COMMITTEE ON CODES OF CONDUCT
ADVISORY OPINION NO. 29
Service as President or Director of a Corporation Operating a Cooperative
Apartment.
The Committee has received the following inquiry:
Some judges report the holding of positions, such as president
or director, of corporations which control the operations of the cooperative
apartment (or possibly condominium) in which they reside. While such associations
probably fall without the proviso of the 1963 Resolution relating to corporations
"organized for profit," your [inquirer] requests guidance as to whether
such positions are within the ambit of Canon 5C(2).
Nothing in the Code of Conduct for United States Judges, adopted by
the Judicial Conference of the United States, or in prior opinions of this
Committee, specifically provides the answer to the inquiry. Pertinent to
its resolution, however, are the following:
1. The still-effective formal resolution of the Judicial Conference
of the United States (see Judicial Conference of the United States,
Report of the Proceedings 62 (Sep. 1963)):
No justice or judge appointed under the authority of the United
States shall serve in the capacity of an officer, director, or employee
of a corporation organized for profit.
2. Canon 5 of the Code stating, broadly and in summary, "[a] judge
should regulate extra-judicial activities to minimize the risk of conflict
with judicial duties."
3. Canon 5C(1) and (2), relating to a judge's financial activities:
(1) A judge should refrain from financial and business
dealings that tend to reflect adversely on the judge's impartiality, interfere
with the proper performance of judicial duties, exploit the judicial position,
or involve the judge in frequent transactions with lawyers or other persons
likely to come before the court on which the judge serves.
(2) Subject to the requirements of subsection (1), 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 other than a business closely held and controlled
by members of the judge's family.
4. Canon 5B concerning a judge's civic activities:
B. Civic and Charitable Activities. A judge may participate
in civic and charitable activities that do not reflect adversely upon the
judge's impartiality or interfere with the performance of judicial duties.
A judge may serve as an officer, director, trustee, or non-legal advisor
of an educational, religious, charitable, fraternal, or civic organization
not conducted for the economic or political advantage of its members, subject
to the following limitations:
(1) A judge should not serve if it is likely that the organization
will be engaged in proceedings that would ordinarily come before the judge
or will be regularly engaged in adversary proceedings in any court.
It is assumed, of course, that the judge who serves as an officer or
director of the corporation controlling the operations of the cooperative
apartment or condominium receives no compensation for this service. See
Judicial Conference Ethics Reform Act Regulations on Outside Earned Income,
Honoraria, and Outside Employment § 5(a) (prohibiting service for
compensation as an officer, board member, or fiduciary). It is also assumed
that the duties of the judge's officership or directorship are confined
to non-profit-making activities in the sense that they relate only to the
operation and maintenance of the members' residence facility. The activities,
thus, although relating in part to and on behalf of residents other than
the judge, are those the judge would find necessary to undertake were he
or she living in a privately owned, single-family residence.
On the foregoing assumptions, the Committee is of the opinion that
the judge's serving as an officer or director of this type of corporation
does not, in and of itself, violate the 1963 Resolution.
The Committee is also of the opinion, however, that service in this
capacity is not readily to be characterized either as "civic" activity
within the permissive reach of Canon 5B or as a "business dealing," within
the prescriptive contemplation of Canon 5C(1). It has attributes of both
in that, on the one hand, the endeavor possesses certain commercial features,
but on the other hand, closely approximates a real estate investment not
forbidden to the judge under Canon 5C(2). It is, moreover, directed at
the saving of expense and at the wise expenditure of funds rather than
to the earning or realization of income.
The Committee, therefore, is of the view that each case of this
kind must depend upon its facts. If the cooperative or condominium is not
a large and substantial one, and if the duties the officership or directorship
entails are routine and primarily internal (allocating responsibilities;
employing maintenance, security, and essential personnel; providing for
services; passing on prospective occupants; formulating occupancy rules;
and the like), the activity would not appear to be violative of the provisions
or the spirit of the 1963 Resolution and the canons quoted above. If, however,
the duties entail business-type contacts, substantial in number or character,
with outside enterprises particularly of the kind that could result in
litigation, a judge's indulgence in the activity becomes questionable,
and he or she should then give consideration to leaving those responsibilities
to others. In all of this, the judge should keep in mind the basic requirements
of Canon 2 (that the judge "should avoid impropriety and the appearance
of impropriety in all activities") and of Canon 3 (that the "judicial duties
of a judge take precedence over all other activities"). The judge must
also bear in mind the admonition contained in the recommendation adopted
by the Judicial Conference of the United States to the effect that positions
held by a federal judge should not be so great in number as to jeopardize
the particular performance of judicial duties. See Judicial Conference
of the United States, Report of the Proceedings 68 (Oct. 1971).
December 28, 1973
Revised January 16, 1998