November Notes: Attorney Gets SLAPPed with Fees; California Bar Goes Splitsville

Be Very Sure it’s Defamation Before Suing. A Texas attorney – or former attorney, because he’s now been disbarred – is liable for over $100K in attorney’s fees after unsuccessfully suing a local newspaper for coverage he found less than flattering. As I often point out, “defamation” isn’t “something mean somebody wrote about me.” Defamation requires that what’s written or said be materially false, and usually in ways that actually harm one’s reputation. And even then it often doesn’t make sense to sue (because of cost, hassle, and the Streisand Effect). But it REALLY doesn’t make sense to sue when a) the statements weren’t in fact false, and b) you’re doing so in a state like Texas which has a strong “anti-SLAPP” law that allows the defendant to immediately strike your complaint and get a mandatory attorneys’ fee award.

California Bar To Split in Two.  Big news from the country’s biggest bar: California is splitting in two. No, not the earthquake rupture that would cast LA, SF, etc. into the sea, but rather the decision to break the California State Bar into two pieces. To one side goes all of the mandatory licensing and disciplinary activity; to the other goes all of the hob-knobby trade association activity. It’s a natural split, already long in place in New York, Illinois, and, more recently, the United Kingdom. And it makes a ton of sense. The regulatory piece of the Bar – which is mandated with protecting the public – has always been in tension with the trade association interests of members. It’s far too easy – and tempting – for lawyers to use the levers of industry regulation to protect their monopoly. This divided structure doesn’t completely solve for the problems of self-regulation, but at least it removes one major impediment.

Not Sure About Twitter? Try “Lurking.” Georgia Supreme Court Justice Keith Blackwell, when asked about his twitter habits, noted that while he has an account, he uses it strictly to read information posted by others – he does not tweet. While his reasons for so doing may be grounded in a heightened sense of judicial propriety, this approach can have wider application. For while Twitter is a phenomenal source for breaking news, incisive commentary, cultural ephemera, and humor, interactivity on twitter  . . . isn’t always so hot. You can find yourself arguing with a disguised Russian troll bot, or besieged by basement-dwelling racist troglodytes. Or simply anonymous weirdos possessing no familiarity with logic and reasoned debate. And you get to spend your tame arguing with them – 140 characters at a time. Sure, there are bright sides, too. I’ve engaged with, and even met in real life, smart, thoughtful people on twitter. But if you’re just wading in, starting out as a lurker might be the best bet.

Social Media News and Notes:

Better than nothing: court accepts unsent text as dead man’s last will and testament.

The “can judges ‘friend’ lawyers” question is going all the way to the Florida Supreme Court.

Arf! Can AI rules be created to make intelligent robots act more like service dogs?

What if We Just “Certified” Lawyers Instead of Licensing Them?

Last week, I attended the FTC’s second Occupational Licensing Roundtable in Washington, D.C. The Roundtable – titled “The Effects of Occupational Licensure on Competition, Consumers, and the Workforce: Empirical Research and Results” – consisted of economists delving into the costs of occupational licensing. The prognosis is grim. Licensing requirements cost society a great deal (primarily in the form of higher prices and lack of economic freedom for workers to pursue a trade), while returning negligible benefits. Although most comments submitted to the Roundtable addressed other, more recently-licensed professions, Avvo and Responsive Law both submitted comments briefly summarizing some of the empirical data on the cost of legal licensing.

This is not to say that we believe attorneys should be wholly unregulated. Many of the costs of licensing stem from the breadth of the legal monopoly and the numerous restrictions on lawyer marketing and service delivery. These costs could be ameliorated simply by adopting a simpler, narrower licensing regime. But I was struck by a point of consensus by the Roundtable participants: that certification could replace licensure and deliver a massive benefit to consumers (in the form of lower cost, more innovation, and better access) while not meaningfully impacting public protection.

h/t The Locker Room

How would this work in the law? In a world of “certified” lawyers, only those possessing the qualification could use the title “lawyer.” But others could do most or all of what lawyers do, so long as they didn’t try to pass themselves off to the public as certified lawyers. There might be areas (like representing parties in litigation) where providing services would be limited to those possessing certification, but such areas would be few and far between.

Shocking? Not really; that’s largely how legal practice works today in many parts of the world, including England. In a world of certification, clients would have nearly all of the same public protective benefits of licensing while enjoying massively more choice in legal service offerings. It would even be better for lawyers, as certification should be more portable between states than licensure is (and lawyers could choose to still practice in another state regardless, assuming they are willing to forego certification). What’s more, local court-based certifications could flourish, getting back to one of the original purposes of geographic licensing – ensuring that local lawyers are experienced with local law and court procedures.

Lots of food for thought, and the FTC’s continued work in this area will bear close watching.

LegalTech Startup TikD Sues Florida Bar

So the same day I ponder the question of ethics opinions and antitrust, a lawsuit gets filed against the Florida Bar – alleging antitrust violations related to, in part, an advisory ethics opinion!

This will bear watching. The plaintiff in the case is “Tikd,” an innovative service that helps consumers get legal help – with highly predictable outcomes – when dealing with routine traffic tickets. And the lawyers for Tikd are Ray Abadin (who was President of the Florida Bar just a couple of years back) and Pete Kennedy, the Austin, TX antitrust lawyer who successfully represented LegalZoom and Zlien in various UPL fights with states bars.

The ethics opinion at issue apparently deals with both UPL and fee-splitting concerns with Tikd, and it’s not even clear the opinion even exists. But Tikd says its competitors are spreading the word that the opinion is out there, and the Bar isn’t disavowing it – or even meeting with Tikd to discuss the matter.

For the Florida Bar, this is yet another illustration of the problem with ethics opinions in areas involving competition and advertising. Bars are wired to give conservative advice, but what they really should be doing in these areas is not opining at all. Rather, they should flip the script and adopt a policy that affirmatively encourages innovation in the delivery of legal services, and only looks to enforce the Rules in reaction to evidence of public harm.

Ethics Opinions and Antitrust

So a couple of weeks ago I was at the ABA’s Third Annual UPL School in Chicago – a gathering of those bar authorities dedicated to rooting out the unauthorized practice of law. And I have to say – it was a strangely chastened bunch. The specter of North Carolina Dental Board v. FTC hung heavy in the air, and many in attendance claimed that they no longer issue advisory opinions or cease-and-desist letters. Rather, they do one of two things when they get complaints: dismiss, or file a lawsuit.

This isn’t a bad thing. Advisory opinions and C&D letters can have a toxic, chilling impact, stopping all sorts of activities that are well outside the boundaries of the legal monopoly. In fact, this is the sort of practice that got the North Carolina Dental Board into hot water – dentists using C&D letters to shut down tooth-whitening services. And it’s what we see in the more egregious examples of UPL enforcement. Being more cautious when wielding the regulatory club isn’t a bad thing, so long as regulators don’t overcompensate and abandon ALL attempts to enforce UPL. 1

But I have to wonder: is the UPL side of the regulatory house not talking to the legal ethics side? Because the same issues exist there. North Carolina Dental stands for the proposition that Bar regulators can lose their state action antitrust immunity for anti-competitive behavior. And what’s more, this potential liability also carries through to the individual members of the Bar boards and committees that make these determinations.

Advertising ethics opinions – and advertising review boards, in those states that employ them – can have the same sort of anti-competitive impacts as UPL letters and opinions. In all such cases, potential competitors are being elbowed out or burdened. The fact that in the advertising context those competitors are primarily fellow members of the Bar doesn’t make a difference. Bar Ethics Committees – which are comprised of market participants – are issuing ethics opinion that limit competition. The do so by chilling the ability of other members of the Bar – members who may not enjoy Bar leadership positions – to offer information about legal services to the public. They may even limit non-lawyer competition with Bar lawyer referral services.

As with UPL, there are ways Bars can regulate such advertising activity without taking on antitrust risk. Doing so requires an open, transparent, and evidence-based showing that the consumer protection justifications for its restrictions outweigh the anti-competitive effects. Or at least “active supervision” by actual state government actors. But that’s not the typical closed ethics opinion approach, which we continue to see even now two years after the decision in North Carolina Dental. A handful of states – like Virginia, North Carolina, Oregon, and Washington – at least seem to be aware of this concern. But it’s odd that the cautious approach on the UPL front has yet to be matched by most regulators on the legal ethics side.

Notes:

  1. Despite my skepticism about the breadth of the legal monopoly, I’ll readily acknowledge that there are consumer-impacting UPL practices out there, among them non-lawyers pretending to be licensed and the various related forms of “notario” fraud.

October Notes: The Facebook Post that Cost an In-House Lawyer Her Job

In-House Lawyer Fired for Intemperate Facebook Post: Expressing a lack of sympathy for shooting victims based on their perceived political leanings isn’t a good look on anyone. So it’s no surprise that CBS lawyer Hayley Geftman-Gold was unceremoniously fired for posting on Facebook, shortly after the mass shooting at a Las Vegas country music festival, that she was indifferent because “country music fans often are Republican gun toters.” It’s (yet another) example of how the quick-and-informal nature of social media posting can lead to permanent career damage. But should Geftman-Gold’s post also lead to disciplinary sanctions?  The answer is certainly no. Outside of limited circumstances involving their own clients and legal matters, lawyers still have a First Amendment right to express their opinions. But as this instance shows, there’s a lot more than merely legal ethics to keep in mind when thinking about sending out that oh-so-incisive tweet or Facebook post.

No “Excusable Neglect” For Cutting Corners on Anti-Spam Software:  I’ve never been one to get exercised about spam. Modern email clients sort it well, and it’s easy to quickly scan the “junk” file every few days and purge the offending items. But combine an inordinate distaste for spam with law firm frugality and you get an email system that automatically deletes valid and spam email alike – with no safeguards. Which can unhappily lead to important court documents finding their way straight to the memory hole, sight unseen. That’s, uh, bad – and malpractice-worthy. Or as a Florida appellate court put it, in denying a law firm’s request for leave to appeal an award of attorneys’ fees against its client: “Odom & Barlow made a conscious decision to use a defective email system without any safeguards or oversight in order to save money.” Ouch! One part of a lawyer’s duty of technological competence is listening to the experts – and not shining their recommendations to save a few bucks.

Court Doesn’t Buy the “Contract By Tweet” Concept: While some people are content to argue about whether twitter is really just a cesspool of logic-free argument and pet videos, others are trying to use it to cobble together contract claims. Here’s how it works: post your creative ideas, tweet them at actors and movies execs, and then when a movie that plausibly looks like your idea appears, pounce with the contract claim! Alas, as with all too many 1-2-3 PROFIT ideas online, this one has met a brick wall. It turns out that to make a contract claim – even on social media – you’ve got to have, you know, the elements of a contract. Things like “terms,” and “agreement,” and “consideration.” A shocking reminder that the rules applicable in real life still apply online.

Social Media News and Notes:

UN Ambassador Nikki Haley learns that retweets CAN equal endorsements.

Yeah, so it turns out that creating fake court orders to get negative online reviews taken down isn’t such a hot strategy.

And tempting though it might be, it’s best not to create bogus online postings about opposing counsel, either.

Speech Restrictions on Judges

More on occupational speech restrictions: I’ve come across this recent piece by Texas A&M law prof Lynne Rambo, dealing with First Amendment issues around judicial speech.  Rambo’s article notes that “surprisingly, most of the state and federal courts deciding judicial discipline cases based on extrajudicial speech have not addressed the constitutionality of the code provisions involved.”

No kidding! That’s because there’s been precious little judicial guidance in general when it comes to the tension between the First Amendment and occupational speech restrictions, and next to none where lawyers and judges are concerned (this, despite the law being the most speech-intensive of the licensed professions). Nonetheless, what little there is out there points in the general direction of occupational speech being regulated subject to the same intermediate scrutiny standard applicable to commercial speech.

We also know that occupational speech regulation only goes so far. Lawyers don’t waive their First Amendment rights as a condition of Bar membership; they are free to opine and express themselves any way they want (or at least, to the same extent as any other citizen) as long as doing so doesn’t involve their clients or matters.

But what about judges? Is there something special about their roles that would lend itself to greater reach for occupational speech regulation? Professor Rambo makes the case in the affirmative, arguing that judicial speech – even far off the bench – should be regulated via the Pickering test applicable to public employees.

What’s the Pickering test? It’s a balancing test, which looks at the the interests of the employee in commenting on matters of public concern and the interests of the State – as the employer – in promoting the efficiency of the public services it performs through its employees. It doesn’t apply to things an employee might say as part of his or her job (it’s not a First Amendment violation for a government employer to discipline an employee for those), but rather only to those things a government employee says OUTSIDE of the job that may cause problems for the government employer’s mission.

That’s not much of an issue for most government employees, but it’s different for judges given their position in society. Judges are highly esteemed and viewed as neutral arbiters. The courts are very attuned to ensuring that judges avoid even the appearance of bias. A judge could be highly competent – and a paragon of objectivity – but that judge staking out positions on one “side” or another of contentious issues in the community will cause no end of trouble for the court.

As Rambo notes, the interest of the government employer in the Pickering test is “promoting the efficiency of the public services it performs through its employees.” She suggests that in the judicial context this means something more: protecting the judiciary from extrajudicial statements by judges that compromise “either the actual or the perceived independence, integrity or impartiality of the court.”

That sounds right, particularly since the “efficiency” of the government institution that is the court is best measured not by how quickly it churns through cases but rather by how independent and impartial it can be – both in reality AND appearance. And that means that judges – unlike lawyers – may be subject to occupational speech regulation that reaches far beyond the confines of the courtroom.

North Carolina Defeats First Amendment Defense to UPL

North Carolina – which has one of the most specific definitions of “the practice of law” going – has just won an unlicensed practice of law victory over an association that wanted to provide legal services to its members.

The outcome wasn’t a huge shock; North Carolina, like all states, prohibits non-lawyers from practicing law. As the association (whose ostensible purpose was to provide legal advice and counsel to small and mid-sized employers) is a corporation, it can’t practice law. That also means it can’t hire lawyers to provide legal services to the public. Easy win.

But in getting to this outcome, North Carolina had to overcome an objection that’s rarely seen: that the state’s UPL restrictions violate the First Amendment.

There’s a tension between professional regulation and the First Amendment, for much of “the practice of law” involves expressive acts. But while this has been heavily litigated in the professional advertising context, there’s been precious little judicial guidance where “occupational speech” regulation is concerned.

So it’s notable that this case addresses the issue, and perhaps understandable that the decision would botch the analysis so badly.

How’s that? The North Carolina case cites to a recent Fourth Circuit decision, Moore-King v. County of Chesterfield 1 for the proposition that professional regulation of speech is not subject to the First Amendment.

That’s quite obviously wrong. Even regulation of professional advertising speech is subject to First Amendment scrutiny. And there have been a number of cases recently involving regulation of doctors’ speech while treating patients – those cases have taken First Amendment coverage as a given, even as they wrestled with whether intermediate or strict scrutiny of the regulations should apply.

In fact, the Moore-King case involved a licensing requirement for fortune-tellers, and it stands for a much more limited proposition than that adopted by the District Court in North Carolina: that “generally applicable licensing provisions” don’t raise First Amendment concerns. This in no way means that all professional regulation is outside the scope of the First Amendment.

What’s more, not even all licensing requirements get a pass from First Amendment scrutiny. The Fourth Circuit in Moore-King takes pains to distinguish the County’s straightforward licensing requirements from regulations that banned the sale of fortune-telling services, and also notes that the government does not have “carte blanche” in creating these regulations.

None of which is to say that the  North Carolina court reached the wrong decision – it likely did. The Bar has a generally applicable licensing scheme, and it’s hard to imagine that a wholesale challenge to the practice of licensing lawyers would ever succeed. But it’s important to recognize the limits of this occupational licensing exception, and reinforce the fact that attorneys do not check their First Amendment rights at the door as the price of being called to the Bar.

Finally, while the legality of a license requirement for attorneys may be a settled question, the same cannot be said for the contours of that legal monopoly. For it’s one thing to have a generally applicable licensing requirement before people can represent others in court, but it’s quite another to extend that requirement to any and all who would sell advice and counseling on matters that seem “legal.”  Most in the legal profession take it for a given that such “legal advice” is restricted to the monopoly of lawyers, but that seems far from clear given the First Amendment issues in play. 2

Notes:

  1. 708 F.3d 560 (4th Cir. 2013).
  2. And watch the Institute for Justice, which is litigating several cases involving First Amendment challenges to occupational licensing restrictions. The latest of these – just filed in Florida – deals with restrictions on providing compensated dietary advice.

SF “Soda Warning” Law Nixed

Sugar-water-purveyors and nanny-state-haters alike can cheer: San Francisco’s disclaimer requirement for soda advertisers has been killed off by the Ninth Circuit.

What kind of disclaimer? A prominent box containing this text:

WARNING: Drinking beverages with added
sugar(s) contributes to obesity, diabetes, and
tooth decay. This is a message from the City
and County of San Francisco.

Your tax dollars at work, San Francisco!

I’m not a big soda drinker, but my interest is the compelled speech angle – the attorney ad rules are replete with disclaimer requirements. In fact, the seminal Supreme Court case on compelled speech (Zauderer v. Office of Disciplinary Counsel) involved attorney advertising.

The opinion striking San Francisco’s law (American Beverage Assn. v. City and County of San Francisco) offers a terrific overview of the compelled speech doctrine. And as the opinion notes, the state has wide latitude to compel advertisers to “speak” uncontroversial facts – as long as that compulsion isn’t too burdensome.

In analyzing the San Francisco ordinance, the Ninth Circuit opinion does a neat little flip of Zauderer, where “technically truthful” advertising was found to still be deceptive because it omitted key information:

Applying this principle to disclosure requirements, a literally
true but misleading disclosure creates the possibility of
consumer deception.

Nice! The decision goes on to find that while the the San Francisco warning is technically true – there is a consensus, at the population level, that added sugar contributes to obesity, etc. – it also suggests that this is true at the individual level, “regardless of the quantity consumed or other lifestyle choices.” And as such, the disclaimer is at best a “disputed policy view.” As the court notes:

Zauderer does not allow the state to require corporations to provide one-sided or misleading messages, or to use their own property to convey an antagonistic ideological message.

The court also found that the disclosure requirement was unduly burdensome, as the disclaimer would have comprised 20% of subject advertisements. And, interestingly, it didn’t even bother with a second level of analysis to see if the more exacting intermediate scrutiny test would save San Francisco’s law – it simply gave the law the kibosh.

In any event, the opinion is nice exposition of the constitutional test in this often-confusing area. And what’s more, it offers something for state bar regulators to keep in mind when thinking about the viability of their own disclaimer requirements.

September Notes: Fee-splitting, burner devices, and more judicial “friends.”

The Fight Over Judicial “Friends” Continues.  A Florida case highlighted in last month’s newsletter has been decided, with the outcome being that a Miami judge does not need to recuse herself merely because she is Facebook “friends” with counsel for one of the litigants. As the unanimous court of appeals decision notes, “the degree of intimacy among Facebook ‘friends’ varies greatly.” No kidding, right? As anyone who has used Facebook for more than a hot second knows, one’s “friends” can range from BFFs to people you haven’t seen or talked to in years. Absent further evidence of potential bias, a Facebook friendship between judges and counsel shouldn’t even be worthy of mention as grounds for recusal. Still, lawyers being lawyers, you can expect to keep hearing about this “issue” for quite some time.

Some States Look to Modernize Fee-Splitting Rules. Rule 5.4 of the ABA Model Rules prevents lawyers from splitting fees with non-lawyers. This rule is really a form of conflict prevention, designed – as the title of the rule itself notes – to preserve the professional independence of lawyers. But the Rule’s rigid language hasn’t aged well. Accepting credit cards for legal fees results in a technical violation of Rule 5.4 every time the credit card processor takes their 3% “split” of the fee. While this issue has been largely ignored, Bars are struggling with innovative new services and the growing adoption of performance-based marketing (in which advertisers pay per customer, rather than per-impression or per-click). But some states are starting to take action. North Carolina and Oregon are taking different approaches, but both have proposed amendments to their fee-splitting rules that should take effect before the end of 2017. These changes preserve the public-protective purpose of the rules while easing up on the rigid technical limitations.

Do Lawyers Need “Burner” Devices When Traveling Overseas? The ABA Journal profiles an interesting issue for jet-setting lawyers: protecting client files when returning from travel abroad. While foreign snooping and theft are the more obvious concerns, there’s also the fact that lawyers have no meaningful Fourth Amendment protection from search when re-entering the country. That’s enough to cause some law firms to require attorneys to use “burner” devices – laptops containing no client data – when traveling overseas. Is that something that all globe-trotting lawyers should emulate? After all, this is an edge case risk for the vast majority of lawyers. But taking some simple precautions when traveling – like putting all of your client data in the cloud – offers protection from both far-out risks like this one and the more likely hazard of device loss or compromise. For while tech never fails to create fascinating new issues to explore, paying attention to good old physical security remains a lawyer’s primary means of protecting client data.

Social Media News and Notes:

If you MUST travel overseas with client files, perhaps consider using an encrypted flash drive.

Nebraska becomes the 28th state to add “technological competence” to a lawyer’s ethical obligations.

Ohio Supreme Court justice takes to Facebook to blast Browns players for kneeling during national anthem.

No, the Facial Validity of Ad Rules Doesn’t Get Ethics Committees Off the Hook

As I’ve often noted, I take a dim view of ethics opinions that don’t consider the First Amendment implications when dealing with lawyer advertising. I mean, it’s a pretty important thing, the First Amendment, right? And as the First Amendment drives the boundaries of the rules, it . . . seems like a big miss to not pay attention to it.

In response to my making this point during a talk earlier this week, the objection was raised that the rules are just fine; they’ve been tested in court and found to be constitutional. Case closed; ethics committees needn’t worry about anything other than considering how far the rules might be stretched to prohibit various attorney conduct.

I didn’t have the opportunity to respond to this curious argument, but given the bona fides of the attorney who made it (an eminent and smart lawyer, who shall go nameless here), I suspect this argument may have more currency than I would have thought. So, a quick little First Amendment lesson:

IT DOESN’T MATTER if the Rules have already been found to be Constitutional.

Hell, if they hadn’t been so found, they would no longer be the Rules.

In First Amendment law there are “facial” and “as-applied” challenges to rules. The former argues that a law is unconstitutional on its face; it is not possibly amenable to a constitutional interpretation. The latter – which is far more common – argues that the law has been unconstitutionally applied in a particular case.

So the fact that Bar advertising Rules may have survived previous constitutional challenges is only relevant to the extent one is interpreting similar applications of the rule. It is not remotely a clean bill of Constitutional health to all applications of the rule, and certainly not an excuse for ethics committees to turn a blind eye to First Amendment parameters when opining on speech-impacting rules.

I realize, too, that this makes the jobs of ethics committees more difficult. But given the costs to the public and the bar imposed by overreaching opinions in this area, they need to either do this work or get out of the business of issuing ethics opinions on lawyer advertising.

Social Media + The Law of Legal Marketing