Opinion 18-118

October 18, 2018

Digest:   Where a full-time judge was formerly an equity partner in a large law firm, and will receive life-long annual retirement benefits from the firm, but those retirement benefits are effectively “fixed” on a particular date rather than tied to the firm’s ongoing profits:

(1) the judge is permanently disqualified, without the possibility of remittal, from all cases in which the judge had any personal involvement as a lawyer;

(2) the judge is disqualified, subject to remittal, from all cases involving the law firm as long as he/she continues to receive retirement benefits from the firm;

(3) the judge need not consult the firm’s conflict databases to determine whether a litigant is a current or past client of the law firm;

(4) the judge is disqualified, subject to remittal, from all cases involving litigants the judge recognizes as current clients of the firm as long as he/she continues to receive retirement benefits from the firm;

(5) for two years from the date the retirement benefits are effectively “fixed,” the judge is disqualified, subject to remittal, from all cases involving litigants the judge recognizes as past clients of the law firm.

Rules:    Judiciary Law § 14; 22 NYCRR 100.2; 100.2(A); 100.3(E)(1); 100.3(E)(1)(a)(I); 100.3(E)(1)(b)(i)-(ii); 100.3(E)(1)(c); 100.3(F); Opinions 18-46; 17-150; 16-36; 15-63; 15-51; 13-54; 04-42; 97-85.

Opinion:

         A full-time judge was previously an equity partner in a large law firm with multiple offices. On taking the bench, the judge retired from the firm and is entitled to a share of the firm’s profits through his/her retirement date. Thereafter, the judge is also entitled to an ongoing annual retirement benefit. On a certain date, the amount of the benefit will be calculated and its amount “fixed” based on the firm’s actual profits during a specified period. Once “fixed,” the amount is no longer tied to the firm’s ongoing profitability, although it may be increased based on cost-of-living adjustments or lowered if the firm’s total annual retirement payments to former partners exceed a set percentage of that year’s profits. Conversely, if the firm dissolves, the retirement payments could end. The judge asks how long he/she is disqualified in cases involving the law firm’s current and former clients. In particular, the judge is aware of Opinion 16-36, which says the initial disqualification period ends two years after the date when “the financial relationship between the judge and law firm completely ends, including return of any undistributed capital to the judge.” Here, unlike Opinion 16-36, the judge’s financial connection to the law firm is not expected to end, as he/she anticipates receiving annual retirement payments for life.

         A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). A judge must also disqualify him/herself in any proceeding in which the judge’s impartiality “might reasonably be questioned” (see 22 NYCRR 100.3[E][1]), or in other circumstances as required by rule or law (see e.g. Judiciary Law §14). For example, a judge must never preside in a proceeding if the judge knows he/she “served as a lawyer in the matter in controversy” (22 NYCRR 100.3[E][1][b][i]; 100.3[F]; Judiciary Law § 14) or “has a personal bias or prejudice concerning a party” (22 NYCRR 100.3[E][1][a][i]; 100.3[F]). A judge is disqualified, subject to remittal, if he/she knows that a lawyer with whom the judge previously practiced law “served during such association as a lawyer concerning the matter” (see 22 NYCRR 100.3[E][1][b][ii]; 100.3[F]) or the judge has an economic or other interest that could be substantially affected by the proceeding (see 22 NYCRR 100.3[E][1][c]).

1. Cases in Which Judge Had Any Personal Involvement as a Lawyer

         Although this obligation is independent of a judge’s financial connections with a former law firm, for completeness we note that a judge must never preside in a proceeding if the judge knows he/she “served as a lawyer in the matter in controversy” (22 NYCRR 100.3[E][1][b][i]; Judiciary Law § 14; Opinion 18-46). Disqualification on this ground is not remittable (see 22 NYCRR 100.3[F]; Opinion 18-46).

2. Cases Involving the Judge’s Former Law Firm

         A judge who is receiving a fixed life-long pension from his/her former law firm is disqualified, subject to remittal, in all cases in which the law firm appears, for as long as he/she is receiving the pension (see Opinion 04-42 [fixed monthly pension]).¹

3. Cases Involving Current or Former Clients of the Judge’s Former Law Firm, When Represented by Other Counsel

a) Identification of the Law Firm’s Current or Former Clients

         A judge must adopt “reasonable procedures to avoid presiding over matters” involving recent former clients (Opinions 17-150; 13-54). Since a judge is unlikely to be able to identify with unerring accuracy hundreds or thousands of current or former clients of his/her former law firm, we said in Opinion 16-36 (citations omitted):

[T]he “rules governing judicial conduct are rules of reason” and should be “construed so as not to impinge on the essential independence of judges in making judicial decisions.” Therefore [the judge’s obligation] applies only to clients the judge actually recognizes as current or former clients of the firm, or if such representation by the judge’s former law firm is otherwise brought to the judge’s attention. The Committee believes it would be unduly burdensome and unnecessary for the judge to run every party appearing before him/her through the law firm’s database to determine if a client relationship exists or ever existed during the judge’s former employment with the firm. If the judge is entirely unaware that a party ... is also being represented in other matters by the judge’s former firm, the parties will suffer no actual, apparent, or reasonably perceived prejudice due to the client’s prior or current relationship with the judge’s former law firm.

Thus, we do not require a judge to conduct an active search or otherwise take extraordinary steps to uncover possible current or former connections between litigants and the judge’s former law firm, when these litigants are represented by other counsel (cf. Opinion 17-150 [judge is disqualified, subject to remittal, from matters involving clients of his/her former associate, but “has no obligation to consult [the former associate] about the identities of his/her private practice clients”]).

         If the judge suspects a litigant had or has a connection with his/her former law firm, the judge may ask the parties and/or their counsel about it.

         b) Known Current Clients

         While the financial relationship is ongoing between the judge and his/her former law firm, and for two years after the relationship completely ends, the judge is disqualified, subject to remittal, in matters involving known current clients of the judge’s former law firm when that client appears before the judge as a party (see Opinions 18-46; 16-36; 15-51). It makes no difference during the disqualification period whether the judge had any “personal” involvement in representing that client (see e.g. Opinions 18-46; 16-36; 15-51; 13-54).

         Clearly, the financial relationship between the judge and his/her former law firm has not ended if the judge is receiving annual retirement or pension payments from the firm (see e.g. Opinions 04-42 [financial relationship does not end as long as the judge’s fixed monthly pension “is an ongoing obligation of the law firm”]; 15-63 [the relationship is ”not entirely severed until all financial obligations between the judge and the firm have completely ended, so that no further potential contingency or compensation payments..., or other financial connections exist between the judge and law firm]).

         We now consider whether a different analysis applies where, as here, the amount of the judge’s pension payment is “fixed” after a certain date and thus not directly tied to the firm’s ongoing profitability. With respect to litigants the judge recognizes as the firm’s current clients, we conclude the judge’s impartiality still might be reasonably questioned, since the amount of the fixed pension payment may be re-evaluated for possible cost-of-living increases or reduced if the firm becomes less profitable.

         Accordingly, we believe the date on which the amount of the judge’s life-long annual pension payment becomes “fixed” cannot be treated as the date of the conclusion of the financial relationship with respect to the firm’s current clients. Thus, the judge remains disqualified, subject to remittal, in all cases involving litigants the judge recognizes as the law firm’s current clients even when represented by other counsel. There is no end to this obligation, as long as the pension continues.

         c) Known Former Clients

         Ordinarily, a judge’s obligation with respect to a former client continues for two years after the financial and business relationship between them has completely ended. Since it would be difficult, if not impossible, for judges to apply this standard to their former law firm’s former clients, we have allowed a judge to treat the attorney/client relationship as ending the date the judge’s financial and business connections with his/her former law firm completely end (see Opinion 16-36). Thus, while the financial relationship is ongoing between the judge and his/her former law firm, and for two years after that relationship completely ends, we have said the judge is disqualified, subject to remittal, in matters involving known former clients of the judge’s former law firm when the ex-client appears before the judge as a party (see Opinions 18-46; 16-36; 15-51). Again, it makes no difference during the disqualification period whether the judge was “personally” involved in representing the firm’s former client (see e.g. Opinions 18-46; 16-36; 15-51; 97-85).

         The public will readily perceive there is no ongoing financial connection between a law firm and its former clients. Indeed, it seems unlikely that a case involving an ex-client of the judge’s former law firm could affect the judge’s continued receipt of a “fixed” annual retirement benefit from the law firm. We further note that a law firm may have hundreds or thousands of former clients it no longer represents. Thus, we believe it is appropriate to provide an end date for a judge’s disqualification in matters involving former clients of his/her former law firm, even when the judge anticipates receiving a life-long pension from the law firm.

         Here, there is a significant date following the judge’s retirement from the firm when the judge and law firm’s financial relationship becomes effectively “fixed” for all practical purposes. Inasmuch as this date is well after the judge has fully severed her/his relationship with the law firm’s clients and the judge’s relationship with the law firm itself is financially static, we conclude this is a reasonable date to use.

         Accordingly, for two years from the date the retirement benefits are effectively “fixed,” the judge is disqualified, subject to remittal, from all cases involving litigants the judge recognizes as past clients of the law firm.

         Once the two-year period elapses, it is within the judge’s discretion whether to disclose or disqualify him/herself with respect to former clients of the judge’s former law firm, when represented by other counsel (see Opinions 18-46; 16-36; 15-51). In exercising this discretion, we have advised (Opinion 16-36 [citations, quotation marks, and internal brackets omitted]):

the judge should consider factors such as the amount of time elapsed since the last representation, the nature and duration of the representation, the nature of the instant proceeding, and whether there are any special circumstances creating a likely appearance of impropriety. Where disqualification is not mandated, the judge is the sole arbiter of recusal, and this discretionary decision is within the personal conscience of the court.

         In sum, where a full-time judge will receive life-time annual retirement benefits from his/her former law firm and those annual benefits will for all practical purposes be administratively “fixed” on a specified date after the judge leaves the firm, as to litigants recognized by the judge as former clients of the judge’s former law firm, the period of disqualification subject to remittal ends two years from the date when the judge’s annual pension benefits are effectively “fixed.”

         Opinions 18-46, 16-36, and 15-51 are hereby modified to reflect this change.

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¹ On the facts presented here, just as in Opinion 04-42, we have no reason to consider the theoretical possibility that the judge’s anticipated life-long pension might terminate independently of the law firm’s dissolution.