CEO 11-03 – April 6, 2011

CONFLICT OF INTEREST

STATE REPRESENTATIVE ENGAGED AS EXPERT WITNESS BY LAW FIRM
REPRESENTING DEPARTMENT OF FINANCIAL SERVICES IN LITIGATION


To: Name withheld at person's request (BocaRaton)

SUMMARY:

No prohibited conflict of interest would be created were a Member of the House of Representatives to continue to be engaged as an expert witness for a law firm that is representing the Department of Financial Services in an insurance insolvency litigation matter. Neither the law firm nor the Member's LLC would be doing business with or subject to the regulation of the Legislature, and no continuing or frequently recurring conflict of interest would be created. The Member would not be personally representing another person or entity for compensation before a state agency when negotiating with the law firm to extend the contract for expert witness services or when acting in the capacity as an expert witness in fulfillment of that contract and testifying in court, consulting with counsel, or communicating with other agents and employees of DFS. CEO 08-20 and CEO 84-9 are referenced.

QUESTION:

Would a prohibited conflict of interest be created were you, a Member of the House of Representatives, to continue to be engaged as an expert witness for a law firm that is representing the Department of Financial Services in an insurance insolvency litigation matter?

 

Your question is answered in the negative.


In your letter of inquiry you advise that you serve as a Member of the Florida House of Representatives. You also advise that you are an attorney who has worked professionally in the field of insurance, serving for the past ten years as an expert insurance witness (primarily in state and federal courts, rarely before administrative tribunals) and as a reinsurance arbitrator in disputes between reinsurers and underlying insurers. You explain that you provide these services through a limited liability company, of which you are the sole managing member.

 

Further, you advise that as an expert witness you provide opinion testimony in the form of custom and practice in the insurance industry on insurance-related matters. You are selected by and retained as an expert by trial lawyers representing clients, with the contract being with the attorneys and not with the underlying parties in the litigation. Over the past five years, you have been engaged by various law firms in different matters as an expert witness in connection with insurance insolvency matters, where the law firms' underlying client has been the Department of Financial Services (DFS).

 

Prior to your election to the House of Representatives in 2010, you advise, you were engaged as an expert witness by a law firm whose underlying client was DFS in an insolvency litigation matter in court and you testified about a year ago as the insolvency expert. You are retained by the law firm and paid by the firm, with the firm being reimbursed for that expense by the underlying client (here, DFS). Currently a series of motions and various post-trial proceedings and hearings are under way, and the law firm has asked you to continue as their insurance expert and to be available to testify in these various post-trial matters. You question whether you may continue to testify and generally be available as an expert to consult with the law firm in this pending case.

 

Regarding employment and contractual relationships, the Code of Ethics for Public Officers and Employees provides:

 

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.— No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee . . .; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]

The first part of this provision prohibits a public officer from having employment or a contractual relationship with a business entity that either is doing business with his agency or is subject to the regulation of his agency. Here, regardless of whether you would be considered to have employment or a contractual relationship with your LLC or with the law firm that has engaged your services, neither the LLC nor the firm is doing business with the Legislature. To the extent that either business entity could be considered to be "subject to the regulation" of the Legislature, the following provision of the Code of Ethics would create an exception: 

When the agency referred to is a legislative body and the regulatory power over the business entity resides in another agency, or when the regulatory power which the legislative body exercises over the business entity or agency is strictly through the enactment of laws or ordinances, then employment or a contractual relationship with such business entity by a public officer or employee of a legislative body shall not be prohibited by this subsection or be deemed a conflict. [Section 112.313(7)(a)2., Florida Statutes.]

See, for example, CEO 08-20 (State Senator offered partnership in private equity firm).

The second portion of Section 112.313(7)(a) addresses employment and contractual relationships that would create a continuing or frequently recurring conflict of interest or that would impede the full and faithful discharge of the official's public duties. This prohibition "establishes an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct or whether they coincide to create a situation which 'tempts dishonor.'"  Zerweck v. State Commission on Ethics, 409 So.2d 57, 61 (Fla. 4th DCA 1982).  Under the circumstances presented, however, we find that the responsibilities of the two positions do not overlap in such a way as to create a prohibited conflict of interest.

 

Members of the Legislature are governed also by Article II, Section 8(e), Florida Constitution, which provides in relevant part: 

 

No member of the Legislature shall personally represent another person or entity for compensation during term of office before any state agency other than judicial tribunals.

 

Implementing this provision, Section 112.3139(9)(a)3., Florida Statutes, provides in part: 

 

No member of the Legislature shall personally represent another person or entity for compensation during his or her term of office before any state agency other than judicial tribunals or in settlement negotiations after the filing of a lawsuit.

 

The term "represent" is defined in Section 112.312(22), Florida Statutes, to mean:

 

actual physical attendance on behalf of a client in an agency proceeding, the writing of letters or filing of documents on behalf of a client, and personal communications made with the officers or employees of any agency on behalf of a client.

 

In our view, you would not be personally representing another person or entity for compensation before a state agency when negotiating with the law firm to extend the contract for expert witness services or when acting in your capacity as an expert witness in fulfillment of that contract and testifying in court, consulting with counsel, or communicating with other agents and employees of DFS1. An "expert witness" is "A witness qualified by knowledge, skill, experience, training, or education to provide a scientific, technical, or other specialized opinion about the evidence or a fact issue." Black's Law Dictionary, 7th Ed., p. 1597. These responsibilities and actions do not involve representing another in the same sense that an attorney or other advocate represents a client or employer in seeking to influence the actions of an agency.

 

Accordingly, we find that no prohibited conflict of interest would be created were you, a Member of the House of Representatives, to continue to be engaged as an expert witness for a law firm that is representing the Department of Financial Services in an insurance insolvency litigation matter. 

 

 

ORDERED by the State of Florida Commission on Ethics meeting in public session on April 1, 2011 and RENDERED this 6th day of April, 2011.

 

 

_______________________________
Roy Rogers, Chairman

 

[Copies of Commission on Ethics opinions referenced in this opinion may be obtained through the Commissionís Internet web site: www.ethics.state.fl.us/ or by contacting the Commission on Ethics directly.]

 

[1]We would distinguish these actions from, for example, actions taken to represent the LLC before a state agency in an attempt to secure business from that agency. See CEO 84-9 and Complaint No. 90-86, In re Michael Langton (1992).