555 P.2d 640 (Ariz. 1976), SB--96, Matter of Bates

Docket NºSB--96.
Citation555 P.2d 640, 113 Ariz. 394
Opinion Judge[9] Cameron
Party NameIn the Matter of Members of the State Bar of Arizona, John R. BATES and Van O'Steen, Respondents.
Attorney[6] Orme Lewis and John P. Frank, Phoenix, for State Bar of Arizona. [7] William C. Canby, Jr., Phoenix, for respondents.
Case DateJuly 26, 1976
CourtSupreme Court of Arizona

Page 640

555 P.2d 640 (Ariz. 1976)

113 Ariz. 394

In the Matter of Members of the State Bar of Arizona, John R. BATES and Van O'Steen, Respondents.

No. SB--96.

Supreme Court of Arizona.

July 26, 1976

In Banc.

Page 641

[113 Ariz. 395] Orme Lewis and John P. Frank, Phoenix, for State Bar of arizona.

William C. Canby, Jr., Phoenix, for respondents.

CAMERON, Chief Justice.

This matter is before the court on objections to the conclusions of law and recommendations of the Board of Governors of the State Bar of Arizona which held that the respondents John R. Bates and Van O'Steen, attorneys at law, were guilty of violating the disciplinary rules for attorneys as provided in Rule 29(a) of the Rules of the Supreme Court, 17 A.R.S.

We must answer the following questions on review:

  1. Does DR 2--101(B) violate either the federal or state antitrust laws?

  2. Does DR 2--101(B) violate the First and Fourteenth Amendments of the United States Constitution?

  3. Does DR 2--101(B) violate the Fourteenth Amendment right of equal protection of the law?

  4. Is DR 2--101(B) void for vagueness?

  5. Does the State Bar Disciplinary procedure violate due process?

The facts of this case are not in dispute. John R. Bates and Van O'Steen are law partners engaged in the practice of law under the name of the 'Legal Clinic of Bates and O'Steen.' On 22 February 1976, respondents published an advertisement in the Arizona Republic, a newspaper of state-wide and substantial out-of-state circulation, publicizing the availability of their legal services and stating fees for certain services. See Exhibit A.

Disciplinary Rule 2--101(B) of Rule 29(a) of the Rules of the Supreme Court reads:

'A lawyer shall not publicize himself, or his partner, or associate, or any other lawyer affiliated with him or his firm, as a lawyer through newspaper or magazine advertisements, radio or television announcements, display advertisements in the city or telephone directories or other means of commercial publicity, nor shall he authorize or permit others to do so in his behalf. * * *'

Respondents admit they knowingly violated DR 2--101(B).

After complaint, hearing, and findings by a Special Administrative Committee, the Board of Governors made the following findings of fact, conclusions of law, and recommendations:

'This matter having come on for full and final hearing on April 7, 1976, before the Special Administrative Committee of Ivan Robinette, Carl W. Divelbiss, [113 Ariz. 396]

Page 642

and Philip E. VonAmmon, Chairman, and the matter having been heard, evidence having been taken, and briefs having been submitted, and the Board of Governors having reviewed the above matter on April 28, 1976, it is now determined and recommended by the Board as follows:

FINDINGS OF FACT

'The Respondents, John R. Bates and Van O'Steen, did, in fact cause an advertisement for their law office to be published in a Phoenix newspaper, as charged in the Formal Complaint and as admitted in the Answer.

CONCLUSIONS OF LAW

'The act of the Respondents violates Disciplinary Rule 2--101(B).

RECOMMENDATIONS

'The act of the Respondents was on one hand a deliberate and knowing violation of the Rule, but on the other hand was undertaken as an earnest challenge to the validity of a rule they conscientiously believe to be invalid. We therefore recommend a penalty of one-week suspension from the practice of law for each of them, the weeks to run consecutively and not simultaneously, so as to avoid the closing down of their practice. 'We further recommend that the enforcement of this discipline be suspended until 30 days after a final decision has been made concerning the validity of the rule in the highest court to which it is presented.

'The foregoing Findings of Fact, Conclusions of Law, and Recommendations are issued by the Board of Governors this 30th day of April, 1976, pursuant to Rule 36(d) of the Rules of the Supreme Court of the State of Arizona.

/s/ Mark I. Harrison

Mark I. Harrison, President

State Bar of Arizona'

Respondents timely objected to the recommendations of the Board of Governors and the matter was transferred to this court pursuant to Rule 36(d) of the Rules of the Supreme Court.

ANTITRUST LAWS

Respondents contend that DR 2--101 violates Sections 1 and 2 of the Sherman Act. 15 U.S.C. § 1, 2 and Arizona antitrust statutes A.R.S. §§ 44--1401 through 44--1413. That a rule is a violation of the federal or state antitrust laws is a defense when the court is being asked to enforce a violation of these rules, Continental Wallpaper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed. 486 (1909); Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed.2d 165 (1942), and this defense is available in the state court. General Aniline & Film Corp. v. Bayer, 305 N.Y. 479, 113 N.E.2d 844 (1953).

In support of their position, respondents rely heavily on Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975). In Goldfarb, supra, the Supreme Court held that a county bar's publication of a minimum fee schedule, and enforcement of this schedule through professional discipline by the state bar, was anticompetitive activity which the Sherman Act was clearly meant to proscribe.

We do not believe that the holding of Goldfarb, supra, applies to the facts of this case. Goldfarb, supra, was concerned with a minimum fee schedule. Attempts at minimum fees or price floors are traditionally the target of antitrust laws, state and federal, as they tend to artificially raise the prices of goods and services without a corresponding increase in the value of those services. The control of advertising by the Supreme Court of members of the Bar is far different than price fixing by a local bar association. We do not believe that Disciplinary Rule 2--101(B) conflicts with Goldfarb, supra.

However, even if we were to find that DR 2--101(B) violated the provisions of the Sherman Act, we believe this would be state action which is exempt by the Sherman Act. The Sherman Act was not [113 Ariz. 397]

Page 643

meant to restrain activities required by the state acting as a sovereign. The Supreme Court stated:

'* * * (I)n view of the (Act's) words and history, it must be taken to be a prohibition of individual and not state action. * * * The state * * * imposed the restraint as an act of government which the Sherman Act did not understake to prohibit. * * *' Parker v. Brown, 317 U.S. 341, 352, 63 S.Ct. 307, 314, 87 L.Ed. 315, 326 (1943).

This position was reinforced by the United States Supreme Court in Goldfarb, supra, as follows:

'The threshold inquiry in determining if an anticompetitive activity is state action of the type the Sherman Act was not meant to proscribe is whether the activity is required by the State acting as a sovereign. (citations omitted) Here we need not inquire further into the state action question because it cannot fairly be said that the State of Virginia through its Supreme Court Rules required the anticompetitive activities of either respondent. Respondents have pointed to no Virginia statute requiring their activities; state law simply does not refer to fees, leaving regulation of the profession to the Virginia Supreme Court; although the Supreme Court's ethical codes mention advisory fee schedules they do not direct either respondent to supply them, or require the type of price floor which arose from respondents' activities. * * *' 95 S.Ct. at 2015.

The regulation of the State Bar by the Supreme Court is an activity of the State of Arizona acting as sovereign and exempt by the very provisions of the Sherman Act. Parker v. Brown, supra; State of New Mexico v. American Petrofina, Inc., 501 F.2d 363 (9th Cir. 1974).

There is, however, another reason why the respondents reliance upon the antitrust provision of the state and federal acts is misplaced, over and above the exemption contained in the Sherman Act. The State Bar of Arizona is an integrated bar, integrated by court rule. Rule 27, Rules of the Supreme Court, 17A A.R.S. Attorneys are officers of the Supreme Court and subject to the regulation of that court, and the legislative branch of government, state or federal, may not interfere with the court in the reasonable and constitutional regulation of the practice of the law. This seems to have been recognized by the Supreme Court in Goldfarb, supra, when it stated:

'* * * The interest of the States in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice, and have historically been 'officers of the courts.' (citations omitted) In holding that certain anti-competitive conduct by lawyers is within the reach of the Sherman Act we intend no diminution of the authority of the State to regulate its professions.' Goldfarb v. Virginia State Bar, supra, 421 U.S. at 792, 95 S.Ct. at 2016, 44 L.Ed.2d at 588.

FIRST AMENDMENT

Respondents urge that DR 2--101(B) should be declared null and void as a violation of the First Amendment. Bigelow v. Virginia, 421 U.S. 809, 95 S.Ct. 2222, 44 L.Ed.2d 600 (1975) and Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). We disagree. Restrictions on professional activity, and in particular advertising, have repeatedly survived constitutional challenge. Williamson v. Lee Optical Co., 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955); Barsky v. Board of Regents, 347 U.S. 442, 74 S.Ct. 650, 98 L.Ed. 829 (1954); Semler v. Oregon State Board of Dental Examiners, 294 U.S. 608, 55 S.Ct. 570, 79 L.Ed. 1086 (1935). The legal profession, like the medical profession, has always prohibited advertising since it is a form of solicitation deemed contrary to the best interests of society. In re Cohen, 261 Mass. 484, 159 N.E. 495 (1928); State ex [113 Ariz. 398]

Page 644

rel. Hunter v. Crocker, 132 Neb. 214...

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10 practice notes
  • Lawyer and law firm web pages as advertising: proposed guidelines.
    • United States
    • Rutgers Computer & Technology Law Journal Vol. 28 Nbr. 2, June 2002
    • June 22, 2002
    ...the advertisement at issue in Bates was comparatively uncontroversial. (53.) Id. at 356. (54.) Id. (55.) Id. at 356. See also In re Bates, 555 P.2d 640, 643,645 (Ariz. 1976). The lawyers further contended that state rule DR 2-101(B) violated their equal protection and due process rights and......
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    • Utah Bar Journal Nbr. 2009, January 2009
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    ...were authorized by the state . . . .'") (internal citation omitted) (interpreting Arkansas state law); In re Bates, 555 P.2d 640, 642 (Ariz. 1976) (applying federal state action immunity under state law); Alpert v. Boise Water Corp., 795 P.2d 298, 303 (Idaho 1990) (......
  • 661 F.2d 1295 (D.C. Cir. 1981), 78-2235, Feldman v. Gardner
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the District of Columbia Circuit
    • July 23, 1981
    ...the argument for what it was a defensive challenge to the validity of the rule, not an original antitrust action. See Matter of Bates, 113 Ariz. 394, 555 P.2d 640, 642 (1976). For a more complete discussion of Bates, see text infra at notes [61] The District Court dismissed Feldman's federa......
  • 429 U.S. 813 (1976), 76-316, Bates v. Arizona State Bar
    • United States
    • Federal Cases United States Supreme Court
    • October 4, 1976
    ...No. 76-316. United States Supreme Court. October 4, 1976 Appeal from the Supreme Court of Arizona. Facts and opinion, Matter of Bates, 113 Ariz. 394, 555 P.2d OPINION In this case probable jurisdiction noted. Contenidos Page 813 429 U.S. 813 (1976) 97 S.Ct. 53, 50 L.Ed.2d 73 John R. BATES ......
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8 cases
  • 661 F.2d 1295 (D.C. Cir. 1981), 78-2235, Feldman v. Gardner
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the District of Columbia Circuit
    • July 23, 1981
    ...the argument for what it was a defensive challenge to the validity of the rule, not an original antitrust action. See Matter of Bates, 113 Ariz. 394, 555 P.2d 640, 642 (1976). For a more complete discussion of Bates, see text infra at notes [61] The District Court dismissed Feldman's federa......
  • 429 U.S. 813 (1976), 76-316, Bates v. Arizona State Bar
    • United States
    • Federal Cases United States Supreme Court
    • October 4, 1976
    ...No. 76-316. United States Supreme Court. October 4, 1976 Appeal from the Supreme Court of Arizona. Facts and opinion, Matter of Bates, 113 Ariz. 394, 555 P.2d OPINION In this case probable jurisdiction noted. Contenidos Page 813 429 U.S. 813 (1976) 97 S.Ct. 53, 50 L.Ed.2d 73 John R. BATES ......
  • 433 U.S. 350 (1977), 76-316, Bates v. State Bar of Arizona
    • United States
    • Federal Cases United States Supreme Court
    • June 27, 1977
    ...since most Page 352 legal services may be performed legally by the citizen for himself. See Faretta v. California, 422 U.S. 806. P. 382. 113 Ariz. 394, 555 P.2d 640, affirmed in part and reversed in BLACKMUN, J., delivered the opinion of the Court, in which BRENNAN, WHITE, MARSHALL, and STE......
  • 555 F.2d 978 (D.C. Cir. 1977), 76-1023, United States v. National Soc. of Professional Engineers
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the District of Columbia Circuit
    • March 14, 1977
    ...fees. Consumers Union v. American Bar Association, 427 F.Supp. 506 (E.D.Va.1976) (three judge court); Bates v. Arizona State Bar, 113 Ariz. 394, 553 P.2d 640 (1976), prob. juris. noted, --- U.S. ----, 97 S.Ct. 53, 50 L.Ed.2d 73 (1976). Apart from potential distinctions between professions, ......
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