Motion to Dismiss or Affirm — Jacoby v. Supreme Court of New Jersey

Oa Appeal from the Supreme Coart of New Jersey

I le

Question Presented

Does DR 2-102(C), a Rule of Discipline of the Supreme

Court of New Jersey, which prohibits the practice of law

under a firm name unless each named partner was or is a

member of the New Jersey bar, violate the First and Four-

teenth Amendments, the Commerce Clause, the Privileges

and Immunities Clause and the Equal Protection Clause of

the Constitution of the United States as applied by the

Supreme Court of New Jersey to permit affiliation by out-

of-state law firms with New Jersey firms and, further, to

permit advertisement of such affiliation consistent with New

Jersey disciplinary rules regulating attorney advertising?

TABLE OF CONTENTS

Question Presentev

Tam or AUTHORITIES

Counter-STaTEMENT OF THE CASE

Arcument—<As interpreted by the Supreme Court of

New Jersey, DR 2-102(C) permits affiliation be-

tween out-of-state law firms and New Jersey law

firms as well as advertisement of such affiliation;

thus, although the rule requires that the name of

a New Jersey firm contain only the names of the

partners who are or were members of the New

Jersey Bar, it does not implicate any question

of constitutional significance so as to warrant

plenary review by the Court

A. The narrow restriction on the use of the

Jacoby & Meyers firm name in New Jersey to

prevent deception falls so clearly within the

parameters of permissible regulation under

the Commercial Speech Doctrine as to totally

obviate the need for further review —..........

B. Since DR 2-102(C) neither discriminates based

upon residency nor affects any fundamental

right, it does not violate the Privileges and

Immunities Clause

C. DR 2-102(C) regulates evenhandedly to pro-

tect the citizens of New Jersey without discrimi-

nating against or unduly burdening interstate

4

10

14

9

* 2885

TABLE OF CONTENTS

D. Since DR 2-102(C) is rationally related to an

important State interest it does not violate

the Equal Protection Clause

CoxcLusion

Arran:

A- Rule 1:14 of the New Jersey Court Rules

B—Rule 1:19 of the New Jersey Court Rules

A =

F

ae

iv TABLE OF AUTHORITIES

PAGE

Table of Authorities

Cases Cited

Allied Stores v. Bowers, 358 U.S. 522 (1959) 0. 8

American Trial Lawyers v. New Jersey Supreme

Court, 66 N. J. 258, 330 A.2d 350 (1974) —....... 2,11

Austin v. New Hampshire, 420 U.S. 656 (1975) — 21

Baidwin v. ee ee ee ee ee

871 (1978) 8, 21

Bates v. State Bar of Arizona, 433 U.S. 350 (1977) 7, 13,

15, 17, 26

Brown v. Supreme Court of Virginia, 359 F. Supp.

549 (E.D. Va. 1973), summarily aff’d 414 US.

1034 (1974) 19, 28

Carey v. Brown, 447 U.S. 455 (1990ꝶ 25

Central Hudson Gas v. Public Service Com'n of

New York, 447 U.S. 557 (1980) i 15

Friedman v. Rogers, 440 U.S. 1 (1979) ...............5, 6, 15-18

Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) ... 7, 23

Hicklin v. Orbeck, 437 U.S. 518 (1970 21

H. P. Hood & Sons v. DuMond, 336 U.S. 525 (1949)

Hughes v. Oklahoma, 441 U.S. 322 (1979) .......... 22

Huron Portland Cement Co. v. Detroit, 362 U.S. 440

(1960) 7

Leis v. Flynt, 439 U.S. 438 (1979) 7, 8, 21, 23

LiVolsi, In re, 85 N.J. 576, 428 A.2d 1268 (1981) —. 2,10

Logan, In re, 70 N.J. 222, 358 A.2d 787 (1976) ......... 10

TABLE OF AUTHORITIES

Martin v. Davis, 187 Kan, 473, 957 P. 2d 782

(1960)

Martin v. Walton, 368 U.S. 25 (1961) *

Minnesota v. Clover Leaf Creamery Co., 449 U.S.

456 (1981)

NBC, In re, 64 N. J. 476, 317 A. 2d 695 (1974

New Orleans v. Dukes, 427 U.S. 297 (1976) —

Norfolk & Western R. Co. v. Beatty, 423 U.S. 1009

(1975), smamarily aff’g 400 F. Supp. 234 (S. D.

III. 1975) 23

Ohralik v. Ohio Stute Bar Assn., 436 U.S. 447

(1978) 15, 23, 25, 26

Philadelphia v. New Jersey, 487 U.S. 617 (1978) 23

Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) —— 7, 22

Police Department v. Mosley, 408 U.S. 92 (1972) — 25

Professional Ethies Advisory Comm. Op. 475, In re,

E 8 8 Bl.

89 N. J. 74, 444 A.2d 1092 (1982) 4,5

Professional Ethics Opinion 447, In re, 86 N.J. 473,

432 A.2d 59 (1981) 3

R.M.J., In re, 102 S.Ct. 929 (1982) 6, 13, 15, 16, 18

Sackman, In re, 90 N. J. 521, —— A.2d —— (1982) 10, 19,

20

State v. Rush, 46 N.J. 399, 217 A.2d 441 (1966) —— 2

Virginia Pharmacy v. Va. Citizens Consumer Coun-

cil, 425 U.S. 748 (1976) 6, 7, 14, 15, 17

Williamson v. Lee Optical, 348 U.S. 483 (1955) — 9, 25

“i

vi TABLE OF AUTHORITIES

PAGE

United States Constitution Cited

First Amendment i, 5, 16, 17, 20, 25

Fourteenth Amendment i

New Jersey Constitution Cited

Article VI, Section II, Paragraph 3 2

Statute Cited

28 U.S.C.:

Sec. 1257(a) 9

Rules Cited

Sup. Ct. R.:

Rule 16 (1) (b)

Rule 16 (01) (d)

N. J. Ct. R.:

R. 1:14 5 3

R. 1:19-1 3

R. 1:19-8 3,4

R. 1:20A-1 11

R. 1:21-1(a) 10, 22

Other Authority Cited

ABA Comm. on Professional Ethies, Formal Op.

318 (1967) 13

——

vii

PAGE

ABA Model Code of Professional Responsibility

DR 2-102(C)

ABA Model Code DR 2-102(B) ao, 24

Disciplinary Rules of the Code of Professional Re-

sponsibility of the American Bar Association, as

amended and supplemented by the Supreme Court

of New Jersey:

ABA Model Code DR 2-102(B) 13

DR 2-102(C) i, 3-5, 7, 8, 10-12, 16, 17, 19-26

DR 2-101(D) . 5, 11

Drinker, Legal Ethies (1953) 12

p. 230 24

NO. 82-139

Ix Toe

Supreme Court of the United States

Ocrosrr Term, 1982

*

*

JACOBY & MEYERS, a partnership,

Appellant,

SUPREME COURT OF NEW JERSEY; ADVISORY

COMMITTEE ON PROFESSIONAL ETHICS OF THE

SUPREME COURT OF NEW JERSEY; and NEW

JERSEY STATE BAR ASSOCIATION,

Appellees.

On Appeal from the Supreme Court of New Jersey

—

MOTION OF APPELLEE SUPREME COURT OF

NEW JERSEY TO DISMISS OR AFFIRM

The appellee Supreme Court of New Jersey respectfully

moves pursuant to Rule 16(1)(b) and (d) to dismiss this

appeal or affirm the judgment of the Supreme Court of

New Jersey on the ground that the constitutional questions

presented are so insubstantial as tc obviate the need for

further review, and also because the case does not raise

any issues of special importance, does not conflict with fed-

eral precedent, was correctly decided below, and may be

rendered moot upon the completion of pending State pro-

ceedings.

2

Counter-Statement of the Case

With the adoption of the 1947 State Constitution, the

existing decentralized regulation of the legal profession in

New Jersey was revamped to establish the Supreme Court

of New Jersey, the State’s highest appellate court, as the

exclusive regulator of the practice of law in the State.“

Thus, Article VI, II, par. 3 of the New Jersey Constitu-

tion provides that the Supreme Court of New Jersey,

“shall make rules governing the administration of

all courts in the State and, subject to law, the prac-

tice and procedure in all such courts . . . [and] shall

have jurisdiction over the admission to the practice

of law and the discipline of persons admitted.”

As consistently interpreted by the Supreme Court of New

Jersey, this constitutional provision empowers the court

to establish and supervise the obligations and conditions as

to the practice of law from admission to disbarment and in

“every area in which unjust or une‘}ical conduct might

afflict the public at the hands of those admitted by the court

to the practice of law.” American Trial Lawyers v. New

Jersey Supreme Court, 66 N.J. 258, 264, 330 A.2d 350, 353

(1974). See also In re LiVolsi, 85 N.J. 576, 428 A.2d

1268 (1981); State v. Rush, supra, 46 N.J. at 410, 217

A.2d at 447. Moreover, in supervising the practice of

law in the State, the Supreme Court of New Jersey

has “scrupulously endeavored to protect against even the

slightest propensity that the public will be deceived or

* Prior to 1947, control over the admission of attorneys to the

mission of attorneys to ice in the State. State v. Rush, 46

N.J. 399, 411-412, 217 A.2d 441, 447 (1966).

misled.” In re Professional Ethics Opinion 447, 86 N.J.

473, 478, 432 A.2d 59, 61 (1981) (upholding disciplinary

rule which prevents attorneys from including non-legal

qualifications on law firm letterheads).

In the exercise of its constitutionally delegated powers,

the Supreme Court of New Jersey has adopted the Dis-

ciplinary Rules of the Code of Professional Responsibility

of the American Bar Association, as amended and supple-

mented by the court, to govern the conduct of the members

of the bar of this State. See N.J. Ct. R. 1:14 (Ral).* To

assist it in enforcing the New Jersey Disciplinary Rules,

the court established the Advisory Committee on Profes-

sional Ethics, which Committee is authorized to accept in-

quiries and issue opinions concerning proper conduct for

members of the legal profession under the disciplinary

rules. N.J. Ct. R. 1.19-1 et seg. (Ra2 to Ra6). A right of

direct review by the Supreme Court of New Jersey of an

opinion of the Advisory Committee is available to any

aggrieved member of the bar under N.J. Ct. R. 1:19-8

(Ra4 to Rad).

Disciplinary Rule (DR) 2-102(C), as promulgated by the

Supreme Court of New Jersey, prohibits the use of a law

firm name in the State “unless all those named are or were

members of the bar in New Jersey.” In September 1980,

the law firm of Jacoby & Meyers requested an opinion from

the Advisory Committee on Professional Ethies as to

whether DR 2-102(C) would permit the use of the Jacoby &

Meyers name in connection with a law practice that the

firm proposed to establish in New Jersey. Both of the

named partners of the firm, Leonard Jacoby and Stephen

Meyers, are members of the California bar; they are not,

As used throughout, “Ra” refers to the appendix to this mo-

tion to dismiss or affirm; “Aa” refers to the appendix to appellant’s

Jurisdictional Statement.

4

however, licensed to practice in New Jersey. In 1972, they

had formed the law firm of Jacoby & Meyers to serve a

large middle-class clientele with basic, standardized legal

services, From the time of its origin in California ten

years ago, the firm has expanded considerably through the

use of media advertising and by opening numerous neigh-

borhood law offices staffed by local attorneys. In 1979 the

firm opened several offices in New York under its California

name, Jacoby & Meyers. These offices are staffed by New

York attorneys under the supervision of a partner licensed

to practice in New York. At present, the firm has 75 offices,

interviews approximately 500 clients per day, and esti-

mates that it accepts about 600 new matters each week.

In response to the inquiry made by Jacoby and Meyers,

the Advisory Committee ruled that the use of Jacoby &

Meyers as a New Jersey law firm name was prohibited by

the plain language of DR 2-102(C) because neither Leon-

ard Jacoby nor Stephen Meyers had ever been licensed

to practice in New Jersey. N.J. Advisory Comm. on Pro-

fessional Ethics, Op. 475, 107 N.J.L.J. 283 (April 2, 1981)

(Aa-Al to Aa-A3). Thereafter, on April 3, 1981, Jacoby

& Meyers petitioned the Supreme Court of New Jersey

for review of the Advisory Committee opinion under N.J.

Ct. R. 1:19-8, claiming that insofar as DR 2-102(C) bars

the use of the Jacoby & Meyers firm name in New Jersey,

the rule unconstitutionally infringes upon the firm’s First

Amendment rights and violates the Commerce, Privileges

and Immunities, and Equal Protection Clauses of the

United States Constitution. The Jacoby & Meyers peti-

tion was granted and subsequently, the New Jersey State

Bar Association was permitted to intervene in support

of the disciplinary rule.

In a decision issued on April 29, 1982, the Supreme

Court of New Jersey upheld the constitutionality of DR

2-102(C). In re Professional Ethics Advisory Comm. Op.

—— — —ů— 7 —

see generally Aa-B5 to Aa-B7). It consequently created

tion, i

importance of the matter, the court asked the committee

to provide its report by January 1, 1983 (Id.). The com-

mittee is currently studying the rule and has scheduled

hearings for November 1982. The future retention of the

rule is thus uncertain.

As to the constitutionality of DR 2-102(C), however,

he Supreme Court of New Jersey carefully analyzed and

correctly rejected the contentions of Jacoby & Meyers under

the applicable precedents of this Court. In regard to the

First Amendment challenge, the court held that the use of

an official designation such as a law firm name could

be regulated without offending the First Amendment in

order to prevent practices inhereatly misleading to the

public, citing Friedman v. Rogers, 440 U.S. 1 (1979) (up-

holding a Texas regulation prohibiting the practice of

At the same time the court referred DR 2-101(D), the ban on

television advertising by New Jersey attorneys, for similar re-

evaluation and study in light of certain facts which came to light

during the course of this case.

herently misleading since the universal practice through-

out the history of the legal profession in this State has

been to include only New Jersey attorneys iu firm names,

and since the pablie expectation that those named in New

Jersey firms are licensed to practice in New Jersey has

been reinforced by the long existence of the rule (Aa-B30

to Aa-B36). Given the potential for deception inherent

in out-of-state firm names in New Jersey, the court up-

held the prohibition only against their use as firm names

under the rationale of Friedman v. Rogers, supra (Aa-B20

to Aa-B32).

By providing that New Jersey firms may affiliate with

an accommodation of interests, with only the narrowest

limitation on the use of firm names to prevent deception,

is consistent with the First Amendment guarantee of free-

mercial speech (Aa-B20 to Aa-B46; citing Virginia Phar-

macy v. Va. Citizens Consumer Council, 425 U.S. 748

* 33321

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B57 to Aa- B59; citing Baldwin v. Montana Fish d Game

Comm n, 436 U.S. 371 (1978), and Leis v. Flynt, swpra).

|

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i

7

based on residency, a finding fatal to appellant’s privi-

leges and iamunities claim (Aa-B59 to Aa-B61).

Finally, the court below considered and rejected ap-

pellant’s conteation that DR 2-102(C) offends the Equal

Protection Clause “by unreasonably discriminating be-

tween classes of partnership names” since the rule

permits the names of deceased partners to be used by

New Jersey firms while barring firm names containing

lawyers unlicensed in the State (Aa-B61 to Aa-Bé62).

In reviewing this allegation, the court applied the ra-

ing of special protection under the Constitution) (Aa-

ARGUMENT

As interpreted by the Supreme Court of New Jersey,

DR 2-102(C) permits affiliation between out-of-state

law firms and New Jersey law firms as well as advertise-

ment of such affiliation; thus, although the rule re-

quires that the name of a New firm contain only

the names of the partners who are or were members

of the New Jersey Bar, it does noi implicate any ques-

tion of constitutional significance so as to warrant

plenary review by the Court.

As the exclusive regulator of the practice of law in the

State of New Jersey, the Supreme Court of New Jersey

has repeatedly recognized its responsibility for the proper

functioning of the judicial system and, particularly, for

“maintaining public confidence” in that system. In re Li-

Volsi, supra, 85 N.J. at 585, 428 A.2d at 1272. In carrying

out this responsibility, the court has been mindful of the

need to act with just and decent regard for all vital inter-

ests concerned, including those of the pubiic, the bench, tie

bar and the individual respondents.” In re Logan, 70 N.J.

222, 225, 358 A.2d 787, 789 (1976). Where questions have

arisen as to the continued validity of its rules, or as to

their necessity or viability, the Supreme Court of New

Jersey has unhesitatingly undertaken an examination of

the challenged policies. See In re Sackman, 90 NJ.

521, —— A.2d —— (1982) (N. J. Ct. R. 1.21-1(a) modi-

fied so as to permit the practice of law in New Jer-

sey by licensed New Jersey attorneys, whether resi-

dent or non-resident, upon the condition that such attor-

neys maintain a bona fide office in the Stute; rule referred

to committee constituted to examine the question of firm

names to consider also the office requirement of the modi-

fied rule); In re Li Folsi, supra (review of eonstitutionality

1¹

and desirability of Fee Arbitration Committees, N. J. Ct. R.

1:20A-1 et seg., requiring arbitration of attorney fee dis-

putes upon a client’s request, whether the

or not, or upon a lawyer’s request if the client consents;

constitutionality of procedures upheld; need for amend-

ment of rules to provide for limited right

knowledged); American Trial Lawyers v.

Court, supra (constitutionality of rule establishing

ated schedule of maximum contingent fees for tort litiga-

tion upheld) ; In re NBC, 64 N. J. 476, 317 A.2d 695 (1974)

(Canon of Judicial Ethics barring courtroom sketching dur-

ing court seessions or recesses modified). As these New

Jersey cases indicate, the rules of the State’s highest court

f

. . „are never immutable. Applications for their

review are never foreclosed [for] .. . {t]he Court

does not adopt its rules to promote or brook injus-

tice, but, as best it can, to secure justice, and justice

under Constitution and law.” American Trial Law-

vers v. VN. Supreme Court, supra, 66 N.J. at 267,

330 A 2d at 355.

In conformity with this policy, the Supreme Court of

New Jersey has considered and interpreted DR 2-102(C)

and, further, has referred this rule, along with DR 2-101

(D), to a special Supreme Court Committee for additional

intensive study (Aa-35 to Aa-38). Although the court found

no constitutional infirmity in DR 2-102(C) it sought re-

evaluation of the rule, stating:

“The Court’s responsibility in regulation of the

State bar is fundamental. We have plenary and ex-

clusive control over both admission to the bar and

the practice of law. We seek to exercise that con-

trol in the interests of the public. In a rapidly chang-

are

12

ing world we should be careful to remain responsive

to the public’s needs, However, it would be wrong

to alter existing rules and the legitimate expecta-

tions they create, without an understanding of what

effects the changes may have. We therefore need a

thorough review and a study.“ (Aa-B8 to Aa-B9).

However, even in its present form DR 2-102(C), as in-

terpreted by the Supreme Court of New Jersey, repre-

sents a balanced approach addressing not only the poten-

tial for deception inherent in the use of firm names in New

Jersey where named partners have not been admitted in

this State but, also, the demands of a “rapidly changing

world” in which multistate practice is increasingly preva-

lent“ (Aa-B8; see also Aa-B39 to Aa-B40). It is the long

standing custom locally that the names of New Jersey law

firms include only the names of attorneys licensed to prac-

tice in the State. This well .stablished practice raises legi-

timate expectations on the part of New Jersey citizens that

the men and women whose names appear as firm names

in this State have obtained admission to the bar in this

State. Henry S. Drinker, in his fundamental work, Legal

Ethics (1953), stated the basis for the firm name limita-

tion in simple, unequivocal terms:

“The name of a lawyer not admitted locally may

not be included in the firm name (even though he

may properly be a member of the firm) despite a

statement on the letterhead, shingle, and law list

that he is admitted only in the foreign state, since

the firm name appearing elsewhere without such ex-

* Nonetheless, the presentation of the Supreme Court Committee's

report and recommendations inay well dictate a rule in the

near future. The court has exp/icitly stated “.. our takes

no position about the wisdov: of retaining the rule” (Aa-B67).

planation would imply that all the members in

name were authorized to practice locally.” At 280.“

usage

Where long established practice and

strictures of rule, the public would indeed be misled by a

departure from such practice. While a rule change, if

deemed appropriate, will a fortiori alter local custom, none-

theless common understandings can be expected to dimi-

nish only over time (see Aa-B37). Moreover, in consider-

ing restrictions on advertising by attorneys, this Court has

noted that in this area there are “special risks of decep-

tion—‘[B]ecause the public Jacks sophistication concerning

legal services, misstatements that might be overlooked or

deemed unimportant in other advertising may be found

inappropriate in legal advertising.’” In re R.M.J., supra,

102 S. Ct. at 936, quoting Bates v. State Bar of Arizona,

433 U.S. 350, 383 (1977) (footnote omitted). Although cus-

tom and the lack of sophistication on the part of the public

clearly support the reasonableness of DR 2-102(C), the

Supreme Court of New Jersey specifically narrowed its

scope. As interpreted, this rule not only furthers the legi-

interstate practice. In this appeal, Jacoby & Meyers chal-

lenges the constitutionality of the rule as limited by the

4

:

See ABA Comm. on Professional Ethics, Formal Op. 318

tate,

Under the ruling of the New Jersey Supreme Court, ap-

pellant may not open a law firm in New Jersey under the

name Jacoby & Meyers since neither named partner is a

member of the New Jersey bar. The decision below does

not completely foreclose use of the Jacoby & Meyers firm

name in the State, however, for appellant may affiliate

with a New Jersey law firm and advertise the affiliation

using its California name. As the court explicitly held in

relation to out-of-state firms:

“Lawyers in New Jersey affiliated with such a firm

will be able to signify in an appropriate manner

their affiliation on letterheads, professional cards

and office signs, so long as they make clear that the

out-of-state firm is not licensed to practice in New

Jersey. Similarly, the multijurisdictional firm will

be free to advertise its association with a New Jer-

sey affiliate, consistent with this State’s rule on law-

yer advertising.” (Aa-B40 to Aa-B41).

The restriction on the use of the Jacoby & Meyers firm

name in New Jersey is consequently extremely narrow. Al-

though appellant argues that this minimal incursion upon

the use of its firm name violates the First Amendment, the

disciplinary rule in question falls so clearly within the

parameters of permissible regulation of commercial speech

as to totally obviate the need for further review of this

matter.

While this Court has afforded some protection to com-

mercial speech in a doctrine evolving from Virginia Phar-

mac v. Va. Citizens Consumer Council, supra, it has never-

theless repeatedly stressed that the difference between com-

mercial speech and other varieties of speech entitle the

former to a different and lesser degree of protection than

the latter. This is so primarily because commercial speech

is inextricably linked to commercial activity and is care-

fully calculated to promote business profits, thus making

it less likely to be inhibited by proper regulation than

other forms of speech. Id. at 771 n. 24; Bates v.

State Bar of Arizona, supra, 433 U.S. at 383; Fried-

man v. Rogers, supra, 440 U.S. at 10; Central Hud-

son Gas v. Public Service Com’n of New York, 447 U.S.

557, 562-564 (1980). Moreover, since the First Amend-

ment’s concern for commercial speech is based upon the

informational function of advertising, regulations aimed

at promoting truthful commercial communications and fair

dealing in the marketplace are permitted. In re R. M. J.,

supra, 102 S. Ct. at 937.

The necessary corollary to the foregoing proposition is

that commercial speech which is false, deceptive, or mis-

leading is subject to restraint. Id.; Central Hudson, supra,

447 U.S. at 562-564; Virginia Pharmacy, swpra, 425 U.S. at

771. States thus retain the power to regulate commer-

cial activity deemed harmful to the public even when the

activity in question involves speech. Friedman v. Rogers,

supra, 440 U.S. at 10; Ohralik v. Ohio State Bar Assn., 436

US. 447, 456 (1978). In exercising this power, states may

place reasonable restrictions on the time, place, and man-

ner of advertising. Bates v. State Bar of Arizona, supra,

433 U.S. at 384; Virginia Pharmacy, supra, 425 U.S. at

771-772. Such restrictions may require, for example, that

a commercial message appear in such form, or include

such additional information or warnings, as to insure that

it does not lead to deception. While Imlisleading ad-

vertising may be prohibited entirely,” and states may im-

F i

1

pose appropriate restraints when the particular content

or method of the advertising suggests that it is inherently

misleading or when experience has proven that in fact such

advertising is subject to abuse,” restrictions upon such ad-

vertising “may be no broader than reasonably necessary

to prevent the deception.” Jn re R.M.J., supra, 102 S. Ot.

at 937.

The narrow restriction imposed upon the use of out-of-

state law firm names by DR 2-102(C) is clearly authorized

by the foregoing principles because, as interpreted by the

Supreme Court of New Jersey, the disciplinary rule sweeps

no broader than reasonably necessary to prevent the poten-

tial for deception which could arise if named partners in

a New Jersey firm are not and never have been members

of the State bar. In fact, by permitting the advertisement

of affiliation with out-of-state law firms, the rule merely

restricts the manner in which the Jacoby & Meyers name

can be used in New Jersey; it does not prohibit mention of

the name altogether. Since the rule constitutes a reason-

able manner restriction aimed at preventing deception and

permits an alternate means of communicating the connec-

tion or affiliation between out-of-state and New Jersey

firms, it simply does not give rise to an issue of constitu-

tional significance.

The propriety of upholding DR 2-102(C) against a First

Amendment challenge is also particularly clear when this

case is analyzed under Friedman v. Rogers, supra, In

Friedman, the Court sustained a Texas regulation pro-

hibiting the practice of optometry under a trade name, not-

ing that the restriction in question had only the most inci-

dental effect on the content of commercial speech. 440 U.S.

at 16. The decision emphasized that while the use of a

trade name could enhance the solicitation of patronage, the

name itself had no intrinsic meaning and was consequently

17

quite different from and less entitled to protection than

about the price and availability of products and

services. The Court thus distinguished the use of a trade

name from the advertising protected in Virginia Pharmacy

and Bates. 440 U.S. at 12, 16. It noted that while a

trade name could acquire meaning over time through ill-

defined associations, the name had the potential to be ma-

nipulated and used to mislead the public. Consequently,

reasonable regulation in the form of a ban on the use of

trade names in the practice of optometry was found neces-

sary to prevent the very real potential for deception.

While the holding in Friedman compels the conclusion

reached on First Amendment grounds by the Supreme

Court of New Jersey in the Jacoby & Meyers matter, it is

important to point out that the restrictions in both cases

simply prohibit the practice of closely regulated profes-

sions under particular kinds of names found to be inher-

ently misleading to the consumer public. Such limited re-

straints have a minimal impact on commercial speech, for

the factual information associated with the trade or firm

name—such as the type of services offered and the prices

charged—may be communicated freely to the public.“ In

fact, it is deserving of note that the rule at issue here is

even less restrictive than the one upheld in Friedman be-

cause DR 2-102(C), as interpreted by the Supreme Court

of New Jersey, allows out-of-state and New Jersey law

firms to affiliate and publish such affiliations, while the

Texas rule prohibited even the mention of a trade name in

connection with the practice of optometry. In construing

the disciplinary rule to permit more communication than

aliowed in Friedman, the court below properly accommo-

dated the need to regulate commercial activity to protect

the public with the directive contained in In re R. M. J.,

supra, 102 8. Ct. at 937, that restrictions on commercial

speech be limited to those deemed reasonably necessary to

prevent deception. The narrow restraint resulting from this

accommodation is obviously well within the parameters es-

tablished by this Court for permissible regulation of com-

mercial speech.

Despite the clear and persuasive anelogy between the

trade name at the heart of Friedman and the law firm

name involved here, Jacoby & Meyers argues in its Juris-

dictional Statement that Friedman is not controlling in this

case since it applies only where actual abuse or deception

has been demonstrated. This position is plainly wrong. In

Friedman, although the Court took notice of a history of

abuse in the commercial practice of optometry in Texas,

no actual deception was shown on the record invoiving the

partienlar trade optometrists before the Court. The Court

consequently relied upon the potential for deception inher-

ent in the use of trade names and the large-scale commer-

cial practice of optometry in reaching its decision to up-

hold the law. 440 U.S. at 14-16. And recently, in In re

R. M. J., swpra, 102 S. Ct. at 937, the Court reaffirmed that

restrictions on commercial speech are appropriate either

when advertising is inherently likely to deceive, or when

the record indicates that a particular form or manner of

advertising has been deceptive. It is clear, therefore, that

states may regulate commercial speech when the nature of

the speech is likely to mislead the public.

Appellant has also tried to avoid both the holding of

Friedman and the basic tenet of commercial speech doc-

(1960) (upholding a rule which required Kansas attorneys

who practiced regularly in other states to retain local eoun-

sel before appearing in the Kansas courts). See also

Brown v. Supreme Court of Virginia, 359 F. Supp. 549

(E.D. Va. 1973), summarily aff'd 414 U.S. 1034 (1974)

(Virginia bar rule governing admission by reciprocity up-

held as supporting a valid state interest despite claim that

one effect of the rule was to protect resident Virginia at-

torneys from competition). Deference should thus be given

to the findings of the Supreme Court of New Jersey since

it is the forum best equipped to determine and articulate

the purpose of a disciplinary rule it adopted for the regu-

lation of the bar in the State. Moreover, as demonstrated

in the opinion below, long standing custom and the univer-

sal application of the firm name rule in New Jersey have

fostered consumer expectations which may not be prevalent

elsewhere, but which realistically could be frustrated by

the names of attorneys unlicensed in the State

to be used in New Jersey law firm names. The prevention

of deception is thus truly at the heart of DR 2-102(C).

Pinally, in regard to economic protectionism, it is important

to note that the Supreme Court of New Jersey recently

changed a disciplinary rule to provide for equal treatment

between

local bar, but, rather, wants to ensure that more quali-

fied lawyers are available to New Jersey citizens. 90

N.J. at 530. The protectionist motive ascribed by ap-

pellants to the court below consequently is unsupportable.

The Supreme Court of New Jersey properly applied the

commercial speech doctrine in sustaining the extremely nar-

row restriction on the use of out-of-state law firm names

in New Jersey against appellant’s First Amendment chal-

lenge. In fact, in light of the alternate means of communi-

cation specifically authorized by the court below, and the

wholly incidental impact on commercial speech caused by

the valid bar regulation contained within DR 2-102(C), the

First Amendment claim raised by Jacoby & Meyers in this

appeal is so insubstantial as to warrant either dismissal by

the Court, or summary affirmance of the decision of the

Supreme Court of New Jersey.

B. Since DR 2-102(C) neither discriminates based upon

between members of the New Jersey bar and attorneys

licensed elsewhere but not admitted to ice in New

Jersey. That this is so is evident from the plain language

of DR 2-102(C) which allows the names of attorneys li-

ersey attorneys

who happen to live in the State. Since DR 2-102(C) does

and

ties Clause of the Constitution which prohibits a state from

iminati nonresidents in regard to fundamen-

tal rights or essential activities. See Baldwin v. Mon-

tana Fish d Game Com u, supra, 435 U.S. at 380-384;

Hicklin v. Orbeck, 487 U.S. 518, 523-526 (1978). Dis-

tinctions based upon bar membership simply do not come

7

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be

is a fundamental right deserving of

Privileges and Immunities Clause. Surely, this claimed

right is not vital to the preservation of the nation as a

single entity, nor does this claimed right demand recogni-

tion under a “norm of comity;” hence, it is not covered by

the Clause. See Baldwin, supra, 436 U.S. at 383; Austin

v. New Hampshire, 420 U.S. at 656, 660-662 (1975). More-

C. DR 2-102(C) regulates evenhandedly to protect the

citizens of New Jersey without discriminating against

or unduly burdening interstate commerce.

It is, of course, firmly established that notwithstanding

the affirmative grant of authority to Congress as to the

regulation of interstate ~ommerce, the states retain broad

power to legislate in matters of local concern pursuant to

reserved Tenth Amendment powers. See e.g., H. P. Hood

Sons v. DuMond, 336 U.S. 525, 531-532 (1949). As stated

in Pike v. Bruce Church, 397 U.S. 137, 142 (1970), aud re-

affirmed in Hughes v. Oklahoma, 441 U.S. 322, 331 (1979),

“Where the challenged law regulates evenhandedly to ef-

fectuate a legitimate local public interest, and its effects

on interstate commerce are only incidental, it will be up-

held unless the burden on such ecmmerce is clearly exces-

sive in relation to the putative local benefits.” Here, the

challenged rule is uniformly applicable to residents and

nonresidents of New Jersey for, as noted above, the distine-

tion created by DR 2-102(C) is based solely upon admis-

sion to the New Jersey bar and not upon residence in or

out-of-state. DR 2-102(C) is simply not discriminatory on

its face or in its effect.

In this regard, the New Jersey Supreme Court sought in In

— ’

lating the practice of professions.” Goldfarb v. Virginia

State Bar, supra, 421 U.S. at 792. The states’ interest

in regulating lawyers is ‘especially great since lawyers

are essential to the primary governmental function of ad-

ministering justice. Ohralik v. Ohio State Bar Assn.,

at 792. Indeed, “[s]ince the founding of the Republic”

the states and the District of Columbia have had exclusive

over the practice of law within their boundaries.

Leis v. Flynt, supra, 439 U.S. at 442. In conformity

with these iples, this Court has held that a lawyer

licensed in one state need not be permitted to practice

in another jurisdiction. Id. at 443, citing Norfolk d

Western R. Co. v. Beatty, 423 U.S. 1009 (1975), sum-

marily aff’g 400 F. Supp. 234 (S.D. III. 1975); Brown

v. Supreme Court of Virginia, supra. Certainly, lawyers

not admitted in New Jersey, and therefore not permitted

to practice in this State, may be limited in the use

of their firm names in this State, especially in light

of the inherent deception attendant upon such use.

If, as appellant contends, the Supreme Court of New

Jersey has sustained DR 2-102(C) for purposes of eco-

upon interstate commerce may be sustained. In short DR

2-102(C) is not “a protectionest measure” but rather is “a

law directed to legitimate local concerns, with effects upon

interstate commerce that are only incidental.” Philadel-

phia v. New Jersey, 437 U.S. 617, 625 (1978). Appellant’s

claim of undue burden upon interstate commerce must

therefore fail.

aN

244 |

Finally, appellant claims that because New Jersey per-

mits the use of firm names containing the names of de-

ceased partners who were licensed to practice in this State,

the prohibition on the inclusion of out-of-state partners un-

licensed in New Jersey constitutes an irrational classifica-

tion under the Equal Protection Clause of the United

States Constitution. Preliminarily, as noted by the court

below, lawyers who have not been admitted to the bar in a

particular state do not constitute a suspect class . de-

serving o extraordinary protection under the Equal Pro-

tection Clause” (Aa-B63). Further, the “right” to the use

of a particular law firm name as such, rather than as an

affiliate of a New Jersey firm, does not constitute an in-

fringement upon any fundamental right protected by the

Constitution. Thus, DR 2-102(C) is valid if it is “ration-

ally related to a legitimate state interest.” New Orleans v.

Dukes, 427 U.S. 297, 308 (1976).

The Supreme Court of New Jersey has held that a firm

name such as Jacoby & Meyers is inherently misleading.

Long standing custom and usage in New Jersey has limited

firm names in this State to the named partners who are or

were members of the New Jersey bar. Particularly in such

circumstances, the use of the Jacoby & Meyers name with-

out opportunity for explanation (see Drinker, Legal Ethics,

supra, at p. 230) would confuse the public. On the other

hand, it has also been the well established practice in this

State for New Jersey firms to continue under the same

firm name upon the death of a named partner. See DR 2-

102(B). Custom in this case therefore compels a different

result, since common understandings prevent deception

where New Jersey firms retain the name of a deceased

partner as part of their firm names. The court below, how-

ever, acknowledges that there may be “some potential for

misleading consumers” in the deceased partner rule (Aa-

B64). Nonetheless, the removal of any possible potential

source of deception is not required by the Constitution

a state may consider one problem at a time, establishing

priorities which appear appropriate in each case. See Wil-

liamson v. Lee Optical, 348 U.S. 483, 489 (1955).°

Even if, as appellant contends, DR 2-102(C) is to be

subjected to strict scrutiny because First Amendment

concerns are implicated, the State’s interest in regulat-

ing the bar and in preventing deception would with-

stand this level of review. See Carey v. Brown, 447

U.S. 455, 461-462 (1980); Police Department v. Mosley,

408 U.S. 92, 98-99 (1972). As amended by the Supreme

Court of New Jersey, the rule is “finely tailored”, Carey

v. Brown, supra, 447 U.S. at 461, to permit Jacoby &

Meyers to associate with New Jersey firms and to ad-

vertise that association. However, commercial speech is,

under the rulings of this Court, “afforded [but] a li-

mited measure of protection, commensurate with its sub-

ordinate position in the scale of First Amendment values.

.. Ohralik v. Ohio State Bar Association, supra,

436 U.S. at 456. See Friedman v. Rogers, supra, 446

U.S. at 10. Because commercial speech relates entirely

to economic interests and not to the more basic interest in

the exchange of ideas in a free and open society, the

Court has refused to apply strict criteria in reviewing

this form of speech. Thus, in considering the applica-

tion of the overbreadth analysis in the context of ordi-

nary commercial speech, Justice Blackmun suggested that

* As noted earlier, oo ome ee oe

of New Jersey is now its report on DR 2-102(C) for

Court’s further consideration of these issues. See supra, pp. 1

11122271

2725

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110

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ini

DR 2-102(C) is clearly rationally related to an im-

portant state interest; the equal protection claim raised

by the appellant does not warrant review by this Court.

Inwos I. Kimmetmay,

Attorney General of New Jersey,

Atto for Appellee, Supreme Court of

New Jersey

Richard J. Hughes Justice Complex

ON 112,

Trenton, New Jersey 08625.

(609) 984-1053

3 1S shame

Dated: October 4, 1982

APPENDIX A

Rule 1:14 of the New Jersey Court Rules

RULE 1:14. CODES OF ETHICS

The Disciplinary Rules of the Code of Professional Re

sponsibility and the Code of Judicial Conduct of the Ameri-

can Bar Association, as amended and supplemented by the

Supreme Court and included as an Appendix to Part I of

these rules, shall govern the conduct of the members of the

bar and the judges of all courts of this State.

Where appropriate, the words “partnership,” “attorney”

and “lawyers” shall be construed to include professional

corporations for the practice of law, as well as attorney

employees, agents and shareholders thereof, and attorneys

acting as “of counsel” thereto.

Note: Source—R.R. 1:25. Canons of Professional

Ethies of the American Bar Association deleted July

7, 1971 and the Code of Professional Responsibility,

as amended and supplemented, adopted July 7, 1971

to be eifective September 13, 1971; amended Novem-

ber 27, 1974 to be effective April 1, 1975; amended

July 16, 1981 to be effective September 14, 1981.

Ula]

APPENDIX B

Rule 1:19 of the New Jersey Court Rules

RULE 1:19. ADVISORY COMMITTEE ON PRO-

FESSIONAL ETHICS

1:19-1. Appointment and Organization

The Supreme Court shall appoint an advisory com-

mittee on professional ethics consisting of 15 members of

the bar serving for terms of 3 years with the terms of 5

members expiring each year. A vacancy occurring during

a term shall be filled for the unexpired portion thereof.

The court shall annually designate a member of the com-

mittee to serve as chairman. The Administrative Director

or the Courts shall serve as secretary of the committee.

Note: Source—-R.R. 1:26A(a).

1:19-2. Jurisdiction

The committee shall accept inquiries only from the state

bar association, from any county or local bar association,

or from any member of the New Jersey bar, concern-

ing proper conduct for a member of the legal profession

under the Disciplinary Rules of the Code of Professional

Responsibility of the American Bar Association as amended

by the Supreme Court and other rules of this court govern-

ing the practice of attorneys. It shall not consider an

inquiry involving a pending action where its opinion might

affect the interests of the parties, and it may decline to

accept any inquiry without stating its reasons therefor.

Note: Source—R.R. 1:26A(b) (first sentence) (e)

(third sentence), (d) amended April 4, 1977, ef-

fective immediately.

Appendia B

1:19-3. Form of Inquiry

All inquiries shall be addressed to the secretary who

shall transmit them to the committer, They shall be in

writing, shall set out the factual situation in detail, shall

be accompanied by a short brief or memorandum citing

the rules of court or canons of ethics involved and any

other pertinent authorities, and shall contain a certificate

that any opinion of the committee will not affect the in-

terests of the parties to any pending action.

Note: Source—R.R. 1:26A(b) (second and third

sentences).

1194. Disposition of Inquiries

The committee may act through parts consisting of not

less than 5 members, but if the opinion of any such part is

not unanimous the inquiry shall be referred to the com-

be

shall transmit a copy to the person

making the inquiry, and, where the committee so requests,

arrangements for its publication. Pub-

Note: Source—R.R. 1:26A(c) (first, second and

fourth sentences), (e).

4a

Appendia B

1:19-5, Inquiries from Supreme Court

The committee as a whole shall consider and render

opinions on such matters as the Supreme Court may from

time to time submit to it. Such opinions shall not be

published without prior approval of the court.

Note: Source R. R. 1:26A(f).

1:19-6. Effect of Published Opinions

Published opinions of the committee shall be binding

upon the Ethics Committee in their disposition of all mat-

ters.

1:19-7. Procedure

The committee shall, subject to the approval of the

Supreme Court, determine the methods and procedure to

be followed in considering inquiries and expressing opin-

ions.

Note: Source—R.R. 1:26A(g).

1:19-8. Petitions for Review

(a) Notice. Within 20 days after an opinion

blished, or within 30 days after any final action

Advisory Committee on Professional Ethics other

2 *

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b

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F

b

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view thereof by serving on the Attorney General

of petition for review by the Supreme Court and

the original notice with the Clerk of the Supreme

fF

5a

Appendia B

The notice shall set forth the petitioner’s name and address

and, if he is represented, the name and address of counsel.

The notice shall designate the action of the Advisory Com-

mittee on Professional Ethics sought to be reviewed and

shall concisely state the manner in which the petitioner is

aggrieved.

(b) Deposit for Costs. Deposit for costs shall be made

in accordance with R. 2:12-5.

(e) Record on Petition for Review. If the petition for

review is granted, the record on review shall be the formal

opinion, if any, issued pursuant to R. 1:19-4 or R. 1:19-5,

the inquiry, brief or memorandum submitted, and any docu-

ments or other evidence or proof relied upon by the Ad-

visory Committee on Professional Ethics in arriving at its

determination.

(d) Form of Petition for Review. A petition for re-

view shall be in the form of a brief, conforming to the

applicable provisions of R. 2:6 and not exceeding 15 pages

if printed or 20 pages if otherwise reproduced or typed,

exclusive of tables of contents, citations and appendix.

It shall contain a short statement of the matter involved,

the question presented, the errors complained of and the

arguments in support of the petitioner’s position. It shall

also contain a certification by the petitioner or counsel, if

any, that the petition presents a substantial question and

filed in good faith and not for purposes of delay.

is

(e) Service and Filing of Petition for Review. Within

10 days after filing of the notice of petition for review, 2

shall be served on the Attorney

General and the Secretary of the Advisory Committee

i

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1

:

on Professional Ethics and 9 copies thereof shall be filed

with the Clerk of the Supreme Court.

K,

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Note: Adopted April 4, 1977 to be effective im-

mediately.