Category Archives: U.S. Constitution and UPL regulation- professional speech and application of UPL rules

U.S. DOJ files Statement in TIKD in federal lawsuit arguing that Florida Bar is not immune from Sherman antitrust allegations

Hello everyone and welcome to this Ethics Alert Update which will discuss the recent (March 12, 2018) Statement of Interest filed by the United States Department of Justice arguing that The Florida Bar is not immune or exempt from antitrust under the Sherman Antitrust Act based upon the U.S. Supreme Court’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  The case is TIKD Services LLC, v. The Florida Bar, et al., Case No. 1:17-cv-24103-MGC (U.S. District Court, Southern District of Florida-Miami Division).  The Statement of Interest is available on the PACER federal document system here:  https://www.pacer.gov/login.html (subscription required).

As I previously blogged, TIKD Services, LLC filed the federal lawsuit against The Florida Bar, the Ticket Clinic law firm, and other individuals in the U.S. District Court, Southern District of Florida on November 8, 2017.  The TIKD app allows an individual who has received a traffic citation to upload a photo of the citation and pay a fixed fee and TIKD retains an attorney to represent that individual.  If the individual receives points against his or her license, TIKD refunds the payment and pays the cost of the ticket.  The business model is based on the fact that contested traffic tickets are often dismissed or a lower fine is assessed and, since TIKD deals in volume, it can charge a lower price than a lawyer who is separately retained by the individual.

The Florida Bar issued a staff opinion finding that lawyers who work with TIKD and similar programs could be in violation of Florida Bar disciplinary rules, including fee splitting and interference with the lawyer’s independent professional judgment.  A complaint was filed with The Florida Bar by members of the law firm alleging that TIKD was engaging in the unauthorized practice of law (UPL).  That complaint is currently pending and the Bar has recommended further proceedings.

TIKD then filed the federal lawsuit court alleging conspiracy, restraint of trade, tortious interference with business relationships, and antitrust violations.  The defendants include The Florida Bar, attorney Mark S. Good, who founded The Ticket Clinic law firm, and other individuals.  According to the federal Complaint, The Florida Bar advised TIKD that it was opening an unlicensed practice of law investigation into the company’s activities after the company was featured in a Miami Herald story and a few months later, attorneys with The Ticket Clinic threatened to report two of TIKD’s lawyers to The Florida Bar if they continued to work with TIKD.

A state lawsuit was filed and was settled; however, TIKD alleges in the federal Complaint that The Florida Bar and the Ticket Clinic law firm continued to make a “concerted effort” to put it out of business, and that the firm’s lawyers continued filing “baseless ethics complaints” against attorneys who represent TIKD customers.

A recent (February 21, 2018) Motion for Sanctions filed by the Ticket Clinic law firm alleged, inter alia, that The Florida Bar has immunity, which immunized the individual defendants, that the individuals have immunity on other grounds, that the lawsuit is frivolous on other grounds, and that the lawsuit should be dismissed and the Plaintiffs should be sanctioned.

On March 12, 2018, the U.S. Department of Justice filed a statement of interest stating that The Florida Bar is not immune from federal or state antitrust liability under the Sherman Act as an arm of the state based upon the U.S. Supreme Court’s 2015 decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  According to the statement:

“The Florida Bar defendants assert, as one ground for their motion to dismiss, that they are entitled to protection against Sherman Act claims by the state-action doctrine of Parker v. Brown, 317 U.S. 341 (1943), without having to satisfy either the “clear articulation” or “active supervision” requirements of that doctrine. That position is incorrect. The Supreme Court’s most recent state-action decision, N. Carolina State Bd. of Dental Examiners v. FTC, 135 S. Ct. 1101 (2015), clarified the state-action doctrine with respect to state agencies that regulate learned professions. It requires that the Bar, if “controlled by active market participants,” id. at 1114, must satisfy the clear articulation and active supervision requirements in order to obtain state-action protection.”

Bottom line:  As I have previously blogged, this is one of the first cases filed in Florida (and possible in any jurisdiction) which directly alleges that a State Bar’s procedures violate the Sherman Antitrust Act in reliance upon the U.S. Supreme Court opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  The Statement of Interest filed by the U.S. Department of Justice agrees with that analysis and argues that it is correct.  Stay tuned…

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.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

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Federal district judge dismisses lawsuit alleging that the North Carolina’s regulation of UPL is unconstitutional

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of a federal district judge in North Carolina dismissing a non-profit corporation’s claims that the state’s UPL statute is unconstitutional.  The case is: Capital Associated Industries Inc. v. Josh Stein et al., Case No. 1:15-cv-00083 (U.S. District Court, Middle District of North Carolina).  The September 19, 2017 order and opinion is here: http://www.abajournal.com/images/main_images/NCBar.pdf

A corporation called Capital Associated Industries Inc. (CAI) filed the lawsuit after the North Carolina State Bar issued a proposed ethics opinion which found that CAI’s plan to provide legal services would constitute unlawful UPL.

According to the order and opinion of U.S. District Judge Loretta Biggs, CAI is a non-profit (and non-legal) corporation which provides human resources services to members, who pay annual dues. The corporation proposed to provide employment-related legal advice through its own lawyers as part of its membership services. It also proposed charging a separate fee of $195.00 an hour for other legal services, including drafting employment agreements and potential representation before the Equal Employment Opportunity Commission.

CAI argued that North Carolina’s UPL Statutes, as applied to them, “violate CAI’s right to substantive due process because the statutes are not rationally related to any legitimate governmental interest.  The State Bar responds that the NC UPL Statutes “are rationally related to North Carolina’s interest in avoiding potential ‘conflicts of interest and loyalty,’ as well as its interest in avoiding the ‘impairment of attorney independence.’”

The order and opinion held that the statute was sufficiently related to the government’s interest in avoiding potential conflicts of interest and loyalty, and in avoiding the impairment of attorney independence.  “North Carolina could rationally decide that nonlawyers would be more likely than lawyers to encourage the attorneys whom they supervise to violate the ethical canons that govern the legal profession.”

CAI also argued that the UPL Statutes “violate the freedom of speech guaranteed by the First Amendment, as applied to its proposed provision of legal services.  Specifically, CAI argues that the UPL Statutes restrict CAI’s speech on the basis of its content; that the UPL Statutes prohibit CAI from speaking on the basis of its corporate identity; and that this restriction on its speech cannot survive strict scrutiny.  The State Bar argues that the UPL Statutes operate as permissible regulation of a profession and not a restriction on speech that is entitled to First Amendment protection.”

The order and opinion stated that the UPL statute is not subject to strict First Amendment scrutiny since CAI’s proposed communications with members on employee legal questions are professional speech.  “The Fourth Circuit has held that under the professional speech doctrine, ‘a state’s regulation of a profession raises no First Amendment problem where it amounts to ‘generally applicable licensing provisions’ affecting those who practice the profession.’”  Pursuant to same, CAI “has no First Amendment right to advertise legal services since its right to provide such services is unlawful under the (UPL) statutes.”   According to media reports, CAI’s attorney has stated that the organization will appeal to the Fourth Circuit Court of Appeals.

Bottom line:  This opinion appears to strengthen the regulation of UPL by state Bars such as the North Carolina Bar.  The opinion also analyzes the constitutional scrutiny that applies in cases involving the regulation of professional speech “where it amounts to ‘generally applicable licensing provisions’ affecting those who practice the profession.”

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.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under joe corsmeier, Joseph Corsmeier, U.S. Constitution and UPL regulation- professional speech and application of UPL rules, Unauthorized practice of law, Unlicensed practice of law, UPL and professional speech, UPL North Carolina federal judge opinion on regulation of UPL