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Ethics Opinion

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NOTE: Various references in this ethics opinion to portions of the Michigan Code of Judicial Conduct are no longer accurate due to amendments effective August 1, 2013. Click here to review language added to (which is underlined) and language stricken from (which is indicated by strikethrough) Canons 2, 4, 5, and 7.

J-4

March 8, 1991

SYLLABUS

  1. If within the preceding two years a judge has been a member of the law firm appearing in a matter, the judge is automatically disqualified from the matter, regardless of whether the advocate was a partner or associate of the judge, regardless of whether the advocate was a member of the firm when the judge was a member, and regardless of whether the judge was a member of the firm at the time the judge took judicial office.

    When assigned to preside over a matter in which the advocate for a party was a member of a law firm of which the judge was a member within the preceding two years, but which advocate is no longer a member of that firm, the judge shall disclose the former relationship on the record, and recuse from the matter unless the parties and counsel request that the judge proceed to hear the matter. This disqualification is not imputed to other members of a law firm with which the judge has never been associated, and with whom the judge has never been associated.

  2. Regular, periodic, or one-time disbursements to a judge from a lawyer or law firm appearing as an advocate in a matter before the judge do not require the judge's automatic disqualification, unless the matter over which the judge presides is a matter which affects the disbursement. The judge should disclose the relationship on the record, and recuse unless the parties ask the judge to proceed.

  3. A judge is not automatically disqualified from hearing a case conducted by an unrelated lawyer simply because a relative of the judge within the third degree of consanguinity is a member or employee of the law firm appearing in the case. However, the judge should disclose the relationship on the record, the law firm should disclose whether the judge's relative has participated personally and substantially in the matter, and the judge is recused unless the parties ask the judge to proceed.

  4. A judge who is a former city commissioner is disqualified in all matters which came before the city commissioners while the judge served as commissioner, and from matters which arise after the judge resigns as commissioner, if the judge participated personally and substantially in the matters.

    References: MCJC 1, 2, 3A(4), 3A(6), 3C, 3D, 5C; MCR 2.003(B); MRPC 1.8(i); JI-6, JI-34; R-3, R-4; RI-11, RI-47; C-216.

    CI-282, CI-260, and CI-1095 are superseded; CI-293, CI-890, CI-1079, and C-228 are superseded to the extent that they require automatic disqualification for financial interests.

TEXT

A lawyer who has been elected circuit court judge seeks advice concerning the judge's disqualification from matters in which members of the judge's former law firm appear as advocates for parties, as follows:

  1. Is the judge disqualified from presiding over matters in which an associate of the judge's former law firm appears, when the associate joined the law firm after the judge departed?
  2. The judge was a partner in a predecessor law firm two months before the judicial election, which law firm "divided" with the judge and other lawyers creating a new firm, while certain partners and associates merged with another existing firm [merged firm]. Is the judge disqualified from presiding over matters in which members of the predecessor firm appear, even though the appearing member joined the predecessor firm after the judge departed?
  3. Is the judge disqualified from presiding over matters in which members of the merged law firm, of which the judge was never a member, appear?
  4. The judge will receive a retirement benefit from the current law firm partners, to be paid out over three years; will the judge be disqualified from presiding over matters in which members of the firm appear for the entire pay-out period?
  5. The judge and certain partners of the judge's predecessor law firm, some of whom are current partners of the judge and some of whom joined the merged firm, are partners in a real estate venture which owns the building in which both the judge's current firm and the merged firm are located. Is the judge disqualified from presiding over matters in which the real estate partners appear? In which members of firms of the real estate partners appear?
  6. If the real estate interest of the judge is purchased through an agreement whereby the judge will receive payments over time, is the judge disqualified from presiding over matters in which the real estate partners appear during the time the judge is receiving payments? Is the judge disqualified from presiding over matters in which other members of the real estate partners' firms appear?
  7. Although the judge is disqualified from presiding over matters in which relatives of the judge within the third degree of consanguinity appear, is the judge disqualified from presiding over cases of other members of the relatives' firms?
  8. As a former city commissioner, is the judge disqualified from presiding in pending matters, in which the city is a party, which were pending or impending while the judge was commissioner? Is the judge disqualified from presiding over future matters in which the city is a party and in which the judge had personal and substantial participation as a commissioner?

I. THE DISQUALIFICATION RULE

MCR 2.003(B) states:

    "A judge is disqualified when the judge cannot impartially hear a case, including a proceeding in which the judge

      "(1) is interested as a party;

      "(2) is personally biased or prejudiced for or against a party or attorney;

      "(3) has been consulted or employed as an attorney in the matter in controversy;

      "(4) was a partner of a party, attorney for a party, or a member of a law firm representing a party within the preceding two years;

      "(5) is within the third degree (civil law) of consanguinity or affinity to a person acting as an attorney or within the sixth degree (civil law) to a party;

      "(6) or the judge's spouse or minor child owns a stock, bond, security, or other legal or equitable interest in a corporation which is a party . . .;

      "(7) is disqualified by law for any other reason."

MCJC 3C states: "A judge should raise the issue of his disqualification whenever he has cause to believe that he may be disqualified under [MCR 2.003(B)]."

II. DISQUALIFICATION AS MEMBER OF A LAW FIRM REPRESENTING A PARTY WITHIN THE PRECEDING TWO YEARS

1. Is the judge disqualified from presiding over matters in which an associate of the judge's former law firm appears, when the associate joined the law firm after the judge departed?

2. The judge was a partner in a predecessor law firm two months before the judicial election, which law firm "divided," with the judge and other lawyers creating a new firm, while certain partners and associates merged with another existing firm [merged firm]. Is the judge disqualified from presiding over matters in which members of the predecessor firm appear, even though the appearing member joined the predecessor firm after the judge departed?

MCR 2.003(B)(4) makes no distinction between partners and associates, between persons who are firm members at the time the judge takes office and those who join the judge's firm later. The prohibition is against the judge presiding over matters brought by a firm of which the judge had been a member within the preceding two years.

Therefore, if within the preceding two years the judge has been a member of the law firm appearing in a matter, the judge is automatically disqualified, regardless of whether the advocate was a partner or associate of the judge, regardless of whether the advocate was a member of the firm when the judge was a member, and regardless of whether the judge was a member of the firm at the time the judge took judicial office. See, e.g., CI-282, CI-1079.

Although MCJC 3D allows for remittal of disqualification as provided by court rule, there are no exceptions permitted for this disqualification. In accord, JTC A/O 49.

3. Is the judge disqualified from presiding over matters in which members of the merged law firm, of which the judge was never a member, appear?

In CI-282, a former partner of a judge who had dissolved the partnership prior to the judge's election asked whether the disqualification rule applied. The Committee, applying the existing court rule "The judge shall be deemed disqualified to hear the action when the judge . . . was a partner of a party or attorney within two years next preceding the hearing of the cause . . .," reasoned that the former partner could not appear before the judge within the two year period, since the lawyer had been the judge's law partner. Under the current language of MCR 2.003(B)(4), there is no prohibition for the judge having been a partner of a lawyer appearing before the judge; rather the rule seems to apply only to the law firm of record. Under the prior court rule it was apparent that a judge could not preside in cases in which a former partner appeared. The phrasing of the current court rule leads to the conclusion that the judge is disqualified if the judge was a partner of a party or if the judge was the lawyer for a party, but not if the judge was a partner of a lawyer for a party. Because of the change in the rule, there appears to be no automatic disqualification of a judge when a former partner appears.

Although there is no automatic disqualification, the judge and the former partners were in fact associated, albeit under a different legal entity, within the preceding two years. The purpose of the two-year disqualification rule is to avoid requiring a party to prove actual bias in cases in which the judge has been recently personally and professionally closely associated with counsel for a party. It is unrealistic to conclude that a judge who recently, i.e., within the preceding two years, shared ethics and malpractice responsibility for the acts and omissions of the advocate, and who benefitted directly or indirectly from the client's business, could put those considerations aside to adequately and impartially hear a matter in which the advocate appears.

The disqualification rule cannot be a tool or strategy that is applied merely on the name of the firm or structural entity, without regard to the actual members of the firm. Thus, a judge should not be able to avoid disqualification under MCR 2.003(B)(4) when the judge's former firm reorganizes, changes names, merges, or divides. On the other hand, the rule was never intended to apply a blanket disqualification tainting every lawyer with whom the judge was professionally connected within the preceding two years. Therefore, when a reorganized or renamed firm is essentially the alter ego of the judge's former firm, the disqualification rule will apply. When the reorganization, dissolution, or other movement of lawyers between firms fundamentally changes the liabilities, obligations, client base, and payment structure from the judge's former firm, the automatic disqualification rule should not apply.

In R-4 we discussed the presumption that partners are privy to confidential information and firm management decisions. The presumption can be rebutted in a particular matter if the partner, in this case the judge, proves that he/she did not have access to confidential information and was screened from participation in the matter.

When assigned to preside over a matter in which the advocate for a party was a member of a law firm of which the judge was a member within the preceding two years, but which advocate is no longer a member of that firm, the judge should disclose the former relationship on the record, and recuse from the matter unless the parties and counsel request that the judge proceed to hear the matter. This disqualification is not imputed to other members of a law firm to which the judge has never been associated, and with whom the judge has never been associated.

CI-282, CI-260, and CI-1095 are hereby superseded as inconsistent with the current rule.

III. DISQUALIFICATION FOR FINANCIAL INTEREST

4. The judge will receive a retirement benefit from the current law firm partners, to be paid out over three years; will the judge be disqualified from presiding over matters in which members of the firm appear for the entire pay-out period?

5. The judge and certain partners of the judge's predecessor law firm, some of whom are current partners of the judge and some of whom joined the merged firm, are partners in a real estate venture which owns the building in which both the judge's current firm and the merged firm are located. Is the judge disqualified from presiding over matters in which the real estate partners appear? In which members of firms of the real estate partners appear?

6. If the real estate interest of the judge is purchased through an agreement whereby the judge will receive payments over time, is the judge disqualified from presiding over matters in which the real estate partners appear during the time the judge is receiving payments? Is the judge disqualified from presiding over matters in which other members of the real estate partners' firms appear?

These questions deal with a judge's disqualification for financial interest. MCJC 5C states in part:

    "(1) A judge should refrain from financial and business dealings that tend to reflect adversely on his impartiality or his judicial office, interfere with the proper performance of his judicial duties, exploit his judicial position, or involve him in frequent transactions with lawyers or persons likely to come before the court on which he serves.

    "(2) Subject to the requirements of subsection (1), a judge may hold and manage investments, including real estate, and engage in other remunerative activity, but should not serve as director, officer, manager, advisor or employee of any business . . . .

    "(3) A judge should manage his investments and other financial interests to minimize the number of cases in which he is disqualified. As soon as he can do so without serious financial detriment, he should divest himself of investments and other financial interests that require frequent disqualification."

The periodic payments to the judge from the law firm clearly place the judge in frequent transactions with persons whose interest come before the judge. Therefore, the Committee has consistently held that a judge is precluded from hearing cases involving members of the former firm as long as the judge is receiving payments from the firm on stock, CI-293, purchase of the judge's interest in the firm, CI-1079, or fees for casework, C-228, CI-1079. If the judge is receiving payments from a third party, and not directly from the law firm, the judge would not be disqualified, JI-20.

Thus, if the judge is still receiving buy-out payments after the end of the two year period in MCR 2.003(B)(4), the judge will continue to be disqualified from matters of the firm until the final buy-out payments are paid.

A different approach has traditionally been taken concerning real estate investments, which MCJC 5C(2) explicitly allows as long as the judge does not participate as director or manager. The building ownership is a continuing financial interest of the judge. To the extent that the judge receives income from the real estate venture, the judge would be disqualified from matters in which the real estate partners and their firms appear, CI-890.

As to the law firm/tenants who are not real estate partners, the continuing landlord-tenant relationship clearly involves transactions with lawyers likely to come before the judge's court. In JI-6 we noted that a landlord-tenant relationship between a lawyer and a judge creates the appearance of impropriety, MCJC 2, and reflects adversely on the judge's partiality and the fairness of the administration of justice, MCJC 1. Although there might not be any actual bias resulting in disqualification under MCR 2.003(B)(2), the relationship casts doubt over the judge's decisions which affect the lessees' ability to regularly pay their lease obligation. For such cases, the reasoning was that the judge should disclose the relationship with the lessee lawyer and recuse unless the parties and their counsel request that the judge continue in the matter, JI-6. This applied to every tenant, not just the lawyer-tenants who share building ownership with the judge. If the landlord-tenant relationship results in frequent disqualification of the judge, the judge must divest the interest, MCJC 5C.

We believe that automatic disqualification for every continuing financial interest, although traditional, is not required under the current Code or court rules. MCR 2.003(B)(6) disqualifies a judge when a member of the judge's immediate family has more than a de minimis economic interest in a party; clearly, then the judge's economic connection to an advocate must be more than de minimis before automatic disqualification is required. Where the agreement for the financial interest is a contract with the amount due the judge established as a set amount, not subject to contingency or discretion of the judge or the payor, and neither the amount nor the terms of payment are in dispute, the fact of the agreement to pay the judge is not presumptively prejudicial. Regular, periodic, or one-time disbursements to the judge from a lawyer or law firm are not prejudicial unless the matter over which the judge presides is the matter which affects the disbursement.

This approach is consistent with the Committee's approach when the judge's personal counsel appears in an unrelated matter before the judge. In such cases we have considered it sufficient for the judge to disclose the relationship on the record, and to recuse unless the parties ask the judge to proceed. That is the appropriate result in these cases. Further, since the judge's real estate partnership in this case is with individual members of certain tenant law firms, and not with the law firms themselves, disqualification should not be imputed to members of the real estate partners' firms.

Therefore in matters in which the judge has a financial interest with an advocate appearing in the matter, the judge should disclose the relationship on the record and recuse unless the parties ask the judge to proceed.

CI-293, CI-890, CI-1079, and C-228 are superseded to the extent that they require automatic disqualification for financial interests.

IV. DISQUALIFICATION FOR PERSONAL RELATIONSHIP

7. Although the judge is disqualified from presiding over matters in which relatives of the judge within the third degree of consanguinity appear, is the judge disqualified from presiding over cases of other members of the relatives' firms?

MCR 2.003(B)(5) requires automatic disqualification whenever the presiding judge is within the third degree of consanguinity or affinity to a person acting as lawyer for a party. C-216 held that a judge is not automatically disqualified from hearing a case conducted by an unrelated lawyer simply because a relative of the judge within the third degree is a member or employee of the law firm appearing in the case. In accord, R-3; MRPC 1.8(i). However, the judge should disclose that the relative is a member or employee of the law firm appearing in the matter, and the law firm should disclose whether the judge's relative has participated personally and substantially in the matter. The judge is recused unless requested by the parties and their counsel to proceed.

V. DISQUALIFICATION FOR FORMER PUBLIC POSITION

8. As a former city commissioner, is the judge disqualified from presiding in pending matters in which the city is a party which were pending or impending while the judge was commissioner? Is the judge disqualified from presiding over future matters in which the city is a party and in which the judge had personal and substantial participation as a commissioner? For purposes of this issue it is assumed that the judge did not act as lawyer for the city or the city council, but sat on the decision-making board.

MCR 2.003(B)(2) requires disqualification whenever a judge is biased for or against a party. As a member of the city governing board which authorizes litigation, settlements, and sets procedures which may be subject to challenge, a commissioner not only has knowledge but also has been an integral part of the process by which the matters are brought before the courts. While a member of the city governing board, a commissioner is privy to information, advice of counsel, procedures, and other evidence involving matters which come before the courts.

A judge is required to make rulings based solely on the information presented in the matter, and may not rely on information outside the record or become predisposed to a particular position. MCJC 1, 3A(4), 3A(6). In this case the judge would be presiding not only over matters of the city board of which the judge had been a member, but would be asked to review decisions which the judge participated in making. See, RI-47. The judge is clearly disqualified in all matters which came before the city commissioners while the judge served as commissioner.

The judge would also be disqualified from matters which arise after the judge resigns as commissioner, if the judge participated personally and substantially in the matters. See JI-34 and RI-11 for a discussion of "personal and substantial participation" as a public official. Without specific examples of matters which may come before the judge, we cannot provide more explicit guidance.

 
     

 

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