2011-07 (April 19, 2011)
Disclosure/Disqualification; Rule 2.11

Issue: May a Judicial Official preside over a case involving a financial institution seeking to collect on a debt of less than $100,000 if the Judicial Official owns approximately $25,000 worth of stock or bonds in the financial institution?

Response: Additional facts include that the $25,000 investment represents a miniscule percentage of the stock or bonds that are issued by the financial institution and that the financial institution is regularly involved in collection litigation. Based upon the information provided, the majority of the Committee concluded that the $25,000 investment was a prohibited economic interest in a party, because this investment amount was more than an insignificant interest that could not raise a reasonable question regarding the Judicial Official’s impartiality. See Code of Judicial Conduct, Rule 2.11(a)(3) (requiring disqualification if a judge has “an economic interest … in a party to the proceeding”); Id., Terminology (defining an “economic interest” to mean “ownership of more than a de minimis legal or equitable interest” and defining “de minimis” to mean “an insignificant interest that could not raise a reasonable question regarding the judge’s impartiality.”). The Committee observed that ethics opinions from other jurisdictions in such cases have taken into account diverse factors including the amount, and proportion of the Judicial Official's investment in the institution, the importance of the investment to the Judicial Official, and the potential impact of the proceeding on its value. See Virginia Ethics Advisory Committee Opinion 00-05; Arkansas Judicial Ethics Advisory Committee Opinion 94-08 and Florida Judicial Ethics Advisory Opinion 2010-25. At least two other jurisdictions have set a fixed limit on investments. See Colorado Code of Judicial Conduct (defining “economic interest” as ownership of more that a 1% legal or equitable interest in a party, or a legal or equitable interest in a party of a fair market value exceeding $5,000, or a relationship as a director, advisor, or other active participant in the affairs of a party) and California Code of Judicial Ethics, Canon 3E (trial judges are disqualified if they have an interest over $1,500 in a party and appellate judges are disqualified if they have an interest in excess of 1 % or $1,500, which ever is less.). Although the majority did not consider such factors, the majority did consider relevant the provisions of C.G.S section 51-46a which require Judicial Officials and others to identify specifically on an annual basis any securities owned that are valued in excess of $5,000. Based on the information in this case, the majority concluded that, despite the fact that the Judicial Official's investment represented a miniscule percentage of the stock issued, the amount is such that a reasonable question could be raised about impartiality. The Committee further concluded that the Judicial Official may seek remittal of the disqualification in accordance with Rule 2.11(c).

 The remaining Committee member believed, based on the facts provided and applying factors from other jurisdictions noted by the majority, that objectively the Judicial Official’s investment interest in the financial institution is de minimis within the terminology of the Code, unless it represents a substantial portion of the Judicial Official’s portfolio. However, that member believed that the Judicial Official should disqualify him/herself from presiding over a case involving the financial institution due to concerns regarding an appearance of impropriety under Rule 1.2 in that reasonable minds, under these facts, may perceive that the ownership interest could influence the Judicial Official’s conduct in the case. Further, if the Judicial Official would receive a direct pecuniary benefit from determining the proceeding, disqualification is required under General Statutes § 51-39(a).