May a judge or the judge's spouse sell legal-service plans, and what happens when a provider appears in court?

Plain-English summary

The judge and spouse were agents or associates selling legal-service plans on commission. The request asked whether the spouse could continue, whether the judge could remain named on the business application, whether business outside the judge's area changed the analysis, and what to do when a plan provider appeared before the judge. Source: Opinion 99-01, p. 1

The committee said the judge should not continue as an agent or associate or lend her name to the business. If the spouse continued, the judge would still have an indirect interest in business proceeds under community-property law. For a case involving the plan company's legal services, the committee called for recusal or disclosure and waiver under Rule 21-400(C), with agreement entered in the record. Source: Opinion 99-01, p. 3

The committee said solicitation outside the judge's local area or New Mexico did not avoid the Code's concern about the judge's own continuing agent role. It referred the questions about the spouse's continuing sales and provider appearances back to its recusal answer. Source: Opinion 99-01, pp. 3–4

In practice

The opinion distinguishes the judge's own participation and use of her name from the spouse's continued business and the judge's resulting indirect interest in cases involving the plan company. Source: Opinion 99-01, pp. 3–4

Common questions

Q: Could the judge remain listed on the business for estate-planning reasons?

A: The committee said the judge should not lend her name to the legal-service-plan business while serving as a judge. Source: Opinion 99-01, pp. 1, 3

Q: Did the spouse's separate role eliminate the judge's financial interest?

A: No. The committee said New Mexico community-property law left the judge with an indirect interest, triggering recusal or the specified waiver process in affected cases. Source: Opinion 99-01, p. 3

Background and rules framework

The committee applied then-current New Mexico Code of Judicial Conduct Canons 21-500, 21-400, and 21-200 to a judge's financial activity, impartiality, and potential disqualification. Source: Opinion 99-01, pp. 2–4

Citations and references

• New Mexico Code of Judicial Conduct Canons 21-500, 21-400, and 21-200. Source: Opinion 99-01, pp. 2–4

See also

• NM Judicial Op. 01-04: Rent From Referral Providers
• NM Judicial Op. 01-09: Sale to Court Lawyer

Source

• Landing page: New Mexico judicial advisory opinions
• Original PDF: Judicial Advisory Opinion 99-01

Original opinion text

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

Advisory Committee on the Code of Judicial Conduct

Hon. Frank H. Allen. Jr. Chairman
Hon. Thomas A. Donnelly
Prof. William T. MacPhearson. Jr.
Hon. Marie A. Baca

January 13, 1999

The Honorable

Re: Judicial Advisory Opinion 99-01

Dear Judge

The Committee is in receipt of your letter dated December 14, 1998, requesting an Advisory Opinion as to whether several business ventures that you and your husband are currently engaged in would constitute conflicts of interest with your duties as a Judge.

According to your letter, you and your husband are independent agents or associates
marketing legal service plans for
working on a commission basis. You have
indicated that
designs, underwrites, and markets legal plans which
provide a variety of legal services to purchasers in New Mexico and other states.
Additionally, you have stated that you and your husband operate a ranch in New Mexico.

Specifically, you have posed the following questions:

1) Can my husband continue the
business as an ongoing concern
for himself personally?
2) For estate planning purposes, can my name remain on the business application as the spouse?
3) Can [my husband] continue to operate the division for ?
4) Can [my husband] continue to sell the
product and/or associate
memberships within the county under either his personal associate
membership or
associate membership?
5) Is there a conflict if business is conducted out of County?
6) Is there a conflict if business is conducted out of the State of New Mexico?
7) Is there a conflict should a litigant appear before me in
Court
represented by the provider law firm?
8) Please advise on any other issues you feel are relevant.
Honorable
Page 2

Based on the facts as presented to us by you, three Canons of the Code of Judicial Conduct adopted by our Supreme Court are pertinent to your several inquiries.

Canon 21-500 provides in part, as follows:

A. Extra-judicial activities in general. A judge shall conduct all of the judge's extra-judicial activities so that they do not:
(1) cast doubt on the judge’s capacity to act impartially as a judge;

D. Financial Activities.

(1) A judge shall not engage in financial and business dealings that:

(a) may reasonably be perceived to exploit the judge's judicial position; or
(b) involve the judge in frequent transactions or continuing business relationships with those lawyers or other persons likely to come before the court on which the judge serves.

(2) A judge may, subject to the requirements of this Code, hold and manage investments of the judge and members of the judge's family, including real estate, and engage in other remunerative activity.

Canon 21-400 states in part:

A. Recusal. A judge is disqualified and shall recuse himself or herself in a proceeding in which the judge’s impartially might reasonably be questioned, including but not limited to instances where: '

(3) the judge knows that he or she … or the judge’s spouse … has an economic interest in the subject matter of the controversy…

Canon 21-200 provides in applicable part:

A. Respect for the law. A judge... shall act at all times in a manner that promotes public confidence in the Honorable Page 3

integrity and impartiality of the judiciary.

B. Impartiality. A judge shall not allow family, social, political or other relationships to influence the judge's judicial conduct or judgment. A judge shall not lend the prestige of judicial office to advance the private interest of the judge or others… to convey the impression that they are in a special position to influence the judge.

Based upon the provisions of the above Canons of the Code of Judicial Conduct, it is our opinion that the answers to the questions posed by you are as follows:
1. If you or your husband continue to act as an agent or associate of , you should recuse yourself in any case where the company provides legal services related to a legal proceeding which
comes before you as a
Judge. See Canons 21-200; 21-400;
21-500. Alternatively, under Canon 21-400 (C), which provides:

A judge disqualified by the terms of Paragraph A of this rule may disclose on the record the basis of the judge's disqualification and may ask the parties and their lawyers to consider, out of the presence of the judge, whether to waive disqualification. If following disclosure of any basis for disqualification other than personal bias or prejudice concerning a party, the parties and lawyers, without participation by the judge, all agree that the judge should not be disqualified, and the judge is then willing to participate, the judge may participate in the proceeding. The agreement shall be incorporated in the record of the proceeding.

Additionally, even if you no longer continue to remain as an
associate or agent of
, if your husband continues to
act as an associate, you would continue to have an indirect interest in the proceeds of such business under New Mexico’s community property laws. This would require you to recuse yourself or follow the provisions of Canon 21-400 (C).

2. We conclude that the provisions of Canon 21-500(A) and (D) generally direct that you not continue to act as an agent or associate
of
, or to lend your name to such business
while serving as a judge. Id. The Commentary to Canon 21-500(D)(1) further provides that "[a] judge must avoid financial and business dealings that involve the judge in frequent transactions or continuing business relationships with persons likely to come either before the judge personally or before other judges on the judge's court. In addition, the judge should discourage members of the judge's family from engaging in dealings that would reasonably appear to exploit the judge's judicial position.”
3. Our response to your third question is the same as our answer to No. 1.
Honorable
Page 4

4. Our response to your fourth question is the same as our answer to No. 1.

5. In our opinion, if you remain an agent or associate of , the provisions of Canon 21-500(D) (1) (a) would be implicated, even if memberships are solicited outside the area wherein you serve as a judge. Id.

6 Our response to your sixth question is the same as No. 5.

7 Our response to your seventh question is the same as No.1 8 Our response to your eighth question is the same as No. 1.

Very truly yours

Frank H. Allen, Jr.
Chairman
Judicial Advisory Committee