Kirk v. Citigroup Global Markets Holdings Inc.

Background

David Kirk, proceeding without a lawyer, sued Citigroup Global Market Holdings, Inc. alleging violations of federal securities law and fraud under New York law. The court had previously dismissed the amended complaint for lack of federal diversity jurisdiction, but the Second Circuit vacated that order and held that the complaint sufficiently invoked federal securities law to establish federal-question jurisdiction.

After the appeal, Kirk asked for the case to be transferred to another judge or, alternatively, sought permission to file a recusal motion. He later filed the motion under 28 U.S.C. §§ 455 and 144. Citigroup opposed the motion.

Recusal standards

Section 455 requires a judge to step aside when the judge’s impartiality might reasonably be questioned or when the judge has personal bias or prejudice concerning a party. The court described recusal as subject to a very high standard and asked whether an objective, disinterested observer who knew the relevant facts would reasonably question the judge’s impartiality.

The court explained that Section 144 did not apply because Kirk was proceeding without a lawyer. That provision requires a certification by the lawyer of record and a sworn affidavit alleging bias; the court noted that Kirk also did not submit a sworn affidavit. The court therefore considered the motion under Section 455, which it said provides an available method for self-represented litigants to seek recusal.

The court’s analysis

Kirk identified two categories of alleged bias. First, he relied on the court’s prior rulings, including orders denying his request for free legal representation, explaining that punitive damages could not establish diversity jurisdiction, and granting Citigroup leave to file a sanctions motion. The court stated that adverse rulings alone generally do not establish a reasonable basis to question impartiality. Kirk had not shown that those rulings relied on information from outside the case or reflected favoritism or hostility so severe that fair judgment was impossible. The court also noted that it ultimately denied Citigroup’s sanctions motion.

Second, Kirk argued that recusal was required because the judge had allegedly been recommended for appointment by Senator Charles Schumer, whom Kirk associated with securities attorneys, securities firms, and Citigroup contributions. The court found this alleged connection too indirect and speculative to support disqualification.

Disposition

The court held that Kirk had not shown that an objective and disinterested observer would reasonably question the court’s impartiality. The court DENIED Kirk’s Motion for Recusal and directed the Clerk to terminate ECF No. 107. It also directed the parties to file a joint status report with a proposed briefing schedule for Citigroup’s Rule 12(b)(6) motion to dismiss by January 20, 2023.