Chief Justice Burger
delivered the opinion of the Court.
The question presented is whether the Due Process Clause of the Fourteenth Amendment was violated when a justice of the Alabama Supreme Court declined to recuse himself from participation in that court’s consideration of this case.
I — I
This appeal arises out of litigation concerning an insurance policy issued by appellant covering appellees Margaret and Roger Lavoie. In January 1977, Mrs. Lavoie was examined by her physician, Dr. Douglas, because of various ailments. Shortly thereafter, on Dr. Douglas’ recommendation, she was admitted to the Mobile Infirmary Hospital, where she remained for 23 days for a battery of tests.
After her discharge, the hospital forwarded the appropriate forms and medical records along with a bill for $3,028.25 to appellant’s local office in Mobile, Alabama. The local office refused to pay the entire amount, tendering payment for only $1,650.22. The local office also sent a letter to the national office, concluding that the 23-day hospitalization was unnecessary and that “[hjospital records do not indicate anything to the contrary,” even though all the hospital records had not yet been received. At one point, the national office told the local office to continue denying the request for full payment, but added that “if they act like they are going to file suit,” the file should be reviewed.
Appellees filed suit against appellant, seeking both payment of the remainder of their original claim and punitive damages for the tort of bad-faith refusal to pay a valid claim. The trial court dismissed for failure to state a cause of action with respect to the bad-faith counts. Appellees appealed to the Alabama Supreme Court, which remanded on the ground that it had “not foreclosed the possibility of recovery in tort for the bad faith refusal of an insurer to pay legitimate benefits due under an insurance policy.” Lavoie v. Aetna Life & Casualty Co., 374 So. 2d 310, 312 (1979). On remand, the trial court entered judgment for appellees on the unpaid portion of their claim and granted summary judgment for appellant on the bad-faith claim. The Alabama Supreme Court again reversed, explaining that on that same day it had “recognized the intentional tort of bad faith in first party insurance actions.” Lavoie v. Aetna Life & Casualty Co., 405 So. 2d 17, 18 (1981) (citing Chavers v. National Security Fire & Casualty Co., 405 So. 2d 1 (1981)). On remand, appellees’ bad-faith claim was submitted to a jury. The jury awarded $3.5 million in punitive damages. The trial judge denied appellant’s motion for judgment n.o.v. or, alternatively, for remittitur.
The Alabama Supreme Court affirmed the award in a 5-to-4 decision. 470 So. 2d 1060 (1984). An unsigned per curiam opinion expressed the view of five justices that the evidence demonstrated that appellant had acted in bad faith. The court interpreted its prior opinions as not requiring dismissal of a bad-faith-refusal-to-pay claim even where a directed verdict against the insurer on the underlying claim was impossible. The opinion also clarified the issue of whether a bad-faith suit could be maintained where the insurer had made a partial payment of the underlying claim. Although earlier opinions of the court had refused to allow bad-faith suits in such circumstances, partial payment was not dispositive of the bad-faith issue. The court also rejected.appellant’s argument that the punitive damages award was so excessive that it must be set aside.
Chief Justice Torbert, joined by Justice Beatty, dissented; Justice Maddox, joined by Justice Shores, also dissented, concluding that the case was controlled by the court’s earlier decision in National Savings Life Ins. Co. v. Dutton, 419 So. 2d 1357 (1982), because there was an arguable reason for appellant’s refusal to pay the claim.
The court’s opinion was released on December 7, 1984; on December 21,1984, appellant filed a timely application for rehearing. On February 14, 1985, before its application had been acted on, appellant learned that while the instant action was pending before the Alabama Supreme Court, Justice Embry, one of the five justices joining the per curiam opinion, had filed two actions in the Circuit Court for Jefferson County, Alabama, against insurance companies. Both of these actions alleged bad-faith failure to pay a claim. One suit arose out of Maryland Casualty Company’s alleged failure to pay for the loss of a valuable mink coat; the other suit, which Justice Embry brought on behalf of himself and as a representative of a class of all other Alabama state employees insured under a group plan by Blue Cross-Blue Shield of Alabama (including, apparently, all justices of the Alabama Supreme Court), alleged a willful and intentional plan to withhold payment on valid claims. Both suits sought punitive damages.
On February 21, 1985, appellant filed two motions in the Alabama Supreme Court, challenging Justice Embry’s participation in the court’s December 7, 1984, decision and his continued participation in considering appellant’s application for rehearing. The motion also alleged that all justices on the court should recuse themselves because of their interests as potential class members in Justice Embry’s suit against Blue Cross. On March 8, 1985, the court unanimously denied the recusal motions. The brief order stated that each justice had voted individually on the matter of whether he should recuse himself and that each justice had voted not to do so. At the same time, by a 5-to~4 division, the court denied appellant’s motion for rehearing.
Chief Justice Torbert wrote separately, explaining that although his views had not been influenced by his possible membership in the putative class alleged in Justice Embry’s suit against Blue Cross, he was nonetheless notifying the Clerk of the court where that suit was pending not to permit him to be included in the alleged class. Justice Maddox also wrote separately, taking similar action.
On March 20, 1985, appellant obtained a copy of the transcript of Justice Embry’s deposition, taken on January 10, 1985, in connection with his Blue Cross suit. The deposition revealed that Justice Embry had authored the per curiam opinion in this case over an 8- or 9-month period during which his civil action against Blue Cross was being prosecuted. Justice Embry also stated that, during that period, he had received “leads” from people with regard to his bad-faith action against Blue Cross and that he put them in touch with his attorney. Finally, Justice Embry revealed frustration with insurance companies. For example, when asked if he had ever had any difficulty with processing claims, Justice Embry retorted: “[T]hat is a silly question. For years and years.”
Appellant moved for leave to file a second application for rehearing based on the deposition, but that motion was denied. Appellant filed an appeal with this Court, and Justice Powell, as Circuit Justice, granted appellant’s application for a stay of the judgment below pending this Court’s disposition of the appeal. Shortly thereafter, Justice Embry’s suit against Blue Cross was settled by stipulation of the parties. In the stipulation, Blue Cross recognized that “some problems have occurred in the past and is determined to minimize them in the future.” Justice Embry received $30,000 under the settlement agreement on a basic compensatory claim of unspecified amount; a check for that sum was deposited by his attorney directly into Justice Embry’s personal account.
We postponed consideration of the question of jurisdiction pending argument on the merits. 471 U. S. 1134 (1985). We now vacate and remand.
r — i ⅜ — I
We are satisfied as to the Court’s jurisdiction over the question of whether Justice Embry’s participation violated appellant’s Fourteenth Amendment due process rights. Ap-pellees argue that the Alabama Supreme Court did not reach this issue because it was raised only after the court’s decision on the merits. We reject that contention as at odds with the record. On March 8, 1985, the court entered the following order:
“Upon consideration, the Court is of the opinion that under the allegation of said motion in this case each justice should vote individually on the matter of whether or not he or she is disqualified and should recuse. Each justice having voted not to recuse,
“IT IS, THEREFORE, ORDERED that the ‘Motion for Disqualification and Motion for Withdrawal of Opinion of December 7, 1984, and for Hearing De Novo’ be . . . denied.” App. to Juris. Statement 64a.
This order clearly demonstrates that the Alabama court reached the merits of appellant’s constitutional challenge, albeit on a justice-by-justice basis. Moreover, appellant raised this issue as soon as it discovered the facts relating to Justice Embry’s personal lawsuits. On this record, we conclude jurisdiction is proper. See Ulster County Court v. Allen, 442 U. S. 140, 147-154 (1979); Ward v. Village of Monroeville, 409 U. S. 57, 61 (1972).
HH hH
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Appellant contends Justice Embry s general hostility towards insurance companies that were dilatory in paying claims, as expressed in his deposition, requires a conclusion that the Due Procéss Clause was violated by his participation in the disposition of this case. The Court has recognized that not “[a]ll questions of judicial qualification . . . involve constitutional validity. Thus matters of kinship, personal bias, state policy, remoteness of interest, would seem generally to be matters merely of legislative discretion.” Tumey v. Ohio, 273 U. S. 510, 523 (1927); see also FTC v. Cement Institute, 333 U. S. 683, 702 (1948) (“[M]ost matters relating to judicial disqualification [do] not rise to a constitutional level”). Moreover, the traditional common-law rule was that disqualification for bias or prejudice was not permitted. See, e. g., Clyma v. Kennedy, 64 Conn. 310, 29 A. 539 (1894). See generally Frank, Disqualification of Judges, 56 Yale L. J. 605 (1947). As Blackstone put it, “the law will not suppose a possibility of bias or favour in a judge, who is already sworn to administer impartial justice, and whose authority greatly depends upon that presumption and idea.” 3 W. Blackstone, Commentaries *361. The more recent trend has been towards the adoption of statutes that permit disqualification for bias or prejudice. See Berger v. United States, 255 U. S. 22, 31 (1921) (enforcing statute disqualifying federal judges in certain circumstances for personal bias or prejudice). See also ABA Code of Judicial Conduct, Canon 3C(l)(a) (1980) (“A judge should disqualify himself. . . where he has a personal bias or prejudice concerning a party”). But that alone would not be sufficient basis for imposing a constitutional requirement under the Due Process Clause. We held in Patterson v. New York, 432 U. S. 197, 201-202 (1977) (citations omitted), that
“it is normally within the power of the State to regulate procedures under which its laws are carried out. . . and its decision in this regard is not subject to proscription under the Due Process Clause unless it offends some principle of justice so rooted in the traditions and conscience of our people as to be ranked as fundamental.”
We need not decide whether allegations of bias or prejudice by a judge of the type we have here would ever be sufficient under the Due Process Clause to force recusal. Certainly only in the most extreme of cases would disqualification on this basis be constitutionally required, and appellant’s arguments here fall well below that level. Appellant suggests that Justice Embry’s general frustration with insurance companies reveals a disqualifying bias, but it is likely that many claimants have developed hostile feelings from the frustration in awaiting settlement of insurance claims. Insurers, on their side, have no easy task, especially when trying to evaluate whether certain medical diagnostic tests or prolonged hospitalization were indicated. In turn, the physicians and surgeons, whether impelled by valid medical judgment or by apprehension as to future malpractice claims — or some combination of the two — similarly face difficult problems. Appellant’s allegations of bias and prejudice on this general basis, however, are insufficient to establish any constitutional violation.
B
The record in this case presents more than mere allegations of bias and prejudice, however. Appellant also presses a claim that Justice Embry had a more direct stake in the outcome of this case. In Tumey, while recognizing that the Constitution does not reach every issue of judicial qualification, the Court concluded that “it certainly violates the Fourteenth Amendment ... to subject [a person’s] liberty or property to the judgment of a court the judge of which has a direct, personal, substantial, pecuniary interest in reaching a conclusion against him in his case.” 273 U. S., at 523.
More than .30 years ago Justice Black, speaking for the Court, reached a similar conclusion and recognized that under the Due Process Clause no judge “can be a judge in his own case [or be] permitted to try cases where he has an interest in the outcome.” In re Murchison, 349 U. S. 133, 136 (1955). He went on to acknowledge that what degree or kind of interest is sufficient to disqualify a judge from sitting “cannot be defined with precision.” Ibid. Nonetheless, a reasonable formulation of the issue is whether the
“situation is one ‘which would offer a possible temptation to the average . . . judge to . . . lead him not to hold the balance nice, clear and true.’” Ward v. Village of Monroeville, supra, at 60.
Under these prior holdings, we examine just what factors might constitute such an interest in the outcome of this case that would bear on recusal. At the time Justice Embry cast the deciding vote and authored the court’s opinion, he had pending at least one very similar bad-faith-refusal-to-pay lawsuit against Blue Cross in another Alabama court. The decisions of the court on which Justice Embry sat, the Alabama Supreme Court, are binding on all Alabama courts. We need not blind ourselves to the fact that the law in the area of bad-faith-refusal-to-pay claims in Alabama, as in many other jurisdictions, was unsettled at that time, as the court’s close division in deciding this case indicates. When Justice Embry cast the deciding vote, he did not merely apply well-established law and in fact quite possibly made new law; the court’s opinion does not suggest that its conclusion was compelled by earlier decisions. Instead, to decide the case the court stated that “it is first necessary to review the policy considerations, elements, and instructive guide posts set out by this court in earlier case law.” 470 So. 2d, at 1070. And in another case the court acknowledged that “the tort of bad faith refusal to pay a valid insurance claim is in the embryonic stage, and the Court has not had occasion to address every issue that might arise in these cases.” National Savings Life Ins. Co. v. Dutton, 419 So. 2d, at 1362.
The decision under review firmly established that punitive damages could be obtained in Alabama in a situation where the insured’s claim is not fully approved and only partial payment of the underlying claim had been made. Prior to the decision under review, the Alabama Supreme Court had not clearly recognized any claim for tortious injury in such circumstances; moreover, it had affirmatively recognized that partial payment was evidence of good faith on the part of the insurer. Sexton v. Liberty National Life Ins. Co., 405 So. 2d 18, 22 (1981). The Alabama court also held that a bad-faith-refusal-to-pay cause of action will lie in Alabama even where the insured is not entitled to a directed verdict on the underlying claim, a conclusion that at the least clarified the thrust of an earlier holding. Cf. National Savings Life Ins. Co. v. Dutton, supra, at 1362. Finally, the court refused to set aside as excessive a punitive damages award of $3.5 million. The largest punitive award previously affirmed by that court was $100,000, a figure remitted from $1.1 million as “obviously the result of passion and prejudice on the part of the jury.” -Gulf Atlantic Life Ins. Co. v. Barnes, 405 So. 2d 916, 926 (1981).
All of these issues were present in Justice Embry’s lawsuit against Blue Cross. His complaint sought recovery for partial payment of claims. Also the very nature of Justice Embry’s suit placed in issue whether he would have to establish that he was entitled to a directed verdict on the underlying claims that he alleged Blue Cross refused to pay before gaining punitive damages. Finally, the affirmance of the largest punitive damages award ever (by a substantial margin) on precisely the type of claim raised in the Blue Cross suit undoubtedly “raised the stakes” for Blue Cross in that suit, to the benefit of Justice Embry. Thus, Justice Embry’s opinion for the Alabama Supreme Court had the clear and immediate effect of enhancing both the legal status and the settlement value of his own case.
We need not decide whether to characterize the decision under review as a change in Alabama law or a clarification of the contours of that law, a judgment we are obviously not called on to make. We hold simply that when Justice Embry made that judgment, he acted as “a judge in his own case.” Murchison, supra, at 136.
We also hold that his interest was “ ‘direct, personal, substantial, [and] pecuniary.’” Ward, supra, at 60 (quoting Tumey v. Ohio, 273 U. S., at 523). Justice Embry’s complaint against Blue Cross sought “compensatory damage for breach of contract, inconvenience, emotional and mental distress, disappointment, pain and suffering” in addition to punitive damages for himself and for the class. Soon after the opinion of the Alabama Supreme Court in this case was announced, Blue Cross paid Justice Embry what he characterized in an interview as “a tidy sum,” Reply Brief for Appellant 10, n. 8, to settle the suit. Records lodged with this Court show that Justice Embry received $30,000, which was deposited by his attorney directly into Justice Embry’s personal account. To be sure, a portion of this money may have gone to Justice Embry’s attorney in connection with the case, even though some materials before us suggest that his attorney agreed to waive his fee. Deposition of A. Grey Till in Clay v. Nationwide Insurance Co., CV-78-1148 (Cir. Ct. of Mobile Cty., Ala.), pp. 27-29. We are also aware that Justice Embry obtained a statement in the settlement agreement to the effect that “[t]he primary object of the institution of this suit . . . was to emphasize to defendant Blue Cross . . . that, claims under the Plan be processed and determined by Blue Cross in a timely and efficient manner,” even though that type of relief was not sought specifically in the complaint while monetary relief was. We nonetheless hold that the “tidy sum” that Justice Embry received directly is sufficient to establish the substantiality of his interest here.
We conclude that Justice, Embry’s participation in this case violated appellant’s due process rights as explicated in Tumey, Murchison, and Ward. We make clear that we are not required to decide whether in fact Justice Embry was influenced, but only whether sitting on the case then before the Supreme Court of Alabama “ ‘would offer a possible temptation to the average . . . judge to . . . lead him not to hold the balance nice, clear and true.’” Ward, 409 U. S., at 60 (quoting Tumey v. Ohio, supra, at 532). The Due Process Clause “may sometimes bar trial by judges who have no actual bias and who would do their very best to weigh the scales of justice equally between contending parties. But to perform its high fimction in the best way, ‘justice must satisfy the appearance of justice.’” Murchison, 349 U. S., at 136 (citation omitted).
C
Appellant has challenged not only the participation of Justice Embry in this case but also the participation of all the other justices of the Alabama Supreme Court, or at least the six justices who did not withdraw from Justice Embry’s class action against Blue Cross, claiming that they also have an interest in this case. Such allegations do not constitute a sufficient basis for requiring recusal under the Constitution. In the first place, accepting appellant’s expansive contentions might require the disqualification of every judge in the State. If so, it is possible that under a “rule of necessity” none of the judges or justices would be disqualified. See United States v. Will, 449 U. S. 200, 214 (1980).
More important, while these justices might conceivably have had a slight pecuniary interest, we find it impossible to characterize that interest as “ ‘direct, personal, substantial, [and] pecuniary.’” Ward, supra, at 60 (quoting Tumey, supra, at 523). Appellant concedes that nothing in the record even suggests that these justices had any knowledge of the class action before the court issued a decision on the merits. Thus, at most only the decision to deny rehearing was even plausibly affected. Any interest that they might have had when they passed on the rehearing motion was clearly highly speculative and contingent. At the time, the trial court had not even certified a class, let alone awarded any class relief of a pecuniary nature. With the proliferation of class actions involving broadly defined classes, the application of the constitutional requirement of disqualification must be carefully limited. Otherwise constitutional disqualification arguments could quickly become a standard feature of class-action litigation. Cf. In re City of Houston, 745 F. 2d 925 (CA5 1984). At some point, “[t]he biasing influence . . . [will be] too remote and insubstantial to violate the constitutional constraints.” Marshall v. Jerrico, Inc., 446 U. S. 238, 243 (1980). Charges of disqualification should not be made lightly. See Rooker v. Fidelity Trust Co., 263 U. S. 413 (1923). We hold that there is no basis for concluding these justices were disqualified under the Due Process Clause.
D
Having concluded that only Justice Embry was disqualified from participation in this case, we turn to the issue of the proper remedy for this constitutional violation. Our prior decisions have not considered the question whether a decision of a multimember tribunal must be vacated because of the participation of one member who had an interest in the outcome of the case. Rather, our prior cases have involved interpretations of statutes with provisions concerning this question, e. g., Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U. S. 145 (1968), disqualifications of the sole member of a tribunal, e. g., Ward v. Village of Monroeville, supra, and disqualifications of an entire panel, e. g., Gibson v. Berryhill, 411 U. S. 564 (1973). Some courts have concluded that a decision need not be vacated where a disqualified judge’s vote is mere surplusage. See, e. g., State ex rel. Langer v. Kositzky, 38 N. D. 616, 166 N. W. 534 (1918); but see, e. g., Oakley v. Aspinwall, 3 N. Y. 547 (1850). But we are aware of no case, and none has been called to our attention, permitting a court’s decision to stand when a disqualified judge casts the deciding vote. Here Justice Embry’s vote was decisive in the 5-to-4 decision and he was the author of the court’s opinion. Because of Justice Embry’s leading role in the decision under review, we conclude that the “appearance of justice” will best be served by vacating the decision and remanding for further proceedings. Appellees have not contended that, upon a finding of disqualification, this disposition is. improper.
I — I I — I > — i
We underscore that our decision today undertakes to answer only the question of under what circumstances the Constitution requires disqualification. The Due Process Clause demarks only the outer boundaries of judicial disqualifications. Congress and the states, of course, remain free to impose more rigorous standards for judicial disqualification than those we find mandated here today.
Appellant also argues that the retrospective imposition of punitive damages under a new cause of action violates its rights under the Contracts Clause of Article I, § 10; that a $3.5 million punitive damages award is impermissible under the Excessive Fines Clause of the Eighth Amendment; and that lack of sufficient standards governing punitive damages awards in Alabama violates the Due Process Clause of the Fourteenth Amendment. In addition, appellant contends that Ala. Code § 12-22-72 (1975), under which any person who unsuccessfully appeals a money judgment is assessed a 10% penalty, is unconstitutional under the Equal Protection Clause of the Fourteenth Amendment. These arguments raise important issues which, in an appropriate setting, must be resolved; however, our disposition of the recusal-for-bias issue makes it unnecessary to reach them.
The judgment of the Supreme Court of Alabama is vacated, and the case is remanded for further proceedings not inconsistent with this opinion.
Vacated and remanded.
Justice Stevens took no part in the consideration or decision of this case.
Justice Embry’s suit against Maryland Casualty Company had been settled sometime earlier by the payment of Justice Embry’s claim.
Justice Embry has since retired from the court for health reasons.
The Court in Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U. S. 145 (1968), stated in dicta that “in Tumey[, 273 U. S., at 524,] the Court held that a decision should be set aside where there is ‘the slightest pecuniary interest’ on the part of the judge . . . .” Id., at 148. We think this was a misreading of Tumey. The reference to “the slightest pecuniary interest” in that opinion came in a portion of the opinion describing “cases at common law in England prior to the separation of colonies from the mother country . . . 273 U. S., at 524. At a later point in the opinion, Chief Justice Taft quoted approvingly from the work of Justice Cooley, that disqualification is not worked in cases where the “‘interest is so remote, trifling and insignificant that it may fairly be supposed to be incapable of affecting the judgment of or of influencing the conduct of an individual.’” Id., at 531 (quoting T. Cooley, Constitutional Limitations 594 (7th ed. 1903)). Chief Justice Taft also reiterated that the case was not one “in which the penalties and the costs are negligible. . . . The court is a state agency, imposing substantial punishment.... It is not to be treated as a mere village tribunal for village peccadilloes.” 273 U. S., at 532. We therefore follow Ward v. Village of Monroeville, 409 U. S. 57, 60 (1972), and decline to read Tumey as constitutionalizing any rule that a decision rendered by a judge with “the slightest pecuniary interest” constitutes a violation of the Due Process Clause.
We have confined the opinion to the issues presented by the parties and express no view on the question discussed by the justices who write separately. The issues here are far more complex than acknowledged by the concurrences, which, reasoning from hypothetical situations on matters not presented by the facts of this case, postulate a broad general rule. Traditionally the Court does not undertake to “ ‘formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied.’” Ashwander v. TVA, 297 U. S. 288, 347 (1936) (Brandéis, J., concurring) (quoting Liverpool, N. Y. & P. S. S. Co. v. Emigration Comm’rs, 113 U. S. 33, 39 (1885)). Because the issue of disqualification of a single member of a multimember panel arises in a variety of factual contexts, see generally 48A C. J. S., Judges § 159, p. 868 (1981) (collecting eases), sound judicial practice wisely counsels judges to avoid unnecessary declarations on issues not presented, briefed, or argued.
If Justice Embry had disqualified himself, the decision of the trial court would not have been affirmed by a vote of an equally divided court. Rather, Ala. Code § 12-2-14 (1975), which authorizes the appointment of special justices in the event disqualifications result in an even-numbered court which is evenly divided on a matter, would presumably have come into play.