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HomeMy WebLinkAbout82-561 MorrisBurton D. Morris, Esq. Baskin & Sears, P.C. P.O. Box 1150 Harrisburg, PA 17108 Dear Mr. Morris: Mailing Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 July 7, 1962 ADVICE OF COUNSEL 82 -561 RE: Section 3(h)(1); Definition of "Interest; City Solicitor This responds to your letter of June 6, 1982 in which you requested advice from the State Ethics Commission. Issue: Does the Ethics Act preclude a city solicitor from participating in a process whereby an urban developer is to be selected as a "preferred developer" for purposes of urban redevelopment projects where that solicitor's spouse is or may be engaged as the legal representative for the developer and may that solicitor's spouse represent clients who wish to do business with the city including individuals or entities which provide supplies and services to the city? Facts: The centeral business district of a third -class city has been approved for urban renewal and redevelopment. In conjunction with that redevelopment a "preferred developer" is to be selected. A legal practitioner (hereinafter attorney) whose spouse currently holds the post of city solicitor within the third -class city in question, may acquire as a client and represent a particular developer who might seek to receive the "preferred developer" designation from the city. This attorney may also be engaged in future representation of clients who wish to do business with the city in the context of providing supplies and services to the city. Purchase contracts or bidding specifications for these individuals or entities whom the attorney might represent would require the approval of the solicitor's office as to legality and form. The solicitor's office may be involved during the negotiation process. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Burton D. Morris, Esq. July 7, 1982 Page 2 It should be noted that in relation to the nrrre.s '. desginating a " prefered developer" any request for legal advice by the mayor or the Development Departmem of the city are contemplated as being directed to one of the assistant city solicitors as opposed to the attorney's spouse. The assistant city solicitors have likewise been instructed to issue appropriate advice as requested without the solicitor's- spouse's involvement. If the attorney's firm is given the "preferred developer" designation, it is contemplated that the solicitor's- spouse will continue to refrain from advising the mayor and other city officials in regard to the designation, the negotiation and construction periods of the redevelopment project. Legal advice in regard to the project will continue to be provided by several assistant city solicitors. Discussion: It has generally been held that part -time solicitors serving in municipalities are not to be considered "public employees" or "public officials" pursuant to those definitions contained in the Ethics Act. See Ballou v. State Ethics Commission, Pa. , 436 A.2d 186 (1981). However, this decision does not address the question of the applicability of the Ethics Act to a. full -time position of city solicitor which we assume to exist in this case. Likewise, there is some question as to the applicability and the impact of Section 3(h)(1) of the Ethics Act. This provision of the Ethics Act provides as follows: Any individual who holds an appointive office in any political subdivision shall not have any interest in any contract or construction in which that political subdivision shall enter or have any interest. 65 P.S. 403(h)(1) In relation to Section 3(h)(1) the definition of the term "interest" indicates that this term shall not include the "ownership of shares of stock in any corporation in an amount of 5% or less of the total issue of said corpora- tion." Thus, in order to answer.your question we need to assess the impact of Section 3(h)(1) upon the solicitor - spouse as a person who may hold "appointive office" within the city and the question of whether or not the marital relationship between the solicitor- spouse and the potential that the attorney will represent a client before the city falls within the purview of the definition of "interest" of Section 3(h)(1j of the Ethics Act. Burton D. Morris, Esq. July 7, 1982 Page 3 Assuming, without deciding, that a solicitor does hold "appointive office" within the city or is otherwise within the purview of the Ethics Act it is my opinion that the "interest" which the solicitor - spouse would enjoy if the spouse of the solicitor were to be engaged as an attorney representing persons before the city (either the prospective "preferred developer" or individuals and entities seeking to provide supplies or services to the city) is not of such a nature that the "appointive officer" would be precluded from having this "interest." Specifically, although the solicitor - spouse may realize an indirect benefit as a result of the spouse- attorney's acquisition or representation of a particular client, the definition of "interest" in Section 3(h)(1) provides a non - exclusive but descriptive test to be applied in this kind of circumstance. The indirect nature of the "interest" apparent here is not such as would prohibit this relationship. See Nanovic, 80 -041. It is interesting to note that it has generally been held, from a stand -point of professional -legal ethics, that there is nothing inherently improper or unethical about marital partners, who are both lawyers, occupying an adversary role in legal matters. See Formal Opinion 340 of the A.B.A. Committee on Ethics and Professional Responsibility (September 23, 1975). In that ruling it was emphasized that two potential pitfalls which lawyers who find themselves in this position would be well advised to take are: First, that the clients on both sides be fully appraised of the situation and be allowed to make their own decision as to the advisa- bility of pursuing the matter with the counsel of their initial choice; and second, that the lawyer involved take extraordinary care to avoid any inadvertant or accidental breach of the client's confidence or disclosure of informa- tion relative to any ongoing legal matter. It is also significant that, although an entire law firm is disqualified from handling a particular legal matter under the A.B.A. Rules of Professional Responsibility, D.R. 5- 105(d) when cne of its partners or associates is disqualified under D.R. 5- 101(a), there is nothing improper in a client, of his own will, chosing to have another attorney in the same firm represent his interest if he feels that the marital relationship in question poses too great a threat to the propriety, real or apparent, of the initial choice of counsel. Burton D. Morris, Esq. July 7, 1982 Page 4 Thus, in the present instance the rules of professional responsibility would appear to resolve any question of impropriety if the city solicitor's office referred all matters involving the solicitor's spouse to another counsel in the same office and relieved the solicitor- spouse of all responsibility for working on these affairs personally. This appears to be the course that is currently being undertaken or contemplated in the situation which you pose. In this determination we recognize that it has been generally held that the right to choose one's own counsel is a "crucial right" which is not to be curtailed without care and caution. In a recent case, Blumenfeld v. Borenstein, 276 S.E.2d 607 (1981) it was held that only a showing of special circumstances which prevent an adequate representa- tion of the client would justify disqualification cf an attorney on the grounds that his spouse belongs to the firm representing the opposing party. The Court said that: A pei se rule of disqualification on the sole ground that an attorney's spouse is a member of a firm repre- senting an opposing party would not only be unfair to the lawyer so disqualified and to their.clients, . but would also have the signifigant detrimental effect upon the legal profession ... a per se rule would effectively create a category of legal "Typhoid- Marys ", chilling both professional opportunities and personal choices. Blumenfeld, supra, at page 609. With these concerns in mind and with the review of the Ethics Act developed above, particularly in light of the fact that the solicitor's - spouse will not participate in rendering of legal advice in either of the two activities -- the selection or negotiations with the "preferred developer" or with the clients who might be providing supplies or services to the city -- which you outlined in your letter, there does not appear to be any prohibition against this representation under Section 3(h)(1) of the Ethics Act. It is, however, advisable for this "wall" as you have proposed to be structured and observed in order to avoid any appearance of a conflict with the public trust as set forth in Section 1 of the Ethics Act. Burton D. Morris, Esq. July 7, 1982 Page 5 Conclusion: There is no per se prohibition in the Ethics Act in the circumstances proposed or contemplated as outlined herein. Thus, the attorney may represent the prospective "preferred developer" in matters pending before the city as well as individuals and entities seeking to provide services and supplies to the city so long as the cautions set forth above are observed. Specifically, the solicitor - spouse should not be involved in the rendering of legal advice in regard to any of the projects or contracts or approvals necessary for these "preferred developers" o"r other suppliers or contractors with the city. The solution of referring such request for advice or approvals to another counsel within the office of the city solicitor will avoid even any appearance of a conflict between the solicitor's interest and the "public trust." Pursuant to Section 7(9)(ii), this Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may request that the full Commission review this Advice. A personal appearance before the Commission may be scheduled and a formal Opinion from the Commission will be issued. You should make such a request or indicate your disapproval of this Advice within the next 30 days. SSC /rdp Sincerely, f . 4't Ll,G2 a6dra S. C istianson General Co.nsel