Auld-Susott, et al. v. Galindo, et al.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
EVAN AULD-SUSOTT, as Trustee for
(1) IRREVOCABLE LIFE INSURANCE
TRUST OF JOHN L. SUSOTT AND
KATHRYN C. SUSOTT UAD 8/17/1988
AS RESTATED, EXEMPT TRUST FBO
DANIEL C. SUSOTT, and (2)
IRREVOCABLE LIFE INSURANCE
TRUST OF JOHN L. SUSOTT AND
KATHRYN C. SUSOTT UAD 8/17/1988
AS RESTATED, NON-EXEMPT
TRUST FBO DANIEL C. SUSOTT; and
JOHN L. SUSOTT,
Plaintiffs,
vs.
LAURYN GALINDO and DANIEL C.
SUSOTT,
Defendants.
CIVIL NO. 20-00270 LEK RT
ORDER DENYING DEFENDANTS’
MOTION TO DISQUALIFY OR
RECUSE THE HON. LESLIE E.
KOBAYASHI
ORDER DENYING DEFENDANTS’ MOTION TO DISQUALIFY OR
RECUSE THE HON. LESLIE E. KOBAYASHI
Defendants Lauryn Galindo (“Galindo”) and Daniel C. Susott (collectively,
“Defendants”) seek disqualification or recusal of United States District Judge
Leslie E. Kobayashi pursuant to 28 U.S.C. §§ 144 and 455. ECF No. 37. The
matter was assigned to this Court on December 22, 2020. ECF No. 39. The Court
elects to decide the Motion without a hearing pursuant to Rule 7.1(c) of the Local
Rules of Practice for the United States District Court for the District of Hawaii.
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After careful consideration of the pleadings and filings in this case, the Motion is
DENIED.
BACKGROUND
Defendants move to disqualify or recuse Judge Kobayashi based on Judge
Kobayashi’s rulings and one statement in a separate civil action over which Judge
Kobayashi presided in which Galindo was also a defendant, Auld-Susott v.
Galindo, Civil No. 16-00450 LEK-WRP (the “First Case”). 1 ECF No. 37-1 at 2.
Galindo asserts in her declaration in support of the Motion, ECF No. 37-2, that
eight instances in the First Case evince Judge Kobayashi’s bias against her:
1. Judge Kobayashi initially ruled that Galindo could not call witnesses at trial
due to her counsel’s failure to timely file direct examination testimony, but,
upon reconsideration, allowed Galindo to testify as to her defenses, but
disallowed other witnesses from testifying. Id. at 3–4.
2. Judge Kobayashi did not allow Galindo’s counsel to cross-examine the
plaintiff in the First Case using the plaintiff’s judgment debtor examination.
Id. at 5.
3. Judge Kobayashi made a finding of a certain badge of fraud relating to a
fraudulent transfer claim using a preponderance of the evidence standard,
1 Defendants incorrectly identify the First Case as “Civil No. 19-00350 LEK
RLP.” ECF No. 37-1 at 2.
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rather than the clear and convincing evidence standard that Judge Kobayashi
used in examining other badges of fraud. Id. at 6.
4. Judge Kobayashi found that there was no consideration for the fraudulent
transfer. Id. at 6–7.
5. Judge Kobayashi found that Galindo knew that the transfer was done in
fraud of the transferor’s creditors. Id. at 7.
6. Judge Kobayashi declined to reconsider certain rulings she made at the
summary judgment phase at trial. Id.
7. Judge Kobayashi held that the plaintiffs’ claims were brought within the
statute of limitations. Id. at 7–8.
8. Judge Kobayashi described Galindo’s conduct as “reprehensible” in her
Order Denying Plaintiffs’ Relief from Judgment. Id. at 8.
LEGAL STANDARD
Disqualification of a judge is mandated where his or her impartiality may be
reasonably questioned. See 28 U.S.C. § 455(a) (“Any justice, judge, or magistrate
judge of the United States shall disqualify himself in any proceeding in which his
impartiality might reasonably be questioned.”). Moreover, personal bias or
prejudice concerning a party also requires disqualification. See id. § 455(b)(1)
(“He shall also disqualify himself . . . [w]here he has a personal bias or prejudice
concerning a party[.]”). Plaintiff also invokes 28 U.S.C. § 144, which provides:
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Whenever a party to any proceeding in a district court
makes and files a timely and sufficient affidavit that the judge
before whom the matter is pending has a personal bias or
prejudice either against him or in favor of any adverse party, such
judge shall proceed no further therein, but another judge shall be
assigned to hear such proceeding.
The affidavit shall state the facts and the reasons for the
belief that bias or prejudice exists, and shall be filed not less than
ten days before the beginning of the term at which the proceeding
is to be heard, or good cause shall be shown for failure to file it
within such time. A party may file only one such affidavit in any
case. It shall be accompanied by a certificate of counsel of record
stating that it is made in good faith.
28 U.S.C. § 144.
DISCUSSION
The “substantive standard” for the disqualification or recusal of a judge
under 28 U.S.C. §§ 144, 455(a), and 455(b) “is the same: ‘[W]hether a reasonable
person with knowledge of all the facts would conclude that the judge’s impartiality
might reasonably be questioned.’” United States v. Hernandez, 109 F.3d 1450,
1453 (9th Cir. 1997) (per curiam) (alteration in original) (quoting United States v.
Studley, 783 F.2d 934, 939 (9th Cir. 1986)).
The Supreme Court has provided the following guidance as to when a
judge’s rulings or statements can form the basis for disqualification:
[J]udicial rulings alone almost never constitute a valid basis for
a bias or partiality motion. In and of themselves (i.e., apart from
surrounding comments or accompanying opinion), they cannot
possibly show reliance upon an extrajudicial source; and can
only 	in 	the 	rarest 	circumstances 	evidence 	the 	degree 	of
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favoritism or antagonism required (as discussed below) when no
extrajudicial source is involved. 	Almost invariably, they are
proper grounds for appeal, not for recusal. 	Second, opinions
formed by the judge on the basis of facts introduced or events
occurring in the course of the current proceedings, or of prior
proceedings, do not constitute a basis for a bias or partiality
motion 	unless 	they 	display 	a 	deep-seated 	favoritism 	or
antagonism that would make fair judgment impossible. 	Thus,
judicial remarks during the course of a trial that are critical or
disapproving of, or even hostile to, counsel, the parties, or their
cases, ordinarily do not support a bias or partiality challenge.
They may do so if they reveal an opinion that derives from an
extrajudicial source; and they will do so if they reveal such a high
degree of favoritism or antagonism as to make fair judgment
impossible.
Liteky v. United States, 510 U.S. 540, 555 (1994) (citation omitted).
The first seven decisions that Defendants argue reflect Judge Kobayashi’s
bias against Galindo are each an attempt to second-guess various procedural,
evidentiary, and substantive rulings that Judge Kobayashi issued in the First Case.
Nothing in Galindo’s declaration regarding these seven instances reflects any
evidence of “favoritism or antagonism” on Judge Kobayashi’s part. Id.
Defendants’ proper remedy is therefore to file an appeal (which they did)—not to
seek Judge Kobayashi’s disqualification in a separate case.
The final instance upon which Defendants rely is a statement Judge
Kobayashi made in a written order describing certain of Galindo’s actions as
“reprehensible.” ECF No. 37-2 at 8. Although Defendants did not provide the full
statement in its moving papers here, that sentence reads: “In short, while
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[Galindo]’s actions are reprehensible and not condoned, this Court cannot grant
Plaintiffs relief under Rule 60.” Civ. No. 16-00450 LEK-WRP, ECF No. 192 at
13.
While Judge Kobayashi’s statement was strongly worded, it does not reflect
bias or prejudice sufficient to warrant her disqualification.2 Liteky recognizes that
a judge may arrive at just such a conclusion based on evidence adduced at trial:
The judge who presides at a trial may, upon completion of
the 	evidence, 	be 	exceedingly 	ill 	disposed 	towards 	the
defendant, 	who 	has 	been 	shown 	to 	be 	a 	thoroughly
reprehensible person. But the judge is not thereby recusable for
bias 	or 	prejudice, 	since 	his 	knowledge 	and 	the 	opinion 	it
produced were properly and necessarily acquired in the course of
the proceedings, and are indeed sometimes (as in a bench trial)
necessary to completion of the judge's task. 	As Judge Jerome
Frank 	pithily 	put 	it: 	“Impartiality 	is 	not 	gullibility.
Disinterestedness does not mean child-like innocence. 	If the
judge did not form judgments of the actors in those court-house
dramas called trials, he could never render decisions.” 	Also not
subject 	to 	deprecatory 	characterization 	as 	“bias” 	or
“prejudice” are opinions held by judges as a result of what they
learned in earlier proceedings. 	It has long been regarded as
normal and proper for a judge to sit in the same case upon its
remand, and to sit in successive trials involving the same
defendant.
Liteky, 510 U.S. at 550–51 (emphasis added) (quoting In re J.P. Linahan, Inc., 138
F.2d 650, 654 (2d Cir. 1943)). Thus, that Judge Kobayashi viewed Galindo’s
2 Indeed, the fact that the challenged statement was part of a sentence denying
Plaintiff’s Motion for Relief from Judgment demonstrates Judge Kobayashi’s lack
of bias or prejudice.
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conduct as “reprehensible” following the trial in the First Case does not preclude
Judge Kobayashi from presiding over a second case involving Galindo.
Defendants’ argument that Judge Kobayashi’s conduct is similar to the type
of conduct that Justice Kennedy viewed as requiring recusal in his concurring
opinion in Liteky is unavailing. In his concurrence, Justice Kennedy explained that
if “a judge presiding over a retrial should state, based upon facts adduced and
opinions formed during the original cause, an intent to ensure that one side or the
other shall prevail, there can be little doubt that he or she must recuse.” Id. at 558
(Kennedy, J., concurring). As an example of such egregious conduct, Justice
Kennedy cited Rugenstein v. Ottenheimer, 152 P. 215 (Or. 1915), in which the
Supreme Court of Oregon reversed a judgment because of the “judge’s failure to
disqualify himself on retrial, where [the] judge had stated: ‘This case may be tried
again, and it will be tried before me. I will see to that. And I will see that the
woman gets another verdict and judgment that will stand.’” Id. (some internal
quotation marks omitted) (quoting Rugenstein, 152 P. at 216). Unlike the judge in
Rugenstein, Judge Kobayashi did not indicate any intent whatsoever to
predetermine or influence the outcome of either the First Case or this case.
Defendants have therefore failed to set forth a legally valid reason for Judge
Kobayashi’s disqualification or recusal.
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CONCLUSION
For the reasons set forth above, Defendants’ Motion to Disqualify or Recuse
the Hon. Leslie E. Kobayashi is DENIED.
IT IS SO ORDERED.
DATED: Honolulu, Hawai‘i, December 23, 2020.
Civil No. 20-00270 LEK-RT, Evan Auld-Susott, et al. v. Lauryn Galindo, et al.;
ORDER DENYING DEFENDANTS’ MOTION TO DISQUALIFY OR RECUSE
THE HON. LESLIE E. KOBAYASHI
Jill A. Otake
United States District Judge
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