Thom, Application of

• Decision Date: 03 July 1973
• Citation: 33 N.Y.2d 609,347 N.Y.S.2d 571
• Parties: , 301 N.E.2d 542 Application of William J. THOM, Appellant, for Approval of the Incorporation of Lambda Legal Defense & Education Fund, Inc.
• Court: New York Court of Appeals Court of Appeals

Page 571

347 N.Y.S.2d 571

33 N.Y.2d 609, 301 N.E.2d 542

Application of William J. THOM, Appellant, for Approval of

the Incorporation of Lambda Legal Defense &

Education Fund, Inc.

Court of Appeals of New York.

July 3, 1973.

Victor Rabinowitz and Herbert Jordan, New York City, for appellant.

Louis J. Lefkowitz, Atty. Gen. (Daniel M. Cohen and Samuel A. Hirshowitz, New York City, of counsel), in his statutory capacity under section 71 of the Executive Law.

PER CURIAM.

The order of the Appellate Division, 40 A.D.2d 787, 337 N.Y.S.2d 588 should be reversed and the matter remitted to that court for reconsideration of the application. The determination of that court was unsupportable in finding that the Lambda Corporation was neither benevolent nor charitable in ostensible purpose and that there was no demonstrated need for the corporation. We do not agree, however, that the Appellate Division is without discretion in considering applications for approval under section 495 of the Judiciary Law, Consol.Laws, c. 30 and sections 608.1--608.9 of the Appellate Division Rules (22 NYCRR part 608). There may be and will undoubtedly arise in the future many applications on behalf of corporations which will not merit approval because of factors related to the responsibility of the sponsors, the method of financing, the scope of activities proposed, and still others not predictable or definable in advance, any or all of which may affect the public interest. Moreover, section 608.2 setting forth the requirements and standards for applications would be senseless unless the several matters required to be included in the application were not subject to discretionary review. Nor do we find any lack of standards, if standards be required, implied or expressed, in the variously detailed rules.

BURKE, Judge (concurring).

The appellant seeks to reverse an order of the Appellate Division which denied his application for approval of 'the * * * existence * * * and incorporation' of the Lambda Legal Defense & Education Fund, Inc. (hereafter Lambda) as a legal assistance corporation and dismissed the petition.

Section 495 of the Judiciary Law ¹ prohibits the practice of law in New York by corporations or voluntary associations, subject to certain limited exceptions set forth in subdivision 5 of section 495 which provides, in relevant part: 'This section shall not apply * * * to organizations organized for benevolent or charitable purposes, or for the purpose of assisting persons without means in the pursuit of any civil remedy, whose existence, organization or incorporation May be approved by the appellate division of the supreme court of the department in which the principal office of such corporation or voluntary association may be located.' (Emphasis added.)

In furtherance of the authority thus vested in the Appellate Divisions by subdivision 5 to approve or disapprove the practice of law by 'benevolent or charitable' organizations or by organizations rendering legal services to 'persons without means', the First Department promulgated part 608 of its Rules (22 NYCRR part 608, hereafter Rule 608) which sets forth the procedural rules for application and practice pursuant to section 495 of the Judiciary Law. Actually, Rule 608 is a codification of the principles set forth in Matter of Community Action for Legal Servs., 26 A.D.2d 354, 274 N.Y.S.2d 779 (hereafter CALS), wherein, noting the Appellate Division's concern for the protection of the public from the potential abuses of the corporate practice of law, minimal standards were called for which would insure that, in dealing with authorized corporate practitioners, 'the public will receive the best available legal services in the same way as those who retain their own private lawyers, with effective recourse to the Court for gross professional failure'. Among the safeguards suggested in CALS were the requirements that lay control over the operation of the legal assistance corporation be held to a minimum, and that the lawyer-employee of the corporation "maintain full professional and direct responsibility to his clients for the information and services so received" thus insuring the independence and inviolability of the lawyer-client relationship (26 A.D.2d, at pp. 361--362, 274 N.Y.S.2d, at p. 788).

The petition gave to Lambda, which had previously been approved by the Commissioner of Education as a not-for-profit corporation, the following corporate purpose: 'The Corporation is organized to seek, through the legal process, to insure equal protection of the laws and the protection of civil rights of homosexuals.' In the petition, which was modeled upon the previously approved application of the Puerto Rican Legal Defense and Education Fund, Inc., Lambda proposed, among other things '(a) to initiate or join in judicial and administrative proceedings whenever legal rights and interests of significant numbers of homosexuals may be affected; (b) to provide to homosexuals information which will broaden their awareness of their legal rights and obligations; (c) to inform the legal community and the public of the goals, methods and accomplishments of the Corporation'. Additionally, it was proposed that Lambda would provide legal services without charge 'in those situations which give rise to legal issues having a substantial effect on the legal rights of homosexuals'. It is not disputed that Lambda's petition complied in all respects with the requirements of Rule 608, pursuant to which other legal assistance organizations have been authorized to practice law.

Despite the compliance of Lambda's petition with Rule 608, and the recommendation of various bar associations that Lambda's application be approved, ² the Appellate Division denied and dismissed the application, declaring: 'The stated purposes are on their face neither benevolent nor charitable * * * nor, in any event, is there a demonstrated need for this corporation. It is not shown that the private sector of the profession is not available to serve this clientele, nor that, as to indigents, the existing legal assistance corporations are not available. A supplemental affidavit does indicate a lack of desire on the part of some attorneys who work Pro bono publico to take the cases of homosexuals, but this appears to be no more than a matter of taste, and it is not established that lawyers are completely lacking. The averment does not show that the persons concerned will be without legal services unless this corporation is approved for the purpose.' The court went on to conclude: 'it seems to us that we should not put our imprimatur upon any corporation which seeks approval to practice law for no more reason than that it claims to represent a minority.'

For reasons set forth hereinafter, we reverse.

The threshold issue on this appeal concerns the validity of the Appellate Division's determination that Lambda did not qualify for section 495 (subd. 5) approval since its stated purpose--to protect the legal rights of homosexuals, a minority--was 'neither benevolent nor charitable'. Petitioner contends, with justification, that the disapproval of Lambda's application on the ground that its purpose was not charitable or benevolent was inconsistent with the Appellate Division's prior approval of the Puerto Rican Legal Defense and Education Fund, Inc. (PRLDEF), and that the equal protection clause thus requires consideration of Lambda as a charitable organization.

Section 495 (subd. 5) excepts from the proscription against the corporate practice of law organizations organized 'for benevolent or charitable purposes' Or 'for the purpose of assisting persons without means'. In February of 1972, the Appellate Division approved the section 495 (subd. 5) application of the PRLDEF, which set forth the following as its corporate purpose: 'To initiate or join in judicial and administrative proceedings affecting legal rights and interests of substantial numbers of Puerto Ricans and to conduct related informational and research programs'. The PRLDEF petition did not purport to limit its services to indigents; it must, therefore, be concluded that its application was approved as being that of an organization organized for 'benevolent or charitable' purposes--that the Appellate Division considered the rendering of free legal services in furtherance of the rights of a minority to be a charitable or benevolent purpose. As the petitioner points out, the characterization of such free legal services as charitable finds support in decisional law (see Matter of Green v. Javits, 7 Misc.2d 312, 166 N.Y.S.2d 198, affd. 4 A.D.2d 869, 167 N.Y.S.2d 431; Dohrenwend v. Board of Educ., Sup., 227 N.Y.S.2d 505).

The stated purpose of the Lambda petition was substantially identical to that of the Puerto Rican Defense Fund; indeed the petitioner admits having modeled the Lambda petition on the PRLDEF application. There is thus no justification for a finding that one was motivated by charitable goals while the other was not. Accordingly, the Appellate Division erred in finding the purpose of Lambda neither 'benevolent nor charitable'.

Upon concluding that Lambda was a charitable organization, a more troublesome issue arises--whether in the case of a properly submitted application, which fully complies with Rule 608 in a case such as this, there remains in the Appellate Division any discretion as to the approval or disapproval thereof. We think not.

The petitioner contends that Lambda's proposed activities are protected by the First Amendment, and that under the United States Supreme Court's decisions the Appellate Division may not restrict or prohibit such activities (citing N.A.A.C.P. v. Button, 371 U.S. 415, 83 S.Ct. 328, 9 L.Ed.2d 405; Railroad Trainmen v. Virginia Bar, 377 U.S. 1, 84 S.Ct. 1113, 12 L.Ed.2d 89; Mine Workers v. Illinois Bar Ass'n, 389 U.S. 217, 88 S.Ct. 353, 19 L.Ed.2d 426; United Transp. Union v. Michigan Bar, 401 U.S. 576, 91...