Let me see if I've got this straight: The American Legion is suing the ACLU for ????? what???? Perhaps a declaratory judgment that the Legion is a better organization? Or that the ACLU should be preemptied from suing to do something the Legion anticipates the ACLU has threatened to do? The scenario you allude to doesn't make any sense. Moreover, I can guarantee that if any judge's spouse is a counsel of record in a case before the court, that judge is going to recuse himself/herself without a suggestion by either party.
Every court has internal rules that mandate such a recusal. Anyone who told you differently is either purposefully or otherwise handing out misinformation.
http://64.233.161.104/search?q=cache:5QPz5aaWM6kJ:www.legion.org/word/aclu2.rtf+%22american+legion%22%2Baclu&hl=en&ie=UTF-8
The American Legion will stand with the Boy Scouts all the way to the Supreme Court if necessary. The ACLU has successfully used the courts to tear down a cross that was intended as a soldiers' monument in California. Moreover, the ACLU is soaking taxpayers with its legal fees. The city of San Diego recently paid $940,000 in ACLU legal fees after the organization
chased the Boy Scouts out of Balboa Park. Nationally, taxpayers fork over millions to ACLU attorneys. To stop this greed, Congress must amend 42 U.S. Code, Section 1988 of the Civil Rights Act, which is being exploited by these radical lawyers.
http://www.welshamerican.com/Rees/convmem.htm AMERICAN LEGION CONVENTION FIGHTS TO SUPPORT TROOPS, VETS RIGHTS, AND PRESERVE CROSS IN THE DESERT HONORING WWI VETS
And one more, ON TOPIC. The matter of burning the American flag.
http://americanflagblog.flagstuff.com/blog/2005/07/burning_america_3.html In one of it's more misguided adventures in legislation, the Supreme court ruled that the First Amendment right of free speech would forevermore also apply to the felony of arson - specifically, the burning of American flags.