# Petition for Writ of Certiorari — Rapoport v. Florida Bar > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_2048%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2003 - **Citation:** 540 U.S. 967 ## Text ?™ Supreme Uo |) FIL 5 US. 03 315 AUG 25 2003 In the Supreme Court of the United States ae ee ALBERT A. RAPOPORT, ~ Petitioner, THE FLORIDA BAR, Respondent. Petition for a Writ of Certiorari to the Supreme Court of Florida PETITION FOR A WRIT OF CERTIORARI 4 os | Joseph R. Giannini Counsel of Record 925 S. Westgate Ave., #102 Los Angeles, CA 90049 (310) 442 9386 Attorney for Petitioner CURRY & TAYLOR @ WASH D.C. @ (202) 223-3160 @ USSCINFO.COM inwe 4 { ‘ i QUESTIONS PRESENTED 1. In Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379 (1963), this Court held that a federal statute and regulation that explicitly authorized practice before the United States Patent Office pre-empted state law, and that under federal law Florida may not prohibit within the State tasks which are incident to the preparation and prosecution of patent applications. Likewise, a federal statute and regulation explicitly authorizes practice before the Securities Exchange Commission. Can the State of Florida, consistent with the Supremacy Clause, enjoin within the State of Florida, federal practice and tasks which are incident to the preparation and prosecution of federal securities arbitrations under the Securities Exchange Act? 2. This Court has over and over again held that under the Federal Arbitration Act contracts requiring securities law arbitrations, conducted under the Rules of the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE) pre- empts state law, and they must be rigorously enforced according to the contract terms. Can the State of Florida, consistent with the Federal Arbitration Act and the Supremacy Clause, enjoin arbitration practice by qualified attorneys as defined by arbitration agreements approved by the NASD and NYSE within the State of Florida? ll TABLE OF CONTENTS QUESTIONS PRESENTED.........-..-::::sessssesssereereteneestenttntten i TABLE OF CONTENT .........:::ssessseceesecsrsseennenseenenennsensenennes il TABLE OF AUTHORITIES .........:::esccssseeeesersretessensennaneees iii OPINIONS BELOW...........::::sccscessecesrsereeeenesnseseesnsensenseneneess l JURISDICTION .........0.:cessssrssssrsssserseenssvessersnscssensennonsensenconse ] RELEVANT PROVISIONG.......::::::c:cesssseseseeseseesesssesnennenenness ] STATEMENT. ........-:0ceescsecssscscvsscsccssenscseronsesnsennensennssensonscons ] REASONS FOR GRANTING THE WRIT........-.:::eee 9 CONCLUSION ......:0:-ceecscsscsssssssseccenccnceosnssntssneencssnnconnsenesoes 20 APPENDIX Supreme Court Order Denying Rehearing .........--+++. la Supreme Court Decision... 3a NYSE Constitution and Arbitration Rules.............. 15a NASD Manual - Code of. Arbitration PLOCECUIE ....0ccscsccsesescesssssesseseseeessnneesssesoesecessceeasansen sas l6a NASD Dispute Resolution Arbitration —- UNIFORM SUBMISSION AGREEMENT ...........-.-+ 17a iS el Ong MO eae . ill TABLE OF AUTHORITIES CASES Allied Bruce Terminix v. Dobson, 513 U.S. Nee eputcbanienton 7, 16 Barnard v. Thorstenn, 489 U.S. 546 EGE SRST EF sor a ae ORO 15 Chambers v. NASCO, Inc., 501 U.S. 278 Niles lsdeeiaces Snastcanawdarcsnjanivesiocevasilavsatinvers 10 Citizens Bank v. Alafabco, Inc. 02-1295, aaa cate sah pundcundniais smecnanepuns 19 Ex parte Burr, 9 Wheat. 529, 531 (1824) 0 10 Florida Bar re Advisory Opinion on Nonlawyer Representation in Securities Arbitration, 696 So.2d 1178 (Fla. 1997)... cece 7 Frazier v. Heebe, 482 U.S. 641 (1987)... cece 12,13 Gibbons v. Ogden, 9 Wheat 1, 211... ec eeeeeeeeeeeee 4 Howsam v. Dean Witter Reynolds, 537 Ce lanbnhinanniniiionnins 16 In Re Desilets, 291 F.3d 925 (6th Cir. 2002) ...... cc. 10 In Re Poole, 222 F.3d 618, 621 (9" Cir. a cslinpanenesuhiadibanseniesed 11 i iv ; Mastronbuono v. Shearson Lehman | Hatton, Frac., 614 US. GE C1BBG .2.....000c.rrsceesereseressenevserenns 16 Pennsylvania v. Wheeling & B. Bridge Cer, 1B Bere. GIG, BB issn csnnssenesnrncensissccrnerssvennesernenvenareene 4,9 Perry v. Thomas, 482 U.S. 483 (1987) -.sccssssssssssssssseeeee 16 | Selling v. Radford, 243 U.S. 46, 49 (1916) «0.2... 10 | Shearson/American Express Inc. v. i McMahon, 482 U.S. 220 (1987) ..........ccsccesseseseeeeees 5, 14, 17 | Sperry v. Florida ex rel. Florida Bar, 373 CRA BE CID cnennscesecncnvisineansntssennconnenennsinnnicvisionninnit 4,5, 10 | Supreme Court of New Hampshire v. | Piper, 470 U.S. 274, 285 (1985)) ...........ccscescsrsssseseseenseees 15 | Theard v. United States, 354 U.S. 278 | (IT) esncsevesecnssntinnsenninsositiennsinenvensantnnetaenvneatasivakientientavenastates 10 ; Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford University, 489 U.S. 468, 474 (1989) ........ccccseseseeeteees 16 Constitutional Statutory Provisions & Regulations | Re A ore ae onctneen 1, 4, 9, 18 ) 9 U.S.C. § 1 — 307 (2000), (FAA) ecccssssssssssssssssesssesesesensen 4 Be Oe it ssp vandleiencdnneacdisacibrentesasoensbiaabicnncemtelenaneineetees 7,17 BG EGE. © TE sersesnssnoveitiintnsennesnenasvnnsisinnnannssnentianen 18, 19 SE URE. © TEE wininrcecnccscitvnerinncicesiiiomninsstpnansnnantiitiii 18, 19 . BE UFC © Fe ae Riv sencicctemsecancacsaccusanonenenscuncenens 6, 17 BG UDA. © FG civsiesecminiconinaraamuinass 6, 17, 19 Bee CEE .. © CR a sretieviceeesnssticsbnicesdleigeasvenamade 18 Serheee- Oley Act OE BIC scsvivinisicessssessesvevsesonssensnesvesseees i) PF CPOs RE, Bi i wsesasccnsonnssnsnsianccneesncansnans 1,4, 9, 18 BS USC. © TEE 6 CU case erentssnsnscisensnencartuicennicrtnemanneietan 5 ae ULE © Bt Ci iiidtininniscniinnaeeal l PORES 60 COT scenic vieniesnicnsznccsstionncncaneninmnpent 1, 11 Article I § 8. Commerce Clause .....................6:. pees 1, 5, 20 Article VI, Section 2. Supremacy Clause....................64 l Pe DI i iicinicicscnncsioesiaemeaad 1, 9, 11, 18, 14, 15 Other Authorities ABA E-Journal, May 16, 2003 “Out-Of- State Insecurity, Florida Ruling on Federal Securities Arbitration Cases Puts Legs Ct TAGS scccviisonininiciaidammneaann 8 ABA MJP Commission Report, Client Representation in the 21” Century, www.abanet.org/cpr/mjp-home. html. .............. eee 8,13 Florida Daily Business Breeze, March 24, 2003, cover story, “Down the chute, The Florida Supreme Court springs a trap vl door on out-of-state attorneys banning them from securities cases in Set CUNEO.” cissceseres 8, 11, 19 l Opinions Below The Florida Supreme Court decision in The State Bar v. Rapoport SCO01-73 is set forth in the Appendix. The official report.is listed at 845 So.2d 874 (2003). Jurisdiction The decision on which certiorari is requested was entered on February 20, 2003. Rehearing was denied on May 6, 2003. Justice Anthony Kennedy granted an extension to file for certiorari review to August 25, 2003. The statutory provision for this Court's jurisdiction is 28 U.S.C. § 1257 (2), which provides for an appeal from a final judgment of the highest court of a state when the validity of a challenged state statute is sustained as not in conflict with federal law. Relevant Provisions See Appendix for text: Preamble to Constitution Article I § 8. Commerce Clause Article VI, Section 2. Supremacy Clause First Amendment 5 U.S.C. § 500. Administrative practice; general provisions 17 CFR Sec. 201.102 Appearance and practice before the Commission Statement Petitioner Albert A. Rapoport has been a member in good standing of the Bar of the District of Columbia for almost 50 years, and a member in good standing of 2 eet cttitantiiie, Maat eatin ates dae the bar of this Honorable Supreme Court for 44 years. Petitioner is a veteran of World War II and the Korean War. Petitioner and his wife reside in Florida. Petitioner is not a member of the Florida Bar. adits tenes tate Petitioner has vast experience as a stock-broker. Petitioner has been licensed as a Series 7 broker.’ Petitioner has been certified as an arbitrator and mediation by the NASD and NYSE. Petitioner because of his experience working as an attorney, Series 7 broker/dealer, and arbitrator is particularly well qualified to represent investors in securities arbitrations. Petitioner limits his practice to federal securities arbitrations before the NASD and NYSE. | ee eer. eee The Florida Bar filed a petition for an injunction claiming Petitioner was engaged in the unlicensed practice of law (UPL). This petition was not filed because any client complained against petitioner. The petition alleged Petitioner was engaged in the unlicensed practice of law because he (1) represents parties in Florida in securities arbitration proceedings by entities such as the American Arbitration Association, the National Association of Securities Dealers, and the New York Stock Exchange; and (2) advertises his securities arbitration services in the Fort Lauderdale Sun-Sentinel. The Florida Supreme Court issued an order to show cause, and referred the matter to a referee for determination of any questions of fact. ‘ ‘The Series #7 General Securities Registered Representative Examination qualifies an individual to sell any type of security. The exam is administered by the National Association of Securities Dealers at test sites throughout the United States. The exam consists of 250 multiple questions, divided into two three hour periods. The exam subjects tested are Equity Securities, Debt Securities, Options, Trading Markets, Customer Accounts, New ~ Issues, Investment Companies, Taxes and Tax Shelters, Regulations, and Analysis. ee *? et While representing himself, Petitioner requested that the referee continue his case since he had undergone three-vessel coronary artery bypass surgery, was still suffering from cardiac arrhythmias, and was under instructions from his doctor to avoid all undue stress. A copy of his doctor's instructions was attached to the motion. His request for a continuance was denied. Petitioner asked that the referee reconsider his decision and permit him an opportunity to recover from his surgery so that he could "fully and properly prepare his response" to the Bar's motion for summary judgment. Petitioner asserted that there were material issues of fact in dispute and that he should be available in . approximately one month. His request was denied. At no time did the referee provide any hearing. After the referee denied both requests for a continuance, the referee requested an extension from the Florida Supreme Court based on Petitioner’s illness, only to file his decision. The Florida Supreme Court granted the request and extended the time to file the referee's report. The referee in his findings of fact concluded that (1) Petitioner is a nonlawyer in Florida and cannot operate a law practice or engage in the general practice of law in Florida; (2) Petitioner has engaged in the practice of law by giving legal advice and consultation to clients, by drafting, signing, and filing securities arbitration claims for clients, and by representing clients in securities arbitration proceedings; (3) no federal or state law authorizes Petitioner as a nonlawyer to provide legal services and advice in_ securities arbitration matters; (4) Florida maintains its substantial interest and authority to prohibit UPL to protect the public; (5) Petitioner has advertised his availability to represent parties in securities arbitration proceedings; and (6) Petitioner has engaged in Unauthorized Practice of Law (UPL) and is subject to injunction. 4 Petitioner argued to the referee and later to the Florida Supreme Court that the Federal Arbitration Act, 9 U.S.C. § 1 — 307 (2000), (FAA) preempts state law and that Florida has no authority to forbid an attorney from acting in Florida for parties in federal securities matters. In Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379 (1963) this Honorable Court held that Florida could not enjoin a nonlawyer registered to practice before the U.S. Patent Office from preparing and prosecuting patent applications in Florida because a federal statute and Patent Office regulations authorized the practice. This Court held “the law of the State, though enacted in the exercise of powers not controverted, must yield when incompatible with federal legislation.” /d. at 384 (citing Gibbons v. Ogden, 9 Wheat 1, 211.) This Court explained “A State may nct enforce licensing requirements which though valid in the absence of federal regulation, give the State’s licensing board a virtual power of review over the federal determination that a person or agency is qualified and entitled to perform certain functions, or which impose upon the activity sanctioned by federal license additional conditions not contemplated by Congress.” Jd. at 385. “No State law can hinder or obstruct the free use of a license granted under an Act of Congress.” Jbid. (citing Pennsylvania v. Wheeling & B. Bridge Co., 13 How. 518, 566). As in patent practice, likewise, there is in federal securities law a statute and regulation that explicitly authorizes all attorneys in good standing to practice this federal law. See 5 U.S.C. § 500 (practice before federal administrative agencies); 17 CFR Sec. 201.102 Appearance and practice before the (SEC) Commission. 2) The Florida Supreme Court decision incorrectly holds there is no federal authorization for non-Florida licensed counsel to appear in federal securities arbitrations in Florida, and it totally disregards this Court’s decision in Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379 (1963). Sperry is a mirror image of this case. The Florida Supreme Court has refused to defer to the Supremacy Clause and to follow this Court’s precedent. Additionally, the Federal Arbitration Act (FAA) rests on the authority of Congress to enact substantive rules under the Commerce Clause. Petitioner argued this Honorable Court has again and again held that under the Federal Arbitration Act, that contracts requiring securities law arbitrations, conducted under the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE) pre-empt state law, and must be rigorously enforced according to the contract terms. Petitioner argued the Florida Supreme Court was obligated to follow Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987). Shearson presented two questions regarding the enforceability of predispute arbitration agreements between brokerage firms and their customers. The first is whether a claim brought under § 10(b) of the Securities Exchange Act of 1934 (Exchange Act), 48 Stat. 891, 15 U.S.C. § 78j(b), must be sent to arbitration in accordance with the terms of an arbitration agreement. The second is whether a claim brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., must be arbitrated in accordance with the terms of such an agreement. Jd. at 222. Both of these questions were answered in the affirmative, and held these questions had to be 6 arbitrated under the terms of the written securities law arbitration agreements. This Court reasoned, “Since the 1975 amendments to § 19 of the Exchange Act, however, the Commission has had expansive power to ensure the adequacy of the arbitration procedures employed by the SROs. No proposed rule change may take effect unless the SEC finds that the proposed rule is consistent with the requirements of the Exchange Act, 15 U.S.C. § 78s(b)(2); and the Commission has the power, on its own initiative, to "abrogate, add to, and delete from" any SRO rule if it finds such changes necessary or appropriate to further the objectives of the Act, 15 U.S.C. § 78s(c). In short, the Commission has broad authority to oversee and to regulate the rules adopted by the SROs relating to customer disputes, including the power to mandate the adoption of any rules it deems necessary to ensure that arbitration procedures adequately protect statutory rights. In the exercise of its regulatory authority, the SEC has specifically approved the arbitration procedures of the New York Stock Exchange, the American Stock Exchange, and the NASD, the organizations mentioned in the arbitration agreement at issue in this case.” Jd. at 234-35. The arbitration procedures adopted by the NASD and the NYSE that have been approved by the SEC permit all sister-state attorneys in good standing to appear as counsel in disputes between brokerage firms and their customers. The client/broker arbitration agreements and the Uniform Submission Agreements bind the parties to these SEC approved arbitration rules. There is no restriction that only Florida licensed attorneys can appear as counsel in the NASD or NYSE ca Lia egtanradael ee 7 arbitration rules. (Moreover, the vast majority of these SEC approved arbitration agreements provide New York as the choice of law.) Congress in 1990 has enacted legislation extending, not retracting, the scope of the Federal Arbitration Act. Allied Bruce Terminix v. Dobson, 513 U.S. 265, 271 (1995) See 9 U.S.C. § 15 (Congress eliminated the Act of State doctrine as a bar to arbitration. international arbitrations; 9 U.S.C. §§ 201- 208 (international arbitration). The Florida Supreme Court rejected Petitioner’s pre-emption arguments and affirmed the referee. The Florida Supreme Court without a moment’s analysis held, “None of the (16 cited Federal Arbitration Act) cases, however, concerns the authorization of the practice of law in securities arbitration proceedings.” Instead, the Court relied upon Florida Bar re Advisory Opinion on Nonlawyer Representation in Securities Arbitration, 696 So.2d 1178 (Fla. 1997). In that case, the Court held that it was the unlicensed practice of law for non-lawyers in securities arbitration proceedings to give specific legal advice and perform the traditional tasks of the lawyer at arbitration proceedings. That case, however, included a footnote that it was not meant to include or apply to attorneys licensed in other states. The Florida Supreme Court, in essence, took a case applicable to a non-lawyer, never admitted to practice anywhere and shoe-horned all non- Florida licensed attorneys in good standing appearing in federal securities arbitrations into that same non-lawyer category. | Two members of the Florida Supreme Court: dissented holding that Petitioner had been denied his 8 fundamental right to due process, and that he was entitled to a hearing on his claims. The Florida Supreme Court’s decision has sent shockwaves in federal securities arbitrations throughout the United States. See ABA E-Journal, May 16, 2003 “Out-Of-State Insecurity, Florida Ruling on Federal Securities Arbitration Cases Puts Lawyers i Limbo.” See Florida Daily Business Breeze, March 24, 2003, cover story, “Down the chute, The Florida Supreme Court springs a trap door on out-of-state attorneys banning them from securities cases in the state.” This article goes on to conclude that there are only about 15 licensed attorneys in South Florida specializing in federal securities arbitrations. This Florida “trap door” sprung on federal practice specialists is even more shocking in light of the ABA amendment’s to the Model Rules of Professional Conduct. These amendments were the result of the ABA’s adoption of its MJP Commission Report, Client Representation in the 21” Century. This report is available on the ABA’s web page www.abanet.org/cpr/mj -home.html. These amendments came after two years of Multijurisdictional Practice (MJP) hearings conducted nationally by a blue chip panel of recognized leaders of the bar. The MJP Commission reviewed testimony and opinions from virtually every arm of the organized bar. The ABA Model Rules now call for reciprocal bar admission on motion for experienced attorneys and reciprocal discipline enforcement. Pe ae ee ee Pe 9 Reasons For Granting The Writ 1. The Court Should Grant Certiorari Because The Florida Supreme Court’s Decision Totally Disregards This Court’s Decision in Sperry, and The State of Florida Does Not Have The Right To Trump Federal Licensing Law This case wherein the Florida Supreme Court has adopted a parochial view rather than national presents a transcending question of federal law in this 21° Century of increased technology and attorney specialization. The Securities Exchange Act and the Securities Exchange Commission were created by Congress. The federal courts have exclusive jurisdiction of violations of the Exchange Act and regulations. 15 U.S.C. § 78aa. Just last year as a result of the Enron and WorldCom scandals, Congress has responded by passing the Sarbanes-Oxley Act of 2002 which contains new criminal and reporting provisions and gives the SEC broad new powers to regulate the conduct of attorneys who practice before it. Intertwined with this federal substantive law are the First Amendment rights to associate with counsel of choice, and right to petition for redress of grievances. Consistent with the First Amendment, Congress has authorized all American attorneys in good standing to appear before federal administrative agencies. 5 U.S.C § 500. The SEC has adopted 17 CFR Sec. 201.102 Appearance and practice before the Commission that authorizes all American attorneys in good standing to practice before the SEC. Since the founding of our nation, it has been the law that “No State law can hinder or obstruct the free use of a license granted under an Act of Congress.” Pennsylvania v. Wheeling & B. Bridge Co., 13 How. 518, 566. See Theard v. United States, 354 US. 278 10 (1957)(state and federal bar are distinct and each has authority to admit or discipline its members); Chambers vy. NASCO, Inc., 501 U.S. 278 (1957)(a federal court has power to control admission to its bar) (citing Ex parte Burr, 9 Wheat. 529, 531 (1824)). In re Ruffalo, 390 U.S. 544, 547 (1968)(accord). Once federal admission is secured, a change in circumstances underlying state admission — such as a shift in domicile — is "wholly negligible" on the right to practice before a federal court. See Selling v. Radford, 243 U.S. 46, 49 (1916). In Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379 (1963) this Honorable Court held that Florida could not enjoin a nonlawyer registered to practice before the U.S. Patent Office from preparing and prosecuting patent applications in Florida because a federal statute - and Patent Office regulations authorized the practice. This Court explained “A State may not enforce licensing requirements which though valid in the absence of federal regulation, give the State’s licensing board a virtual power of review over the federal determination that a person or agency is qualified and entitled to perform certain functions, or which impose upon the activity sanctioned by federal license additional conditions not contemplated by Congress.” Id. at. 385. Sperry is a mirror image of this case. The State of Florida in this anneal has disregarded this Court’s hoiuuis ALL OPVEF TY) ALI A LIEU Hgyetsss Hier A bapyLddigy O46 federal licensing law in favor of its own antiquated parochial view. This Court should also reverse the Florida Supreme Court decision because it is diametrically opposed to decisions by federal courts that have followed this Court’s precedent refusing to permit state law to trunip federal licensing rules. See In Re Desilets, 2991 F.3d 925 (6th Cir. 2002)(held lawyer properly