Statement of the Federal Communications Bar Association
To Be Presented in Summary by Sidney White Rhyne
at the Philadelphia Hearing of the
ABA Commission on Multijurisdictional Practice
February 1, 2002
Ladies and gentlemen, I appear before the Commission on behalf of the Federal Communications Bar Association, the FCBA.
This statement supersedes a statement that I filed on my own behalf on January 18, the deadline for written statements by those desiring to testify at this hearing. Though in that statement I identified my affiliation with the FCBA, I did not submit the statement on behalf of the Association. Our members had been given an opportunity in our monthly newsletter, until January 25, to comment on Rule 5.5 in the Interim Report of this Commission and that time had then not yet expired. Our Executive Committee rightly felt it necessary to await the running of that period for input from the membership before taking an official position.
I can now report that the Executive Committee, our corporate board of directors, has endorsed this statement as have the President of the Association, the Co-Chairs of our Professional Responsibility Committee, and our current Delegate to the ABA House. The only changes I have made in the statement I submitted on January 18 are the addition of preliminary paragraphs describing the FCBA and its membership, and the addition to the clarifying changes I suggested for the language of Rule 5.5 in Appendix J to the Interim Report of some additional changes suggested by members, which are basically consistent with my January 18 statement.
About the FCBA
The FCBA is an organization of lawyers with a specialty practice, primarily rooted in federal law, serving a nationwide and indeed an international client base. The organization has about 3,500 members, principally lawyers who represent clients with business interests in the field of communications. Most of these businesses are regulated by the Federal Communications Commission, the FCC.
The FCBA has been an affiliated organization of the ABA, with representation in its House of Delegates, for over fifty years.
The clients of members of the FCBA include radio and television stations, both commercial and non-commercial, and cable television systems. They also include telephone companies, facilities-based long distance carriers, local exchange carriers, international carriers, and resellers of telecommunications services.
Clients of members of the FCBA include wireless telecommunications companies, such as those that provide cellular and personal communications services, paging services, and special mobile radio services. They include manufacturers, utilities, railroads and other businesses that maintain internal wireless communications systems.
They include internet service providers and content providers. They include domestic and international satellite companies, teleport operators, satellite system operators, and earth station licensees.
FCBA member clients also include manufacturers of equipment for all the foregoing services, plus numerous entities that do business with entities in the telecommunications industry, such as radio and television program syndicators. They include municipalities that award or must consider renewal or revision of cable television franchises, or grant of franchises to private competitive telecommunications services. They include real estate owners and developers negotiating agreements to provide communications services to their tenants or residents, purchasers of long distance and local exchange capacity, and satellite capacity, and police departments and other public safety organizations that communicate by radio.
FCBA attorneys represent investors in, and lenders to, telecommunications entities. They also represent consumer groups and citizen watchdog groups that monitor and report
on the performance of broadcasters and others in the telecommunications industry. The current Chairman and General Counsel of the FCC are both members of the FCBA. Our active members include many employees of the Commission.
Our members are principally concentrated in the District of Columbia, because the District is the seat of the FCC. However, we also have members in 47 states and 20 foreign countries.
Our lawyer members in private practice are chosen by their clients because of their particular expertise in areas of the law in which the clients need assistance. They are routinely called upon to provide services to clients in jurisdictions other than those in which the lawyers maintain their offices and hold their bar memberships. We have a strong interest in seeing that the clients of these members are able to receive the services of the lawyers they have chosen, to provide the benefits of expertise they need.
In rendering services to their clients in other states, our members will ordinarily associate with local counsel if local litigation is involved. Most of the work of our members for their clients, however, does not involve litigation.
This includes field investigations, advice to clients and their employees, negotiation with attorneys and other representatives of entities with which the clients have business relationships, and transactional work such as the buying and selling of telecommunications facilities and businesses, and the financing of business expansions or recapitalizations. In those instances, our attorneys will seek the help of local counsel where, in the exercise of their professional judgment, they determine the clients best interests to require it.
Background of Presenter
I am a lawyer who is licensed to practice in the District of Columbia and for more than forty years has maintained a law office in that jurisdiction. My practice has been largely devoted to the representation of broadcasters and other persons and entities licensed by the Federal Communications Commission, or with other interests in matters before the FCC.
I am a former President of the FCBA. I have in the past served as the FCBAs Delegate to the House, though I do not currently hold that position. I am one of the Co-Chairs of the FCBA Professional Responsibility Committee.
I testified for the FCBA before this Commission at its hearing a year ago during the MidYear Meeting of the ABA in San Diego. At that time, of course, the focus was on other proposals related to multijurisdictional practice such as in the ALI Restatement of the Law Governing Lawyers and the Preliminary Report of the ABA Ethics 2000 Commission. The focus of this statement will be on Rule 5.5 as proposed in the Interim Report of this Commission released at the end of last November for public comment.
The comments and suggestions in this statement are based on my practice as a communications lawyer and on comments and suggestions received from other lawyers with experience in that kind of specialty practice.
Preference for "Common Sense Proposal"
I first of all note a preference for the proposed new Rule 5.5 on Multijuridictional Practice suggested by the Law Practice Management Section of the ABA and other organizations, including the FCBA. This is the so-called "Common Sense Proposal."
We prefer it because it is less complicated than the "safe harbor" approach and because it recognizes that multijurisdictional practice reflects client demands and assures clients the lawyers of their choice. Where lawyers are able to meet client needs for temporary services in an extraterritorial jurisdiction without either establishing an office or a continuous presence in that jurisdiction, and without holding themselves out as licensed in that jurisdiction, it is good for the clients, their lawyers, and the public.
The "safe harbor" approach is unrealistic in todays world of commerce. It assumes single jurisdictional practice rather than multijurisdictional practice to be the norm. It assumes that clients normally reside and have business only or at least primarily in the jurisdiction in which their lawyer is admitted to practice, and that experience with and knowledge of the client, its business, its culture and its executives, is irrelevant to providing good representation.
The numerous exceptions in the "safe harbor" approach invite the sort of nit-picking of language that we will offer in this statement to try to assure that lawyers will not be prevented from meeting their clients reasonable needs where those needs occur, and that clients will be able to be served by the lawyers they believe best able to meet their needs.
Suggested Changes in Appendix J
If this Commission, however, should decide to stay with the "safe harbor" approach to regulation of multijurisdictional practice as proposed in Appendix J to its Interim Report, we suggest the following changes in the language there proposed:
Insert the words "and in good standing" after the word "admitted" in the first line of this paragraph, so the sentence refers to a "lawyer admitted and in good standing in another United States jurisdiction" (added language boldfaced). Paragraph (b) would thus parallel proposed paragraph (c), in which the words "and in good standing" follow the word "admitted."
This change and the others suggested in this statement appear at the end of the statement in a revised version of Rule 5.5 that is "redlined" against the version proposed in Appendix J.
Substitute the words "performs legal services within this jurisdiction" for the words "represents a client," so the clause would read "does not engage in the unauthorized practice of law when the lawyer performs legal services within this jurisdiction on a temporary basis" (new language boldfaced).
The purpose of this change is to make clear it is the lawyers presence in the jurisdiction, and not the lawyers representation of the client, that must be temporary.
To apply it to a hypothetical, suppose a communications lawyer who is admitted to practice in the District of Columbia, who practices out of an office in D.C., and has for thirty years represented a broadcast licensee of the FCC with several radio stations in Alabama and other states. The client broadcaster has, with the advice and counsel of the D.C. lawyer and his assistance in negotiations, entered into a contract to sell one of its stations in Alabama to a buyer in that state. The D.C. lawyer has prepared an application for the statutorily required consent of the Federal Communications Commission, has represented the client in connection with the processing of the application by the FCC, which has granted the application, and the client understandably wishes to be represented by its lawyer at the closing which will take place in Alabama, a state where the lawyer is not admitted to practice.
Rule 5.5(b) as proposed in Appendix J could arguably prohibit that representation because, though the lawyers presence in Alabama for the closing would be temporary, the representation of the client has been anything but temporary. It had lasted for thirty years and will presumably continue even after the closing, because the client will be retaining other stations. This hypothetical is drawn directly from one of my own experiences, repeated as to its essentials for other clients in other states.
Third Change :
We would also, in the same paragraph, substitute for the words "in this jurisdiction if the lawyers services do not create" the words "unless it has been shown that the lawyers services have created." The sentence would then clearly recognize the D.C. lawyer as not having engaged in the unauthorized practice of law by performing legal services in Alabama on a temporary basis " unless it has been shown that the lawyers services have created an unreasonable risk to the interests of the lawyers client, the public, or the courts" (new language boldfaced).
This change would make clear that the burden is on whatever person, prosecutor or disciplinary authority challenges this very ordinary type of multijurisdictional practice, to show that there was in fact an unreasonable risk in the services the lawyer provided. The burden in the event of a dispute should not be on the lawyer to show an absence of risk, nor should the lawyer feel subject to any sort of threshold test for undertaking services needed by a client other than the test in Rule 1.1(a) of ability to provide "competent representation."
For the same reason stated as to the first change in Rule 5.5(b) proposed above, we would add in Rule 5.5(c) between the words "if performed" and the words "on a temporary basis," the words "within this jurisdiction." The paragraph would then refer to services "for a client that are within paragraph (b), if performed within this jurisdiction on a temporary basis by a lawyer admitted and in good standing in another United States jurisdiction" (new language boldfaced).
Like the first change in Rule 5.5(b), this change would help clarify that the word "temporary" is intended to refer to the duration of the lawyers presence for the client within the jurisdiction and not to the duration of the lawyers representation of the client.
We would insert in the first line of this paragraph, after the word "performed," the words "in this jurisdiction;" and then shorten the rest of the paragraph by substituting for the words "lawyer without a law license or other authorization from a state or local governmental body" the words "licensed lawyer." The paragraph would then permit temporary services by a lawyer in good standing in another jurisdiction if the services "may be performed in this jurisdiction by a person who is not a licensed lawyer" (new language boldfaced).
This is probably not a substantive change, but we found the double negative "not a lawyer without a law license" to be confusing and the reference to some "other authorization from a state or local governmental body" to be unnecessary.
We would change the word "and" before the semi-colon to "but," so the line would read "are not within paragraph (c)(3) or (c)(4) but:" (new language boldfaced). This would indicate more clearly that, though the services may not be excepted from unauthorized practice by(c)(3) or (c)(4), they are saved by (c)(5).
Alternatively, the text on that line could be deleted entirely and paragraphs (5)(i), (5)(ii) and (6) could be renumbered under (c) as paragraphs (5), (6) and (7), respectively. We have not incorporated this technical change in our redlined version on pages 12-14 of the Appendix J Rule 5.5, though we see no reason not to simplify the rule in that way.
We would substitute in proposed Rule 5.5(c)(5)(ii), for the words "a matter that has a substantial connection to," the words "legal services rendered by the lawyer in." The paragraph would thereby except from treatment as unauthorized practice any services that "arise out of or are reasonably related to legal services rendered by the lawyer in a jurisdiction in which the lawyer is admitted to practice" (new language boldfaced).
In the hypothetical example of the D.C. lawyer serving a broadcast client in Alabama, it might be difficult to argue that the lawyers services at the closing in Alabama on the sale of an Alabama radio station by an Alabama seller to an Alabama buyer had a substantial connection to the District of Columbia. But it is undeniable that the services arose out of and were reasonably related to legal services rendered by the lawyer in the District of Columbia, from which he had regularly served his Alabama client, including most recently with services in the contractual and regulatory prerequisites to the closing of this very transaction.
Also, as presently drafted, the proposed rule could create an artificial incentive for a lawyer to provide in a contract that the law of the jurisdiction in which he or she is admitted will be controlling solely to provide a "substantial connection to the jurisdiction in which the lawyer is admitted" and thereby avoid a charge of unauthorized practice.
We would also substitute, in Rule 5.5(c)(6), for the words "are governed primarily by...," the words "arise out of or are reasonably related to legal services involving ...." This would make the language of Rule 5.5(c)(6) parallel language already proposed by the Commission in the previous paragraph, so that 5.5(c)(6) would except from treatment as unauthorized practice any services that " arise out of or are reasonably related to legal services involving federal law ...." (new language boldfaced). It would also recognize that multijurisdictional services required by clients of lawyers who practice in federal, international and other legal specialties invariably deal with mixed questions of the law of their specialty and the law of one or more states.
For instance, in the hypothetical case of the D.C. lawyer representing an Alabama client in the closing on sale of the clients Alabama radio station, there could be questions not only of compliance with the Federal Communications Act, FCC regulations and policies, federal environmental protections and pension rights, but also of compliance with state restrictions on bulk transfers of business assets, perhaps with local zoning and real estate recordation requirements, and even questions of the validity of the contract itself or of certain contractual clauses, all questions of Alabama law. Every transaction involving an entity that is regulated by the FCC involves a unique interplay of requirements of the Federal Communications Act and other federal laws with state law.
Proposed Rule 5.5(c)(6) as presently worded seems to infer an obligation on the part of the lawyer to make an advance quantitative determination of whether the services to be rendered in Alabama will turn out to be "primarily" as to matters of federal or state law. This is a difficult question at best. The rule provides no guidance as to how such a determination should be made.
The professional judgment on whether and to what extent it is in the clients best interests to involve local counsel should be left to the lawyer chosen by the client to represent the client in the transaction. The judgment should be made in consultation with the client where there is any doubt. It does not always require a lawyer licensed in a state to research, interpret and advise on the law of that state. If it did, there would not be enough Delaware lawyers to go around for every corporation in this country that is chartered in Delaware.
As an extra safeguard for lawyers such as communications attorneys who handle matters regulated by governmental agencies other than those of the jurisdictions they must enter to serve the needs of their clients, we propose a new Rule 5.5(c)(7) that would make clear it is not unauthorized practice to render services that " concern matters subject to the oversight or approval of federal, international or foreign authorities or tribunals or those of a jurisdiction in which the lawyer is admitted to practice."
We would split paragraph (e) into two new paragraphs, (e) and (f), dealing with what are presently clauses (i) and (ii) of paragraph (e). One reason for this is that the introductory language in paragraph (e), "Except as authorized by these rules or other law," modifies both (i) and (ii). Regarding (ii), we cant think of any situation in which a lawyer not admitted to practice in a jurisdiction would be authorized by law to hold out to the public that he or she was so authorized.
In new paragraph (e), which would retain only what is now clause (i), we would add after the words "establish an office" the words "for legal services for the public." The paragraph would then say that a lawyer admitted in another jurisdiction shall not within the jurisdiction adopting the rule, unless otherwise authorized by law, "establish an office for legal service to the public ...." (added language boldfaced). The reason for the boldfaced new language is that law firms engaged in major litigation in jurisdictions where their lawyers are not admitted sometimes do establish temporary offices from which to conduct the litigation, but these would not be offices for legal service to the public.
In new paragraph (f) the words retained from paragraph (e) of Appendix J, "A lawyer who is not admitted to this jurisdiction shall not," would be directly followed by "represent or hold out to the public that the lawyer is admitted to practice in this jurisdiction" as in Appendix J. But the qualifier in Appendix J, "Except as authorized by these rules or other law," would not appear.
Starting with consideration of the proposal of the Ethics 2000 Commission for Rule 5.5 that had been made at this time last year, this Commission has made substantial strides toward clarifying the right of lawyers to meet the needs of their clients when those needs arise in jurisdictions beyond the jurisdictions in which the lawyers conduct their practices, and in assuring the right of clients to choose the lawyers they deem best able to meet their needs. For that progress lawyers, their clients and the public, should be grateful. The changes we have proposed would, we believe, provide necessary further clarification.
A move to Rule 5.5 along the lines proposed by the Law Practice Management Section, the American Corporate Counsel Association, the National Organization of Bar Counsel, the Association of Professional Responsibility Lawyers, and other organizations such as the FCBA that have joined with them, would be even better. It would replace a general prohibition having often laborious exceptions with a reasonably circumscribed permission that is less complicated and more easily understood.
RULE 5.5 UNAUTHORIZED PRACTICE OF LAW
(FCBA Proposals "redlined" against
Appendix J to Interim Report)
(a) A lawyer shall not practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction.
(b) A lawyer admitted and in good standing in another United States jurisdiction, but not in this jurisdiction, does not engage in the unauthorized practice of law when the lawyer
[represents a client]performs legal services within this jurisdiction on a temporary basis [in this jurisdiction if the lawyer's services do not create]unless it has been shown that the lawyers services have created an unreasonable risk to the interests of the lawyer's client, the public, or the courts.
(c) Services for a client that are within paragraph (b), if performed within this jurisdiction on a temporary basis by a lawyer admitted and in good standing in another United States jurisdiction, include services that:
(1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the representation;
(2) may be performed in this jurisdiction by a person who is not a
[lawyer without a law license or other authorization from a state or local governmental body;]licensed lawyer;
(3) are in or reasonably related to a pending or potential proceeding before a tribunal or administrative agency held or to be held in this or another jurisdiction, if the lawyer is authorized by law or court or agency order to appear in such proceeding or reasonably expects to be so authorized;
(4) are in or reasonably related to a pending or potential arbitration, mediation, or other alternate dispute resolution proceeding held or to be held in this or another jurisdiction;
(5) are not within paragraph (c)(3) or (c)(4)
(i) are performed for a client who resides or has an office in a jurisdiction in which the lawyer is authorized to practice, or
(ii) arise out of or are reasonably related to
[a matter that has a substantial connection to]legal services rendered by the lawyer in a jurisdiction in which the lawyer is admitted to practice; or
[are governed primarily by]arise out of or are reasonably related to legal services involving federal law, international law, the law of a foreign nation, or the law of a jurisdiction in which the lawyer is admitted to practice [.]; or
(7) concern matters subject to the oversight or approval of federal, international or foreign authorities or tribunals or those of a jurisdiction in which the lawyer is admitted to practice.
(d) A lawyer admitted to practice in another jurisdiction but not in this jurisdiction does not engage in the unauthorized practice of law in this jurisdiction:
(1) if the lawyer is an employee of a client and acts on behalf of the client or its commonly owned organizational affiliates except for work for which pro hac vice admission is required; or
(2) when the lawyer renders services in this jurisdiction pursuant to other authority granted by federal law or the law or a court rule of this jurisdiction.
(e) Except as authorized by these rules or other law, a lawyer who is not admitted to practice in this jurisdiction shall not
[(i)]establish an office for legal service to the public or other permanent presence in this jurisdiction for the practice of law.
(f) A lawyer who is not admitted to practice in this jurisdiction shall not
[or (ii)]represent or hold out to the public that the lawyer is admitted to practice law in this jurisdiction.