LawHQ, LLC v. Curtin
| Decision Date | 20 January 2021 |
| Docket Number | No. 1:20-00033-MSM-PAS,1:20-00033-MSM-PAS |
| Court | U.S. District Court — District of Rhode Island |
| Parties | LAWHQ, LLC, and Thomas Alford, Plaintiffs, v. David D. CURTIN, in his official capacity as Chief Disciplinary Counsel for the Disciplinary Board of the Supreme Court of Rhode Island, Defendant. |
Gregory Beck, Greg Beck Law Office, Washington, DC, Rebecca Evans, Pro Hac Vice, LawHQ, LLC, Salt Lake City, UT, Matthew L. Fabisch, Fabisch Law, LLC, Brockton, MA, for Plaintiffs.
Andrea M. Shea, Sean H. Lyness, Office of the Attorney General, Providence, RI, for Defendant.
This lawsuit is part of a nationwide litigation effort undertaken by LawHQ, LLC, and its founder, Thomas Alvord. LawHQ is a Utah limited liability corporation practicing law, or at least allowed to practice law, in nearly all 50 states under its trade name "LawHQ." That trade name is at the core of the dispute before the Court.
R.I. Sup. Ct. Rules, Art. V, Rules of Prof. Conduct, Rule 7.5(a). The Rule, if enforced against the plaintiffs, would preclude LawHQ from practicing under its trade name in Rhode Island. The plaintiffs plan to extend their nationwide practice to Rhode Island but maintain that the prospect of enforcement of Rule 7.5 precludes them from doing so. They have therefore sued for injunctive relief against the person who enforces the Rules of Professional Conduct: David D. Curtin, Chief Disciplinary Counsel. Mr. Curtin has brought a Motion to Dismiss (ECF No. 11) pursuant to Fed. R. Civ. P. 12(b)(1). By this Memorandum and Order, and for the reasons below, the Court DENIES that Motion.
The plaintiffs claim that Rule 7.5 violates their First Amendment rights by unconstitutionally restricting their commercial speech. Jurisdiction is therefore appropriate under 28 U.S.C.A. §§ 1331 and 1343(a)(3). The plaintiffs have demonstrated a clear First Amendment interest. In Bates v. State Bar of Arizona , the Supreme Court held that lawyers and law firms have a protected First Amendment interest in commercial speech. 433 U.S. 350, 383, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977).1 Here plaintiffs allege that Rule 7.5(a)2 of the Rhode Island Rules of Professional Conduct is "more extensive than is necessary to serve the state's claimed interest in preventing misleading advertising" and is therefore unconstitutional on its face, in violation of the First Amendment to the United States Constitution. (ECF No. 1 ¶13). The defendant, as "the party seeking to uphold a restriction on commercial speech [will carry] the burden of justifying it" when the merits are addressed by the court. Thompson , 535 U.S. at 373, 122 S.Ct. 1497 (citing Edenfield v. Fane , 507 U.S. 761, 770, 113 S.Ct. 1792, 123 L.Ed.2d 543 (1993) ) (internal citations omitted).
There are two bases asserted by the defendant in the Motion to Dismiss. The first is jurisdictional, invoking the twin justiciability doctrines of "standing" and "ripeness," both elements of the requirement to federal court jurisdiction arising from Article III of the United States Constitution. Reddy v. Foster , 845 F.3d 493, 499 (1st Cir. 2017). The second is Mr. Curtin's demurrer that he is not the appropriate person against whom the lawsuit should proceed.
While the merits are not before the court,3 and the Motion to Dismiss is purely procedural, a brief discussion of Rule 7.5 is instructive. According to the Complaint, the origin of the Rule was the American Bar Association's ("ABA") adopting it in the 1920s to address a fear that trade names would "disguise the practitioner or his partnership." (ECF No. 1 at 3) (quoting Report of the Special Committee , 52 ABA Rep. 495, 496 (1928)). The Rule then supported Canon 33 which barred "false, misleading, assumed or trade name[s]." When "select[ing the] use of a firm name, no false, misleading, assumed or trade name should be used." Id. at 4 (quoting Cannons of Prof'l Ethics , Canon 33 (1937)).
For many years, Rhode Island omitted the trade name ban from its Rules. R.I. Sup. Ct. Rules, Art. V, Rules of Prof. Conduct, Rule 7.5(a) (2007). A comment to the rule explained that "a trade name such as the ‘ABC Legal Clinic’ " was "acceptable" under the rule "so long as it is not misleading." Id. The "use of such names to designate law firms," the comment noted, "has proven a useful means of identification." Id. In 2015, however, the prohibition was re-adopted and remains in effect today. Rhode Island Rules of Prof'l Conduct 7.5(a) & cmt. (2015). In 1983, the ABA eliminated many "lawyer advertising restrictions," see ABA Formal Op. 84-351 (1984), while adding a comment to Rule 7.5 explaining that a law firm may use a trade name "so long as it is not misleading." (ECF No. 1, ¶¶26, 27). In 2019, the ABA eliminated Rule 7.5 entirely. ABA Standing Committee on Ethics and Prof'l Responsibility, Lawyer Advertising Rules for the 21st Century 1 (2019), http://bit.ly.sw.library.ntpu.edu.tw:81/2NqQp54.
LawHQ maintains it is a national law firm, specializing in "protecting consumers from the proliferation of telephone spam under the Telephone Consumer Protection Act." (ECF No. 1, ¶4). Following the ABA elimination of the ban, it mounted a campaign against the enforcement of the trade name ban in those states that had not voluntarily dropped it. At this writing, it appears that Rhode Island will soon stand alone in maintaining Rule 7.5.4
LawHQ employs lawyers admitted outside Utah to practice under its firm name. It contends that it "intends" to do precisely that in Rhode Island but has postponed doing that because of its fear of prosecution. Mr. Curtin, for his part, contends that an "intention" is not sufficient and that LawHQ's failure to take such concrete steps as hiring a Rhode Island lawyer and renting office space deprives it of standing to press the lawsuit and makes its claim "not ripe" for adjudication. (ECF No. 11.)
Standing and ripeness are related doctrines. Project Veritas Action Fund v. Conley , 270 F. Supp. 3d 337, 340 (D. Mass. 2017). Both are essential components of subject-matter jurisdiction. Reddy , 845 F.3d at 500. Both doctrines are intended to keep the courts out of hypothetical controversies where injury may be speculative and unlikely.
Much as standing doctrine seeks to keep federal courts out of disputes involving conjectural or hypothetical injuries, the Supreme Court has reinforced that ripeness doctrine seeks to prevent the adjudication of claims relating to ‘contingent future events that may not occur as anticipated, or indeed may not occur at all.’
Id. at 500-501, quoting Texas v. United States , 523 U.S. 296, 300, 118 S.Ct. 1257, 140 L.Ed.2d 406 (1998). As the First Circuit has explained, "standing" focuses on who may bring an action, while "ripeness" looks to when the action may be brought. Rhode Island Assn. of Realtors, Inc. v. Whitehouse , 199 F.3d 26, 33 (1st Cir. 1999).
In order "[t]o establish ... standing, a plaintiff must satisfy three elements: ‘a concrete and particularized injury in fact, a causal connection that permits tracing the claimed injury to the defendant's actions, and a likelihood that prevailing in the action will afford some redress for the injury.’ " Franklin Cal. Tax-Free Trust v. Puerto Rico , 85 F. Supp. 3d 577, 593-94 (D.P.R. 2015) (quoting Weaver's Cove Energy, LLC v. R.I. Coastal Res. Mgmt. Council , 589 F.3d 458, 467 (1st Cir. 2009) ). Two of those requirements – a causal connection and redress if successful – cannot be disputed here: if the plaintiffs have suffered an injury by being precluded from practicing law in Rhode Island, it would be because of the enforcement of Rule 7.5. And equally certain is the fact that the jettisoning of Rule 7.5 would cure that injury. The problem for the plaintiffs here is the first criterion: whether they have suffered an injury that is concrete enough to support an action for declaratory and injunctive relief.
The "concrete" injury element is met only if it has already happened, or if there is an adequate threat of an actual or imminent injury. A.C. v. Raimondo , No. 18-645-WES, 494 F.Supp.3d 170, 183–84 (D.R.I. Oct. 13, 2020) (citing Dantzler, Inc. v. Empresas Berrios Inventory & Operations, Inc. , 958 F.3d 38, 47 (1st Cir. 2020) ). In a pre-enforcement case, as this is, that credible fear of prosecution is where the doctrines of "standing" and "ripeness" overlap, the plaintiff must satisfy each doctrine. If there is no credible fear of prosecution, the plaintiff lacks the likelihood of injury that would give it standing. And if fear of prosecution is not reasonable, the lawsuit may be premature. Id. In this Circuit a court is to presume the threat of prosecution is credible, absent compelling evidence to the contrary. Whitehouse , 199 F.3d at 31. The bar to show a credible threat of prosecution is "extremely low." Mangual v. Rotger-Sabat , 317 F.3d 45, 57 (1st Cir. 2003). While the plaintiff has the burden of persuasion in a pre-enforcement lawsuit, Blum v. Holder , 744 F.3d 790, 795 (1st Cir. 2014), all reasonable inferences are drawn in his favor when ruling on a motion to dismiss.
To show standing, the plaintiffs need not show that they have already been...
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