September 14, 1999
Ownership by a judge and spouse of $1,000,000 in New York City bonds does
not require the judge to recuse himself or herself in all cases involving
22 NYCRR 100.0(D)(4);
A judge states that the judge and the judge's spouse own New York City Tax Free Municipal Bonds in the approximate sum of $1,000,000. The judge asks whether it is ethical and proper to preside in cases involving New York City, almost all of which are negligence cases.
At issue is section 100.3(E)(1)(c) of the Rules Governing Judicial Conduct
which requires a judge to disqualify himself or herself where:
What constitutes an "economic interest," in this instance, is set forth in section 100.0(D)(4) of the Rules:(c) the judge knows that he or she, individually or as a fiduciary, or the judge's spouse or minor child residing in the judge's household has an economic interest in the subject matter in controversy or in a party to the proceeding or has any other interest that could be substantially affected by the proceeding;
. . .(D) "Economic interest" denotes ownership of a legal or equitable interest, however small, or a relationship as officer, director, advisor or other active participant in the affairs of a party, except that
(4) ownership of government securities is not an economic interest in the issuer unless a proceeding pending or impending before the judge could substantially affect the value of the securities.
Given the total value of all New York City bonds that are outstanding, the Committee does not believe the fact of ownership of $1,000,000 of such bonds requires disqualification in each and every case in which the City is a party. Indeed, it is difficult to perceive how a negligence law suit against the City could be of sufficient dimensions so as to be likely to "substantially affect the value of the securities" owned by the judge and the judge's spouse. What should happen in the event other kinds of cases may come before the judge involving, for example, the specific securities owned by the judge or legal issues bearing upon the value of such securities are not matters presently before the judge or the Committee. All that is being said herein is that the mere fact of ownership of $1,000,000 worth of New York City bonds is not, in and of itself, a circumstance requiring disqualification.