United States District Court, D. Connecticut
RULING AND ORDER
N. Chatigny, United States District Judge
Jacoby & Meyers, LLP brings this suit against the Judges of
the Connecticut Superior Court to challenge the
constitutionality of Connecticut Rule of Professional Conduct
5.4, which restricts the ability of lawyers to share fees or
enter into business partnerships with nonlawyers. Plaintiff
asks the Court to declare that Rule 5.4 violates the United
States Constitution and enjoin its enforcement. Defendants,
supported by amici the Connecticut Bar Association and the
Connecticut Trial Lawyers Association, have moved to dismiss
(ECF No. 14) on various grounds. For reasons that follow, the
motion is granted.
is a nationwide law firm incorporated as a limited liability
partnership in the State of New York. Plaintiff states that
it maintains offices for the practice of law in Connecticut.
The judges of the Connecticut Superior Court have adopted the
Connecticut Rules of Professional Conduct, which govern the
conduct of attorneys licensed to practice in the state.
5.4 prevents non-lawyers from investing in law firms. The
Rule provides in part that “a lawyer shall not form a
partnership with a nonlawyer if any of the activities of the
partnership consist of the practice of law, ” or
“practice with or in the form of a professional
corporation or association authorized to practice law for a
profit, if . . . a nonlawyer owns any interest therein . . .
.” Plaintiff alleges that by preventing it from raising
capital in exchange for granting nonlawyers an equity stake
in the law firm, Rule 5.4 unconstitutionally restricts its
ability to practice law and deprives clients of
cost-effective, technologically-advanced access to the legal
fifty states have adopted some version of Rule 5.4. On the
same day plaintiff filed this suit, it filed substantially
similar pre-enforcement constitutional challenges to Rule
5.4's counterparts in New York and New Jersey. In the New
Jersey action, the District Court abstained under
Railroad Commission of Texas v. Pullman
Co., 312 U.S. 496 (1941), on the ground that resolution
of the constitutional issues raised by the complaint should
be deferred pending a determination by the Supreme Court of
New Jersey of whether Rule 5.4 does or does not permit a
non-lawyer to own an equity interest in a law firm. See
Jacoby & Meyers, LLP v. Justices of the Supreme Court of
N.J., 11-cv-2866 (PGS) (D.N.J. Mar. 2, 2012). The New
Jersey action was eventually voluntarily dismissed,
apparently with no intervening application to the New Jersey
York action was initially dismissed for lack of standing
because other provisions of New York law besides Rule 5.4
could be invoked to bar nonlawyer investment in law firms and
plaintiff challenged only Rule 5.4. Jacoby & Meyers,
LLP v. Presiding Justices of the First, Second, Third and
Fourth Dep'ts, Appellate Div. of the Supreme
Court of the State of N.Y., 847 F.Supp.2d 590, 598
(S.D.N.Y. 2012). In dismissing the action, Judge Kaplan noted
that “even if this Court perceived that the state
statutes at issue here were unclear, it would have abstained
under Pullman and stayed the action pending a state
court resolution of the state law issues.” Id.
at 599. The Court of Appeals vacated and remanded to permit
plaintiff to amend its complaint to challenge any other New
York laws that could prohibit nonlawyer investment in law
firms. Jacoby & Meyers, LLP v. Presiding Justices of
the First, Second, Third and Fourth Dep'ts,
Appellate Div. of the Supreme Court of the State of
N.Y., 488 F.App'x 526, 527 (2d Cir. 2012), as
amended (Jan. 9, 2013). The Court foreclosed the
possibility of Pullman abstention in that case,
reasoning that the appellees were judicially estopped from
arguing that other provisions of state law prohibiting
nonlawyer investment in law firms were sufficiently unclear
as to warrant abstention. Id.
remand, Judge Kaplan dismissed the action, ruling that
plaintiff's constitutional challenges were
“entirely without merit.” Jacoby &
Meyers, LLP v. Presiding Justices of the First, Second, Third
and Fourth Dep'ts, Appellate Div. of the Supreme Court of
the State of N.Y., 118 F.Supp.3d 554, 560 (S.D.N.Y.
2015)(“Jacoby III”). Last week, the
Court of Appeals affirmed. Applying rational basis review,
the Court agreed with Judge Kaplan that “the challenged
laws serve New York State's well-established interest in
regulating attorney conduct and in maintaining ethical
behavior and independence among the members of the legal
profession.” Jacoby & Meyers, LLP v. Presiding
Justices of the First, Second, Third and Fourth Dep'ts,
Appellate Div. of the Supreme Court of the State of
N.Y., Docket No. 15-2608, 2017 WL 1101082, at *8 (Mar.
24, 2017), citing Jacoby III, 118 F.Supp.3d at
574-75. In view of the Court of Appeals decision, it is
apparent that this action should be dismissed.
plaintiff's claims are not plainly foreclosed by the
affirmance in Jacoby III, dismissal of this action
is proper to “avoid unnecessary friction in
federal-state relations, interference with important state
functions, tentative decisions on questions of state law, and
premature constitutional adjudication.” Babbitt v.
United Farm Workers Nat'l Union, 442 U.S. 289, 306
(1979) (citing Harman v. Forssenius, 380 U.S. 528,
534 (1965)). In the “void for vagueness” section
of its opposition brief, plaintiff asserts that Rule
5.4's prohibition against a lawyer practicing in a firm
in which a nonlawyer owns “any interest” is
ambiguous because some types of interests, such as bank loans
and lines of credit are permitted, while others, such as
plaintiff's hypothetical nonlawyer investments, might be
prohibited. See Pl.'s Mem. in Opp'n to Mot.
to Dismiss (ECF No. 21) at 29-30. As discussed at oral
argument, plaintiff can gain clarification of the scope of
Rule 5.4's prohibition by seeking an advisory opinion
from the Connecticut Bar Association or bringing a
declaratory judgment action in state court. Either is
preferable to proceeding with this action.
defendants' motion to dismiss (ECF No. 14) is granted.
The Clerk may close the file.
 Plaintiff originally filed this suit
as Jacoby & Meyers Law Offices, LLP. According to the
records of the New York Department of State, plaintiff
changed its name to Jacoby & Meyers, LLP in 2000.
Plaintiff made an oral motion to amend the complaint to
reflect this name change (ECF No. 43). The Court grants this
motion on the grounds that leave to amend is freely granted
and there is no undue prejudice to defendants. See Nogbou
v. Mayrose, 400 F.App'x 617, 620 (2d Cir.
 The complaint also includes claims
that Rule 5.4 violates the Connecticut Constitution and state
laws, but those claims have been withdrawn. See
Pl.'s Mem. in Opp'n to Mot. ...