May two judges personally market billing software and consulting services to healthcare providers through their own company?

Plain-English summary

A district judge and a circuit judge proposed forming a marketing company to sell another Alabama corporation’s accounting, consulting, and healthcare billing software services. They planned to solicit mainly healthcare providers and would personally conduct marketing, although they would avoid using their titles and avoid clients in their judicial jurisdictions.

The Commission rejected the proposed agreement. It evaluated the judges’ personal marketing against Canon 5C(1)’s limits on business dealings that impair impartiality, interfere with duties, or exploit judicial position, along with Canons 2, 2C, 3, and 5. The opinion compared earlier decisions distinguishing passive or limited business activity from personal solicitation and time-consuming work.

The judges asserted that they could avoid interference with judicial duties, but the Commission concluded that their proposed personal marketing was prohibited. Its answer was confined to that plan, rather than a general ban on all business ownership or software development.

In practice

The holding addresses the judges’ personal sales role in a proposed marketing agreement. The opinion separately notes that Canon 5C(2) permits some remunerative activity subject to Canon 5C(1).

Common questions

Q: Would omitting judicial titles cure the proposal?

A: No. The judges proposed that limit, but the Commission still rejected their personal marketing.

Q: Did avoiding customers in their court jurisdictions change the answer?

A: No. The Commission rejected the agreement on the stated plan, which included that restriction.

Q: Did the opinion forbid every software business?

A: No. It cites prior advice allowing a judge-developed product marketed through a corporation without personal sales or use of judicial position.

Background and rules framework

Canon 5C(1) governs business activity that affects impartiality, judicial duties, or use of judicial position; Canon 5C(2) permits remunerative activity subject to that limit. The opinion also discusses Canons 2, 2C, 3, 5, and 6 in assessing the proposed work.

Citations and references

Alabama Canons of Judicial Ethics:

• Canons 2, 2C, 3, 3A(5), 3B(1), 5, 5C(1), 5C(2), and 6

Other opinions cited:

• Alabama Advisory Opinion 02-798, bank-board business solicitation
• Alabama Advisory Opinion 96-604, software marketed without a judge’s personal sales role

See also

• AL Judicial Ethics Op. 07-889: Active-Retired Judge and Lawyer Relationships
• AL Judicial Ethics Op. 07-890: Judge as Television Legal Commentator

Source

• Landing page: Alabama JIC advisory opinions
• Original PDF: Advisory Opinion 08-892

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

JUDICIAL INQUIRY COMMISSION
DATE ISSUED: June 9, 2008 ADVISORY OPINION 08-892
EXTRA-JUDICIAL BUSINESS ACTIVITY:
MARKETING NON-LEGAL SERVICES AND
SOFTWARE PRODUCTS FOR AN ALABAMA
C O R P O R A T IO N T O H E A L T H C A R E
PROVIDERS
ISSUE
May two judges enter into a “marketing
agreement” with an Alabama corporation to
personally market its accounting and consulting
services and software products primarily to
healthcare providers for more efficient billing of
healthcare services? Answer: No, the judges
should not be personally involved to any degree
in marketing services or software.
FACTS
A district judge in a metropolitan area and a
circuit judge of a two-county rural circuit propose
to form a corporation for “a specialized
marketing business” and enter into a “marketing
agreement” with an Alabama corporation to
market its accounting and consulting services and
software products. The targeted clientele would
be primarily in the healthcare industry,
particularly hospitals. The software enables
healthcare providers to more efficiently bill
insurance companies, Medicare, Medicaid, and
self-paying patients.
The judges’ titles would not be used in any
manner or mode to promote the business. The
marketing plan would be designed to minimize
any potential conflict. The software products do
not target the legal community and, if any such
products were developed while the judges are on
the bench, they would not market them. In
addition, the judges would not market to any
potential client in their respective jurisdictions.
Although they plan eventually to hire other
marketing employees, the judges would
personally market the services and software.
They assert that the proposed business would not
require them to expend time to the extent that it
would interfere with their judicial duties.
DISCUSSION
Canon 5C, which governs financial activities of a
judge, provides in pertinent part:
(1) A judge should refrain from
financial and business dealings that tend
to reflect adversely on his impartiality,
interfere with the proper performance of
his judicial duties, or exploit his judicial
position.
(2) Subject to the requirements of
subsection (1), a judge may hold and
manage investments, including real
estate, and engage in other remunerative
activity including the operation of a
business.[ ]
1
(3) A judge should manage his
investments and other financial interests
to minimize the number of cases in which
he is disqualified.
The 1972 American Bar Association Model Code
1
of Judicial Conduct contained two versions of
Canon 5C(2). The preferred version stated that “a
judge may hold and manage investments, including
real estate, and engage in other remunerative
activity, but should not serve as an officer, director,
manager, advisor, or employee of any business.”
Alabama chose the alternative version. It was
intended only as a stop-gap standard in jurisdictions
not willing or able to provide adequate salaries for
judges. See E. Wayne Thode, Reporter’s Notes to
the Code of Judicial Conduct 22-23, 80-83 (1973).
As the Model Code Canon 5C(2) Commentary
(1972) noted, “The remedy, however, is to secure
adequate judicial salaries” and once adequate
salaries are provided, the preferred standard should
be adopted so the potential conflicts and possible
appearances of impropriety that exist in the
alternative standard can be eliminated. Thode,
supra, at 22-23, 82-83.
ADVISORY OPINION 08-892
Page 2
See also Canon 2 (“[a] judge should avoid
impropriety and the appearance of impropriety
in all his activities”); Canon 2C (a judge “should
not lend the prestige of his office to advance the
private interests of others; nor should he convey
or permit others to convey the impression that
they are in a special position to influence him”);
Canon 3 (“[t]he judicial activities of a judge take
precedence over his other activities”); Canon
3A(5) (a judge should dispose promptly of the
business of the court); Canon 3B(1) (a judge
should diligently discharge his administrative
duties); Canon 5 (“[a] judge should regulate his
extra-judicial activities to minimize the risk of
conflict with his judicial duties”); and Canon 5F
(“[a] judge should not practice law”).
In addition, Canon 6 requires scrutiny of the
proposed compensation, as follows:
A j u d g e m a y r ec e iv e
compensation and reimbursement of
expenses for the . . . extra-judicial
activities permitted by these canons, if
the source of such payments does not
give the appearance of influencing the
judge in his judicial duties or otherwise
give the appearance of impropriety,
subject to the following restrictions:
A. COMPENSATION.
Compensation should not
exceed a reasonable amount.
Nor should it exceed what a
person who is not a judge would
receive for the same activity.
B . E X P E N S E
REIMBURSEMENT. Expense
reimbursement should be
limited to the actual cost of
travel, food, and lodging
reasonably incurred by the
judge and, where appropriate to
the occasion, by his spouse.
Any payment in excess of such
an amount is compensation.
The application of these provisions is, of course,
fact-specific. See, e.g., Advisory Opinions 02-798
(a circuit judge who serves on a local bank’s board
of directors is prohibited, pursuant to Canons 2C,
5C(1), and 5C(3), from making business calls for
the purpose of soliciting and retaining business for
the bank); 99-723 (a judge may serve on the board
of directors of a bank located in the court’s
jurisdiction where the board meets monthly, the
judge’s service would not cause disqualification
from a significant number of proceedings, and the
remuneration is commensurate with that normally
paid for such service); 96-619 (a judge may write
to public librarians and boards of education to
solicit the purchase of a children’s book the judge
authored 20 years earlier if the judge does not use
his title or office or otherwise exploit his judicial
position in such letters, interfere with the proper
performance of his judicial duties, or reflect
adversely on his impartiality); 96-604 (where a
circuit judge would not personally sell or
recommend law-related software he developed to
attorneys practicing in his court, where the
software would be ordered and distributed through
a closely-held family corporation, and where the
software would be marketed using the corporate
name without any identification of the judge with
the product, “the marketing of such a software
program would not violate Canon 5 unless, of
course, the judge uses his position to market the
program or allows the marketing process to
interfere with the proper performance of the
judge’s official duties”); 95-553 (a probate judge
may hold a position as an elected member on the
state board of the Alabama Farmer’s Federation
and ALFA Insurance if he can do so within the
constraints of Canons 3, 5C, 5D, and 6); 89-382 (a
judge may be employed as a data-processing
consultant by an institution of higher learning that
is located outside the judge’s jurisdiction and that
has never had and is not likely to have any cases
before the judge unless the activity would interfere
with the proper performance of the judge’s judicial
duties or reflect on the judge’s impartiality); 87-
312 (it would be almost impossible for a judge to
engage in the business of federal and state tax-
return preparation without violating the provisions
ADVISORY OPINION 08-892
Page 3
of Canon 5C); 78-40 (it would be impossible for
a district judge to sell real estate for a licensed
broker without in many respects placing himself
in violation of Canon 5C(2)); and 78-34 (same).
Thus, in determining whether the proposed
extra-judicial activity of personally marketing
services and software is permitted by the canons,
the Commission considers whether such activity
would interfere with the judges’ full compliance
with Canon 5C(1)’s requirements that the
proposed activity neither reflect adversely on
their impartiality, interfere with the proper
performance of their judicial duties, nor exploit
their judicial position; Canon 2's requirement
that they avoid impropriety and the appearance
of impropriety; Canon 2C’s mandate that they
avoid lending the prestige of their office to
advance the private interests of others or
conveying or permitting others to convey the
impression that they are in a special position to
influence them); Canon 3's requirement that
their judicial activities take precedence over
their other activities; and Canon 5's duty to
regulate their extra-judicial activities to
minimize the risk of conflict with their judicial
duties. See also Canon 3A(5)’s requirement that
a judge promptly dispose of the business of the
court; Canon 3B(1)’s mandate that a judge
“diligently discharge his administrative
responsibilities, m ain tain professional
competence in judicial administration, and
facilitate the performance of the administrative
responsibilities of other judges and court
officials”); Canon 3A(5) Commentary (“Prompt
disposition of the court’s business requires a
judge to devote adequate time to his duties, to be
punctual in attending court and expeditious in
determining matters under submission, and to
insist that court officials, litigants and their
lawyers cooperate with him to that end.”).
Compare Advisory Opinions 78-40 (a judge’s
engagement in the sale of real estate for a
licensed real estate broker would tend to
interfere with the proper performance of the
judge’s judicial duties) and 02-798 (a judge’s
making business calls as a member of a bank
board for the purpose of soliciting business
would exploit the judicial position and interfere
with the proper performance of judicial duties if
performed during usual business hours) with
Advisory Opinion 99-723 (a judge’s service on a
bank’s board of directors that meets monthly and
is not involved in the daily operations of the bank
does not appear to cause interference with the
proper performance of the judge’s judicial duties).
See also Advisory Opinion 89-382 (“[I]f the
activity becomes too time consuming and causes
the judge to delay cases or judicial decisions or if
it causes him to change court dates, the activity
would interfere with the performance of his
judicial duties and should be avoided.”).
Consistent with the dictates of the cited canons
and the Commission’s prior advisory opinions, the
Commission concludes that the requesting judges
are prohibited from engaging in the proposed
marketing agreement.
REFERENCES
Alabama Canons of Judicial Ethics, Canons 2, 2C,
3, 3A(5), 3B(1), 5, 5C(1) - (3), 5D, 5F, and 6A
and B, and Commentary, Canon 3A(5).
Alabama Advisory Opinions 02-798, 99-723, 96-
619, 96-604, 95-553, 89-382, 87-312, 78-40, and
78-34.
1972 ABA Model Code of Judicial Conduct,
Alternative Canon 5C(2) and Canon 5C(2)
Commentary.
E. Wayne Thode, Reporter’s Notes to the Code of
Judicial Conduct 22-23, 80-83 (1973).
____
This opinion is advisory only and is based on the
specific facts and questions submitted by the judge
who requested the opinion pursuant to Rule 17 of
he Rules of Procedure of the Judicial Inquiry
Commission. For further information, you may
contact the Judicial Inquiry Commission, P. O.
Box 303400, Montgomery, Alabama 36130-3400;
tel.: (334) 242-4089; fax: (334) 353-4043.