Hello everyone and welcome to this Ethics Alert which will discuss the recent California law that requires the California Bar to split into separate regulatory and trade association entities, which appears to be in response to the U.S. Supreme Court’s North Carolina dental antitrust case in 2015. The State Bar of California’s press release announcing the “historic” law is here: http://www.calbar.ca.gov/About-Us/News-Events/News-Releases/ArtMID/10234/ArticleID/525/State-Bar-prepares-to-implement-historic-reforms-followingGov-Brown-signature-on-the-agency%E2%80%99s-annual-fee-bill
According to the State Bar press release: “Today (October 2, 2017) Gov. Jerry Brown signed SB 36 into law, the fee bill for the State Bar of California. In addition to setting the annual licensing fee for lawyers, SB 36 includes historic reforms for the public protection agency.”
Under the law, effective in 2019, the California Bar will act only as the disciplinary and regulatory agency and membership will be mandatory for all of the state’s lawyers. The current 19-member Bar board will transition into a group of 13 individuals serving four-year terms. Six of the 13 members must be members of the public. All board members will be appointed by the California Supreme Court, the state legislature, and the governor and will no longer be elected.
A separate nonprofit entity will be created for trade association activities and will include all Bar sections. Membership in that entity will be voluntary and will include an annual membership fee.
The California Bar must also comply with a California Supreme Court policy to identify and address any proposed decision of the board of trustees which raises antitrust concerns. This requirement is clearly an attempt to avoid allegations of antitrust violations which were found by the U.S. Supreme Court in North Carolina State Board of Dental Examiners v. Federal Trade Commission, No. 13–534. (USSC February 25, 2015).
In that 2015 case, the USSC found that the North Carolina dental regulatory board, which was made up of primarily dentists, did not have state-action antitrust immunity in its attempts to prohibit non-dentists from providing teeth-whitening services to the public.
The regulation of lawyers (and other licensed professionals) in Florida and other states is implemented through boards, commissions, committees, or other similar entities which investigate and make findings. In Florida, there is no separate trade association; however, findings by Bar Counsel, grievance committees, and the Bar Board of Governors are subject to review by the Florida Supreme Court.
I previously blogged about North Carolina State Board of Dental Examiners v. Federal Trade Commission and its aftermath in my Ethics Alerts here: https://jcorsmeier.wordpress.com/2015/03/17/u-s-supreme-court-opinion-finds-that-there-is-no-automatic-antitrust-immunity-for-state-professional-licensing-boards/, here: https://jcorsmeier.wordpress.com/2015/06/24/legalzoom-files-federal-antitrust-lawsuit-against-the-north-carolina-state-bar-citing-2015-ussc-dental-board-case/, and here: https://jcorsmeier.wordpress.com/2015/10/28/legalzoom-settles-multi-million-dollar-antitrust-suit-against-the-north-carolina-state-bar-with-agreement-to-continue-operating/
In some states, these antitrust issues are most likely not in play. For example, the Illinois Attorney Registration and Disciplinary Commission oversees the registration and discipline of attorneys and all Illinois lawyers are required to pay dues to that entity. All final disciplinary orders are also issued by the Illinois Supreme Court. The Illinois State Bar Association is a separate voluntary association which engages in trade association activities.
Bottom line: This California law is clearly in response to (and an attempt to overcome) the antitrust issues identified by the U.S. Supreme Court in North Carolina State Board of Dental Examiners v. Federal Trade Commission. Will other states follow? Stay tuned…
…and be careful out there.
Disclaimer: this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.
Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
29605 U.S. Highway 19 N. Suite 150
Clearwater, Florida 33761
Office (727) 799-1688
Fax (727) 799-1670