Judge's Diversity Effort Draws High Court Rebuke
A Manhattan federal judge's habit of prodding lead counsel in class actions to staff cases with women and minority lawyers came under fire at the U.S. Supreme Court on Monday. Justice Samuel Alito Jr. dressed down U.S. District Judge Harold Baer of the Southern District of New York in a six-page statement, not-so-subtly hinting that Baer should knock it off.
The warning came as the high court denied certiorari in the underlying case, an antitrust class action against Sirius XM Radio Inc. that settled in a deal valued at $180 million in May 2011. The unsuccessful cert petition was filed by Theodore Frank of the Center for Class Action Fairness, who argued that Baer's diversity initiative was improper.
Alito wrote that "the uniqueness" of Baer's practice made Supreme Court review unwarranted. But he stressed that the decision to deny cert was far from an endorsement. "Based on the materials now before us, I am hard pressed to see any ground on which Judge Baer's practice can be defended," Alito wrote. And, he concluded somewhat ominously, "If the challenged appointment practice continues and is not addressed by the Court of Appeals, future review may be warranted."
As we've reported (here and here, for instance), Baer has long been a crusader for diversity when it comes to lead counsel appointments. His practice stems from a provision of Federal Rule of Civil Procedure that allows judges to consider "matter[s] pertinent to counsel's ability to fairly and adequately represent the interests of a class." In the Sirius case and in class actions against JPMorgan Chase & Co., Goldman Sachs Group Inc. and Chubb Corp., Baer has ruled that class counsel should "ensure that the lawyers staffed on the case fairly reflect the class composition in terms of relevant race and gender metrics."
The only other judge we're aware of who's taken a similar position is U.S. District Judge Cathy Seibel of the Southern District of New York, sitting in White Plains. In May she asked four firms vying for lead roles in multidistrict litigation against Bayer AG to consider adding women to their proposed teams in a case involving allegedly faulty intrauterine birth-control devices.
CCAF's Frank first objected to the Sirius settlement in 2011. In December 2012, the U.S. Court of Appeals for the Second Circuit rejected the challenge on the grounds that Frank's client lacked standing.
In an email Monday, Frank called the Sirius settlement "illegal."
"It's gratifying for Justice Alito to acknowledge our objection was correct and the Second Circuit was wrong, but disappointing that class counsel has stolen $13 million from the class in a zero-dollar settlement with impunity," Frank said.
Baer was out of the country on Monday and did not immediately respond to a request for comment.