Nonresident attorneys required to maintain physical office within state

New York Law on Out-of-State Attorneys to Face Challenge on Constitutional Grounds

April 15, 2015 By Charisma L. Troiano, Esq. Brooklyn Daily Eagle

Chief Judge Jonathan Lippman. Eagle file photo

Share this:

In a recent interpretation of a statute governing attorney activity, the New York State Court of Appeals unanimously held that state law requires nonresident attorneys wishing to practice in New York state to maintain an actual office here. The United States Second Circuit Court of Appeals will likely make a ruling on the constitutionality on the office requirement for nonresident New York attorneys.

Earlier this month, New York’s high court issued a decision on the interpretation of Judiciary Law section 470. The law — which the New York Law Journal asserts has remained virtually unchanged since 1909 — allows a nonresident attorney to practice within New York’s courts only if said attorney maintains an “office for the transaction of law business.”

Ekaterina Schoenefeld, a New Jersey-based attorney who also holds a New York license, filed a legal challenge in an upstate federal court, arguing that section 470 was unconstitutional both on its face and as applied to nonresident attorneys by burdening their fundamental right to practice law.

The justices of the Northern District of New York ruled in favor of Schoenefeld’s motion on summary judgment, finding that the office requirement did in fact affect a nonresident’s attorney’s fundamental right to practice their profession. The defendants — including NYS Attorney General Eric Schneiderman — appealed to the U.S. Second Circuit appeals court. The federal appellate court, however, was unable to address the constitutionality of section 470 without first clarifying the actual meaning of the law.

In April 2014, Second Circuit Judge Peter Hall sent a certified question to the New York State Court of Appeals, where he asked for the minimum requirements that would satisfy section 470. In federal cases involving an issue or question that turns on state law, federal courts will typically certify a question or ask the state’s highest court to clarify the law at issue.

In response, a unanimous New York Court of Appeals unequivocally held that section 470 “requires nonresident attorneys to maintain a physical office in New York.” Chief Judge Jonathan Lippman, writing for the court, did not address the constitutionality of the law but rather focused his decision on the “plain terms” of the statute. “It is well settled that, where the language of a statute is clear, it should be construed according to its plain terms,” wrote Lippman.

The state, appearing to have recognized a potential constitutional roadblock in its defense of Judiciary Law section 470, asked the high court for a narrow interpretation of the law. The state argued that the purpose behind an in-state office requirement for out-of-state attorneys was to ensure that nonresident attorneys have a physical presence to receive personal service — or, notice of a legal action.

But, Lippman noted, the law does not merely require an office within the state but an office for the transaction of business.

Any issues surrounding process of service, for example, have been addressed by the ability to serve notice via email, fax or overnight delivery. It is true, Lippman explained, “that service on an out-of-state individual presented many more logistical difficulties in 1862 when the provision was originally enacted … [but] there would appear to be adequate measures in place relating to service upon nonresident attorneys.”

Further, case precedent — including two cases from the Appellate Division, Second Department — has interpreted section 470, requiring “a nonresident attorney to maintain a physical office space.”

“With the New York State Court of Appeals answering the certified question in the affirmative, we are even more confident that the Second Circuit will find section 470 unconstitutional,” said Michael Ansell, a partner at the Ocean, N.J., firm Ansell Grimm & Aaron. Ansell is lead attorney for a group of out-of-state lawyers who filed an amicus brief in Schoenefeld’s case.

In 2013, the New Jersey Supreme Court amended its “bona fide office” requirement for attorneys. Ansell’s interest in the case goes beyond Schoenefled’s desire to practice law in New York, expanding to the burdens placed on solo practitioners.

“We have a few locations in New Jersey, and some of our attorneys practice in New York,” said Ansell, a New York and New Jersey licensed attorney. “Our firm can pick up and join with a N.Y.-based law office if we need to prosecute or defend a case in New York, but that is something we can work around. The same cannot be said for smaller firms or solo attorneys who do not have the resources.”

Ansell predicts that the U.S. Second Circuit will find section 470 unconstitutional. “I would anticipate that with e-filing expanding across the country and the use of technology becoming more accepted by the courts, physical presence in a state will no longer be a necessity.”

Schoenefeld did not return a call for comment as of press time. She appeared pro se serving as her own attorney. Laura Etlinger, assistant solicitor general argued for the state.

Court of Appeals Judges Susan Phillips Read, Eugene Pigott Jr., Jenny Rivera, Sheila Abdus-Salaam and Eugene Fahey joined in court’s ruling. Judge Leslie Stein did not take part.