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.
JI-40
July 29, 1991
SYLLABUS
A judge may sell law books to persons whose interests are unlikely to come before the judge.
If the purchaser is a party or advocate for a party in a matter coming before the judge and the purchase transaction has not been fully completed, i.e., all elements of the purchase agreement fulfilled, the judge must disclose the relationship on the record and recuse unless the parties ask the judge to proceed.
A judge may, without being disqualified, sell his/her law books to a lawyer who is likely to come before the court on which the judge serves if a device used to shield the identity of the purchaser, such as a blind trust.
References: MCJC 2, 5C(1)(3); J-4; CI-293, CI-618.
TEXT
A judge has inquired whether or not a proposed sale of the judge's law books to a lawyer would violate the MCJC 5C.
The judge also asks whether, if the direct sale of law books to a lawyer is prohibited, would it also be prohibited to sell the law books to a lawyer if a device were used to shield the identity of the purchaser. In addition to the device an account would be set up to hold the proceeds of such sale. The money in the account would not be available to the judge until all of the books were sold. The identity of the purchaser would not be disclosed.
After review of MCJC 5C(1)(3) and 5C(2), CI-293 and CI-618, the conclusion on the first issue, the direct sale without a device to shield the identity of the purchaser, is that this kind of sale is clearly prohibited. The second issue, the sale of the law books indirectly through the proposed manner, is allowed, as long as the identity of the purchaser remains undisclosed.
MCJC 2 states:
MCJC 2(A) states:
". . . A judge must avoid all impropriety and appearance of impropriety. He must expect to be the subject of constant public scrutiny. He must therefore accept restrictions on his conduct that might be viewed as burdensome by the ordinary citizen and should do so freely and willingly."
MCJC 2(C) states:
"A judge should not allow his family, social, or other relationships to influence his judicial conduct or judgment. He should not use the prestige of his office to advance the business interests of himself or others . . . ."
CI-618 noted that the sale, leasing or other disposition of a judge's books, equipment and/or building should be contemplated to as not to conflict with the Code of Judicial Conduct or CI-293, which precluded a judge from hearing cases involving members of the judge's former law firm so long as that firm is financially obligated to the judge for payment of stock in the law firm.
This theory was recently reaffirmed in J-4, which held that 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 financial relationship on the record and recuse unless the parties ask the judge to proceed.
Canon 5 states that "a judge shall regulate his extra-judicial activities to minimize the risk of conflict with his judicial duties." MCJC 5C(1), regarding financial activities, states:
"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."
MCJC 5C(3) states:
"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."
A judge is not restricted in negotiating or concluding an agreement for the sale of law books at market value with one whose interests do not come before the judge, or with a lawyer who is not likely to practice before the court on which the judge serves.
When a financial arrangement involves a significant amount of money, the potential of impropriety or appearance of impropriety to exist is great. This is especially true when the purchasing lawyer is practicing in the jurisdiction in which the judge serves. The potential impropriety or appearance of such could also lead to frequent disqualification. Pursuant to J-4, when the judge has a financial arrangement with a party or counsel for a party whose interests are before the judge, the judge is required to disclose the relationship and recuse unless asked to proceed in the matter.
The next question to be addressed is the proposed sale of books in an indirect manner so that the identity of the purchaser will be shielded from the judge and the proceeds kept in an account until all the books are sold. CI-618 explicitly authorized a lawyer who retires from law practice when becoming a judge to sell the physical assets of the firm, including books. The opinion also addressed whether, in lieu of an outright sale, the lawyer could transfer firm assets, including real estate and physical assets, into a trust; although the trust would be administered by an independent trustee, the lawyer would know with whom the trustee was dealing on the matter. Citing to MCJC 5C(1) and (2), the opinion concluded that a blind trust or device like it would not cure the impropriety of a continuing financial arrangement between the trustee on the lawyer's behalf and lawyers who may or may not practice before the court.
The proposed transaction in question in the instant case is distinguishable, because the community in question in CI-618 was very small and it would be very unlikely that the purchaser's identity would be concealed for long.
The indirect sale as proposed here would not be prohibited as long as the identity of the purchaser or purchasers is kept in strict confidence and never disclosed to the judge. As long as the identity of the purchaser or purchasers is kept undisclosed the potential for a conflict of interest and disqualification of the judge is minimized.
Therefore, a judge may sell law books to persons whose interests are unlikely to come before the judge. If the purchaser is a party or advocate for a party in a matter coming before the judge and the purchase transaction has not been fully completed, i.e., all elements of the purchase agreement fulfilled, the judge must disclose the relationship on the record and recuse unless the parties ask the judge to proceed. An indirect sale (via a device to shield purchaser identity) would not violate the Michigan Code of Judicial Conduct as long as the identity of the purchaser remains undisclosed to the judge.