Gorsuch paid $3.28 million by former firm, under 2005 deal

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Posted: Feb 07, 2017 2:08 PM
Gorsuch paid $3.28 million by former firm, under 2005 deal

WASHINGTON (AP) — Supreme Court nominee Neil Gorsuch gave up a $1 million a year paycheck when he left his private law practice a decade ago for less financially rewarding work as a government lawyer and then a judge.

But he managed to do quite nicely for his first four years on the federal bench even so, earning $3.28 million in deferred payments through 2009. That was on top of the judge's annual salary, around $200,000 at the time.

The payments resulted from an agreement Gorsuch signed when he joined the Bush administration in 2005.

He worked on several potentially lucrative cases that had yet to produce big paydays for the firm. When they did, Gorsuch collected his share according to what he told senators in 2006 were "predetermined rules."

Gorsuch has been a judge on the 10th U.S. Circuit Court of Appeals since 2006. Last week, President Donald Trump nominated him for a Supreme Court seat that has been empty since Justice Antonin Scalia died a year ago.

Judges who come from private practice are supposed to end their financial relationships with their former law firms as quickly as possible, preferably immediately. Chief Justice John Roberts reported that he made a clean break from his firm when he became an appeals court judge in 2003.

But lawyers' fees sometimes are paid on a contingency basis. A healthy payoff can hinge on the size of a judgment a lawyer wins for his client. And the payment itself can take years because of appeals, among other issues.

"Flexibility may be required to allow for fees that cannot be calculated at the time the lawyer leaves, and payments that for tax and other reasons need to be paid over a period of time," said Charles Geyh, an ethics expert at the Indiana University law school.

The one thing judges cannot do while they are receiving payments is take part in cases involving their former firms, Geyh said. There's no indication Gorsuch ruled in a case involving his old firm.

Gorsuch's payments came from his work on four cases, including a dispute between the now-closed Columbia Women's Hospital in Washington, D.C., and an insurance company, said former Gorsuch law partner David Frederick. Gorsuch and Frederick worked together at the Washington, D.C., law firm now known as Kellogg, Huber, Hansen, Todd, Evans and Figel.

Gorsuch was the hospital's primary lawyer during a two-week jury trial that resulted in an $18.2 million verdict against the insurer in 2004, he said in his Senate confirmation questionnaire in 2006.

The money was not paid until 2009, according to court records. Gorsuch received his largest payment in 2009, more than $2.5 million, according to personal financial disclosures judges must file every year.

At the time he became a judge, Gorsuch reported his net worth was just over $3 million, with his money invested in mutual funds and retirement and education accounts.

In 2015, Gorsuch reported assets ranging from $3.2 million to $7.25 million. A retirement account and a college savings account, each worth $500,000 to $1 million, were his largest reported investments. Judges are not required to report the value of their homes.

In 2017, appellate judges make $217,600. If confirmed to the Supreme Court, Gorsuch would receive a pay hike of more than 15 percent, to $251,800 a year.