Judiciary Law § 470

Schoenefeld v Schneiderman, ___ F3d ___, 2016 WL 1612845

Predictions are difficult, especially about the future. Much to my surprise, Judiciary Law 470, requiring non-resident attorneys to maintain a physical office in New York in order to practice here, has survived a constitutional challenge.

A year ago, I posted about the Court of Appeals determination in this case, construing Judiciary Law § 470 as meaning what it says: a non-resident attorney must maintain a physical office in New York in order to practice here. The Court had responded to a certified question from the Second Circuit, seeking to know whether the plaintiff’s constitutional challenge to § 470 could be avoided by an alternative reading. It seemed at the time that the Court of Appeals’ construction of the statute made the challenge unavoidable, and that it must inevitably fall afoul of the Privileges and Immunities Clause of the US Constitution.

Indeed, my comment at the time was

The tenor of the opinion is that the Court recognized that Judiciary Law § 470 cannot be sustained under the Privileges and Immunities Clause, and that it was unwilling to rewrite it in order to save it. That the Second Circuit will invalidate it seems a foregone conclusion.

Well, right and wrong. The challenge was indeed unavoidable, but the statute has survived.

The challenge came in federal court from a New Jersey attorney, duly admitted in New York and in compliance with all other requirements, who wished to practice in New York but not to open a second office here. She observed, correctly, that a New York attorney has no need for a formal office but can work from home.

The District Court found that the statute unduly burdened the rights of non-resident attorneys, without a corresponding justification in a state interest. In the Second Circuit, the State argued that the statute aimed only at ensuring that the attorney was amenable to the service of process, and could be satisfied by the designation of an agent for the service of process or even the maintenance of a post office box. Existing New York case law, unfortunately, did not support that interpretation.

Before considering the constitutionality of the statute, the Second Circuit wanted to be sure that the more lenient view of the statute’s requirements was not available and that the constitutional challenge could not be avoided. It therefore certified the question of what the minimum requirements for compliance were. The New York Court of Appeals rejected the alternate interpretations, holding that a physical office within the state is required in order to facilitate the service of process on attorneys.

The stage seemed set for a the Second Circuit to invalidate the statute as violative of the Privileges and Immunities Clause. The court found that there was no “protectionist purpose” behind the statute, favoring New York attorneys, but only the neutral purpose of providing a means of service of process on all attorneys. In fact, the court noted, it was the plaintiff who was seeking to be treated differently from New York resident attorneys. In so ruling, it had the benefit of the recent SCOTUS decision of McBurney v Young, 133 S.Ct. 1709. While not establishing a new rule of law, McBurney clarified that the privileges and immunities clause is violated only when the questionable law was enacted for a protectionist purpose. Contrast that with the Commerce Clause, which “regulates effects, not motives,” rendering irrelevant an inquiry into the reasons for enacting a statute with a discriminatory effect. (Schoenefeld had asserted Equal Protection and Commerce Clause claims, but they had been dismissed by the District Court and not appealed by her.)

There was a dissent, which regarded the majority’s approach as erroneously placing the burden of proving discriminatory intent on the plaintiff, instead of requiring the state to justify the discriminatory statute.

Schoenefeld v State of New York,

___ NY3d ___, 2015 NY Slip Op 02674 [2015]

The Court of Appeals has construed Judiciary Law § 470 as indeed meaning what it says: a non-resident attorney, admitted to the Bar of New York and in compliance with all other requirements, may practice before the courts of the state only if she maintains a physical office for the transaction of business in New York. In so holding, the Court almost certainly paved the way for the US Court of Appeals for the Second Circuit to invalidate the statute under the Privileges and Immunities Clause of the US Constitution.

The statute reads: 
“A person, regularly admitted to practice as an attorney and counsellor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counsellor, although he resides in an adjoining state.”

The Court responded to a certified question from the Second Circuit. (Schoenefeld v State of New York, 748 F.3d 464 [2d Circ., 2014]) Plaintiff Ekaterina Schoenefeld is a resident of New Jersey and a member of the New Jersey bar, whose only office is in Princeton. She has also been admitted to the bars of New York and California. She alleges in her complaint that she has in fact passed up the opportunity to represent clients in New York courts to avoid violating the Judiciary Law provision.

She sued in federal court, claiming that the requirement for the maintenance of an office in New York places a burden upon her and other non-resident attorneys, not placed upon residents. Read More