June 10, 2010
Digest: A judge may serve as an officer of family corporations that invest in real estate.
Rule: 22 NYCRR 100.2; 100.2(A); 100.4(A)(1)- 3); 100.4(D)(3)(b); Opinion 07-51; 05-130(B); 99-84 (Vol. XVIII); 99-12 (Vol. XVII).
An attorney awaiting confirmation of his/her appointment to judicial office asks whether he/she may serve as an officer of family corporations after assuming the bench. The inquirer advises that he/she is an equal shareholder with close relatives of closely held corporations that own real estate. The inquirer further advises that each corporation in which he/she is an officer has as its sole asset one commercial building and parking lot occupied by one commercial tenant.
A judge must avoid impropriety and the appearance of impropriety in all the judge’s activities (see 22 NYCRR 100.2) and must act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary (see 22 NYCRR 100.2[A]). A judge may engage in extra-judicial activities so long as they do not (1) cast reasonable doubt on the judge’s capacity to act impartially as a judge; (2) detract from the dignity of judicial office; or (3) interfere with the proper performance of judicial duties and are not incompatible with judicial office (see 22 NYCRR 100.4[A] - ). Nevertheless, a full-time judge shall not serve as an officer, director, manager, general partner, advisor, employee or other active participant of any business entity, except that a judge, subject to the requirements of the Rules Governing Judicial Conduct, may manage and participate in a business entity engaged solely in investment of the financial resources of the judge or members of the judge's family (see 22 NYCRR 100.4[D][b]).
The Committee previously has advised that a family court hearing examiner (now known as support magistrate) may own stock in and be an officer of a family-owned corporation in which the hearing examiner and his/her spouse are the sole shareholders, but may not appear in any court on behalf of the corporation (see Opinions 05-130[B]; 99-84 [Vol. XVIII]). The Committee also has advised that a judge may serve as a general partner in a family-owned partnership that is engaged solely in the investment of the judge’s and his/her family’s financial resources (see Opinion 99-12 [Vol. XVII]). Therefore, the inquirer also may serve as an officer of family corporations that own real estate after he/she assumes the full time bench. However, should a non-family member purchase shares in any such corporation, the judge may no longer serve as an officer of that corporation (see id.).
The Committee overrules prior Opinion 07-51, which advises that a full-time judge may remain a shareholder of a family corporation that owns rental real estate but may not serve as an officer of the corporation.