Case Name: In the Matter of the Proceedings Pursuant to Section 22 of Article VI of the Constitution of the State of New York in Relation to The Honorable Jacob D. Fuchsberg, Associate Judge of the Court of Appeals
Court: New York Judiciary Court
Jurisdiction: New York
Decision Date: 1977-10-12
Citations: 43 N.Y.2d j
Docket Number: 
Parties: In the Matter of the Proceedings Pursuant to Section 22 of Article VI of the Constitution of the State of New York in Relation to The Honorable Jacob D. Fuchsberg, Associate Judge of the Court of Appeals.
Judges: 
Reporter: New York Reports
Volume: 43
Pages: j–eee

Head Matter:
STATE OF NEW YORK COURT ON THE JUDICIARY
In the Matter of the Proceedings Pursuant to Section 22 of Article VI of the Constitution of the State of New York in Relation to The Honorable Jacob D. Fuchsberg, Associate Judge of the Court of Appeals.
Appearances: Harold R. Tyler, Jr., Rudolph W. Giuliani and
Richard Parsons counsel to the court.
Wachtell, Lipton, Rosen & Katz (Herbert M. Wachtell, George A. Katz and Allan A. Martin of counsel), and Charles S. Desmond for respondent.

Opinion:
Per Curiam.
This court was convened by order of the Chief Judge of the Court of Appeals of the State of New York, dated September 6, 1977, pursuant to article VI of the New York State Constitution, to investigate, hear, and determine matters concerning respondent in respect of the sales, purchases and exchange of New York City notes and Municipal Assistance Corporation ("MAC") bonds owned by him.
The court appointed Harold R. Tyler, Jr., as its counsel, assisted by Rudolph W. Giuliani, Richard Parsons and Theodore Van Itallie. Respondent has been represented in these proceedings by Wachtell, Lipton, Rosen & Katz and.Charles S. Desmond.
On October 12, 1977 the court denied a motion by counsel for respondent for an order rescinding the appointment of Mr. Tyler as counsel to conduct the proceedings. The order and decision of the court are attached as Appendix I.
At the request of this court and its counsel, the Chief Judge filed a supplemental order, dated November 16, 1977, expanding the scope of the inquiry to include, inter alia, investigation of allegations that respondent obtained the advice and assistance of experts on the law and others in proceedings before the Court of Appeals in a manner not consistent with the relevant Rules and Canons governing judicial conduct.
Counsel to the court has in close consultation with the court conducted a thorough investigation of all the allegations against respondent, has examined respondent and his law clerk, Perry S. Reich, under oath, has interviewed all the material witnesses, and has furnished to the court not only the results of his investigation, but also the benefit of his advice and judgment. Respondent has furnished information and records concerning his financial transactions. The court has reviewed written submissions from counsel for respondent. It has also allowed respondent and his attorneys to appear before it to present orally all facts and arguments they deemed relevant.
We observe that, unlike other Courts on the Judiciary which have been convened, our duty, in accordance with the order of the Chief Judge, is first to investigate and to ascertain the underlying facts. Not until there appears probable cause for removal or other discipline may the court proceed with the preferral of charges. We are acutely aware of our dual function and have pursued our obligation with due regard for the responsibilities inherent in both processes.
No essential issues of fact have developed from the inquiry. Respondent and his counsel have been given every opportunity to present their arguments with respect to those facts in the same manner as would have eventuated if a lengthy hearing had been had. Respondent and his counsel have waived the necessity of the service of charges and public hearing, which might have involved notice to the Governor, to the Legislature, and respondent's suspension from office (NY Const, art VI, § 22, subds e, i). The letter of waiver reads as follows: -
"During the course of the proceedings of January 16, 1978, there was discussion as to whether the Court would be empowered to issue a report reviewing the investigation that has been made and articulating the reasons for its determination.
"It was my thought at the time that I had indicated such a waiver [of confidentiality] on behalf of Judge Fuchsberg. questions had been raised as to whether my wording of such intended waiver of confidentiality had been conditional or otherwise insufficient to permit the Court the latitude of rendering a report of this nature, should the Court be so inclined.
"To obviate any misunderstanding which may have resulted from my choice of language on the January 16 record, I wish hereby formally to set forth for the Court that the waiver to permit the Court to render such a report is intended to be entirely unconditional. This waiver is being expressed with Judge Fuchsberg's full approval." Under the circumstances, the court has resolved to adopt the procedure of issuing this report of the facts and the conclusions it draws from those facts.
The issue now before this court is whether the facts justify the removal or other discipline of respondent for cause (22 NYCRR 580.3 [b]). Respondent's conduct must be measured against the relevant Rules and Canons "in the general moral and ethical standards expected of judicial officers by the community." (Sarisohn v Appellate Div., Second Dept, Supreme Ct. of State of N. Y., 265 F Supp 455, 458; Bartlett v Flynn, 50 AD2d 401, 404, app dsmd 39 NY2d 942.)
I
We consider first respondent's ownership, purchase and sale of New York City notes and MAC bonds and his participation in cases arguably affecting the value of those holdings.
Prior to taking office as an Associate Judge of the Court of Appeals, respondent had purchased large amounts of New York City short-term notes. On January 1, 1975, the date he commenced his Court of Appeals term, respondent held $3.4 million in par value of such notes. After taking office, respondent redeemed notes as they matured and continued to make substantial investments in securities of the City and State of New York. For the most part, these investments were in short-term revenue anticipation and bond anticipation notes, maturing within one year of date of issue.
On July 2, 1975, respondent held $2,900,000 par value in New York City short-term notes. Between July 2, 1975 and December 28, 1976, respondent did not increase his holdings of New York City notes, but he continued to redeem notes as they matured. Such redemptions continued until November 14, 1975, on which date respondent held $1,500,000 par value of short-term city notes.
November 14, 1975 was the effective date of the Emergency Moratorium Act for the City of New York ("Moratorium Act"), which imposed a three-year "freeze" on redemption of, or actions to enforce short-term city obligations issued between November 14, 1974 and November 13, 1975. The entire $1,500,000 par value of notes respondent held on the effective date of the Moratorium Act had been issued during the previous year and were thus "frozen" by the act.
As a holder of "frozen" New York City notes, respondent was presented with two options. One was to exchange before December 29, 1975 his frozen notes (which under the act reduced the interest on the notes after maturity to 6%) for an equivalent par value of 8% MAC bonds due in 1986. The other was to hold the frozen notes. Respondent decided to exercise both options. In December, 1975, he exchanged $880,000 par value of frozen New York City notes for an equivalent par value of MAC bonds; he retained the remaining $620,000 of frozen notes.
On December 19, 1975, respondent undertook one further transaction with respect to his note holdings, namely, he sold $600,000 of 8.75% city notes due March 12, 1976 at 59.875, and purchased on the same day $600,000 of 7.55% city notes due February 13, 1976 at 59.625. Both the notes sold and those purchased were subject to the moratorium. The object of such sale and purchase, as stated by respondent, was to "record the depreciation" for tax purposes.
From December, 1975, through mid-December, 1976, respondent made no other purchases, sales or exchanges of city notes. On November 19, 1976, the Court of Appeals rendered its decision in Flushing Nat. Bank v Municipal Assistance Corp. for City of N. Y. (40 NY2d 731) holding the Moratorium Act unconstitutional. It was not until February 8, 1977 that the remittitur, specifying the time schedule for the repayment of the formerly frozen notes, was handed down by the court (40 NY2d 1094).
During the period between the "main decision" in Flushing Nat. Bank v MAC (supra) on November 19, 1976 and the decision on the remittitur on February 8, 1977, respondent made two additional purchases of New York City notes. On December 28, 1976 he purchased $835,000 par value of New York City short-term bond and revenue anticipation notes. On February 4, 1977, he purchased an additional $200,000 par value of New York City short-term bond anticipation notes. The purchases on both dates were of city notes that were subject to the Moratorium Act, and were effected at prices below par value. The December 28 purchases of $835,000 par value of notes was effected at a principal cost of $771,241 or 92% of par value. The February 4 purchase of $200,000 par value of notes was effected at a principal cost of $189,900 or 95% of par value.
During the period in which respondent's city note holdings were smallest—$620,000 between December, 1975 and December, 1976—he made sizable investments in New York State short-term notes, as well as his already mentioned exchange for $880,000 in MAC bonds. At the middle of this period, in June, 1976, he owned approximately $3 million in State notes. Between the date respondent commenced his Court of Appeals term and May 31, 1977, his holdings of New York City and/or New York State securities averaged, in aggregate amount, approximately $3,000,000.
New York City's fiscal crisis and the legislation intended to remedy it provoked a significant amount of litigation. Among such cases decided by the Court of Appeals were: Wein v City of New York (36 NY2d 610, May 27, 1975, "Wein I"), upholding the legislation which created the Stabilization Reserve Corporation; Sgaglione v Levitt (37 NY2d 507, Sept. 29, 1975), holding unconstitutional a statutory provision mandating investment of certain State retirement system funds in MAC bonds; Wein v State of New York (39 NY2d 136, March 23, 1976, "Wein II"), upholding the constitutionality of State appropriations to New York City and MAC; Flushing Nat. Bank v MAC (40 NY2d 731, supra, Nov. 19, 1976), holding unconstitutional the "moratorium" on repayment of New York City short-term notes; Wein v Carey (41 NY2d 498, March 31, 1977), rejecting a constitutional attack on a portion of State short-term notes issued in the spring of 1976; and Quirk v Municipal Assistance Corp. for City of N. Y. (41 NY2d 644, April 26, 1977), upholding the validity of the diversion to MAC of certain sales and use tax revenues.
Respondent's transactions in New York City, New York State and MAC securities during the pendency of the "fiscal crisis cases" in the Court of Appeals and inferior courts raise difficult questions of propriety. There are certain specific transactions, and certain cases, discussed later, which raise particular problems. But in focusing upon them we do not ignore the broader issue of the propriety of respondent's purchase of New York City and State securities during a period in which cases involving difficult questions of law and requiring the drawing of subtle distinctions regarding the basic financial status of the city and State were frequently before the Court of Appeals.
A number of factors must be considered in arriving at the resolution of this broad issue of propriety. Among them is the fact that respondent had significant investments in New York City securities well before he became a member of the Court of Appeals. Many of his purchases after his term commenced were in fact "roll-overs", i.e., reinvestment of the proceeds of redeemed notes into new notes. Also relevant is the fact that the Code of Judicial Conduct sets a higher "disqualification threshold" for government, as opposed to other, securities. It must also be noted that in two of the "fiscal crisis cases" (Flushing Nat. Bank v MAC, 40 NY2d 731, supra; Quirk v MAC, 41 NY2d 644, supra) respondent disqualified himself and did not participate. In a third, Sgaglione v Levitt (supra), he voted against his apparent financial interest. In Wein v State of New York (39 NY2d 136, supra, "Wein II") respondent claims that an announcement was made from the bench that one of the Judges held city and MAC securities and that if anyone objected he would withdraw; and in Wein v Carey (41 NY2d 498, supra), respondent held none of the State notes at issue at the time of argument and decision. Finally, in Boston Stock Exch. v State Tax Comm. (42 NY2d 1008, supra), the possible effect on the value of respondent's holdings was indirect and insubstantial.
Notwithstanding these facts, respondent's transactions in city and State securities during the pendency of the "fiscal crisis cases" were ill-advised. Respondent's holdings were, largely, short-term notes. They matured in a maximum of 12 months, and, since many were purchased after date of issue, they frequently matured in a shorter period. Thus, maintenance of respondent's holdings required frequent "roll-overs." The fact that it was necessary to "roll-over" these funds to keep them in short-term notes created frequent opportunities for re-examination of his investment policy. Respondent should have taken advantage of these opportunities to divert his assets elsewhere. Although we find that his failure to do so did not violate the letter of Canons 5C(1) and 5C(3), we conclude that his conduct violated the spirit of those and other Canons, most particularly Canon 2A.
Respondent should have recognized that under the circumstances of the fiscal crisis and his position as a member of the Court of Appeals, city and State securities were inappropriate investments. It quickly became apparent that the fiscal crisis had provoked a stream of litigation and that some of these cases would reach the Court of Appeals. We construe the Canons not to have exacted the liquidation of all his holdings of New York State and city securities as soon as the course of events made it plain that cases affecting the value of those holdings would come before the Court of Appeals, but concern for avoiding the appearance of impropriety should have con strained respondent from investing new funds in New York City and State securities and should have motivated him to discontinue the practice of "rolling-over" New York governmental securities.
While we are troubled generally by the maintenance of respondent's city and State note holdings, there are several specific occurrences which raise particular problems and must be considered in greater detail.
As we have noted, respondent owned short-term city notes that were effectively frozen by the "Moratorium Act". On November 14, 1975, the effective date of that act, he held $1.5 million in city notes. In December, 1975, respondent, pursuant to an offer made to all holders of frozen notes, exchanged $880,000 of such notes for an equivalent par value of long-term MAC bonds. This exchange created a direct conflict in cases challenging MAC and thus compounded respondent's existing conflicts in participating in "fiscal crisis" litigation. The fact that Wein v State of New York (39 NY2d 136, supra, "Wein II"), a case concerned with a major appropriation to MAC, was argued before the court only one month after this exchange, underscores the insensitivity of the respondent's action. That the exchange may have been a prudent investment decision does not relieve the respondent of his responsibility under the Canons to handle his financial affairs in such a way as to minimize possible areas of conflict. We conclude that this exchange violated Canons 5C(1) and 5C(3) of the Code of Judicial Conduct.
Respondent's sale and repurchase of $600,000 in frozen notes in December, 1975, described above, also invites scrutiny. This sale and repurchase have been misperceived in articles appearing in the press as an outright purchase of frozen notes and have elicited critical comment. Unlike the $880,000 MAC exchange, this transaction did not add a new type of security to respondent's holdings and thus did not expand the categories of cases presenting direct conflicts. Nonetheless, we find that, given the context of the fiscal crisis and respondent's position as a member of New York State's highest tribunal, the propriety of any transaction in these frozen notes may be legitimately questioned. The fact that a particular action may be prudent from a business standpoint must never distract a Judge from his obligation to promote public confidence in judicial institutions. (See Canon 2A.)
Respondent's purchases of city notes during the period after the Court of Appeals held the Moratorium Act unconstitutional in Flushing Nat. Bank v MAC (40 NY2d 731, supra), but before settlement of the remittitur in the same case, raise some serious questions. The facts show that he purchased $835,000 par value on December 28, 1976, and $200,000 par value on February 4, 1977, of precisely the notes at issue in the Flushing case and the then pending remittitur.
The Court of Appeals decided Flushing Nat. Bank v MAC on November 19, 1976. That decision, holding the Moratorium Act unconstitutional, was a clear statement of the noteholders' rights to repayment of principal. However, the decision left open the period of time to be allowed for the city to make such repayment. In the words of the court, "[plaintiffs] are not entitled immediately to extraordinary or any particular judicial measures unnecessarily disruptive of the city's delicate financial and economic balance." (40 NY2d, at p 741). Accordingly, the court directed that the time schedule for repayment be determined in a remittitur, which was issued by the court on February 8, 1977 (40 NY2d 1094).
As it turned out, the remittitur did not have a measurable impact on the market price of the notes formerly subject to the Moratorium Act. It is clear, however, that the remittitur, by imposing an accelerated repayment schedule, or alternatively, replacing the legislative moratorium with a judicial one, could have had an effect on the price.
Respondent had disqualified himself from participation in the Flushing main decision and remittitur; and we find that he did not make these purchases on the basis of "inside" information as to the action the Court of Appeals would take. Nonetheless, these purchases could reasonably create the impression, despite the absence of a factual basis for such impression, that respondent was purchasing securities on the basis of some information or advantage not generally available to the public. If the six Judges of the Court of Appeals who participated in the Flushing decision could not have made these purchases, then respondent should likewise not have made these purchases. Conduct which, "[n]o matter how innocent unnecessarily and unwisely put a burden of explanation and justification not only on [a Judge] but on the judiciary of which he is an officer", is justly subject to criticism (Matter of Suglia, 36 AD2d 326, 328). "[T]he appearance of impropriety and the perception by the public of special privilege and advantage must be avoided." (Matter of Feinberg, 39 NY2d [a], [v]). We thus conclude that respondent's purchases of New York City notes while the remittitur was still pending before the court on which he sits created the appearance of impropriety in violation of Canon 2A.
We are also obliged to consider respondent's failure to disqualify himself in Wein v City of New York ("Wein I") and Wein v State of New York ("Wein II"). We are cognizant that the issue of disqualification is "one of the most difficult and delicate problems in judicial administration." (American Cyan-amid Co. v Federal Trade Comm., 363 F2d 757, 763, cert den 394 US 920.) However, we detect in Canon 3C a new stress on the objective factor of the appearance of impartiality. (See Note, Disqualification of Judge and Justices in the Federal Courts, 86 Harv L Rev 736; House Report No. 93-1453 on new US Code, tit 28, § 455, in 1974 US Code Congressional and Administrative News, p 6351.)
Wein I (which was argued in the Court of Appeals on May 2, 1975) concerned the constitutional validity of a statutory scheme authorizing the Stabilization Reserve Corporation ("SRC") to issue up to $520 million in bonds and notes and pay the proceeds into the city's general fund. Respondent was given notice of the arguable impact of the case on the validity of his city note holdings by (1) the allegations of the complaint that the Comptroller of the City of New York had announced on January 27, 1975 that the city proposed to sell $700 million of bonds and notes ($290 million in city revenue anticipation notes, $141 million of city bonds, and $260 million of SRC notes by the SRC), and that the amount of borrowing power under article VIII (§ 4) of the State Constitution was insufficient to permit such a sale; (2) plaintiffs argument that these short-term notes, because they were rolled over year after year, were permanent indebtedness and not a temporary debt which could be excluded from indebtedness within the meaning of the Constitution; and (3) the claim in the amicus brief of the Financial Community Liaison Group that "the re-establishment of access to the public market [for city securities] is essential to the survival of the City."
At the time of his participation in this case, respondent owned approximately $3.8 million par value in New York City notes. These are "government securities" and thus appear to bring into play the higher "disqualification threshold" set out in Canon 3C(3)(c)(iv), i.e., require disqualification only if the outcome of the proceeding could substantially affect the value of the government securities. That provision, however, should not divert attention from the standard set forth in Canon 3C(1), which mandates disqualification whenever "impartiality might reasonably be questioned". As a holder of a substantial amount of city notes, respondent should have recognized that his impartiality in the proceeding was open to legitimate question.
A procedure is provided under the Canons to eliminate the appearance of partiality. Under Canon 3D (22NYCRR 33.3 [d]) a Judge may disclose the basis of his conflict on the record and if the parties and lawyers all agree in writing that such conflict is insubstantial, the Judge may participate in the proceeding. Respondent's failure either to disqualify himself from this case or utilize this procedure constituted a violation of Canon 3C(1). We reach this conclusion without questioning respondent's belief in his own impartiality, or, indeed, the fact of his impartiality in contributing to the decision of this case. Our concern, rather, is with "[t]he guiding consideration that the administration of justice should reasonably appear to be disinterested as well as be so in fact." (Public Utilities Comm, v Poliak, 343 US 451, 467; see, also, Matter of Dodge & Stevenson Mfg. Co. 77 NY 101, 110; cf. Commonwealth Corp. v Casualty Co., 393 US 145, 150.)
Wein II involved a constitutional attack on legislation providing for appropriations of $250 million and $500 million to the City of New York and MAC, respectively, from the State Local Assistance Fund. The funds at issue had already been advanced to the city and MAC in the fall of 1975, at the height of the city's fiscal crisis. Thus, while a decision holding the appropriations unconstitutional could not have altered the fact that the funds had been disbursed and utilized, reports in the press and arguments made to the Court of Appeals suggest that such a decision would have affected both the financial stability of the city and the marketability of its obligations (see New York Times, March 24, 1976; amicus brief of certain New York financial institutions). At the time of the argument and decision in Wein II, respondent held $880,000 par value in MAC bonds, $620,000 par value in city notes and approximately $800,000 par value of State notes.
The case presented a significant conflict of interest given respondent's city, State and MAC holdings. Indeed, respondent testified that he recognized such conflict and planned to disqualify himself from the case. As it turned out, he elected to participate. It is claimed that his participation was preceded by an announcement in open court by the Chief Judge that an unnamed Court of Appeals Judge owned some city and MAC securities and that if counsel objected the Judge would disqualify himself. However, the Judge involved was not named and the amounts of his holdings were not specified. Even assuming that respondent, through the Chief Judge, made some effort to inform the litigants in Wein II of his conflict of interest, his failure to disqualify himself was a violation of Canon 3C(1). We note that if he had identified himself and stated the amounts of his holdings, that action would have assured that the parties' waiver of disqualification was both knowing and intelligent.
II
During the course of the inquiry into respondent's financial dealings and his participation in certain cases raising arguable conflicts, allegations were received that respondent had consulted with law professors in respect of proceedings before the Court of Appeals.
The facts are not in dispute. Respondent consulted with law professors with regard to at least 12 different cases pending before the Court of Appeals. In certain of the instances the consultation amounted to a telephone conversation with a professor in which new developments in the relevant area of law were discussed. In other instances respondent sent the briefs in the case to the professor and asked him to prepare and submit a memorandum containing the latest authorities. In three instances, respondent sought and obtained from law professors draft opinions. Substantial portions of the language of the opinions eventually published by respondent in these cases were taken from the draft opinions which had been submitted by the law professors. Finally, in at least one, and possibly two, cases, respondent forwarded an unpublished draft opinion of another Judge on the Court of Appeals to a law professor with whom he was consulting without notifying the Judge in question.
Canon 3A(4) provides a specific procedure for obtaining the advice of an outside expert. It prohibits a Judge from initiating or considering any ex parte communications concerning a pending matter; however, it permits him to obtain the advice of a "disinterested expert on the law" if he notifies the parties of the identity of the expert, the substance of his advice, and affords them reasonable opportunity to respond.
Concededly, in all of the cases and instances mentioned, respondent did not notify members of the court, the parties, or their counsel, that he was seeking outside consultation. There was no opportunity, therefore, for the parties or their attorneys to comment upon the expert rendering the advice or the substance of the advice rendered as is required by the Canon and the Rule. Thus, it is clear that respondent's consultations constituted violations of Canon 3A(4) and 22 NYCRR 33.3 (a) (4). (See Informal Opinion 1346, Nov. 26, 1975, ABA Committee on Ethics and Professional Responsibility.)
There is no evidence, however, that such violations were willful. Respondent has testified he was unaware of the Canon's existence, as have the law professors with whom he consulted. We note, in this connection, that the Canon was adopted relatively recently. It was promulgated by the American Bar Association in 1972, adopted by the New York State Bar Association in 1973, and adopted by the Administrative Board of the Judicial Conference in 1974. Canon 3A(4) has no clear antecedent in the prior Canons of Judicial Ethics originally promulgated by the ABA in 1924. Moreover, we are also aware that prior to the adoption of Canon 3A(4), some Judges in other jurisdictions apparently engaged in the practice of consulting law professors in connection with pending cases without notifying the parties. (See, e.g., the discussion of Judge Clark's and Frank's consultations with Professors Moore and Noss at Yale University in Schick, Judicial Relations on the Second Circuit, 1941-1951, 44 NYU L Rev 939, 941-947.)
We do not condemn the judicial practice of consulting with law professors and other experts on the law. When properly safeguarded, it can assist in achieving thorough and well-researched opinions. (See Justice Traynor's plea for assistance from disinterested scholars appearing in amici curiae in Traynor, Badlands in an Appellate Judge's Realm of Reason, 7 Utah L Rev 157, 170.) The interests of all parties are protected if, in each case where an expert is consulted, the parties are informed of his identity, the substance of his advice and allowed an opportunity to respond. Failure to observe such safeguards creates the possibility of unfairness. As stated by Justice Denecke of the Oregon Supreme Court: "Ex parte conversations or correspondence with experts, law teachers or otherwise, is unfair and can be misleading. The facts given may be incomplete or inaccurate, the problem can be incorrectly stated or other matters can be incorrectly stated." (Denecke, The Judiciary Needs Your Help, Teachers, 22 Journal of Legal Education 197, 203.) Moreover it cannot be assumed that legal and other experts will give only objective advice. They may have developed philosophical loyalties which aifect the advice that they give; as practicing attorneys they may have cases involving the same problems on which they are rendering advice; as consultants they may owe allegiance to business or other- interests that could benefit from acceptance by courts of their viewpoints. Unless the parties are given the opportunity to respond to the expert and the substance of his advice, his prejudices and preconceptions may go unchallenged. In short, the practice of judicial consultation with experts without notice to the parties is fraught with dangers. Notice to the parties, as mandated by Canon 3A(4), largely eliminates these dangers while preserving the beneficial aspects of obtaining such outside help.
In view of the fact that respondent's violations of Canon 3A(4) were not willful, that he has indicated his intention to comply strictly with it in the future, and that the Canon constitutes a relatively recent limitation on a practice which has occurred in the past on other appellate courts, we are inclined not to castigate respondent for those consultations in and of themselves which, although violations of the Canon, amounted to little more than informal solicitations for current thinking in a particular area of the law. It is important, however, to emphasize that even this conduct was violative of the Canon and that the prescribed procedure of the Canon should be followed, if such solicitations of advice appear necessary.
However, respondent's actions went beyond merely asking for advice from the law professors in question. On three occasions substantial portions of the language of opinions published under respondent's name were taken from drafts submitted by the law professors. Also, admittedly on one and possibily on two occasions, he provided professors with unpublished draft opinions of other Court of Appeals Judges without notifying the Judges in question.
We find these actions by respondent most disturbing. We have no reason to doubt respondent's testimony that in each of these three cases he arrived at his result independently and that he employed the language submitted to him only because it correctly reflected his own views. Our concern is with the appearance that such a practice creates. The substantial incorporation of outside experts' language in a Judge's opinion suggests, without more, that the expert is influencing the decision-making process. To that extent such a practice impairs the public's confidence in the independence and integrity of the judiciary and thereby violates Canon 2A. The practice also violates Canon 2B (22 NYCRR 33.2 [c]) by conveying to the law professors in question and allowing them to convey to others the impression that they are in a special position to influence respondent.
We are mindful that law clerks often contribute substantially to the preparation of opinions. There are, however, important distinctions between a law clerk and an outside expert. The law clerk is a sworn court employee (22 NYCRR 25.23). He is a recognized figure of the judicial institution, familiar to the litigants and fully exposed to the submissions of both parties to the adversarial proceeding. We cannot accept respondent's explanation that he looked upon the law professors he consulted as "ad hoc" law clerks.
We are equally disturbed by respondent's breach of the court's confidentiality. No Canon specifically prohibits transmission to noncourt personnel of unpublished, draft opinions formulated by Judges and circulated as part of the collective decision-making process. However, the adverse impact of transmitting such draft opinions to those outside the court system is so obvious that condemnation of it need not be based on an express Canon or Rule. Confidentiality is crucial to the success of many types of deliberative processes, but it is of the utmost importance for the proper functioning of a collegial court. (See Nixon v Sirica, 487 F2d 700, 740-742.)
CONCLUSION
Although we conclude that respondent's purchases and exchanges of New York governmental securities, his participation in cases potentially affecting the value of these securities, and his consultations with outside experts in some respects violate the Rules and Canons as previously described, we believe that the preferral of charges seeking his removal from office is not warranted. We have carefully examined all of the relevant circumstances: and, aside from minor details, there can be no question or dispute about what occurred. However, conduct authorizing the removal of a judicial officer has been defined as that "justifying 'the finding that his future retention of office is inconsistent with the fair and proper administration of justice.' " (Matter of Kane v Rudich, 256 App Div 586, 587; Matter of Barlow, 141 App Div 640, 643.) "Removal of any public officer, especially one elected by the voters, is an extreme penalty." (Matter of Sobel, 8 NY2d [a], [j].)
In our view, the evidence does not support a determination that the respondent is unfit to continue in judicial office. The record establishes his inattentiveness to and, at times, a cavalier disregard for the necessity of avoiding the appearance of impropriety; yet the same record does not show deliberately fraudulent conduct, willful violations of Rules and Canons, or corrupt actions inspired by financial interest. We cannot say that conduct presenting the appearance of impropriety is never sufficient for removal. Nonetheless, in the circumstances of this case, the absence of any evidence of fraudulent or corrupt intent persuades us not to prefer charges seeking the respondent's removal. The absence of controverted operative facts which require sifting by a trial process also argues against preferral of charges.
We conclude, therefore, that these proceedings should be terminated, with the observation that the record discloses behavior that properly subjects respondent to censure and disapproval, and with the hope that the foregoing discussion of respondent's actions, in light of the applicable standards of judicial conduct, will assist in assuring that respondent and others similarly situated will be attentive to the Rules and Canons and act in a way that does not cast the slightest doubt on the independence, impartiality, and integrity of the judiciary.
. The basic documents governing the conduct of Judges are (1) the Code of Judicial Conduct ("Canons") adopted in 1973 by the New York State Bar Association and (2) the Rules Governing Judicial Conduct ("Rules") (22 NYCRR Part 33), promulgated by the Administrative Board of the Judicial Conference in 1974. These two documents are basically identical. The only difference of significance for this proceeding is the omission from Canon 5C(3) of the Code of Judicial Conduct, which provides: "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 frequent disqualifications."
. Another of the cases that arguably had an effect on the value of respondent's holdings but which does not fit into the line of "fiscal crisis cases" is Boston Stock Exch. v State Tax Comm. (42 NY2d 1008, Sept. 13, 1977). It involved the stock transfer tax which at the time was earmarked to secure MAC bonds.
. It has been argued by respondent's counsel that this distinction may be construed to encourage judges to invest in government securities. (Code of Judicial Conduct, Canon 3C[3][c][iv]; 22 NYCRR 33.3 [c] [3] [iv]). Although this argument goes too far and ignores some of the facts presented here, all other things being neutral, a Judge could reasonably conclude based on the different standards for disqualification that investment in government securities will create fewer instances necessitating disqualification. Here, of course, all things were not neutral, and investment in these securities was continued, maintained and in some respects expanded, despite the pendency in the Court of Appeals and lower courts of many cases arguably affecting the value of these securities.
. Canon 5C(1) provides: "A judge should refrain from financial and business dealings that tend to reflect adversely on his impartiality, interfere with the proper performance of his judicial duties". (22 NYCRR 33.5 [c] [1].) Canon 5C(3) appears in footnote "1". Canon 2A provides: "A judge should respect and comply with the law and should conduct himself at all times in a manner, that promotes public confidence in the integrity and impartiality of the judiciary." (22 NYCRR 33.2 [a].)
. Under Judiciary Law (§ 14), the parties may, in writing or in open court upon the record, waive a claim as to disqualification when the Judge owns securities of a corporate litigant.
. Respondent recalls sending only one draft opinion of another Judge to a law professor; however, one of the law professors interviewed recollected a second such incident.
. "A judge shall accord to every person who is legally interested in a proceeding, or his lawyer full right to be heard according to law, and, except as authorized by law, neither initiate nor consider ex parte or other communications concerning a pending or impending proceedings. A judge, however, may obtain the advice of a disinterested expert on the law applicable to a proceeding before him if he gives notice to the parties of the person consulted and the substance of the advice, and affords the parties reasonable opportunity to respond." (22 NYCRR 33.3 [a] [4])
. Thode's Reporter's Notes to Code of Judicial Conduct states: "Canon 3A(4) and Commentary are based in part on old Canon 17. The more difficult questions concerned such transactions as a telephone call by a judge to a law professor to obtain advice on a contested issue within the area of the professor's expertise, or consultation by the judge with another judge not on the same panel or the same court. These are not infrequent or hypothetical situations—the Committee was informed of many such communications. See the discussion of the controversy between Judges Frank and Clark over these very issues in the recent book by Marvin Schick, Learned Hand's Court (The Johns Hopkins Press, 1970), and Schick's article, Judicial Relations on the Second Circuit, 1941-1951, 44 N.Y.U.L. Rev. 938, 941-947 (1969). The Committee concluded that unless the ex parte communication is authorized by law—statute, common law, and rule being the principal methods of authorization—the communication should be prohibited. Communications between judges and between the judge and court personnel whose function is to aid the judge in carrying out his adjudicative duties were recognized by the Committee as falling within the 'authorized by law' provision. "Strong arguments were made to the Committee that a judge should be allowed to obtain the advice of disinterested experts on issues of law in a proceeding before him. The Committee recognized the potential for better decisions implicit in such consultations, but also perceived the possible inroads on the adversary system. One obvious way for a judge to obtain the aid of a legal expert is the amicus curiae brief, and in the Commentary the Committee emphasizes the value of that technique. "The Committee recognized that the amicus curiae brief is too formal, time-consuming, and cumbersome a procedure to be useful in every situation. Therefore, it authorized a judge to obtain advice on a legal issue if the judge gives notice to the parties of the name of the person consulted and the substance of the advice received, and then affords the parties an opportunity to respond. There is no requirement that the advice be in writing; it could be received in a telephone conversation. This procedure is intended to allow a judge to obtain expert help not otherwise available in the proceeding, while preserving the adversary process through the notice given and the opportunity to respond. The Committee concluded that the adversary process entitles the parties to be informed of the content of such communications through the use of the notice procedure or the amicus curiae brief, or else to have the proceeding or an impending proceeding free of those communications. The Committee was of the opinion that if either the judge or the expert does not want the name of the expert or his advice to become known, then such advice should not be received by the judge."
. Canon 2B provides, in part: "A judge should not convey or permit others to convey the impression that they are in a special position to influence him."