In Re Advisory Committee on Professional Ethics Opinion 705

926 A.2d 839, 192 N.J. 46, 2007 N.J. LEXIS 880

• Court: Supreme Court of New Jersey
• Decided: July 19, 2007
• Status: Published

Opinions

PER CURIAM.

In this appeal, we must determine whether a provision of the New Jersey Conflicts of Interest Law (Act), N.J.S.A. 52:13D-12 to -27, must yield to a conflicting Rule of Professional Conduct (RPC). Specifically, the question presented is whether attorneys formerly employed by the State are subject to N.J.S.A. 52:13D-17 when the Act’s post-employment restrictions are more stringent than the directives of RPC 1.11(c).

In response to an attorney inquiry, the Advisory Committee on Professional Ethics (ACPE) concluded that, absent a decision by this Court to defer to the Legislature, RPC 1.11 “should prevail” over the Act’s more restrictive mandates. Because N.J.S.A. 52:13D-17 serves a legitimate governmental purpose and does not improperly encroach on judicial interests, we defer to the Legislature in the spirit of comity and hold that attorneys formerly employed by the State must comply with both the Act and the RPCs.

I.

Rule of Professional Conduct 1.11 prohibits a former government attorney from representing a private client in matters in which the lawyer, as a public employee, recently or substantially participated. See RPC l.ll(a)(l)-(3). However, that conflict of interest will not be imputed to the attorney’s law firm if:

(1) the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom, and

(2) written notice is given promptly to the appropriate government agency to enable it to ascertain compliance with the provisions of this Rule.

[RPC 1.11(c).]

In May 2005, in compliance with RPC 1.11(e)(2), attorney John M. Van Dalen, of Van Dalen Brower, L.L.C., notified the Division of Law of the Department of Law and Public Safety that he represented Scarborough Construction in a matter concerning Harbor Cove in Somers Point. Van Dalen’s letter informed the Division that his partner, Stephen Brower, a former Deputy Attorney General, was screened from participation in the matter because of Brower’s “responsibilities while in the Attorney General’s office for legal services to the Department of Environmental Protection in connection with Harbor Cove.”

Three weeks later, the Division advised Van Dalen, also a former Deputy Attorney General, that in addition to meeting the requirements of RPC 1.11(c)(2), his firm was also “required to comply with N.J.S.A 52:13D-17,” which provides that no former State employee may represent, “whether by himself [or herself] or through any partnership, firm or corporation in which he [or she] has an interest,” any client other than the State in connection with a matter that the employee was “substantially and directly involved” with as a State employee. See N.J.S.A. 52:13D-17. Although the present conflict of interest “has proven to be moot,” Van Dalen requested that the ACPE address the overlap of the Act and RPC due to the issue’s “strong continuing importance to my firm and to the bar generally as the situation is likely to reoccur.”

In response, the ACPE published Opinion No. 705, 184 N.J.L.J. 390 (2006). After recognizing “a direct conflict between” N.J.S.A. 52:13D-17 and RPC 1.11(c), the ACPE opined that the Court-approved RPC “should prevail.” Opinion No. 705, supra, 184 N.J.L.J. at 390. The ACPE stated:

In this inquiry, the statute is more restrictive and the Court’s ethics rule in RPC 1.11(c) is more liberal, allowing attorneys to proceed in proper cases by screening and notification. Our reading of Winberry [v. Salisbury, 5 N.J. 240, 74 A.2d 406, cert. denied, 340 U.S. 877, 71 S.Ct. 123, 95 L.Ed. 638 (1950)] and Knight [v. City of Margate, 86 N.J. 374, 431 A.2d 833 (1981)] is that the Court’s ethics rule should prevail in this case, absent a decision by the Court to defer to the statute under principles of comity.

[Opinion No. 705, supra, 184 N.J.L.J. at 390.]

Pursuant to Rule 1:19-8, the Department of the Public Advocate petitioned this Court to review Opinion 705. We granted the petition. 191 N.J. 319, 923 A.2d 1097 (2006).

II.

Observing that N.J.S.A 52:13D-17 applies to all former State employees, not just attorneys, the Public Advocate contends that the Act does not regulate an “area reserved to this Court” and, therefore, does not implicate separation of powers and comity principles. Because the Legislature is entitled to establish ethical tenets for State employees, petitioner maintains that the present conflict between a legislative and judicial pronouncement should be resolved in favor of the more stringent standard, here N.J.S.A 52:13D-17. According to the Public Advocate, “[t]o carve attorneys out of the Conflicts of Interest Law, which applies equally to all employees of the legislative and executive branches, would create uncertainty and unequal treatment antithetical to the Act’s purpose of ensuring all employees are held to a uniform and high standard of ethical conduct that engenders the trust of the public.”

Conversely, the ACPE argues that RPC 1.11(c) controls the present circumstances. Relying on this Court’s “sweeping authority to govern [its] own house,” In re P.L. 2001, Chapter 362, 186 N.J. 368, 379, 895 A.2d 1128 (2006), the ACPE contends that the Court should reject the Legislature’s attempt to strip away its exclusive power over attorney discipline. According to the ACPE, RPC 1.11(c) demonstrates this Court’s recognition that, in the context of imputing a former government attorney’s conflict of interest to an entire law firm, the public interest is adequately protected by adherence to the requirements of the RPCs. Therefore, the ACPE contends that RPC 1.11(c) should not yield to the Act.

Van Dalen agrees with the ACPE. Referencing this Court’s “plenary and preemptive authority over the practice of law and attorney ethics,” Van Dalen likewise asserts that RPC 1.11(c) trumps its conflicting statutory analogue.

III.

Before addressing the separation of powers issue presented by this appeal, we first review the statutory provision and RPC implicated by Van Dalen’s proposed representation.

A.

“In our representative form of government, it is essential that the conduct of public officials and employees shall hold the respect and confidence of the people.” N.J.S.A 52:13D-12(a). In view of that maxim, and “[t]o ensure propriety and preserve public confidence,” N.J.S.A. 52:13D-12(b), the Legislature enacted the New Jersey Conflicts of Interest Law in 1971, L. 1971, c. 182. “[Applicable to a wide spectrum of public officials and employees,” including attorneys, Knight, supra, 86 N.J. at 391, 431 A.2d 833, the Act “furnishes specific standards to guide the conduct of persons serving in State government,” N.J. Executive Comm’n on Ethical Standards v. Byrne, 238 N.J.Super. 84, 87, 569 A.2d 264 (App.Div.1990). Ultimately, the Act endeavors to “maintain the public’s confidence in government and its officers and employees” by “ensuring] that public servants do not ... use their official positions to earn money unfairly, especially at the expense of the public.” In re Advisory Comm. on Prof'l Ethics Opinion 621, 128 N.J. 577, 581-82, 608 A.2d 880 (1992).

At issue here is N.J.S.A. 52:13D-17, which states, in pertinent part:

No State officer or employee or special State officer or employee, subsequent to the termination of his [or her] office or employment in any State agency, shall represent, appear for, negotiate on behalf of, or provide information not generally available to members of the public or services to, or agree to represent, appear for, negotiate on behalf of, or provide information not generally available to members of the public or services to, whether by himself [or herself] or through any partnership, firm or corporation in which he [or she] has an interest or through any partner, officer or employee thereof, any person or party other than the State in connection with any cause, proceeding, application or other matter with respect to which such State officer or employee or special State officer or employee shall have made any investigation, rendered any ruling, given any opinion, or been otherwise substantially and directly involved at any time during the course of his [or her] office or employment.

[(Emphasis added).]

The Act defines “interest,” in part, as:

(1) the ownership or control of more than 10% of the profits or assets of a firm, association, or partnership, or more than 10% of the stock in a corporation for profit other than a professional service corporation organized under the “Professional Service Corporation Act”____ The provisions of this act governing the conduct of individuals are applicable to shareholders, associates or professional employees of a professional service corporation regardless of the extent or amount of their shareholder interest in such a corporation.

[N.J.S.A. 52:13D-13(g).]

Willful violators are subject to a maximum of six-months imprisonment and a $1,000 fine, as well as a civil penalty “of not less than $500 nor more than $10,000.” N.J.S.A 52:13D-17. In short, the Act imputes the conflict of interest of a former State government employee — including an attorney — to the entire partnership, firm, or corporation in which the former employee obtains an “interest,” as statutorily defined.

Applied here, Van Dalen would be precluded from representing Scarborough Construction due to Brower’s prior substantial, direct involvement in the Harbor Cove matter and Brower’s significant interest in the law firm.

B.

The RPCs applicable to former government attorneys “reflect the guiding principle that a lawyer shall not represent a private client if such representation involves taking improper advantage of his or her former governmental position.” In re Opinion 621, supra, 128 N.J. at 593-94, 608 A.2d 880. Accordingly, the RPCs constrain the representational opportunities of former government attorneys in limited circumstances.

The pre-cursor to the current version of RPC 1.11 “rejected the concept of screening a former government lawyer disqualified by an actual conflict arising from contact with, responsibility for, or confidential information about a matter,” thereby imputing a former government attorney’s conflict to all members of his or her law firm. Kevin H. Michels, New Jersey Attorney Ethics — The Law of New Jersey Lawyering 532 (2007). However, at the behest of the Pollock Commission and as part of an expansive overhaul of the RPCs, RPC 1.11 was amended in 2004 to permit the screening of a former government attorney to cure an actual conflict of interest. See id. at 545.

As currently drafted, RPC 1.11 prohibits a former government attorney from representing a client in three circumstances: (1) when “the lawyer participated personally and substantially as a public officer or employee”; (2) when “the lawyer had substantial responsibility as a public officer or employee”; or (3) when, within six months of the attorney’s government service, the private party’s interests “are materially adverse to the appropriate government agency.” RPC l.ll(a)(l)-(3). However, law firms may cure the conflict, avoid imputation, and undertake representation of a client if: “(1) the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom, and (2) written notice is given promptly to the appropriate government agency to enable it to ascertain compliance with the provisions of this Rule.” RPC 1.11(e).

Applied here, and assuming Brower is not apportioned a fee, Van Dalen would be ethically permitted to represent Scarborough Construction because Brower was screened from involvement in the Harbor Cove matter and Van Dalen complied with the notice requirement of RPC 1.11(c)(2).

IV.

“[A] fundamental principle of our State government,” our separation of powers principle “first appeared in substantially its present form in the New Jersey Constitution of 1844.” Commc’ns Workers of Am., AFL-CIO v. Florio, 130 N.J. 439, 449, 617 A.2d 223 (1992). Designed to “maintain the balance between the three branches of government, preserve their respective independence and integrity, and prevent the concentration of unchecked power in the hands of one branch,” David v. Vesta Co., 45 N.J. 301, 326, 212 A.2d 345 (1965) (footnote and emphasis omitted), the principle is expressly enumerated in our Constitution:

The powers of the government shall be divided among three distinct branches, the legislative, executive, and judicial. No person or persons belonging to or constituting one branch shall exercise any of the powers properly belonging to either of the others, except as expressly provided in this Constitution.

W-J. Const, art. Ill, ¶ 1.]

That bedrock principle is one of independence and interdependence among the coordinate branches of our government. Knight, supra, 86 N.J. at 388, 431 A.2d 833. First, “[t]he constitutional spirit inherent in the separation of governmental powers contemplates that each branch of government will exercise fully its own powers without transgressing upon powers rightfully belonging to a cognate branch.” Ibid. The principle guarantees that no one branch can “claim[ ] or receive[ ] inordinate power.” Brown v. Heymann, 62 N.J. 1, 11, 297 A.2d 572 (1972). Accordingly, we refuse to tolerate any deviation from the separation of powers principle that “impairs the essential integrity of one of the great branches of government.” Massett Bldg. Co. v. Bennett, 4 N.J. 53, 57, 71 A.2d 327 (1950).

Second, and equally important, “the doctrine requires not an absolute division of power but a cooperative accommodation among the three branches of government.” Commc’ns Workers of Am., supra, 130 N.J. at 449, 617 A.2d 223. “[T]he division of governmental powers implants a symbiotic relationship between the separate governmental parts so that the governmental organism will not only survive but will flourish.” Knight, supra, 86 N.J. at 388, 431 A.2d 833. Conversely, a rigid and inflexible classification of powers would “render government unworkable.” Massett Bldg. Co., supra, 4 N.J. at 57, 71 A.2d 327. Thus, the separation of powers principle was not intended “to create three ‘watertight’ governmental compartments, stifling cooperative action.” In re P.L.2001, Chapter 362, supra, 186 N.J. at 379, 895 A.2d 1128 (quotation omitted); see also In re Salaries for Prob. Officers of Bergen County, 58 N.J. 422, 425, 278 A.2d 417 (1971) (“[T]he doctrine of separation of powers was never intended to create, and certainly never did create, utterly exclusive spheres of competence.”). Rather, our Constitution encourages cooperation among the branches, In re Zicarelli, 55 N.J. 249, 264-65, 261 A2d 129 (1970), affd, 406 U.S. 472, 92 S.Ct. 1670, 32 L.Ed.2d 234 (1972), and permits “some osmosis ... when the branches of government touch one another,” Knight, supra, 86 N.J. at 388, 431 A2d 833.

Our Constitution vests this Court with the authority to “make rules governing the administration of all courts in the State and, subject to the law, the practice and procedure in all such courts. The Supreme Court shall have jurisdiction over the admission to the practice of law and discipline of persons admitted.” N.J. Const, art. VI, § 2, ¶ 3. Notwithstanding that grant of authority, “[i]n the spirit of comity,” this Court has shared its jurisdiction with the Legislature and “upheld narrowly-circumscribed legislation that touches on attorney discipline.” McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 554, 556, 626 A.2d 425 (1993). In certain circumstances, although they “might impinge upon the Court’s constitutional concerns,” we have accommodated the lawful and reasonable exercise of power by the other branches of government on the practice of law. Knight, supra, 86 N.J. at 391, 431 A.2d 833; see also Passaic County Prob. Officers’ Ass’n v. County of Passaic, 73 N.J. 247, 255, 374 A.2d 449 (1977) (“It has ..., since 1948, been the practice of this Court, with only occasional deviation, to accept and adopt legislative arrangements that have not in any way interfered with this Court’s constitutional obligation.”). Accordingly, when the actions of another branch of government implicate fields within this Court’s purview, the validity of such action and this Court’s “ultimate power to accept or reject such action, turn upon the legitimacy of the governmental purpose of that action and the nature and extent of its encroachment upon judicial prerogatives and interests.” Knight, supra, 86 N.J. at 391, 431 A.2d 833.

Resolution of such questions calls for “the most thorough and careful review to guard against the encroachment of one coequal branch of government on another.” Commc’ns Workers of Am., supra, 130 N.J. at 457, 617 A.2d 223. Nevertheless, “[w]e ordinarily do our very best to harmonize our constitutional powers with the apparently conflicting will of the Legislature.” In re Hearing on Immunity for Ethics Complainants, 96 N.J. 669, 677, 477 A.2d 339 (1984).

V.

In respect of the “legitimacy of the governmental purpose,” the Act is one of the Legislature’s many attempts to preserve and enhance the public’s confidence in government and its civil servants. The ACPE concedes as much. Indeed, “[t]here can be no equivocation on the point that the New Jersey Conflicts of Interest Law ... vitally serves a significant governmental purpose.” Knight, supra, 86 N.J. at 391, 431 A.2d 833; see also N.J.S.A 52:13D-12(a) (noting need for public employees to “hold the respect and confidence of the people”); N.J.S.A 52:13D-12(b) (Act aims “[t]o ensure propriety and preserve public confidence”). As we have observed, “[cjonfidence in government depends to a large extent on confidence in the honesty and integrity of its employees.” In re Petition for Review of Opinion No. 569, 103 N.J. 325, , 511 A.2d 119 (1986). The Act endeavors to buoy that confidence.

Regarding Knight’s second prong — “the nature and extent of [the statute’s] encroachment upon judicial prerogatives and interests” — we do not find N.J.S.A 52:13D-17 to be an improper infringement of the Judiciary’s interests. The restrictions imposed by the Act do not interfere with the Judiciary’s authority to administer the courts or regulate the bar. Despite the conflict between N.J.S.A 52:13D-17 and RPC 1.11, the separation of powers doctrine is not debased. Rather, the Legislature merely sought to establish, within its prerogative, ethical guidelines for all State employees — attorneys and non-attorneys alike — and instill confidence in the public concerning the virtue of our State’s civil servants.

Van Dalen and Brower, as attorneys formerly employed by the State, are subject to both the ethical standards established by this Court and to whatever additional, applicable restrictions are imposed by the Legislature. See In re Opinion 621, supra, 128 N.J. at 582, 608 A.2d 880 (observing that, for lawyers, Act’s mandates “are in addition to” RPCs). We agree with the Public Advocate that an exemption for attorneys from N.J.S.A 52:13D-17, which is a statute of general application, would be incongruous with the State’s strong policy of ensuring uniformly high ethical standards designed to stimulate public confidence in our civil servants. Therefore, in the interest of comity, we hold that the restrictions imposed by N.J.S.A 52:13D-17 on all former State employees are equally applicable to attorneys and need not yield to the conflicting commands of RPC 1.11. Here, accommodation of the Legislature is “compatible with the judiciary’s core goals and further[s] our common mission to give the State good and responsible government.” In re P.L. 2001, Chapter 362, supra, 186 N.J. at 390, 895 A.2d 1128.

VI.

Our duty is to interpret the New Jersey Constitution and apply it to the present conflict between coordinate branches of government in a realistic and practical manner. “In so doing, we attempt to lay down no general ‘guidelines’ covering other situations not involved here, and attempt to confine the opinion only to the very question[ ] necessary to decision of the case.” Commc’ns Workers of Am., supra, 130 N.J. at 463, 617 A.2d 223 (quotation omitted). On the question presented, because N.J.S.A 52:13D-17 serves a legitimate governmental purpose and because its encroachment on judicial prerogatives is not improper, we defer to the Legislature and hold that attorneys formerly employed by the State must comply with the post-employment strictures of both N.J.S.A 52:13D-17 and RPC 1.11.

In view of that holding, we refer this matter to the Professional Responsibility Rules Committee for a reevaluation of RPC 1.11 and direct the Committee to draft, for the Court’s consideration, a proposed rule in harmony with N.J.S.A. 52:13D-17.¹

We reverse the ruling of the ACPE.

1 In the interim, however, we note that former federal government attorneys must continue to comply with the mandates of RPC 1.11 only and need not adhere to the more restrictive requirements of the Act.