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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
DR. ALAN SACERDOTE, et al.,
Plaintiffs,
v.
NEW YORK UNIVERSITY,
Defendant.
No. 16 Civ. 6284 (RWS)
PLAINTIFFS’ RESPONSE TO DEFENDANT’S SUR-REPLY REGARDING
PLAINTIFFS’ MOTION TO VACATE AND FOR A NEW TRIAL1
NYU’s sur-reply (Doc. 386) regarding the declarations of former federal judges
Timothy K. Lewis and F.A. Little, Jr. mostly rehashes the same arguments NYU
already made in moving to strike the declaration of Mark I. Harrison. See Doc. 374.
NYU’s arguments fail for the same reasons set forth in Plaintiffs’ opposition to that
motion: the opinions of Judge Lewis and Judge Little are based on reliable facts and
provide appropriate statements on issues of judicial disqualification. See Doc. 377.
The Lewis and Little declarations are not offered as legal opinions, but rather to
assist the Court in deciding the factual question of whether an objective person
might reasonably have questioned Judge Forrest’s impartiality under the
circumstances. Although NYU disputes the factual bases for their opinions—
particularly the incontrovertible fact that the Board of Trustees was responsible for
monitoring and removing the Plans’ fiduciaries—NYU’s disagreement about the
facts is not a basis for exclusion. Yet, NYU is not content with that. NYU has made
1 The January 16, 2019 order allowed Plaintiffs to respond on the return date. Doc.
385.
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ad hominem attacks, outrageously accusing highly distinguished former federal
jurists of “violat[ing] their own ethical duties.” These remarkable attacks are
entirely baseless, and NYU should retract them. NYU simply wants the Court to
ignore the fact that objective observers—including a preeminent expert in the field
of judicial ethics and two others who have distinguished careers serving on the
federal bench—have reviewed the record and concluded that Judge Forrest’s
impartiality might reasonably be questioned under the circumstances. The Court
should reject NYU’s request to exclude the declarations.
I. The declarations will assist the Court in deciding the fact question of
whether an objective observer might reasonably have questioned
Judge Forrest’s impartiality in light of her considering and possibly
discussing a law partnership with a prominent member of the
Defendant’s Board of Trustees while the case was under advisement.
NYU repeats the same argument it made against Mr. Harrison: that the
declarations of Judge Lewis and Judge Little contain improper legal opinions. Doc.
386 at 2–3 (Part I); see Doc. 374 at 2–5 (Part I). As set forth in Plaintiffs’ opposition
to that motion, significant authority supports the use of expert testimony, if it is
seen as expert testimony, on issues of judicial conduct and recusal/disqualification.
Doc. 377 at 16–18 (Part II.A). That is because the recusal determination presents a
mixed question of fact and law. Id. at 19; see Petrov v. Gonzales, 464 F.3d 800, 804
(7th Cir. 2006). In particular, the question of how an “objective, informed observer”
would view certain facts is a factual question. See United States v. Bayless, 201 F.3d
116, 126 (2d Cir. 2000) (recusal standard asks whether an “objective observer” with
full knowledge of the underlying facts “could reasonably question the judge’s
impartiality.”) (citation omitted).
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Judge Lewis emphasizes that the purpose of his declaration is not to provide an
opinion on whether the legal standard set forth in 28 U.S.C. §455(a) has been met,
but rather “to present the candid and objective view of a former federal judicial
colleague who also left the bench to join a law firm for whatever assistance it might
provide.” Doc. 382-4 at 6–7. Similarly, Judge Little makes clear that his opinion is
based on his own experience and practice regarding recusal issues, and presents his
objective opinion of how a reasonable person would have viewed the facts that
Judge Forrest had a 20-year professional relationship with a prominent member of
NYU’s Board of Trustees and was considering resuming that relationship while the
case against NYU was under advisement. Doc. 382-2 at 2–9. These opinions may be
helpful to the Court in deciding the fact question of whether an objective observer
might reasonably have questioned Judge Forrest’s impartiality.
The case cited by NYU, In re Initial Public Offering Securities Litigation, 174 F.
Supp. 2d 61 (S.D.N.Y. 2001), is distinguishable because the facts there were
undisputed. Doc. 377 at 18. Here, as it did with Mr. Harrison, NYU disputes the
factual bases of the opinions of Judge Lewis and Judge Little (Doc. 386 at 4–7 (Part
II), and disputes as a factual matter whether an objective, informed observer might
reasonably have questioned Judge Forrest’s impartiality (Doc. 371 at 1). Thus, the
declarations are admissible even under NYU’s case. In re Public Offering, 174 F.
Supp. 2d at 66 (holding expert opinion on judicial conduct admissible “where a fact
is in dispute”). If NYU had stipulated to the fact that an objective, informed
observer might have questioned Judge Forrest’s impartiality, that factual issue
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would not be in dispute. NYU has not done so.
NYU brashly suggests that the mere fact that Judge Lewis and Judge Little
were paid for their time reviewing pleadings and exhibits and preparing their
declarations renders their opinions unreliable. Doc. 386 at 3. If NYU’s reasoning
were valid, no retained expert would ever be permitted to testify—including one
NYU offered in this case, who was compensated at a higher rate than either Judge
Lewis or Little.2 The fact that NYU’s position is wholly without legal support is
demonstrated by the absence of any citation for this audacious suggestion.
II. The opinions of Judge Lewis and Judge Little have a proper factual
basis.
NYU repeats another argument from the Harrison motion, asserting that Judge
Lewis and Judge Little improperly rely on incorrect facts or inadmissible hearsay.
Doc. 386 at 4–8 (Part II); see Doc. 374 at 5–14 (Part II). Plaintiffs’ arguments in
opposition to that motion apply equally here. See Doc. 377 at 8–16 (Part I). The
opinions of Judge Lewis and Judge Little have a reliable factual basis, supported by
the record. Further, even if NYU’s disputes about those facts were valid, they go
strictly to weight, not admissibility. SR Int’l Bus. Ins. Co. v. World Trade Ctr.
Props., LLC, 467 F.3d 107, 134 (2d Cir. 2006).
NYU contends it was improper for Judges Lewis and Little to “assume” certain
facts and to rely upon purported “inadmissible hearsay and Plaintiffs’ own
submissions.” Doc. 386 at 4–7. Rule 703 expressly allows an expert to “base an
opinion on facts or data in the case that the expert has been made aware of or
2 See, e.g., Doc. 272-25 ¶6 (Daniel Fischel, $1,500 per hour).
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personally observed.” Fed. R. Evid. 703 (emphasis added). Moreover, “the facts that
form the basis for an expert’s opinions or inferences need not be admissible in
evidence ‘if of a type reasonably relied upon by experts in the particular field.’”
United States v. Locascio, 6 F.3d 924, 938 (2d Cir. 1993) (quoting Fed. R. Evid. 703)
(emphasis omitted); Astra Aktiebolag v. Andrx Pharms., Inc., 222 F. Supp. 2d 423,
491 (S.D.N.Y. 2002). As stated by the Second Circuit, “‘it is rare indeed that an
expert can give an opinion without relying to some extent upon information
furnished him by others.’” Howard v. Walker, 406 F.3d 114, 127 (2d Cir. 2005)
(quoting Reardon v. Manson, 806 F.2d 39, 42 (2d Cir. 1986)). An expert who is
qualified under Rule 702 “is assumed ‘to have the skill to properly evaluate the
hearsay, giving it probative force appropriate to the circumstances.’” Locascio, 6
F.3d at 938 (quoting In re “Agent Orange” Prod. Liab. Litig., 611 F. Supp. 1223,
1245 (E.D.N.Y. 1985)). Accordingly, the judges’ reliance on purported “hearsay” and
Plaintiffs’ submissions do not render the opinions inadmissible.
NYU fails to show that either declaration is unreliable. NYU criticizes both
Judge Little and Judge Lewis for “assum[ing]” that Judge Forrest was considering a
return to Cravath after the New York Law Journal reported on July 18, 2018 that
she was leaving the bench, while she was deciding the case. Doc. 386 at 4, 7. The
fact that Judge Forrest was “considering” a return to Cravath on July 18 is not just
a reasonable inference. It inevitably follows from the fact that Judge Forrest stated
that Cravath was the “only firm” she considered, that it was an “easy decision” and
that she was “thrilled to be coming home.” Doc. 359-1; Doc. 359-2; Doc. 359-41. Any
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reasonable person would conclude that Judge Forrest considered where she would
go, if not before she announced she was leaving the bench, then certainly upon
making the announcement. And any reasonable person would conclude that place
was Cravath because the judge stated that is the “only firm” she considered. This
reasonable conclusion is further supported in the July 18 article citing a source with
knowledge of the situation as stating that “[a] return to Cravath seems like a
distinct possibility for Forrest.” Doc. 359-38. Moreover, Judge Forrest was receiving
annual payments from Cravath of over $380,000 at the time, and she began her
employment at Cravath less than 60 days after the July 18 New York Law Journal
report, with no period before that off the bench. Doc. 359-36 at 32–33 (Question 20);
Doc. 359-41.
While NYU claims that Judge Little’s discussion of the “extremely close
professional relationship between Judge Forrest, Evan Chesler, and the Cravath
firm” is based on inadmissible hearsay (Doc. 386 at 4), evidence of this extremely
close relationship comes directly from Judge Forrest’s own words. She described
being paired up with Mr. Chesler in a mentor-mentee work relationship during her
early years at Cravath, which was “a great compliment” that made her “feel like a
star,” (Doc. 359-31), and even introduced Mr. Chesler who was in attendance at her
2011 confirmation hearing before Senate Judiciary Committee (Doc. 359-35).
Similarly, Mr. Chesler’s role as the chief fundraiser for NYU and face of its $1
billion endowment campaign is shown by various publications from NYU’s own
website. Docs. 359-18 through 359-22; see Fed. R. Evid. 801(d)(2) (opposing party’s
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statement is not hearsay).
NYU wrongly asserts that Judge Little’s statement that Mr. Chesler was
“responsib[le] for overseeing the Retirement Committee’s carrying out their
fiduciary duties” is “unsupported by any evidence in this case.” Doc. 386 at 4–5.
This is flat out wrong. In fact, the Committee’s Charter states that the Board of
Trustees, of which Mr. Chesler is a member, is responsible for monitoring the
Committee’s performance as fiduciaries. Doc. 359-12 (NYU00034912 at 14–15, 18–
21); Doc. 359-13 (NYU0094316). The Board of Trustees also had the responsibility
to determine whether to remove or replace any member of the Committee (Doc. 359-
13 at NYU0094315), the Committee reported to the Board of Trustees annually “on
the actions taken by the Committee to discharge its duties under the Plans,” and
the Board of Trustees’ Finance Committee, of which Mr. Chesler is a member, was
responsible for approving the investment policy statement used by the Committee
(id. at NYU0094316). NYU’s attempt to distance Mr. Chesler and the Board of
Trustees from their role in this action is simply unavailing and inexplicable.
NYU further contends that even if Judge Forrest’s credibility determinations
could be called into question, that would not change the result in this case because
the credibility findings pertained only to “procedural imprudence,” not “objective
imprudence.” Doc. 386 at 1–2, 7. But Judge Forrest’s findings regarding objective
imprudence also relied heavily on credibility determinations between the parties’
respective experts. Doc. 348 at 55 & n.76, pp. 65–66, 76 (crediting NYU’s experts
over Plaintiffs’ experts). Accordingly, Judge Forrest’s credibility determinations
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applied to both.3
NYU accuses Plaintiffs’ counsel of “misrepresent[ing]” that Judge Lewis and
Judge Little had “read[] all the filings” and were “fully aware of the facts,” and
similarly criticizes Judge Lewis for stating that to the best of his belief, he had read
“everything that is now before this court.” Id. NYU apparently interprets these
statements as a representation that the judges had reviewed all 386 docket entries
since August 2016 in their entirety, as well as the nearly 2,000-page trial transcript
and hundreds of summary judgment and trial exhibits that have nothing to do with
the recusal issue before the Court. But as the context makes clear, “all the filings”
and “everything” before the Court refers to the memoranda and documents cited in
connection with Plaintiffs’ motion to vacate and for new trial. See Doc. 382-4 (Judge
Lewis stating that opinions “are based upon my review of both parties’ post-trial
submissions”) (emphasis added).
The materials reviewed by the judges include Judge Forrest’s disclosure “that
she would be teaching at NYU as an adjunct professor while the action was
ongoing” (Doc. 386 at 8), which Plaintiffs discussed in their opening memorandum,
and regarding which Plaintiffs made no request to recuse. See Doc. 358 at 9 (citing
Doc. 5). Although NYU criticizes Judges Lewis and Little for not citing the
3 Defendant’s experts on imprudence and recordkeeping fees were two lawyers
with no investment management experience or recordkeeping experience. See Doc.
272-25 ¶1; Doc. 272-27 ¶1. In contrast, Plaintiffs’ experts on these subjects were a
25-year veteran investment manager, and the national head of recordkeeping
pricing for T. Rowe Price for 10 years. Doc. 272-15 at 2–6 (Part I); Doc. 272-16 ¶¶3–
10.
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purportedly “incredibly probative fact” that Judge Forrest made that disclosure
(Doc. 386 at 8), NYU itself failed to even cite the disclosure in its opposition to the
motion to vacate. See generally Doc. 371. If disclosure of an adjunct professorship
were “incredibly probative” as NYU now claims, surely NYU would have cited and
discussed it extensively. Accordingly, the fact that Judges Lewis and Little did not
cite the disclosure neither “undercut[s] their integrity” nor shows that they
“violated their own ethical duties” as NYU recklessly and baselessly asserts. Doc.
386 at 7–8. It simply shows that the August 2016 disclosure has little or no
relevance to the circumstances prevailing on July 18, 2018 when the situation
dramatically changed while the case was under submission, as NYU tacitly
concedes by its own failure to cite the August 2016 disclosure.
In sum, the declarations of the Honorable Timothy K. Lewis and the Honorable
F.A. Little, Jr. are relevant, reliable and informative. The Court should ignore
NYU’s inexcusable, disrespectful ad hominem attacks on these distinguished jurists
and deny NYU’s request for exclusion.
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January 22, 2019 Respectfully submitted,
/s/ Jerome J. Schlichter
SCHLICHTER, BOGARD & DENTON, LLP
Andrew D. Schlichter, Bar No. 4403267
Jerome J. Schlichter (pro hac vice)
Heather Lea (pro hac vice)
Joel Rohlf (pro hac vice)
100 South Fourth Street, Suite 1200
St. Louis, MO 63102
Phone: (314) 621-6115
Fax: (314) 621-5934
Counsel for Plaintiffs
CERTIFICATE OF SERVICE
I hereby certify that on January 22, 2019, I electronically filed the foregoing
document with the Clerk of Court using the CM/ECF system which will
automatically send e-mail notification of such filing to the attorneys of record.
/s/ Jerome J. Schlichter
Counsel for Plaintiffs
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