Appellate Justices Accused of Conflict of Interest

Wednesday, June 27, 2012


ICO Global Communications has accused two California appellate justices of having a conflict-of-interest in a fraud and breach-of-contract case that cost the company $603 million.

For 13 months, Associate Justice Elizabeth Grimes was part of a three-person 2nd District Court of Appeal panel that overturned a 2008 lower court decision and tossed out the claim against Boeing Co. in April, but not before she recused herself without explanation in November 2011. Presiding Justice Patricia Bigelow then appointed herself to replace Grimes on the panel and served for a month and a half before she, too, recused herself.

After the recusals it was discovered that both jurists held stock in Boeing. Although the California Code of Judicial Ethics requires that appellate judges not participate in cases where they hold $1,500 or more of stock in a company that’s involved, court documents and California Fair Political Practices Commission disclosures indicate Bigelow owned Boeing stock worth between $2,000 and $10,000, and Grimes held stock worth between $101,000 and $1 million.       

ICO, a subsidiary of Pendrell Corp., has asked the state Supreme Court to reinstate the original judgment in their favor. The company had been awarded the millions in compensatory and punitive damages after claiming that Boeing breached two contracts to build and launch a dozen telecommunications satellites. ICO is headed by Craig McCaw, a cellphone pioneer who owns about one-third of Pendrell.

The California Commission on Judicial Performance, which is authorized to investigate matters of this type, does not comment on its activities and often settles conflict-of-interest cases privately with letters of admonishment.     

–Ken Broder


To Learn More:

State Appellate Justices at Center of Conflict-of-Interest Concerns (by Jennifer Gollan, The Bay Citizen)

ICO Global Communications Asks to Reinstate Boeing Verdict (by Ryan Faughnder, Los Angeles Times)

California Code of Judicial Ethics (pdf)

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