Lawyers Board Repeals Four Opinions
by
Kenneth L. Jorgensen, Director
Minnesota Office of Lawyers Professional Responsibility
Reprinted
from Minnesota Lawyer (December 2,
2002)
At its Oct. 25, 2002, meeting, the
Lawyers Professional Responsibility Board repealed four of its 17 remaining
formal opinions. The opinions were
repealed as part of the Board’s ongoing review of its opinions in light of the
Supreme Court’s decision in In re Panel File No. 99-42, 621 N.W.2d 240
(Minn. 2001). In that decision, the
high court held that a lawyer could not be disciplined solely for violating a
Lawyers Board Opinion. The Lawyers
Board process for the ongoing review of its opinions is discussed in more
detail in the November 2002 issue of Bench & Bar. (See Bateman, “Opinions of the
Lawyers Board,” 59 Bench & Bar 10 at p. 6.)
The four opinions recently repealed
are:
·
Opinion No. 3 concerning
part-time judges,
·
Opinion No. 4, which
addresses withdrawal for nonpayment of fees,
·
Opinion No. 10 governing debt
collection procedures, and
·
Opinion No. 16 relating to
interest and late charges on attorney fees.
Opinion No. 3 was adopted in 1972 and prohibited part-time
judges from practicing law in the court in which the part-time judge
serves. The opinion also extended the
disqualification to the part-time judge’s law partners and associates.
Over the past decade, amendments to the Code of Judicial
Conduct codified and clarified the application of the part-time judge
disqualification. See e.g.,
Section C of the Application of the Code of Judicial Conduct and its related
comment.
In addition, Rule 1.10 of the Rules of Professional Conduct
delineates the types of conflicts that are imputed to other members of a law
firm. With the evolution of substantive
ethics rules that more comprehensively address the issue, Opinion No. 3 became
obsolete, thus necessitating its repeal.
Adopted in 1973, Opinion No. 4 addressed
a lawyer’s withdrawal from representation for nonpayment of fees. The opinion contained res ipsa loquitur or
switching burden of proof provision that placed higher burden of proof upon lawyers
who failed to enter into written fee agreements with clients. Specifically, the opinion required lawyers
without written fee agreements to justify their withdrawal for nonpayment of fees
by proving the client’s noncompliance with the oral fee arrangement by a
standard of clear and convincing evidence.
The switching burden of proof
provision, although laudable for its encouragement to use written fee
agreements, has little, if any basis in the Rules of Professional Conduct. Without a sufficient nexus to the
substantive ethics rules, this requirement appeared to be a regulation that
went beyond that authorized by the Supreme Court, especially in light of the Panel
File No. 99-42 decision.
The comprehensive set of
guidelines contained in Opinion No. 10 was intended to keep a clear demarcation
between the activities of law firm and nonlawyer debt collection agencies. The opinion was premised upon the notion
that blurring the distinction between law firms and collection agencies could lead
to abuse of debtors and adversely reflect upon the legal profession.
Since the
opinion was adopted in 1977, federal and state consumer protection laws,
including most notably the Fair Debt Collection Practices Act (FDCPA), have
encompassed and far exceeded the regulation of collection activities proscribed
by the Lawyers Board opinion.
Within
the past several years, federal court rulings have made it clear that the FDCPA
applies not only to collection agencies, but also lawyers. Like Opinion No. 3, this opinion became
obsolete due to the evolution of more comprehensive substantive law
regulations.
Opinion No. 16 created a safe harbor from lawyer discipline prosecution for de minimis violations of Truth-in-Lending (TIL) violations associated with interest assessed by lawyers on past due legal fees.
In short, lawyers who charged
6 percent or less without disclosure in a written fee agreement, or 8
percent or less disclosed in a written fee agreement, were exempt from lawyer
discipline for noncompliance with TIL disclosure requirements under the
opinion. Attorneys who charged interest
outside of the opinion’s guidelines remained subject to lawyer discipline
prosecution for TIL disclosure violations.
Opinion No. 16’s connection to the Rules of Professional Conduct was the reasonable fee requirements of Rule 1.5(a). The opinion postulated that the fee charged was unreasonable if the interest charged was usurious or in violation of TIL because required disclosures were not made. However, the opinion’s safe harbor provision, which used the rate of interest charged to draw the line between de minimis and significant TIL violations, was based upon prosecutorial discretion standards and did not originate from any authority in the Rules of Professional Conduct.
The court’s denouncement in Panel
File No. 99-42 of Lawyers Board opinions creating standards not found in
the Rules of Professional Conduct led the repeal of the opinion.
The Lawyers Board is continuing to examine its formal opinions in conjunction with the ABA’s Ethics 2000 proposed amendments to the Rules of Professional Conduct. The Board welcomes bar comment concerning its opinions. The opinions can be accessed on the Lawyers Board Web site at www.courts.state.mn.us/lprb.