On Monday, February 24, 2025, Bloomberg Law reported that a federal judge in Manhattan recused himself from a case involving PayPal Inc.’s investment initiative aimed at supporting venture-capital funds led by Black and Latino entrepreneurs. This decision follows allegations that the judge’s courtroom policies included racial preferences, prompting concerns over impartiality.

U.S. District Judge Dale Ho’s courtroom guidelines promote the involvement of less experienced attorneys, specifically encouraging participation from those from backgrounds historically underrepresented in the federal bar. According to the policies, the lead attorney retains the final say on who represents the client in court, rather than the judge.

The recusal was prompted by a motion filed by lawyers from the firm Consovoy McCarthy, who are representing the plaintiff challenging PayPal’s investment program as discriminatory. They argued that Judge Ho’s policies create a perception that the court condones racial preferences, potentially undermining the fairness of the proceedings.

The case was reassigned to U.S. District Judge Jesse Furman on February 19, following the motion submitted on February 14. The attorneys contended that Judge Ho’s practices violated the constitutional guarantees of equal protection and Canon 2A of the Code of Conduct for U.S. judges, which mandates that judges must respect the law and uphold public confidence in the judiciary’s integrity and impartiality.

Consovoy McCarthy referenced the significant Supreme Court case, Students for Fair Admissions v. President and Fellows of Harvard College, arguing that the essence of equal protection under the Constitution is to eliminate government-imposed racial discrimination. They also claimed that Judge Ho’s actions contravened Canon 3C, which states that judges should disqualify themselves in situations where their impartiality could reasonably be questioned, particularly if they have a personal interest that could be influenced by the case outcome.

This is not the first instance where the lawyers have sought to have a case reassigned due to a judge’s policies. They previously raised concerns about U.S. District Judge Analisa Torres, arguing that her courtroom standards, which encouraged participation from inexperienced attorneys—especially women and minorities—also amounted to racial preferences. Following these complaints, Judge Torres modified her language regarding the involvement of junior attorneys in court proceedings.

Furthermore, other judges have faced similar scrutiny regarding their policies. In 2024, three judges in Illinois rescinded orders that promoted opportunities for newer, female, or minority attorneys after an ethics complaint from a conservative legal organization challenged these practices.

In light of ongoing debates about courtroom policies, many judges are now opting for race-neutral approaches that seek to support all newer lawyers entering the profession. These revised policies encourage, but do not mandate, law firms and senior attorneys to expand the roles of junior lawyers in legal proceedings. Judges have noted a decline in trial cases and a corresponding reduction in speaking opportunities for newer attorneys, emphasizing that the decision on who represents a client ultimately lies with the lead counsel, not the presiding judge.

 

 

Source: Bloomberg Law