Federal judge accused of financial conflicts of interest

November 20, 2012

A federal judge for the Central District of California in Los Angeles has issued three key rulings over a four-year period that favored companies in which he owned stock, a California Watch analysis has found.

Judges are required to make yearly disclosures of their investments and to step aside from cases in which they have a financial interest, no matter how small, by federal law and the Code of Conduct for United States Judges.

But Judge Manuel Real, a 46-year veteran of the bench appointed by President Lyndon B. Johnson, appears to have skirted those conflict-of-interest laws.

In at least three cases before the federal court in Los Angeles, Real did not recuse himself:

In 2008, he awarded Microsoft Corp. $746,027 in damages and fees in a copyright infringement case against a computer sales and repair company. At the time, Real held Microsoft stock worth between $15,001 and $50,000.

In another 2008 case involving a contract dispute between Atlanta Cancer Care and biotech giant Amgen, Real dismissed the suit against Amgen. Real held between $15,001 and $50,000 of Amgen stock, which he transferred to someone else shortly after the case was appealed.

In 2009, Real dismissed a lawsuit against Verizon. After the plaintiff in the case appealed the decision to the 9th U.S. Circuit Court of Appeals, Real bought Verizon stock worth $15,001 to $50,000. The appeals court upheld Real’s dismissal, but returned the case to Real for further deliberation. The parties reached an agreement in February 2011, and Real dismissed the case.

In all three cases, the company’s stock rose at least a dollar per share during the two months following Real’s ruling or dismissal.

Real, previously reprimanded for poor conduct on the bench, did not respond to repeated California Watch interview requests made via email or messages left with his courtroom clerk.

Judges who fail to withdraw from conflict of interest cases can face sanctions ranging from a private reprimand to suspension from hearing cases. In addition, a judge can be referred to Congress for an impeachment hearing.