Judges often are required to decide whether they can ethically participate in a case before them because of previous relationships they may have had with those involved in the dispute.

Antonin Scalia, President Reagan's choice for the Supreme Court, confronted such an issue last fall on the U.S. Court of Appeals here. A law firm in the case before him had paid him a consulting fee of $25,800 three years earlier, before he was a judge, for services on behalf of AT&T in connection with an unrelated case. AT&T was also a litigant in the case that came before him last fall.

Scalia, after informally seeking advice from the chief judge about his former relationship with AT&T, remained on the case. He wrote an opinion ruling against the company.

Experts in judicial ethics, in interviews last week, were divided about whether Scalia did the correct thing, whether his remaining on the case created an appearance of conflict of interest in violation of the canons of ethics.

"I think it does raise questions about his judicial judgment," said Monroe H. Freedman, former dean of the Hofstra Law School and a longtime legal activist and commentator on legal ethics. Freedman called Scalia's participation an "act of serious misjudgment."

By contrast, John P. Frank, a leading commentator on the subject of judicial disqualification, saw "absolutely . . . no impropriety" in Scalia's action.

According to Scalia's 1982 financial disclosure statement, he received the fee that year from the Chicago law firm of Sidley & Austin for consultation regarding a massive antitrust dispute between AT&T and MCI Communications Corp. He had been retained in 1980, while a law professor at the University of Chicago, because of his expertise in telecommunications law.

AT&T lawyers said Friday that Scalia worked with them in preparing their case and was to testify for them in the lawsuit brought against AT&T by MCI. He was not called to testify, they said, because his testimony was unnecessary.

Last October, AT&T and MCI again confronted each other in an unrelated and much less important matter involving different issues: a procedural motion involving interpretation of a Federal Communications Commission rule. The dispute is part of a more significant controversy over fees for hookups by other companies into AT&T's networks.

According to federal law, a judge "shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned." But different judges interpret the rules differently.

Some disqualify themselves in any case in which their old law firm is appearing before them -- even after many years -- or when one of their old clients is a litigant. Others remains sitting in such cases, depending on the circumstances.

The concern of the law and the code of conduct is not solely that a judge might appear to favor a party with whom he has been associated, but that he might disfavor such a party, bending over backward because of the past relationship.

Last fall, neither AT&T nor MCI knew that Scalia was sitting on the case because it has a motion and the judges hearing it were not identified in advance, according to attorneys on both sides. No oral arguments were held. Scalia did not inform either side of the consulting arrangement, attorneys said. In his Oct. 4 opinion, Scalia, joined by Judges Robert H. Bork and Abner J. Mikva, ruled against his former associates, taking MCI's position over AT&T.

Scalia responded to questions from The Post through a law clerk, who said Scalia's participation in the 1985 case (Western Union Telegraph Co. v. FCC) was proper because sufficient time had passed since his involvement with AT&T and Sidley & Austin, which still represents AT&T.

Speaking for Scalia, the law clerk said, "It's a common practice for judges to recuse themselves from matters [involving] a company that they have worked for . . . for two to three years after their connection with that company. The judge recused himself from all matters which concerned AT&T for a period of three years."

The clerk, who asked not to be identified, said Scalia also checked with Chief Judge Spottswood W. Robinson III "to make sure that three years was an adequate time period." (Robinson declined to be interviewed.) The clerk said AT&T had not been a regular client of Scalia's. In addition to the $25,800 listed on the 1982 disclosure form, the clerk said, Scalia received a fee from AT&T in 1980 oe less than $2,000 for presenting a seminar.

Jeffrey M. Shaman, a law professor who heads the Center for Judicial Conduct Organizations, which is part of the American Judicature Society, said Scalia did not violate the legal canons but "if Judge Scalia wanted to appear absolutely, perfectly impartial, he might have recused himself."

Freedman said he had no doubts that Scalia did the wrong thing.

Geoffrey C. Hazard Jr., a Yale law professor and expert in legal ethics, said, "It's a judgment call and not a per se [automatic] disqualification." Hazard said a judge should ask, "'Has this thing got anything to do with what I worked on before?' and if the answer is no, then he's going to keep on going."

During his Aug. 4, 1982, Senate confirmation hearing for the appeals bench, Scalia was asked to identify the criteria that would prompt him to recuse himself from a case.

Scalia said he would consult the canons of judicial ethics. He also said, "As far as my own personal soul search is concerned I would disqualify myself in any case in which I believed my connection with one of the litigants or any other circumstances would cause my judgment to be distorted in favor of or against one of the parties. I would furthermore disqualify myself if a situation arose in which, even though my judgment would not be distorted, a reasonable person would believe that my judgment would be distorted. That does not mean anybody in the world, but a reasonable person."

(Scalia joined in a 1985 appeals court decision reinstating a lower court jury's decision that The Washington Post libeled former Mobil Oil Corp. president William P. Tavoulareas in a 1979 article about his business dealings and awarding him $2,050,000 in damages. He later dissented from a full appeals court decision to rehear the issue. The matter is pending.)