Wednesday, March 29, 2017

No First Amendment rights for private, for-profit law firms

The Court of Appeals has ruled that a for-profit law firm cannot bring a First Amendment challenge to New York's ethical rules that prohibit law firms from partnering with non-lawyers. While the law firm claimed a right to associate with its clients through additional outside funding that would enhance its legal services, the Second Circuit holds that no such First Amendment or associational rights exist for the law firm.

The case is Jacoby & Meyers, LLP v. The Presiding Justices of the First, Second, Third and Fourth Departments, decided on March 24. J&M wants to partner with investors whose additional capital would allow the firm to improve the quality of its legal services, reduce its fees and overall expand its ability to serve its clients. New York ethical rules, however, prohibit lawyers from partnering with -- and taking investment money from -- non-lawyers, on the theory that such partnerships would reduce attorney independence and eliminate incentives for lawyers to put their clients' interests first.

As a side-note, astute readers will recall that J&M rode the first wave of television advertising in the 1970s after the Supreme Court ruled that regulations prohibiting attorney advertising violated the First Amendment. Those of us who wasted the best years of our lives sitting in front of the television will forever recall J&M's slogan, "It's about time." Now J&M brings a constitutional challenge of its own, but the Court of Appeals rejects it.

The Second Circuit (Carney, Lynch and Hellerstein [D.J.]) runs through when law firms have rights under the First Amendment. Those rights are far and few. The Constitution does recognize a right to association under the First Amendment. As the Circuit tells us, "one line of cases involving political advocacy organizations relies on the expressive value of certain types of association litigation," such as NAACP v. Button, a Supreme Court case from 1963, involving a political advocacy organization that promotes anti-segregation. The ACLU also enjoys these associational rights, under In re Primus, a Supreme Court ruling from 1978. Yet another line of cases "recognizes that clients seeking legal representation -- specifically in the context of union activity -- have a right protected by the First Amendment to associate with each other to obtain legal representation and vindicate their rights effectively." That case was Bhd. of RR Trainmen v. Virginia, a Supreme Court ruling from 1964. The collective activity in that litigation allows people "meaningful access to the courts."

Constitutionally speaking, J&M is not the NAACP or the ACLU because its mission does not fall within that narrow line of cases. It is not engaged in political advocacy or expression. "Clients have First Amendment expressive rights for which litigation may provide a vehicle. When the lawyers' own expressive interests align with those rights, the lawyers themselves may have a cognizable First Amendment interest in pursuing the litigation. We are not aware of any judicial recognition of such an interest, however, when it comes to the lawyer's generic act of pursuing litigation on behalf of any client." 

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