Quantcast
Home / Legal News / State Bar will not sue Supreme Court over assessment

State Bar will not sue Supreme Court over assessment

“I have traveled the state, visiting lawyers and bar associations. I don’t hear anyone talking about this issue. It would be a giant disservice to spend any more time on this issue.”

President Michael D. Guerin,
Gimbel, Reilly, Guerin & Brown

The Wisconsin State Bar’s Board of Governors voted overwhelmingly last Friday not to sue the Wisconsin Supreme Court in federal court for exceeding its authority by imposing a $50 annual assessment on all practicing attorneys to fund WisTAF grants to organizations providing civil legal services to the indigent.

When WisTAF petitioned the Supreme Court for the assessment in 2004, the Board voted to oppose the petition. On March 24, 2005, the Court approved the assessment, with only Justices David T. Prosser Jr. and Jon P. Wilcox dissenting, and the assessment was added to attorney’s bar dues last year.

Although legal advice indicated the assessment is unconstitutional, the Board voted 29-9 not to sue for declaratory judgment in federal court. Public perception of attorneys and the profession was the reason most often cited during discussion for not seeking declaratory judgment.

Separation of Powers

The nine governors voting to bring suit in federal court were: Lisa M. Arent, Milwaukee; Grant E. Birtch, Neenah; Andrew J. Chevrez, West Allis; Gwen-dolyn G. Connolly, Milwaukee; Thomas L. Frenn, Milwaukee; C. Michael Hausman, Delafield; Gregg M. Herman, Milwaukee; John P. Macy, Waukesha; and Robert W. Swain, Appleton.

Prior to the meeting, Arent distributed a 33-page draft petition, setting forth that the order violated the separation of powers doctrine and the First Amendment.

Addressing separation of powers, Arent wrote in the petition, “The assessment is not a cost shifted to lawyers for their regulation or discipline; nor is it a proper exercise of the Court’s administrative authority over the lower courts. The legislature has the exclusive power to tax, and the power cannot be delegated to the judiciary. Therefore, the WisTAF Assessment violates the separation of powers.”

Turning to the First Amendment, the draft argues, “Under the rules, WisTAF grants could be used for the dual purpose of providing individuals legal representation while promoting larger public policy goals to serve certain political or ideological ends. For these reasons, the WisTAF Assessment infringes the First Amendment rights of bar members under Keller v. State Bar of Cal., 496 U.S. 1 (1990).”

“[A]s members of the State Bar, we are compelled to challenge the WisTAF Assessment, to perform our sworn duty to defend the United States and Wisconsin Constitutions,” Arent wrote.

Wait for Study

“The Legislature has the exclusive power to tax, and the power cannot be delegated to the judiciary. Therefore, the WisTAF Assessment violates the separation of powers.”

Lisa M. Arent,
White Hirschboeck Dudek SC

The Board initially considered whether to wait for completion of its study of unmet legal needs, expected this summer, and to then petition the Supreme Court for repeal of the assessment.

Moving for this option, Governor Kenneth A. Knudson argued, “We need to be prepared to address all issues in the motion. We are opening ourselves up to summary rejection if we act before the study is completed. I don’t want to be told by the Court, ‘We told you to do this study and you didn’t.’”

Knudsen also argued that it would open the bar up to ridicule if it sued its own Supreme Court in federal court: “It is important not to give more fodder for attacks on lawyers. … It would be wrong for us to sue in federal court, because it would be bad for the image of lawyers. This body should do all it can not to further damage the image of lawyers.”

While public perception was the most frequently cited reason for not bringing suit, it was not the only one. Several governors expressed the view that the Board had a moral leadership oblitation to not oppose funding legal services, even though they acknowledged that a majority of the Bar’s membership opposes the assessment.

President Michael D. Guerin also supported the motion, “strictly to put off the issue.” Guerin maintained, “As president, I have traveled the state, visiting lawyers and bar associations. I don’t hear anyone talking about this issue. It would be a giant disservice to spend any more time on this issue.”

Both Arent and Governor Grant F. Langley opposed this option, for two reasons: the study will certainly show that there are vast unmet legal needs that the $50 assessment still fails to meet, and thus will undermine the petition; and the unmet legal needs have nothing to do with the unconstitutionality of the assessment.

The motion resulted in a 19-19 tie and was thus defeated.

A subsequent motion by Governor Daniel L. Schneidman to file a concurrent petition with the court to amend the assessment and challenge the suit in federal district court was also defeated, by a voice vote.

Could Bar Challenge?

During the debate, Arent and Governor Paul R. Norman debated whether the bar would even have standing to challenge the assessment. Norman argued, “It would be a breach of our fiduciary duty to bring a suit without a chance of success. It is better to leave it to individual lawyers, who clearly have standing, to bring suit. We should not drag in those members who oppose the suit.”

Arent cited long-standing precedent that organizations, such as the NAACP, have standing to challenge actions that affect their members on their behalf, and added that the Bar, as the entity compelled to collect the assessment, would have standing to bring suit on that ground, as well.

Arent also noted that, as the entity collecting the assessment, the Bar would likely be named as a defendant anyway, if an individual attorney were to bring suit.

Motion to Sue

Finally, the Board considered a motion to seek declaratory judgment in federal court that the Supreme Court’s action in passing the assessment was unconstitutional.
Connolly, who supported bringing suit, said, “Our members overwhelmingly oppose the assessment; and [Arent’s] draft squarely discusses the legal issues. The Supreme Court has, without authority, imposed a tax on one segment of society. I don’t see any merit in going back to the Court, and pointing out its failure of analysis.”

She went on to note that the board should fulfill its duty to members by seeking federal review. Connolly acknowledged the potential for negative perception, but said those concerns should not be a driving factor.

The motion to sue failed.

Successful Resolutions

The only resolutions that did pass, both by voice vote, were: (1) to direct President Guerin to meet with the Supreme Court about what amendments to the assessment the court might approve, and report back to the Board in May; and (2) to provide a summary report of the Board’s actions to the Bar’s membership, and seek feedback.

Many on the Board had complained that they had no idea whether the membership supported filing suit or not. However, a Wisconsin Law Journal online poll, conducted from Jan. 18, 2005 to Feb. 15, 2005 revealed that 63 percent supported filing suit immediately, and another 18 percent supported filing suit, if the Board inquired into the legality of the assessment and concluded it was illegal. Only 15 percent supported the assessment, while 4 percent opposed the assessment, but wanted the Bar to leave it to individual lawyers to challenge it.

Other Actions

In other actions, the Board approved, without debate, a resolution to seek revision of the trust account rules that were approved by the Supreme Court in 2004.
The revisions that the Bar will seek include the following:

  • Clearly defining what is an “advance fee”;

  • Allowing lawyers to deposit advance fees in their general business accounts, provided that the fee agreement is in writing, that the lawyer is obliged to refund any unearned fee at the termination of the representation, and that the attorney consent to arbitration of any dispute;

  • Limiting the absolute rule against telephone transfers of funds to or from trust accounts to pooled trust accounts;

  • Allowing electronic deposits by third parties in some instances;

  • Allowing the creation of credit card trust accounts;

  • Permitting waiver of the five-day wait period before withdrawal of fees from a trust account, provided that the client is notified in writing;

  • Imposing a 30-day time limit for clients to object to a withdrawal from a trust account;

  • Requiring such objection to be “particularized and reasonable”;

  • Giving attorneys good faith discretion as to where to invest trust funds where there is no direction from the client;

  • Clarifying that tangible personal property and securities must be receipted and inventoried in a property ledger; and

  • Redefining “Dishonest Conduct” to include failure to refund an unearned advance fee, upon an award by an arbitrator or court.

The Board also voted to support an amendment to the Rules of Professional Conduct to make explicit that, when an attorney seeks advice from the Bar’s Ethics Hotline, the conversation is confidential.

Leave a Reply

Your email address will not be published. Required fields are marked *

*