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Schoenefeld v. Schneiderman

United States Court of Appeals, Second Circuit

April 22, 2016

EKATERINA SCHOENEFELD, Plaintiff-Appellee,
v.
ERIC T. SCHNEIDERMAN, in his official capacity as Attorney General of the State of New York; ALL JUSTICES OF NEW YORK SUPREME COURT, APPELLATE DIVISION, THIRD JUDICIAL DEPARTMENT; ROBERT D. MAYBERGER, in his official capacity as Clerk of New York Supreme Court, Appellate Division, Third Judicial Department; JOHN G. RUSK, Chairman of the Committee on Professional Standards (" COPS" ), Defendants-Appellants, STATE OF NEW YORK; NEW YORK SUPREME COURT, APPELLATE DIVISION, THIRD JUDICIAL DEPARTMENT; COMMITTEE ON PROFESSIONAL STANDARDS OF NEW YORK SUPREME COURT, APPELLATE DIVISION, THIRD JUDICIAL DEPARTMENT AND ITS MEMBERS, Defendants

         Argued, June 4, 2015

         As Amended April 25, 2016.

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[Copyrighted Material Omitted]

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         Appeal from a judgment of the United States District Court for the Northern District of New York (Kahn, J.) declaring unconstitutional, under the Privileges and Immunities Clause, a New York law requiring nonresident attorneys to maintain an " office for the transaction of law business" within New York State in order to practice law in that state's courts. N.Y. Judiciary Law § 470; see U.S. Const. art. IV, § 2. In response to a certified question from this court, the New York Court of Appeals has clarified that § 470 cannot be satisfied by anything less than a physical office, a decision that does not allow us to avoid deciding plaintiff's constitutional challenge. We here conclude that § 470 does not violate the Privileges and Immunities Clause because it was enacted not for a protectionist purpose to favor New York resident attorneys but, rather, to provide a means whereby nonresidents could establish a physical presence in the state akin to that of residents, thereby resolving a service concern while allowing nonresidents to practice law in the state's courts.

         EKATERINA SCHOENEFELD, Schoenefeld Law Firm LLC, Princeton, New Jersey, Pro se.

         LAURA ETLINGER, Assistant Solicitor General (Barbara D. Underwood, Solicitor General; Andrea Oser, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, Albany, New York, for Defendants-Appellants.

         David B. Rubin, Esq., Metuchen, New Jersey, for Amicus Curiae The New Jersey State Bar Association, in support of Plaintiff-Appellee.

         Leah M. Nicholls, Brian Wolfman, Institute for Public Representation, Washington, D.C., for Amici Curiae New York-Licensed Nonresident Attorneys, in support of Plaintiff-Appellee.

         Before: RAGGI, HALL, CARNEY, Circuit Judges. Judge HALL dissents in a separate opinion.

          OPINION

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          Reena Raggi, Circuit Judge

         On this appeal, we must decide whether New York violates the Constitution's Privileges and Immunities Clause, see U.S. Const. art. IV, § 2, by requiring nonresident members of its bar to maintain a physical " office for the transaction of law business" within the state, when resident attorneys are not required to maintain offices distinct from their homes, N.Y. Judiciary Law § 470. Having now received the New York Court of Appeals' response to our certified question as to the " minimum requirements necessary to satisfy" § 470's office mandate, see Schoenefeld v. New York, 748 F.3d 464 (2d Cir. 2014); Schoenefeld v. State, 25 N.Y.3d 22, 6 N.Y.S.3d 221, 29 N.E.3d 230 (2015) (holding § 470 to require physical office), we conclude that § 470 does not violate the Privileges and Immunities Clause because it was not enacted for the protectionist purpose of favoring New York residents in their ability to practice law. To the contrary, the statute was enacted to ensure that nonresident members of the New York bar could practice in the state by providing a means, i.e., a New York office, for them to establish a physical presence in the state on a par with that of resident attorneys, thereby eliminating a service-of-process concern. We identify no protectionist intent in that action. Indeed, it is Schoenefeld who, in seeking to practice law in New York without a physical presence in the state, is looking to be treated differently from, not the same as, New York resident attorneys. Such differential treatment is not required by the Privileges and Immunities Clause. Accordingly, we reverse the judgment of the United States District Court for the Northern District of New York (Lawrence E. Kahn, Judge ) declaring § 470's office requirement unconstitutional, see Schoenefeld v. New York, 907 F.Supp.2d 252 (N.D.N.Y. 2011), and we remand the case with instructions to enter judgment in favor of defendants on Schoenefeld's Privileges and Immunities claim.[1]

         I. Background

         Because the facts and procedural history underlying this appeal are set forth in our prior panel opinion with which we assume familiarity, we reiterate them here only insofar as necessary to explain our decision to reverse and remand.

         A. The Privileges and Immunities Clause Challenge to N.Y. Judiciary Law § 470

         Plaintiff Ekaterina Schoenefeld, a citizen and resident of New Jersey, is licensed to practice law in New Jersey, New York, and California. She maintains an office in New Jersey, but not in New York. She asserts that she has declined occasional requests to represent clients in New York state courts to avoid violating N.Y. Judiciary Law § 470, which states as follows:

A person, regularly admitted to practice as an attorney and counsellor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counsellor, although he resides in an adjoining state.

N.Y. Judiciary Law § 470 (McKinney 2016) (emphasis added). Schoenefeld seeks a judicial declaration that the office requirement imposed by § 470 on nonresident members of the New York bar violates the Constitution's Privileges and Immunities Clause by infringing on nonresidents' right to practice law in New York. The district court agreed and, on

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the parties' cross-motions for summary judgment, declared § 470 unconstitutional. See Schoenefeld v. New York, 907 F.Supp.2d at 262-66. This timely appeal followed.

         B. This Court's Certification to the New York Court of Appeals

         In appealing the district court's ruling, New York State's Attorney General, on behalf of all defendants, initially argued that this case presented no Privileges and Immunities Clause concern because § 470's office requirement could be construed to demand only " an address for accepting personal service," which could be satisfied by a designated agent. Schoenefeld v. New York, 748 F.3d at 467. Alternatively, the Attorney General argued that, even if § 470 did treat nonresident attorneys differently from resident attorneys, it did not violate the Privileges and Immunities Clause because the burden imposed on nonresidents was " incidental" and substantially related to New York's sufficient state interest in the service of legal papers. Id.

         Seeking to avoid a possibly unnecessary constitutional question, see Arizonans for Official English v. Arizona, 520 U.S. 43, 78-79, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) (explaining that, in confronting constitutional challenge to statute, court must first determine if any reasonable construction " will contain the statute within constitutional bounds," and emphasizing that " [w]arnings against premature adjudication of constitutional questions bear heightened attention" where federal court is asked to invalidate state statute), but uncertain as to whether New York's highest court would, in fact, construe § 470 as urged by defendants, see Schoenefeld v. New York, 748 F.3d at 468-69 (observing that New York's lower courts had never interpreted § 470 to be satisfied by less than physical office space), this court certified the following question to the New York Court of Appeals:

Under New York Judiciary Law § 470, which mandates that a nonresident attorney maintain an " office for the transaction of law business" within the state of New York, what are the minimum requirements necessary to satisfy that mandate?

Id. at 471.

         The Court of Appeals accepted the certification and, upon review, held that § 470 " requires nonresident attorneys to maintain a physical office in New York." Schoenefeld v. State, 25 N.Y.3d at 25, 6 N.Y.S.3d at 222. In so ruling, the court observed that the statute, initially enacted in 1862, " appears to presuppose a residency requirement for the practice of law in New York State," to which " [i]t then makes an exception, by allowing nonresident attorneys to practice law if they keep an 'office for the transaction of law business'" in New York. Id. at 27, 6 N.Y.S.3d at 223. The Court acknowledged that the 1862 statute had linked the office requirement to service of process, so that " service, which could ordinarily be made upon a New York attorney at his residence, could be made upon the nonresident attorney through mail addressed to his office." Id., 6 N.Y.S.3d at 224. But, the two statutory parts were severed in 1909, with the office requirement codified at § 470 making no reference to service. See id. at 27-28, 6 N.Y.S.3d at 224. In these circumstances, the Court of Appeals concluded that the term " office," as used in § 470, could not be construed to mean only an address or agent sufficient for the receipt of service. Rather, the plain meaning of " office," particularly when joined with " the additional phrase 'for the transaction of law business,'" requires " nonresident attorneys to maintain a physical office

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in New York." Id. at 25, 28, 6 N.Y.S.3d at 222, 224.

         The Court of Appeals acknowledged a legitimate state interest in ensuring that personal service can be made on nonresident attorneys practicing in New York courts. But, in construing the statute, it observed that the " logistical difficulties" with service at the time the office requirement was enacted had largely been overcome by state law authorizing " several means of service upon a nonresident attorney, including mail, overnight delivery, fax and (where permitted) email," id. at 28, 6 N.Y.S.3d at 224 (citing N.Y. C.P.L.R. 2103(b) (McKinney 2015)), as well as the court's own rule conditioning the admission of nonresident attorneys without full-time employment in New York upon their designation of " the clerk of the Appellate Division in their department of admission as their agent for the service of process," id., 6 N.Y.S.3d at 224-25 (citing N.Y. Comp. Codes R. & Regs. tit. 22, § 520.13(a) (2015)). Thus, the office requirement could not be construed to require only an address for service. The term was properly understood to require a physical premises.

         Because the Court of Appeals' response to our certified question does not moot Schoenefeld's constitutional challenge to § 470, we proceed to address her claim and conclude that it fails on the merits.[2]

         II. Discussion

         A. Standard of Review

          We review an award of summary judgment de novo, and will affirm if " viewing the evidence in the light most favorable to the non-moving party, there is no genuine dispute as to any material fact." Baldwin v. EMI Feist Catalog, Inc., 805 F.3d 18, 25 (2d Cir. 2015) (internal quotation marks and citation omitted). " Claims turning entirely on the constitutional validity or invalidity of a statute," such as the

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Privileges and Immunities challenge here, " are particularly conducive to disposition by summary judgment as they involve purely legal questions." Connecticut ex rel. Blumenthal v. Crotty, 346 F.3d 84, 93 (2d Cir. 2003).

         B. The Privileges and Immunities Clause

         The Privileges and Immunities Clause states that " [t]he Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." U.S. Const. art. IV, § 2, cl. 1. The Clause operates to " place the citizens of each State upon the same footing with citizens of other States, so far as the advantages resulting from citizenship in those states are concerned." Paul v. Virginia, 75 U.S. (8 Wall.) 168, 180, 19 L.Ed. 357 (1868); see Bach v. Pataki, 408 F.3d 75, 88 (2d Cir. 2005), overruled on other grounds by McDonald v. Chicago, 561 U.S. 742, 130 S.Ct. 3020, 177 L.Ed.2d 894 (2010).[3] In short, the Clause does not demand that a citizen of one State be allowed to carry with him into another state the privileges and immunities which come with citizenship in his state. Rather, it guarantees " that in any State every citizen of any other State is to have the same privileges and immunities which the citizens of that State enjoy." Baldwin v. Fish & Game Comm'n of Mont., 436 U.S. 371, 382, 98 S.Ct. 1852, 56 L.Ed.2d 354 (1978) (internal quotation marks omitted). It is toward that end that the Clause " prevents a State from discriminating against citizens of other States in favor of its own." Id. (internal quotation marks omitted).

         The Privileges and Immunities Clause, however, is " not an absolute" that precludes states from ever distinguishing between citizens and noncitizens. Supreme Court of Va. v. Friedman, 487 U.S. 59, 67, 108 S.Ct. 2260, 101 L.Ed.2d 56 (1988); see Baldwin v. Fish & Game Comm'n of Mont., 436 U.S. at 383 (collecting cases and observing that state need not " always apply all its laws or all its services equally" to citizens and noncitizens). To prevail on a Privileges and Immunities challenge, a plaintiff must demonstrate that the state has burdened nonresident activity that is " sufficiently basic to the livelihood of the Nation as to fall within the purview of the Privileges and Immunities Clause." Supreme Court of Va. v. Friedman, 487 U.S. at 64 (internal quotation marks and alterations omitted). Upon such a showing, the state may defend its position by demonstrating that " substantial reasons exist for the discrimination and the degree of discrimination bears a sufficiently close relation to such reasons." Id. at 67; accord Connecticut ex rel. Blumenthal v. Crotty, 346 F.3d at 94. A court necessarily conducts these inquiries in light of the Supreme Court's recent admonition that constitutionally protected privileges and immunities are burdened " only when [challenged] laws were enacted for [a] protectionist purpose." McBurney v. Young, 133 S.Ct. 1709, 1715, 185 L.Ed.2d 758 (2013).

         In McBurney, which was decided after the district court ruled in this case, a nonresident plaintiff challenged Virginia's Freedom of Information Act (" FOIA" ) for hampering his ability to pursue a common calling. He alleged that the law, by allowing only Virginia citizens to inspect and copy public records, abridged his ability to

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engage in the business of " request[ing] real estate tax records on clients' behalf from state and local governments." Id. at 1714-15. The Supreme Court acknowledged that the ability to pursue a common calling is protected by the Privileges and Immunities Clause. See id. at 1715. Nevertheless, it identified no unconstitutional burden because plaintiff had failed to " allege," and " ha[d] offered no proof," that the statute " was enacted in order to provide a competitive economic advantage for Virginia citizens." Id. To the contrary, the statute was enacted with the " distinctly nonprotectionist aim" of allowing " those who ultimately hold sovereign power," i.e., the citizens of Virginia, to " obtain an accounting from the public officials to whom they delegate the exercise of that power." Id. at 1716. The Supreme Court thus concluded that, even if the statute had " the incidental effect of preventing citizens of other States from making a profit by trading on information contained in state records," in the absence of a showing of discriminatory purpose to favor state citizens, plaintiff could not pursue a Privileges and Immunities claim. Id.[4]

          We do not understand McBurney to state any new principle of law. Nevertheless, McBurney provides a clarification not available to the district court at the time it ruled in this case, specifically, that the Privileges and Immunities Clause does not prohibit state distinctions between residents and nonresidents in the abstract, but " only" those " enacted for the protectionist purpose of burdening out-of-state citizens" with respect to the privileges and immunities afforded the state's own citizens. 133 S.Ct. at 1715; see Baldwin v. Fish & Game Comm'n of Mont., 436 U.S. at 380-81.

         Nor do we understand McBurney to suggest that the disparate effects of a challenged state law are completely irrelevant to a Privileges and Immunities inquiry. As the Supreme Court has recognized in other contexts, burdensome effects can sometimes admit an inference of proscribed intent. Cf. Washington v. Davis,426 U.S. 229, 241, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976) (noting relevancy of disproportionate impact to racially discriminatory intent). What McBurney makes plain, however, is that it is protectionist purpose, and not disparate effects alone, that identifies the sort of discrimination prohibited by the Privileges and Immunities Clause, by contrast, for example, to the Commerce Clause. See generally McBurney v. Young, 133 S.Ct. at 1720 (separately analyzing challenged law under dormant Commerce Clause); cf. Comptroller of the Treasury of Md. v. Wynne,135 S.Ct. 1787, 1801 n.4, 191 ...


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