Opinion 13-24

March 14, 2013

Please Note: This opinion has been modified by Opinion 21-22(A) concerning a judge’s obligations when a party is appearing without counsel. As stated in Opinion 21-22(A), “we no longer prohibit remittal of disqualification merely because a party is unrepresented. We hereby modify our prior opinions to abolish that requirement.” This also affects opinions “where disclosure (or disclosure and insulation) is mandated in lieu of outright disqualification” (see id. fn 3).

Digest:         (1) A judge is disqualified, subject to remittal, when commercial tenants of the judge’s children or stepchildren appear before the judge as attorneys or parties, but not when they appear as witnesses. (2) A judge is not disqualified from presiding over matters in which account-holders at the judge’s spouse’s bank or financial services company appear before the judge. (3) If a judge knows that an attorney, party or witness appearing before the judge has significant business dealings with the judge’s spouse’s bank, the judge must consider all the circumstances and thereafter must decide, in his/her discretion, whether to disclose or recuse. (4) A judge is not disqualified from presiding over matters involving not-for-profit entities that have received charitable gifts from the judge’s spouse or the spouse’s businesses.

Rules:          Judiciary Law §14; 22 NYCRR 100.2; 100.2(A); 100.3(E)(1); 100.3(E)(1)(c); 100.3(E)(1)(d)(iii); 100.3(E)(2); 100.3(F); Opinions 12-94; 12-36; 12-30; 11-147; 10-168; 09-239; 09-138; 07-105/07-119; 07-27; 04-140; 04-99; 04-51; 03-83; 98-40 (Vol. V); 92-126 (Vol. X); 91-56 (Vol. VII); People v Moreno, 70 NY2d 403 (1987).

Opinion:

         The inquiring judge states that his/her spouse and adult children¹ have certain business interests in the locality where the judge presides. The spouse’s business interests include a banking institution and financial services company, whose depositors or account-holders may appear before the judge. The children have a principal ownership interest in office buildings whose commercial tenants include attorneys and others who may appear before the judge; some of the tenant law firms also represent the judge’s spouse’s businesses. The judge further states that his/her spouse engages in philanthropic activities, and thus recipients of charitable donations from the judge’s spouse or his/her business enterprises may appear before the judge. The judge seeks the Committee’s advice on whether disclosure or disqualification is required in each instance.

         A judge must always avoid even the appearance of impropriety ( 22 NYCRR 100.2) and must always promote public confidence in the judiciary’s integrity and impartiality (22 NYCRR 100.2[A]). A judge must also “keep informed about the judge’s personal and fiduciary economic interests, and “make a reasonable effort” to keep informed about the personal economic interests of the judge’s spouse and minor children residing in the judge’s household” (22 NYCRR 100.3[E][2]).

         A judge must disqualify him/herself in any proceeding where his/her impartiality might reasonably be questioned (22 NYCRR 100.3[E][1]) or in other specific circumstances as required by rule or by law (see id.; Judiciary Law §14). For example, a judge is disqualified, subject to remittal,² where the judge knows that his/her “spouse has an economic interest in the subject matter in controversy or in a party to the proceeding, or has any other interest that could be substantially affected by the proceeding” (22 NYCRR 100.3[E][1][c]); or where the judge knows that a person within the sixth degree of relationship to the judge or the judge’s spouse “has an interest that could be substantially affected by the proceeding” (22 NYCRR 100.3[E][1][d][iii]). Conversely, where disqualification is not mandatory, a trial judge is the sole arbiter of recusal (see People v Moreno, 70 NY2d 403 [1987]). Of course, if the judge doubts his/her ability to be impartial in a particular matter, the judge should not preside (see, e.g., Opinion 12-94).

Commercial Tenants

         The inquiring judge is disqualified, subject to remittal, when commercial tenants of the judge’s children or stepchildren appear before the judge as attorneys³ or parties (see 22 NYCRR 100.3[E][1]; 100.3[F]; Opinions 07-27 [attorney appearing before the judge rents office space in a building owned by the judge’s parents’ corporation]; 04-51[attorney appearing before the judge rents office space from the judge’s spouse]). In the Committee’s view, the relevant analysis does not change, and remittal is still permitted, even when the commercial tenant is a law firm that represents the judge’s spouse’s business enterprises (see, e.g., Opinions 10-168 [remittal available where attorney represents judge’s spouse]; 03-83 [remittal available where attorney represents judge’s spouse’s employer]).

         In contrast, neither recusal nor disclosure is required when a commercial tenant of the judge’s children appears as a witness, provided that the judge concludes that he/she can be fair and impartial (see Opinions 11-147 [judge need not disclose or recuse where second cousin law enforcement officer appears as witness before the judge]; 09-239 [disqualification not required where witness is an attorney who regularly appears before the judge and is a close relative of co-judge]; see also 22 NYCRR 100.3[E][1]; People v Moreno, 70 NY2d 403 [1987]; but cf. Opinion 91-56 [Vol. VII] [disqualification may in some circumstances be required where expert witness is a business partner of the judge’s spouse]).

Account Holders

         As for attorneys, parties and witnesses who appear in court and have accounts with the judge’s spouse’s bank or financial services company, the Committee concludes that neither disclosure nor disqualification is required, provided the judge concludes he/she can be fair and impartial (see Opinions 92-126 [Vol. X] [judge need not recuse in matters involving bank which holds mortgage on judge’s home]; 04-99 [disclosure and recusal not required where assistant county attorney appears before judge, and judge’s spouse and County Attorney share a mutual ownership interest in rental property]; see also 22 NYCRR 100.3[E][1]; People v Moreno, 70 NY2d 403 [1987]).

Substantial Business Dealings

         As for attorneys, parties and witnesses who may have had “substantial business dealings” with the judge’s spouse’s bank, the Committee notes this description is too vague and general for the Committee to provide detailed advice on the judge’s obligations in every possible factual scenario. The inquiring judge must, of course, “make a reasonable effort to keep informed about the personal economic interests of the judge’s spouse” (22 NYCRR 100.3[E][2]). If the inquiring judge knows that a person appearing before him/her has substantial business dealings with the judge’s spouse’s bank, the Committee believes that the judge should “exercise discretion in light of the facts presented on a case-by-case basis,” because “[t]he judge is in the best position to assess whether in that particular proceeding ‘the judge’s impartiality might reasonably be questioned’” (Joint Opinion 07-105/07-119, quoting 22 NYCRR 100.3[E][1]; see also People v Moreno, 70 NY2d 403 [1987]).⁴

Recipients of Charitable Gifts

         There is no disclosure or recusal obligation in matters involving entities that receive charitable donations from the judge’s spouse or the spouse’s business enterprises, provided the judge concludes he/she can be fair and impartial (see Opinions 04-140 [judge need not disclose that he/she has made a reasonably modest contribution to a not-for-profit legal services organization that regularly appears in court as counsel or may appear as a party]; 98-40 [Vol. V] [judge may make charitable contributions to a local Police Benevolent Association whose members regularly appear before the judge]; 22 NYCRR 100.3[E][1]; see also People v Moreno, 70 NY2d 403 [1987]).

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     ¹ The Committee notes that, for purposes of the rules on disqualification and disclosure, it is not necessary to distinguish between a judge’s children and step-children.

     ² Remittal is not available if any party appears without counsel (see, e.g., Opinion 12-36). Where available, remittal is a three-step process: first, the judge must fully disclose the basis for disqualification on the record; second, without the judge’s participation, the parties who have appeared and not defaulted and their lawyers must all agree that the judge should not be disqualified; and third, the judge must independently conclude that he/she can be impartial and be willing to participate in the case. If all three steps are satisfied, the judge may accept remittal of disqualification and must incorporate the parties’ and their attorneys’ agreement into the record of the proceeding (Opinion 09-138, relying on 22 NYCRR 100.3[F]).

     ³ The Committee notes that the recusal and remittal rules apply not only to tenant law firms, but also to the partners and associates of such firms.

     ⁴ If the judge determines that his/her spouse has an interest that could be “substantially affected by the proceeding,” the judge is disqualified, subject to remittal (22 NYCRR 100.3[E][1][c]; 100.3[F]).