Sacerdote et al v. New York University

MEMORANDUM OF LAW in Opposition re: 357 MOTION to Vacate 349 Clerk's Judgment,, 348 Memorandum & Opinion, . MOTION for New Trial . . Document

S.D.N.Y.November 29, 2018

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DR. ALAN SACERDOTE, et al., Plaintiffs, v. NEW YORK UNIVERSITY, Defendant. : : : : : : : : : : Case No.: 1:16-cv-06284-RWS ECF Case MEMORANDUM IN OPPOSITION TO MOTION TO VACATE JUDGMENT AND FOR NEW TRIAL Mark Muedeking (admitted pro hac vice) Ian C. Taylor (admitted pro hac vice) Jennifer K. Squillario (admitted pro hac vice) Adam J. Pié (admitted pro hac vice) DLA Piper LLP (US) 500 8th Street, NW Washington, DC 20004 (202) 799-4000 Brian Kaplan (BK4922) Evan D. Parness (EP6680) DLA Piper LLP (US) 1251 Avenue of the Americas New York, New York 10020 (212) 335-4500 Attorneys for Defendant Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 1 of 32 TABLE OF CONTENTS Page i INTRODUCTION ............................................................................................................1 STANDARD OF REVIEW ...............................................................................................3 BACKGROUND AND RELEVANT FACTS .....................................................................5 I. Plaintiffs’ Motion to Vacate Follows this Court’s Rulings in Favor of NYU on All Counts. ......................................................................................................................5 II. Evan Chesler Is Not a Principal of NYU. ..............................................................6 III. The Board of Trustees’ Actions Were Never at Issue in This Case. .................................7 IV. There Is No Indication That Cravath Acted Improerly or Would Agree to Admit Judge Forrest to Advance Mr. Chesler’s Personal Interes s or the Interests of NYU. ....................................................................................................................... 11 V. There Are No Facts That Could Reasonably Suggest to a Well-Informed Observer That Judge Forrest, a Highly Talented and Experienced Attorney, Would Have Any Incentive to Rule for NYU in This Case to Ingratiate Herself to Mr. Chesler of Cravath. .......................................................................................................... 12 ARGUMENT ...................................................................................................................... 14 I. Plaintiffs Have Failed to Meet Their High Burden of Proving That Judge Forrest Was Required to Recuse Herself From This Case. ....................................................... 14 A. Any Alleged Connection Between Judge Forrest and NYU is too Indirect to Raise any Doubts About the Court’s Impartiality........................................... 14 B. Judge Forrest was Not Required to Recuse Herself B cause of Mr. Chesler’s Alleged Interests in the Litigation. .................................................... 19 C. Judge Forrest’s Decision to Rejoin Her Former Law Firm After Retiring From the Bench Would Not Cause a Well-Informed Observer to Harbor Any Reasonable Doubt About Her Impartiality. ................................................ 21 II. Even If Plaintiffs Could Establish That Recusal Is Required, Plaintiffs Are Not Entitled to a New Trial............................................................................................. 22 CONCLUSION ........................................ ...................................................................... 25 Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 2 of 32 ii TABLE OF AUTHORITIES Page(s) Cases In re Aguinda, 241 F.3d 194 (2d Cir. 2001) ................................................................................. 3, 19 Alex. Brown & Sons Inc. v. Marine Midland Banks, Inc., No. 96 CIV. 2549 RWS, 1997 WL 97837 (S.D.N.Y. 1997) ........................................... 15, 18 In re Allied-Signal Inc., 891 F.2d 974 (1st Cir. 1989) ............................................................................... 23, 24 Anderson v. Sullivan No. 07–111, 2013 WL 5302287 (W.D. Pa. 2013) ............................................. 16, 17, 8 Bailey v. Broder, No. 94 Civ. 2394 (CSH), 1997 WL 73717 (S.D.N.Y. Feb. 20, 1997) ..................................... 3 Barry v. U.S., 528 F.2d 1094 (7th Cir. 1976) .................................................................................. 23 Camacho v. Autoridad de Telefonos de Puerto Rico, 868 F.2d 482 (1st Cir. 1989) ..................................................................................... 25 Canino v. Barclays Bank, PLC, No. 94-cv-6314 (SAS), 1998 WL 7219 (S.D.N.Y. Jan. 7, 1998) ................................. 15 Chitimacha Tribe of La. v. Harry L. Laws Co., Inc., 690 F.2d 1157 (5th Cir. 1982) .................................................................................. 16 Cool Light Co. v. GTE Prods. Corp., 24 F.3d 349 (1st Cir. 1994) ....................................................................................... 25 De Curtis v. Ferrandina, 529 Fed. Appx. 85 (2d Cir. 2013) ............................................................................... 5 DeLuca v. Long Island Lighting Co., Inc., 862 F.2d 427 (2d Cir. 1988) ..................................................................................... 21 DeNike v. Cupo, 196 N.J. 502 (2008) .................................................................................................. 19 Easley v. Univ. of Mich. Bd. of Regents, 906 F.2d 1143 (6th Cir. 1990) .................................................................................. 21 Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 3 of 32 iii Gench v. Hostgator.com, LLC, No. 14-cv-3592 (RA), 2015 WL 4579147 (S.D.N.Y. July 29, 2015) ........................... 15 Harris v. Bd. of Supervisors of La. State Univ. & Agric. & Mech. College, 409 Fed. Appx. 725 (5th Cir. 2010) .......................................................................... 21 Higganbotham v. Okla. 328 F.3d 638 (10th Cir.2003) ................................................................................... 25 Hoatson v. N.Y. Archdiocese, 280 Fed. Appx. 88 (2d Cir. 2008) ............................................................................. 20 Hoffenberg v. U.S., 333 F. Supp. 2d 166 (S.D.N.Y. 2004) ...................................................................... passim In re Billedeaux, 972 F.2d 104 (5th Cir.1992) ..................................................................................... 16 In re Continental Airlines Corp., 901 F.2d 1259 (5th Cir. 1990) .................................................................................. 18 In re Kansas Pub. Emps. Ret. Sys., 85 F.3d 1353 (8th Cir. 1996) .................................................................................... 21 In re Mason, 916 F.2d 384 (7th 1990) ............................................................................................. 4 In re Medtronic, Inc. Sprint Fidelis Leads Prods. Liab. Litig., 601 F. Supp. 2d 1120 (D. Minn. 2009) ............................................................... 20, 21 In re Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 839 F.2d 1226 (7th Cir.1988) ................................................................................... 16 Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847 (1988) ......................................................................................... 4, 5, 23 Marcavage v. Bd. of Trs. of Temple Univ. of the Comm nwealth Sys. Of Higher Ed., 232 Fed. Appx. 79 (3d Cir. 2007) ....................................................................... 24, 25 Martin v. Monumental Life Ins. Co., 240 F.3d 223 (3d Cir. 2001) ..................................................................................... 23 Mathis v. Goldberg, No. DKC 12-1777, 2013 WL 1232898 (D. Md. 2013) ...... ............................................. 21 Maurey v. Univ. of S. Cal., 12 Fed. Appx. 529 (9th Cir. 2001) ................. ........................................................... 21 Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 4 of 32 iv Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) .................................................................................. 20 Patterson v. Mobil Oil Corp., 335 F.3d 476 (5th Cir. 2003) .................................................................................... 25 Payne v. Univ. of S. Miss., No. 1:12cv41–KS–MTP, 2013 WL 3967535 (S.D. Miss. 2013) ........................................... 21 Pepsico, Inc. v. McMillen, 764 F.2d 458 (7th Cir. 1985) .............................................................................. 18, 19 Ransmeier v. Mariani, 718 F.3d 64 (2d Cir. 2013) ....................................................................................... 15 Royal Air Maroc v. Servair, Inc., 603 F. Supp. 836 (S.D.N.Y. 1985) ............................................................................ 16 Scott v. Metro. Health Corp., 234 Fed. Appx. 341 (6th Cir. 2007) ............................................................................ 3 Sharkey v. J.P. Morgan Chase & Co., 251 F. Supp. 3d 626 (S.D.N.Y. 2017) ............................................................................... 3 Spanos v. Boschen, 61 A.D.2d 837 (N.Y. App. Div. 1978) .............................................................................. 7 TV Commc’ns Network, Inc. v. ESPN, Inc., 767 F. Supp. 1077 (1991) ............................................................................................... 20 U.S. v. Ali, 799 F.3d 1008 (8th Cir. 2015) .................................................................................... 3 U.S. v. Arena, 180 F.3d 380 (2d Cir. 1999) ..................................................................................... 20 U.S. v. Cerceda, 172 F.3d 806 (11th Cir. 1999) .................................................................................. 25 U.S. v. DeTemple, 162 F.3d 279 (4th Cir. 1998) ...................................................................................... 4 U.S. v. Jordan, 49 F.3d 152 (5th Cir. 1995) ....................... ......................................................... 23, 24 U.S. v. Lovaglia, 954 F.2d 811 (2d Cir.1992) ............................................................................ 4, 22, 25 Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 5 of 32 v U.S. v. Occhipinti, 851 F. Supp. 523 (S.D.N.Y.1993) ......................................................................... 3, 23 U.S. v. Pescatore, No. 05-CR-128 (TCP) (ARL), 2006 WL 47451 (E.D.N.Y. Jan. 5, 2006) ............................. 20 U.S. v. Reiners, 187 F.3d 632 (4th Cir. 1999) .................................................................................... 17 Valente v. Univ. of Dayton, No. 3:08–cv–225, 2008 WL 11352577 (S.D. Ohio 2008) ................................................... 21 Williamson v. Ind. Univ., 345 F.3d 459 (7th Cir.2003) ..................................................................................... 25 Wiltshire v. Williams, No. 10-CV-6947, 2012 WL 899383 (S.D.N.Y. 2012) ...... ............................................ 3, 14 Statutes 28 U.S.C. § 455 ....................................................................................................... passim Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 6 of 32 1 INTRODUCTION After a thorough and fair eight-day bench trial that resulted in a judgment dismissing all of their claims, Plaintiffs seek another bite at the apple by making the baseless claim that Judge Katherine B. Forrest violated her ethical duties under 28 U.S.C. § 455 by returning to Cravath, Swaine & Moore LLP (“Cravath”) after finding for NYU in this case. Plaintiffs’ Motion to Vacate is premised upon Plaintiffs’ misstatement of he record, speculative and unsubstantiated claims, and the alleged personal interests of an unrelated non-party. Plaintiffs’ motion fails to show that an objective, disinterested observer fully informed of the underlying facts, would entertain significant doubt that justice was done, or that a reasonable person, knowing all the facts, would question Judge Forrest’s impartiality. Plaintiffs seek disqualification by alleging that “Judge Forrest was considering employment with [Cravath], whose chairman, Evan Chesler, is a key member of the Board of Trustees of NYU and its Executive Committee, Finance Committee, and Compensation Committee.” (ECF No. 358 at 1.) Plaintiffs’ argument is necessarily based on five necessary premises, each of which is either an outright misstatement of the facts or a dubious and unsupported insinuation: (1) that Mr. Chesler was a “Principal” of NYU; (2) that Mr. Chesler’s conduct as a member of the NYU Board of Trustees was at issue in this case; (3) that Mr. Chesler controls Cravath to such an extent that Mr. Chesler’s interests and Cravath’s interests are identical; (4) that Cravath and Mr. Chesler would offer a partnership to Judge Forrest in an attempt to influence her decision; and (5) that Judge Forrest’s prospects upon leaving the bench were so limited or that Judge Forrest was so desperate to return to Cravath that she would have an incentive to rule in favor of NYU. The first two of these premises are flat-out misstatements of the record. Mr. Chesler is not a “Principal” of NYU as Plaintiffs allege. Nor was he a party, witness or lawyer in this case. Plaintiffs’ contention that the actions of the NYU Board of Trustees, let alone Mr. Chesler, were Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 7 of 32 2 at issue in this case is blatantly false. Plaintiffs did not even mention the Board of Trustees once in any of the five complaints they filed in this and a related case; th Board of Trustees was mentioned only twice during the trial of this case; Plaintiffs did not refer to the Board of Trustees in their summation; and the Board of Trustees was not even discussed in the Plaintiffs’ detailed proposed findings of fact and conclusions of law. Plaintiffs’ contentions concerning Cravath are pure sp culation unsupported by any facts. Mr. Chesler is one of over eighty partners at Cravath. And while Mr. Chesler currently holds the title of Chairman of Cravath, Mr. Chesler moved outf he managing role of presiding partner more than six years ago. Plaintiffs provide no support for their premise that any well informed observer would conclude that Cravath’s decision to offer partnership to former Judge Forrest would or could be influenced or dependent on her ruling in this case. Plaintiffs’ claims concerning Judge Forrest’s return to Cravath are also flawed. A well- informed observer would know that former Judge Forrest was a highly talented lawyer, that she could have her pick of the top-tier law firms upon leaving the bench, and that she would have absolutely no incentive to even consider ruling in favor of NYU in this case to ingratiate herself with Mr. Chesler or Cravath. Any well-informed and objective observer would immediately understand that former Judge Forrest’s statement that Cravath was the “only firm . . . she considered joining” was made after she joined Cravath and was obviously intended to promote her practice at that firm. Plaintiffs reliance solely on an alleged “appearance of impropriety” is not enough to justify vacatur under Rule 60(b)(6). Plaintiffs do n t even address the requirements of Rule 60(b)(6). Nor have Plaintiffs provided any evidenc of actual bias or harm, which is required to vacate a final order under section 455(a). Rather, Plaintiffs filed this motion to vacate, not Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 8 of 32 3 because of Judge Forrest’s impartiality or any harm, but because they want to circumvent the Court’s decision. This Court and the Second Circuit, however, have long cautioned against using recusal motions as “strategic devices” to avoid the “adverse consequences” of a judge’s decision. Hoffenberg v. U.S., 333 F. Supp. 2d 166, 172-73 (S.D.N.Y. 2004) (quoting In re Drexel Burnham Lambert, Inc., 861 F.2d 1307, 1312 (2d Cir. 1988)). STANDARD OF REVIEW “There exists a strong presumption of a judge’s impartiality.” Bailey v. Broder, No. 94 Civ. 2394 (CSH), 1997 WL 73717, at *2 (S.D.N.Y. Feb. 20, 1997). Accordingly, a party seeking recusal bears a “substantial burden” in proving that recusal is required. U.S. v. Occhipinti, 851 F. Supp. 523, 525 (S.D.N.Y.1993); see also U.S. v. Ali, 799 F.3d 1008, 1017 (8th Cir. 2015) (“‘A party introducing a motion to recuse carries a heavy burden of proof; a judge is presumed to be impartial and the party seeking disqualification bears the substantial burden of proving otherwise.’”). “It is not the burden of the judge, or the prevailing party, to disprove or rule out any ‘conceivable’ chain of events the movant can dream up.” Scott v. Metro. Health Corp., 234 Fed. Appx. 341, 355 (6th Cir. 2007) (emphasis dded). “[T]he grounds asserted in a recusal motion must be scrutinized with care, and judges should not recuse themselves solely because a party cl ims an appearance of partiality.” In re Aguinda, 241 F.3d 194, 201 (2d Cir. 2001). Where a party seeking recusal fails to meet their burden of proof, “disqualification is not optional; rather, it is prohibited.” Sharkey v. J.P. Morgan Chase & Co., 251 F. Supp. 3d 626, 632 (S.D.N.Y. 2017) (quoting In re Aguinda, 241 F.3d at 201); see also Wiltshire v. Williams, No. 10-CV-6947, 2012 WL 899383, at *6 (S.D.N.Y. 2012) (“The Second Circuit has emphasized that a judge has a duty not to recuse unless the facts warrant it, and this duty is as strong as the duty to do so when warranted.”). “The Second Circuit has ‘interpreted 28 U.S.C. § 455 as asking whether ‘an objective, Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 9 of 32 4 disinterested observer fully informed of the underlying facts, would entertain significant doubt that justice would be done absent recusal,’ or alternatively, whether ‘a reasonable person, knowing all the facts,’ would question the judge’s impartiality.” Hoffenberg, 333 F. Supp. 2d at 171-72 (quoting U.S. v. Yousef, 327 F.3d 56, 169 (2d Cir.2003)) (emphasis added). Motions to recuse are analyzed objectively from the perspectiv of a “well-informed, thoughtful observer rather than to a hypersensitive or unduly suspicious person.” In re Mason, 916 F.2d 384, 386 (7th 1990) (“A reasonable observer is unconcerned about trivial risks” but rather requires “a risk substantially out of the ordinary” to justify recusal.); see also U.S. v. DeTemple, 162 F.3d 279, 287 (4th Cir. 1998) (“[A] reasonable outside observer is not a person unduly suspicious or concerned about a trivial risk that a judge may be biased.”). Motions to recuse “are committed to the discretion of the judge . . .who is enjoined to ‘weigh the policy of promoting public confidence in the judiciary against the possibility that those questioning [a judge’s] impartiality might be seeking to avoid the adverse consequences of his presiding over their case.’” Hoffenberg, 333 F. Supp. 2d at 172-73 (quoting U.S. v. El– Gabrowny, 844 F. Supp. 955, 958 (S.D.N.Y.1994)); see also U.S. v. Lovaglia, 954 F.2d 811, 815 (2d Cir.1992) (“[J]udges must be alert to avoid thepossibility that those who would question their impartiality are in fact seeking to avoid the consequences of the judge’s expected adverse decision.”) (internal quotation marks omitted). Even if a statutory violation occurred, the Court must also determine what remedy “will best serve the purpose of the legislation [requiring recusal].” Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 862 (1988) (failure to recuse can be harmless error). A court should only grant Rule 60(b)(6) motions to vacate for a based on section 455(a) in “extraordinary circumstances.” Id. at 863-64; see also De Curtis v. Ferrandina, 529 Fed. Appx. 85, 86 (2d Cir. Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 10 of 32 5 2013) (Rule 60(b)(6) requires proof of “extraordinary circumstances or extreme hardship.”). BACKGROUND AND RELEVANT FACTS I. Plaintiffs’ Motion to Vacate Follows this Court’s Rulings in Favor of NYU on All Counts. Plaintiffs’ pleadings in this case challenged the management of two defined-contribution, participant directed, 403(b) retirement pension plans made available to certain NYU faculty and staff (collectively, the “Plans”). To administer these Plans and other plans, NYU created a Retirement Plan Committee (the “Retirement Committee”). The actions of the Retirement Committee were the sole basis of Plaintiffs’ claims in this case. (ECF No. 348 at 2.) Upon a motion by NYU, the Court dismissed the vast majority of Plaintiffs’ claims on August 25, 2017. (ECF No. 79.) The Court then denied Plaintiffs’ motion for reconsideration of the dismissal of those claims and Plaintiffs’ request to amend their complaint a second time to join as defendants several NYU employees who served ex officio on the Retirement Committee. (ECF Nos. 100, 101.) In an admitted effort to circumvent these Orders, Plaintiffs initiated a second action, Sacerdote, et al. v. New York University School of Medicine, et. al. (Case No. 17- cv-08834) (“Sacerdote II”). On February 23, 2018, this Court dismissed Plaintiffs’ Sacerdote II lawsuit in its entirety, holding inter alia that the Sacerdote II complaint was “duplicative,” “a blatant attempt to replead an existing action;” and “an attempt to avoid the Court’s previous rulings.” (Sacerdote II, ECF No. 137 at 2, 4.)1 In April 2018, the Court held an eight-day bench trial, which consisted of testimony from seventeen witnesses, five experts, and over six hundred exhibits. (ECF No. 348 at 5-8.) Plaintiffs’ only remaining claims at trial were tha NYU, through its Retirement Committee, allegedly breached ERISA’s fiduciary duties by (1) allowing the Plans to pay unreasonable 1 A more detailed discussion of Plaintiffs’ attempts to avoid adverse decisions can be found in NYU’s motion for sanctions. (Sacerdote II, ECF No. 164.) Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 11 of 32 6 administrative fees, and (2) failing to remove two funds from the Plans’ investment alternatives. (ECF No. 79.) After considering all of the evidenc, the Court found that the Retirement Committee performed its role adequately and that Plintiffs had failed to establish any breach of fiduciary duty. (ECF No. 348 at 28-29.) The Court f rther found that “the evidence does not support a failure or loss with regard to recordkeeping fees, or with regard to the two Plans investment options at issue here.” (Id. at 29.) “Accordingly, the Court [found] in favor of NYU on all claims.” (Id. at 3.) II. Evan Chesler Is Not a Principal of NYU. Plaintiffs falsely claim that Mr. Chesler is a principal of NYU. (Id.) While Mr. Chesler is a member of the Board of Trustees and sits on several committees on the Board, he has no authority to act independently on behalf of NYU. Rather, NYU’s powers are vested in and exercised by the Board of Trustees, which has a maximum of seventy voting members.2 As a trustee, Mr. Chesler has one vote, and an action by the NYU Board of Trustees requires a majority vote with a quorum of one-third of the voting trustees.3 Mr. Chesler is currently one of sixty-one voting trustees on the NYU Board of Trustees.4 In addition, Mr. Chesler also serves as a member on: the Executive Committee (which has twenty members), the Committee on Trustees (which has fourteen members), the Compensation Committee (which has nine members), the Development Committee (which has sixteen members), and the Finance Committee (which has voting members).5 The Executive Committee has all of the powers of the Board except for powers that cannot be delegated. Under the NYU bylaws, all committees must have a quorum of one-third of 2 Ex. A, Charter ¶ 2; Ex. B, Bylaws ¶ 12. 3 Ex. B, Bylaws ¶ 23. 4 Ex. C, NYU Board of Trustees Webpage. 5 Ex. D, NYU Board of Trustees Committees Webpage. Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 12 of 32 7 its members to approve any action, with approval requiring a majority vote of the members present.6 Because the Executive Committee can exercise Board powers, and a quorum of one- third requires at least seven of the committee’s twen y members present, a majority vote would require four votes.7 Mr. Chesler’s power as a committee member is limited to one vote. Because Mr. Chesler had no independent authority to act on NYU’s behalf, he was not a principal of NYU, and was not a party in this case. See Spanos v. Boschen, 61 A.D.2d 837, 838 (N.Y. App. Div. 1978) (“The management of a not-for-profit corp ation is vested in its board, not in its directors acting individually”). III. The Board of Trustees’ Actions Were Never at Issue in This Case. For the first time ever in this litigation, Plaintiffs claim that their complaint “directly implicate[s] NYU’s Board of Trustees” and Mr. Cheslr. (ECF No. 358 at 4-5.) Plaintiffs devote more than a third of their motion to this argument in an attempt to re-characterize their complaint as an action against the Board of Trustees.8 (ECF No. 358 at 4-6, 9-14.) The Board of Trustee were never “central to the case.” Plaintiffs never brought any claims against the Board of Trustees, despite attempting to file five separate complaints in two lawsuits. (See e.g. ECF Nos. 1, 39, 84-2; Sacerdote II ECF Nos. 1, 105).9 While Plaintiffs named NYU, NYU subsidiaries, the Retirement Committee, and all present and former R tirement Committee members as 6 Ex. B, Bylaws ¶ 53(b)-(c). 7 Mr. Chesler is also the chair of the NYU Faculty of Arts and Science Board of Overseers; a member of the NYU School of Law Foundation Board of Trustees; an NYU School of Law adjunct professor; founder and chair of the NYU Lawyer Alumni Mentoring Program; and a member of the NYU School of Law Center on Civil Justice Board of Advisors. Ex. C, NYU Board of Trustees Webpage. None of these positions grant him any relevant indiv dual authority to act on NYU’s behalf specific to the Retirement Committee. Ex. B, Bylaws ¶ 53. 8 Plaintiffs devote several pages citing any references to the NYU Board of Trustees found in the record. Plaintiffs devote a page discussing how named Plaintiffs’ believ d that the Board was managing the Retirement Plas, as if that were fact. (ECF No. 358 at 12.) Most of Plaintiffs’ cites concern the creation of the Retirement Committee and do not relate to any actions of the Board. Plaintiffs also cite their experts Dr. Gerald Buetow, whose testimony the Court found flawed and unpersuasive, (ECF No. 348 at 66 n. 110); and Michael Geist, who the Court found “lacked the particular expertise necessary to provide useful opinions to the Court.” (Id. at 7 n. 19.) 9 All ECF citations in this memorandum are to docket number 16-cv-6284 unless otherwise noted. Citations and references to Sacerdote II refers to Plaintiffs’ second lawsuit, Sacerdote, et al. v. New York University School of Medicine, et. al. (Case No. 17-cv-08834). Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 13 of 32 8 defendants, Plaintiffs never tried to sue the NYU Board of Trustees or any member of the Board. (ECF Nos. 1, 39, 84-2; Sacerdote II ECF Nos. 1, 105). Plaintiffs never mentioned the NYU Board of Trustees in any pleading, including the very paragraphs cited in their motion to vacate. (See ECF Nos. 1, 39, 84-2; Sacerdote II ECF Nos. 1, 105). Nor did Plaintiffs ever allege that the Board of Trustees were fiduciaries under ERISA. (See ECF Nos. 1, 39, 84-2; Sacerdote II ECF Nos. 1, 105). While Plaintiffs attempted to plead a uty to monitor claim—which was dismissed eight months before trial for lacking any factual bsis—that claim never mentioned the NYU Board of Trustees or Mr. Chesler. (See ECF Nos. 1, 39, 84-2; Sacerdote II ECF Nos. 1, 105.)10 Nevertheless, Plaintiffs now repeatedly argue that e NYU Board of Trustees were fiduciaries responsible for the Plans and for monitoring the Retirement Committee. (See ECF No. 358 at 1-3, 5, 9, 19, 21, 23.) The Retirement Committee Charter, which established the Retirement Committee, states that the Retirement Committee, not the Board of Trustees, was responsible for the administration and management of the Plans at issue. (Ex. E, PX466 at 2; id. at 2 (“The Committee shall be responsible for evaluating, selecting and monitoring participant- directed investment options” in the Plans); id. at 3 (“The Committee . . . shall have full discretionary authority for deciding benefit claims and appeals to the extent consistent with each Plan, and all such decisions shall be final and conclusive on all persons”).) While Plaintiffs claim that the Committee Charter requires that the NYU Board of Trustees monitor the actions of the Retirement Committee, the Charter itself uses th word monitoring only once, and only to establish the Committee’s duty to monitor the Plans. (Id. at 2.) 10 On page 24 of their motion, Plaintiffs note that this case was the first of eleven other pending ERISA cases, most of which were brought by Plaintiffs’ counsel, to goto trial. Notably, the Plaintiffs’ counsel in those cases did not name the Board or Trustees or any individual trustees as defendants. See e.g., Munro v. Univ. of S. Calif., 16-cv- 6191 (C.D. Cal.); Vellali v. Yale Univ., 16-cv-1345 (D. Conn.); Henderson v. Emory Univ., 16-cv-2920 (N.D. Ga.); Divane v. Northwestern Univ., 16-cv-8157 (N.D. Ill.); Kelly v. Johns Hopkins Univ., 16-cv-2835 (D. Md.); Tracey v. Mass. Inst. Tech., 16-cv11620 (D. Mass.); Clark v. Duke Univ., 16-cv-1044 (M.D.N.C.); Cates v. Columbia Univ., 16-cv-6524 (S.D.N.Y.); Sweda v. Univ. of Pa., 16-cv-4329 (E.D. Pa.); Cunningham v. Cornell Univ., 16-cv-6525 (S.D.N.Y.); Cassell v. Vanderbilt Univ., 16-cv-2086 (M.D. Tenn.). Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 14 of 32 9 Plaintiffs further incorrectly assert that the NYU Board of Trustees was responsible for reviewing and approving the Retirement Committee’s Investment Policy Statement (“IPS”), that the Committee Charter required “the Finance Committee of the Board of Trustees to” approve all changes to the IPS, and that compliance with the IPS was an issue at trial. (ECF No. 358 at 5-6, 13.) The IPS does not mention the Board, and the Committee Charter does not state that the Board or any of its Committees must review and approve the IPS. (Ex. E, PX466 at 4; Ex. F, PX534; Ex. G, DX391.) There is no evidence in therecord that the Board or any of its Committees ever reviewed or was required to review the IPS. The only evidence in the record states that he Retirement Committee r viewed and approved the IPS. (See Ex. H, Tr. at 1005:8- 17) (explaining that the IPS is reviewed annually and that “the retirement committee votes and approves it”). As for compliance with the IPS being an issue at tri l, Judge Forrest explained: “At trial, plaintiffs argued that the Committee failed to approve or use an IPS, and that such failure evidences an imprudent process. This assertion is incorrect. While the IPS was not formally signed, the evidence at trial supports that it was in fact adopted and used throughout the Class Period.” (ECF No. 348 at 24 n. 34.) Plaintiffs’ final claim concerning the relevance of the NYU Board of Trustees concerns a reporting requirement that was never at issue in this case. Plaintiffs point to the section of the Committee’s Charter that requires the Board of Trustee to approve any discretionary changes to the Plans which would “cost more than $3 million or result in an annual increase in cost of over $2 million.” (ECF No. 358 at 6.) However, the record contains no evidence of any discretionary change, nor have Plaintiffs alleged that the Retirement Committee made any discretionary change, that would have increased the Plans’ costs t such a level that the NYU Board of Trustees’ approval was required. All of the allegations in this case related to actions that fell Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 15 of 32 10 within the full discretionary authority of the Retir ment Committee. (Ex. E, PX466 at 2.) Plaintiffs’ claim that the NYU Board of Trustees was “central to this case” is pure fiction. Not one member of the NYU Board of Trustees was depos d or called as a witness at any stage in this case. The trial record contains no references to any member of the NYU Board of Trustees. The trial record contains no reference to Cravath, or any of its members. Of the thousands of pages of exhibits entered into evidence i this case, not a single page of any document mentions Mr. Chesler, Cravath, or any member of Cravath. Although supposedly “central” to the case, the NYU Board of Trustees was mentioned just twice during live witness testimony, and one of those instances was during the testimony of Patricia Halley, co-chair of the Retirement Committee, wherein Mrs. Halley explained that the Retirement Committee, not the Board, reviewed and approved the IPS. (Ex. H, Tr. at 1005:8-17). The only other instance was a misstatement of fact by Plaintiff Monaco, who testified (without any foundation) that it was her “understanding” that the “board of trustees was respon ible, basically, for administering this plan.” (Id. at 1050:22-25.) Plaintiff Monaco’s testimony is clearly disproven by the Committee Charter, which explicitly states the opposite: “the Retirement Committee . . . shall serve as Plan Administrator for the plans.” (Ex. E, PX466 at 2.) Because the focus of the trial was always about the actions of the Retirement Committee, and not the NYU Board of Trustees, not once in the Court’s findings of facts and conclusions of law did Judge Forrest mention or discuss the actions of the NYU Board of Trustees. (See ECF No. 348.)11 As the Court correctly observed, Plaintiffs’ conte tion was “that NYU, through its Retirement Committee (the “Committee”), failed to fulfill certain of its fiduciary obligations 11 The only reference to the NYU Board of Trustees that appears in the Court’s opinion was a citation to Dr. Gerald Buetow’s testimony that he was engaged by Plaintiffs o “opine on the fiduciary process and investment decisions made by NYU and its officers and trustees.” (ECF No. 348 at 66 n. 110.) The Court found Dr. Buetow’s testimony flawed and was ultimately not persuaded by his testimony. (Id.). Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 16 of 32 11 under ERISA.” (Id. at 2 (emphasis added).) IV. There Is No Indication That Cravath Acted Improperly or Would Agree to Admit Judge Forrest to Advance Mr. Chesler’s Personal Interests or the Interests of NYU. Plaintiffs admit that there is no evidence that Cravath acted improperly in inviting Judge Forrest to return to the firm as a partner. (ECF No. 358 at 2. (“Plaintiffs wish to make clear that they are not accusing the Cravath firm of impropriety”).) Moreover, Plaintiffs have not alleged that Mr. Chesler had any role in Cravath’s decision t invite Judge Forrest to return to the firm, or that Mr. Chesler controls Cravath to such an extent that his interests are identical to Cravath’s. Plaintiffs though seek to conflate the interests of Mr. Chesler and Cravath to suggest that Mr. Chesler controlled Cravath’s decision to approve Judge Forrest’s return to the firm to benefit his personal interests or those of NYU. (Id. at 1-3, 7, 9, 14-15, 23.) But no reasonably-informed observer of the facts would give any credence to these suggestions. Nor have Plaintiffs alleged any facts that would cause a well-informed observer to even entertain the thought that Cravath or Mr. Chesler attempted to influence Judge Forrest’s decision. Mr. Chesler is one of over eighty partners at Cravath.12 Mr. Chesler has not served as a presiding partner at Cravath in over six years.13 Under Cravath’s firm rules, Mr. Chesler was required to step down from his leadership position in 2012, which he did effective January 2013.14 While Mr. Chesler was given the title of “Chairman of Cravath,” this position is “largely honorary.”15 A well-informed observer would not believe that Mr. Chesler controls Cravath to such an extent that Mr. Chesler’s interests and Cravath’s interests are identical. Nor would any well-informed observer believe that a large and prominent law form such as Cravath would in fact offer a partnership to Judge Forrest to influence her decision in this case, which did not 12 See Ex. I, Cravath NALP Profile; Ex. J, Cravath Chambers P ofile. 13 Ex. K, Peter Lattman, A New Leader is Appointed at Cravath, Swaine & Moore. N.Y. Times (June 29, 2012). 14 Id. 15 Id. Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 17 of 32 12 involve the firm or one of its clients, merely because one of its partners served as an NYU Board member. The record contains zero evidence that Cravath’s decision to invite Judge Forrest to return to the partnership was motivated by anything other than her exceptional qualifications. V. There Are No Facts That Could Reasonably Suggest toa Well-Informed Observer That Judge Forrest, a Highly Talented and Experienced Attorney, Would Have Any Incentive to Rule for NYU in This Case to Ingratiate Herself to Mr. Chesler of Cravath. Plaintiffs insinuate that because Judge Forrest said th t Cravath was “the only firm she . . . considered joining,” she had an incentive to rule in favor of NYU in order to ingratiate herself with Mr. Chesler and Cravath so that she could return o the firm. (ECF No. 358 at 15.) Any well-informed objective observer would immediately understand that this statement to the Wall Street Journal was made after she joined Cravath and was obviously intended to promote her practice at the firm. Judge Forrest spent the majority of her legal career at Cravath. Having previously served as a Cravath summer associate and law clerk, Judge Forr st joined Cravath as an associate immediately after graduating from law school.16 Judge Forrest excelled as an associate at Cravath and was promoted to partner in just eight years.17 While at Cravath, she advised, represented, and litigated on behalf of a number of major firm clients including, but not limited to: Time Warner Inc., Warner Music Group, Schneider El ctric, United Airlines and First Solar Inc.18 Judge Forrest was regularly recognized for her exceptional legal work by numerous publications including: The American Lawyer, Chambers, Global Competition Review, IP Law & Business, Lawdragon and The Legal 500.19 Judge Forrest frequently wrote and presented on issues related to technology, antitrust, corporate mergers, and litigation matters and was well 16 See Ex. L, Judge Forrest’s Answers to the United States Senate Committee on the Judiciary Questionnaire. 17 See id. 18 See Ex. M, Hon. Katherine B. Forrest (fmr.) Cravath Biography. 19 See Ex. L, Judge Forrest’s Answers to the United States Senate Committee on the Judiciary Questionnaire. Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 18 of 32 13 regarded as a thought leader in the antitrust community.20 Judge Forrest’s success continued in the public sector. After two years as the Deputy Assistant Attorney General for the Anti-Trust Divison of the United States Department of Justice, Judge Forrest was nominated by President Obama and confirmed by the Senate as a District Court Judge. While on the bench, she was praised by her colleagues as an outstanding judge who possessed a high intellect and strong work ethic.21 Judge Forrest was recognized by The American Lawyer as one of ten district court judges to watch (based on feedback from litigators across the country) and Law360, who named her one of the most influential recently- appointed judges in the federal judiciary.22 During her seven years on the bench, she presided over thousands of cases, including over a hundred complex and high-profile trials, wrote over a thousand opinions, and sat by designation on the Second Circuit for over three dozen appeals.23 In announcing her return to the firm, Cravath’s current presiding partner Faiza Saeed praised Judge Forrest’s “depth of experience and perspective from her time at the DOJ and as a federal judge that will be invaluable to clients navig ting regulatory challenges, investigations and complex litigation.”24 Ms. Saeed noted that the firm’s twenty years of experience working with Judge Forrest was a major reason Cravath asked her to return as a partner in the firm.25 So, while a return to Cravath was a natural choice for Judge Forrest, her stellar record as an attorney and jurist indicates that her prospects were certainly not limited to that firm. And her exceptionally successful prior experience at Cravath would only lead a well-informed observer to believe that Cravath, and countless other law firms, would welcome her back into private 20 See id.; Ex. M, Hon. Katherine B. Forrest (fmr.) Cravath Biography. 21 See Ex. N, Colby Hamilton, US Judge Katherine Forrest Retiring From Federal Bench in Manhattan, The New York Law Journal, (July 18, 2018). 22 See Ex. M, Hon. Katherine B. Forrest (fmr.) Cravath Biography; Ex. O, Aebra Coe, 10 Recently Appointed Judges Named Most Influential, Law360, (Nov. 23, 2016). 23 Ex. P, Cravath Press Release Announcing Return of Judge Forrest to Cravath. 24 Id. 25 Id. Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 19 of 32 14 practice. Based on these facts, no well-informed observer would have any reason to believe that Judge Forrest had any incentive to rule for NYU in this case in order to advance her legal career or ingratiate herself with Cravath to allow her to return to Cravath as a partner. ARGUMENT I. Plaintiffs Have Failed to Meet Their High Burden of Proving That Judge Forrest Was Required to Recuse Herself From This Case. In another attempt to avoid an adverse judgment, Plaintiffs filed this motion premised solely on highly attenuated and unsupported suggestions that Judge Forrest’s well-reasoned decision was influenced by alleged interests of Mr. Chesler. No well-informed observer would give any credence to Plaintiffs’ allegations, and the case law rejects their attempt to negate the decision in this case based on such highly attenuatd llegations. “A judge’s acquaintance with a party, an attorney, or a witness without some factual basis for inferring bias or prejudice, is not sufficient to warrant recusal.” Wiltshire, 2012 WL 899383, at *3. As Mr. Chesler was neither a “party, attorney, or witness” at any stage of the litigation, and he was not a principal whose actions were at issue in this case, Plaintiffs have failed to establish that Judge Forrest had a disqualifying interest in this case. Plaintiffs’ motion to vacate is based on nothing more than an attenuated chain of relationships and speculation, none of which warranted Judge Forrest’s recusal. A. Any Alleged Connection Between Judge Forrest and NYU is too Indirect to Raise any Doubts About the Court’s Impartiality. The Second Circuit is clear that “where 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.” Alex. Brown & Sons Inc. v. Marine Midland Banks, Inc., No. 96 CIV. 2549 RWS, 1997 WL 97837, at *8 (S.D.N.Y. 1997) (quoting In re Drexel Burnham Lambert Inc., 861 F.2d at 1313). Any motion for recusal that is based on “an attenuated chain of relationships” must be Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 20 of 32 15 denied. Ransmeier v. Mariani, 718 F.3d 64, 70 (2d Cir. 2013). Plaintiffs have not established, nor could they establish, that Judge Forrest had any interest in NYU or in the outcome of the litigation. Nor have Plaintiffs established that Mr. Chesler was a “Principal” of NYU, that his actions were at issue in this case, or that he controlled Cravath to such an extent that Cravath’s interests were identical to his own. Lacking any reasonably disqualifying interest, Plaintiffs’ motion to vacate boils down to “an attenuated chain of relationships,” which is insufficient to support a motion to recuse. Ransmeier, 718 F.3d at 70. Every Circuit has consistently held that attenuated connections between a party and the Court do not require recusal. See Gench v. Hostgator.com, LLC, No. 14-cv-3592 (RA), 2015 WL 4579147, at *2 (S.D.N.Y. July 29, 2015) (“Certainly here, then, where the undersigned’s spouse[, an attorney,] has not represented any of the parties to this litigation, no ‘reasonable person, who knows and understands all the relevant facts, would conclude that the court’s impartiality might reasonably by questioned’”); Canino v. Barclays Bank, PLC, No. 94-cv-6314 (SAS), 1998 WL 7219, at *3 (S.D.N.Y. Jan. 7, 1998) (no recusal required where “the Judge’s husband is a partner in a firm which represented Defendant and that, as a result of this relationship, she and her husband benefited from fees rom that client”); In re Billedeaux, 972 F.2d 104, 106 (5th Cir.1992) (finding that “any interest that could be attributed to” the trial judge due to the fact that her husband is a partner in a law firm who represents a party in other matters “is so remote and speculative as to dispel any perception of impropriety.”).26 Even in cases involving a judge’s post-bench employment, where the connection between 26 See also Chitimacha Tribe of La. v. Harry L. Laws Co., Inc., 690 F.2d 1157, 1166-67 (5th Cir. 1982) (no recusal required where judge previously represented defendant in an unrelated matter and still receives payments from his old firm who represents defendant in other cases); Royal Air Maroc v. Servair, Inc., 603 F. Supp. 836, 842 (S.D.N.Y. 1985) (no recusal required where judge’s prior firm represented defendant’s parent company and judge previously represent defendant in other matters); In re Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 839 F.2d 1226, 1129-30 (7th Cir.1988) (no recusal required where def ndant retained judge’s son as counsel in an unrelated matter). Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 21 of 32 16 the judge and a party is attenuated, courts do not require disqualification. For example, in Anderson v. Sullivan, the defendant was represented by the “law firm of MacDonald Illig Jones and Britton LLP (“MacDonald Illig”).” No. 07–111, 2013 WL 5302287, at *2 (W.D. Pa. 2013). For more than 40 years, MacDonald Illig represented Erie Indemnity Company (“EIC”) as its insurance defense counsel. Id. Two weeks before denying plaintiff’s motion for sanctions, the presiding judge announced his plans to retire from the bench and accept “a position as General Counsel for [EIC].” Id. at *1. Plaintiff filed a motion to vacate arguing “that due to the relationship between [EIC] and MacDonald Illig,” the judge’s decision to join EIC is no different than “if he were leaving the bench to work directly for [MacDonald Illig].” Id. at *2. The Anderson court disagreed, finding that a “‘well-informed, thoughtful and objective observer’” “would not raise a question of impartiali y” based on the judge’s decision to join EIC shortly after denying plaintiff’s motion. Id. (quoting Sensley v. Albritton, 385 F.3d 591, 599 (5th Cir. 2004)). The court further noted that because “th lengthy rulings [on the motion] were based on an extensive record and were presumably begun well prior to any alleged conflict,” the record itself disproves plaintiff’s theory that the opinion was “an attempt to appease a law firm with which his new employer has a relationship.” Id. at *3. Even considering the close business relationship between the former judge’s employer and defense counsel in the case, the court “[found] no reason to disturb Judge McLaughlin’s thorough rulings.” Id. A similar decision was reached in U.S. v. Reiners, 187 F.3d 632 (4th Cir. 1999). In Reiners, the defendant argued that the sentencing judge’s pro pective employment, following retirement, with a law firm representing NationsBank, Signet Bank, and Phillip Morris, three entities who defendant was found guilty of defrauding, warranted recusal. Id. at *4. The court held that because the “record does not reflect that either of the banks or Phillip Morris were Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 22 of 32 17 represented by lawyers from the law firm in question in connection with this case” the judge’s future employment did not bring his impartiality into question. Id. (emphasis added). Similar to Anderson and Reiners, Judge Forrest’s decision to return to Cravath is too far attenuated for a reasonable observer, fully informed of all the facts, “to entertain significant doubt” about Judge Forrest’s impartiality. Hoffenberg, 333 F. Supp. 2d at 171-72. Cravath had no role in the litigation of this case. Nor did Mr. Chesler. As there was no direct connection between Judge Forrest and any party or counsel in the case, there is no reasonable basis to question the Court’s impartiality. See Reiners, 187 F.3d 632, at *4. Any speculative fears Plaintiffs’ may have conjured concerning Judge Forrest’s impartiality are further dispelled by the record in this case. Just as in Anderson, Judge Forrest’s Opinion and Order is based on an extensive record, much of which was decided well before “any alleged conflict.” Anderson, 2013 WL 5302287, at *3. Plaintiffs do not claim that Judge Forrest was biased during the trial or that any of her decisions were influenced by any bias. To the contrary, Plaintiffs’ counsel praised Judge Forrest for her “great patience and also deep involvement in the facts of this case.” (Ex. Q, Tr.at 1792:21-22). Plaintiffs allege no facts to suggest that Judge Forrest had any contact with Cravath before she made her decision in this case. Plaintiffs admitted that the earliest point in time where “the critical facts related to Judge Forrest’s resignation from the bench occurred [was] after submission of the case and before the ruling.” (ECF No. 358 at 2 (emphasis added).) Furthermore, Judge Forrest’s opinion was largely finished before closing arguments, months before Plaintiffs’ claim that the alleged conflict occurred. Judge Forrest was writing the decision in “real time,” incorporating witness discu sions and facts into the decision as it “happens live.” (Ex. R, Tr. at 29:23-30:23.) Judge Forrest confirmed this process at summation Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 23 of 32 18 stating that “for bench trials, as you folks know, e’ve been working on including testimony, including documents, every night.” (Ex. S, Tr. at 1553:14-1554:8.) As of closing arguments, Judge Forrest had already written seventy-five pages of her seventy-eight page opinion. (Id.) Just as in Anderson, a “well-informed, thoughtful and objective observr” fully informed of the extensive record of Judge Forrest’s decisions in this case would not entertain significant doubts about her impartiality. See 2013 WL 5302287, at *2. Despite citing no applicable case law for the argument, Plaintiffs contend that whenever any “prospective employment relationship exists, the judge’s impartiality is reasonably questioned.” (ECF No. 358 at 19.) As their own case law makes clear, however, section 455 is triggered only where the judge’s interest is “direct.” Alex. Brown & Sons Inc., 1997 WL 97837, at *8. Every case Plaintiffs cite involving a “prospective employment relationship” involved employment or potential employment with counsel or a party directly involved in the litigation. See Pepsico, Inc. v. McMillen, 764 F.2d 458, 459-60 (7th Cir. 1985) (recruiter fo a judge seeking post-bench employment contacted the firms of both plaintiff’s and defendants’ trial counsel in the case); In re Continental Airlines Corp., 901 F.2d 1259, 1261 (5th Cir. 1990) (judge “received and accepted an offer for partnership in the law firm representing Continental” in the case after issuing orders including granting Continental’s counsel’s fee requests); DeNike v. Cupo, 196 N.J. 502, 509-11 (2008) (plaintiff’s counsel approached the presiding judge and began negotiating the judge’s post-retirement employment at plaintiff’s firm). The Court in Pepsico even limited its holding to the narrow and limited cases where a judge was “exploring the prospects of employment with one lawyer or all lawyers appearing in a case before him.” 764 F.2d at 461 (emphasis added).27 Neither Cravath nor Mr. Chesler are a party or a counsel in 27 The court in Pepsico explicitly stated: “Our holding is narrow. We do n t explore the outer bounds of propriety in a resigning judge's negotiating with law firms for uture employment.” 764 F.2d at 461. Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 24 of 32 19 this case. Plaintiffs have failed to establish a direct prospective employment relationship between Judge Forrest and any party or counsel in this case. B. Judge Forrest was Not Required to Recuse Herself Because of Mr. Chesler’s Alleged Interests in the Litigation. Mr. Chesler did not have any role in this case. Hewas not a witness, counsel, or party. Nevertheless, Plaintiffs argue, hypothetically and without support, that a potential judgment against NYU “would have been detrimental to Mr. Chesler’s strong charitable interest in NYU . . . .” (ECF No. 358 at 22.) Plaintiffs further cite Mr. Chesler’s “deep[] involvement” with NYU as further evidence of his alleged interest in this ca e. (Id. at 6-7.) Neither basis merits recusal. Even assuming Plaintiffs were correct concerning Mr. Chesler’s alleged interests, as a matter of law Mr. Chesler’s alleged interests in the litigation are irrelevant to whether Judge Forrest was required to recuse herself. The personal and alleged financial interests of a non- party who is not even related to Judge Forrest are precisely the type of “remote, contingent, indirect [and] speculative interests” that the Second Circuit has routinely rejected. In re Aguinda, 241 F.3d at 201. And, even if Mr. Chesler’s interests were relevant in evaluating Judge Forrest’s impartiality, none of Mr. Chesler’s interests would satisfy the requirements of section 455 as a party’s charitable interests are generally not a valid basis for recusal under section 455. See Hoatson v. N.Y. Archdiocese, 280 Fed. Appx. 88, 90-91 (2d Cir. 2008) (no recusal required even though the judge was a member of the Guild of Catholic Lawyers of the Archdiocese of New York, received an award from that organization, a d whose brother is the President of the Catholic Lawyers Guild and a partner in a law firm that represents the Archdiocese of New York in other litigation); Nachshin v. AOL, LLC, 663 F.3d 1034, 1041-42 (9th Cir. 2011) (a Judge’s husband’s service on the board of a charity identifi d in a class action as a proposed cy pres award beneficiary in the case did not require recusal because there was no reason to expect a Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 25 of 32 20 board member of a non-profit would “himself realize a significant benefit” from a cy pres award to the charity); U.S. v. Arena, 180 F.3d 380, 398 (2d Cir. 1999) (no recusal requi d where a judge’s wife contributed to Planned Parenthood, a victim of the defendant in the indictment). And, even if Mr. Chesler’s charitable and personal i terests in NYU were the type of disqualifying interest that would require recusal under § 455, those interests have no effect on Judge Forrest’s impartiality. Even in cases alleging an actual financial interest in the outcome of a case, recusal is not required where those interests do not involve the judge. TV Commc’ns Network, Inc. v. ESPN, Inc., 767 F. Supp. 1077, 1079-80 (1991) (no recusal requi d where the judge’s friend was a principal of a company that owns “an unspecified amount of stock in one or more of defendant” companies); U.S. v. Pescatore, No. 05-CR-128 (TCP) (ARL), 2006 WL 47451, at *8-9 (E.D.N.Y. Jan. 5, 2006) (no recusal required where judge’s spouse owned stock in two insurance companies who were victims of the criminal case); In re Medtronic, Inc. Sprint Fidelis Leads Prods. Liab. Litig., 601 F. Supp. 2d 1120, 1125 (D. Minn. 2009) (denying plaintiffs’ motion to recuse where judge’s son owned stock in a company that “derives ‘significant’ revenue” from a party in the case); Hoffenberg, 333 F. Supp. 2d at 176-77 (no recusal required where judge’s wife was a former part-owner and publisher for the New York Post, an entity connected to petitioner’s SEC fraud charges). Further, any argument that an adverse opinion might affect Mr. Chesler’s ability to fundraise is inherently speculative and, therefore, would not warrant recusal even if it involved Judge Forrest. Hoffenberg, 333 F.Supp.2d at 171-72 (“Where a case involves rmote, contingent, indirect or speculative interests, disqualification is not required.”).28 28 See also DeLuca v. Long Island Lighting Co., Inc., 862 F.2d 427, 428-29 (2d Cir. 1988) (no recusal required in an development case where judge’s decision might affect his ownership interests in his own land); In re Medtronic, 601 F. Supp. 2d at 1125 (denying motion to recuse where judge’s son owned stock in a company that “derives ‘significant’ revenue” from a party and the company might be damaged from the outcome of the case); In re Kansas Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 26 of 32 21 Finally, Plaintiffs’ attempts to attribute Mr. Chesl r’s alumni activities as evidence against Judge Forrest’s impartiality are flawed.29 Alumni activities, even those that involve a judge directly, are not grounds for recusal absent a direct financial interest or extrajudicial knowledge of facts relevant to the case. See e.g. Easley v. Univ. of Mich. Bd. of Regents, 906 F.2d 1143, 1146-47 (6th Cir. 1990) (no recusal requir d where the judge was an alumnus of the university, previously a volunteer fundraiser, and present member of the law schools’ committee of visitors); Harris v. Bd. of Supervisors of La. State Univ. & Agric. & Mech. College, 409 Fed. Appx. 725, 727-28 (5th Cir. 2010) (no recusal required even though the judge served on the law school’s alumni board of trustees, while the university was managed by a board of supervisors).30 C. Judge Forrest’s Decision to Rejoin Her Former Law Firm After Retiring From the Bench Would Not Cause a Well-Informed Observer to Harbor Any Reasonable Doubt About Her Impartiality. Plaintiffs have not met their substantial burden of proving that a fully-informed observer would entertain significant doubts about Judge Forrest’s impartiality. A motion to recuse is evaluated from the perspective of a reasonable person who knows all the facts. Hoffenberg, 333 F. Supp. 2d at 171-72. Therefore, a well-informed observer would be fully aware of Judge Forrest’s professional ties to Cravath that far predat this litigation. Plaintiffs have not alleged any facts to suggest tha Judge Forrest would believe she needed to rule in favor of NYU in order to secure a position at Cravath. To the contrary, a well- informed observer would know that both Judge Forrest and Cravath had a mutual interest in Pub. Emps. Ret. Sys., 85 F.3d 1353, 1362 (8th Cir. 1996) (no recusal requir d where judge owned stock in a party’s parent company who filed a related case where the judge’s opinion might become persuasive authority in the other case); Mathis v. Goldberg, No. DKC 12-1777, 2013 WL 1232898, at *2-3 (D. Md. 2013) (no recusal required where an adverse decision could hurt the mediation industry, which would include judge’s spouse’s mediation business). 29 In their motion to vacate, Plaintiffs admit that they do not object to Judge Forrest’s own connections with NYU, which the Court properly disclosed at the outset of the litigation. (ECF No. 358 at 9.) 30 See also Maurey v. Univ. of S. Cal., 12 Fed. Appx. 529, 532 (9th Cir. 2001); Valente v. Univ. of Dayton, No. 3:08–cv–225, 2008 WL 11352577, at *4-6 (S.D. Ohio 2008); Payne v. Univ. of S. Miss., No. 1:12cv41–KS–MTP, 2013 WL 3967535, at *2 (S.D. Miss. 2013). Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 27 of 32 22 resuming their relationship that was wholly unrelatd o this case. Prior to joining the bench, Judge Forrest spent her entire private practice carer at Cravath, where she was immensely successful. A well-informed observer would find that Judge Forrest’s interest in returning to the law firm where she spent most of her legal career rasonable and proper, if not entirely expected. A well-informed observer would also understand that, as a former Federal District Court Judge, Judge Forrest would be highly coveted by many law firms. A well-informed observer, therefore, would not reasonably question Cravath’s decision to invite Judge Forrest to return to the firm given her history of prior success at the firm and her wealth of experience on the bench. Instead, Plaintiffs conjure up hollow and speculative claims in hopes of escaping an adverse judgment. Lovaglia, 954 F.2d at 815 (“[J]udges ‘must be alert to avoid the possibility that those who would question their impartiality are in fact seeking to avoid the consequences of the judge’s expected adverse decision.’”). While Plaintiffs’ argument might find traction with a “hypersensitive, cynical, and suspicious person,” a well-informed observer, having reviewed the extensive record in this case and knowing Judge Forrest’s impeccable resume, both on the bench and at Cravath, would not harbor significant doubts about her impartiality. U.S. v. Jordan, 49 F.3d 152, 156 (5th Cir. 1995). Because Plaintiffs have failed to overcome their “substantial burden” in proving that recusal is required, Plaintiffs’ motion to vacate must be denied. Occhipinti, 851 F. Supp. at 525. II. Even If Plaintiffs Could Establish That Recusal Is Required, Plaintiffs Are Not Entitled to a New Trial. Plaintiffs’ Motion to Vacate is devoid of any discussion of the requirements of a Rule 60(b)(6) motion. Instead, Plaintiffs erroneously caim that, in evaluating the proper remedy under section 455, “any doubt must be resolved in favor of recusal.” (ECF No. 358 at 23.) While any doubt concerning whether recusal was required is resolved in favor of recusal, vacatur Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 28 of 32 23 for a violation of section 455(a) under Rule 60(b)(6) should only be granted in “extraordinary circumstances.” Liljeberg, 486 U.S. at 863-64. Even if Plaintiffs could meet their substantial burden of proving that recusal was required in thisca e, Plaintiffs cannot establish the type of “extraordinary circumstances” that would warrant vacating the judgment. Id. at 862. Contrary to Plaintiffs’ contentions, where there is only the appearance of impropriety, and there is no any evidence of actual bias or that the party was actually harmed by a failure to recuse, the court should uphold the decision. See Barry v. U.S., 528 F.2d 1094, 1100 (7th Cir. 1976) (when the trial is “impeccably fair and just,” failure to recuse is harmless error); In re Allied-Signal Inc., 891 F.2d 974, 975 (1st Cir. 1989) (“[W]here no actu l bias is at issue, where the question is solely one of appearances, judicial actions already taken are not necessarily rendered invalid because of a circumstance that violates § 455(a).”) Where a “court has invested substantial judicial resources and there is indisputably no evidence of prejudice, a motion for recusal of a trial judge should be supported by substantial justification, not fanciful illusion.” Martin v. Monumental Life Ins. Co., 240 F.3d 223, 237 (3d Cir. 2001) Plaintiffs do not allege any facts to suggest that Judge Forrest considered rejoining Cravath before she rendered her opinion in this case. Nor have Plaintiffs alleged any facts to suggest that Judge Forrest was biased. Rather, Plaintiffs object to Judge Forrest’s employment decision, which Plaintiffs admitted did not occur until “after submission of the case and before the ruling” at the earliest. (ECF No. 358 at 2.) Even if this Court accepted all of Plaintiffs’ speculative claims, Plaintiffs’ claims raise no issue concerning the over ninety-five percent of the Court’s opinion that Judge Forrest made “in real time” during the trial and months before Plaintiffs allege recusal was required. (Ex. S, Tr. at 1553:14-1554:8; Ex. R, Tr. at 29:23-30:23). Plaintiffs have not cited to any erroneous decision. Instead, Plaintiffs rehash the same Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 29 of 32 24 arguments contained in their motion to alter and amend. For the reasons stated in NYU’s opposition to Plaintiffs’ motion to alter and amend the judgment (ECF No. 352), Plaintiffs have failed to show that the Court committed any error that would require vacating the Court’s opinion. As Plaintiffs question only appearances and do not allege actual bias, any alleged failure to recuse is harmless error. See In re Allied-Signal Inc., 891 F.2d at 975 (“[W]here no actual bias is at issue, where the question is solely ne of appearances, judicial actions already taken are not necessarily rendered invalid because of a circumstance that violates § 455(a).”). Where, as here, the record contains no evidence of an actual error, there can be no finding of prejudice to any party. See Marcavage v. Bd. of Trs. of Temple Univ. of the Commonwealth Sys. Of Higher Ed., 232 Fed. Appx. 79, 84-85 (3d Cir. 2007) (“no prejudice suffered” where the court’s decisions were correct); Jordan, 49 F.3d at 158 (“Appellant does not contend that [the judge] was actually biased during the trial phase, nor does she allege an xplicit nexus between the alleged errors and the appearance of bias.”). Further, where the only error cited is an error of law, Plaintiffs would not be prejudiced by seeking relief on appeal, as any error of law would be reviewed de novo. See, e.g., Williamson v. Ind. Univ., 345 F.3d 459, 464-65 (7th Cir.2003) (a failure to recuse is harmless error when the finding of law is reviewed de novo on appeal); Higganbotham v. Okla.328 F.3d 638, 646 (10th Cir.2003) (same); Patterson v. Mobil Oil Corp., 335 F.3d 476, 485 (5th Cir. 2003) (same). Likewise, where the decision contains no errors, there is no danger to other cases upholding a correct decision. Marcavage, 232 Fed. Appx. at 84-85 (“We can envision no future injustice as a consequence of this ruling, because there were no mistakes in the District Judge’s actual trial rulings.”). Given that attenuated nature of Plaintiffs’ recusal motion, the lack of any evidence of bias, errors or harm, and Plaintiffs repeated history of attempting to avoid adverse opinions, Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 30 of 32 25 granting a motion to vacate the opinion based solely on the alleged appearance of impropriety would not restore “the public’s confidence in the judicial process.” Id. To the contrary, granting Plaintiffs’ motion would damage public confidence in the judicial process because it would allow a party to escape an adverse judgment not on the merits but through unsupported and disingenuous claims of bias.31 Separately, because Plaintiffs do not allege that Judge Forrest was biased, (see ECF No. 358 at 2); this Court can remedy any alleged errors through a de novo review of the record. Cool Light Co. v. GTE Prods. Corp., 24 F.3d 349, 351 (1st Cir. 1994) (upholding the decision after an “independent, review of the entire record led him to the same conclusion.”); Camacho v. Autoridad de Telefonos de Puerto Rico, 868 F.2d 482, 490 (1st Cir. 1989) (“Since we have independently confirmed the correctness of the lower court’s decision, see supra Parts III-V, the judge’s refusal to recuse himself was, at worst, harmless error.”). CONCLUSION For the reasons set forth above, Defendant respectfully requests that the Court deny Plaintiffs’ motion to vacate judgment and for a new trial. Respectfully submitted, /s/ Ian C. Taylor Mark Muedeking (admitted pro hac vice) Ian C. Taylor (admitted pro hac vice) Jennifer K. Squillario (admitted pro hac vice) Adam J. Pié (admitted pro hac vice) 31 See also Hoffenberg, 333 F. Supp. 2d at 172-73 (when weighing public confidence a judge must consider “the possibility that those questioning his impartiality might be seeking to avoid the adverse consequences of his presiding over their case.”); Lovaglia, 954 F.2d at 815 (“[J]udges ‘must be alert to avoid the possibility that those who would question their impartiality are in fact seeking to avoid the consequences of the judge’s expected adverse decision.’”); U.S. v. Cerceda, 172 F.3d 806, 816 (11th Cir. 1999) (“Without evidence that bias could have tainted the outcome of the hearings, there is a significant risk that the public would find it unjust to require the Government to expend time and money to conduct these proceedings a second time.”). Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 31 of 32 26 DLA PIPER LLP (US) 500 8th Street, NW Washington, DC 20004 (202) 799-4000 Brian Kaplan (BK4922) Evan D. Parness (EP6680) DLA Piper LLP (US) 1251 Avenue of the Americas New York, New York 10020 (212) 335-4500 Attorneys for Defendant Case 1:16-cv-06284-RWS Document 371 Filed 11/29/18 Page 32 of 32