A high-profile insider trading prosecution, currently pending in the Southern District of New York, has yielded the first indications that the tide may have turned against a questionable prosecutorial practice of channeling certain criminal cases around the district’s system of random judicial assignment. In a unanimous order in United States v. Blaszczak, the district’s Assignment Committee has, for the first time, rejected the government’s position that the government properly caused a new case to be assigned to the same judge who had handled a prior, related case, and has directed the clerk to reassign the case to a judge selected at random. Order, June 8, 2017, issued in United States v. Fogel, 1:17-cr-00308. The order is issued in the wake of United States v. Newman, 773 F.3d 458 (2d Cir. 2014), where the Second Circuit went out of its way to criticize the government for channeling cases, although that issue was not even directly before the court. It appears to represent a departure from the Southern District’s previously more tolerant attitude with respect to an increasingly controversial practice. See, e.g., J. Bach and Rachel B. Kane, “Insider Trading Case Raises Concerns About Judicial Assignment,” N.Y.L.J. Sept. 30, 2013 (discussing the case of Michael Steinberg).
The U.S. Attorney’s capacity to avoid random assignment and channel a criminal case to a known judge has turned on a perceived loophole in the district’s local Rules for Division of Business Among Judges (the Rules). Most criminal defendants in the Southern District are randomly assigned to a judge through the system known as “the wheel.” In certain instances, however, the U.S. Attorney’s Office (the Office) will elect to charge a new defendant by “superseding” indictment, effectively joining the new case to a prior case that involves some of the same facts and issues. Under Rule 6(e) of the local Rules, proceeding by superseding indictment ensures that the case will revert to the same judge who handled the case in which an earlier indictment had issued, rather than to a judge assigned at random.
