Ohio Board Advisory Opinion Op 91-014

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804
OFFICE OF SECRETARY
OPINION 91-14
Issued June 14, 1991
[Former CJC Opinion-provides advice under the former Ohio Code of Judicial Conduct which is superseded by the
Ohio Code of Judicial Conduct, eff. 3/1/2009.]
[Not Current- subsequent rule amendments to Canons 1 through 6, Ohio Code of Judicial
Conduct, eff. May 1, 1997; See In re Disqualification of Lavrich, 74 Ohio St. 3d 1216 (1990).]
SYLLABUS: A judge's ownership of stock in a party to a proceeding creates an appearance of
partiality. Therefore, a judge's ownership of bank stock is a financial interest which requires
disqualification when the bank in which the judge owns stock is a party to a proceeding, even
though the stock is held in a retirement plan of which another bank is trustee and in which the judge
does not participate in the management. Code of Judicial Conduct Canon 3 C (1) (c). A judge
should also disqualify him/herself under Canon 3 C (1) (c) for "any other interest that could be
substantially affected by the outcome of the proceeding." Finally, a judge should also consider
whether he/she should disqualify him/herself under the general standard of disqualification in
Canon 3 C (1) that "[a] judge should disqualify himself in a proceeding in which his impartiality
might reasonably be questioned." Canon 3 D does allow a judge disqualified by the terms of
Canon 3 C (1) (c) to follow a procedure for remittal of disqualification.
OPINION: We have before us a request for an advisory opinion on whether a judge who owns
bank stock should disqualify him/herself from a proceeding in which the bank is a party. The
question is based on the following premises: the stock was purchased years prior to the proceeding
and is held in the judge's individual retirement plan (Keogh plan); the trustee of the plan is a bank
not involved in the proceeding; the judge does not participate in the management of the plan; at the
time of the proceeding the judge would own approximately 200 shares of 151,000 shares of
outstanding stock; and the 200 shares would have an estimated value of $11,500.
Investments by judges are not prohibited by the Code of Judicial Conduct (Judicial Code), but are
regulated by the Judicial Code. Under Canon 5 C (2) "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." This provision is subject to the
requirement of Canon 5 C (1) that "[a] judge should refrain from financial and business dealing that
tend to reflect adversely on his impartiality, interfere with the proper performance of his judicial
duties, exploit his judicial position, or involve him in frequent transactions with lawyers or persons
likely to come before the court on which he

Op. 91-14 2
serves." A further restriction is found within Canon 5 C (3) that "[a] judge should manage his
investments and other financial interests to minimize the number of cases in which he is
disqualified. As soon as he can do so without serious financial detriment, he should divest himself
of investments and other financial interests that might require disqualification."
As one commentator has suggested "[i]nvestment is the single area of economic activity which
cannot reasonably be prohibited to judges, due to the need to permit some fruitful disposition of a
judge's savings." S. Lubet, Beyond Reproach: Ethical Restrictions on the Extrajudicial Activities
of State and Federal Judges 13 (1984). Commentary to Canon 5 C supports this view: "Owning
and receiving income from investments do not as such affect the performance of a judge's duties."
However, in counterbalance to allowing a judge to make investments lies the fundamental goal of
the legal system - equal justice under the law through a system which insures an impartial judge.
Thus, Canon 3 C (1) and 3 C (1) (c) provide that "[a] judge should disqualify himself in a
proceeding in which his impartiality might reasonably be questioned, including but not limited to
instances where: he knows that he, individually or as a fiduciary, or his spouse or minor child
residing in his household, has a substantial financial interest in the subject matter in controversy or
in a party to the proceeding, or any other interest that could be substantially affected by the
outcome of the proceeding." (emphasis added). Canon 3 C (2) places a duty upon a judge to
inform him/herself about his/her personal and fiduciary financial interests.
Canon 3 C (3) (c) defines financial interest and identifies certain activities and ownerships which
are not considered financial interests under Canon 3.
[F]inancial interest means ownership of a legal or equitable interest, however small,
or a relationship as director, advisor, or other active participant in the affairs of a
party, except that:
(i) ownership in a mutual or common investment fund that holds
securities is not a "financial interest" in such securities unless the
judge participates in the management of the fund;

Op. 91-14 3
(ii) an office in an educational, religious, charitable, fraternal, or
civic organization is not a "financial interest" in securities held by the
organization;
(iii) the proprietary interest of a policy holder in a mutual insurance
company, of a deposit or in a mutual savings association, or a similar
proprietary interest, is a "financial interest" in the organization only if
the outcome of the proceeding could substantially affect the value of
the interest;
(iv) ownership of government securities is a "financial interest" in
the issuer only if the outcome of the proceeding could substantially
affect the value of the securities.
Code of Judicial Conduct Canon 3 C (3) (c).
The Judicial Code's reference to a "substantial financial interest" in Canon 3 C (1) (c) and its
definition of a financial interest as a "legal or equitable interest, however small" in Canon 3 C (3)
(c) raises the question of whether a judge should disqualify him/herself only when he/she has a
substantial financial interest or when he/she has a financial interest however small. The drafters of
the ABA Code of Judicial Conduct, rejected a "substantial interest" test in Canon 3 C (1) for two
reasons: doubt as to its constitutionality and the ambiguity of the test. See, E. W. Thode, Reporter's
Notes to Code of Judicial Conduct 65 (1973).
Several state ethics committees have considered disqualification issues involving a judge's
ownership of stock in a bank which is a party to a proceeding. A judge may own stock in banks
(outside his/her district) in which he/she owned stock prior to taking judicial office, but must not
hear cases in which either bank is a party and must be cautious of hearing cases in which the
outcome would affect the banks or the value of the judge's stock. Nebraska SupCt, Op. 89-4
(1989). A judge who owns stock in a bank cannot write a default order in a case filed by the bank -
even a small amount of stock is a financial interest and signing the default order creates the
appearance of impropriety and partiality. West Virginia SupCt App, Op. October 14, 1988.

Op. 91-14 4
A judge's ownership of stock in a party to a proceeding creates an appearance of partiality.
Therefore, it is this Board's opinion that a judge's ownership of bank stock, even though held in a
retirement plan (Keogh plan) of which another bank is trustee and which the judge does not
participate in the management, is a Canon 3 C (1) (c) financial interest for which the judge should
disqualify him/herself. Further, under Canon 3 C (1) (c), a judge should also disqualify him/herself
for "any other interest that could be substantially affected by the outcome of the proceeding." For
example, if it is known to a judge that the outcome of a proceeding could substantially affect a
judge's retirement plan, then a judge should disqualify him/herself. Finally, a judge should also
consider whether he/she should disqualify him/herself under the general standard of
disqualification in Canon 3 C (1) that "[a] judge should disqualify himself from a proceeding in
which his impartiality might reasonably be questioned." Canon 3 D does allow a judge disqualified
by the terms of Canon 3 C (1) (c) to follow a procedure for remittal of disqualification.
In closing, the Board advises that it does not have the authority to answer whether or not a judge is
disqualified from any particular proceeding. Under the constitution and laws of the State of Ohio,
determination of judicial disqualification is a judicial function.
Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, non-binding opinions in response to prospective or hypothetical questions
regarding the application of the Supreme Court Rules for the Government of the Bar of Ohio,
the Supreme Court Rules for the Government of the Judiciary, the Code of Professional
Responsibility, the Code of Judicial Conduct, and the Attorney's Oath of Office.