Does Judge Jed Rakoff have a Prop 8 problem?
In November, Judge Rakoff blocked a Securities and Exchange Commission (SEC) settlement with Citigroup over a mortgage-bond deal because the SEC didn't provide the court with facts "upon which to exercise even a modest degree of independent judgment." Rakoff criticized the $285 million settlement as "pocket change" and claimed that there should have been a Citigroup admission of facts in the case because "there is an overriding public interest in knowing the truth."
The SEC appealed the ruling to the Second Circuit Court of Appeals, arguing that Rakoff committed legal error in rejecting the settlement based on the admission criterion because courts have not required consent judgments to include admissions in the past.
The twist to this appeal is that it doesn’t involve a dispute between the parties, the SEC and Citigroup. Instead, it’s a dispute between the SEC and Judge Rakoff. (Citigroup has remained relatively mum since the initial Rakoff/SEC tiff erupted last year.)
As pointed out in the On The Case blog for Thomson Reuters News & Insight, this raises the question: Who will argue for Rakoff during the appeal?
Frankel offers four possibilities: The Second Circuit could let the record speak for Rakoff, call for amicus briefs supporting Rakoff’s position, appoint a lawyer to argue Rakoff’s view, or allow Rakoff to provide briefing or send a lawyer on his behalf.
We call this a Prop 8 problem because California’s same-sex marriage ban was left in a similar lurch when California Governor Jerry Brown and Attorney General Kamala Harris opted not to defend the ballot initiative in a constitutional challenge. In that case, the California Supreme Court ruled that the initiative’s sponsor, ProtectMarriage, had standing to defend the initiative.
In the Citigroup case, there’s a lingering question of whether Judge Rakoff’s ruling will have a voice before the Second Circuit Court of Appeals.
Who, if anyone, would you like to see argue Judge Rakoff’s position to the appellate court?
- Second Circuit Could Hear Citigroup Consent Judgment Appeal (FindLaw’s Second Circuit blog)
- Judge Rejects SEC Settlement with Citigroup (FindLaw’s Decided)
- Judge Rakes SEC and BoA Over the Coals for Their Proposed Settlement Agreement (FindLaw’s Courtside)