Sharood v. Hatfield

• Decision Date: 26 June 1973
• Docket Number: No. 44439,44439
• Citation: 296 Minn. 416,210 N.W.2d 275
• Parties: R. Paul SHAROOD, et al., Petitioners, v. Rolland F. HATFIELD, State Auditor of the State of Minnesota, et al., Respondents.
• Court: Minnesota Supreme Court

Page 275

210 N.W.2d 275

296 Minn. 416

R. Paul SHAROOD, et al., Petitioners, v. Rolland F. HATFIELD, State Auditor of the State of Minnesota, et al., Respondents.

No. 44439.

Supreme Court of Minnesota.

June 26, 1973.

Rehearing Denied Sept. 20, 1973.

Syllabus by the Court

1. Determination by the court as to the constitutionality of L.1973, c. 638, in so far as it attempts to regulate the practice of law presents a justiciable issue determinable by an original proceeding commenced in this court.

2. The power to regulate the practice of law rests in the judiciary.

3. L.1973, c. 638, in so far as it purports to regulate the practice of law is an impermissible interference with the court's power to regulate the practice of law and as such is held to be unconstitutional.

Heard and considered en banc.

Richard E. Kyle and Leonard J. Keyes, and Briggs & Morgan, St. Paul, for petitioners.

Warren Spannaus, Atty. Gen., Jonathan H. Morgan, Sol. Gen., Peter W. Sipkins, Asst. Sol. Gen., and Kenneth E. Raschke, Jr., Special Asst. Atty. Gen., St. Paul, for respondents.

Bruce Campbell, Senate Counsel, Peter S. Wattson, Asst. Attys. Gen., St. Paul, amicus curiae.

KNUTSON, Chief Justice.

This is an original proceeding commenced in this court challenging the constitutionality of portions of L.1973, c. 638, in so far as they affect the right of this court to regulate the practice of law. Petitioners are R. Paul Sharood, an attorney at law duly licensed to practice in the State of Minnesota and a member of the Minnesota State Bar Association; Robert M. Frisbee, an attorney at law duly licensed to practice law in the State of Minnesota who is not a member of the Minnesota State Bar Association; and the Minnesota State Bar Association, an unincorporated voluntary association. The petitioners bring this proceeding for themselves and all attorneys at law of the State of Minnesota. Respondents are Rolland F. Hatfield, state auditor; Val Bjornson, state treasurer; and Richard L. Brubacher, commissioner of administration of the state.

We issued our order on June 8, 1973, to show cause, returnable on June 19, 1973, why the relief prayed for in the petition, that we judicially declare unconstitutional and void the provisions of L.1973, c. 638, that are in conflict with the right and duty of this court to regulate the practice of law, should not be granted.

At the 1973 session of the Minnesota legislature, c. 638 was adopted and became law on May 24, 1973. It is a comprehensive act seeking to regulate the examination of all professional groups in the state, including those regulating the practice of law.

In order to fully understand the impact of this act upon the court's right to control and regulate the practice of law, it is necessary to take judicial notice of our own past orders and records. Prior to 1960, the court, in order to finance the admission of attorneys to the practice of law and disciplinary proceedings, received its funds in part from legislative appropriations that came from tax sources. On October 5, 1961, this court, deeming it inappropriate to police our profession by tax money, promulgated a rule under which all attorneys were required to pay an annual registration fee of $7, which money was to be used for the purpose of regulating the practice of law. The preamble to this order read:

'WHEREAS, Minnesota does not have an integrated bar but does have an active and effective voluntary bar association in which a large percentage of all active attorneys at law practicing in this state are members, and

'WHEREAS, In the past the expenses of conducting examinations for admissions to the practice of law and the expenses incident to conducting disciplinary proceedings have been paid in part by a biennial appropriation of the legislature out of the general tax sources of the state; in part by a fee exacted from applicants for admission to the bar; and in part by contributions received from the state bar association, and

'WHEREAS, It is improper to continue accepting money for these purposes either from the general tax sources of the state or from contributions of a voluntary bar association that does not include as members all practicing attorneys of the state as these obligations ought of right to be borne by all members of the bar, whether associated with the state bar association or not, and

'WHEREAS, There is now no current list of those who are authorized to practice law in this state;

'NOW THEREFORE, By virtue of and under the inherent power of this court to regulate the practice of law in this state, these rules are adopted in order that there may be on file annually a current list of all those authorized to practice law in this state and in order that the expenses of conducting examinations for admissions to the bar and conducting disciplinary proceedings may be borne by all attorneys at law authorized to practice law in this state.'

Originally, the money collected from the registration fee paid by attorneys was deposited in a private bank for the reason that there was no appropriation of it for the use of the court which would have enabled the court to pay the expenses for which it was intended if it were deposited with the state treasurer. By L.1963, c. 718, Minn.St. 481.01 was amended so as to permit the money so collected to be deposited with the state treasurer under a continuing appropriation. The italicized language was added to § 481.01 as it had formerly existed:

'* * * Such fees, And any other fees which may be received Pursuant to such rules as the supreme court may promulgate governing the practice of law, shall be paid to the state treasurer and shall constitute a special fund In the state treasury. The moneys in such fund are appropriated Annually to the supreme court for the payment of compensation And expenses of the members of the board of law examiners And for otherwise regulating the practice of law. The moneys in such fund shall never cancel. Payments therefrom shall be made by the state treasurer, upon warrants of the state auditor issued upon vouchers signed by one of the justices of the supreme court.'

The money collected as registration fees from attorneys has since been deposited with the state treasurer under the above assurance that it would be kept in a special fund and would never cancel.

Ultimately it was determined that $7 per year was insufficient to adequately supervise and regulate the practice of law, so at the request of many leaders of the bar and the Minnesota Bar Association, in 1970 a State Board of Professional Responsibility was established by order of this court with a full-time director and such assistants as he required in order that a more adequate supervision over attorneys could be had. The same year, the registration fee of attorneys had been increased from $7 to $25 per annum, with certain exceptions not here material. All amounts in excess of $7, under the order of this court were to be 'allocated and used exclusively for regulating the practice of law according to the rules of professional conduct adopted or promulgated by the supreme court.'

Under portions of c. 638 the action taken by the supreme court to raise funds from registration of attorneys to regulate the practice of law is now threatened by diverting money contributed by members of the legal profession from the special fund to the general revenue fund of the state without an appropriation of a like amount to the supreme court for the purpose for which the money was raised. This money is not tax money. It is held in trust by the supreme court for the purposes of which it has been contributed by attorneys.

By virtue of registration of all attorneys, for the first time we now know who are attorneys authorized to practice law. In In re Petition for Integration of Bar of Minnesota, 216 Minn. 195, 197, 12 N.W.2d 515, 517 (1943), we pointed out that the 'exact number of attorneys in the state is uncertain.' It remained so until the annual registration of lawyers became effective. By the latest available figures, there are 6,718 attorneys registered under our rule. Of this, 1,834 pay only a $7 registration fee as retired lawyers and judges, out-of-state lawyers, and newly admitted lawyers (not more than 3 years' practice). There are 4,884 attorneys paying the $25 fee. While, as we have stated above, the Minnesota State Bar Association is a voluntary association, it has at the present time 5,085 members, so it is apparent that a very high percentage of the active attorneys belong to the association.

1. Respondents contend that this proceeding is prematurely brought because there has as yet been no overt act to interfere with the power of the court to regulate the practice of law. In other words, they claim there is at this time no justiciable issue that gives the court authority to declare what may or may not be done in the future.

To pass on this contention it is necessary to examine the impact of c. 638 on the court's inherent power to regulate the practice of law:

§ 59 of said chapter purports to delete the provision of Minn. St. 481.01 providing that the moneys paid into a special fund of the state treasury from registration fees and other fees collected pursuant to court order shall remain inviolate, and provides that such fees shall be credited to the general revenue fund with any unexpended balance in such special fund.

§ 59 also provides that expenses of administering the provisions of §§ 481.01 to 481.07 shall be paid from legislative appropriations made to the State Board of Law Examiners upon vouchers signed by a member of this court. No such appropriation has yet been made.

§ 60 of said c. 638 contains provisions in conflict with those of the present rules on professional responsibility. It purports to change provisions of the present rules concerning the number of members on the State Board of Professional Responsibility, the compensation of members, the terms of office...