SCOTUS Denies Cellspin Petition Seeking Recusal Based on Federal Judge’s Financial Ties to Google

The U.S. Supreme Court denied certiorari Monday in Cellspin Soft v. Fitbit, a case arguing in part that a district judge should have been recused due to her spouse’s financial ties to Google and her own ownership of Google stock through heavily managed investment funds.

The petition for writ of certiorari, filed by Bluetooth media upload developer Cellspin in April, claimed that Rogers’ impartiality could reasonably be questioned based on those financial interests, some of which were only disclosed following summary judgment. The petition posed three questions to the Court:

“1. Should the merits as to the question of recusal under 28 U.S.C. § 455(a) be decided first, before reaching the merits of any potential abuse of discretion in excluding evidence in the district court?

2. Is the failure to rule on the merits under § 455(a) a due process violation, especially when the spouse of the district court judge has accepted $700 Million in part from Google (which is a party to ongoing litigation), and has five publicly-announced strategic partnerships with Google?

3. Should federal judges be allowed to hold investments of $5 Million and as much as a $25 Million in hedge funds under 28 U.S.C. § 455(d)?”

Respondent Fitbit is owned by Google and Cellspin said the judge should recuse herself due to an alleged business relationship between Gonzalez Rogers’s husband, Matt Rogers, and Google, as well as her own 2020 and earlier financial disclosures including a “$5–$25 Million dollar investment holding by the name of ‘McKinsey & Company Special Situations Aggressive Long-Term’..”

Matt Rogers served as senior partner for McKinsey & Company, which partnered with Google to improve refinery performance for a McKinsey client in the oil and gas industry. McKinsey also used Google Cloud services and architecture to aid an energy sector client in addressing power outages associated with forest fires in California. Cellspin alleged the substantial business ties between Google and McKinsey created an objective appearance that Judge Gonzalez Rogers would be biased in favor of Google due to her husband’s business ties.

Cellspin also argued the summary judgment decision should be vacated under the Federal Circuit’s 2022 decision in Centripetal Networks, Inc. v. Cisco Systems, Inc., in part due to the judge’s financial interests in Google. However, the funds at issue are managed by third parties and consist of a wide range of companies across the stock market, making them fall under a safe harbor exemption, determined Gonzalez Rogers.

In a decision issued in November 2024 by the U.S. Court of Appeals for the Federal Circuit (CAFC), the CAFC affirmed the denial of Cellspin’s motion under 28 U.S.C. § 455, which it filed seven months after the summary judgment ruling,

The Federal Circuit found that the district court properly dismissed the motion with respect to the allegation regarding Rogers’ financial interests as untimely. Cellspin knew about Fitbit’s acquisition by Google by February 3, 2021, but did not seek recusal until January 2023, “well after it had lost on the summary judgment motion,” wrote the CAFC. “The timing raises obvious concerns of lack of equity and strategic misuse of recusal.” The panel similarly found the allegations regarding the judge’s husband’s collaborations with McKinsey were also not presented in a timely manner.

Matt Rogers’ position as operating partner at Ajax Strategies, a private equity firm that operates several startups receiving significant financial support from Google, was presented as a separate basis for recusal. Cellspin’s motion for recusal included several exhibits demonstrating that global imaging company Planet Labs, hydropower developer Natel Energy, and vegan dairy alternative producer Ripple Foods each raised millions in seed funding from Google while those startups were overseen by Ajax Strategies. It also detailed the use of Google software platforms in five other companies operated by Ajax. While the CAFC acknowledged this basis “raises a different timeliness issue, at least because the relationship of Mr. Rogers with Ajax seemingly did not begin until March 2022,” and therefore “may well have been less publicly available to Cellspin than were facts relating to the asserted bases for recusal discussed above,” the appellate court said any error made by the district court on this point was harmless because the risk of injustice to the parties by denying vacatur was precluded by the CAFC’s separate affirmance of the summary judgment decision.

Cellspin Soft’s petition for writ cited Supreme Court precedent from Liljeberg v. Health Services Acquisition Corporation (1988) indicating that appellate courts “must first determine whether [Section] 455(a) can be violated based on an appearance of partiality.” The evidence of Judge Gonzalez Rogers’ and her husband’s financial interests in respondent Google makes the Federal Circuit’s failure to reach the merits at all even more egregious, Cellspin Soft argued.

Both Judge Gonzalez Rogers’ August 2023 order denying recusal and the Federal Circuit’s ruling last November took Cellspin Soft to task for moving for recusal in an untimely manner, namely after Judge Gonzalez Rogers had already entered summary judgment in the case. In response, Cellspin Soft countered that some details of Judge Gonzalez Rogers financial interests did not come to light until well after her summary judgment ruling, including information about her holdings in the investment fund managed by McKinsey, which annually files for an exemption to U.S. Securities & Exchange Commission (SEC) regulatory rules for mutual funds on that hedge fund. This information only came to light in Judge Gonzalez Rogers’ August 2023 ruling, which “the Court note[d] for transparency purposes.”

Cellspin Soft cited several Supreme Court and regional circuit court rulings other than Liljeberg  confirming the importance of considering recusal factors before reaching the merits of a case in order to satisfy constitutional due process. Such early determinations on recusal are required for proper appellate review standards and to ensure that the issue is properly before the appellate court.

Had the Federal Circuit analyzed the merits of the recusal motion first instead of first affirming Judge Gonzalez Rogers’ summary judgment ruling, as Court precedent supports, Cellspin Soft contended that the appellate court should have recognized that Judge Gonzalez Rogers’ ruling to exclude evidence under local rules was not properly before the court for abuse of discretion review. Without the Supreme Court’s correction, Cellspin Soft said that the Federal Circuit’s ruling would establish a problematic legal precedent undermining judicial impartiality, compromising the fundamental fairness of the judicial process, and eroding public trust in the legal system.

Cellspin Soft’s cert petition also attacked the Federal Circuit’s finding that any error in the district court’s analysis of recusal was harmless, arguing that errors to constitutional due process are so structural in nature that they cannot be harmless. For constitutional errors to be harmless, they must be harmless beyond a reasonable doubt, according to the Supreme Court’s 1967 ruling in Chapman v. California. In Cellspin v. Fitbit, the Federal Circuit failed to even address the merits of Cellspin Soft’s recusal motion, despite the fact that at least one Federal Circuit judge expressed doubt during oral arguments that financial interests in Google through Ajax could have led Judge Gonzalez Rogers to exclude evidence for Google’s benefit as she did during trial.

The Federal Circuit was only able to avoid addressing Cellspin Soft’s Section 455(a) arguments by adopting “a strained explanation of the preclusive effects of the district court’s summary judgment decision,” according to the petition. On summary judgment, Judge Gonzalez Rogers found that Cellspin Soft was unable to rely on evidence that claimed “user information” was contained within a Fitbit code variable called “OAuth” on the ground that this code variable was not identified in Cellspin Soft’s claim chart as required by the district court’s local procedural rules. While the Federal Circuit found that the exclusion of evidence against respondent Garmin had preclusive effect against the Fitbit code evidence, Cellspin Soft pointed out that Judge Gonzalez Rogers applied preclusive effect to the Garmin evidence after finding Cellspin Soft was estopped from entering the evidence against Fitbit.

The cert petition further argued that the Federal Circuit ignored its own precedent from 2012’s Shell Oil Co. v. United States in severing the recusal motion from the preclusion issue, noting that Shell Oil held that it was even more difficult to sever recusal issues when there was substantial overlap with respect to the issues involved among the remaining parties.