By Ronald C. Minkoff [Originally published in NYPRR May 2007]
Now that approximately 35 states have adopted some variation of Model Rule 5.5, and a plethora of case law Birbrower v. Superior Court of California, 17 Cal. 4th 119, 70 Cal. Rptr.2d 304, 949 P.23 1 (1998), the ability of lawyers to practice across state lines has become the subject of increasing and more specific regulation. In recent years, a new area of contention has arisen regarding another form of multijurisdictional practice (MJP) — practice by a lawyer before the federal courts in a state where she either has never been admitted or has been suspended from practice.
This issue has put federal and state courts across the country at odds. Following the lead of a 43-year-old U.S. Supreme Court case, Sperry v. Florida Ex. Rel. Florida Bar, 373 U.S. 379 (1963), federal courts have guarded jealously their prerogative to regulate the power to practice before federal agencies or federal courts, whether or not the lawyer has been authorized to do so by regulators in the state in which the lawyer (or, in the case of Sperry, the non-lawyer) is physically practicing. State courts, meanwhile, define their power to regulate lawyers broadly and will, for example, preclude a lawyer admitted to practice only in federal court from operating a law office in the state, if her practice impinges in any way on state law issues.
The fundamental tension in this area between federal power and states’ rights is not likely to be resolved soon, but it has led courts and commentators to question whether limits exist on the authority of states to regulate law practice within their borders, and whether federal courts and agencies should be permitted to exert autonomy in this important area. This article will examine this tension from the perspectives of both the federal and the state courts, and suggest the most appropriate analytical framework for resolving federal/state MJP issues.
The Sperry decision is the granddaddy of all cases in this area. In Sperry, the Florida Bar attempted to enjoin a non-lawyer who was licensed to practice before the U.S. Patent Office (U.S.P.O.) pursuant to federal statute (35 U.S.C. §31) from operating an office in Florida and holding himself out as authorized to represent Florida citizens before the U.S.P.O. The U.S. Supreme Court did not “question that under Florida law the preparation and prosecution of patent applications for others constitutes the practice of law,” and that Florida “has a substantial interest in regulating the practice of law licensing requirements which, though valid in the absence of federal regulation, give ‘the State’s licensing board a virtual power of review over the federal determination’ that a person or agency is qualified and entitled to perform certain functions. …” [Id.]
This sweeping view of federal authority to regulate “federal” law practice has been echoed in several federal court decisions. The most recent example is Surrick v. Killion, 449 F.3d 520 (3rd Cir. 2006). Surrick was disbarred from practicing in Pennsylvania state court for five years for leveling false accusations of case fixing against local judges, and the U.S. District Court for the Eastern District of Pennsylvania imposed a reciprocal suspension of 30 months. When the federal court suspension expired (long before the state suspension did), Surrick sought a declaratory judgment permitting him to continue to maintain a Pennsylvania law office for the purpose of maintaining his federal court practice. The Third Circuit permitted him to do so, citing Sperry and Supremacy Clause principles. The court noted that “a federal court has the power to control admission to its bar and to discipline attorneys who appear before it,” and neither state courts nor state regulators can interfere with it. [449 F.3d at 531, citing Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991).] This power, the court held, extends to controlling the “incidents” of the right to practice, including maintaining an office in the state. [449 F.3d at 532–33.] The court rejected the contention that Surrick’s handling of diversity cases, which often involve state law, meant that he fell within the ambit of state regulators: “The Office of Disciplinary Counsel cannot point to any authority indicating that a federal court’s power to determine who may practice law before it depends on the type of cases a lawyer intends to practice.” [Id. at 534.]
Other federal courts have made clear that they will not defer to state courts or regulators on whether attorneys may practice before them. [See, e.g., Theard v. U.S., 354 U.S. 278 (1957) — disbarment in state court does not automatically result in disbarment in federal court; In re Desilets, 291 F.3d 925 (6th Cir. 2002) — attorney admitted in Michigan federal court may recover fees for handling bankruptcy matters there, even though he was not admitted in Michigan state court; In re Mary Poole, 222 F.3d 616 (9th Cir. 2000) — attorney admitted in Arizona federal court but not in Arizona state court may practice bankruptcy law in District of Arizona; the exercise of bankruptcy power is exclusively federal.]
State Court Perspective
Not surprisingly, state courts take a different view. Perhaps the most extreme example is Matter of Perello, 270 Ind. 390 (1979). There, Perello was alleged to have violated a suspension order prohibiting him from practicing in Indiana state court. Disciplinary authorities presented evidence that Perello continued to solicit and advise clients in the local courthouse, and maintain a nearby law office. Perello argued in part that his law practice involved representing clients in the federal district court and in bankruptcy proceedings. The Supreme Court of Indiana rejected this out of hand, stating that it alone had the “sole authority and responsibility for the practice of law in Indiana.” [Id. at 397.] “While we cannot presume to tell the federal courts who they may permit to practice before them,” the court continued, “we nevertheless consider the practice of law in the federal courts in this State to be the practice of law for the purposes of this action.” [Id. at 398.] Thus, the Supreme Court of Indiana suggested that state authorities could regulate the “practice of law” by Indiana practitioners in local federal courts.
Other courts have not gone this far, but have reached similar results. More typical is Attorney Grievance Comm. of Maryland v. Harris-Smith, 356 Md. 72 (1999). There, a lawyer admitted to practice in several states (but not Maryland) and in the U.S. District Court of Maryland maintained a Maryland office devoted solely to representing clients in bankruptcy matters. The lawyer made efforts to “pinpoint” bankruptcy clients from among the clients who came into the office. Nevertheless, the Maryland Supreme Court found that because the lawyer “held herself out to the public as practicing law generally” on her cards and office signage, and because she did not make clear to clients that her practice was limited to bankruptcy, she was illegally practicing law in Maryland. [Id. at 83.] More importantly, the court noted that bankruptcy matters necessarily implicate state law issues, such as whether there are state law defenses to creditor’s claims. “There is a danger that lawyers in the position in which Smith placed herself ‘would be motivated to cast advice artificially in the safe direction,’” and not provide clients with the full range of services they need. [Id. at 84 (citation omitted).]
The majority of courts, state and federal, that have addressed this issue have agreed. [See, e.g., Matter of Reinstatement of Linda A. Leaf, 41 F.3d 181 (7th Cir. 1994) — on reinstatement application in federal court, giving great deference to state court’s refusal to reinstate lawyer to practice; In re Lite Ray Realty Corp., 257 B.R. 150 (Bank R. S.D.N.Y. 2001) — debtor’s attorney not admitted in New York state court may not recover fees for work for bankruptcy debtor, although admitted in S.D.N.Y.; In re Peterson, 163 B.R. 665 (D. Conn. 1994) — same ruling for lawyer admitted only in State of New York and District of Connecticut, but not Connecticut state court; Office of Disciplinary Counsel v. Marcone, 579 Pa. 1 (2004) — lawyer admitted in local federal court but not in State of Pennsylvania could not restrict his practice to diversity cases in federal court; advising citizens on federal law “necessarily implicates counseling clients on state law issues;” Ranta v. McCarney, 391 N.W.2d 161 (N.D. 1986) — prohibiting lawyer admitted only in federal court to open office in state limiting practice to matters of federal tax law.]
Best Analytical Framework
As cases like Sperry and Theard show, the issue of control over federal practice — whether the states may decide who practices in the local federal courts, or whether they may punish lawyers for misconduct committed in those courts — has been in play for at least 50 years. The spate of recent case law in this area shows it is far from resolved. But a simple fact remains: attorney regulation remains almost exclusively the province of the states. That fact rests on many assumptions, including that there are real differences in the procedural and substantive law of the various states, and that the states in the first instance must evaluate the character and ability of the lawyers who want to practice within their borders.
If this state-based system of lawyer regulation means anything, it means that states can take action to protect their citizens against unqualified lawyers. This must extend even to those lawyers who hold themselves out as admitted only in federal court, since there are few legal issues that are exclusively federal. Bankruptcy lawyers must consider options available at state law (e.g., fraudulent conveyance claims, informal compositions of creditors); federal tax lawyers must take into account the state and local tax ramifications of their actions; federal criminal defendants often face parallel state law charges or state investigations. Because state law issues are implicated in all federal areas (immigration law is one possible exception), a prohibition on state law practice should mean there is a prohibition on federal practice in the same state as well — at least where there is no federal statute to the contrary, as there was in Sperry. Cases like Surrick that take the opposing view construe too narrowly the influence of state law on federal court practice.
Ronald C. Minkoff is a shareholder/director of Frankfurt Kurnit Klein & Selz, P.C. His practice emphasizes professional liability and the law of lawyering. He is the Immediate Past President of the Association of Professional Responsibility Lawyers and an Adjunct Professor of Professional Responsibility at Brooklyn Law School. Anne Armstrong, a third-year student at Brooklyn Law School, assisted in the preparation of this article.
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