COMMITTEE ON CODES OF CONDUCT
ADVISORY OPINION NO. 63

Disqualification in Relation to Amici.

An opinion of the Committee has been requested on the applicability of Canon 3C(1)(c) to an amicus curiae. The inquiry is whether this provision of the canon requires disqualification (1) generally whenever the judge has an interest in a corporation filing an amicus brief and (2) when, after a panel decision has been rendered by a court of appeals, such a corporation for the first time files a motion for leave to submit an amicus brief in support of the petition for rehearing and the suggestion for rehearing en banc.

Canon 3C(1)(c) provides that the judge shall disqualify when:

[T]he 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.

In the situations described in the inquiry, the judge does not have a financial interest in the subject matter in controversy. See Thode, Reporter's Notes to Code of Judicial Conduct 66 (ABA 1973). Nor does the judge have such an interest in a party bound by its outcome. See 18 J. Moore, Moore's Federal Practice ¶ 131.40[3][d] (3d ed. 1997). There remains the question of whether the judge's interest in the amicus constitutes "any other interest that could be substantially affected by the outcome of the proceeding."

Any financial interest that could be substantially affected by the outcome of a proceeding is a disqualifying interest, and this aspect of the canon applies to an ownership interest in any corporation, whether or not the corporation appears as an amicus. Even in those situations where an ownership interest could be substantially affected by the outcome of a proceeding, one might well doubt that a judge's impartiality might reasonably be questioned if the extent of the judge's interest is minimal. However, the Reporter's Notes to Code of Judicial Conduct indicates that if the interest could be substantially affected by the outcome, the extent of the interest is irrelevant. The Reporter states that ownership of stock in a nonparty should result in disqualification when the nonparty is in the same industry as the party and the value of industry stock generally could be substantially affected by the decision in the pending case. Thode, supra, at 66;⁽¹⁾ see C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3547, at 602 (1984). But see In re Virginia Electric & Power Co., 539 F.2d 357, 367-68 (4th Cir. 1976) (suggesting that a de minimis interest in a nonparty does not require disqualification). Since a rule of at least equal stringency would seem appropriate where a nonparty is an amicus, a small stock interest in an amicus requires disqualification when the per-unit value of stock could be substantially affected by the decision of the court.

Given the mandatory nature of Canon 3C(1)(c), the result is the same even when the amicus does not surface until the rehearing stage.

In the event that a decision in a pending case will not substantially affect a judge's interest in an amicus, another standard would become relevant, viz., the prohibition against a judge's participation when "the judge's impartiality might reasonably be questioned." Canon 3C(1).⁽²⁾

Finally, it should be emphasized that if an interest in an amicus would not be substantially affected by the outcome and if the judge's impartiality might not otherwise reasonably be questioned, stock ownership in an amicus is not per se a disqualification.

Issued circa 1979
Revised July 10, 1998

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1. ¹ Professor Thode explains that the test is "not whether a judge has a 'substantial interest,' but whether the interest that he has could be substantially affected by a decision in the proceeding before him."

2. ² Section 455(e) of title 28, United States Code, provides that disqualification for the existence of the reasonable appearance of partiality may be waived by the parties. The Code of Conduct has a similar provision. See State of California v. Kleppe, 431 F.Supp. 1344, 1350-51 (C.D. Cal. 1977).

The appearance of impropriety standard was the one relied on by the trial judge to disqualify himself in State of California v. Kleppe, which concerned Exxon's offshore oil leasing. The judge not only owned stock in nonparty Union Oil, whose own operations nearby would be affected by the case's outcome and who had royalty override and partnership arrangements with Exxon in the area, but had also served as Union's litigation counsel for twelve years and reviewed oil and gas leases for it, possibly including some in the area under the judge's consideration.