Florida Supreme Court

Judicial Ethics Advisory Committee

Opinion Number: 97-35

Date of Issue: February 5, 1998

 

JUDGE SERVING PART-TIME AS AN OFFICER OF A FOR-PROFIT CORPORATION WHOSE SHARES ARE EITHER PREDOMINANTLY OWNED BY A PERSON WHO IS NOT A MEMBER OF THE JUDGE'S FAMILY OR BY THE JUDGE AS THE SOLE SHAREHOLDER

ISSUES

May a judge serve part-time as an officer of a for-profit corporation whose shares are predominantly owned by a person who is not a member of the judgeís family? ANSWER: No. A judge is prohibited from serving as an officer of this type of business entity. However, a judge may, subject to the requirements of the Code, manage and participate in a business closely held by the judge or members of the judgeís family, or a business entity primarily engaged in investment of the financial resources of the judge or members of the judgeís family.

May a judge serve part-time as an officer of a for-profit corporation whose shares are entirely owned by the judge? ANSWER: No. A judge is prohibited from serving as an officer of this type of business entity. However, a judge may, subject to the requirements of the Code, manage and participate in a business closely held by the judge or members of the judge's family, or a business entity primarily engaged in investment of the financial resources of the judge or members of the judge's family.

 

FACTS

The inquiring judge has been asked to assist a friend who owns a production company. The friend is asking the judge to work with her on a part-time basis as an officer in her for-profit corporation. A person other than the judge predominantly owns the stock in the corporation. Furthermore, that person is not a member of the judge's family.

The judgeís duties would entail identifying, marketing, and/or optioning literary and other artistic works. The judge would also serve as a consultant regarding film, radio, and television production. Legal work would also be required which could involve negotiating contracts or conducting legal research.

In the event this Committee determines the judge is precluded from such service, she asks whether our result would change if the shares of stock were entirely owned by the judge.

DISCUSSION

Canon 5 of the Code of Judicial Conduct provides, "A Judge Shall Regulate Extrajudicial Activities to Minimize the Risk of Conflict With Judicial Duties." The Code specifically permits a judge to serve as an officer, director, trustee or non-legal advisor of an educational, religious, charitable, fraternal, sororal or civic organization not conduct for profit, subject to delineated limitations and requirements. See, Canon 5C(3). The Code, however, does not permit a judge to serve in all types of business entities.

Canon 5D(3) addresses the ethical obligations and requirements relating to a judge's financial activities. The Canon provides that, "A judge shall not serve as an officer, director, manager, general partner, advisor or employee of any business entity except that a judge may, subject to the requirements of this Code, manage and participate in: (a) a business closely held by the judge or members of the judge's family, or (b) a business entity primarily engaged in investment of the financial resources of the judge or members of the judge's family."

Canon 5D(3) is one of the few per se proscriptions on lawful off-the-bench activities to be found in the Code. See, J. Shaman, S. Lubet, & J. Alfini, Judicial Conduct and Ethics, at 217 (1995). The Canon states a flat prohibition against judges acting as officers, directors, managers, advisors, or employees.

In the present inquiry, the stock of the for-profit corporation is owned predominantly by a person other than the judge. That person is not a member of the judgeís family. Additionally, the judge or members of the judgeís family do not closely hold the corporation. As such, this Committee concludes that the judge is both ethically prohibited from serving as an corporate officer and from managing or participating in the corporation.

The judge poses an alternative question. The judge asks whether the Code provides a different result if the judge is the corporation's sole shareholder.

Floridaís current Code of Judicial Conduct is based upon the American Bar Association's 1990 Model Code. Prior to 1990, the Code of Judicial Conduct had a "no business" rule. As previously noted, a judge may now manage or participate in a business closely held by the judge or members of the judge's family, or a business entity primarily engage in investment of the financial resources of the judge or members of the judge's family. See, Canon 5D(3).

There is nothing in the Code that prevents a judge from initiating a business once he or she has already taken the bench. See, J. Shaman, S. Lubet, & J. Alfini, Judicial Conduct and Ethics, at 224 (1995). While the Code, under specified circumstances, permits a judge's involvement with a closely held corporation, the judge does so subject to the requirements of Code.

The Commentary to Canon 5D(3) provides:

Subject to the requirements of this Code, a judge may participate in a business that is closely held either by the judge alone, by members of the judgeís family, or by the judge and members of the judge's family.

Although participation by a judge in a closely-held business might otherwise be permitted by Section 5D(3), a judge may be prohibited from participation by other provisions of this Code when, for example, the business entity frequently appears before the judgeís court or the participation requires significant time away from judicial duties. Similarly, a judge must avoid participating in a closely-held family business if the judgeís participation would involve misuse of the prestige of judicial office. [Emphasis added]

It is the opinion of this Committee that a judge may, subject to the Code, manage and participate in a corporation in which she is the sole shareholder. However, the judge may not serve as an officer, director, manager, general partner, advisor or employee of the corporation.

Additionally, this Committee stresses to the inquiring judge that the Florida Constitution Art. V, Sec. 13 provides that, "[justices and judges] shall not engage in the practice of lawÖ." This is also echoed Canon 5G, which states, "A judge shall not practice law."

REFERENCES

Florida Code of Judicial Conduct: Canons Canon 5C(3); Canon 5D(3); and Canon 5G.

Florida Constitution: Art. V, Sec.13.

Books or Treatises: J. Shaman, S. Lubet, & J. Alfini, Judicial Conduct and Ethics, at 224 (1995).

__________________

The Judicial Ethics Advisory Committee is expressly charged with rendering advisory opinions interpreting the application of the Code of Judicial Conduct to specific circumstances confronting or affecting a judge or judicial candidate. Its opinions are advisory to the inquiring party, to the Judicial Qualifications Commission and to the judiciary at large. Conduct that is consistent with an advisory opinion issued by the Committee may be evidence of good faith on the part of the judge, but the Judicial Qualifications Commission is not bound by the interpretive opinions by the Committee. Petition of the Committee on Standards of Conduct Governing Judges, Opinion No. 90,133 (Fla. September 4, 1997). However, in reviewing the recommendations of the Judicial Qualification Commission for discipline, the Florida Supreme Court will consider conduct in accordance with a Committee opinion as evidence of good faith. Id.

For further information, contact The Honorable Scott J. Silverman, Chairman, Judicial Ethics Advisory Committee, The Richard E. Gerstein Justice Building, 1351 NW 12th Street #513, Miami, Florida 33125.

Participating Members: Judges Cardonne, Dell, Charles J. Kahn, Lisa D. Kahn, Patterson, Silverman, Smith, Tolten and Attorney Blanton

Copies furnished to:

Justice Charles T. Wells

All Committee Members

All Members of the J.Q.C.

Office of the State Courts Administrator (Name of judge deleted from this copy)