Opinion 06-109

September 7, 2006

Digest:         1) A full-time judge must divest him/herself of jointly-owned race horses where attorneys appearing before him/her are also part-owners. 2) If and when the judge transfers his/her interest to his/her adult child, disclosure and recusal, subject to remittal, are still required when these attorneys appear before the judge.

Rules:          22 NYCRR 100.3(F); 100.4(D)(3), (4); Joint Opinion 93-122 and 94-24 (Vol. XII).

Opinion:

         A recently-appointed full-time judge asks whether he/she may retain a 20% interest in two thoroughbred race horses, where an assistant district attorney and a legal aid attorney who also hold 20% shares each, frequently appear before his/her court. In addition, the judge asks whether, if the rules require divestment, he/she may transfer the 20% share to his/her adult child, and thereafter continue to preside over cases involving either or both attorneys.

         The Rules Governing Judicial Conduct prohibit a full-time judge from serving as a partner in any business entity. 22 NYCRR 100.4(D)(3). Moreover, the Rules require a judge to divest himself/herself of financial interests that “might require frequent disqualifications.” 22 NYCRR 100.4(D)(4).

         The Committee concludes that this partnership investment falls within both of these prohibitions. Divestment is therefore required “as soon as the judge can do so without serious financial detriment.” Joint Opinion 93-122 and 94-24 (Vol. XII). Until divestment is complete, the judge may not preside over matters involving either of the lawyer co-owners of the race horses. Id.

         The inquiring judge also asks whether he/she “may...transfer ownership of those horses to a [child] over the age of 21." While the transfer itself is a matter of law rather than ethics, the Committee sees no ethical bar to an intra-family transfer. If the judge transfers title to his/her child, however, the judge must nevertheless disclose the child’s interest in the racehorse when either or both of the attorneys appear before the judge, and then exercise recusal, subject to remittal. 22 NYCRR 100.3(F).