Courts

The Wild Ethical Lapse That Led To The Resignation Of A Top Bankruptcy Judge

They say love makes you do strange things.

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Gavel surrounded by red hearts, isolated on white, concept of legal action for divorce.If there’s one takeaway from the national obsession over the romance between superstar Taylor Swift and footballer Travis Kelce, it’s that love can happen anywhere. But if you’re a judge and love blossoms with an attorney at a firm with matters in your court, may I tactfully suggest you recuse yourself from those cases. Hell, it doesn’t even have to involve pledges of undying devotion, any kind of situationship is plenty to use the recusal card. It’s advice that a federal judge probably should have heeded.

Bankruptcy Judge David R. Jones is resigning from the bench. As he told Bloomberg Law, “I love the bankruptcy process and the Southern District of Texas. I have always said that the bankruptcy process should be about the participants and the preservation of jobs. I have become a distraction to the good work that the court does. To end that distraction and hopefully return focus, I have resigned.” Curious about what’s behind that? Turns out Judge Jones never disclosed he was in a relationship with Elizabeth Freeman, a bankruptcy attorney at Jackson Walker LLP.

An ethics complaint was filed against the judge by Chief Judge Priscilla Richman of the U.S. Court of Appeals for the Fifth Circuit.

Freeman and Jones have been sharing a house together since at least 2017, according to the complaint from the Fifth Circuit — even as Jones approved attorneys’ fees for Jackson Walker, and didn’t recuse himself from cases in which Freeman was involved. Jones also recommended Freeman to the Lawyer Admissions Committee of the Southern District of Texas Bankruptcy Court without disclosing their relationship.

“There is probable cause to believe that Judge Jones has engaged in misconduct,” Richman wrote in the complaint on Oct. 13. The US Court of Appeals oversees federal judges in Houston.

Jones previously defended his conduct by saying he and Freeman are not married, and therefore he has no monetary interest in Jackson Walker cases.

As a former clerk for Jones, Freeman did not appear before Jones though she did work on matters assigned to the judge. A firm spokesperson said they first heard about the relationship in March 2021, and Freeman was instructed to stop billing on matters before Jones.

Jim Wilkinson, a Jackson Walker spokesman, said the firm “acted in a timely fashion” once it learned of the issue. That included conducting a full inquiry and consulting independent outside ethics counsel for their guidance, he said. Freeman joined Jackson Walker in 2018, and left in late 2022.

“We are confident that we acted responsibly,” Wilkinson said.

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Jones presided over a number of high profile bankruptcy cases, including Neiman Marcus, JCPenney, Seadrill Ltd., and Chesapeake Energy, and helped to champion Houston as a go-to location for bankruptcy filings. But experts predict this scandal has ended that run. “This is all going to take a while to play out, but in the meantime, Houston is probably finished as a go-to bankruptcy filing venue,” said Georgetown Law professor Adam Levitin.

“Bankruptcy judges preside over some of the most complex and significant cases that enter our legal system, whether they involve individual debtors or mega chapter 11 reorganizations. They cannot engage in that all-important work when their impartiality and integrity has been compromised,” said Christopher Hampson, a bankruptcy professor at the University of Florida.

Jones’s resignation likely ends the ethics inquiry by the Fifth Circuit. But as Chief U.S. District Judge Randy Crane of the Southern District of Texas noted, “We’re all dumbfounded and surprised and shocked. And nobody was more disappointed than our court.”

Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.

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