Pre-Bankruptcy Texts Deepen Ethical Concerns About Ex-Judge

Recently revealed texts highlighting a Houston attorney’s apparent interactions with a former bankruptcy judge whom she was dating have added more fuel to the fire amid allegations that their relationship led to improper communications about cases he oversaw.

The texts offer a peek at how Elizabeth Freeman, a partner at Jackson Walker LLP at the time, characterized to her firm colleague her discussions of Chapter 11 cases with David R. Jones, her boyfriend and then-judge for the US Bankruptcy Court for the Southern District of Texas.

And while they don’t necessarily confirm improper, “ex parte” communications, the texts do raise fresh concerns over whether he should’ve recused himself from cases involving Jackson Walker, as well as the ability of distressed corporations and their advisers to hand-pick their bankruptcy judge to secure the outcomes they want.

Freeman’s texts reveal planning over filing JCPenney’s sprawling Chapter 11 case in Jones’ court. On May 12, 2020, three days before the bankruptcy filing of the storied American retailer, Freeman told her Jackson Walker colleague that she had “talked to Jones” and “he’s got us,” according to texts displayed in records viewed by Bloomberg Law.

Freeman told her colleague that there were “too many fights” in the JCPenney case, where Jackson Walker served as local counsel to the company’s lead bankruptcy lawyers at Kirkland & Ellis LLP, and that it couldn’t afford a “process hawk,” referring to Jones’ judicial colleague and friend, Judge Marvin Isgur.

Impartial

The texts highlight ongoing questions over how Jones could have been “impartial,” said Judith Fitzgerald, an attorney with Tucker Arensberg PC and a former bankruptcy judge.

“This type of behind-the-scenes conduct is an embarrassment to, if not an indictment of, a judicial system which promises litigants access to justice and adjudication by fair and impartial judges,” Fitzgerald said. “A courtroom should present a level playing field for the issues raised, not one that pre-handicaps the outcome.”

Bankruptcy rules require attorneys to refrain from communications with the court concerning matters affecting a particular case, said bankruptcy expert Lynn LoPucki, a professor at the University of Florida Levin College of Law and longtime critic of forum shopping. If Freeman talked to Jones about the JCPenney case, she violated the rule, he said.

The texts don’t seem to pass “the smell test,” said Brya Keilson, a Morris James LLP partner and former trial attorney for the Office of the US Trustee. But she cautioned that it’s not clear from the texts whether others also talked to Jones before the case.

“It’s not obviously: ‘Yes, this is ex parte, this is a conversation between the judge and only one party,’” Keilson said. “But it certainly could be, and that’s never a good position in to be in to be discussing something that could be taken as that.”

Even if Jones and Freeman could argue there was no ex parte communication because the case wasn’t filed yet, the texts suggest violations of both attorney professional conduct rules and judicial canons pertaining to impartiality, said Clifford J. White, a former director of the US Trustee’s office.

“Getting inside information about a case assignment is not proper, plain and simple,” White said.

Ex Parte

Georgetown University law professor Adam J. Levitin said the pre-bankruptcy communications between Freeman and Jones aren’t ex parte communications. There was no bankruptcy filed, so there was no case with parties, he said.

And while the texts seem to counter Jones’ claims that they didn’t discuss their mutual cases, the level of harm isn’t fully clear.

In a court hearing over the US Trustee’s motions to disgorge Jackson Walker’s fees in August, Jones’ attorney, Benjamin I. Finestone of Quinn Emanuel Urquhart & Sullivan LLP, said there were no ex parte communications about the substance of any case Jones was involved in.

Determining whether a discussion qualifies as “ex parte” requires context. Practitioners and the court talking about routine scheduling matters is common practice.

Talking about contested matters, or those under negotiation or advisement, is generally considered off limits. Whether the conversation Freeman alluded to crosses that line isn’t clear.

But formal labels don’t matter as much as the ethics do, Levitin said. The communications violate the Code of Conduct for United States Judges, which says judges can’t consider communications concerning an “impending matter that are made outside the presence of the parties or their lawyers,” Levitin said.

“‘He’s got us’ suggests that Jones replied to her about the case,” LoPucki said.

Picking the Judge

The situation between Jones, Freeman, Jackson Walker, and the courts underscores the need to reform the bankruptcy system so debtors can’t pick their judge, Levitin said.

“The Freeman texts illustrate that debtors don’t pick judges because of their skill or experience,” Levitin said. “They pick them because they anticipate favorable treatment.”

It’s improper for a judge to manipulate venue to avoid or get a particular case, said former Nevada bankruptcy judge Bruce Markell, now a professor of bankruptcy law at Northwestern Pritzker School of Law.

“The assignment should be random, and it should follow the rules,” Markell said.

The situation is made worse by the fact that Freeman and Jones were in a romantic relationship and seemingly communicating about a case before it was filed, Markell said.

Freeman’s text saying she “talked to Jones” makes it hard to believe claims that they never had “pillow talk,” Nancy Rapoport, a University of Nevada, Las Vegas law professor who has written about the defendants’ duties to disclose.

There might be an innocent explanation, Rapoport said. But each successive text makes it all look worse, she said.

“When you add them all together they go from ‘don’t look great’ to ‘horrible,’” Rapoport said.