770 F.3d 1002
2d Cir.2014Background
- In 1984 New York City passed Local Law 65 regulating debt collection agencies, excluding attorneys acting on behalf of a client in that capacity.
- In 2007 an amendment proposed to clarify exemptions and broaden the reach of the debt-collection definition; Local Law 15 ultimately exempted certain attorney conduct but extended regulation to other attorney activities.
- Local Law 15 does not amend licensing requirements but imposes new mandatory practices, prohibitions, and penalties on debt collection agencies.
- Local Law 15 defines a debt collection agency to include attorneys or law firms that regularly engage in activities traditionally performed by debt collectors, and also preserves a carved-out exemption for attorney conduct that may only be performed by a licensed attorney when collecting on behalf of a client.
- Plaintiffs are law firms seeking to collect debts who challenged Local Law 15 as conflicting with New York State authority to regulate attorneys and as conflicting with the New York City Charter provisions.
- The district court granted summary judgment to plaintiffs on preemption and charter questions; defendants appealed, and the Second Circuit certified questions to the New York Court of Appeals to resolve jurisdictional issues regarding preemption and charter authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Local Law 15 preempts state regulation of attorney conduct | Berman argues state authority to regulate attorneys governs; Local Law 15 intrudes | City argues local authority can regulate certain attorney conduct not reserved for the state | Certified questions; preemption unresolved; NY Court of Appeals to decide |
| Whether Local Law 15 violates NYC Charter § 2203(c) by granting license control over law practice | Charter reserves licensing power to the state, not city | Charter authorizes city to license and regulate, within limits | Certified questions; if not preempted, issue to NY Court of Appeals |
Key Cases Cited
- In re Roth v. Turoff, 487 N.Y.S.2d 710 (N.Y. Supreme Ct. 1985) (local-law regulation of attorney activity may collide with state authority over practice of law)
- Aponte v. Raychuk, 531 N.Y.S.2d 689 (Sup. Ct. 1988) (state regulatory scheme does not preempt city actions protecting consumers; may supplement)
- DJL Rest. Corp. v. City of New York, 725 N.E.2d 186 (N.Y. 2001) (preemption concept—conflict with state statute or field preemption)
- Beardslee v. Inflection Energy, LLC, 761 F.3d 221 (2d Cir. 2014) (certification standards and discretionary questions to state high court)
- Summa v. Hofstra Univ., 708 F.3d 115 (2d Cir. 2013) (summary judgment de novo standard)
- In re Roth v. Turoff, 487 N.Y.S.2d 710 (N.Y. App. Div. 1986) (cited in preemption discussion; local-law impact on attorney practice)