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February 15, 2017 Articles

Schoenefeld Seeks SCOTUS Review of Second Circuit's Decision

The federal appeals court had previously upheld New York's nonresident attorney office requirement.

Jacqueline M. Pasek

On December 16, 2016, New Jersey lawyer and resident, Ekaterina Schoenefeld, appearing pro se, filed a petition for a writ of certiorari before the U.S. Supreme Court. Her goal? That the court declare New York Judiciary Law Section 470 unconstitutional under the Privileges and Immunities Clause of the U.S. Constitution.

The law in question states that, "[a] person, regularly admitted to practice as an attorney and counselor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counselor, although he resides in an adjoining state." N.Y. Jud Law § 470 (2016). Both Schoenefeld's home and office are in New Jersey, and because she does not have a brick-and-mortar New York office, Schoenefeld alleges that section 470 unconstitutionally prohibits her from practicing law in the state. 

So How Did We Get Here?

In a 2–1 split opinion, the Second Circuit held in 2016 that New York's law requiring nonresident attorneys to maintain an "office for the transaction of law business" within New York State does not run afoul of the Privileges and Immunities Clause of the U.S. Constitution. In so holding, the Second Circuit reversed the U.S. District Court for the Northern District of New York's 2011 decision siding with Schoenefeld and declaring the law unconstitutional. Schoenefeld v. Schneiderman, 821 F.3d 273 (2d Cir. 2016), rev'g Schoenefeld v. New York, 907 F. Supp. 2d 252 (N.D.N.Y. 2011).

Before rendering its decision upholding the law, however, the Second Circuit certified a question on the meaning of the statute’s use of the phrase “office for the transaction of law business” to New York’s highest state court: "Under New York Judiciary Law § 470, which mandates that a nonresident attorney maintain an 'office for the transaction of law business' within the state of New York, what are the minimum requirements necessary to satisfy that mandate?" Schoenefeld v. New York, 748 F.3d 464, 471 (2d Cir., Apr. 8, 2014) (certifying question). The state argued before both the Second Circuit and the New York Court of Appeals that the constitutionality of the statute could be saved by interpreting section 470’s “office for the transaction of law business” to merely require a nonresident attorney to provide an address for service of process or designate an agent for service. The New York Court of Appeals, however, declined to read the statute in this broad manner. Instead, agreeing with Schoenefeld's construction, the New York Court of Appeals held that under its plain language, "the statute requires nonresident attorneys to maintain a physical office in New York." Schoenefeld v. New York, 25 N.Y.3d 22, 25–28 (2015).

Faced with that interpretation, which failed to moot Schoenefeld's constitutional challenge, the Second Circuit looked to the U.S. Supreme Court's recent decision in McBurney v. Young, 133 S. Ct. 1709, 1715, 185 L. Ed. 2d 758 (2013), for guidance. McBurney held that constitutionally protected immunities are burdens "only when [challenged] laws were enacted for [a] protectionist purpose." 133 S. Ct. at 1715. In contrast, section 470, whose predecessor law and recodifications were enacted in the mid-1800s through early 1900s (before the dawn of fax or email), was enacted to ensure that every licensed New York attorney – resident or not – would have a physical presence in the state and therefore a place for service. The Second Circuit held that this was not a protectionist purpose that would favor New York residents over nonresidents. 821 F.3d at 281–82. And while the majority conceded that in 2016 the statute's physical office requirement is "now largely vestigial as a means for ensuring service," it also noted that "the fact remains that the law was enacted for that nonprotectionist purpose, and Schoenefeld has adduced no evidence of a protectionist intent to afford some economic advantage to resident New York lawyers."

A contrary holding, according to the majority, would allow nonresident attorneys to practice on different terms from residents—without a physical presence in the state. The court explained: "The Privileges and Immunities Clause proscribes laws that favor residents over nonresidents in their pursuit of a common calling. It does not mandate that nonresidents be allowed to practice law in a state on terms different from those applicable to residents." Rather than viewing the physical-office requirement as a burden on nonresident attorneys, the majority opined that it actually placed resident and nonresident attorneys on "an equal footing."

Judge Hall disagreed with the majority's reasoning in a lengthy dissent. He wrote that the majority's opinion improperly puts the burden on the plaintiff to make out a thresholdcase of discriminatory intent, rather than keeping the burden on the state when, as in section 470, a statute discriminates on its face against nonresidents with regard to a fundamental right—here, the right to practice law—under the Privileges and Immunities Clause. Id. at 287 (Hall, J., dissenting). And even if some prima facie showing of protectionist intent is required by the plaintiff, Judge Hall reasoned that Schoenefeld had provided it by virtue of the plain text of the statute that draws a facial distinction between residents and nonresidents.

The state, according to the dissent, should then have been required to demonstrate (1) that there is a substantial justification for the discrimination between residents and nonresidents regarding the fundamental right; and (2) that the discrimination imposed by the statute bears a substantial relationship to the stated justification. Id. at 292–93 (quoting Sup. Ct. of N.H. v. Piper, 470 U.S. 274, 284 (1985)). The state's justifications, including "effectuating service of legal papers, facilitating regulatory oversight of nonresident attorneys' fiduciary obligations, and making attorneys more accessible to New York courts," and the nonresident office requirement means to achieve those justifications, were unpersuasive to the dissent in an age of overnight mail delivery, fax and email (as permitted), and New York's requirement of an in-state agent for service of process.

Schoenefeld’s Argument

Schoenefeld’s petition for a writ of certiorari essentially mirrors Judge Hall’s Second Circuit dissent. She argues, in brief, that the majority’s reading of McBurney was wrong, and that both McBurneyitself as well as analogous Commerce Clause jurisprudence (as opposed to the Equal Protection Clause jurisprudence relied on by the Second Circuit majority) place the burden on the state to show sufficient justification for the statute’s discrimination or the unavailability of less restrictive means. See generally Pet. Cert. at 14–25. Schoenefeld also argues that the Second Circuit’s reasoning is in conflict with its sister circuits’ approach to analyzing statutes under the Privileges and Immunities Clause. Id. at 25–28.

Several amici have filed briefs with the Supreme Court, each in support of Schoenefeld’s position. Among them are the Association of Corporate Counsel, the Association of Professional Responsibility, and the New Jersey Bar Association (NJBA). Of particular interest is the New Jersey Bar Association’s amicus brief, which offers itself up as a positive test case for eliminating the physical office requirement. As the NJBA points out, “there are approximately 49,000 New Jersey-admitted attorneys who are also admitted to practice in New York, and have a vital interest in the outcome of this matter.” N.J. Bar Assoc. Amicus Br. at 2. Like New York, until relatively recently, New Jersey also had a brick-and-mortar office requirement for its admitted attorneys. The state’s Supreme Court, however, amended its rule in 2013 to require only that New Jersey lawyers “designate one or more fixed locations” (not to be confused with a more stringent requirement of “maintaining” a physical location) for tasks that must be done in person, such as receipt of mail, inspection of files, or service of process. New Jersey Court Rule 1:21-1(a). Nonresident attorneys without an in-state office must also authorize the Supreme Court Clerk to accept service of process if all else fails. As the NJBA points out, “relieving attorneys of the burden of maintaining an in-state office has not negatively impacted any of the important values cited by defendants in [the Schoenefeld] case.” Id. at 18.

Where Will SCOTUS Go From Here?

The state waived its right to respond to Schoenefeld’s petition. Whether that is because the state feels confident that the Court won’t accept certiorari, or because the state genuinely does not care whether or not section 470 is struck down as unconstitutional (a position that, while some might find impossible to believe, is potentially evidenced by the state’s interpretation suggestions to the New York Court of Appeals and Second Circuit), remains to be known. What is certain, however, is that nearly all parties involved—Schoenefeld, the State of New York, and the amici—all agree that in today’s age of rapid, electronic communication, a brick-and-mortar office requirement for the practice of law should be a thing of the past.

The question remains then: In the event certiorari is granted, will New York lawmakers finally take a harder look at Judiciary Law Section 470?


Jacqueline M. Pasek is an associate with Jones Day in Cleveland, Ohio.


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