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Friday, October 30, 2009

Federal Judge Holds Red Flags Rule Over-Reaches When Applied to Lawyers

A federal judge has called the Federal Trade Commission’s Red Flags Rule over-reaching in its application to lawyers, and granted partial summary judgment on October 29, 2009 to the American Bar Association (“ABA”). Counsel for the ABA says it has won all the relief it sought in its challenge to the regulation, including injunctive relief.

The Red Flags Rule is an identity-theft prevention matter. It requires creditors who defer payments for goods and services to develop and implement written programs to identify, detect, and respond to warning signs of identity theft. In spring 2009, the FTC concluded that lawyers are considered creditors under the rule.

On August 27, 2009, the American Bar Association filed suit in the U.S. District Court for the District of Columbia against the Federal Trade Commission, seeking an injunction to block the application of the "Red Flags Rule" to practicing lawyers.

After the October 29, 2009 hearing, ABA President Carolyn B. Lamm issued a statement:

“This ruling is an important victory for American lawyers and the clients we serve. The court recognized that the Federal Trade Commission’s interpretation of the Fair and Accurate Credit Transactions Act over-reaches and its application to lawyers is unreasonable. By voiding the FTC’s interpretation of a statue that was clearly not intended to apply to the legal profession, the court has ensured that lawyers stay focused on the mission of their work: providing aid and counsel to the individuals and organizations that need us.”

An account of the hearing quotes Walton as saying, “I have a real problem with concluding that Congress intended to regulate lawyers when these statutes were enacted.” http://legaltimes.typepad.com/blt/2009/10/judge-ftc-cannot-make-lawyers-comply-with-identity-theft-laws.html

On October 30, 2009, Judge Walton entered an Order granting summary judgment as to Count I of the ABA’s Complaint alleging that the Commission's application of the Red Flags Rule to attorneys violates 5 U.S.C. § 706(2)(C) as it is "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." A memorandum opinion with points and authorities will issue within 30 days.

Thursday, October 22, 2009

Legal Malpractice

The New Jersey Supreme Court is about to take another look at the "settle and sue" syndrome: When a client settles a case and then sues his or her lawyer over it. The case is Guido v. Duane Morris.

Wednesday, October 21, 2009

ABA Commission to Study Globalization of Legal Services and Impact of Techonology on Law Practice

ABA President Carolyn B. Lamm created the Commission on Ethics 20/20. The Commission will perform a thorough review of the ABA Model Rules of Professional Conduct and the U.S. system of lawyer regulation, and will ultimately propose policy recommendations that will allow lawyers and law firms to better serve their clients, the courts, and the public now and well into the future. The Commission members represent a broad spectrum of expertise in U.S. and global ethics rules, lawyer regulation, globalization, and technology. They come from the judiciary (state and federal), law firms (large and small), corporate counsel, government, and academia. You can learn more about them and the Commission’s work at www.abanet.org/ethics2020

Due to globalization and technology's impact on how lawyer's practice--enabling lawyers and law firms to have a virtual presence in other countries--questions have arisen regarding how the practice of law may be regulated in the future, including choice of law issues. Overseas, in the U.K and Austrailia, for example, there are significant changes being made in how legal services are delivered that are currently prohibited by bar regulators in the U.S.

The Commission will engage ABA and affiliated entities, the judiciary, the bar (including international, state, local, and specialty bar associations), and the public in framing and discussing the issues, and enlist their support in fashioning policy recommendations. The Commission will hold public hearings, roundtables, and present educational programs live and via the web. It will conduct e-surveys and provide broad opportunities for written submissions and comments. At the conclusion of its three-year term, the Commission will issue a report with its recommendations.

Wednesday, October 14, 2009

Trial Conduct: Lawyer denied right to wear baseball cap in court

A federal district court in New York has ruled that a lawyer has no free speech right to wear a baseball cap while appearing in court as a pro se litigant. (Bank v. Katz, E.D.N.Y., No. 08-cv-1033, 9/24/09). The lawyer's desire to make a “fashion statement” is not a fundamental right that trumps the state court's legitimate interest in “maintaining proper decorum, etiquette, and respect for the judicial process,” the court wrote. Judge Nicholas G. Garufis stated: “[I]t is appropriate for a court to expect litigants to appear in attire that is suitable to the dignity of a courtroom, rather than to show up in clothes they might have worn to a baseball game.”