MULTI-JURISDICTIONAL PRACTICE ISSUES FOR LABOR AND EMPLOYMENT ATTORNEYS; A UNION AND
EMPLOYEE SIDE PERSPECTIVE
MICHAEL POSNER, ESQ. Posner & Rosen LLP
3600 Wilshire Blvd., Suite 1800 Los Angeles, CA 90010
The multi-jurisdictional practice train has left the station and is gathering some steam. Many states have adopted temporary practice rules for out of state lawyers. The rules with some variance generally incorporate the essential provisions of ABA Model Rule of Professional Conduct 5.5 that permit lawyers to engage in the temporary practice of law in jurisdictions in which they are not licensed to practice under the following conditions:
"1. When they are undertaken in association with a lawyer who is admitted to practice in the jurisdiction and who actively participates in the matter;
2. When they are in or reasonably related to a pending or potential proceeding before a tribunal in the jurisdiction or another jurisdiction if the lawyer, or a person the lawyer is assisting, is authorized by law or ordered to appear in such proceeding or reasonably expects to be so authorized;
3. When they are in or reasonably related to a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in the jurisdiction or another jurisdiction, if the service arises out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice are not services for which the forum requires pro hac vice admission; and 4. When they are not within paragraph 2 or 3 above, they arise out of
or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice."
However, it is important to note that the ABA Model Rules of Professional Conduct are not self executing and lawyers must be aware of the rules governing the practice of law in the jurisdictions in which they attempt to practice. Failure to do so creates the risk of a contempt citation, or an injunction proceeding to cease from practicing law in the jurisdiction. Moreover, the lawyer may not receive compensation for services performed. See Birbrower vs. Superior Court, 17 Cal. 4th 119 (1998) However, the California Legislature shortly thereafter overruled the California Supreme Court. For a contra view, see also Prudential Equity Group, LCC v. Ajamie, 538 F.Supp,2d 605 (2008).
The growth of multi-jurisdictional practices is in recognition of the redevelopment of national and international business practices and the need to assist and reduce cost for clients.
The Union's perspective of the need for enlightened multi-jurisdictional practice rules is not different from the management perspective. Just as companies find themselves engaged in commerce across state lines, unions both at the international level and regional levels now cross state lines. Just as corporate legal counsel or house counsel may require a lawyer to participate in legal activities in more than one state, union counsel and union staff counsel are equally confronted with the same challenge when dealing with multi-state agreements, corporate campaigns, representational proceedings, arbitrations, mediation and other alternative dispute resolution procedures.
Most labor and employment lawyers whether they practice on the management side or union and employee side are not particularly concerned if opposing counsel is from another jurisdiction. The problem only surfaces when one side attempts a tactical advantage or seeks redress after losing an arbitration as was illustrated by Colmar, Ltd., vs. FremantleMedia North America, Inc., 801 N.E.2d 1017 (2003).
In that case, the parties executed an agreement in which FremantleMedia North America, Inc. agreed to serve as a distributor of plaintiff's film. Plaintiff alleged that the contract was breached as a result of the failure of defendant to actively and aggressively market the film. As a
result of an arbitration provision in the contract, the matter proceeded to arbitration that resulted in an opinion and award in favor of defendant. At the arbitration that was held in Illinois, defendant, a California company, was represented by its California attorney who although licensed to practice in California, was not licensed to practice in Illinois. The attorney for defendant took the deposition of a witness for plaintiff and attended the arbitration in Chicago. After an adverse decision, plaintiff sought to vacate the arbitration award. The court was asked to resolve what it considered to be a question of first impression; whether an out of state attorney representing an out of state client during an arbitration in Illinois, should constitute a basis for vacating the award.
The court distinguished proceedings in which an out of state attorney participates in an arbitration, representing an out of state client, from a disputed action that is brought before the courts. The court was cognizant that the American Arbitration Association rules, by which the arbitration proceeding was governed did not mandate that either party be represented by an attorney. The court also noted that an arbitration is not a judicial proceeding but, an alternative dispute resolution forum where judicial fact finding, court procedures, evidentiary rules and other procedures such as discovery, are either unavailable or limited. The decision found support for its position in Drinane vs. State Farm Mutual Automobile Insurance Company, 153 Ill.2d 207, 212; 606 N.E.2d 1181, (1992) where the state Supreme Court held:
"Arbitration is different from the court system, and does not rely upon legal precedent. Instead, it provides for all questions of law in fact to be determined by the arbitrator. Although arbitrators are not foreclosed from employing the rules of procedure, evidence or discovery of legal proceedings, they are required only to conduct the arbitration in a manner not inconsistent with the guidelines of the Uniform Arbitration Act. These differences are sanctioned because the parties are willing to accept the absence of these
See also Tobacco Superstore Inc. v. Darrough, 207 S.W .3d 511 (2005) that distinguished Preston
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on its facts and concluded that an out of state attorney’s motion for pro hac vice admission filed contemporaneously with the answer should have been granted.
safeguards in return for a final and speedy resolution of their conflict."
Moreover, the court noted that had defense counsel applied for pro hac vice admission pursuant to the state Supreme Court rules, defense counsel would have probably been given such admission as it is routinely granted.
The court acknowledged that the defense attorney's activities in Chicago, were related to his regular representation of his client in California, and the issues for resolution did not require a specific analysis of Illinois law. The court was also influenced by ABA Model Rule 5.5(c) that permits out of state attorneys to represent a party in alternative dispute resolution proceedings so long as the attorney is licensed to practice law in another United States jurisdiction, is not
disbarred or suspended from practice in any jurisdiction and the representation in the Alternative Dispute Resolution proceeding is related to an existent relationship with the out of state client.
However, I question whether the court would have reached the same conclusion if the facts included a mandatory arbitration provision in an employment termination scenario, that raised issues of discrimination involving state public policy.
By contrast, when proceedings are before the courts, a more stringent application Model Rule 5.5 is applied. Out of state attorneys who fail to receive permission to appear in state courts pro hac vice, run the risk that their clients lawsuit will be dismissed. See for example, Preston vs. University of Arkansas for Medical Scientists, 128 S.W.3d 430 (2003), where an out of state attorney failed to apply for admission pro hac vice and the complaint was filed the day before the statute of limitations period lapsed.1
Similarly in Black vs. Ameritel Inns, Inc., 81 P.3d 416 (2003) the court held that an out of state attorney can not serve as an agent to sign a pleading and that defect could not be cured
by an amended complaint, filed after the expiration of the statute of limitations.
Thus, while it is anticipated that it will be easier for lawyers to engage in a multi-jurisdictional practice, it is still important to recognize that even if a lawyer was acting in good faith such will not constitute an adequate defense to a charge of practicing law without a license. To avoid the risk of civil, criminal and malpractice charges, compliance with the rules of the jurisdiction where your practice takes you must be adhered to.
