Through a set of prohibitions of long standing in New York and similar to those widely prevalent in the fifty states and the District of Columbia, the State of New York prohibits non-attorneys from investing in law firms. See generally N.Y. State Bar Ass’n, Report of the Task Force on Nonlawyer Ownership, reprinted at 76 Alb. L. Rev. 865 (2013) (“NYSBA Report”). The prohibition is generally seen as helping to ensure the independence and ethical conduct of lawyers. See id. at 876-77. Plaintiffs-Appellants Jacoby & Meyers, LLP, a limited liability partnership (the “LLP”), and Jacoby & Meyers USA II, PLLC, a related professional limited liability company (the “PLLC”; together, “plaintiffs” or the “J&M Firms”) bring a putative class action challenging New York’s rules, regulations, and statutes prohibiting such investments. The infusions of additional capital that the regulations now prevent, they declare, would enable the J&M Firms to improve the quality of the legal services that they offer and at the same time to reduce their fees, expanding their ability to serve needy clients. They assert that, were they able to do so, they would act on that ability in the interests of such potential clients. Because the laws currently restrict their ability to accomplish those goals, they maintain, the state regime unlawfully interferes with their rights as lawyers to associate with clients and to access the courts — rights they see as grounded in the First Amendment.
The United States District Court for the Southern District of New York (Kaplan,
BACKGROUND
We draw this factual statement from the J&M Firms’ Third Amended Complaint (“TAC”), accepting as true the allegations stated there for purposes of our review of the District Court’s decision. AHW Inv.
P’ship v. Citigroup, Inc.,
Founded in 1972, Jacoby & Meyers, LLP, is a New York-based law partnership that “maintains a network of affiliated law offices across the country, including in Southern California, New York, Alabama, Florida, and Arizona.” Joint Appendix (“J.A.”) 106-07. The LLP presents as its mission the following: “[T]o ensure that people of modest or average means, who could often not afford to hire a lawyer, ha[ve] a practical alternative to obtain competent, qualified counsel at reasonable rates.” J.A. 106. The LLP was formed and is operated, still, as a for-profit law firm, as is its co-plaintiff, the related professional limited liability company Jacoby & Meyers USA II, PLLC.
The J&M Firms challenge the constitutionality of New York Rule of Professional Conduct 5.4, “Professional Independence of a Lawyer,” and a clutch of New York state laws that in combination work to prevent non-lawyers from investing in New York law firms.
The LLP alleges that it “wishes to expand its operations, hire additional attorneys and staff, acquire new technology, and improve its physical offices and infrastructure to increase its ability to serve its existing clients and to attract and retain new clients and qualified attorneys.” J.A. 107. To make these improvements, the LLP asserts, it requires capital contributions. It reports receiving “numerous offers” from “prospective non-lawyer investors ... who are prepared to invest capital in exchange for owning an interest in the firm.” J.A. 109. These include some “high net-worth individuals” and “institutional investors” identified in the TAC. J.A. 109. And it would accept such contributions through the vehicle of the professional limited liability company that it has formed for this purpose. But in light of New York’s prohibitions, it has “been relegated to obtaining capital from (i) the personal contributions of the partners, (ii) retained earnings on fees generated and collected, and (iii) commercial bank loans, which invariably come with onerous interest rates and intrusive covenants and conditions.” J.A. 109. Moreover, these potential alternative sources of capital are either not available in practice, or too costly to be used.
In 2011, the LLP sued the Presiding Justices of the New York Supreme Court’s Appellate Divisions (who administer Rule 5.4) and others, asserting that the rule violates the First and Fourteenth Amendments and the Dormant Commerce Clause of the U.S. Constitution. After an amendment of the complaint, a dismissal for lack of standing, and a successful appeal to this Court with respect to standing, the case was remanded to the District Court, at which point the J&M Firms filed a second amended complaint that attempted to articulate a constitutional challenge to the entire New York regulatory regime. See Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Dep’ts,
This appeal followed.
DISCUSSION
We review de novo■ a district court’s decision to dismiss a complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Apotex Inc. v. Acorda Therapeutics, Inc.,
On appeal, the J&M Firms abandon many of the constitutional challenges asserted in their prior complaints, and press only the argument that New York’s prohibition of non-lawyer investment in law firms infringes their First Amendment rights to petition and to association.
We agree with the District Court that the J&M Firms’ facial challenge fails: as a for-profit law partnership and professional limited liability company, the J&M Firms do not possess the First Amendment rights that they claim to have — and, even if they did have some colorable claim to such rights, their complaint does not plausibly allege that the New York regulatory regime unlawfully restricts them.
A. The First Amendment Rights to Petition and Association
The First Amendment prohibits the enactment of any law “abridging ... the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” U.S. Const, amend. I. The Petition Clause has deep roots in the Anglo-American legal tradition., British subjects enjoyed the right to petition the monarch, and colonial Americans had the
The right to associate freely is not mentioned in the text of the First Amendment, but has been derived over time as implicit in and supportive of the rights identified in that amendment. Thus, drawing upon the rights of both petition and expression, the Supreme Court has held that the First Amendment bears on some situations in which clients and attorneys seek each other out to pursue litigation. One line of cases involving political advocacy organizations relies on the expressive value of certain types of associational litigation. In NAACP v. Button for example, the Court held that the NAACP’s work on anti-segregation cases — and the organization’s efforts to recruit plaintiffs for those cases — constituted “modes of expression and association protected by the First and Fourteenth Amendments.”
Another line of Supreme Court authority recognizes that clients seeking legal representation — specifically in the context of union activity — have a right protected by the First Amendment to associate with each other to obtain legal representation and vindicate their rights effectively. See, e.g., Bhd. of R.R. Trainmen v. Va. ex rel. Va. State Bar,
The Button line of cases might casually be characterized as reflecting lawyers’ expressive rights in the causes they pursue— when those causes implicate expressive
In fact, the Court has explicitly distinguished between the First Amendment protections enjoyed by attorneys who, as part of an advocacy group like the ACLU or the NAACP, have recognized associational rights, and attorneys who are engaged in litigation for their own commercial rewards, albeit in the context of advancing or protecting the interests of their clients. In particular, in 1978 the Court issued on a single day decisions in two cases involving state regulation of attorneys, highlighting this distinction. In In re Primus, the Court struck down the South Carolina Supreme Court’s sanction of an ACLU attorney for solicitation of clients, holding that the disciplinary ruling infringed her First Amendment rights.
Normally the purpose or motive of the speaker is not central to First Amendment protection, but it does bear on the distinction between conduct that is an associational act of expression, and other activity subject to plenary regulation by government. Button recognized that certain forms of cooperative, organizational activity, including litigation, are part of the freedom to engage in association for the advancement of beliefs and ideas, and that this freedom is an implicit guarantee of the First Amendment. As shown above, [the Primus] appellant’s speech — as part of associational activity — was expression intended to advance beliefs and ideas. In Ohralik, the lawyer was not engaged in associational activity for the advancement of beliefs and ideas; his purpose was the advancement of his own commercial interests. The line, based in part on the motive of the speaker and the character of the expressive áctivity, will not always be easy to draw, but that is no reason for avoiding the undertaking.
In re Primus,
We embraced that distinction in Board of Education of the City of New York v. Nyquist, where we rejected the argument that any attorney has a First Amendment right to litigate on behalf of a client even when the representation might violate ethical rules.
B. The J&M Firms’ Purported First Amendment Rights
These cases illustrate why the J&M Firms have failed to allege facts sufficient to establish that any First Amendment right held by them is infringed by the New York regulations, especially in light of the demanding standard that governs a facial constitutional challenge. The J&M Firms argue that the rights at issue are the lawyers’ “right of access to the courts” and “right to associate with clients for purposes of accessing the courts.” Appellants’ Br. 20. But we think In re Primus, Ohralik, and Nyquist foreclose recognizing any such rights in a for-profit law partnership or PLLC that is not itself engaged in its own political advocacy or expression. See In re Primus,
The J&M Firms’ lead argument to the contrary rests primarily on what we think is a misreading of the Supreme Court’s union cases. In particular, they cite United Transportation Union and United Mine Workers, which we describe above, for the proposition that “lawyers hold First Amendment rights of access to courts.” Appellants’ Br. 11, 15. But those cases do not so hold. Rather, they uniformly decide that unions and union members have rights under the First Amendment to associate and to act collectively to pursue legal action — action that ordinarily necessitates the involvement of lawyers. They do not establish that an attorney is entitled to access the court on a client’s behalf, at least not under the First Amendment rights to petition or association. Our reading of these two cases, focusing on the expressive rights of clients, riot their counsel, is in keeping, moreover, with the constitutional text: the rights of petition and assembly attach to “the people” — who are themselves aggrieved and accordingly who seek to assemble or to petition in order to redress their own grievances. U.S. Const, amend. I. Lawyers in a for-profit practice who act in their representative capacities do riot themselves seek access to the courts to remediate their own grievances; rather, they are doing so as a part of a commercial transaction in which they serve, and are paid.
The J&M Firms’ error is compounded by their apparent assumption that they enjoy a constitutionally protected right to associate with clients qua clients. But the so-called “freedom of association” protected by the First Amendment has been generally understood to encompass two quite different types of associational activity: “choices to enter into and maintain certain intimate human relationships,” and “association] for the purpose of engaging in
The J&M Firms fault the District Court for relying on a distinction drawn in case law between the rights and interests of private, for-profit attorneys and not-for-profit political advocacy organizations. They contend that “the right of access to courts is not limited to instances in which attorneys provide services in cases with a political or constitutional dimension,” and that Supreme Court precedent holds “that a for-profit attorney employed by an individual client to litigate a non-political grievance (such as a personal injury case) is fully protected by the First Amendment right of access to the courts.” Appellants’ Br. 17. Although these assertions may hold some superficial appeal, again, we think they misconstrue precedent. As noted above, the Supreme Court has taken pains to differentiate between the protections that the Constitution affords the activities of lawyers acting in a for-profit setting and those acting in a not-for-profit context, advocating political causes in which the attorneys themselves share; those cases reference the attorneys’ own associational and petition rights only in limited circumstances. See In re Primus,
Neither Jacoby & Meyers, LLP, nor Jacoby & Meyers USA II, PLLC, is a not-for-profit political advocacy organization engaging in its own expression, nor a collection of individuals seeking redress of their own grievances or vindication of their own rights. Instead, the J&M Firms are engaged in the practice of law as a business. Thus, their firms can be regulated as businesses, and, as will be explained below, those regulations do not automatically trigger strict scrutiny simply because one of the law firm’s functions is to help clients access the courts. Of course, we do not question the right to petition a court, with the aid of a lawyer, for redress. But in the context of for-profit law firms that serve their clients’ interests as a business, that right belongs to the client, not the attorney. As in a comparable case in the Third Circuit, “[a]ppellants provide no support for the proposition that the Petition Clause protects the rights of an attorney [operating in the context of a for-profit law firm] to appeal to courts or other forums on behalf of another.” Nat’l Ass’n for the Advancement of Multijurisdictional Practice v. Castille,
C. The Failure to Allege any Burden on First Amendment Rights
Because the law is evolving rapidly with respect to the protections afforded commercial speech by the First Amendment, however, we proceed one step further with our analysis. We turn to addressing whether, to the extent that the J&M Firms could be found to have some degree of First Amendment right to associate with clients or to petition the government through the courts on their clients’ behalf — or could be allowed to challenge the regulations on behalf of their clients — their complaint states a claim. We conclude again, however, that their claims fail because the regulations are supported by substantial government interests and impose an insubstantial burden on the exercise of any such First Amendment rights.
The heart of the causal argument is:
[The] complaint alleges that several specifically identified non-lawyers stand ready to take equity stakes in [the J&M Firms’] law practice; that such equity will enable [the J&M Firms] to undertake several specific improvements in technology and infrastructure; and that those improvements, by increasing the efficiency of [the J&M Firms’] provision of legal services, will raise even higher the quality of their legal services and lower the cost to clients, thus affecting [ ] the scope, cost, and quality of lawyers’ association with clients for purposes of accessing courts.
Appellants’ Br. 28.
Taking these projections as accurate, and assuming that the J&M Firms would in fact serve more clients at a lower cost, New York’s regulations proscribing non-lawyer investment in law firms do not impede the lawyers’ constitutionally-shielded ability to associate or petition. We think the only plausible argument that the J&M Firms could have in this vein is that they would be able to and would in fact associate with and serve more needy clients if the regulations are lifted.
Like our sister circuits that have rejected similar Petition Clause challenges to ordinary regulations of the legal profession, we see a marked difference between the regulations at issue here and the state prohibitions on attorney activities that were struck down in Button, Trainmen, and Primus. Unlike in those cases, no attorney here risks censure or sanction for soliciting, meeting with, or representing a client — the activities that can be central to initiating and maintaining the attorney-client relationship. Here, by contrast, the regulations prohibiting non-lawyer investment in law firms simply do “not deny [lawyers] meaningful access to the courts.” Nat’l Ass’n for the Advancement of Multijurisdiction Practice v. Berch,
The J&M Firms attempt to analogize this case to United Transportation Union, and argue that if the right of access to the courts “is impermissibly burdened by prohibitions on such mundane activities as transporting clients to attorneys’ offices,” as the Supreme Court found there, then “the same right is surely burdened by impediments to the various specific effi
D. The State’s Interest in the Challenged Regulations
Because we hold that the J&M Firms’ complaint does not plausibly allege the infringement of any First Amendment right, we need not stay long with the question whether New York’s interests as a state justify its regulations regarding non-lawyer investments.
The J&M Firms ask us to apply strict scrutiny to the regulations. In the context of claims asserting First Amendment associational rights we have instructed that, depending on the burden that the statute imposes on those rights, we will “apply either strict scrutiny, in which case the restriction survives only if it is narrowly drawn to advance a compelling state interest, or rational basis review, in which case the restriction need only be rationally related to a legitimate government interest.” Kraham v. Lippman,
Accordingly, rational basis review applies. The regulations at issue plainly survive that standard because they are rationally related to a legitimate government interest. As the District Court noted, and as we think is cognizable even on a motion to dismiss, the challenged laws serve New York State’s well-established interest in regulating attorney conduct and in maintaining ethical behavior and independence among the members of the legal profession. See, e.g., Jacoby III,
CONCLUSION
The J&M Firms have no claim to the First Amendment rights of association and petition that the Supreme Court has recognized in political advocacy groups or in individuals seeking the vindication of their own rights through not-for-profit counsel. And the New York regulations at issue here have at most an attenuated effect on the availability of attorney services to the population at large. Because the J&M Firms have neither plausibly alleged that they possess any First Amendment rights implicated here nor that any First Amendment right they might generously be assumed to have has been infringed, they have failed to state a claim for relief.
We AFFIRM the judgment of the District Court.
Notes
. Before filing this suit, Jacoby & Meyers, LLP, created Jacoby & Meyers USA, LLC (the "LLC”), its initial co-plaintiff. See Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Dep’ts,
. The J&M Firms cite New York Judiciary Law §§ 478, 484, 485, 491, 495; New York Partnership Law § 121-1500(a)(I); and New York Limited Liability Company Law §§ 201, 1201, 1203, 1207(a), 1209, 1210, 1211, as effecting the prohibition. The American Bar Association, which includes an equivalent to Rule 5.4 in its Model Rules of Professional Conduct, has considered whether to support "alternative business structures” — including some that might permit non-lawyer investment — but has remained agnostic on the overarching issue, concluding simply that it warrants further exploration. See Am. Bar Ass’n R. Prof'l Conduct 5.4; Am. Bar Ass'n, Comm'n on the Future of Legal Servs., Report on the Future of Legal Srvs. in the U.S. 42-43 (2016). As the New York State Bar Association has noted, the functional effect of enacting these rules in one jurisdiction is that any
. New York's Rules of Professional Conduct, modeled after the ABA’s Model Rules of Professional Conduct, were adopted by the Appellate Division of the New York State Supreme Court in 2009. NYSBA Report,
. The District Court initially dismissed the complaint for lack of standing because the LLP challenged the constitutionality of only Rule 5 A — not any of the other provisions of New York law that address non-lawyer investment. See Jacoby I,
. In their papers on appeal, the J&M Firms also refer to the Supreme Court’s decision in Citizens United v. Federal Election Commission,
. This is not to suggest, of course, that a litigant’s right to present his or her position through counsel may easily be curtailed; it is to highlight, rather, that the right in question is the client’s, not the lawyer’s.
. Without fully developing an argument for third-party standing, the J&M Firms at times appear to suggest that their claims encompass the rights of present and potential clients. Because we reject the J&M Firms’ challenge to the relevant regulations on the merits, we need not decide today in what circumstances the third-party standing doctrine might permit attorneys in the capacity of plaintiffs to assert constitutional rights belonging to their clients. (We may avoid this question because limitations on third-party standing are prudential, not constitutional. Kowalski v. Tesmer,
. The J&M Firms' assertions about quality of representation strike us as speculative and, in any event, irrelevant, since any right to access the courts would certainly not also involve a right to a lawyer of a certain caliber above ordinary competence.