Federal Deposit Insurance v. O'Malley ( 1993 )

PRESIDING JUSTICE GORDON,

concurring in part and dissenting in part:

While I agree with the analysis of the majority as to the merits of the claim of the FDIC against the defendant, I must disagree with respect to the analysis of the issues raised under Supreme Court Rule 63(C)(1)(c). (134 Ill. 2d R. 63(C)(1)(c).) Under the provisions of Supreme Court Rule 63(C)(1)(c), a judge must disqualify himself unless all agree otherwise in writing if, “for a period of seven years following the last date on which he represented such a party, he represented any party to the controversy while he was an attorney engaged in the private practice of law.” (134 Ill. 2d R. 63(C)(1)(c).) This rule provides:

“(1) A judge should disqualify himself in a proceeding in which his impartiality might reasonably be questioned, including but not limited to instances where

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(c) he was, within the preceding three years, associated in the private practice of law with any law firm or lawyer currently representing any party in the controversy (provided that referral of cases when no monetary interest was retained shall not be deemed an association within the meaning of this subsection) or, for a period of seven years following the last date on which he represented such a party, he represented any party to the controversy while he was an attorney engaged in the private practice of law.” 134 Ill. 2d R. 63(C)(1)(c).

The majority has incorrectly attempted to apply the distinction made by the supreme court in People v. Del Vecchio (1989), 129 Ill. 2d 265, 544 N.E.2d 312, a criminal prosecution, to the facts of this case. In Del Vecchio the Illinois Supreme Court interpreted the former Supreme Court Rule 67(c) (73 Ill. 2d R. 67(c)) to require a judge who was a former State’s Attorney to recuse himself only if he was the actual counsel in the prosecution and not if he was a mere supervisor or department head with only nominal involvement in the prosecution. The court held that the phrase “acted as counsel” under the old rule excluded involvement consisting solely of personal supervision or mere approval of ministerial administrative procedures.

However, there is a very substantial difference between the nature of the representation provided with respect to attorneys in the private practice of law and those engaged in the public practice as employees of a governmental agency.

In the public sector, the relationship between counsel and client is different in nature since the attorney has no special financial or proprietary interest in the client, namely the government or the public agency by whom the attorney was employed. There the focal point of the attomey/client relationship consists of the specific dispute in which the lawyer is acting on the client’s behalf. This aspect was emphasized under former Rule 67(c), the predecessor of the current rule, which prohibits the judge from participating in a case in which he had previously acted as counsel.

Former Rule 67(c) provided:

“A judge shall not participate in any case in which he has previously acted as counsel. He cannot rid himself of this responsibility by consent of counsel or the parties to the case.” (73 Ill. 2d R. 67(c).)

The prohibition under former Rule 67(c) is now covered under Rule 63(C)(1)(b). Rule 63(C)(1)(b) provides that judicial recusal is required if “he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it.” (134 Ill. 2d R. 63(C)(1)(b).) Under Rule 63(C)(1)(b), no distinction is made between the private and public practice of law.

Subsection 63(C)(1)(c), however, applies specifically to the past relationship between the judge and his former clients even though the case or “controversy” is new. Under this provision, the judge’s past relationship with the client should not depend on whether he or she represented that client in court but rather whether he or she was a member of the firm when that client was represented and whether he or she shared in that client’s fees.

The distinction drawn by the- majority pursuant to People v. Del Vecehio extends only to the provisions of former Rule 67(c) under which it was decided and under its present counterpart, Rule 63(C)(1)(b), which prohibits service of the judge where “he served as lawyer in the matter in controversy.” 134 Ill. 2d R. 63(C)(1)(b).

In point of fact, the current Rule 63(C)(1)(c) specifically excludes from its provisions past representation by virtue of employment in governmental agency, by specifying, “while he was an attorney engaged in the private practice of law.” 134 Ill. 2d R. 63(C)(1)(c); Ill. Ann. Stat., ch. 110A, par. 63(C), Committee Comments, at 30-33 (Smith-Hurd Supp. 1992).

Under Rule 63(C)(1)(c), which applies to the private sector only, no meaningful distinction can be drawn between the interest of the actual trial counsel and the billing or supervisory partner. If anything, the partner who approves of and bills out the work performed for a client or for that matter who shares in the revenues derived from a client is as likely to find himself with conflicting interests or loyalties as the attorney who performed the work in the legal trenches.

Moreover, the trial judge in this case did not disclaim participation in quarterbacking the strategies on behalf of the FDIC. He merely stated that he did not make any court appearances on its behalf but disclosed that he had full supervisory authority over the matters which his office handled on that client’s behalf.

The parallel structure of Rule 63(C)(1)(c) supports this conclusion as well. The first portion of 63(C)(1)(c), which controls for three years, applies to any judge associated in the practice with any lawyer or law firm representing a client before such judge. Thus, for a three-year period, even if the client came to the firm after the judge terminated his association with it, the judge must still recuse himself based upon his association with it notwithstanding that such association predated the acquisition of that client. The second part, which provides for a seven-year restriction, should then apply, as I believe it does, to those situations where the client was being represented by the firm during the time the judge was associated with it, even though the judge did not then take an active role in that client’s matters. Otherwise, the rule would not provide for such instances where the judge was associated with a firm while it represented the client where his role regarding that client was passive. Such instances would then have to be treated within the first provision of Rule 63(C)(1)(c), which does not require the judge to be associated with the firm contemporaneously with its representation of the client as long as he was associated with that firm within the designated three-year period.

While the majority apparently construes the rule to permit a qualitative evaluation to be made as to whether reversal is required, we can find no such discretionary latitude under the rale as currently drafted. Moreover, the language of Rule 63(D) which permits waiver only if “the parties and lawyers *** all agree in writing” would seem to militate against any mitigation where such written waiver is not provided. Ill. Ann. Stat., ch. 110A, par. 63(D) (Smith-Hurd Supp. 1992).

While the scope of Rule 63(C)(1)(c) is perhaps stricter than necessary, particularly in the case of mega law firms with several hundred partners and clients numbering in the hundreds if not thousands, it is not wholly inappropriate with respect to smaller firms where every partner is aware of the various clients which the firm represents and the resultant benefits which he or she may derive from it. In any event, it is not for us to redraft the rule by judicial fiat but to enforce its provisions as we find them.

The fact that the disclosure in this case, that the full seven years had not yet expired, did not occur until the case was adjudicated should not be determinative. Notwithstanding that the court in Woods v. Durkin (1989), 183 Ill. App. 3d 870, 539 N.E.2d 920, appeared to take note of that factor in distinguishing the result of the Federal decision in United States ex rel. Weinberger v. Equifax, Inc. (5th Cir. 1977), 557 F.2d 456, I cannot agree that a purposeful distinction can be predicated upon the timing of the disclosure. This would leave the control of the impact of the rule in the hands of the judge whose participation the rule intends to restrict and regulate.

In Woods, even though the attorneys were apprised upfront of the grounds for the judge’s disqualification they were permitted to await his ruling on the merits before asserting their rights under 63(C)(1)(c) to disqualify the judge and obtain a new trial. A fortiori, a party should have the right to disqualify the judge retroactively where the grounds for disqualification are not disclosed to him until after judgment.

While in this case it is clear that the trial judge acted in good faith and with complete candor and with full and prompt disclosure as soon as the facts became known to him, reversal is nevertheless mandatory under these circumstances where written waiver was not provided. See generally Woods v. Durkin, 183 Ill. App. 3d 870, 539 N.E.2d 920.