COMMITTEE ON CODES OF CONDUCT
ADVISORY OPINION NO. 90

Judges' Duty to Inquire When Relatives May Be Members of Class Action.

In a class action brought pursuant to Rule 23(b)(3), Fed. R. Civ. P., must the judge investigate to determine whether the interests of any of the judge's (or the judge's spouse's) relatives within the third degree of relationship, or the spouses of such relatives, place them within the class definition and thus render them parties to the proceeding, in which event the judge would have to disqualify himself or herself?

The Committee previously advised a judge to undertake such an investigation and, if any of such third degree relatives or their spouses happened to be within the class definition, to ask them if they would be willing to opt out of the class, as Rule 23(c)(2) permits. The Committee has reconsidered the subject and now reaches a different conclusion.

The issue partly depends on the following portion of Canon 3C(1)(d)(i) of the Code of Conduct for United States Judges:

(1) 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:
* * *

(d) the judge or the judge's spouse, or a person related to either within the third degree of relationship, or the spouse of such a person:
(i) is a party to the proceeding, or an officer, director, or trustee of a party.

The Judicial Code contains a similar provision. 28 U.S.C. § 455(b)(5)(i).

Our previous advice was based on two considerations. First, we believed that all members of a Rule 23(b)(3) class action are parties within the meaning of Canon 3C(1)(d)(i). Our Compendium currently states that "[a]ll members of the class are parties, whether named or unnamed, so long as they have not opted out of the class." Compendium § 3.1-6[4](a) (1997). Second, we thought that if a judge failed to make these inquiries and then, at some later time, had to recuse upon discovering that a third degree relative or spouse thereof was a class member, whatever rulings the judge had already made in the case might have to be vacated.

The effect of our advice was to place judges in the position of having to delve into the financial affairs of third degree relatives who were not members of their household. (Relatives "within the third degree of relationship" include one's parents, grandparents, children, uncles, aunts, brothers, sisters, nieces and nephews but do not include a first cousin. See Canon 3C(3)(a) of the Code of Conduct for United States Judges.) Our advice was somewhat at odds, although not entirely inconsistent, with our earlier opinion that a judge is not bound to keep informed of the financial interests of relatives other than his or her spouse and minor children residing in the household. See Canon 3C(2); Compendium § 3.2-1(b) (1997).

The Committee adheres to its previous position that Rule 23(b)(3) class members are "parties" for purposes of Canon 3C(1)(d)(i). (The Committee expresses no view regarding Rule 23(b)(2) class actions. See In re City of Houston, 745 F.2d 925 (5th Cir. 1984).) This straightforward approach not only is consistent with the reasoning of decisions such as In re Cement Antitrust Litigation, 688 F.2d 1297 (9th Cir. 1982), and Union Carbide Corp. v. U.S. Cutting Service, Inc., 782 F.2d 710, 714 (7th Cir. 1986), but also avoids the considerable difficulties that would arise in trying to draw distinctions between Rule 23(b)(3) class members who should be considered parties and those who should not.

The Committee now believes, however, that a judge in a Rule 23(b)(3) class action does not have a duty to investigate whether his or her relatives within the third degree and their spouses are class members. If at some point the judge discovers that one of them was a class member, Canon 3C(1)(d)(i) would require recusal, but this does not mean the judge had been acting unethically by sitting on the case. The situation is thus unlike Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847 (1988), which interpreted 28 U.S.C. § 455(a), a provision comparable to Canon 3C(1), which provides that a judge must disqualify "himself in any proceeding in which his impartiality might reasonably be questioned." See Liteky v. United States, 510 U.S. 540 (1994). Liljeberg applied section 455(a) "retroactively" because the provision's disqualification standard does not depend on the judge's knowledge of the disqualifying facts. In other words, the provision can be violated although the judge was unaware of the facts creating the appearance of impropriety. See 486 U.S. at 859-61. However, when a rule contains a knowledge requirement, there can be no violation until the judge obtains the requisite knowledge.

The knowledge requirement flows from the structure of the canon. As Chief Justice Rehnquist said in dissent in Liljeberg, 486 U.S. at 871, with respect to section 455, "[u]nlike the more open-ended provision adopted in subsection (a), the language of subsection (b) requires recusal only in specific circumstances, and is phrased in such a way as to suggest a requirement of actual knowledge of the disqualifying circumstances." The same is true with respect to Canon 3C. The other specifically enumerated examples in Canon 3C either expressly contain a knowledge requirement, or involve situations in which it is almost impossible for the judge not to know of the disqualifying circumstance. See Canon 3C(1)(a)-(e); Liteky v. United States, 540 U.S. at 553-54 n.2.

In the case of Rule 23(b)(3) class actions, however, it is not necessarily true that a judge would know whether his or her relative is a party. If the judge later discovered this, the analysis in Liljeberg would not give rise to any retroactive consequences. Canon 3C(1)(d)(i) requires knowledge. Canon 3C(2) assures that judges will have such knowledge with respect to themselves, their spouses and their minor children living in the household.⁽¹⁾ The clear implication is -- and the Committee has so decided -- that the judge is under no duty to acquire knowledge of the financial affairs of his or her other relatives within the third degree, or of their spouses. Without such information, a judge sitting on a case in which a relative was, without the judge's knowledge, a class member would not be acting in violation of the canons. Furthermore, cases in which third degree relatives turned out to be members of a class would doubtless fall within the Court's qualification in Liljeberg that "there is surely room for harmless error committed by busy judges who inadvertently overlook a disqualifying circumstance." 486 U.S. at 862.

In short, the Committee is of the view that the unknown presence of a judge's relative as a party in a Rule 23(b)(3) class action does not create a risk of injustice to the parties, and does not undermine the public's confidence in the judicial process -- so long as the judge recuses upon learning of the relative's status as a party. There is thus little risk of the sort of retroactive relief we sought to avoid when we previously advised that a judge should investigate to determine if any third degree relatives fit within the class definition. Accordingly, the Committee is now of the opinion that judges need not undertake such inquiries. Requiring judges to investigate imposes untenable burdens on them and puts judges in the potentially awkward and uncomfortable position of intruding into the personal affairs of those outside their households.

July 8, 1994
Revised January 16, 1998

1. Canon 3C(2) states:

A judge should keep informed about the judge's personal and fiduciary financial interests, and make a reasonable effort to keep informed about the personal financial interests of the judge's spouse and minor children residing in the judge's household.