The victims of a multi-million dollar Ponzi scheme want their money back, and it was up to Judge Carlton Reeves of the Southern District of Mississippi to make that happen.
This case involves a multi-million dollar Ponzi scheme that defrauded hundreds of investors. The ill-gotten gains of that scheme now reside in Defendants’ estates. The Court has determined that a receivership over those estates is appropriate.
Great. So one would expect the balance of the order to appoint a receiver, since the only issue before the court is the appointment of a receiver. But Judge Reeves decided that the appointment of a receiver, the clawback of the ill-gotten gains to be returned to the victims of this multi-million dollar Ponzi scheme was less important, less exigent despite the possibility that the assets might dissipate, then was a very different concern.
The Court believes that particular care is necessary in appointing officers of the federal judiciary, an institution that fails to reflect the diversity of the public it serves. Just one in
five Article III judges are people of color, and only one in three are women. Since 2017, less than one in ten people appointed as Article III judges have been people of color, and less than
one in four have been women. Bankruptcy and magistrate judges appointed by the judiciary are even less diverse, and people of color are hired for just one in six clerkship positions. When federal judges appoint counsel in multi-district litigation, fewer than one in five leadership positions are filled by women.
The same lack of diversity defines the broader legal profession. Despite making up a quarter of the country, people of color represent just one in ten lawyers, and only a third of lawyers are women. At major law firms, fewer than one in ten partners are people of color, and fewer than one in four partners are women.
Deeper patterns of exclusion appear in Mississippi. While black people make up 40% of the population, they represent fewer than 16% of Mississippi’s federal bankruptcy, circuit, district, and magistrate judges. One survey found that fewer than 4% of federal clerks hired in Mississippi, Louisiana, and Texas were black. People of color represent fewer than 11% of the Mississippi bar. Women make up fewer than 16% of Mississippi’s federal bankruptcy, circuit, district, and magistrate judges, and just 23% of the state’s lawyers. (Footnotes omitted.)
And so…who will be the receiver?
It is indisputable that systematic oppression lies behind much of the judiciary’s lack of diversity. The legal profession’s exclusion and discrimination against people of color, especially in federal courts, have been well documented. Research also establishes that federal courts are “places of discrimination” for women, where they feel “invisible” and face “pain, isolation, and injury” – especially from men cloaked in the robes of justice. Particularly hurtful strains of race- and sex-based hatred have appeared in Mississippi’s judiciary. (Footnotes omitted.)
And on it goes. That the federal judiciary reflects a dearth of women and minorities is a matter of numbers. Whether it is “indisputable that systematic oppression lies behind” it may not be entirely as indisputable as Judge Reeves rules. There is no footnote to that sentence, but then indisputable assertions need no footnote since they’re indisputable.
This would have made a powerful op-ed for either the New York Times or the Washington Post, both of which seem to have endless real estate available for such views. This would have been a passionate blawg post, and all Judge Reeves needed to do was ask and I would have handed him the keys to the joint. But these involve mere words rather than actions. What if Judge Reeves wanted to push for real change?
Judge Reeves could have run for president. He still can, as there’s another election coming up. As president, he could nominate people for the judiciary that meet whatever criteria he believes necessary and appropriate. Whether he will find it as easy as the numbers suggest to create the more diverse judiciary he seeks is another matter, but he will figure it out, one way or another.
But what Judge Reeves should not do is what he did here.
Many will extol the message, that the federal judiciary is a white man’s club and we have failed miserably to include women and minorities on the bench. We’ve done a pretty poor job of getting criminal defense lawyers into robes as well, I might add, though we’re not an identity group so nobody really gives a damn. And whether or not you agree with the message in its entirety, Judge Reeves has a very real, very legitimate point.
But a federal judge has no business using his power to incorporate an op-ed into an order. His duty is to resolve a case and controversy. There are, he holds, victims of a Ponzi scheme in need of restitution, and that calls for a receiver to go after the assets before they disappear or devalue. He’s got victims to attend to, and their color and gender is irrelevant to the case before him.
So what was the point of this exceptionally lengthy rant about the lack of diversity in the federal judiciary?
In fulfilling that duty here, the Court will use the “inherent power” courts have “to provide themselves with appropriate instruments required for the performance of their duties.”
The Court will require the Receiver to take steps to guarantee that its hiring practices are as inclusive as possible, ensuring the participation of those who have traditionally been excluded
from legal work in America. Applicants are encouraged to commit to bold and creative steps involving recruiting, retaining, hiring, and other staffing concerns in their applications.
Through their fulfillment, those steps may aim for – though may not guarantee achievement of – targets for billable hours performed by those underrepresented in the legal profession. Even steps that aim for very modest targets, such as 25% of hours being conducted by women and 20% of hours being conducted by people of color, would be laudable.
The job of judge is not social engineering. The choice of receiver is for the benefit of the victims of the Ponzi scheme, not to spread the wealth of legal fees to women and minorities. The duty of the court is to appoint someone qualified to perform the function, without regard to how many of the billable hours are based on race or gender.
The problem isn’t the message, but the medium. This was an order of a federal district judge charged with appointing a receiver for victims of a Ponzi scheme. Instead of fulfilling the responsibilities of the office, Judge Reeves abused his authority to promote his own agenda. Worthy as that may be, it has no business in the order of the court.
Next time, Judge, I’ll be happy to post your rant, but a court order isn’t your personal opportunity to vent and your job is to judge, not socially engineer. This was the wrong way to send the message.