A conflicted court

Monday, May 19, 2008 | 2:10 a.m.

In a rare move, the U.S. Supreme Court disqualified itself from a case last week because too many justices had conflicts of interest.

The court had been asked to rule on a lawsuit seeking $400 billion from more than 50 major corporations that did business with the former apartheid government in South Africa. Four of the nine justices recused themselves.

Federal law requires that the court have a quorum of six justices to hear a case. As a result, a lower court opinion that allows the case to proceed toward trial stands.

The court did not specify the justices’ reasons for withdrawing from the case, but Chief Justice John Roberts and Justices Samuel Alito and Stephen Breyer own stock in some of the corporations being sued. Justice Anthony Kennedy reportedly has a son who works for one of the defendants.

The issue of conflicts of interest due to stock holdings is troubling. Unlike other federal officials, justices and judges are not required to divest themselves of stock.

Instead, they are required to recuse themselves if they own any stock in a company that comes before their court. On the Supreme Court, it is not uncommon to see a justice step aside for a case, which leaves open the possibility of a tie vote.

In an attempt to address the problem, Congress passed a bill two years ago to give judges an exemption on capital gains taxes if they sold their stock and reinvested the money in mutual funds or government securities.

Justices also have the option of putting their holdings into blind trusts, in which they would have no specific knowledge of what companies are in their portfolios.

But as this case shows, neither of those has been a popular option for the justices, and that is a shame. What good is a court if it can’t hear a case? The justices should be compelled to get rid of their potential financial conflicts of interest.