(Bloomberg) — Justice Samuel Alito is the only US Supreme Court member with a stake in more than two dozen individual companies, a distinction that threatens to sideline him from major business cases.

Alito or his wife own tens of thousands of dollars of stock in companies including Raytheon Co., ConocoPhillips and a subsidiary of Johnson & Johnson. The holdings may force him to recuse as oil companies challenge lawsuits blaming them for climate change and J&J tries to settle talc lawsuits by placing a subsidiary into bankruptcy.

Alito’s 2023 financial disclosure report was publicly released last week and shows he continues to own stock in over two dozen companies. Supreme Court disclosures extend to financial interests of spouses and dependent children. In Alito’s case, the filings don’t clarify whether the stocks are owned by the justice or his wife.

Supreme Court justices are allowed to hold individual stocks, but ethics rules deem they should disqualify from cases involving the companies. In the past, more justices held shares in individual companies, but that has become rare. Meanwhile, scrutiny of the judicial ethics has increased after revelations that Justice Clarence Thomas, and to a lesser degree Alito, accepted undisclosed gifts and travel from billionaire benefactors.

“It’s a question not of ethics, but of judgment,” said Steven Lubet, emeritus professor at Northwestern University Pritzker School of Law, who focuses on legal and judicial ethics. “Not everything that’s legal is a good idea.”

The justice did not respond to requests for comment through the court’s public information office.

Alito has recused from 64 cases involving corporations he owns shares of since 2021, according to Fix the Court, an advocacy group that supports court reform, including judicial term limits. During the last term, he recused from 15 cases due to stock ownership, far outstripping the number of recusals from all of his colleagues, according to the group’s data. Justices are not required to say why they disqualified themselves from a particular case but the tally is based on the publicly available information.

Chief Justice John Roberts, who previously owned stocks in many individual companies, has sold all but two. Justice Stephen Breyer owned a multitude of stocks before he stepped down from the bench in 2022. Most of the current justices own mutual funds, which do not create a conflict under the court’s ethics code unless the the justice is involved in the fund’s management.

Business Friendly

As a reliably pro-business vote, Alito and his family’s stock holdings could make a difference in major cases over the coming years.

“He’s got major holdings in consumer products, oil and gas, aviation, beverages, and chemicals,” said Gabe Roth, executive director of Fix the Court. “These are industries where there’s a ton of lawsuits making their way through the lower courts.”

Alito has already recused from a pending bid by oil companies to quash a lawsuit alleging they contributed to global warming, likely because he owns stock in ConocoPhillips and Phillips 66, two of the companies involved in the suit. The case, Sunoco LP v. City and County of Honolulu, centers on whether state and local governments can sue fossil fuel companies for damages over harmful greenhouse gas emissions.

Alito didn’t take part in June when the court asked the Biden administration for input on whether to take up the case.

Alito’s recusal leaves the oil companies without a friendly face on the court. Alito has been a critic of federal environmental regulations for decades, and he has a long history of siding with the Chamber of Commerce, which filed in support of the oil companies in the climate change case. Alito last term agreed with the Chamber of Commerce in 73% of cases where the business group weighed in, according to the left-leaning Constitutional Accountability Center.

Johnson & Johnson said in July it would ask the high court to revive the company’s plan to use a bankruptcy maneuver to settle tens of thousands of talc cancer lawsuits. In the time since, the company has continued to engage in settlement talks. A J&J spokesperson did not respond to a request for comment.

Since 2021, the Supreme Court has turned away multiple appeals from the drugmaker over cases involving its liability for selling products that caused cancer and other illnesses. Alito has recused from those cases, likely due to his stock ownership.

Alito last year exchanged his Johnson & Johnson stock for stock in Kenvue Inc., a former subsidiary of J&J that was spun off. It’s unclear if that exchange will allow Alito to take part in future cases involving the drugmaker.

Justice Brett Kavanaugh also may recuse from any case involving the company, as his father, Edward Kavanaugh, was a cosmetic industry lobbyist whose organization fought efforts to require warnings on talc products.

Code of Ethics

Alito’s dozens of recusals create tension with the Supreme Court’s own voluntary code of ethics, which it adopted in November amid the swirl of ethical scandals.

The code encourages Supreme Court justices to try to avoid recusals when they can because there are only nine members and “much can be lost when even one Justice does not participate in a particular case.” The Supreme Court needs four votes to accept a case, so even one recusal can have a “distorting effect” and require the petitioner to get “four votes out of eight instead of four out of nine,” according to the code.

“It’s right there in the court’s commentary on the code of conduct: recusal is to be avoided if possible,” said Lubet.

Alito has faced criticism for declining to recuse from two cases related to the 2020 presidential election. Democratic lawmakers last term asked Alito to recuse from the cases connected to the Jan. 6 Capitol riot after the New York Times reported that flags associated with election deniers flew in front of two Alito residences. The justice later said his wife flew the flags and he did not know they were associated with the election.

Throughout his time on the court, Alito has chosen to sell off particular stocks in order to partake in upcoming cases. He sold his stake in Exxon in 2016 after years of recusals related to the company, including a 2008 case when the court ruled in a split opinion to reduce the punitive damage award for the 1989 Valdez oil spill to $507.5 million from $2.5 billion. Alito’s absence left the court divided 4-4 on a separate line of argument that might have reduced the award even further.

He also sold his stock in Oracle Corp. in 2019 to take part in the company’s copyright case against Alphabet Inc.’s Google.

There have been a few instances in which Alito has failed to recuse from a case involving a company in which he owns stock. He initially failed to recuse from a 2017 case involving Merck & Co. despite owning stock in the company; he then sold his shares and participated in the case.

In 2011, Alito acknowledged an unintentional conflict of interest, saying a staff oversight led him to take part in a 2009 ruling involving Walt Disney Co.’s ABC News even though his children held Disney stock. Alito voted against ABC in the case, joining a 5-4 majority that revived US efforts to crack down on televised vulgarities.

On at least one occasion, the timing of one of Alito’s trades appeared political in nature. In August of 2023, Alito or his wife sold shares of beer giant Anheuser-Busch InBev SA, which coincided with the timing of a conservative-led boycott of the Bud Light maker over a promotional marketing partnership with a transgender social media influencer. Alito sold shares valued at between $1,000 and $15,000. He bought shares of rival beer maker Molson Coors Brewing Co. on the same day, according to a financial disclosure filing for the justice.

–With assistance from Greg Stohr.

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