Shaulis v. Pennsylvania State Ethics Com'n

• Decision Date: 01 October 2003
• Citation: 833 A.2d 123,574 Pa. 680
• Parties: Kathleen K. SHAULIS, Appellee v. PENNSYLVANIA STATE ETHICS COMMISSION, Appellant, The Commonwealth Bar Association, Intervenor.
• Court: Pennsylvania Supreme Court

833 A.2d 123

574 Pa. 680

Kathleen K. SHAULIS, Appellee v. PENNSYLVANIA STATE ETHICS COMMISSION, Appellant, The Commonwealth Bar Association, Intervenor.

Supreme Court of Pennsylvania.

Submitted October 10, 2000.

Decided October 1, 2003.

Robin M. Hittie, for Pennsylvania State Ethics Com'n.

Kathleen K. Shaulis, for Kathleen K. Shaulis, Appellee.

Patricia Krise Burket, Harrisburg, for the Com. Bar Ass'n, Intervenor.

Before: CAPPY, C.J., and CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and LAMB, JJ.

OPINION

Justice NEWMAN.

The Pennsylvania State Ethics Commission (Commission) appeals from an Order of the Commonwealth Court, which determined that Section 1103(g) of the Public Official and Employee Ethics Act (Ethics Act)¹ was unconstitutional as applied to Kathleen K. Shaulis, Esquire (Shaulis) because it violated Article V, Section 10(c) of the Pennsylvania Constitution, which provides that this Court has the exclusive authority to regulate the conduct of an attorney insofar as it constitutes the practice of law.² For the reasons discussed herein, we affirm the Order of the Commonwealth Court.

FACTS AND PROCEDURAL HISTORY

On January 11, 1999, Shaulis was employed as a Senior Assistant Counsel (Attorney III) with the Office of the Chief Counsel to the Pennsylvania Department of Revenue. On that date, eleven days before her scheduled retirement, the Commission received a letter from Shaulis requesting that the Commission delineate the restrictions imposed by the Ethics Act when attorneys retire from the Department of Revenue. Specifically, Shaulis questioned whether Section 1103(g) of the Ethics Act barred her from publishing articles or books on Pennsylvania state taxes during the first year after her retirement. In the letter, Shaulis articulated her understanding that it is this Court, not the General Assembly, which can issue rules regulating the manner in which an attorney practices law. Shaulis stated that she believed that the Ethics Act could not be applied to restrict an attorney's conduct to the extent that it would constitute the practice of law. The next day, the Commission advised Shaulis that it had received her letter and would issue an Advice of Counsel in response to her query.³

On January 25, 1999, during the pendency of Shaulis' request for a determination by the Commission, this Court issued P.J.S. v. State Ethics Commission, 555 Pa. 149, 723 A.2d 174 (1999), which, the Commission believed, set forth the standard to be applied when determining the extent of its authority to regulate the activities of its former in-house attorneys. In P.J.S., the City Solicitor for the City of Erie sought to circumvent a pending investigation into his activities by asserting his status as an attorney to prevent the Commission's inquiry. We declined to allow him to do so and explained that:

The exclusive jurisdiction of this Court is infringed when another branch of government attempts to regulate the conduct of attorneys merely because of their status as attorneys. However, the jurisdiction of this Court is not infringed when a regulation aimed at conduct is applied to all persons, and some of those persons happen to be attorneys.

Id. at 178. On January 28, 1999, the Commission notified Shaulis that, instead of issuing an Advice of Counsel, it would issue an Opinion due to the potential impact of the decision of this Court in P.J.S. On January 30, 1999, Shaulis responded to the Commission's letter stating her belief that P.J.S. did not have any effect on her requested ruling.

In a letter dated February 4, 1999, the Commission advised Shaulis that it had scheduled a public meeting⁴ for February 26, 1999, to consider her question. However, on February 19, 1999, the Commission cancelled the meeting and told her that she could author materials concerning Pennsylvania state taxes. The Commission expressed its opinion in Advice of Counsel No. 99-511 as follows:

In applying Section 1103(g) to the narrow question which you have posed, specifically whether Section 1103(g) would prohibit you from writing and publishing articles/books on the subject of Pennsylvania State taxes, you are advised that since factually, such activities would not involve representation before your former governmental body, the Department of Revenue, they would not be prohibited by Section 1103(g) of the [Ethics Act].

In light of your comment regarding the practice of law, it is noted that the Pennsylvania Supreme Court's decision in P.J.S. ... may have a broadening effect insofar as the application of the [Ethics Act] to attorneys is concerned. While not material in this particular advisory, the P.J.S. decision may be a factor in considering other activities.

Advice of Counsel No. 99-511, page 3.

By letter dated March 1, 1999, Shaulis asked the Commission to clarify Advice of Counsel No. 99-511 to explain the restrictions that Section 1103(g) imposes upon an attorney who is entering private practice following retirement from the Department of Revenue.⁵ Specifically, Shaulis posed five additional questions:

(1) could she, as an attorney, represent a client before the Board of Finance and Revenue;

(2) could she, as an attorney, represent a client before the Board of Appeals of the Department of Revenue;

(3) could she, as an attorney, participate in negotiations on behalf of a client with respect to a case docketed at the Commonwealth Court, in which the Department of Revenue is participating;

(4) could she participate in a task force to assist in the drafting of proposed tax legislation; and

(5) could she, as any other attorney might (or as a private citizen on her own behalf), ask a representative of the Department of Revenue or the Chief Counsel for the Department for an interpretation of a tax matter?

On March 2, 1999, the Commission informed Shaulis that it had received her request and would issue an Opinion.

On March 18, 1999, following a public meeting, the Commission issued Opinion No. 99-003. The Commission first noted that, based on Pennsylvania Public Utility Commission Bar Association v. Thornburgh, 62 Pa.Cmwlth. 88, 434 A.2d 1327 (1981), affirmed per curiam, 498 Pa. 589, 450 A.2d 613 (1982), the courts of this Commonwealth had consistently held that the predecessors to Section 1103(g) of the Ethics Act could not be read to restrict the conduct of a former public employee insofar as it constituted the practice of law. However, the Commission advised Shaulis that, notwithstanding Thornburgh, it interpreted P.J.S. as setting forth a new standard that permitted some regulation of the conduct of former government attorneys, provided that the regulation did not target attorneys exclusively, but rather included attorneys as part of a broader class. The Commission determined that Section 1103(g) was neither limited to former government employees who were attorneys nor pertained solely to legal representation. Accordingly, and based on its understanding of P.J.S., the Commission found that Section 1103(g) was a valid regulation that did not violate the exclusive jurisdiction of this Court to regulate the conduct of attorneys and the practice of law. Concerning the substantive questions contained in the communication, the Commission ruled that Shaulis could represent clients before the Board of Finance and Revenue (because that entity is not part of the Department of Revenue, Shaulis' former employer) and could assist in the drafting of tax legislation (because such activity does not constitute representation). However, the Commission concluded that Shaulis: (1) could not represent clients before the Board of Appeals of the Department of Revenue; (2) could not participate in negotiations where the Department of Revenue would be participating; and (3) could not, in her capacity as an attorney representing a client, request an interpretation of a tax matter from the Department of Revenue. Opinion No. 99-003, pages 7-10.

Shaulis filed a Petition for Review with the Commonwealth Court, wherein she argued that the foregoing limitations on her conduct violated the exclusive jurisdiction of this Court to regulate the practice of law. The Commission responded with a Motion to Quash, contending that its Opinion was an advisory opinion, not subject to appeal, because it only addressed questions regarding the proposed future conduct of Shaulis. Shaulis filed a Motion to Strike portions of the brief of the Commission that referred to the Lobbying Disclosure Act, 65 Pa.C.S. §§ 1301, et seq., or the matter of Gmerek v. State Ethics Commission,⁶ 751 A.2d 1241 (Pa.Cmwlth.2000), affirmed by an evenly divided Court, 569 Pa. 579, 807 A.2d 812 (2002), then pending before the Commonwealth Court. In her Motion to Strike, Shaulis asserted that the Commission was unfairly attempting to tie her case to Gmerek.

In a published, en banc Opinion, the Commonwealth Court denied the Commission's Motion to Quash, determining that the decision limiting the professional activities of Shaulis constituted an appealable adjudication. Shaulis v. State Ethics Commission, 739 A.2d 1091 (Pa.Cmwlth. 1999) (en banc). The court reasoned that if Shaulis "intentionally violate[d] the Commission's opinion and represent[ed] clients in a legal capacity before the Department of Revenue [she] would surely invite an ethical investigation by the Commission...." Id. at 1099-1100. The Commonwealth Court also granted Shaulis' Motion to Strike references in the brief of the Commission to the Lobbying Disclosure Act and Gmerek, reasoning that the issue in Gmerek was not relevant to the narrow issue under review in the present case.

On the merits, the Commonwealth Court reversed the Opinion of the Commission, finding that Section 1103(g) of the Ethics Act, as applied to Shaulis, violated Article V, Section 10(c) of the Pennsylvania Constitution. The Commonwealth Court distinguished P.J.S. on the basis that P.J.S. involved an attorney who was employed as Erie City Solicitor at the...