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When Both Sides Agree, But the Dispute Lives On
What happens when neither party to an appeal supports the decision of the lower court or when the prevailing party abandons the position it successfully advanced below? In these circumstances, federal appellate courts often appoint independent amicus counsel to get the benefit of an adversarial process on appeal.
This situation occured in June in a case before the U.S. Court of Appeals for the Second Circuit involving a district court decision that rejected a settlement agreement between the U.S. Securities and Exchange Commission and Citigroup Inc. In that case, the SEC sued Citigroup for making misrepresentations about a fund that invested in housing-related subprime securities. When the housing market collapsed, the fund’s investors lost millions while Citigroup profited, in effect, from having bet against its own fund. U.S. District Judge Jed Rakoff found the SEC’s proposed consent decree inadequate and contrary to the public interest and refused to approve it. Both parties sought reversal on appeal, so the Second Circuit appointed amicus counsel to defend the district court’s decision. (The circuit ultimately reversed, holding that Rakoff had abused his discretion by not deferring sufficiently to the SEC’s judgment in evaluating the proposed settlement.)
