May a judge retain an interest in a family marina concession contracting with the agency whose park rangers bring cases to court?

Plain-English summary

A judge and brother owned a business operating marinas and retail services under contract with the state agency responsible for parks. Park police filed many cases in the judge’s court, and the judge asked whether the business created a conflict for cases from that park or other state parks. [Source: Opinion 14-04, p. 1]

Rule 21-311(B)(1) permitted a closely held family business, but Rule 21-311(C) imposed limits on interference with duties, frequent disqualification, and continuing business relationships with likely court participants. The committee was especially concerned that the agency employing park rangers also decided whether to renew the judge’s concession. That financial relationship affected cases from any state park, not only the park housing the business. [Source: Opinion 14-04, pp. 1–2]

The committee concluded that the conflict could be cured only by the judge’s divestiture, as soon as practicable without serious financial detriment. It found the brother’s continued sole ownership did not itself present a conflict because the contract predated the judge’s bench service. [Source: Opinion 14-04, p. 3]

In practice

The opinion requires the judge’s divestiture from businesses contracting with the Energy, Minerals and Natural Resources Department. Its concern extends across parks because of the continuing agency relationship, while the brother’s sole ownership was treated separately. [Source: Opinion 14-04, pp. 2–3]

Common questions

Q: Did the family-business exception allow the judge to retain the concession interest?

A: No. The exception was subject to Rule 21-311(C), and the committee concluded that the agency relationship created a conflict requiring divestiture. [Source: Opinion 14-04, pp. 1–3]

Q: Was the concern limited to cases from the park with the marinas?

A: No. The committee said the financial relationship with the state agency created the concern regardless of which park generated a case. [Source: Opinion 14-04, p. 2]

Q: Could the brother remain the sole owner?

A: On these facts, the committee found no conflict from his continued sole ownership because the agency contract predated the judge’s service. [Source: Opinion 14-04, p. 3]

Background and rules framework

The committee applied New Mexico Code of Judicial Conduct Rules 21-311(B) and (C) governing family business and financial activities, Rule 21-201 on judicial duties, and Rule 21-102 on public confidence in impartiality. It also cited comments 2 and 4 to Rule 21-311. [Source: Opinion 14-04, pp. 1–3]

Citations and references

New Mexico Code of Judicial Conduct:

• Rules 21-311(B), 21-311(B)(1), 21-311(C), 21-201, 21-102. Source: Opinion 14-04.

See also

• NM Judicial Ethics Op. 14-03: School-Bus Inspection Work
• NM Judicial Ethics Op. 16-04: Lender Recusal

Source

• Landing page: New Mexico judicial advisory opinions
• Original PDF: Advisory Opinion 14-04

Original opinion text

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

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

Advisory Committee on the Code of Judicial Conduct
Hon. James J. Wechsler, Chair _ 1 a Bs i RECEIVED

[illegible redacted text]

JUN 05 2014

Hon. Freddie J. Romero i

Hon. Sandra W. Engel | - SUPREME COURT
LAW LIBRARY

June 3, 2014

Re: Judicial Advisory Opinion No. 14-04

Dear [redacted]

You have asked the Advisory Committee on the Code of Judicial Conduct whether a certain family business in which you engage may present an ethical conflict. Specifically, you and your brother share ownership of a business that contracts with the New Mexico Department of Energy, Minerals and Natural Resources to operate three marinas and provide retail services to visitors to a state park. The park is situated within your county, and a significant number of cases, often filed by park police, are filed in your court involving conduct of people in that park. There are other state parks within the county, but your business does not own or operate any concessions in those parks. You are the only judge in your county.

You already understand that in the rare instance of a court case directly involving your business, such as a debt collection or personal injury matter, you would be required to disqualify yourself. Your question is whether your ownership interest in a business contracting with the state agency that operates the parks represents a conflict for you as to cases arising from the park in which your business operates; and if so, whether that conflict also would exist in cases arising from other

state parks.

Rule 21-311(B) NMRA generally bars a judge from holding any ownership interests or participating in a business. But the rules allow a judge to manage and participate in “a business closely held by the judge or members of the judge’s family.” Rule 21-311(B)(1). From your description, this business is wholly owned by you and your brother, so we assume it qualifies as a closely-held family business.

The Code imposes additional conditions, however. The conditions applicable here include:

C. A judge shall not engage in financial activities permitted under Paragraphs A and B if they:

(1) will interfere with the proper performance of judicial duties;

(2) will lead to frequent disqualification of the judge;

(3) will involve the judge in frequent transactions or continuing business relationships with lawyers or other persons likely to come before the court on which the judge serves[.]

We will look individually at each of these conditions.

(1) Interference with the proper performance of judicial duties. Under this rule, as

well as Rule 21-201 NMRA, your time spent managing or operating the business cannot be allowed to encroach upon the time necessary to fulfill your responsibilities as judge. These responsibilities include maintaining regular office hours, devoting adequate time to hearing and resolving all cases, and disposing of all matters promptly and efficiently. Assuming that the time you devote to managing or operating the business is limited and you give your highest priority to fulfilling your responsibilities as a judge, you will have satisfied this requirement.

(2) Frequent disqualifications. The second condition for owning and managing a closely held family business is whether the judge’s business interest will lead to frequent disqualifications. Several factors in your case make this condition an issue of some concern. Your ownership of marinas within the boundaries of a state park will mean that cases will be cited into your court. Those cases that come before you could include matters that might indirectly impact, or appear to impact your business interests. See Rule 21-102 NMRA (requiring a judge to act to promote public confidence in the impartiality of the judiciary and avoid the appearance of impropriety). For example, littering, failing to pay park fees, DWI, assault, or disorderly conduct charges that occur within the park where your businesses operate might be seen as impacting your financial interests. Moreover, our analysis of paragraph (3) below may result in even more disqualifications.

(3) Continuing business relationships with . . . persons likely to come before the

court on which the judge serves. This issue presents the Committee’s greatest concern. Many of the cases arising in the state park where your business is located are filed and prosecuted by park rangers. As part owner of a business that contracts with the state agency that employs those park rangers, your impartiality could be called into question. See Rule 21-102. The state agency that decides periodically whether to renew your concession could be seen as having undue influence over you through its financial leverage. This concern would be present regardless of the park in which the matter arose, because the problem resides in your financial relationship with the agency, not the location where the incident arises.

You have told the Committee that a number of cases are expected to arise in the state parks, but, because of recent changes in state law, more such violations will be disposed of as penalty assessments. In the first five months of this year, there have been more than eighty cases. While most of the cases will likely be disposed of through penalty assessments that do not require hearings, you still are required to sign off on those cases.

The opinion of the Committee is that your ownership in the marinas and retail businesses in the state park creates a conflict of interest that can only be cured by divesting yourself of your interest in the businesses that contract with the Energy, Minerals and Natural Resources Department of the state. You should do so “as soon as practicable without serious financial detriment,” pursuant

to Rule 21-311, cmt. 2.

The Committee does not feel that your brother’s ownership interest in this business presents a conflict for you, however. Rule 21-311, cmt. 4 calls upon judges to discourage their family members from engaging in dealings that would reasonably appear to exploit the judge's judicial position. Since this contract predates your service on the bench, it would not be likely to appear that his continued sole ownership of the business by your brother exploits your judicial position.

Very truly yours,

James J. Wechsler

Chair

cc: Paul L. Biderman, Esq.
Hon. Sandra W. Engel
Hon. Freddie J. Romero
Professor Robert L. Schwartz