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The full case caption appears at the end of this opinion. RYMER, Circuit Judge: The issue before us is whether a law firm owes a duty to its client to disclose that it hired the law clerk of a judge beforewhom it was appearing in a pending matter. Murphy, Weir & Butler (Murphy) represented First Interstate Bank of Arizona and Talley Realty Finance Company(FIB/Talley) who were secured creditors in the Chapter 11 bankruptcy proceeding of Scottsdale Pinnacle Associates(SPA). The Honorable Leslie Tchaikovsky was the presiding bankruptcy judge. Although unknown to the Murphy partnerassigned to this matter, the firm hired Judge Tchaikovsky’ s law clerk for employment at the end of the clerkship. As it turnedout, the “Chinese wall” was not impermeable as it should have been, for the law clerk continued to have some contact withthe case. Judge Tchaikovsky ruled in favor of FIB/Talley, but later recused herself upon SPA’ s motion after SPA found outabout the clerk’ s relationship with Murphy. [FOOTNOTE 1] A new trial before a different judge resulted in a decision withwhich FIB/Talley was not as happy. As a result, it sued Murphy for malpractice. The district court held it was not foreseeable that hiring the law clerk without disclosure would ultimately result in JudgeTchaikovsky’ s recusal, because judges and law clerks are required to preserve the court’ s impartiality and the appearanceof impartiality. For this reason, Murphy had no duty to disclose that the firm had hired the Judge’ s clerk. We agree. Giventhe presumption of judicial impartiality, it was not reasonably foreseeable that the law clerk would continue to work onMurphy’ s matters contrary to the Code of Conduct for Law Clerks; that the Judge would fail to screen off the law clerkcompletely in violation of the Code of Judicial Conduct; and that the conduct of both the Judge and the law clerk wouldamount to an appearance of impropriety such as to require recusal. As judges and law clerks are in the best position toprevent impropriety, we decline to impose a duty of disclosure on law firms. Accordingly, we affirm on FIB/Talley’ s appeal. Murphy also sought indemnification of expenses incurred in defending thislawsuit, but the district court denied its request. We affirm this decision as well. I In early 1993, FIB/Talley engaged Murphy as local counsel in the Chapter 11 bankruptcy of SPA. FIB/Talley, as holder ofthe first deed of trust on SPA’ s only asset, opposed confirmation of SPA’ s reorganization plan and sought relief from theautomatic stay in order to foreclose on the property. On August 12, 1994, Judge Tchaikovsky entered final orders denyingSPA’ s reorganization plan; granting the motion of FIB/Talley for relief from the automatic stay and to determine the value oftheir net secured claim, which she did at $4.75 million; and denying SPA’ s motion to amend the findings and for a new trial. Meanwhile, on November 19, 1993, Murphy offered employment to the Judge’ s only law clerk, to begin at the end of theclerkship in September 1994. The clerk accepted shortly thereafter. A Murphy partner told Judge Tchaikovsky of the firm’ sinterest in hiring the clerk, and the clerk was reminded during the interview with the Murphy hiring committee that she couldnot work on any Murphy matters if she were to accept employment with the firm. Judge Tchaikovsky instructed the clerk todo no more substantive work on any case in which Murphy represented a party in interest, but the clerk handled a fewtelephone calls pertaining to procedural matters, observed some courtroom proceedings, marked up a memorandum relatingto an earlier plan of reorganization, and was told by the Judge of her intended decision on the final plan. SPA found out about the clerk’ s employment in late August and moved on September 20, 1994 to recuse JudgeTchaikovsky and to vacate her orders. Judge Tchaikovsky certified the relevant facts on October 31, 1994, andacknowledged that she had violated 28 U.S.C. � 455(a) [FOOTNOTE 2] by failing to insulate the clerk completely from theSPA proceeding. She recused herself and the matter was reassigned to Bankruptcy Judge Randall Newsome. After holdingan evidentiary hearing, Judge Newsome determined that the conduct of Judge Tchaikovsky and the law clerk amounted to anappearance of impropriety, and ordered a new trial. Subsequently, Judge Newsome valued the SPA property at $6 million,resulting in a net secured claim for FIB/Talley of $5.4 million. [FOOTNOTE 3] He confirmed SPA’ s plan of reorganizationon September 11, 1995. [FOOTNOTE 4] FIB/Talley brought this action for negligence, breach of fiduciary duty, and breach of contract on February 2, 1996. Thedistrict court declined to dismiss on statute of limitations grounds as it believed there was a factual dispute about whenMurphy actually stopped representing FIB/Talley, but granted summary judgment on the merits. Murphy then moved forindemnification of attorney’ s fees and costs in the amount of $441,372, but the district court denied the motion. Both parties have timely appealed. II FIB/Talley argues that Murphy owed a duty to it to ensure that the firm’ s hiring of the Judge’ s law clerk did not jeopardizeits own litigation of the bankruptcy case. In FIB/Talley’ s view, the risk of harm was clearly foreseeable because failing tonotify the client, the client’ s lead attorneys, opposing counsel, or the Judge would open the door to a later recusal motion anda possible vacatur of Judge Tchaikovsky’ s final orders. It notes that because recusal must be brought up as soon as there isa basis to challenge a judge’ s impartiality, SPA would have been precluded from raising the issue after Judge Tchaikovskyissued her final orders if Murphy had disclosed the hiring when it happened. Alternately, it points out, FIB/Talley’ s leadcounsel could have replaced Murphy as local counsel. The general principles that apply are well settled. Attorneys have a duty to “keep a client reasonably informed aboutsignificant developments relating . . . to the representation . . . .” California Rules of Professional Conduct 3-500. Althoughthe attorney owes a basic obligation to provide sound advice in furtherance of a client’ s best interests, “such obligation doesnot include a duty to advise on all possible alternatives no matter how remote or tenuous.” Davis v. Damrell, 119 Cal. App.3d 883, 889 (1981). A “legal malpractice [claim] is compounded of the same basic elements as other kinds of actionablenegligence: duty, breach of duty, causation, and damage.” Nichols v. Keller, 15 Cal. App.4th 1672, 1682 (1993). FIB/Talley’ s negligence and breach of fiduciary duty claims likewise turn on whether Murphy owed them a duty and, if so,whether the breach of that duty caused the harm suffered. “The question of the existence of a legal duty of care in a givenfactual situation presents a question of law which is to be determined by the courts alone. Entry of summary judgment in favorof the defendant in a professional negligence action is proper where the plaintiff is unable to show the defendant owed such aduty of care.” Id. at 1682 (citing Nymark v. Heart Fed. Savings & Loan Ass’ n, 231 Cal.App.3d 1089, 1095 (1991)).Whether there is a duty, in turn, depends largely on the foreseeability of the harm alleged: “Foreseeability of harm, though notdeterminative, has become the chief factor in duty analysis.” Id. at 1686. And the foreseeability component of duty analysis isa legal issue: Foreseeability is a question of fact in many contexts. However, in defining the boundaries of duty, foreseeability is a question of law for the court. The question of foreseeability in a “duty” context is a limited one for the court and is readily contrasted with the fact-specific foreseeability questions bearing on negligence (breach of duty) and causation posed to the jury or trier of fact. Id. [FOOTNOTE 5] Applying these principles, it is clear that the harm FIB/Talley posits — a new trial necessitated by the Judge’ s recusal — wasneither foreseeable to Murphy nor preventable by it. Judicial impartiality is presumed. See United States v.Herrera-Figueroa, 918 F.2d 1430, 1436 n.8 (9th Cir. 1990); In the Matter of Demjanjuk, 584 F. Supp. 1321, 1324-25(N.D. Ohio 1984); United States v. Zagari, 419 F. Supp. 494, 501 (N.D. Cal. 1976). Section 455(a), the Code ofJudicial Conduct, and the Code of Conduct for Law Clerks all place the burden of maintaining impartiality and theappearance of impartiality on the judge and the law clerk. Section 455(a) requires a judge to disqualify herself in any proceeding in which her impartiality might reasonably bequestioned. 28 U.S.C. � 455(a). This mandate is identical to the duty set out in the Code of Judicial Conduct Canon3(E)(1). [FOOTNOTE 6] And pursuant to Canon 3(C)(2), a judge “shall require staff, court officials and others subject tothe judge’ s direction and control to observe the standards of fidelity and diligence that apply to the judge and to refrain frommanifesting bias or prejudice in the performance of their official duties.” Canon 2 of the Code of Conduct for Law Clerks requires a law clerk to avoid impropriety and the appearance ofimpropriety; it states: A law clerk should not engage in any activities that would put into question the propriety of the law clerk’ s conduct in carrying out the duties of the office. A law clerk should not allow family, social, or other relationships to influence official conduct or judgment. A law clerk should not lend the prestige of the office to advance the private interests of others; nor should the law clerk convey or permit others to convey the impression that they are in a special position to influence the law clerk. Id. Canon 5(C)(1) directly speaks to the issue of prospective employment and instructs: A law clerk should refrain from financial and business dealings that tend to detract from the dignity of the office, interfere with the proper performance of official duties, exploit the law clerk’ s position, or involve the law clerk in frequent transactions with individuals likely to come in contact with the law clerk or the court in which the law clerk serves. During the clerkship, a law clerk may seek and obtain employment to commence after the completion of the clerkship; if any law firm, lawyer, or entity with whom a law clerk has been employed or is seeking or has obtained future employment appears in any matter pending before the appointing judge, the law clerk should promptly bring this fact to the attention of the appointing judge, and the extent of the law clerk’ s performance of duties in connection with such matter should be determined by the appointing judge. Id. It is expected that when a “clerk has accepted a position with an attorney or with a firm, that clerk should cease furtherinvolvement in those cases in which the future employer has an interest.” Alvin B. Rubin & Laura B. Bartell, Law ClerkHandbook 23 (1989). It is up to the judge to make sure this happens. “Judges themselves are in the best position to forestallfuture difficulties with a few simple instructions and quick action where necessary.” Kevin D. Swan, Comment, Protectingthe Appearance of Judicial Impartiality in the Face of Law Clerk Employment Negotiations, 62 Wash. L. Rev. 813,840 (1987). Of course judges are not infallible. See, e.g., Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847, 862 (1988)(judge failed to inform the parties of association with institution that could be affected by outcome of litigation); Hall v. SmallBusiness Administration, 695 F.2d 175 (5th Cir. 1983) (magistrate judge allowed law clerk who was a former member ofthe plaintiff class and had accepted employment with the class’ s counsel to work on the case); Miller Industries, Inc. v.Caterpillar Tractor Co., 516 F. Supp. 84 (S.D. Ala. 1980) (district judge allowed law clerk who had acceptedemployment with defendant’ s counsel to continue to work on case). But despite this, judges (and their law clerks) arepresumed to be impartial and to discharge their ethical duties faithfully so as to avoid the appearance of impropriety. Lawyersare entitled to assume that judges (and law clerks) will perform their duty. Further, there are well established and well knownprocedures for ensuring both the reality and appearance of impartiality. [FOOTNOTE 7] For this reason, it is not foreseeablethat hiring a law clerk will result in recusal. Relying on Miller and Hall, FIB/Talley points out that if Murphy had told SPA about hiring Judge Tchaikovsky’ s clerk,SPA might have agreed to waive any objection to Murphy continuing to represent FIB/Talley as local counsel, or set up awaiver in the absence of timely objection to the court, in either case averting the Judge’ s recusal and vacatur of herorders. [FOOTNOTE 8] Neither Miller nor Hall was concerned with the issue of foreseeability. Both involved the timelinessof a party’ s motion to disqualify a judge whose law clerk continued to work on a case in which his future employer wascounsel. In each, the losing side did not learn of the basis for disqualification until after judgment had been entered. Theirbelated motion to disqualify was opposed on the ground of untimeliness and waiver, but the argument was rejected, the judgewas disqualified, and the judgment was vacated. In Miller and Hall, as here, it is obvious in retrospect that the problemscould have been averted if the law firm had refrained from offering employment so long as the clerk was working for thejudge, or if the firm had told the other side. But hindsight is not the test for foreseeability. More importantly, FIB/Talley submits no authority indicating that a law firm should refrain from recruiting judicial clerks –indeed, the Canons indicate otherwise — or must tell opposing counsel, its own clients or the court if it offers employment toa law clerk or its offer is accepted. [FOOTNOTE 9] Murphy had no basis for believing that the Judge’ s impartiality wasreasonably subject to question. Both Judge Tchaikovsky and her law clerk knew about the clerk’ s prospective employmentwith Murphy. Typically (and consistent with the duty to avoid the appearance of impartiality), in these circumstances a judgewould either tell the clerk not to do any work on the matter, or disclose the clerk’ s disqualification on the record andproceed only if the disqualification were waived. Here, the Judge did not seek waivers, but rather told the clerk not to dosubstantive work on the SPA litigation. Regrettably, this did not go far enough to forestall recusal. But the fact that the wallwas permeable in this case does not make it foreseeable that judges and law clerks will not fully honor their ethical duties inall cases. In sum, it is entirely reasonable for law firms to rely on the presumption that judges and law clerks will maintaintheir impartiality by adequately following appropriate procedures when the law clerk has obtained an offer or a position offuture employment. This leaves the burden where it should be as a matter of policy and practicality. The law clerk is the one person who isalways sure to know of a conflict. Even in the computer age there is no reason to assume that counsel of record is aware ofeveryone whom his firm has hired and where each prospective employee is presently working. We therefore cannot agreewith FIB/Talley that Murphy should bear the blame for Judge Tchaikovsky’ s recusal. Nor does FIB/Talley articulate any compelling need for a new duty of the sort it proposes. On the one hand it wouldovercompensate for the occasional judicial lapse; but on the other hand, it would underachieve the objective for no amount ofdisclosure can guarantee the appearance of impartiality if the judge and clerk fall short of what duty turns out to demand. Atthe end of the day neither counsel nor clients can control what happens inside a judge’ s chambers. Accordingly, we agreewith the district court that Murphy owed no duty to inform FIB/Talley, lead counsel, SPA, or Judge Tchaikovsky that JudgeTchaikovsky’ s law clerk had accepted an offer of future employment with the firm. In the absence of duty, none of the claimssurvives. III On its cross-appeal, Murphy argues that it is entitled to indemnification for expenses because it prevailed on a claim thatarose from its role as an agent for its corporate clients. However, Arizona and Delaware only provide for indemnification ofdirectors, not agents, see Ariz. Rev. Stat. � 10-852; 8 Del. Code � 145(c); and California, which recognizes indemnity foragents, Cal. Corp. Code � 317(d), treats a corporation’ s outside counsel as an independent contractor which cannot seekindemnity under � 317(d) for costs incurred in defending a legal malpractice claim brought by the client. See ChannelLumber Co., Inc. v. Simon, 93 Cal.Rptr.2d 482, 487 (Ct. App. 2000). AFFIRMED. :::FOOTNOTES::: FN1 The basis for recusal was the appearance of impropriety; there is no suggestion of actual impropriety or lack ofimpartiality by the Judge or the law clerk. FN2 28 U.S.C. � 455(a) provides that “[a]ny justice, judge, or magistrate of the United States shall disqualify himself in anyproceeding in which his impartiality might reasonably be questioned.” FN3 When coupled with the interest accumulated on the secured claim from August 1994 and the value of an unsecuredclaim, FIB/Talley recovered over $7.4 million. Judge Newsome’ s ruling, however, did not give FIB/Talley relief from theautomatic stay, which would have permitted it to foreclose on SPA’ s property. FN4 FIB/Talley did not appeal. FN5 Both parties submitted expert declarations opining on foreseeability, but FIB/Talley’ s contention that the opinion of itsexpert was improperly ignored is incorrect. The district court properly treated foreseeability in the context of determiningwhether Murphy owed a duty of disclosure as an issue of law. FN6 Canon 3(E)(1) provides: “A judge shall disqualify himself or herself in a proceeding in which the judge’ s impartialitymight reasonably be questioned . . . .” The Commentary further indicates that [u]nder this rule, a judge is disqualified whenever the judge’ s impartiality might reasonably be questioned, regardless whetherany of the specific rules in Section 3E(1) apply. For example, if a judge were in the process of negotiating for employmentwith a law firm, the judge would be disqualified from any matters in which that law firm appeared, unless the disqualificationwas waived by the parties after disclosure by the judge. FN7 FIB/Talley suggests that the problem of isolating a clerk who has an offer or has accepted future employment isexacerbated when (as here) the judge only has a single clerk. This may be so, but has no bearing on the judge’ s duty or thelaw clerk’ s. If the possibility of being without a law clerk poses a practical problem for the judge, the judge can always cureit by either taking on a judicial extern, or prohibiting his or her clerks from interviewing or accepting future employment duringthe clerkship year. FN8 Section 455(a) disqualification is one that might be waived under � 455(e) if preceded by full disclosure on the recordof the basis for disqualification. However, recusal issues must be raised at the earliest possible time after the facts arediscovered. See, e.g., United States v. Conforte, 457 F.Supp. 641, 653 (D. Nev. 1978), aff’ d, 624 F.2d 869, 880 (9thCir. 1980). FN9 The California State Bar Formal Opinion, 1987-93 to which FIB/Talley refers, is inapposite. It has to do with anattorney’ s obligation to disclose a close personal relationship with a court reporter or bailiff to his client. This is animated byconcerns that do not pertain to a law clerk — that the relationship might inhibit the attorney from challenging a transcript orthe bailiff’ s conduct with the jury. FIB/Talley also relies upon the order entered by Judge Kozinski in In re Bernard, 31 F.3d 842 (9th Cir. 1994), in which hedeclined to recuse himself in a bankruptcy appeal on account of a possible appearance of impropriety arising out of his wife’s position as the U.S. Trustee. In doing so, he expressed the view that [c]ounsel for a party who believes a judge’ s impartiality is reasonably subject to question has not only a professional duty tohis client to raise the matter, but an independent responsibility as an officer of the court. Judges are not omniscient and,despite all safeguards, may overlook a conflict of interest. A lawyer who reasonably believes that the judge before whom heis appearing should not sit must raise the issue so it may be confronted and put to rest. Any other course would riskundermining public confidence in our judicial system. Id. at 847. However, as we explain, here the relevant facts were not unknown to the judge, nor was the conflict overlooked. FN10 Honorable Jeffrey T. Miller, United States District Judge for the Southern District of California, sitting by designation.
First Interstate Bank v. Murphy, Weir & Butler FIRST INTERSTATE BANK OF ARIZONA, N.A., a national banking association; TALLEY REALTYFINANCE AND INVESTMENT COMPANY, INC., an Arizona corporation, Plaintiffs-Appellants, v. MURPHY, WEIR & BUTLER, a professional corporation, Defendant-Appellee. No. 98-17420 D.C. No. CV-97-02535-FMS FIRST INTERSTATE BANK OF ARIZONA, N.A., a national banking association; TALLEY REALTYFINANCE AND INVESTMENT COMPANY, INC., an Arizona corporation, Plaintiffs-Appellees, v. MURPHY, WEIR & BUTLER, a professional corporation, Defendant-Appellant. No. 99-15410 United States Court of Appeals for the Ninth Circuit D.C. No. CV-97-02535-FMS Appeals from the United States District Court for the Northern District of California Fern M. Smith, District Judge, PresidingArgued and Submitted March 14, 2000 — San Francisco, California Before: Diarmuid F. O’ Scannlain and Pamela AnnRymer, Circuit Judges, and Jeffrey T. Miller, District Judge. [FOOTNOTE 10] COUNSEL Edward Freidberg, Sacramento, California, for the plaintiff-appellant-cross-appellee. Robert A. Lewis and Randy Michelson, McCutchen, Doyle, Brown & Enersen, San Francisco, California, for thedefendant-appellee-cross-appellant. Filed April 20, 2000
 
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