State Panel to Examine Standards for Private Judges

California Chief Justice Ronald George plans to appoint a 20-member panel to examine whether a growing network of private judges, arbitrators and mediators should be held to the same ethical standards as the state’s judiciary.

George said he is concerned that the increased use of private judges to settle legal disputes “gives some people the perception we have a two-track system of justice, a speedier way of resolving disputes for those willing and able to pay.”

Private judges are part of what is often known as the “alternative dispute resolution” movement, which has grown rapidly since the mid-1980s.

The system, in which both sides in a civil dispute agree to hire a judge to hear their case in private, is viewed as a faster method of settling legal issues outside an often clogged court system and as a way to avoid potentially embarrassing testimony in open court.

With private judges now routinely handling the resolution of major cases, often without any media exposure, concern is growing about the fact that private judges are not subject to oversight by public organizations such as the Commission on Judicial Performance.

A case that illustrated some of George’s concerns occurred when a panel of five private judges handled key stages of a lawsuit involving Pacific Gas & Electric Co. The judges last year agreed on a settlement of $333 million against the utility. This year, three of those judges went on a cruise organized by two of the lawyers who won the case.

John Trotter, one of the private judges who ruled in the PG&E; case and went on the cruise, said he had paid for the trip and dismissed any ethical concerns brusquely: “I’m not a judge. I don’t sit on assignment. I don’t do a judge’s work. I do mediation. I am a lawyer. I’m not a judge.”

Chief Justice George said in an interview with The Times that another key mission of the panel on private judging would be to suggest changes in retirement rules and payroll contribution schedules to slow the pace of judges who retire early to become private judges.

“Some of our most able judges are leaving the bench prematurely and at great cost to the public,” he said.

The chief justice acknowledged that “the private judiciary provides a safety valve that may assist in relieving the clogging of our regular court system. But the flip side is that it also provides an excuse for government not to provide as many judges as needed.”

He did not specify what ethical standards might be extended to private judges. But other sources suggested that disclosure of possible conflicts of interest might be increased, and that social and professional relationships with attorneys might be restricted.

One well-known private judging service, Judicial Arbitration and Mediation Services, claims 350 members nationwide. The American Arbitration Assn. has thousands of members involved in various pursuits under differing organizational structures.

Some parts of the public judicial process, such as supervising depositions, are assigned to private judges and other specialists by the courts. In many other cases, parties in a dispute contract on their own to have their cases heard privately. Banks and other corporations often require acceptance of private mediation by their customers when disputes occur.

New attention was focused on private judging in October when The Times reported on the discount Mediterranean cruise organized by two Los Angeles trial attorneys for 90 people in the legal and medical professions, including 11 public and retired judges.

Payment arrangements were murky, with at least four of the judges initially saying either they had not paid or did not expect to. The chief organizer, attorney Thomas V. Girardi, had split a legal fee of at least $120 million with his partner, Walter J. Lack, after winning the $333-million settlement against PG&E;, Lack said. Girardi said that all but two judges were billed for the cruise, and seven said they had paid.

Stephen Gillers, professor of legal ethics at New York University Law School, said the unchecked growth of private judging has created “a great big gray area. . . . It creates a vacuum and a great potential for abuse we haven’t figured out how to address.”

“Sooner or later we are going to have to decide as a society how we are going to control private judges who make decisions in cases with enormous public consequence,” he said.

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The State Bar of California has appointed a committee to examine the practicality of applying tougher ethical standards to private judges, and the state Supreme Court is reviewing ethical standards for private judges, referees, arbitrators and mediators when they work temporarily under the direction of public judges.

These concerns were foreshadowed last year when a state appeals court judge delivered an unusually sharp challenge to the increasing power, influence and potential ethical abuses of the private judiciary.

Justice Miriam Vogel deplored the growth of private judging, particularly when financially strapped litigants are forced by public judges into accepting private judges, referees, arbitrators or mediators who may charge large sums for their services.

She struck down a demand for $18,356 in fees from a retired Superior Court judge whose services had been required under a public judge’s order although the litigant said he could not afford them.

Vogel criticized the “exponentially growing number of available retired judges, and a dramatic increase in hourly rates and total billings, leaving those of who remain in the public system to address the problems inherent in the creation of a second, separate judicial system. . . . “

“Our courts are experiencing the wholesale departure of judges from the public system to the greener pastures of private judging, where they can and do earn more money, receive more help, obtain better accommodations and work as many or as few hours as they choose,” she wrote.

In response, half a dozen eminent private judges, most with lucrative private practices, successfully petitioned the state Supreme Court to “decertify” Vogel’s criticism by striking it from the published record, though her denial of the specific fees would be allowed to stand. (Chief Justice George was in the minority on a 4-1 vote.)

The section of Vogel’s opinion on the private system “is so loosely written, and so couched in extreme terms, that it ends up as a polemic against private judging,” the private judges told the high court.

“If permitted to remain as a published decision, the loose language . . . may be quoted, and used out of context, both by trial courts and other Courts of Appeal, to the point that such unfounded dictum may take on the respectability of a holding.”

The letter was signed by retired state Supreme Court Justice David N. Eagleson; retired appeals court judges Charles W. Froehlich Jr., Robert F. Kane and Wickson R. Woolpert; and retired Superior Court judges Lester E. Olson and Robert I. Weil.

Century City attorney Stan Lamport, who has been active on the State Bar’s ethics committee, foresees difficulties in bringing private judges under the same ethics rules applied to public judges.

For example, some arbitrators and mediators not only have never been judges, but also have never been lawyers, Lamport said. They can be psychologists or economists with no connection to the State Bar. He also noted that many judges who retire leave the bar association altogether.

Private judge Weil said that although he would support uniform public and private ethical standards, it may well take creation of a new private-judging body by the state Legislature to enforce them.

The Mediterranean cruise that sparked new concerns about the ethics of private judging included six judges who sit on the public bench and five retired judges in the private system.

Although private judge Trotter dismissed criticism of his presence on the cruise by saying, “I don’t do judge’s work,” several private judges and legal experts took issue with that characterization.

“They are purporting to be doing judging. One would ask, if they deny it, what other role were you in when you were doing this?” said Jeffrey Hazard, trustee professor at the University of Pennsylvania Law School. “I think the rules of judicial conduct ought to be applied by analogy to . . . retired judges.”

Michael Young, the general counsel of Judicial Arbitration and Mediation Services, said the group had conducted its own inquiry into the Mediterranean cruise and had concluded that “none of the judges committed any ethical impropriety.”

“In terms of the broader issue of standards, it is true that the California Judicial Code does not apply to private judges,” Young said. “But we asked if the California Judicial Code did apply, was there an ethical problem, and our conclusion was no.”

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One JAMS judge who participated in the PG&E; case and went on the cruise, Jack Goertzen, said he is ready to accept enforcement of ethical standards, including public reprimand and fines against violators.

The cruise also raised concerns about ethical standards in public judging circles.

Constance Dove, executive director of the California Judges Assn., responded by sending out a memorandum on “Propriety of Judges Associating With Attorneys at Social and Educational Settings.”

Although “a judge may socialize with individual attorneys, with whom the judge is friendly, in such activities as golfing, jogging, dining and similar social activities . . . [and] judges are allowed to accept ordinary social hospitality,” all such activities must be disclosed to parties in cases the judges hear, Dove said. Her memo also emphasized public appearances.

“The judge must ensure that the activities do not cast reasonable doubt on the judge’s capacity to act impartially and must do nothing that might diminish the public confidence in the impartiality of the judiciary,” Dove said.