Supreme Court nominee Stephen G. Breyer, who as a federal
appeals court judge has ruled in a number of toxic waste cases, had
a major financial interest in the outcome of similar liability
suits against U.S. polluters, Newsday has learned.
Breyer's financial disclosure statements filed with the
Judicial Ethics Committee in Washington show that the judge had
between $250,000 and $500,000 invested in the Lloyd's of London
insurance company in the mid- and late 1980s.
The forms do not reveal which syndicates Breyer invested in.
But internal Lloyd's documents obtained by Newsday in the United
States and Great Britain indicate that one of Breyer's investments
was a syndicate known as Merrett 418 (1985), whose liabilities for
U.S. Superfund and asbestos claims were so great for that
underwriting year that the group remains unable to close its books,
nine years after it stopped operating. Lloyd's investors (known in
England as "names") are personally liable for all claims.
In 1988, the last year in which Breyer made new investments in
Lloyd's, there were 80 syndicates with unresolved U.S. pollution
liabilities, according to the British trade press. The company is
actually a group of syndicates, with wealthy investors putting up
cash and pledging other assets to cover any potential losses. They
make money on their investments when premiums collected for the
syndicate exceed claims against it.
As a federal appeals court judge in Boston for the past 13
years, Breyer has ruled on a number of Superfund cases, including
two that environmental lawyers describe as major legal precedents.
In both of those, Breyer ruled against the government and in favor
of the defendants.
At the same time, in speeches, articles in legal journals, and
in his recently published book, "Breaking the Vicious Circle:
Toward Effective Risk Regulation," Breyer has made a vigorous
argument that the U.S. government has been needlessly overzealous
in environmental cleanup, particularly in spending large amounts of
money to eliminate what he asserts are marginal risks.
Breyer's chambers referred questions about the Lloyd's
investment and his rulings to the White House.
White House Counsel Lloyd Cutler, in response to inquiries by
Newsday, said that "there was no case to Judge Breyer's knowledge
where his syndicate or Lloyd's itself had an interest in the
particular case he was deciding."
Without a direct involvement with the parties to a case, there
is no obligation by any judge to remove himself from sitting on a
case, Cutler said.
"What he did is generally accepted as the way (the judicial
ethics) rules should be applied," Cutler said. "If the rules were
applied the way you want to apply it, no judge could own shares of
But Cutler said Breyer decided to recuse, or remove, himself
from sitting on asbestos cases "once it became generally clear that
Lloyd's had some risk in asbestos cases. …