U.S. Third Circuit appeals court rejects New Jersey’s prohibition of lawyer’s website posts of excerpts of judicial opinions praising his legal work

Hello everyone and welcome to this Ethics Alert which will discuss the Third U.S. Circuit Court of Appeals opinion which reversed a federal district court opinion upholding a New Jersey guideline prohibiting a lawyer from posting judicial opinion excerpts praising his legal work. The opinion is Andrew Dwyer et al v. Cynthia A. Cappell et al, No. 13-3235 (U.S. Third Circuit Court of Appeal August 11, 2014) and the opinion is here: http://www2.ca3.uscourts.gov/opinarch/133235p.pdf
According to the opinion, the lawyer had posted multiple excerpts of unpublished and public judicial opinions related to fee applications in employment discrimination cases brought under the New Jersey Law Against Discrimination on his law firm website. One quote stated: ““The inescapable conclusion is . . . that plaintiffs achieved a spectacular result when the file was in the hands of Mr. Dwyer. . . . Mr. Dwyer was a fierce, if sometimes not disinterested advocate for his clients, and through an offensive and defensive motion practice and through other discovery methods molded the case to the point where it could be successfully resolved.”

A judge whose opinion quotes were posted on the lawyer’s website wrote to the lawyer in April 2008 and asked that the quotes be removed because he did not want his comments to be misconstrued as a blanket endorsement of the lawyer. The lawyer refused to remove any quotes and the New Jersey State Bar Association’s Committee on Attorney Advertising began examining the issue. The Committee and the New Jersey Bar Association ultimately produced Guideline 3, which was approved by the New Jersey Supreme Court in 2012. Guideline 3 stated that an attorney “may not include, on a website or other advertisement, a quotation or excerpt from a court decision (oral or written) about the attorney’s abilities or legal services.” The guideline did permit a lawyer to post the entire text of a judicial opinion on the website or in an advertisement.

The U.S. District Court upheld Guideline 3 in June 2013; however, before the Guideline was to become effective, the lawyer filed a lawsuit in federal court claiming that Guideline 3 violated his First Amendment rights to engage in truthful commercial speech. The district court found against the lawyer and found that the Guideline was a mere disclosure requirement and not a direct restriction on the lawyer’s speech. In making its ruling, the district court relied on the U.S. Supreme Court opinion in Zauderer v. Office of Disciplinary Counsel (1985), which stated that “an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the state’s interest in preventing deception of consumers.”

The Third Circuit Court of Appeals unanimously reversed the district court’s opinion. The opinion confirmed that disclosure requirements receive less scrutiny than actual restrictions on speech and that the New Jersey Guideline had characteristics of both a disclosure requirement and a restriction on speech. The opinion did not address whether the Guideline was a restriction or a prohibition; however, it stated that even under the less restrictive standard of review for disclosure requirements, the Guideline was constitutionally flawed.

The appellate opinion stated that “Guideline 3 does not require disclosing anything that could reasonably remedy conceivable consumer deception stemming from (the lawyer’s) advertisement.” The opinion also listed an example of a disclosure that would be sufficient: “This is an excerpt of a judicial opinion from a specific legal dispute. It is not an endorsement of my abilities.” Since Guideline 3 required a lawyer to post entire judicial opinions, it “effectively precludes advertising with accurate excerpts from judicial opinions on (the lawyer’s) website, it is unduly burdensome.”

“Guideline 3 as applied to (the lawyer’s) accurate quotes from judicial opinions thus violates his First Amendment right to advertise his commercial services. Requiring (the lawyer) to reprint in full on his firm’s website the opinions noted above is not reasonably related to preventing consumer deception. To the extent the excerpts of these opinions could possibly mislead the public, that potential deception is not clarified by Guideline 3. In any event, what is required by the Guideline overly burdens (the lawyer’s) right to advertise. We thus reverse the order of the District Court and remand the case.

Bottom line: This is a significant First Amendment decision related to lawyer advertising which found that New Jersey Guideline 3, which prohibited a lawyer from publishing excerpts of judicial opinions on his website, was an unconstitutional restriction on the lawyer’s commercial speech. The opinion did approve of the use of a disclosure/disclaimer to prevent any consumer confusion related to the opinion excerpts.

Be careful out there.

Disclaimer: this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

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Florida Bar’s Board of Governors approves increase in CLE hours and revision to the comment to Rule 4-1.1 to require technology competence

 

Hello everyone and welcome to this Ethics Alert which will discuss the recent approval by The Florida Bar’s Board of Governors of amendments to the rules related to technology and increasing the required CLE from 30 to 33 hours, with 3 hours of technology.

The Florida Bar’s Board of Governors (BOG) met on July 24, 2015 and approved a proposed amendment to the Bar Rule 6-10.3, minimum continuing legal education standards, which would increase the minimum CLE requirements from 30 to 33 hours and also require 3 CLE hours in, inter alia, technology related education for each three year cycle. The proposed amendment would maintain the 5 hour minimum requirement for legal ethics, professionalism, bias elimination, substance abuse, or mental illness.  The BOG also approved an amendment to the Comment to Bar Rule 4-1.1 of the Florida Bar rules to emphasize that a lawyer must be competent in the use of technology (or hire someone who is), and understand of the risks and benefits associated with the use of technology.

The approved rule amendments will be submitted in an omnibus petition to amend The Florida Bar Rules, which will be filed with the Florida Supreme Court in the fall of 2016.  Florida lawyers will be solicited to comment on the revisions and those comments will be sent to the Florida Supreme Court with the proposed rule amendments.

Bottom line:  If the rule amendment is approved by the Supreme Court, the minimum CLE hours required of Florida lawyers will increase from 30 to 33 hours every three (3) years, with 3 hours of technology related CLE.  The comment to Rule 4-1.1 will also put lawyers on notice that they must be competent in the use of technology (or hire someone who is).

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

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New York lawyer suspended for 3 months for, inter alia, making racial, ethnic, homophobic, sexist, insulting judge, and being disrupting

Hello everyone and welcome to this Ethics Alert which will discuss the recent New York Appellate Court disciplinary opinion suspending a lawyer who, inter alia, was found to have made “patently offensive racial, ethnic, homophobic, sexist, and other derogatory remarks to attorneys”, insulting an administrative law judge, and being disruptive in a hearing room.  The disciplinary opinion is Matter of Teague 2015 NY Slip Op 06301, Appellate Division, First Department (July 28, 2015) and the opinion is online at justia.com here: http://law.justia.com/cases/new-york/appellate-division-first-department/2015/m-1137.html

According to the opinion, the lawyer was admitted in New York in 1993.  In 2012 and 2013, the New York Disciplinary Committee brought 13 charges against the lawyer.  After a hearing, the assigned referee recommended that the lawyer be found guilty of 6 of the charges, which were related to his “demeanor and actions”. The six charges were confirmed by the New York Hearing Panel in a report dated January 13, 2015 and other the seven charges were dismissed.

The lawyer was charged with having made “patently offensive racial, ethnic, homophobic, sexist, and other derogatory remarks to attorneys”, insulting an administrative law judge in a public forum, and being disruptive inside of and/or in the vicinity of hearing rooms; and “improperly importuning court clerks to recalendar cases even when told it could not be done”.

The evidence included testimony of three Administrative Law Judges: one judge received complaints of “disruptive or explosive conduct” by the lawyer and personally witnessed the behavior on several occasions; a second judge was called “a disgrace” by the lawyer in an open hearing room during or after a contentious hearing.  A third judge had admonished the lawyer for talking in the courtroom, and the lawyer responded by becoming “irate, rude, loud, and combative”.  Three attorneys who practiced traffic law in the same place as the lawyer (traffic court) testified that the lawyer had cursed and made “obscene, racist comments, and uttered profanities about ethnicity and homosexuality” “for years” in the public areas of the court.  The had also threatened one of the attorneys on more than one occasion.

The referee report recommended that the lawyer be “publicly sanctioned” and directed to attend an anger management program, based on the “vituperative and unseemly remarks” made to two Administrative Law Judges and the inappropriate language used with other attorneys. The referee also noted the unpleasant work atmosphere and that inappropriate language between the attorneys “appeared to be commonplace.”  The referee attributed respondent’s misbehavior to “poor impulse control” and a “hair trigger response.”

The report further found that the lawyer admitted that he used inappropriate language, he intended to seek counseling, and he had never been convicted of any offense involving violence.  The lawyer is active in his church, does pro bono work related to traffic cases, and “seeks to be successful on behalf of his clients”.  The Hearing Panel rejected the referee’s recommendation of a “public sanction” and recommended a one month suspension.

After citing to relevant case law, the opinion states:

“Even assuming, as the Referee found, that it is true that inappropriate language by attorneys is commonplace at the (court), we fail to see how this constitutes mitigation or otherwise excuses respondent’s ongoing and public inappropriate behavior. Respondent has shown inexcusable disrespect in open court to two Administrative Law Judges. He has spewed racist, sexist, homophobic and offensive epithets against other attorneys that any reasonable person, let alone a reasonable attorney, would know are simply unacceptable in public discourse…Respondent’s conduct should not and will not be tolerated.  Furthermore, we find it of concern that he attempted to undermine the functioning of the (court) by his repeated requests of the clerks to recalendar cases, even after being informed by more than one clerk that what he was asking would violate (court) policy.

The opinion rejected the one month suspension and suspended the lawyer for three months and also required the lawyer to continue offensive racial, ethnic, homophobic, anger management treatment for one year.

Bottom line:  The practice of law is extremely stressful and lawyers strive to keep the stress (and any improper impulses) under control.  This lawyer clearly failed to do this and made “patently offensive racial, ethnic, homophobic, sexist, and other derogatory remarks to attorneys”, insulted an administrative law judge in a public forum, was disruptive inside of and/or in the vicinity of hearing rooms; and “improperly importune(ed) court clerks to recalendar cases even when told it could not be done”.  Notwithstanding that there was an “unpleasant work atmosphere and that inappropriate language between the attorneys “appeared to be commonplace’ at the court, the opinion suspended the lawyer for 3 months” and cited his poor impulse control” and a “hair trigger response.”  This lawyer should be happy that the sanction was only a three (3) month suspension.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Louisiana lawyer disbarred for social media campaign with “false, misleading and inflammatory statements” to influence custody case

Hello everyone and welcome to this Ethics Alert which will discuss the recent Louisiana Supreme Court disciplinary opinion disbarring a lawyer who, inter alia, made false statements and used Twitter and an online petition to urge readers to contact two presiding judges who she alleged were unwilling to consider the evidence in two child custody cases involving allegations of sexual abuse.  The disciplinary opinion is In Re: Joyce Nanine McCool, No. 2015-B-0284 (June 30, 2015) and the opinion is online here: http://www.lasc.org/opinions/2015/15B0284.opn.pdf

According to the opinion, the lawyer solicited others to make ex-parte contact with presiding judges and the Louisiana Supreme Court to make comments about the cases, which were sealed and confidential proceedings.  The opinion referred to several examples of the lawyer’s media comments, including this tweet: “GIMME GIMME GIMME Evidence! Want some? I got it. Think u can convince a judge to look at it? Sign this petition.”  “Another tweet said, ―Judge

Gambrell at it again – turned a 4 YO child over to a validated abuser – PLEASE TELL ME WHAT IT WILL TAKE FOR EVERYON [sic] TO SAY ‗ENOUGH‘.”

The lawyer also made the following comment: “Please sign the petition, circulate it to all of your friends and families and call Judge Amacker and Judge Gambrell during the hours of 8:30 to 5:00 starting Monday, August 15 to ask why they won’t follow the law and protect these children. Let them know you’re watching and expect them to do their job and most of all, make sure these precious little girls are safe!”

The opinion stated: “These online articles and postings by respondent contain numerous false, misleading, and inflammatory statements about the manner in which (the presiding judges) were handling the pending cases. But respondent denies any responsibility for these misstatements, contending these were ―Raven‘s perceptions of what had happened‖ and respondent was simply ―helping [Raven] get her voice out there.”

The lawyer argued that her conduct was protected by the First Amendment; however, the majority of the Court rejected that argument. “We disagree and take strong exception to respondent’s artful attempt to use the First Amendment as a shield against her clearly and convincingly proven ethical misconduct.” The opinion also stated that the lawyer had an “utter lack of remorse” and a “defiant attitude” by asserting her actions had First Amendment protection.  “The appropriate method for challenging a judge’s decisions and evidentiary rulings, as respondent even conceded, is through the writ and appeal process, not by starting a social media blitz to influence the judges’ and this court’s rulings in pending matters and then claiming immunity from discipline through the First Amendment.”

A disciplinary hearing committee conducted a hearing on February 27, 2014, and March 27, 2014 in which both presiding judges testified. The lawyer also testified and repeatedly denied that she violated the Rules of Professional Conduct.  She also implied and/or stated that her conduct was justified by what the judges had done in the underlying cases and in the interest of protecting the minor children.  The hearing committee recommended that the lawyer be found guilty and recommended a suspension of a year and a day and the disciplinary board concurred.

The opinion concluded: “Respondent’s misconduct is further distinguishable because of her use of the internet and social media to facilitate her misconduct.  As a result, the petition and associated offensive postings had and still have the potential to reach a large number of people world-wide and remain present and accessible on the world wide web even today.  Coupled with her complete lack of remorse and admitted refusal to simply allow our system of review to work without seeking outside interference, respondent’s misconduct reflects a horrifying lack of respect for the dignity, impartiality, and authority of our courts and our judicial process as a whole.”

“Respondent’s social media campaign conducted outside the sealed realm of the underlying judicial proceedings constitutes, in our view, an intolerable disservice to these traditions and our judicial system, which the constraints of our rules of professional conduct seek to safeguard against. Accordingly, we find her ethical misconduct warrants the highest of sanction—disbarment.”

Bottom line:  This lawyer’s misconduct involved the extensive use of social media in a campaign to discredit the judicial system/obtain justice for the children.  The Louisiana Supreme Court found that her misconduct “reflects a horrifying lack of respect for the dignity, impartiality, and authority of our courts and our judicial process as a whole.”  All lawyers must be very wary of using social media to promote their clients’ causes.  This lawyer’s use of social media led to her disbarment.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Minnesota lawyer suspended for, inter alia, making false and/or misleading statements related to trip which caused missed court dates

 

Hello everyone and welcome to this Ethics Alert which will discuss recent Minnesota Supreme Court opinion suspending a lawyer for making false or misleading statements related to a Paris trip which caused her to miss a trial and  court dates.  The opinion is In re Petition for Disciplinary Action against Mpatanishi Syanaloli Tayari-Garrett, Case No. A14-0995 (July 1, 2015) and is online here: http://www.mncourts.gov/mncourtsgov/media/Appellate/Supreme%20Court/Standard%20Opinions/OPA140995-070115.pdf

According to the opinion, the lawyer is admitted to practice in Texas and Minnesota.  She requested a continuance of a May 2, 2011 trial for her client in a criminal matter in Minnesota.  Before a hearing was held on the motion, the lawyer had purchased a nonrefundable round-trip airline ticket to attend her brother’s wedding in Paris, France from May 4, 2011 to May 9, 2011.

The trial court denied the lawyer’s motion to continue and another lawyer who showed up on the lawyer’s behalf on the May 2, 2011 trial date said she had informed him that she was hospitalized in Dallas.  The court granted a continuance for one day and ordered the lawyer to provide documentation of the circumstances surrounding her hospitalization and also the arrangements she had made to travel from Dallas to Minneapolis for the May 2, 2011 trial.  The lawyer failed to attend the May 3, 2011 hearing.

The lawyer later provided documents showing that she was hospitalized on May 2, 2011; however, she was released the next day.  On May 4, 2011, she traveled to Paris.  While she was in Paris, the lawyer attended a May 5, 2011 hearing on a motion for an order to show cause as to why she should not be held in contempt by telephone. The lawyer discussed her illness but did not reveal that she was in Paris at that time.  According to the opinion, “(d)uring the hearing, the court scheduled a contempt hearing for May 9.  In response, the lawyer stated, ‘I have a follow-up appointment next week so I cannot, and I believe the Court is aware of that, that I cannot be there on Monday [May 9].’  (The lawyer) did not appear for the May 9 hearing either in person or by telephone.  In fact, at the time of the May 9 hearing, Tayari-Garrett was en route from Paris to Dallas.”

The referee found the lawyer guilty of multiple Bar Rule violations, including committing a criminal act, misrepresentation, and conduct prejudicial to the administration of justice, and also found aggravating factors that included lack of remorse and refusal to acknowledge the wrongful nature of her conduct.  The referee also recommended that the lawyer be indefinitely suspended no right to petition for reinstatement for a minimum of 120 days.

The Minnesota Supreme Court upheld the referee’s findings and the suspension is effective 14 days from the date of the filing of the July 1, 2015 opinion.  The lawyer will not be eligible to petition for reinstatement for a minimum of 120 days from the date of the suspension and any reinstatement will be conditional on the lawyer’s successful completion of the professional responsibility portion of the state bar examination and satisfaction of Minnesota continuing legal education requirements.

Bottom line:  According to this opinion, this lawyer failed to appear at a hearing and lied to the court regarding the circumstances surrounding her failure to appear and she was also convicted of a criminal misdemeanor for contempt of court.  She received an indefinite suspension will not be eligible to petition for reinstatement for a minimum of 120 days from the date of the suspension.  This is an example of the application of the quote by Sir Walter Scott in 1808 (often misattributed to Shakespeare), “Oh what a tangled web we weave, When first we practice to deceive.”  Another jurisdiction may well have imposed a harsher sanction.

Don’t do this…and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

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Recent ABA Formal Ethics Opinion examines obligations of lawyers in providing file documents to former clients after termination

Hello everyone and welcome to this Ethics Alert which will discuss recent American Bar Association Formal Ethics Opinion 471 which discusses the obligations of lawyers to return file/documents to former clients.  The opinion is Formal Opinion 471 (Ethical Obligations of Lawyer to Surrender Papers and Property to which Former Client is Entitled) (July 1, 2015) and is online here: http://www.abajournal.com/files/aba_formal_opinion_471(7-1-15).pdf

The opinion begins with the premise that lawyers must often return documents and materials to a client after the termination of the representation in order to protect client’s interests.  The opinion analyzed the following facts:  a lawyer had represented a governmental municipality for 10 years.  After the representation was terminated, the municipality requested that  the lawyer provide its new counsel with all files, including both open and closed files.

The opinion further states that lawyers’ obligations and responsibilities are generally outlined in ABA Model Rules 1.15 and 1.16.  Model Rule 1.15 provides that a lawyer must safeguard a client’s property and promptly return it to the client when requested. Model Rule 1.16(d) provides that lawyers take steps “reasonably practicable to protect a client’s interests.” These steps include “in providing file documents to former clients after termination.”  The Model Rules do not define what “papers and property to which the client is entitled.”

According to the opinion, most jurisdictions apply the “entire file” approach, wherein there is a presumption that lawyers must return all papers in the file unless a specific exception applies.  “In those jurisdictions, at the termination of a representation, a lawyer must surrender papers and property related to the representation in the lawyer’s possession unless the lawyer establishes that a specific exception applies and that certain papers or property may be properly withheld.  Commonly recognized exceptions to surrender include: materials that would violate a duty of non-disclosure to another person; materials containing a lawyer’s assessment of the client; materials containing information, which, if released, could endanger the health, safety, or welfare of the client or others;16 and documents reflecting only internal firm communications and assignments. The entire file approach assumes that the client has an expansive general right to materials related to the representation and retains that right when the representation ends.”

Other jurisdictions use the “end product” approach.  Under this approach, lawyers must provide all finished products in the file, such as pleadings and expert and investigative reports, but not work product, such as memoranda about conflicts of interest or ethics, drafts of legal instruments, and legal research and memoranda.  According to the opinion, “(a)dministrative materials related to the representation, such as memoranda concerning potential conflicts of interest, the client’s creditworthiness, time and expense records, or personnel matters, are not considered materials to which the client is entitled under the end product approach. Additionally, the lawyer’s personal notes, drafts of legal instruments or documents to be filed with a tribunal, other internal memoranda, and legal research are viewed as generated primarily for the lawyer’s own purpose in working on a client’s matter, and, therefore, need not be surrendered to the client under the end product approach.” Florida follows this approach.

The opinion states that lawyers should always return end product materials; however, “there may be circumstances in individual representations that require the lawyer to provide additional materials related to the representation.”  Also, any documents and/or materials which would likely prejudice the client’s interests if they are not provided must be returned to the client. The opinion also noted that if a filing deadline is imminent, a lawyer must timely provide “the most recent draft and relevant supporting research” to avoid causing prejudice to the client.

Bottom line: this opinion provides important guidance from the ABA regarding a lawyer’s duties and obligations when providing file documents and/or materials to a client after the representation is terminated.  Of course, lawyers must determine which rule their jurisdiction applies before acting.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

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LegalZoom files federal antitrust lawsuit against the North Carolina State Bar citing 2015 USSC dental board case

Hello everyone and welcome to this Ethics Alert which will discuss the recent antitrust lawsuit filed on June 3, 2015 by LegalZoom against the North Carolina State Bar alleging antitrust violations.  The case is LegalZoom.com, Inc. v. North Carolina State Bar, et al, (U.S. Middle District, North Carolina) Case No.: 1:15-CV-439.  The formal Complaint (WSJ link) is at http://online.wsj.com/public/resources/documents/2015_0604_legalzoom.pdf.

The Complaint was filed on June 3, 2015 and seeks injunctive relief for antitrust violations as well as damages, claiming that the North Carolina State Bar is has “engaged in unauthorized and anticompetitive conduct illegally and unreasonably restraining trade in the Relevant Market” by prohibiting LegalZoom from offering prepaid legal services plans in that state.  As support for the claims, the Complaint cites a recent U.S. Supreme Court decision on the prohibition of non-dentists from providing teeth whitening services in North Carolina.

According to the Complaint, in 1991, the North Carolina state legislature “removed from the State Bar any power over prior and continuing approval of prepaid legal services plans, leaving to the State Bar only the ministerial task of keeping a registration list of plans sold in North Carolina.  The State Bar, however, defied the Legislature. Over time, the State Bar unilaterally and ultra vires reassumed and exercised the power the Legislature had removed. The State Bar adopted – without legislative authority or active State supervision – a restrictive definition of what constitutes a prepaid legal services plan, and then began to refuse to ‘accept’ for registration plans that purportedly did not meet its own definition, excluding those plan providers from the Relevant Market.”  The Complaint states that the Bar rules require the prepaid plans to be paid in advance of any immediate need, and any legal services provided must be provided by lawyers licensed in the state.

In support of the allegations, the Complaint cites the February 2015 U.S. Supreme Court decision North Carolina State Board of Dental Examiners v. Federal Trade Commission, which is here: http://www.supremecourt.gov/opinions/14pdf/13-534_19m2.pdf.  The North Carolina State Board of Dental Examiners opinion held that a dental regulatory board made up mostly of dentists does not have state-action immunity in an antitrust action and authorized a Federal Trade Commission challenge to the dental board’s prohibition of the provision of teeth whitening services by non-dentists.  The opinion also found that when a state board is controlled by market participants in the occupation that it regulates, state-action antitrust immunity does not accrue unless the restraint of trade that is being challenged is affirmatively expressed as state policy and the policy is actively supervised by the state.

Bottom line: It should be very interesting to watch this case unfold.  When the USSC opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission was rendered on February 25, 2015, there was much analysis/commentary in the media regarding the potential vulnerability of state Bars to an antitrust challenge if it could be shown that they were controlled by market participants (lawyers) in the occupation being regulated (the law).  This appears to be the first shot across the bow.  Stay tuned…

…and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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