that Roe was ``settled law.'' He suggested
that the right to an abortion is ``a basic right.'' And while I wish he
had been more open about his thinking relative to restrictions of the
kind upheld in the Court's Casey decision, I believe that once he
explained his basic thinking about Roe, he had legitimate grounds to
avoid making specific commitments on those issues.
Second, I wanted to get a clear sense of Judge Breyer's thinking
about the role of the Court. I am impressed by the deep thought Judge
Breyer has already given to this complex issue. He recognized, for
example, the need to respect precedent and the heavy burden that those
who would upset stare decisis must discharge; at the same time, though,
he praised the Brown versus Board of Education of Topeka decision and
rightfully concluded that it brought ``true meaning'' to the
Constitution's claims of equality under the law. I believe that Judge
Breyer is sensitive to the constant tension between a necessary respect
for precedent and a necessary capability for the law to evolve.
In the same context, I took comfort from his positions on
``legislative intent'' and ``judicial activism.'' Judge Breyer clearly
does not subscribe to the flawed theory that the Court must look only
at a law as passed rather than using legislative history to clarify
ambiguities and uncertainties. Similarly, when asked about judicial
activism, Judge Breyer forcefully rejected the notion that a position
on the bench is license to impose one's personal views on society; but
he also rejected the artificial and misleading notion that a judge's
personal philosophy can be checked at the door. I found his comments on
these issues to be informative, balanced, and sensitive to the constant
need to examine the facts before reaching conclusions. Perhaps the most
instructive statement he made in this regard came in response to a
question from Senator Cohen about his judicial philosophy. Let me quote
Judge Breyer's comments:
I always think law requires both heart and a head. If you
don't have a heart, it becomes a sterile set of rules removed
from human problems . . . . If you don't have a head, there's
the risk that in trying to decide a particular person's
problem in a case that might look fine for that person, you
cause trouble for a lot of other people, making their lives
yet worse. So it's [always] a question of balance . . . .
Third, I was in agreement with Judge Breyer about the separation of
Church and State.
I share the nominee's view about the necessity for, and desirability
of, a reasonably constructed wall to separate Church and State. I
believe that Judge Breyer articulated the justification for that
separation when he argued that assuring the neutrality of the state is
the best way to insure that ``members of each religion [will] be able
to practice that religion freely, to be able to pass their religion on
to their children.''
Finally, Mr. President, I would like to address the issue of the
potential conflict of interest associated with Judge Breyer's
investments in Lloyd's of London and his failure to recuse himself from
cases which might be relevant to that investment. I share Judge
Breyer's conclusion, expressed in the hearing, that the entire issue is
a ``a matter of prudence, it is not a matter of ethics.''
The Judge explained that he had reviewed the specifics of the case--
both at the time he accepted it and subsequently--and concluded that
the cannons of Judicial ethics allowed him to sit in that case. Still,
as he promised the Committee, criticism of his behavior in that case
has sensitized him to the concern it raised. Accordingly, even though
he is not required to do so, he promised to divest himself from any
holdings in insurance companies, including Lloyd's, as soon as
possible.
Based on my review of the nominee's record and the record he has made
before the Judiciary Committee, I can find no reason to oppose his
confirmation and every reason to support it. With the same trepidation
and faith I have felt each time I have given or withheld my consent to
a Supreme Court nomination, I will cast this vote to confirm Judge
Breyer. And I will, in my heart, hope that he will display the wisdom
and compassion which our country has come to expect from the Court.
Mr. BYRD. Mr. President, one of the most important and sobering
responsibilities that we in the Senate have is our role outlined in
Article II, Section 2 of our Constitution. That is, although the
President may nominate judges of the Supreme Court, only with the
``advice and consent of the Senate'' do those nominees assume the
position of Mr. or Madam Justice.
I do not take that responsibility lightly. Cases that come before the
Supreme Court involve some of the most controversial and contentious
issues that face us as a people. The Court's rulings and opinions have
a profound impact on all of the citizens of our Nation.
Let us be mindful that a Supreme Court justice should not only
possess a keen intellect, but also a reputation for fairness and
integrity. Judge Stephen Breyer meets those standards.
Judge Breyer's professional background demonstrates a brilliance and
a deep commitment to public service. Having graduated from Stanford
University in 1959, Judge Breyer then studied at Oxford University as a
Marshall Scholar. After returning to the United States, Judge Breyer
attended Harvard Law School. There, Judge Breyer was a member of the
Harvard Law Review, and graduated magna cum laude in 1964. Following
graduation, Judge Breyer clerked for Supreme Court Justice Arthur
Goldberg. During this time, Judge Breyer served in the Army Reserves
for 8 years, and received an honorable discharge in 1965.
From 1967 to 1981, Judge Breyer was a professor at Harvard Law School
and at the Harvard Kennedy School for Government. At the same time,
Judge Breyer held the positions of assistant special prosecutor for the
Watergate Special prosecution force, Special Counsel, and later Chief
Counsel for the Senate Judiciary Committee. Judge Breyer's tenure with
the Judiciary Committee won for him a reputation for fairness, good
humor, and bipartisanship. Finally, late in the administration of
President Carter, Stephen Breyer was nominated and confirmed to the
U.S. Court of Appeals for the First Circuit. Judge Breyer has served
the Court with distinction since that time, also serving as a charter
member of the U.S. Sentencing Commission, which is charged with
examining unwarranted disparity in Federal sentencing, the effects of
sentencing policy upon prison resources, and the use of plea bargaining
in the Federal criminal justice system.
Mr. President, I do not offer my support of Judge Breyer casually. In
the past few weeks, I have heard from a number of West Virginians,
predominately those who teach their children at home, who have concerns
regarding the Judge's ruling in New Life Baptist Church Academy v. Town
of East Longmeadow. I know that many of my colleagues have similarly
heard from constituents about this matter. During Judge Breyer's
several days of confirmation hearings before the Senate Judiciary
Committee, our colleagues, including Senators Hatch, Thurmond, and
Simpson, asked Judge Breyer about the New Life ruling. In response to
questioning by Senator Simpson, I found one particular exchange quite
helpful. When asked directly about what constitutional questions would
arise if the state tried to infringe on the rights of home schoolers,
Judge Breyer responded:
It [the Constitution] is designed to protect the right of
the parents to pass along to their children their religion
and to protect that from State interference * * * I think
that home schools based on that principle follow from that,
and that is why I say somebody who tried to prevent that
legally would suddenly face very, very serious constitutional
challenges * * *. I think there is a consensus opinion that
that First Amendment protects the right of people to pass
their religion on to their children, and the home school
situation on its face seems to fall within that.
From his responses, and from my study of the New Life case, I believe
that Judge Breyer has no bias against home schooling or religious
schooling. I also found him quite eloquent on the subject of the First
Amendment and religious freedom in particular.
I believe that Judge Breyer will be an able addition to the Supreme
Court. His keen mind, gentle humor, and temperament, combined with a
deep understanding of the law, should enable him to serve our country
well.
Mr. BIDEN. Mr. President, I will say further that Judge Breyer
actually testified for 22 hours before our committee. And I think my
friend from Utah will confirm--and all saw it on television--a
significant amount of that time, he was asked about this potential
conflict, the so-called Lloyd's of London issue; and further, that we
did seek the written advice and the verbal counsel of four or five of
the leading ethicists in the United States of America, recognized by
all, one of whom thought it was a close call, three of whom thought it
was not even a close call, and one of whom, if I remember correctly,
was not sure. There is no need to say more than that.
I see that we only have one--but our most distinguished--speaker left
on our side, the majority leader. He is here, and I yield as much time
as the majority leader feels is necessary.
Mr. MITCHELL. Mr. President, the Senate will shortly vote on the
nomination of Judge Stephen Breyer to be the 108th Justice of the U.S.
Supreme Court in our Nation's history. I believe that President Clinton
has made an excellent choice, and I urge my colleagues to vote to
confirm Judge Breyer.
Judge Breyer's appointment to the Supreme Court is a fitting cap to a
lifetime spent in public service. He has served in all three branches
of our Government--as chief counsel to the Senate Judiciary Committee,
as a top aide in the Justice Department's antitrust division, and, of
course, as a chief judge in the U.S. Court of Appeals.
This breadth of experience will serve him well on the Court. He will
bring with him a unique perspective of the law and how it is made, how
it is enforced, how it is adjudicated.
Judge Breyer's nomination deserves and has received strong bipartisan
support, with the Judiciary Committee unanimously voting to recommend
his confirmation. Liberals and conservatives alike recognized the merit
of Judge Breyer's careful, balanced approach to his job.
During his confirmation hearings and here in debate, concerns were
raised regarding the nature of some of Judge Breyer's investments. This
issue was thoroughly explored, and the record shows that he responded
fully to Senators' concerns.
Whatever one's view of that matter, I do not find it a sufficient
basis to reverse my otherwise very favorable impression of Judge
Breyer's fitness to serve on the Supreme Court. It certainly should not
detract from the reputation he has earned as a fair, considerate, and
thoughtful judge.
Since being appointed to the Federal bench in 1980, Judge Breyer has
proven himself a skilled jurist. President Clinton, announcing the
Breyer nomination, noted ``his sheer excellence, his broad
understanding of the law, his deep respect for the role of the courts
in our life and in protecting our individual rights, and his gift as a
consensus builder.''
Judge Breyer's opinions are known for their clarity and compelling
logic. He recognizes that opinions are supposed to shed light on a
point of law, rather than add to their confusion.
A professor and a jurist, Judge Breyer is well versed in the law. He
has written many notable opinions in diverse areas, including civil
rights, criminal law, constitutional liberties, economic regulation,
and environmental protection.
His rulings have served to protect access to Federal courts for all
Americans, to ensure the rights to free speech and freedom of religion,
to protect the civil rights of all Americans, and to enforce the
criminal law fairly by balancing the interests of law enforcement with
individual rights.
While many of the Supreme Court's high profile cases involve these
sorts of issues, many of the less visible cases involve commercial or
administrative issues. Judge Breyer has established himself as one of
our Nation's leading authorities on antitrust and economic regulation.
He has decided many cases involving the controlling of health care
costs and prescription drug prices, preventing price discrimination,
and defining predatory pricing under the antitrust laws.
In each of these cases, he has worked to ensure that antitrust laws
are used in the way they are intended--to protect consumers. He has
thought and written extensively about these matters, and his expertise
is unquestioned.
His knowledge in these difficult areas will be beneficial in the
Court's deliberations. His skill as a consensus-builder will further
benefit the Court.
In the First Circuit Court of Appeals, where he is currently chief
judge, dissents are few. Judge Breyer has an uncommon ability to bring
people with divergent viewpoints together, to find common themes, and
to help groups reach consensus.
Perhaps most important, no matter what the subject before him, Judge
Breyer remembers that his decisions and opinions will affect the lives
of real people. During his confirmation hearings, he told the committee
that justice requires ``both a heart and a head.''
He explained that without a heart, the law ``becomes a sterile set of
rules removed from human problems, and it won't help.'' And yet without
a head, he said, ``there's the risk that in trying to decide a
particular person's problem * * * you cause trouble for a lot of other
people.
Judge Breyer's rulings show that he uses his heart and his head,
bringing both compassion and intellect to the Federal bench. He takes
into account both the requirements of the letter of the law and the
needs of human beings who present their cases.
Stephen Breyer is an outstanding judge, and I believe he will be an
outstanding Supreme Court jurist.
I urge my colleagues to support his nomination.
I thank my colleagues and yield the floor.
Mr. HATCH. Mr. President, I ask for the yeas and nays.
Mr. BIDEN. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. BIDEN. Mr. President, I will take only 30 seconds.
I have only one regret relative to this nomination, and that is that
our last speaker did not choose to take this seat.
The single most qualified person to serve on the Supreme Court of the
United States, and I say this without equivocation, is the man who just
spoke.
I am sure the opportunity will come again. I hope he is more
enlightened next time in the sense of saying yes.
But that in no way is to reflect negatively on Judge Breyer. We say
there is no one more qualified than Judge Breyer save one I can think
of, and that is George Mitchell. But maybe we will have a chance to
work on that another time.
I yield back the remainder of the time.
Mr. HATCH. I yield back the remainder of our time.
The PRESIDING OFFICER. All time is yielded back.
Vote
The PRESIDING OFFICER. The question is, Will the Senate advise and
consent to the nomination of Stephen G. Breyer, of Massachusetts, to be
an Associate Justice of the Supreme Court? On this question, the yeas
and nays have been ordered, and the clerk will now call the roll.
Mr. MITCHELL. Mr. President, if I may have the attention of my
colleagues, it has been the practice in the Senate that votes on
Supreme Court nominations are made from the Senator's desk. I ask that
Senators cast their votes from their desks during this vote.
The PRESIDING OFFICER. All Senators will stand back from their desks
as their names are called and cast their vote.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. Pell. I announce that the Senator from Florida [Mr. Graham] is
necessarily absent.
I further announce that the Senator from Rhode Island [Mr. Pell] is
absent on official business.
I further announce that, if present and voting, the Senator from
Florida [Mr. Graham] would vote ``yea.''
Mr. SIMPSON. I announce that the Senator from Minnesota [Mr.
Durenberger] and the Senator from Wyoming [Mr. Wallop] are necessarily
absent.
I further announce that, if present and voting, the Senator from
Wyoming [Mr. Wallop] would vote ``yea.''
The result was announced--yeas 87, nays 9, as follows:
[Rollcall Vote No. 242 Ex.]
YEAS--87
Akaka
Baucus
Bennett
Biden
Bingaman
Bond
Boren
Boxer
Bradley
Breaux
Brown
Bryan
Bumpers
Byrd
Campbell
Chafee
Cochran
Cohen
Conrad
Craig
D'Amato
Danforth
Daschle
DeConcini
Dodd
Dole
Domenici
Dorgan
Exon
Faircloth
Feingold
Feinstein
Ford
Glenn
Gorton
Gramm
Grassley
Gregg
Harkin
Hatch
Hatfield
Heflin
Hollings
Hutchison
Inouye
Jeffords
Johnston
Kassebaum
Kempthorne
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mack
Mathews
McCain
McConnell
Metzenbaum
Mikulski
Mitchell
Moseley-Braun
Moynihan
Murray
Nunn
Packwood
Pressler
Pryor
Reid
Riegle
Robb
Rockefeller
Roth
Sarbanes
Sasser
Shelby
Simon
Simpson
Specter
Stevens
Thurmond
Warner
Wellstone
Wofford
NAYS--9
Burns
Coats
Coverdell
Helms
Lott
Lugar
Murkowski
Nickles
Smith
NOT VOTING--4
Durenberger
Graham
Pell
Wallop
So the nomination was confirmed.
The PRESIDING OFFICER. Under the order of July 28, the motion to
reconsider is tabled.
____________________