COMMITTEE ON CODES OF CONDUCT
ADVISORY OPINION NO. 27
Financial Interest -- Judge's Spouse Beneficiary of a Trust from
which Defendant Leases Property.
An active judge has presented a question based upon this set of
facts:
There is pending in the court in which the judge is serving as one
of the active judges, a class action brought under both the Sherman and
Clayton Antitrust Acts and the antitrust laws of the state in which the
judge resides. It is asserted that certain statutes of the state and regulations
of one of its commissions are in violation of the U.S. Constitution. Defendants
are certain major distilling companies, local wholesalers, retail drug
stores, the state through its alcoholic beverage commission, and the State
Wholesale Liquor Dealers Association. One of the drug store defendants
is lessee in a shopping center. The lessor is a national bank as trustee.
The judge's spouse is the sole beneficiary of the trust as it relates to
the shopping center operation. The lease was in existence at the time the
spouse acquired the interest and will continue for several years in the
future. The annual rental is substantial but barely exceeds five figures.
The property is managed by a real estate firm.
The question presented has been stated as follows: Should a judge
disqualify in a case wherein a defendant corporation has a lease arrangement
as lessee with a trustee wherein the judge's spouse is the beneficiary
of such arrangement?
Canon 3C(1)(c) provides:
A judge shall disqualify himself or herself in a proceeding in which
the judge's impartiality might reasonably be questioned, including but
not limited to instances in which:
* * *
(c) the judge knows that, individually or as a fiduciary,
the judge or the judge's spouse or minor child residing in the judge's
household, has a financial interest in the subject matter in controversy
or in a party to the proceeding, or any other interest that could be affected
substantially by the outcome of the proceeding.
It would appear that the spouse does not have a financial interest
in the subject matter in controversy or in a party to the proceeding, as
financial interest is defined in Canon 3C(3)(c).
Whether the spouse has an interest that could be substantially affected
by the outcome of the proceedings cannot be determined on the facts submitted.
A showing as to the extent of the operations of the drug store lessee and
the effect of a judgment adverse to lessee in the antitrust action would
help to determine whether the interest of the judge's spouse would be substantially
affected. However, such a determination would not completely resolve the
question before us. A disqualification is not limited to the enumerated
instances under Canon 3C(1) of which (c) is but one. The canon is clear
that a judge should disqualify in a proceeding in which his or her impartiality
might reasonably be questioned. This is to be read in connection with Canon
2 which states "[a] judge should avoid impropriety and the appearance of
impropriety in all activities." For a judge to preside in a case involving
a defendant which pays a substantial amount of rent which eventually is
paid or credited to the judge's spouse as the sole beneficiary of a trust
managed by the lessor as trustee would, in our opinion, be reasonably subject
to the claim of an appearance of impropriety on the judge's part and to
questioning his or her impartiality.
October 29, 1973
Revised July 10, 1998