Amicus Curiae Brief — Morrison v. Board of Law Examiners of North Carolina (No. 06-499)

OCT 31 ss No. 06-499

enteniaian

§n the Supreme Court of the United States

STEVEN C. Morrison,

PETITIONER,

Vv.

Boarp Or Law EXAMINERS

Or NortH CAROLINA, &T AL.,

RESPONDENTS.

ON PETITION FOR A Writ OF CERTIORARI TO THE

UnireD STATES COURT OF APPEALS

FOR THE FourtH CIRCUIT

MOTION FOR LEAVE TO FILE Amicus CUuRIAE BRIEF

AND

BRIEF OF Amicus CURIAE

ASSOCIATION OF CORPORATE COUNSEL

IN SUPPORT OF PETITIONER

Susan J. Racant Mark I. Levy

Senior Vice President Counsel of Record

and General Counsel AMANDA L. McCoy

ASSOCIATION OF CORPORATE COUNSEL KILPATRICK STOCKTON LLP

1025 Connecticut Avenue, N.W. 607 14th Street, N.W.

Suite 200 Suite 900

Washington, D.C. 20036 Washington, D.C. 20005

(202) 293-4103 (202) 824-1437

Counsel for Amicus Curiae

Association of Corporate Counsel

204464 g

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

MOTION FOR LEAVE TO FILE AMICUS CURIAE

BRIEF OF THE ASSOCIATION OF CORPORATE

COUNSEL IN SUPPORT OF PETITIONER

Pursuant to Supreme Court Rule 37.2(b), the Association

of Corporate Counsel (“ACC”) respectfully moves for leave

to file the attached brief as amicus curiae in support of

petitioner. Petitioner has consented to the filing of this brief;

respondents have not responded to our request for consent.

The ACC is a non-profit bar association of attorneys

practicing in the legal departments of public, private, and

not-for-profit corporations and other private-sector

organizations. ACC promotes the common interests of its

members, contributes to their continuing education, secks

to improve understanding of the role of in-house attorneys,

and encourages advancements in standards of corporate legal

practice. With more than 20,000 members employed by over

8,000 organizations in 55 countries, ACC represents attorneys

in both large and small companies, including 98 of the

Fortune 100 companies, and 74 of the Global 100 companies.

One of ACC’s principal missions is to serve as the voice

of the in-house bar. This occurs not only in connection with

matters that concern corporate legal practice and the ability

of its members to fulfill their functions as in-house counsel

to their companies, but also on broader issues relating to the

regulation of the legal profession generally, including how

outside counsel to ACC members’ clients perform their duties

and are regulated. Accordingly, ACC consistently promotes

standards that facilitate the effective and efficient practice

of law and opposes standards that interfere with that

objective, including state bar requirements that discriminate

against or burden the efficient, coordinated, and seamless

flow of corporate legal services across jurisdictional

boundaries.

ACC’s primary interest as amicus curiae in this case

arises from the profound implications of the Fourth Circuit’s

decision on the ability of ACC’s members to serve their

clients and on their corporate employers’ ability to receive

effective and economical legal representation from outside

and in-house counsel. Modern and sophisticated corporate

clients must operate in an increasingly national, and often

international, business climate in order to compete and

flourish. It is imperative for the legal profession to grow with

clients’ needs, unhindered by outdated and unconstitutional

practice barriers that artificially and unnecessarily preclude

otherwise qualified and competent corporate lawyers from

fully and readily serving the expanding geographical legal

needs of their clients. These artificial practice barriers protect

neither the public nor clients: rather, they merely create

obstacles that significantly impede corporate clients’ freedom

to hire expert counsel of their choice or to relocate in-house

legal staff with whom they have a longstanding and trusted

professional relationship. Because the North Carolina

reciprocity provisions at issue in this case unconstitutionally

impair these objectives, ACC submits this brief in support

of the petition for certiorari that seeks review of the Fourth

Circuit’s decision upholding those provisions.

Accordingly, the motion for leave to file the attached

amicus curiae brief should be granted.

Respectfully submitted.

Susan J. HACKETT Mark I. Levy

Senior Vice President Counsel of Record

and General Counsel AMANDA L. McCoy

ASSOCIATION OF KILPATRICK STOCKTON LLP

CorPorRATE COUNSEL 607 14th Street, N. W.

1025 Connecticut Ave.,N.W. Suite 900

Suite 200 Washington, D.C. 20005

Washington, D.C. 20036 (202) 824-1437

(202) 293-4103

Counsel for Amicus Curiae

Association of Corporate Counsel

October 31, 2006

i

- TABLE OF CONTENTS

Sade OF AU POS TIBG: 66s vn bice dive vea een

INTEREST OF THE AMICUS CURIAE .........

INTRODUCTION AND SUMMARY OF

| Bub marae ap rnee gs ee Ey Op ae area me

I.

THE MODERN PRACTICE OF LAW HAS

BECOME INHERENTLY INTERSTATE

IN ORDER TO SERVE CLIENTS’ NEEDS,

AND NORTH CAROLINA’S RECIPRO-

CITY PROVISIONS FAIL TO REFLECT

THIS DEVELOPMENT OF THE LEGAL

PROFEGHION. 55 ss

THE NORTH CAROLINA RECIPROCITY

PROVISIONS ARE IRRATIONAL

AND BURDENSOME AND _ ARE

UNNECESSARY TO THE STATE’S

LEGITIMATE INTEREST IN ENSURING

ATTORNEY COMPETENCE AND

pik er Tr eee eye ee ore

A. States’ Bar Admission Systems. ......

B. The Design And Effect Of The North

Carolina Reciprocity Provisions. .....

10

ii

Contents

Page

lil. THE NORTH CAROLINA RECIPROCITY

PROVISIONS VIOLATE THE EQUAL

PROTECTION AND DUE PROCESS

CLAUSES AND THE COMMERCE

CAGE Saas A haa acich aac Waeorew ee yes 14

A. Due Process And Equal Protection. ... 14

BCS CRG. on oc ei oe er eae 17

XPT RANE dois b 0 5 Coe NSN SER Mew enews 20

ili

TABLE OF AUTHORITIES

Page

Cases .

Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984)

JERE REG Decne Shakin cheeses de aeieok ee 18

Barnard v. Thorstenn, 489 U.S. 546 (1989) ....... 8, 17

C&A Carbone, Inc. v. Town of Clarkstown, 511 U.S.

| aE a Ras oe a SENT Osher” 18

City of Cleburne v. Cleburne Living Center, 473 U.S.

SE CRE Ns Cis BSS SERRE IG CARRE 15

Frazier v. Heebe, 482 U.S. 641 (1987) ........ 5, 8, 15

Great Atlantic & Pacific Tea Co. v. Cottrell, 424 U.S.

Sb | eee eet a ee tee eee tea Sana 17

Keenan v. Board of Law Examiners of North

Carolina, 317 F. Supp. 1350 (E.D.N.C. 1970)

CR NN OOUNED oa cis vcs cece rere wees 1-2

Leclerc v. Webb, No. 06-11 petition for cert. pending

(filed June 22, 2006), order inviting Solicitor

General to file a brief (Oct. 2, 2006) .......... 8

Leis v. Flynt, 439 U.S. 438 (1979) ............. 4,3

Maine v. Taylor, 477 U.S. 131 (1986) ........... 18

iv

Cited Authorities

Page

Maw v. Calogero, No. 05-1645, petition for cert.

pending (filed June 23, 2006), order inviting

Solicitor General to file a brief (Oct. 2, 2006) .. 8

New Energy Co. v. Limbach, 486 U.S. 269 (1988)

bak eae basen conti Smetana a oR Ceeean 18

Schware v. Board of Bar Examiners of New Mexico,

S9E Ue AER TTED rR Serre eee reaeaereein 1,14

State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S.

ME CRN ik hoa FOG TRE 15

Supreme Court of New Hampshire v. Piper, 470 U.S.

RIRCIUE bp eane cnc deeaesinaseeawns 7, 8, 15, 17

Supreme Court of Virginia v. Friedman, 487 U.S. 59

CONOR SSSA ORR EER 8, 10, 15, 16, 17

United States v. Gonzalez-Lopez, 126 S. Ct. 2557

COI oO PRUs and heehee sows eeecen 5,8

Zobel v. Williams, 457 U.S. 55 (1982) ........... 15

Rule

Re Ce BI cw Oke ha ek ee kee 1

Cited Authorities

Other Authorities

Richard L. Abel, AMericAn Lawyers (1989) ...... 3, 6

AMERICAN Bar Association, Report of the Committee

on Multijurisdictional Practice (Aug. 2002) ....

Sets tet ON Ee On EEE COE 4,5, 7, 8, 12, 14, 16

Jonathan B. Chase, Does Professional Licensing

Conditioned Upon Mutual Reciprocity Violate the

Commerce Clause?, 10 Vr. L. Rev. 223 (1985) ... 17

Gerald J. Clark, The Two Faces of Multijurisdictional

Practice, 29 N. Ky. L. Rev. 251 (2002) ........ A

National Conference of Bar Examiners and American

Bar Association Section of Legal Education and

Admission to the Bar, CoMpREHENSIVE GUIDE TO

Bar ADMISSION REQUIREMENTS (2006) .......... 10

National Conference of Bar Examiners, THE Bar

EXAMINERS’ HANDBOOK (3d ed. 1991) .......... 2,3

Carol A. Needham, Splitting Bar Admission into

Federal and State Components: National

Admission for Advice on Federal Law, 45 U. Kan.

Ra PERO NED. cons vvecetwvcsseves 5, 7, 13, 16

North Carolina Board of Law Examiners

website, http://www.ncble.org (follow “comity”

ED Wind's do twhiv-s SAN t to eweeveguae yess 11

vi

Cited Authorities

Page

Andrew M. Perlman, A Bar Against Competition:

The Unconstitutionality of Admission Rules for

Out-of-State Lawyers, 18 Geo. J. Lear Etuics 135

CE even Gans beens 30a 6, 7, 8, 11, 13, 15, 18

Deborah L. Rhode, IN Tue INTERESTS OF JUSTICE:

REFORMING THE LEGAL Proression (2000) . .5, 7,8, il, 16

Ronald D. Rotunda, Mopern ConstTiITuTIONAL Law

5 3-S.at 1S CGOE, DOGG ov evicteeekenwecess 17

Chesterfield Smith, Time for a National Practice of

Law Act, 64 A.B.A.J. 557 (1978) ...........5. 7

Charles W. Wolfram, Sneaking Around in the Legal

Profession: Interjurisdictional Unauthorized

Practice by Transactional Lawyers, 36 S. Tex. L.

Re GES CIRSS? bo ween Hi aes 4,5, 7, 12,15

1

INTEREST OF THE AMICUS CURIAE

The Association of Corporate Counsel (“ACC”) is a non-

profit bar association for attorneys practicing as in-house counsel

in the legal departments of domestic and international public,

private, and not-for-profit corporations and other private-sector

organizations. The interest of ACC as amicus curiae is set forth

in the accompanying motion for leave to file this brief.'

INTRODUCTION AND SUMMARY OF ARGUMENT

It is well established, and not contested in this case, that

states have the constitutional authority to regulate the legal

profession and the practice of law. This includes the admission

of attorneys to the state bar. See Schware v. Board of Bar

Examiners of New Mexico, 353 U.S. 232 (1957). Furthermore,

this Court has recognized that a lawyer admitted in one state

does not have a constitutional right automatically to be allowed

to practice in another state. See Leis v. Flynt, 439 U.S. 438, 443

(1979).

At the same time, it is equally well settled that a state

“cannot exclude a person from the practice of law . . . for reasons

that contravene the Due Process or Equal Protection Clause of

the Fourteenth Amendment.” Schware, 353 U.S. at 238-39.

Furthermore, although a state can set appropriate standards of

legal competence and good character for admission to its bar,

“any qualification must have a rational connection with the

applicant’s fitness or capacity to practice law.” Jd. at 239. As

Judge Craven previously explained for a three-judge district

court with specific reference to the North Carolina bar, “[iJjn

licensing attorneys there is but one constitutionally permissible

state objective; the assurance that the applicant is capable and

fit to practice law.” Keenan v. Board of Law Examiners of North

1. Pursuant to Supreme Court Rule 37.6, amicus curiae states that

this brief was not authored, in whole or in part, by counsel for a party,

and no monetary contribution to the preparation or submission of this

brief was made by any person or entity other than the amicus curiae, its

members, or counsel.

2

Carolina, 317 F. Supp. 1350, 1359 (E.D.N.C. 1970) (three-judge

court). See Pet. 2 (North Carolina bar statutes and rules). Thus,

the National Conference of Bar Examiners recognizes that

“{s]tate standards of qualification ... must have a rational

connection with the applicant’s fitness or capacity to practice

law.” National Conference of Bar Examiners, THe Bar

EXAMINERS’ HANDBOOK 20:103 (3d ed. 1991).

The reciprocity provisions adapted by the bar of North

Carolina (and those of approximately 22 other states, see page

10, infra) squarely raise the issue of the constitutional limits on

state requirements imposed for bar admission without

examination. The North Carolina reciprocity requirements are

arbitrary and irrational and serve as protectionist barriers that

impede the ability of out-of-state lawyers to gain admittance in

North Carolina.

In recent years, the practice of law unquestionably has

become interstate (and international) in nature. This largely

reflects the needs of clients in a national (and global) economy.

State regulation of the legal profession, however, was born in

another era, when businesses were largely local and lawyers

were primarily engaged in practice before the courts of a single

state. Because the practice of law has changed and the regulation

of lawyers has not, the state licensing system has failed to keep

up with this development. The reciprocity provisions imposed

by North Carolina and 22 other states lead to arbitrary and

irrational results for lawyers required to comply with the burdens

of multistate practice regulation. This impedes the interstate

practice of law and interstate movement of lawyers, but fails to

serve the states’ legitimate objective of ensuring the competence

and fitness of the attorneys admitted to their bars.

The focus of state bar regulation increasingly has shifted

from the legitimate ends of protecting the public toward the

illegitimate ends of protecting local practitioners from

competition from their peers who are qualified to practice but

licensed in other states. It is not unusual, unfortunately, for state

3

bars to adopt various means to protect the interests of their

locally admitted members. For example, they widely erected

residency requirements, but this Court repeatedly invalidated

those measures. North Carolina’s reciprocity provisions

represent the next generation of restrictive bar requirements,

and petitioner’s challenge to reciprocity requirements is the latest

battle in this continuing war to free lawyers, their clients, and

the Nation’s economy from the parochial restraints of state bar

organizations.

The question of the constitutionality of these reciprocity

provisions warrants this Court’s review. Such requirements are

common among the states and present an issue of recurring

importance. As the practice of law has become more national

(and international) in nature and the mobility of lawyers has

increased, state restraints on multi-jurisdictional practice have

imposed ever-greater burdens on clients’ choice of counsel, the

expert practice of substantive law which is not limited by the

boundaries of states and nations, and the inter-connected nature

of our world economy. This has had particularly adverse effects

on corporate lawyers and the corporate clients they represent.

See Richard L. Abel, American Lawyers 124 (1989) (“easing

of interstate mobility will be particularly important to house

counsel’). The circumstances of this case fully illustrate these

problems. Accordingly, the petition for a writ of certiorari should

be granted. See National Conference of Bar Examiners at

20:103-04, 20:107 (recognizing that “much of the states’

discretion in dealing with bar admissions has been eliminated

by the cloaking of bar applicants with constitutional protections”

and that reciprocity requirements “are ripe for challenge’’).

4

lL. THE MODERN PRACTICE OF LAW HAS BECOME

INHERENTLY INTERSTATE IN ORDER TO

SERVE CLIENTS’ NEEDS, AND NORTH

CAROLINA’S RECIPROCITY PROVISIONS FAIL

TO REFLECT THIS DEVELOPMENT OF THE:

LEGAL PROFESSION.

Our legal system, like the national (and international)

economy, has undergone rapid and profound change in recent

years. In particular, the practice of law has been largely

transformed in the last few decades.

As Justice Stevens noted in his dissent in Leis, “the nature

of law practice has undergone a metamorphosis.” 439 U.S. at

449 (Stevens, J., dissenting). “Interstate law practice and multi-

state law firms are now commonplace,” and “‘[mJulti-state or

interstate practice by attorneys in this country is an expanding

phenomenon.”” /d. at 449 n.8 (citation omitted).

National bar organizations and academic commentators

similarly have observed this fundamental change in the practice

of law. A report of the American Bar Association Commission

on Multijurisdictional Practice, noting “the changing nature of

law practice,” explains the “general consensus” that “cross-

border legal practice” is “on the increase” and that “this trend is

not only inevitable, but necessary.” AMERICAN Bar ASSOCIATION,

Report of the Committee on Multijurisdictional Practice (Aug.

2002) at 3, 10. See also, e.g., Charles W. Wolfram, Sneaking

Around in the Legal Profession: Interjurisdictional

Unauthorized Practice by Transactional Lawyers, 36 S. Tex.

L. Rev. 665, 668 (1995).

This now-familiar development in the legal profession has

been attributed to a number of factors. For example, clients large

and small, from every industry, increasingly are involved in

disputes or transactions that cross state lines and thus need multi-

state legal services. Especially as law practice has become more

specialized, corporate clients depend on lawyers who have

expertise in a particular substantive area of law as it is applied

5

across jurisdictional lines; clients look to hire lawyers who can

meet their needs wherever legal representation is required. While

local counsel will always play a vital role, there is an increasingly

great need for national and even international counsel. This, in

turn, has been facilitated by a growing degree of uniformity in

state law in a host of areas and the enhanced scope and

applicability of federal law. Finally, the greater mobility of

lawyers and the existence and prominence of large multi-state

and even international law firms also play an important role in

this development. See, e.g. Frazier v. Heebe, 482 U.S. 641, 648

n.7 (1987); Leis, 439 U.S. at 449 & nn.6, 8 (Stevens, J.,

dissenting); ABA Report at 3, 10-12; Wolfram at 668-69; Gerald

J. Clark, The Two Faces of Multijurisdictional Practice, 29 N.

Ky. L. Rev. 251, 263-64 (2002).

- In assessing this development, it is critical to keep in mind

the needs of the client and lawyers’ paramount obligation to

serve their clients. See Leis, 439 U.S. at 445 n.2 (Stevens, J.,

dissenting). Noting “our tradition of respect for client choice,”

the ABA Report explains that there is a “need for lawyers to

cross state borders to afford clients competent representation”

and that “[t]he existing system of lawyer regulation has costs

for clients.” ABA Report at 5, 10, 12. See also Deborah L.

Rhode, IN Tue INTERESTS OF JUSTICE: REFORMING THE LEGAL

PROFESSION 154 (2000); Carol A. Needham, Splitting Bar

Admission into Federal and State Components: National

Admission for Advice on Federal Law, 45 U. Kan. L. Rev 453,

476 (1997); see generally United States v. Gonzalez-Lopez, 126

S. Ct. 2557 (2006) (discussing right to counsel of client’s own

choosing).

Unjustified restrictions on the multijurisdictional practice

of law severely burden corporate clients in a variety of ways.

See, e.g., ABA Report at 10-12; Wolfram at 668-69. For example,

in litigation or transactions that involve more than one state, as

complex and even many routine legal issues do today, these

restrictions require companies to have legal representation in

multiple (sometimes all 50) states. In turn, this restricts their

6

ability to retain outside counsel of their choice who is expert in

the area of law and who is familiar to the client but not licensed

in every one of the states in question. It also impairs their ability

to achieve coordinated and effective compliance with the law

across the company as a whole. And it necessarily increases the

cost of legal services to the client.

| Similarly, such restrictions require companies to have in-

house lawyers admitted in every jurisdiction where they operate

or legal disputes arise. Thus, instead of one corporate attorney

who is expert in the particular area of law, they need to have a

multiplicity of lawyers, thereby interfering with efficient staffing

and internal flexibility and again driving up legal costs.

Finally, these restrictions also undermine companies’ ability

to retain or hire lawyers by discouraging outside or in-house

counsel from relocating to take new positions because of the

significant deterrent posed by arbitrary admission rules and the

prospect that an experienced lawyer would again have to take

the bar exam (perhaps in multiple jurisdictions). This case

graphically illustrates these concerns for corporations and for

the legal profession.

Unfortunately, state bars have not, in general, kept up with

the fundamental changes in the legal profession. Historically,

“few restrictions on interstate law practice existed. .. . ‘[U)ntil

the 1930s, lawyers admitted in one state encountered few

impediments in practicing in another.’” Andrew M. Perlman, A

Bar Against Competition: The Unconstitutionality of Admission

Rules for Out-of-State Lawyers, 18 Geo. J. LeGat Etnics 135,

145 (2004), quoting Abel at 124.

With the Depression, however, “[s]tarting in the 1930s, state

bars increasingly ‘sought to protect their markets from out-of-

state lawyers.” Jd. at 148, quoting Abel at 124. “One prominent

legal ethicist, Professor Charles Wolfram, has captured the

essence of what many commentators have found:

‘(T]he states [today] are by and large quite restrictive

about admitting out of state lawyers. . . . The reasons

7

given for the restrictions are probably largely pious

eyewash. The real motivation, one strongly suspects,

has to do with cutting down on the economic threat

posed for in-state lawyers .. . by competition with

out-of-state lawyers.’

Id. at 147, quoting Wolfram at 679. Thus, as this Court has

noted, according to a former president of the American Bar

Association, “‘[mJany of the states that have erected fences

against out-of-state lawyers have done so primarily to protect

their own lawyers from professional competition.”” Supreme

Court of New Hampshire v. Piper, 470 U.S. 274, 285 n.18

(1985), quoting Chesterfield Smith, Time for a National Practice

of Law Act, 64 A.B.A.J. 557 (1978). See also, e.g., Perlman at

138, 147-50, 170, 178; Clark at 254, 265; Needham at 467,

475-76.

State bar regulation continues to amount to guild-like

protectionism for local lawyers and fails to reflect the profound

changes that have occurred in the legal profession and the multi-

state practice of law. As the ABA Report succinctly summarizes:

“Although client needs and legal practices have evolved, lawyer

regulation has not yet responded effectively to that evolution.”

ABA Report at 3. Instead of “catch[ing] up with the changing

realities of the practice of law,” the perpetuation of restraints

on multi-jurisdictional practice embodies “semi-official

professional mythology about the largely bygone world in which

the bar’s leadership appears to believe it continues to practice

. . . [and in particular] the myth of the single-state practitioner.”

Wolfram at 670. These restraints on “interstate practice are both

real and substantial, and they reflect poor state policy. . . . [Such

limits] either must ignore the present realities and desirability

of interstate dealings by clients or be rooted in concern for the

competitive advantage of local lawyers that ill serves a vibrant

national economy.” /d. at 713. See also Rhode at 154 (“[s}uch

reciprocity rules are difficult to justify from any consumer

protection perspective”); Clark at 264-65. As a result, although

“(ljawyers recognize that the geographic scope of a lawyer’s

8

practice must be adequate to enable the lawyer to serve the needs

of clients in a national and global economy,” state bar rules

“impede lawyers’ ability to meet their clients’ multi-state and

interstate legal needs efficiently and effectively.” ABA Report

at 3.

State bar protection has taken different forms over time.

For example, residency requirements once were widely used to

exclude out-of-state lawyers. In a series of decisions, this Court

invalidated such restrictions. See Barnard v. Thorstenn, 489 U.S.

546 (1989); Supreme Court of Virginia v. Friedman, 487 U.S.

59 (1988); Piper, supra; see also Frazier v. Heebe, supra

(residency requirement for federal district-court bar was

irrational and unnecessary to serve the purpose of attorney

competence). In addition, in some instances out-of-state lawyers

have been excluded by application of pro hac vice rules. See,

e.g., Gonzalez-Lopez, supra. See also Maw v. Calogero, petition

for cert. pending, No. 05-1645 (filed June 23, 2006), and Leclerc

v. Webb, petition for cert. pending, No. 06-11 (filed June 22,

2006), orders inviting Solicitor General to file briefs (Oct. 2,

2006).

The reciprocity provisions adopted by respondents (and the

bars of 22 other states) are the latest manifestation of this same

problem. Such requirements are arbitrary, irrational, unrelated

to the protection of the public, and onerous to out-of-state

lawyers and their clients. There can be no doubt about the

significance of this issue to our legal system and to our economy

in general. In Piper, this Court explained both that “the practice

of law is important to the national economy” and that “the legal

profession has a noncommercial role and duty” that underscore

the broad public consequences of bar limitations.

Furthermore, such restraints are not self-correcting. “The

history of bar reform suggests that necessary changes often occur

only after significant litigation.” Perlman at 178. This is hardly

surprising; “[o]nce admitted to the bar, lawyers have little

incentive to eliminate arbitrary or overbroad restrictions if the

9

effect would be to increase the number of potential competitors.” ;

Rhode at 154.

In the past, this Court has been vigilant to grant review to

foreclose unconstitutional efforts by state bars to exclude out-

of-state lawyers. It should be no less vigilant here.

ll. THE NORTH CAROLINA RECIPROCITY

PROVISIONS ARE IRRATIONAL AND BURDEN-

SOME AND ARE UNNECESSARY TO THE

STATE’S LEGITIMATE INTEREST IN ENSURING

ATTORNEY COMPETENCE AND FITNESS.

The North Carolina reciprocity provisions consist of two

parts. The first is the basic reciprocity requirement that North

Carolina will admit to its bar without a required bar examination

a lawyer licensed in another state if, but only if, that other state

does the same for a North Carolina lawyer seeking admittance

to its bar (the “place-of-admission requirement’). The second

is the additional requirement that the lawyer must actively have

practiced in the reciprocity state for at least four of the last six

years preceding the application to be admitted to the North

Carolina bar without examination (the “place-of-practice

requirement’).

ACC submits that both provisions are at issue here under

the Fourth Circuit’s decision. The court of appeals, while

purporting to treat them as separate issues, in fact conflated

them. Thus, while the court disclaimed deciding the

constitutionality of the basic place-of-admission reciprocity

requirement (Pet. App. 3 n.1), its stated rationale for expressly

upholding the place-of-practice requirement was entirely and

exactly that reciprocity itself is valid. See id. at 6-8. Accordingly,

the decision below effectively passed upon both components

of the North Carolina reciprocity provisions. In these

circumstances, the antecedent place-of-admission requirement

as well as the place-of-practice requirement that was explicitly

sustained are properly before this Court.

10

A. States’ Bar Admission Systems.

In 2005, of the 50 states and the District of Columbia,

approximately 19 jurisdictions required that an attorney who

seeks full-time or permanent admission to that state’s bar,

regardless of the applicant’s prior practice or admission in

another jurisdiction, take and pass that state’s bar examination.

See generally National Conference of Bar Examiners and

American Bar Association Section of Legal Education and

Admission to the Bar, ComprEHENSIVE GuIDE TO BAR ADMISSION

REQUIREMENTS 25-29 (2006) (not inclusive of recent 2006

changes to bar admission requirements).

The remaining jurisdictions provided for admission without

examination (also known as “admission on motion,” see

Freidman, 487 U.S. at 61) to certain applicants who have

previously been admitted to the bar of another state. Of these

approximately 32 jurisdictions, some 13 states allowed attorneys

who have previously been admitted to the bar of any other U.S.

jurisdiction, and who have been practicing for a prescribed

number of years, to apply for admission on motion without

having to re-take a bar examination.

The remaining jurisdictions limited admission on motion

to those candidates from jurisdictions that permit reciprocity of

admission without examination for their lawyers. Of the

approximately 23 reciprocity jurisdictions, some 14 states,

including North Carolina, required that the applicant have

engaged in the active practice of law for a specified number of

years in the state of reciprocity. Under the laws of the other

nine reciprocity states, the location of the applicant’s practice

need not have been in a reciprocity state.

B. The Design And Effect Of The North Carolina

Reciprocity Provisions.

An understanding of the design and effect of the place-of-

admission and place-of-practice requirements is crucial for the

legal arguments that follow in Section II, infra.

1]

1. Place-of-admission requirement. North Carolina affords

reciprocity to lawyers admitted in any other state if, and only if,

that state offers reciprocal advantages to North Carolina lawyers

requesting admission without examination to its bar. If another

state declines, for whatever reason, to enter into a reciprocal

arrangement, North Carolina will not permit the other state’s

lawyers to be admitted on this basis; in thus excluding them,

North Carolina does not make any determination of the other

state’s bar admission standards or the competence of its lawyers

to practice in North Carolina. See Rhode at 154 (“{i]f

experienced out-of-state attorneys are competent to practice, it

shouldn’t matter how their local bars treat competitors”).

Conversely, North Carolina automatically allows

reciprocity to another state simply upon the other state’s grant

of reciprocity to North Carolina. Again, North Carolina makes

no attempt to determine the stringency of the other state’s bar

examination, or the competence of its lawyers, or the similarity

of the laws of that state to those of North Carolina, or any other

factor that would rationally support North Carolina’s acceptance

of the other state’s bar exam and admission as an indication of

the competence and character of the lawyer seeking admittance

to the North Carolina bar. See Perlman at 150. In fact,

respondents’ website expressly disclaims even knowing at any

given time which other states have reciprocity arrangements

with North Carolina, directing the viewer to check with the bar

authorities in the other states. See http://www.ncble.org (follow

“comity” hyperlink).

Respondents have candidly acknowledged that the sole

purpose of this reciprocity requirement is to entice other states

to confer reciprocal benefits on North Carolina lawyers. See

Pet. App. 39. Thus, the North Carolina reciprocity requirement

was designed and adopted in order to benefit lawyers licensed

in North Carolina, not to protect the public by ensuring the

competence and fitness of lawyers seeking admission to the

North Carolina bar without examination.

12

In view of the deficiencies and arbitrariness of state-by-

state reciprocity arrangements such as North Carolina’s, the ABA

Commission on Multijurisdictional Practice recommends that

admission without examination be extended to any lawyer who,

inter alia, has been admitted to practice law in any other state,

territory, or the District of Columbia for a specified period of

time. See ABA Report at 47. As the Report elaborates, the

recommended provision

recognize[s] the reality that lawyers who have been

admitted to another state’s bar and have practiced

actively for a significant period of time without

disciplinary sanction are qualified to establish a law

practice in the new state and that, for experienced

lawyers, the bar examination [which would be

necessary absent reciprocal admission] . . . serves

as an unnecessary obstacle to establishing a practice

in the new state.

Id. at 48.?

2. Place-of-practice requirement. In addition to the basic

place-of-admission reciprocity requirement, North Carolina also

imposes a place-of-practice requirement that the applicant for

admission without examination must have actively practiced

for at least four of the last six years in the reciprocity state. In

particular, it is not sufficient that an applicant have been licensed

by and actively practicing law in a state for that period preceding

his application; rather, he is required to have been engaged in

the active practice of law in the specific state that is the basis

for his requested admission without examination on the ground

of reciprocity. By itself, this provision serves to exclude licensed

and competent out-of-state lawyers from admission in North

Carolina. See Wolfram at 682 (“[mJost onerous for lawyers who

frequently move from state to state is a requirement found in

many on-motion states establishing a minimum number of years

2. Respondent was admitted, by examination, in California,

Indiana, and Ohio.

13

during which the out-of-state applicant must have practiced law

in a single jurisdiction”); Needham at 503.

In its evident design and effect, the North Carolina place-

of-practice requirement is highly arbitrary and irrational and

does nothing to ensure competence and fitness to practice law.

For example, there is no comparable requirement for a lawyer

who long-ago passed the North Carolina bar exam to retain his

eligibility to practice in North Carolina. Such a lawyer might

not have practiced law at all for an extended period, or not done

so in the six years preceding his application, or practiced for

brief periods in various jurisdictions outside North Carolina, or

moved away from North Carolina for many years (even to a

non-reciprocity state such as California) and then returned to

the state; yet, provided only that he satisfied the formal

requirements to maintain his bar membership each year, he could

resume practice at any point without any inquiry by respondents.

See Perlman at 158.

Likewise, as petitioner’s case demonstrates, this place-of-

practice requirement can illogically divest applicants of

eligibility for reciprocity admission that they previously

established. Mr. Morrison passed the bar exams of, and practiced

in, both Indiana and Ohio, which are reciprocity states with

North Carolina. If he had applied for admission without

examination at that time, he would have qualified. However,

because he continued to practice law for approximately 15 years

in California (where he also passed the bar exam, but which is

not a reciprocity state) and for three years in North Carolina

itself, he lost that eligibility. By contrast, a junior lawyer who

was admitted and practiced in Indiana or Ohio for four years

and then sought reciprocity admission in North Carolina would

be accepted. See Perlman at 150. Indeed, if Mr. Morrison himself

had moved back to Indiana or Ohio and practiced there for four

years, he instantly would have regained his eligibility for

reciprocity admission in North Carolina. In that circumstance,

while his competence to practice law in the state would not

have changed, the arbitrary factor of the location of his most

14

recent practice would determine his admission without

examination to the North Carolina bar.

Finally, the North Carolina place-of-practice requirement

is starkly protectionist. It does not ensure competence and fitness

but simply restricts the out-of-state lawyers who can be admitted

without examination in North Carolina and thus compete with

in-state attorneys. See Pet. App. 7-8.

The ABA Commission on Multijurisdictional Practice

avoids these inherent defects in the place-of-practice requirement

imposed by North Carolina. It recommends that admission

without examination be granted if the applicant practiced for

the prescribed period in any state, territory, or the District of

Columbia. ABA Report at 47.° The Commission explains that

lawyers who have practiced for such “a significant period of

time” in “another state’s bar” are “qualified to establish a law

practice in the new state.” /d. at 48.

Il. THE NORTH CAROLINA RECIPROCITY

PROVISIONS VIOLATE THE EQUAL PROTEC-

TION AND DUE PROCESS CLAUSES AND THE

COMMERCE CLAUSE.

Against this background, it is clear that the North Carolina

place-of-admission and place-of-practicé requirements violate

the Equal Protection and Due Process Clauses and the

Commerce Clause.

A. Due Process And Equal Protection.

Equal protection and due process are violated if the

provision in question is arbitrary and irrational in relation to

the legitimate governmental objective it is drawn to achieve.

See Schware, 353 U.S. at 238-39 (to “exclude a person from

the practice of law,” “any [bar] qualification must have a rational

connection with the applicant’s fitness or capacity to practice

law” in order to satisfy equal protection and due process);

3. The Commission recommended a period of practice of five of

the preceding seven years.

15

see also, e.g., City of Cleburne v. Cleburne Living Center, 473

U.S. 432, 440, 448 (1985); Zobel v. Williams, 457 U.S. 55,

60, 61, 65 (1982); cf Frazier v. Heebe, 482 U.S. at 646, 649

(invalidating, under supervisory power, a district-court bar

requirement as “unnecessary and irrational”); see also State

Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003)

(due process). Here, as a matter of law, the only legitimate state

interest is to ensure the competence and fitness of reciprocity

applicants to practice law. See pages 1-2, supra. Neither the

place-of-admission requirement nor the place-of-practice

requirement satisfies this constitutional standard.

1. Place-of-admission requirement. As explained above

(see pages 11-12, supra), the basic place-of-admission

reciprocity requirement does nothing to ensure competence and

fitness to practice law. Rather, North Carolina automatically

allows reciprocity for any other state that grants reciprocity to

it. Thus, this requirement does not serve to test the competence

of lawyers seeking admission on motion; North Carolina has

effectively ceded control over its own bar to the other states

with which it has reciprocity relationships. Respondents rejected

petitioner’s application for reciprocity simply because

California, where he passed the bar exam and practiced for

approximately 15 years, is not a reciprocity state with North

Carolina — and it did so without any determination (or even

inquiry) as to whether California’s bar admission standards

established the professional qualifications of California-

admitted lawyers to practice in North Carolina. See Perlman at

147 (referring to “(t]he senselessness of rigid rules on interstate

law practice”); Wolfram at 679 (“[t]he reasons given for the

restrictions [on admitting out-of-state lawyers] are probably

largely pious eyewash’’).

While, of course, “this Court is not well positioned to dictate

specific legislative choices to the State, it is sufficient to note

that .. . [other] alternatives exist.” Friedman, 487 U.S. at 69;

see also Piper, 470 U.S. at 285 n.19. Most obviously, North

Carolina could — as 13 other states do and the ABA

16.

Commission on Multijurisdictional Practice recommends — not

limit its admission without examination to only some other (self-

selected) states but extend it to attorneys admitted and in good

standing in any other jurisdiction. Especially with respect to

experienced practitioners like Mr. Morrison, that approach

would be no less effective in ensuring the competence and fitness

of the lawyers admitted and would avoid the arbitrariness and

irrationality of North Carolina’s current requirement.

Nor is it an answer that applicants could avoid the

unconstitutional reciprocity requirement merely by taking the

North Carolina bar exam. First, this Court already has rejected

the identical argument, holding that such an alternative is “quite

irrelevant” because it does not cure the arbitrariness and

irrationality of the requirements and distinctions of the North

Carolina system. See Friedman, 487 U.S. at 66-67. Second,

obligating an experienced lawyer to take another bar exam is

no “mere” matter. “A bar examination, as we know judicially

and from our own experience, is not a casual or lighthearted

exercise.” Jd. at 68. Furthermore, the bar exam, which is

designed for new attorneys, is not a meaningful or accurate way

to test the competence of an experienced lawyer to practice law

and constitutes a needless barrier to admission in another state.

See ABA Report at 48 (“for experienced lawyers, the bar

examination therefore serves as an unnecessary obstacle to

establishing a practice in the new state”); Needham at 456;

Rhode at 150-52. Finally, it is cold comfort to require an

experienced lawyer who has a national practice, or who works

in or has moved among several states, to incur the significant

expense and commit the substantial time to take bar exams in

each and every one of the jurisdictions necessary to serve his

needs and those of his clients. See ABA Report at 8, 48.

2. Place-of-practice requirement. Likewise, North

Carolina’s place-of-practice requirement bears no rational

relationship to the legitimate state objective of attorney

competence and fitness. Rather, as previously demonstrated (see

pages 12-14, supra), it is completely arbitrary and irrational

17

and utterly fails to ensure that competent out-of-state attorneys

are admitted and incompetent ones rejected.

Once again, possible alternatives are readily imaginable.

For instance, in line with the practice in approximately nine

states and the recommendation of the ABA Commission on

Multijurisdictional Practice, Norin Carolina might simply

require that experienced out-of-state lawyers have practiced for

a specified period in any jurisdiction(s) in which they are

admitted (rather than, as North Carolina now does, in a particular

jurisdiction). Better yet, North Carolina could dispense with

any such place-of-practice requirement altogether and accept

that an experienced lawyer who has been practicing anywhere

else for years without any problems or complaints is competent

to be admitted to its bar. Of course, the Court need not pass

upon the constitutionality of such alternatives to grant and

ultimately resolve this case. For this purpose, it is sufficient to

note that the place-of-practice requirement adopted by

respondents is arbitrary and irrational and therefore cannot stand.

B. Commerce Clause.

The petition demonstrates that the North Carolina place-

of-admission and place-of-practice provisions violate the

Commerce Clause under the decisions of this Court, such as

Great Atlantic & Pacific Tea Co. v. Cottrell, 424 U.S. 366 (1976),

that strike down state reciprocity statutes. See also Ronald D.

Rotunda, MODERN ConstTITUTIONAL Law § 3-3 at 121 (6th ed.

2000) (questioning bar reciprocity arrangements after Great

Atlantic); Jonathan B. Chase, Does Professional Licensing

Conditioned Upon Mutual Reciprocity Violate the Commerce

Clause?, 10 Vr. L. Rev. 223 (1985).4

4. This Court has noted that the Commerce Clause was derived

from the same provision of the Articles of Confederation, and serves

the like purpose of “creat[ing] a national economic union,” as the

Privileges and Immunities Clause at issue in Piper, Friedman, and

Barnard, and that the two clauses have a ‘““mutually reinforcing

relationship." Piper, 470 U.S. at 278-80 & n.8.

18

In addition, these provisions also violate the cardinal

Commerce Clause principle that states cannot adopt protectionist

measures that advantage in-state interests at the expense of those

out-of-state. See, e.g., C&A Carbone, Inc. v. Town of Clarkstown,

511 U.S. 383 (1994); New Energy Co. v. Limbach, 486 U.S..-

269 (1988); Maine v. Taylor, 477 U.S. 131 (1986).

Under this Court’s Commerce Clause precedents, different

standards of review apply depending upon the type of state

measure at issue. Given that the North Carolina place-of-

admission and place-of-practice requirements expressly

discriminate between in-state and out-of-state attorneys, there

is a substantial argument that heightened scrutiny should obtain

here. See, e.g., Bacchus Imports, Ltd. v. Dias, 468 U.S. 263,

270 (1984) (“where simple economic protectionism is effected

by state legislation, a stricter rule of invalidity has been erected”).

But in any event, the North Carolina provisions fail to pass

constitutional muster even under the less stringent standard

because they do not serve the legitimate state purpose of attorney

competence and arbitrarily, irrationally, and unnecessarily

burden out-of-state lawyers.

1. Place-of-admission requirement. At first glance,

reciprocity in general, by allowing lawyers more easily to enter

other states’ bars, appears to enhance rather than obstruct

interstate law practice and movement by attorneys. However,

that rationale does not justify the place-of-admission

requirement imposed by North Carolina. See Perlman at 149

(“Protectionism is also apparent in the twenty-one jurisdictions

that limit admission on motion to lawyers ‘from jurisdictions

also offering admission on motion.’. . . The primary explanation

... is to promote the economic interests of the in-state bar’’)

(citation omitted).

First, the North Carolina place-of-admission requirement

is avowedly designed to benefit in-state lawyers. By respondents’

own admission, the root purpose is to induce other states to

admit without examination North Carolina lawyers to their bars

19

precisely in order to benefit those in-state lawyers. That,

however, is irrelevant to the legitimate state interest of ensuring

that out-of-state lawyers reciprocally admitted to the North

_ Carolina bar are competent and fit to practice law in the State.

Once it is seen that the place-of-admission requirement does

not serve that interest, all that remains is the naked protectionist

purpose to provide a benefit for North Carolina lawyers engaged

in interstate law practice.

In addition, that rationale in no way supports respondents’

approach to allow admission without examination to lawyers

in only some states rather than all — and indeed in only those

states that elect to grant reciprocal admissions to North Carolina

lawyers. Once again, that is entirely unrelated to attorney

competence and fitness and reveals that North Carolina simply

is seeking an economic benefit for its lawyers.

Finally, these vices in the North Carolina place-of-

admission requirement easily could be cured, e.g., by allowing

experienced attorneys admitted in any other jurisdiction to move

for admission without examination in North Carolina. See pages

15-16, supra.

2. Place-of-practice requirement. North Carolina’s place-

of-practice requirement is facially protectionist. By admitting

only those out-of-state lawyers who meet the arbitrary

prerequisite that they have actively practiced for four of the last

six years in the particular reciprocity state, and thus by excluding

other attorneys like petitioner who have demonstrated

competence and fitness in the legal profession by their many

years of practice in other jurisdictions, North Carolina serves

to protect their own in-state bar members against competition

from out-of-state lawyers. Furthermore, alternatives exist that

would allow North Carolina to ensure the competence and

fitness of the out-of-state attorneys it admits without

examination and, at the same time, would not disadvantage those

attorneys in order to benefit North Carolina lawyers. See page

17, supra.

20

CONCLUSION

For the foregoing reasons and those stated in the petition,

the petition for a writ of certiorari should be granted.

Respectfully submitted.

Susan J. HACKETT Mark I. Levy

Senior Vice President Counsel of Record

and General Counsel AMANDA L. McCoy

ASSOCIATION OF KILPATRICK STOCKTON LLP

CorPORATE COUNSEL 607 14th Street, N. W.

1025 Connecticut Ave., N.W. Suite 900

Suite 200 Washington, D.C. 20005

Washington, D.C. 20036 (202) 824-1437

(202) 293-4103

Counsel for Amicus Curiae

Association of Corporate Counsel

October 31, 2006