ON PETITION FOR REVIEW OF OPINION 475 OF THE ADVISORY COMMITTEE ON PROFESSIONAL ETHICS AND DR 2-102(C)
Supreme Court of New Jersey
April 28, 1982
Argued October 5, 1981
For affirmance—None.
ON PETITION FOR REVIEW OF OPINION 475 OF THE ADVISORY COMMITTEE ON PROFESSIONAL ETHICS AND DR 2-102(C).
Argued October 5, 1981—Decided April 28, 1982.
Colette A. Coolbaugh, Secretary, argued the cause for respondent Advisory Committee on Professional Ethics (Colette A. Coolbaugh, attorney; Richard J. Engelhardt, Staff Attorney, on the brief).
Arthur Montano argued the cause for intervenor New Jersey State Bar Association (Montano, Summers, Mullen & Manuel, attorneys; Arthur Montano and Alan P. Bruce, on the brief).
Briefs were submitted on behalf of amicus curiae Robert B. Zagoria, attorney, pro se.
The opinion of the Court was delivered by
New Jersey law firms have always included only the names of New Jersey lawyers. That custom is now enforced by
Jacoby & Meyers, a law partnership with offices in California and New York, seeks review of an opinion of the Advisory Committee on Professional Ethics which prohibited it from opening a New Jersey office under the name “Jacoby & Meyers.” Neither of petitioner‘s named partners is or has ever been a member of the New Jersey bar. Petitioner challenges the constitutionality of
We find that
Moreover, to permit a full evaluation of
Therefore, after the release of this opinion, the Court will refer both rules to a special Supreme Court Committee for its report and recommendations. Given the importance of the matter being considered, we will ask that Committee to subject these issues to intensive study. This will include hearings where all points of view may be expressed. We will ask the Committee to report by January 1, 1983, if possible. We express no view on the merits of this reevaluation.
The Court‘s responsibility in regulation of the state bar is fundamental. We have plenary and exclusive control over both admission to the bar and the practice of law. We seek to exercise that control in the interests of the public. In a rapidly changing 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 expectations they create, without an understanding of what effects the changes may have. We therefore need a thorough review and study.
Finding no constitutional infirmity in
I
In 1972 Leonard Jacoby and Stephen Meyers, members of the California bar, formed a profit-making law firm to serve a large middle-class clientele with basic, standardized legal services. Beginning in California, the firm expanded considerably during the 1970‘s using media advertising and operating out of many neighborhood law offices staffed by local attorneys. In 1979 the firm opened neighborhood offices in New York under its Califor-
Petitioner has indicated its desire to open a New Jersey office. On September 10, 1980, Jacoby & Meyers requested an opinion from this Court‘s Advisory Committee on Professional Ethics on whether
II
The initial question is whether Jacoby & Meyers has “standing” under
In view of the public importance of this matter, we choose not to take such a course. This Court has inherent power under
The Advisory Committee ruled in Opinion 475 on petitioner‘s inquiry despite the wording of
III
At the outset, we hold that the Advisory Committee correctly applied
A lawyer or a professional corporation shall not hold himself or itself out as having a partnership with one or more lawyers or professional corporations unless they are in fact partners. A partnership shall not be formed or continued between or among lawyers licensed in different jurisdictions unless all enumerations of the members and associates of the firm on its letterhead and in other permissible listings make clear the jurisdictional limitations on those members and associates of the firm not licensed to practice in all listed jurisdictions; provided, however, a firm name may not be used in New Jersey unless all those named are or were members of the bar in New Jersey. [Emphasis added].
This disciplinary rule clearly prevents petitioner from using its name in New Jersey. Leonard Jacoby and Stephen Meyers have never been licensed to practice law in this State. The Code provision could not be more explicit in banning the use of their names in a New Jersey law firm. The Committee, limited as it must be to interpretation of the Code of Professional Ethics, correctly applied the existing disciplinary rule.
IV
We now address petitioner‘s contentions that the provision in
A. First Amendment
Petitioner argues that the firm name restriction in
In the past decade, the United States Supreme Court has repudiated the notion that commercial speech does not warrant constitutional protection. The landmark case of Virginia Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976), held that a state could not prohibit all advertising by pharmacists of the prices of prescription drugs. The Court stated that, just as commercial speech “is indispensable to the proper allocation of resources in a free enterprise system, it is also indispensable to the formation of intelligent opinions as to how that system ought to be regulated or altered.” 425 U.S. at 765, 96 S.Ct. at 1827. In Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1976), the Court extended the reasoning of Virginia Pharmacy to protect the advertising of prices of routine legal services.
However, the Supreme Court has never equated commercial speech with political expression. Our society values political expression as an inherent part of the democratic process. Commercial speech, in contrast, is valued and constitutionally protected only to the extent that it conveys facts which facilitate honest commercial transactions. With that in mind, both the U.S. Supreme Court and this Court have said “there can be no constitutional objection to the suppression of commercial messages ... more likely to deceive the public than inform it.” In re Professional Ethics Opinion 447, 86 N.J. 473, 477 (1981), quoting Central Hudson Gas v. Public Service Comm‘n, 447 U.S. 557, 563, 100 S.Ct. 2343, 2350, 65 L.Ed.2d 341 (1980). Moreover, “a different degree of protection is necessary to insure that the flow of the truthful and legitimate commercial information is unimpaired.” Virginia Pharmacy, 425 U.S. at 771, n.24, 96 S.Ct. at 1830, n.24.
Because commercial speech concerning the nature or price of goods and services is more objective than other speech, it burdens the speaker less to require its truthfulness. At the same time, commercial speech is perhaps more likely to be taken as objectively true, and therefore may more easily deceive the listener when false. The obvious importance of commercial speech in generating business profits insures that its proper regulation will not unduly inhibit the full flow of business information which the speaker seeks to convey. Id. at 775-81, 96 S.Ct. at 1832-35 (Stewart, J., concurring). While restraints on other forms of speech may chill expression and development of political and other ideas, regulation of commercial speech serves primarily to promote honesty and fair dealing in the marketplace.
Not all commercial speech receives identical constitutional protection. In Friedman v. Rogers, supra, the Supreme Court drew a distinction between different types of commercial speech which bears directly on petitioner‘s claim. The Court explicitly distinguished the objective and easily verifiable price information at issue in Virginia Pharmacy and Bates from the more potentially misleading information conveyed through use of a trade name. The Court noted that while Virginia Pharmacy and Bates involved speech that was self-explanatory, a trade name is
a form of commercial speech that has no intrinsic meaning. A trade name conveys no information about the price and nature of the services offered by an optometrist until it acquires meaning over a period of time by associations formed in the minds of the public between the name and some standard of price or quality. Because these ill-defined associations of trade names with price and quality information can be manipulated by the users of trade names, there is a significant possibility that trade names will be used to mislead the public. [440 U.S. at 12-13, 99 S.Ct. at 895 (footnote omitted)]
It is precisely the potential for misleading the public through “ill-defined associations” inherent in trade names which
As we have often noted, there is nothing more important to our system of justice than public confidence in the bench and bar. Whether the attorneys in a firm are licensed to practice
Our holding in this case is supported by the recent United States Supreme Court decision involving commercial speech by lawyers, In the Matter of R. M. J., supra. While invalidating restrictions placed by Missouri on lawyers’ advertising, the Supreme Court stressed that the Constitution permits prohibition of both inherently misleading advertising and advertising that experience has shown is subject to abuse. 102 S.Ct. at 935-937. That is precisely the basis for the prohibition here. The use of a firm name in New Jersey that includes attorneys not admitted to our bar is certain to deceive at least some consumers of legal services.5
The inquiry does not end there, however. As the United States Supreme Court pointed out, “the remedy ... is not necessarily a prohibition but preferably a requirement of disclaimers or explanation,” 102 S.Ct. at 937.
This “less restrictive alternative” approach immediately suggests the possibility that the use of a disclaimer such as “Jacoby & Meyers, not licensed in New Jersey” should be permitted. However, instead of diminishing the potential for deception, we believe such an explanation would create additional confusion. It might even imply to some prospective clients an official disapproval of Jacoby & Meyers’ practice. We do not believe that the Constitution‘s protection of commercial speech requires such risks, particularly since our interpretation of
It might also be suggested that the deception inherent in the use of the firm name “Jacoby & Meyers” would not exist but for our rule, and that the rule change itself would end the deception. The rule has reinforced the public expectation that those named in a New Jersey firm are licensed to practice in this State. Undoubtedly a rule change would diminish that expectation over time and therefore reduce the possibility of deception. However, we see no constitutional requirement to abolish
There is a further constitutional justification for the continuation of the prohibition contained in the rule. Under our rules, law firm names are “official” designations, and therefore are regulated more carefully than ordinary advertising. See In re Opinion 447, supra. A firm name, like an attorney‘s license, letterhead or business card, serves to identify a firm or association of attorneys as persons authorized to practice law in this jurisdiction. Id. Where, as here, the State seeks simply to ensure that the official status of an attorney as one licensed to
In concluding that the First Amendment does not protect the use of the firm name “Jacoby & Meyers” in New Jersey, we note that this restriction does not hamper the ability of that firm, or any New Jersey firm with which it may be associated, to advertise the association. New Jersey firms are not prohibited from associating with out-of-state law firms or from advertising that association as long as there is no deception involved. We recognize that the legal profession has changed dramatically over the last decade, with legal advertising now permitted and the practice of law becoming increasingly interstate in scope. Our rules are flexible enough, despite the firm name restriction involved in this case, to accommodate the needs of multijurisdictional 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 Jersey affiliate, consistent with this State‘s rules on lawyer advertising.
This Court recognizes, however, that television advertising by New Jersey lawyers is banned, while New York attorneys have been permitted to advertise on the broadcast media. Jacoby & Meyers has legally used television ads in New York which are regularly beamed to New Jersey on interstate channels. The extent and intensity of such advertising is not in the record, and we have no way of knowing how substantial or influential it is. We do know that if petitioner were allowed to use its firm name in New Jersey in any form its television advertising could give it a substantial competitive advantage.
We do not pass here on the wisdom of our ban on television advertising. Advertising by lawyers is a very recent develop-
For the present, however, the ban exists. It has been imposed in good faith and applies to all New Jersey lawyers. Any New Jersey law firm that advertised in print its association with petitioner would be likely to gain a real benefit from petitioner‘s television advertising. This would produce an unfair advantage over other firms in New Jersey who comply with the rule. We would, in effect, have drawn an exception to our television ban in favor of petitioner and its New Jersey affiliates. The Court finds no conceivable justification for such an exception. Indeed we would deem it grossly unfair. We therefore hold that our ban on television advertising,
Our restriction on the use of out-of-state firm names which are not televised in New Jersey is highly limited, the limitation
B. Commerce Clause
Petitioner argues next that
Under the Commerce Clause, the “crucial inquiry” is whether the law is “basically a protectionist measure, or whether it can fairly be viewed as a law directed to legitimate local concerns, with effects upon interstate commerce that are only incidental.” Philadelphia v. N. J., 437 U.S. 617, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978).
Measures whose only purpose is economic protection of local interests are virtually per se invalid. See Philadelphia v. New Jersey, supra. However, it is well established that a state may, in the exercise of its police power, lawfully enact legislation affecting interstate commerce, provided that the federal government has not preempted the field. Such state regulation is limited only to the extent that it discriminates against interstate commerce. See Philadelphia v. N. J., 437 U.S. at 626-27, 98 S.Ct. at 2536-37. In this case, there is no such discrimination. The rule applies equally to all persons, resident and nonresident, who are not members of the New Jersey bar. In the absence of such discrimination, there can be no violation of the interstate
Even if the state regulation is directed against interstate commerce, it may be upheld if it satisfies a two-part balancing test. Applying that test, the courts will uphold regulations whenever (1) they are rationally related to legitimate state concerns, and (2) the resulting discrimination is outweighed by the state interest in enforcing the regulation. See Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970); Southern Pacific Co. v. Arizona, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915 (1944).
We need not belabor the State‘s legitimate interest in regulating its Bar through the enforcement of
The State‘s paramount interest in preventing deception in the practice of law overrides any incidental effect the rule may have on interstate commerce. While the Supreme Court recognized in Goldfarb that legal services are “commerce” for purposes of the Sherman Act,
The Commerce Clause thus does not prevent the application of
We note as a matter of information, in addition to the absence of any residency requirement in New Jersey, that we are the only state which permitted admission to the bar on the basis of
C. Privileges and Immunities Clause
The Privileges and Immunities Clause9 ensures that non-residents and residents receive equal treatment with respect to “fundamental” activities whose restriction would “hinder the formation, the purpose, or the development of a single union.” Baldwin v. Montana Fish & Game Comm‘n, 436 U.S. 371, 98 S.Ct. 1852, 56 L.Ed.2d 354 (1978); Salorio v. Glaser, 82 N.J. 482, cert. den. 449 U.S. 804, 101 S.Ct. 49, 66 L.Ed.2d 7 (1980). Petitioner argues, without direct support, that the right to use its firm name in New Jersey is a “fundamental” privilege guaranteed by the Privileges and Immunities Clause.
The Supreme Court has never declared the practice of law to be a “fundamental” privilege under the clause, and nothing suggests it would now do so. To the contrary, as the Court noted in Leis v. Flynt, supra, several times in the last decade it has sustained state bar rules that excluded out-of-state counsel from practice altogether or on a case-by-case basis. 439 U.S. at 443, 99 S.Ct. at 701.10
Moreover, as stated above,
The rule, therefore, does not offend the Privileges and Immunities Clause.
D. Equal Protection Clause
Petitioner advances a final constitutional claim that
Where state regulation neither infringes upon a fundamental right nor burdens a suspect class, the Supreme Court has upheld any legislative classification based upon facts that “reasonably can be conceived to constitute a distinction, or difference in state policy,” Allied Stores v. Bowers, 358 U.S. 522, 530, 79 S.Ct. 437, 443, 3 L.Ed.2d 480 (1959). In this case, petitioner points to a distinction created between lawyers in firms whose named partners are or were licensed to practice here and whose firm name therefore can be used, and lawyers such as Messrs. Jacoby and Meyers who cannot use their firm name here. Certainly, lawyers who are not licensed to practice in New Jersey do not constitute a suspect class such as race, religion or alienage deserving of extraordinary protection under the Equal Protec
The Court does not deny that use of a firm name containing deceased or retired partners has some potential for misleading consumers. Cf.
There are significant distinctions between prohibiting the use of a firm name such as Jacoby & Meyers where neither named partner has ever been licensed to practice in New Jersey and requiring that law firms change their names whenever a named partner dies. In the former case, the burden on the firm is minimal, for the reasons discussed above. By contrast, the burden entailed by a mandate that firms continually update their names would be substantial. Additionally, the death of a named partner may not substantially alter the firm‘s practice, and therefore should not necessitate a sacrifice in the name recognition that the firm has built. Indeed, in many cases requiring a change of name upon the death of a named partner would
For these reasons, the distinction attacked by petitioner is rational and therefore constitutionally permissible under the Equal Protection Clause.
V
Although we sustain
In regulating the advertising of legal services, this Court has used great caution. We have done so because the constitution mandates that we regulate the practice of law,
However, we recognize that in an age of lawyer advertising, reputations will no longer develop exclusively by the word of
HANDLER, J., concurring in part and dissenting in part.
I concur in the essential judgment of the Court that
I do not believe, however, that the Court should deal with the question whether a national law firm such as Jacoby & Meyers or a local affiliate of that firm will be in violation of our State‘s ban on television and radio advertising if the local office lawfully advertises its affiliation through the conventional print media, while the national firm continues to advertise on out-of-state television without even mentioning its New Jersey affiliate. That question is premature, complex and controversial. While it is entirely appropriate to note these issues, there is no need to resolve them in this case. By ruling on an interim basis that our State‘s ban on attorney broadcast advertising will apply to certain kinds of television advertising involving affiliated law firms, the Court may be thought to have turned a narrow firm name controversy into a TV advertising case with substantial constitutional and public policy implications. I am not prepared in this case to resolve even provisionally the issue of whether
It is important to keep a sharp focus on the real issue in this case. Petitioner Jacoby & Meyers, a national law firm with offices throughout California and New York, is considering opening several branches in New Jersey and wants to operate under its existing name of Jacoby & Meyers. However, our State‘s disciplinary rules prohibit the mention in the firm name of any lawyer not licensed to practice in New Jersey.
Petitioner initiated this action to challenge the constitutionality of our firm name rule. In today‘s decision the Court has rejected that challenge. I agree with the majority that
The majority further states that our firm name restriction presents no barrier to a New Jersey law office advertising its affiliation with a national firm. The New Jersey branch of the firm may note such an association on office signs, professional cards and letterheads, as long as the reference is not misleading. See ante at 88. It may also utilize all currently permissible forms of commercial advertising. See ante at 88. As far as I am concerned, recognition of the right to advertise affiliation draws the sting from the firm name restriction and constitutes the only basis for its acceptability.
I do not believe the Court is required to confront more than the foregoing propositions. Nevertheless, the Court has felt constrained to address television advertising, which is prohibited under our disciplinary rules. See
The Court, for purposes of this case, states that “if petitioner were allowed to use its firm name in New Jersey in any form its television advertising [in New York] could give it a substantial competitive advantage [over New Jersey firms].” See ante at 88. According to the majority: “Any New Jersey law firm that advertised in print its association with petitioner is likely to gain a real benefit from petitioner‘s television advertising.” Ante at 89. In my view, the record in this case is too slim to resolve the fact-sensitive question of whether Jacoby & Meyers’ New York television advertising would constitute a direct bene
Of greater concern than the Court‘s expressed belief that Jacoby & Meyers’ New Jersey affiliate would reap an unfair trade advantage from advertising practices in New York is the cast which its discussion could place on future cases or proceedings which may be more appropriate for determining the permissible scope of attorney broadcast advertising. The majority forewarns Jacoby & Meyers that if it intends to continue running television commercials in New York, it must forego advertising its affiliation with New Jersey firms not only in the broadcast but also in the print media. It serves a similar warning upon any New Jersey firm affiliating with petitioner.
This in futuro disposition by the Court necessarily involves speculation on distant problems which are not ripe for a reasoned resolution. Cf. Clay v. Sun Ins. Office Limited, 363 U.S. 207, 221, 80 S.Ct. 1222, 1230, 4 L.Ed.2d 1170, 1175 (1960) (Frankfurter, J.) (“[W]e do not remotely hint to an answer to a question that is prematurely put“). Furthermore, in discussing the question of permissible television advertising, the majority addresses an issue with significant constitutional and public policy implications. Such matters should be kept at arms length until their proximity to the heart of the controversy makes hand-to-hand combat with them unavoidable. Cf. Donadio v. Cunningham, 58 N.J. 309, 325-326 (1971) (“a court should not reach and determine a constitutional issue unless absolutely imperative in the disposition of the litigation“). See, e.g., Ahto v. Weaver, 39 N.J. 418, 428 (1963); Lordi v. UA New Jersey Theaters, Inc., 108 N.J.Super. 19, 33 (Ch.Div.1969).
Despite my reservations, I am somewhat mollified because the Court‘s decision is intended to be temporary. It is made in the context of a potential change in our rules governing this entire subject. Were this not a provisional ruling, our decision might place us on a collision course with the principles enunciated in the United States Supreme Court‘s latest decision on the scope of legal advertising. See In the Matter of R. M. J., 455 U.S. 191, 102 S.Ct. 929, 71 L.Ed.2d 64 (1982). In that decision Justice Powell, writing for a unanimous Court, underscored the point that regulations restricting the right of attorneys to advertise are valid only “where the record indicates that a particular form or method of advertising has in fact been deceptive.” Id. at 203, 102 S.Ct. at 937. Justice Powell further explained that the scope of any such restriction must be “no broader than reasonably necessary to prevent the deception.” Id. at 203, 102 S.Ct. at 937.
This Court is mindful of the great changes which have occurred in the practice of law throughout the country. It is fully aware of the direction which the Supreme Court is taking on attorney advertising. I am confident that we will navigate within the constitutional markers set by the Supreme Court. Such a course would acknowledge that there is nothing inherently deceptive or misleading about television and radio advertising.3 Moreover, it would recognize that a blanket prohibition
against such advertising may sweep more broadly than necessary to effectuate the State‘s legitimate ends.4
In the wake of the R. M. J. decision, questions have surfaced not only as to the continued constitutional validity of our State‘s total ban on television and radio advertising by lawyers but also as to its desirability as a matter of policy. At least 39 other states, plus the District of Columbia, now allow attorneys to advertise on television or radio in some form. See Andrews, “Lawyer Advertising and the First Amendment,” 1981 Am. B. Foundation Research J. 967, 1014-1015; “Lawyer Takes To T.V.,” 109 N.J.L.J. 183 (1982). In addition, the new ABA Model Rules of Professional Conduct provide that lawyers may advertise their services through public media, including radio and
I recognize the majority‘s sincere conviction that something be said about the rule‘s present application. However, I have a lingering concern about the effect of this ruling on petitioner‘s otherwise permissible advertising practices. As already mentioned, a New Jersey firm may freely advertise its association with a national law firm, as long as that advertising is not deceptive or misleading. See ante at 88. Nevertheless, the Court rules today that such nonmisleading advertising can be banned simply because the national law firm simultaneously exercises television advertising rights allowed it in another state, even though that advertising makes no reference to the firm‘s New Jersey affiliate. This ruling tends to contradict the Court‘s basic rationale for sustaining the firm name restriction—that New Jersey lawyers can fully advertise their associations with national firms. However, I do not surmise that, even in the immediate future while our rules are being studied anew, this Court will prohibit reasonable, nondeceptive advertising or deny lawyers the right to contest any adverse restrictions placed upon permissible advertising efforts.
I would see no need to comment on the subject of attorney television advertising in this case were it not for the Court injecting the issue into its decision. I would much prefer to be able to consider these problems either in a more appropriate case raising these issues on an adequate record or in a rulemaking proceeding which seeks the formulation of an appropriate regulation.
To the extent the majority‘s decision may be thought to be an imprimatur on our current strictures against television advertising, I merely want to state that I do not think this is so and to suggest that our rules may not be deserving of a vigorous
HANDLER, J., concurring in the result and dissenting in part.
For affirmance—Chief Justice WILENTZ and Justices PASHMAN, SCHREIBER, HANDLER, POLLOCK and O‘HERN—6.
For reversal—None.
Argued January 25, 1982—Decided April 29, 1982.
Notes
Moreover, by prohibiting lawyers from advertising on television and radio, it can certainly be argued that New Jersey has denied attorneys access to the most effective means of commercial advertising. As the Supreme Court has noted in the context of political speech: “[The public‘s] increasing dependence on television, radio and other mass media for news and information has made these expensive modes of communication indispensible instruments of effective . . . speech.” Buckley v. Valeo, 424 U.S. 1, 19, 96 S.Ct. 612, 635, 46 L.Ed.2d 659, 688 (1976). See generally Mastro, Costlow and Sanchez, “Taking the Initiative: Corporate Control of the Referendum Process Through Mass Media Spending and What to Do About It,” 32 Fed.Comm.L.J. 315 (1980).
[I]t is clear that purely dignitary limitations can no longer be imposed upon lawyer advertising. The freedom that attaches to other, like-situated commercial speakers now attaches to members of the bar. Perhaps that is exactly as it should be. We are, after all, a nation that stakes its best hopes on untrammeled expression. [“Living Up to the First Amendment,” 109 N.J.L.J. 204 (1982)]