The Feds Weigh in on Tikd

When the Supreme Court decided to grant cert in the North Carolina Dental Board case, many bar associations seemed concerned. Concerned enough to file an amicus brief, pointing out that a narrowing of the state action immunity doctrine could put their own self-regulatory activities at risk.

As we know, the Supreme Court went forward anyway, and the Bars ARE at risk. They interpret their rules in broad and overreaching ways. The industry claims a monopoly over any work that remotely looks “legal.” And, most fatally, the Bars are operated by groups of market participants – market participants who don’t always grasp that the purpose of regulation is to protect the public, not to preserve the incomes of lawyers.

Surprisingly, while some Bars have responded to North Carolina Dental by tightening up their processes, there’s been little examination of whether the potential for antitrust liability merits a meaningful re-look at how Bars carry out their regulatory activity. Most Bars haven’t even done the obvious stuff, which would start with disbanding ethics opinion-writing and advertising review committees. And there’s been even less action on the administrative rulemaking front, where most Bars continue to operate systems where rules changes must be voted on by market participants. Suffice it to say that is not a model for maximizing the consumer- and competition-protective aspects of the rules.

What explains this? My money would be on hubris.

From advertising (“legal services are different”) to sunshine laws (“lawyers are licensed by the judiciary, so you can’t FOIA their licensing records”) to monopolization (“if it remotely smells legal, it’s got to be done by a lawyer”), lawyer exceptionalism has been the order of the day. In the eyes of the Bar, the rules that apply to other, humdrum professions and services simply doesn’t apply to lawyers. The attitude, it seems, is that lawyer self-regulation means whatever the Bars want it to mean.

I know, I know: there are plenty of lawyers and Bar leaders who understand these problems, and are trying to do the right thing. But the inertial, institutional weight is piled powerfully in the opposite direction. And lacking the willingness to change from within, Bars may find themselves forced into change from without.

I’ve written about the antitrust lawsuit filed against the Florida Bar by Tikd, a company that helps people resolve traffic tickets. In response to that suit, the Bar has basically taken the position that North Carolina Dental doesn’t apply to it.

That’s almost certainly wrong. And you needn’t just take my word for it, as a rather influential party has just weighed in to opine on the wrongness of the Bar’s position. In a statement of interest filed in the case, the Department of Justice stepped in with a 14 page brief dismantling the theory of lawyer exceptionalism. As the DOJ notes, the Bars can’t just rely on their relationship to the judiciary to claim the state action immunity defense:

“TIKD challenges neither a Bar rule nor a state supreme court decision. TIKD alleges instead that the Bar improperly enforced its rules and abused its authority, and that its improper enforcement had anti-competitive effects.”

Uh-huh. It’s not really that complicated: unless disinterested state actors are actively supervising the Bar’s anticompetitive actions, the Bar – and its members on the committees in question – are exposed to potential antitrust liability. Now, I would HOPE that Bars would address this potential liability by being, you know, less anti-competitive (as opposed to just creating structures for greater state supervision). But in any event, the first step is acknowledging the problem. And on that front, the DOJ has just sent all lawyer regulators a powerful message.