Partial Withdrawal Taints a Proceeding in NJ, But Only If It's an Attorney

When it comes to conflicts of interest, is a local government
attorney primarily an attorney or a local government official? I
would answer this question, "Definitely an official." But recently
the New Jersey Supreme Court answered this question, "Definitely an
attorney." In fact, had the attorney been an administrator, the
opinion suggests, the court's decision would have been different.<br>
<br>
The opinion focuses on the standard for determining whether the
decision of a local government body should be voided, as tainted by a
conflict of interest. The two standards considered are actual prejudice and
appearance of impropriety. Different levels of court applied different standards in the case of <i>Kane Properties, LLC</i> v. <i>City of Hoboken</i>. <a href="http://www.judiciary.state.nj.us/opinions/supreme/A969711KaneProperties…; target="”_blank”">The
NJ Supreme Court's decision on the standard</a> was made on June 26. Thanks to Patricia Salkin for
bringing this decision to my attention by <a href="http://lawoftheland.wordpress.com/2013/07/02/nj-supreme-court-holds-tha…; target="”_blank”">blogging

about it on her Law of the Land blog</a>.<br>
<br>

<b>The Facts</b><br>
Here are the basic facts. A developer sought a variance to build a
residential building in an industrial zone in Hoboken, best known as
Frank Sinatra's hometown. A condominium association opposed the
variance. The zoning board unanimously granted the variance, and the
association appealed the decision to the city council. At this time,
the association's lawyer was made corporation counsel. The
association took on new counsel and, when the corp. counsel informed
the parties of the appeal procedures (and, ironically, asked the
parties to identify any conflicts of interest they knew of involving
council members), the developer objected to the corp. counsel's
participation. Corp. counsel withdrew from participation in the
appeal.<br>
<br>
Then corp. counsel sent a generic memo about procedures to the
council, and the developer again objected. The council reversed the
zoning board's decision. The corp.
counsel participated in the meeting on a resolution to
memorialize the council's reversal of the decision, and he signed the council's resolution.<br>
<br>
If an actual prejudice standard were applied (as it was by the trial
court) and this is all the corp. counsel's participation in the
matter, the council's decision would likely stand. Corp. counsel
wrote only about procedures that apply to any case, and only
participated in a meeting after the decision had already been made.<br>
<br>
<b>Withdrawal and Appearance of Impropriety</b><br>
But knowing what participation means and how important procedures
are to any decision, an attorney who still participated, even if
only in procedural ways, very likely participated behind the scenes
as well. It is reasonable for people to
assume that there was other participation than what was done in public. This is effectively what
an appearance of impropriety standard assumes (although the court does not discuss this):  if an official
with a conflict of interest, especially after objections
have been made, participates at all, then it appears that the
official was attempting to influence the decision. Therefore, the
decision is tainted and should be voided.<br>
<br>
One could even argue that, if it was the council that hired the
corp. counsel, it should not have heard the case at all, but rather
have found a more neutral forum to hear the appeal.<br>
<br>
The appellate court, which overrode the district court's denial of
the developer's complaint, described the appearance of impropriety
standard like this:  whether, “in the mind of a reasonable
citizen fairly acquainted with the facts, this scenario would create
an appearance of improper influence.” <br>
<br>
The appellate court concluded that the corp. counsel "should have
been absolutely and completely screened from this application.” In
effect, it determined that any participation at all created an
appearance of impropriety sufficient to void the decision. This
might be a bit strong, but it does send a clear message that
withdrawal from participation means complete withdrawal.<br>
<br>
<b>Attorney or Official?</b><br>
The problem with both the appellate and Supreme Court opinions is that they show no interest in the corp. counsel
as a government official, but only as an attorney or judge. Similarly, they show no interest in ethics laws, but only in the Rules of Professional Conduct. The Supreme
Court determined that, had the matter not been a quasi-judicial one,
the standard would have been actual prejudice, because that is the
standard New Jersey courts have applied with respect to conflicts of
interest under the Rules of Professional Conduct. But since it was a
quasi-judicial matter, the same standard applies as that which
applies to a judge.<br>
<br>
Any official could have provided advice to the council about any aspect of the case (land use, traffic, water issues, etc.) and influenced the council, and would not be seen by the court in the same light. And yet the court found that application of the
appearance standard in the case of a government attorney's
involvement in a quasi-judicial proceeding "is essential to <br>
maintaining public confidence in the integrity of the proceeding." Why more essential than with respect to other officials' involvement?<br>
<br>
What the court says about "recusal" is valuable: "Recusal, if it is
to have any meaning at all, must neither be porous nor partial."
The corp. counsel's incomplete withdrawal "irretrievably tainted" the council's
decision. This is the right message to send. But by limiting the opinion to attorneys and rules that apply only to them, the court sends the message that others may not have to withdraw so completely.<br>
<br>
The court's opinion is a good one, but there is no reason to limit it to attorneys or to the Rules of Professional Conduct. It's sad that judges have such tunnel vision when it comes to government officials who happen to be attorneys. This tunnel vision prevents them from seeing this case as a government official's conflict or revolving door situation which, if not responsibly handled, can taint a decision even if the official's influence has nothing to do with legal issues.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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