September 18, 1990

The Ethics Advisory Committee has been asked for its opinion as to whether the Code of Judicial Conduct prohibits a state funded trial court judge from presiding over any case brought by a collection agency which also provides collection services to the state treasurer's office.

Utah Code Ann. 79-4-22 requires that fines, fees, court costs and forfeitures collected by state funded trial courts be paid to the state treasurer. Those funds become "state money'' as defined by Utah Code Ann. 51-7-3(17), and are subject to the control and management of the state treasurer. According to the request, the state treasurer has contracted with a private collection agency for the collection of NSF checks, including those NSFchecks received by state funded trial courts as fines, fees, court costs and forfeitures. The collection agency in question provides similar services to a myriad of non-governmental businesses and individuals, and those services often result in litigation pending before the state funded trial courts. Some of the state treasurer's NSF checks may be the subject of litigation.

Canon 3(C)(1)(c) requires disqualification when the judge or a member of the judge's family has a "financial interest" in either the subject matter in controversy or is a party to the proceeding. If such an interest exists because of the contract between the state treasurer and the collection agency, the judge must be disqualified from all of the collection agency's cases.

"Financial interest" is defined as "ownership of a legal or equitable interest, however small" but does not include ownership of government securities, ownership of deposits in a financial institution, the proprietary interest of policy holder in a mutual insurance company, the proprietary interest of a depositor in a mutual savings association or a similar proprietary interest, unless "the outcome of the proceeding could substantially affect the value" of the interest. Even assuming that a judge owns some legal, equitable or proprietary interest in state money arising from the right to receive a salary or the right to receive money accumulating in a retirement account, it is unlikely that the outcome of any given NSF check case would substantially affect the value of that interest.

It is the opinion of the committee that the Code does not require blanket disqualification in all cases in which the collection agency is a party simply because the agency has a service contract with the state treasurer. A contrary conclusion would preclude state funded trial court judges from presiding over any case in which a state agency or state contractor is a party. However, in each individual case, the judge should consider the entire Code of Judicial Conduct, including the Canon 2(B) requirement that a judge should not allow "other relationships to influence judicial conduct or judgment" and the remaining Canon 3(C) disqualification standards. Finally, as mandated by Canon 2(B), the judge should not permit the collection agency to convey the impression that it is in a special position or influence because of its contract with the state treasurer.