Does Pam Karlan have an ethics problem? Part Two

Pam Karlan served in the Biden administration as Principal Deputy Assistant Attorney for Civil Rights at the same time that she was being paid lavishly by Stanford University where she had been teaching law (and has now returned). During her time at the Justice Department, Karlan worked on a brief in a Supreme Court case challenging Harvard’s race-based admissions policy for undergraduates. Stanford has a similar policy and had filed an amicus brief (note: typo corrected) in the Harvard litigation before Karlan’s arrival at the DOJ.

Yesterday, I wrote that these facts seem to raise a conflict of interest for Karlan. She owed the Justice Department and the American people a view of the Harvard case unaffected by Stanford’s interest in the matter. Yet, with Stanford paying her more than $1 million while she was at the DOJ, there is at least the appearance that Karlan’s input might have been affected by Stanford’s interest.

Although the conflict of interest seems clear, Karlan and the DOJ could rely on 5 CFR § 2640.203(b) to avoid legal jeopardy. It provides:

An employee on a leave of absence from an institution of higher education may participate in any particular matter of general applicability affecting the financial interests of the institution from which he is on leave, provided that the matter will not have a special or distinct effect on that institution other than as part of a class.

The argument would be that Stanford can be affected by a decision in the Harvard case only as a member of the class of institutions that grants preferential admissions to members of certain minority groups including blacks. Thus, that litigation is a “matter of general applicability.”

A counter-argument might be that the ways in which universities grant racial preferences varies from institution to institution. One can envisage a Supreme Court decision in the Harvard case under which Stanford’s particular program would survive while others would fail (or vice versa).

Indeed, something very much like this happened the last time the Supreme Court issued major rulings on the use of race-based preferences by institutions of higher learning. The Court upheld the University of Michigan law school’s preference regime while striking down the same University’s preference regime for undergraduates.

Thus, although the Court’s decision in the Harvard case would apply to all colleges and universities, its application might very well produce different outcomes for different institutions. It could, in other words, have an effect on Stanford distinct from its effect on other colleges and universities. With Karlan on Stanford’s payroll while she worked on the Harvard case, the public could not be fully confident that she wouldn’t try to shape the government’s argument for the special benefit of Stanford.

If section 2640.203(b) doesn’t allow Karlan to participate in the Harvard case, she might still have received a waiver from the DOJ under 5 CFR § 2640.301 permitting her to do so. However, it seems unlikely that a waiver was issued in this case. More likely, Karlan and the DOJ relied on Section 2640.203(b) to the extent they considered the conflicts issue at all.

In any case, such waivers are only to be granted where an otherwise disqualifying interest is not substantial. Given Stanford’s participation in the Harvard litigation, its interest in that case seems substantial.

Thus, if a waiver was granted, it should not have been. And while a waiver might protect Karlan legally, it should not shield her from criticism for participating in a case in which Stanford has such a clear interest.

The same is true, I think, if Karlan’s situation was covered by Section 2640.203(b). It seems to me that she should have recused herself from the Harvard case.

All of this comes with the same caveat as my original post. I’m not an expert in these matters.