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Judge Ellison of S.D. TX District Court Bites Back at Outrageous 5th Circuit Judge Jerry Smith’s Opinion Over Zealously Protecting JPMorgan Chase by Attacking Ellison in Error

“In almost 20 years on the bench, this court has not had to issue any other writing like this one. But, never before has an appellate judge mischaracterized the trial record so significantly, and it appears, willfully,” Ellison said.

SMITH, JERRY E.

HIGGINSON, STEPHEN A.

DUNCAN, STUART K.

U.S. Judge Keith P. Ellison of the U.S. District Court for the Southern District of Texas in Houston Bites Back at 5th Circuit Panel

A Houston federal judge, admonished by an appeals court for appearing to criticize arbitration, has fired back with his own rebuke, calling the panel’s characterization of his courtroom remarks “misleading and inaccurate.”

U.S District Court Judge Keith Ellison of the Southern District of Texas delivered the reproach Monday in an order in a labor case involving JPMorgan Chase & Co. call-center workers who alleged they’ve been shorted on wages. A U.S. Court of Appeals for the Fifth Circuit panel, led by Judge Jerry Smith, said last month Ellison was wrong to say JPMorgan was required to send collective action notices to employees who had signed arbitration agreements.

Smith, in a footnote, said Ellison “obviously has a “jaundiced view” of arbitration, including the recent U.S. Supreme Court decision that said employment agreements can prohibit workers from forming class actions. Smith warned Ellison to “avoid even the appearance of judicial endorsement on the merits of the action.”

Responding to the Fifth Circuit’s criticism, Ellison, serving on the bench since 1999, said the questions he raised during court hearings in the JPMorgan case were taken out of context and misconstrued.

“In almost 20 years on the bench, this court has not had to issue any other writing like this one. But, never before has an appellate judge mischaracterized the trial record so significantly, and it appears, willfully,” Ellison said.

Ellison said that if the case returns to the same appeals judges, “it is to be hoped that the panel can achieve a higher degree of accuracy and candor. This court can ill afford the time and effort that are required to set right such errors.”

Ellison rejected the suggestion that he had prejudged the merits of the workers’ complaint, which alleges JPMorgan violated the Fair Labor Standards Act by not paying certain employees for “off the clock” work. The collective action potentially involves 42,000 current and former employees.

Smith pointed to Ellison’s comments about the workers being “victims of this illegality,” and said that it suggested JPMorgan violated labor law. He also said Ellison referred to “further disenfranchisement” of employees even beyond the “huge compromise of individuals’ rights” that occurred when they signed arbitration agreements.

Quoting from the transcript of the hearing, Ellison in his response pointed out the comment were raised in a hypothetical question, and they were not an endorsement of either side in the dispute.

“Many other references during the hearing further validate the obvious truth that this court had not assumed illegality, or any misconduct, on the part of the defendant,” Ellison wrote.

JPMorgan’s lawyers at Morgan, Lewis & Bockius did not immediately respond to a request for comment.

Clif Alexander, a partner at Anderson Alexander in Corpus Christi, Texas, said at the Fifth Circuit’s argument hearing it appears the judges were angry about some of Ellison’s comments. But Alexander said it was clear to him that Ellison was not making a comment on the actual merits of the case during the hearings.

“It came off like hypothetical questions or a dialogue with the attorneys to get a better understanding of Chase’s opinion,” Alexander said Tuesday. “He was just trying to drill down on the issue more.”

Alexander said they are weighing their options, including asking the full Fifth Circuit to review the panel’s decision.

Ellison concluded his order with a footnote that flipped the tables on the Fifth Circuit.

“Judge Smith’s entire opinion seems to take as a given that the arbitration agreements that defendant’s employees may have signed are valid and enforceable,” the judge wrote. He noted that the plaintiffs do not concede as much, and that JPMorgan hasn’t made any effort to push the case from court to arbitration.

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