Residency Rules for N.Y. Lawyers Inspire Dissent

     MANHATTAN (CN) — Nonresident attorneys need a New York office to practice law in the state, a divided panel of the Second Circuit ruled Friday, reversing an injunction.
     New Jersey attorney Ekaterina Schoenefeld had challenged the requirement, which dates back to the 19th century, as discriminatory.
     Though licensed to practice law in New Jersey, New York and California, Schoenefeld had an office only in Princeton, N.J.
     Claiming that New York Judiciary Law 470 prevented her from representing clients in the Empire State without a physical office there, Schoenefeld brought a federal complaint in 2007.
     Passed in its first form in 1862, Law 470 requires every attorney admitted to the New York bar to have a physical premises in the state. Resident attorneys could use their homes, while nonresident attorneys would need to lease office space.
     Schoenefeld argued that the law’s distinction between state residents and nonresidents violates the U.S. Constitution’s privileges and immunities clause, which prevents one state from discriminating against citizens of another state.
     Though a federal judge in Albany granted Schoenefeld an injunction, New York Attorney General Eric Schneiderman argued on appeal that the law was designed to protect clients, and that nonresident lawyers can use a designated agent to meet the law’s requirements.
     The Second Circuit reversed 2-1 today, saying the law is not meant to unduly nonresident attorneys.
     “Rather, it was enacted to ensure that every licensed New York lawyer, whether a state resident or not, could practice in the state by providing a means for the nonresident attorney to establish a physical presence in the state … akin to that of a residential attorney,” Judge Reena Raggi wrote for the majority.
     Finding that Schoenefeld did not show that the law had a protectionist purpose — nor that it was more expensive for nonresidents to lease office space than for residents to operate a home office — the Second Circuit said she lacked standing to sue.
     “Indeed, it is Schoenefeld who, in seeking to practice law in New York without a physical presence in the state, is looking to be treated differently from, not the same as, New York resident attorneys,” Raggi wrote.
     In a 25-page dissenting opinion, Judge Peter Hall said the judiciary law discriminates against nonresidents, while in-state lawyers could “set up an ‘office’ on the kitchen table of their studio apartments if so desired.”
     Hall also slammed the majority for ignoring input by New York’s highest court, the Court of Appeals, which intervened since the case implicated the interpretation of a state law.
     That court “graciously took time away from its own busy docket,” only for the majority to “disregard[] its holding, as well as Second Circuit precedent, Hall said.
     Whereas the majority placed the burden unfairly on the plaintiff to prove the law was enacted for a protectionist purpose, Hall said it is up to the state to prove vice-versa.
     “If the majority’s rational were sufficient, then any restriction based on residency, no matter how onerous, would pass constitutional muster so long as the state could point to a non-protectionist purpose for the restriction,” he wrote.
     Hall also lambasted his colleagues for ignoring such expenses as rents, insurance, staff, and equipment as burdensome to non-resident lawyers. “The state of New York has chosen to discriminate against non-resident attorneys with regard to their right to pursue a common calling, and it has failed to provide a substantial justification for that discrimination,” he wrote.
     Schoenefeld did not return a voicemail or email seeking comment. A spokesman for the New York Attorney General’s office declined to comment.