Also known as:entanglements · excessive entanglement
Written by attorneys · grounded in primary & secondary sources — see below
A judge's financial connection to a party in pending litigation that creates an appearance of impropriety or conflict of interest. The connection triggers a duty to avoid such dealings even without actual participation in the affected decision.
Sources & Authorities· 2 primary sources
Select any source to read its text and confirm it supports the definition.
Cases
Hornbooks
How it applies
Common Examples
2
Judge's Bond Holdings Trigger Discipline
Edith Eberhardt owned municipal bonds issued by the city of Riverton while presiding over a contract dispute in which the city was a defendant. She continued to purchase additional notes after the case was assigned to her docket. The judicial conduct commission imposed discipline because her ongoing financial position created an appearance of impropriety and potential conflict, regardless of whether she participated in any ruling affecting the city's obligations.
Analyst Report Creates Primary Liability
Echo Systems supplied detailed revenue projections to an outside analyst who then published a report repeating those figures. Investors who relied on the report sued Echo for securities fraud. Echo was held primarily liable because its repeated private communications with the analyst demonstrated entanglement sufficient to treat the published statements as its own.
Put it into practice
Test Yourself
10
Practice Questions5
Coopers & Lybrand v. Livesay437 U.S. 463, 468 (1978)
Common questions
Frequently Asked
2
What conduct by a judge creates improper entanglement with a litigant's securities?+
Owning or continuing to acquire municipal bonds or notes of a city that is a party in pending litigation creates the prohibited entanglement. The rule applies even if the judge does not participate in any decision affecting the city's financial obligations.
Supporting sources
Does the entanglement doctrine in securities cases require the issuer to have expressly adopted the analyst's statement?+
No. Primary liability can attach when the issuer has entangled itself with the analyst through the provision of information that forms the basis of the published statement, even without formal adoption.
Supporting sources
TortsProducts liability based on the design, manufacture, and distribution of products and defenses to such claims · Products liability based on the design, manufacture, and distribution of products and defenses to such claimsNEXTGENFoundational