Minnesota’s No Good, Very Bad UPL Decision

Brian Faughnan has the details, but here’s the quick overview: A Colorado attorney agrees to help out his in-laws, who are dealing with a debt collector in their home state of Minnesota. Like a good son-in-law, he does it for free. He engages in a series of emails with the attorney for the creditor, who eventually (because shaking people down for small-time debts isn’t enough to satisfy his “I’ve gotta be an asshole” jones) files a bar grievance against the Colorado lawyer. Colorado lawyer ends up being disciplined by the Minnesota Bar authorities for the unlicensed practice of law, a decision which is subsequently upheld by the Minnesota Supreme Court.

(Read the decision: In Re Charges of Unprofessional Conduct.)

Where to begin? Brian and other ethics mavens have already focused on the troubling retrograde nature of this decision, applying antiquated notions of the practice of law to modern communications norms. But I want to focus on three other fundamental problems with this decision:

Defining “The Practice of Law:”  As I’ve noted before, lawyer regulation has some fundamental First Amendment problems.  This is particularly true with respect to “legal advice.” The prohibition on non-lawyers providing legal advice is a content-based speech restriction, and those almost never survive a constitutional challenge.

In this case, Minnesota had the multi-jurisdictional practice statute to rely on; that rule explicitly limits out-of-state lawyers, and thus provides a thin facade to conceal an otherwise-suspect rationale. But what if the son-in-law hadn’t been a lawyer?  More on that in a moment.

“Holding Out:”  Much is made, too, of the argument that the Colorado attorney was “holding out” as the lawyer on a Minnesota legal matter. But this doesn’t survive scrutiny. The “holding out” indictment is based solely on the fact that the Colorado lawyer stated that he “represented” his in-laws. Yet restrictions on “holding out” as a lawyer are intended to apply to a specific set of practices that are harmful to consumers (i.e., pretending to be licensed as an attorney when you are not, in an effort to solicit business) – not to whatever this was. 1

And again, what if the Colorado lawyer hadn’t been an attorney? Would the disciplinary authorities have been able to argue that his statement of representation evidenced “holding old?” As with the definition of the “practice of law,” the only thread holding this together is the fact that the son-in-law was a lawyer.  Had he NOT been a lawyer, the state would have been left with a difficult argument: that people can’t help each other out with informal legal advice and advocacy unless they are in-state-licensed attorneys.

Which, come to think of it, is actually what most attorneys believe anyway. But I’m pretty confident that proposition would lose if challenged on First Amendment grounds.

Antitrust:  The discipline in this case was imposed by a 6-member panel of the Minnesota Lawyers Professional Responsibility Board. The Board is  comprised primarily of Minnesota lawyers. The discipline was then affirmed by the Minnesota Supreme Court, using a “clearly erroneous” standard.

This is a problem for the Board. Imposing discipline on non-market participants to maintain a government-sanctioned monopoly is the definition of anti-competitive behavior. And while quasi-government boards made up of market participants used to receive antitrust immunity, they don’t anymore (thanks to the North Carolina Dental Board case) unless they are “actively supervised” by the state. Judicial review – especially judicial review based on a highly deferential standard like that used here – is not within shouting distance of “active supervision.” While this issue wasn’t brought up in this case, it’s something Minnesota should think about if it plans to keep having other attorneys handle disciplinary decisions – and particularly when those decisions involve excluding competition from the market for legal services.

Notes:

  1. Let’s call it pedantry: “The out-of-state lawyer stated that he represented an in-state party. In-state parties can only be represented by in-state attorneys. Ergo, he is “holding out” as an in-state attorney.”

One thought on “Minnesota’s No Good, Very Bad UPL Decision”

Leave a Reply