Case Title: Matter of Bates

Citation: 113 Ariz. 394, 555 P.2d 640

Docket Number: 

State: arizona

Court: Arizona Supreme Court

Date: 1976-07-26T00:00:00Z

Document:
113 Ariz. 394 (1976) 555 P.2d 640 In the Matter of Members of the State Bar of Arizona, John R. BATES and Van O'Steen, Respondents. No. SB-96. Supreme Court of Arizona, In Banc. July 26, 1976. *395 Orme Lewis and John P. Frank, Phoenix, for State Bar of Arizona. William C. Canby, Jr., Phoenix, for respondents. CAMERON, Chief Justice. This matter is before the court on objections to the conclusions of law and recommendations of the Board of Governors of the State Bar of Arizona which held that the respondents John R. Bates and Van O'Steen, attorneys at law, were guilty of violating the disciplinary rules for attorneys as provided in Rule 29(a) of the Rules of the Supreme Court, 17 A.R.S. We must answer the following questions on review: The facts of this case are not in dispute. John R. Bates and Van O'Steen are law partners engaged in the practice of law under the name of the "Legal Clinic of Bates and O'Steen." On 22 February 1976, respondents published an advertisement in the Arizona Republic, a newspaper of state-wide and substantial out-of-state circulation, publicizing the availability of their legal services and stating fees for certain services. See Exhibit A. Disciplinary Rule 2-101(B) of Rule 29(a) of the Rules of the Supreme Court reads: Respondents admit they knowingly violated DR 2-101(B). After complaint, hearing, and findings by a Special Administrative Committee, the Board of Governors made the following findings of fact, conclusions of law, and recommendations: Respondents timely objected to the recommendations of the Board of Governors and the matter was transferred to this court pursuant to Rule 36(d) of the Rules of the Supreme Court. ANTITRUST LAWS Respondents contend that DR 2-101 violates Sections 1 and 2 of the Sherman Act. 15 U.S.C. § 1, 2 and Arizona antitrust statutes A.R.S. §§ 44-1401 through 44-1413. That a rule is a violation of the federal or state antitrust laws is a defense when the court is being asked to enforce a violation of these rules, Continental Wallpaper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 29 S. Ct. 280, 53 L. Ed. 486 (1909); Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S. Ct. 172, 87 L. Ed. 2d 165 (1942), and this defense is available in the state court. General Aniline & Film Corp. v. Bayer, 305 N.Y. 479, 113 N.E.2d 844 (1953). In support of their position, respondents rely heavily on Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S. Ct. 2004, 44 L. Ed. 2d 572 (1975). In Goldfarb, supra, the Supreme Court held that a county bar's publication of a minimum fee schedule, and enforcement of this schedule through professional discipline by the state bar, was anticompetitive activity which the Sherman Act was clearly meant to proscribe. We do not believe that the holding of Goldfarb, supra, applies to the facts of this case. Goldfarb, supra, was concerned with a minimum fee schedule. Attempts at minimum fees or price floors are traditionally the target of antitrust laws, state and federal, as they tend to artificially raise the prices of goods and services without a corresponding increase in the value of those services. The control of advertising by the Supreme Court of members of the Bar is far different than price fixing by a local bar association. We do not believe that Disciplinary Rule 2-101(B) conflicts with Goldfarb, supra. However, even if we were to find that DR 2-101(B) violated the provisions of the Sherman Act, we believe this would be state action which is exempt by the Sherman Act. The Sherman Act was not *397 meant to restrain activities required by the state acting as a sovereign. The Supreme Court stated: This position was reinforced by the United States Supreme Court in Goldfarb, supra, as follows: The regulation of the State Bar by the Supreme Court is an activity of the State of Arizona acting as sovereign and exempt by the very provisions of the Sherman Act. Parker v. Brown, supra; State of New Mexico v. American Petrofina, Inc., 501 F.2d 363 (9th Cir.1974). There is, however, another reason why the respondents reliance upon the antitrust provision of the state and federal acts is misplaced, over and above the exemption contained in the Sherman Act. The State Bar of Arizona is an integrated bar, integrated by court rule. Rule 27, Rules of the Supreme Court, 17A A.R.S. Attorneys are officers of the Supreme Court and subject to the regulation of that court, and the legislative branch of government, state or federal, may not interfere with the court in the reasonable and constitutional regulation of the practice of the law. This seems to have been recognized by the Supreme Court in Goldfarb, supra, when it stated: FIRST AMENDMENT Respondents urge that DR 2-101(B) should be declared null and void as a violation of the First Amendment. Bigelow v. Virginia, 421 U.S. 809, 95 S. Ct. 2222, 44 L. Ed. 2d 600 (1975) and Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 96 S. Ct. 1817, 48 L. Ed. 2d 346 (1976). We disagree. Restrictions on professional activity, and in particular advertising, have repeatedly survived constitutional challenge. Williamson v. Lee Optical Co., 348 U.S. 483, 75 S. Ct. 461, 99 L. Ed. 563 (1955); Barsky v. Board of Regents, 347 U.S. 442, 74 S. Ct. 650, 98 L. Ed. 829 (1954); Semler v. Oregon State Board of Dental Examiners, 294 U.S. 608, 55 S. Ct. 570, 79 L. Ed. 1086 (1935). The legal profession, like the medical profession, has always prohibited advertising since it is a form of solicitation deemed contrary to the best interests of society. In re Cohen, 261 Mass. 484, 159 N.E. 495 (1928); State ex *398 rel. Hunter v. Crocker, 132 Neb. 214, 271 N.W. 444 (1937); Mayer v. State Bar of California, 2 Cal. 2d 71, 39 P.2d 206 (1934). In the case of Bigelow v. Virginia, supra, a newspaper editor was convicted of running an ad offensive to a Virginia statute concerning abortions. In the instant case, we are not concerned with the prosecution of the newspaper for running the ad in question. Were this the case, we would have no hesitancy in invoking the First Amendment in the newspaper's favor. In the instant case, we are concerned with the regulation of the attorneys for violating the rule against advertising by an attorney. That Bigelow, supra, does not apply is indicated in the footnote which states: The recent case of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., supra, relied upon by the respondents can also be distinguished. Virginia Board of Pharmacy, supra, concerned the power of the state to prohibit the advertising of prepackaged prescription drugs. Mr. Chief Justice Burger in his concurring opinion stated: *399 And footnote 25 in the major opinion stated: EQUAL PROTECTION Respondents contend that since advertising is permitted by qualified legal assistance organizations, they are being denied equal protection of the law by not being allowed to advertise. Respondents, in their brief, state: We disagree. DR 2-101(B) further reads as follows: We believe that these classifications are reasonable. For example, the purpose of allowing legal assistance organizations a limited amount of advertising is to bring to the attention of those of limited finances who are in need of legal assistance but who are frequently unaware of the fact that such services are available. The attorney himself may not advertise but only the legal assistance organization. We do not believe that DR 2-101(B) violates the equal protection provisions of the United States Constitution or the Arizona Constitution. VAGUENESS Respondents further contend that they are being denied due process because Rule DR 2-101(B) is void for vagueness. *400 Respondents contend that a rule must be sufficiently definite that a person of ordinary intelligence may understand whether his contemplated conduct is prohibited. Of course, in the instant case, there is no indication that the respondents did not know the advertisement violated DR 2-101(B). We do not find the rule vague or overbroad and persons of ordinary intelligence, be they attorney or non-attorney, should have no difficulty in reading this rule as prohibiting a lawyer from publicizing himself "through newspaper or magazine advertisements." DR 2-101(B). DUE PROCESS Respondents contend that Rules 26 through 33 of this court violate due process because the members of the Special Administrative Committee and the Board of Governors were in competition with the respondents. Respondents cite the United States Supreme Court: Admittedly, there is a question when members of a profession attempt to selfregulate their profession and impose discipline for violations of what may be at times technical and complex standards. While there is a necessity for fair and impartial hearings, there is also the necessity that the persons who must hear the allegations of professional misconduct have the required knowledge of the standards and needs of the profession. Non-professionals alone could not bring to the hearings a sufficient knowledge and understanding of professional standards or a compulsion to enforce them. The most the non-professional would bring to such a hearing is business ethics, and business ethics, while adequate for the commercial world, are not sufficient as a standard for professional conduct. We must then balance the need for an informed and concerned Board with the degree of pecuniary interest, however slight or minimal, which may exist when attorneys sit in judgment of other attorneys. In the instant case, we do not find a sufficient pecuniary interest by the Committee or the Board to require that they be disqualified because of interest. Even if we were to find that the Board and Committee had a sufficient pecuniary interest to make them suspect, there is a safeguard in that the final arbiter in disciplinary matters is the Supreme Court which has the obligation to make an independent determination of the facts from the record. In re Johnson, 106 Ariz. 73, 471 P.2d 269 (1970); In re Lurie, 113 Ariz. 95, 546 P.2d 1126 (1976). There is no pecuniary conflict between the members of this court and the respondents and we find no lack of due process. DISPOSITION The Board of Governors recommended that since the act of placing the advertisement in the Arizona Republic was done in good faith as an earnest challenge to the validity of DR 2-101(B), respondents should only be suspended from the practice of the law for one week each, the weeks to run consecutively. We agree with the Board of Governors that the act was done in good faith to test the constitutionality of DR 2-101(B). We believe that the respondents should be censured only. It is ordered that upon issuance of the mandate herein, the respondents John R. Bates and Van O'Steen are guilty of the violation of DR 2-101(B), Rule 29(a), 17 A.R.S., and that they and each of them are censured. *401 STRUCKMEYER, V.C.J., concurs. GORDON, Justice (specially concurring): I concur in the result. While I agree with much of the law and many of the comments expressed by the majority, I feel compelled to add a few comments of my own. The content of the advertisement in this case highlights the concern expressed by Chief Justice Burger in his concurring opinion in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 96 S. Ct. 1817, 48 L. Ed. 2d 346 (1976): Few members of the Bar, much less the public at large, would similarly define or explain what services were included in handling a "simple" or "uncontested" divorce. Moreover, I am able to foresee instances in which the $175.00 fee quoted for this service would be unreasonably high. Is it deceptive to advertise legal services in connection with an uncontested adoption proceeding when by statute the county attorney, upon application, is required to perform similar services without expense to the petitioner? A.R.S. § 8-127. These and other difficulties demonstrate some of the substantial policy considerations which justify restrictions on advertising by *402 attorneys. Whether a blanket ban on certain forms of advertising is unconstitutional as violative of the First Amendment is a far weightier question which I am not yet prepared to resolve in the negative. I am concerned, however, that to impulsively discard the regulations leaving few if any guidelines in their wake, might well initiate a flood of media combat for legal business which would serve neither the best interests of the public nor the Bar. HAYS, Justice (dissenting). I dissent. I agree with the opinion of the majority in all respects except that I cannot go along with the punishment imposed. It appears to me that the "watered down" version of punishment adopted by the majority invites more and better testing of all the provisions of the Code of Professional Ethics. Admittedly, the Respondents violated the Code in order to secure more clients for their legal clinic. The testing of an allegedly questionable provision was incidental and the method of testing was the one calculated to attain the monetary advantage sought. I would adopt the penalty recommended by the Special Administrative Committee, suspension for not less than six (6) months. HOLOHAN, Justice (dissenting). The matters presented by this case involve important issues of constitutional law and public policy. Recent decisions of the Federal Supreme Court have brought into question activities which were once assumed lawful in the regulation of professional conduct of attorneys. Assumptions of the past must be reexamined in light of the continual development of First Amendment rights. Despite my own personal dislike of the concept of advertising by attorneys, I have concluded that the advertising ban contained in DR 2-101(B) of the Disciplinary Rules is unconstitutional. There is an additional consideration present in this case which, aside from the constitutional issues, suggests that we should not enforce the ban on advertising when it deals with the fees to be charged for services. In Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S. Ct. 2004, 44 L. Ed. 2d 572 (1975), the United States Supreme Court held that minimum fee schedules for attorneys is price fixing forbidden by the Sherman Act. The ban on advertising by attorneys is also under attack as a method of price fixing which is equally unlawful under the Sherman Act. The majority opinion does not contend that the absolute ban on advertising by attorneys is not a violation of the Sherman Act. This Court is content to rely on the position that the ban is exempt from the Sherman Act as state action, citing Parker v. Brown, 317 U.S. 341, 63 S. Ct. 307, 87 L. Ed. 315 (1943). Since the ban on advertising by attorneys was enacted by this Court under the authority of the State Constitution, the time has arrived for us to review that ban in light of the fact that such action is in fact contrary to the national public policy. It may be that we have the power to exempt attorneys from the Sherman Act, but should we continue such a position in the face of national public policy to the contrary? While this Court may enact an exemption from the Sherman Act, it may not limit the rights of persons under the First Amendment. What is at stake in this case is more than regulation of a profession or the discipline of two lawyers. More fundamentally there is involved the right of the public as consumers and citizens to know about the activities of the legal profession. Obviously the information of what lawyers charge is important for private economic decisions by those in need of legal services. Such information is also helpful, perhaps indispensable, to the formation of an intelligent opinion by the public on how well the legal system is working and whether it should be regulated or even altered. This Court's power to *403 regulate the profession of law comes from the people, and what the people give they can also take away. The rule at issue prevents access to such information by the public. In May of this year, the United States Supreme Court struck down a ban on advertising of prices by pharmacies in the State of Virginia. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 96 S. Ct. 1817, 48 L. Ed. 2d 346 (1976). The case held that "commercial speech" (advertising) is entitled to First Amendment protection. Society and consumers were held to have strong interest in the free flow of commercial information. The majority opinion correctly points out that the U.S. Supreme Court reserved judgment on whether a ban on commercial advertising might be constitutional, stating: While the majority concludes that this statement supports a complete ban of advertising by attorneys, I am not inclined to such a conclusion. Certain kinds of advertising by lawyers may cause confusion and deception, but the remedy is to ban such kinds of advertising rather than any form of advertising. This appears to me to be what the Court meant in Va. Pharmacy Bd. when it stated: "In concluding that commercial speech, like other varieties, is protected, we of course do not hold that it can never be regulated in any way." Slip Op. p. 22. Similarly, the Court noted: "Untruthful speech, commercial or otherwise, has never been protected for its own sake." Slip Op. p. 23. Disciplinary Rule 2-101(B) purports to ban advertising by attorneys, but in reality the rule discriminates between one type of commercial advertising and another type which is permitted by Disciplinary Rule 2-102(A)(6). By whatever name described the "reputable law list" is advertising. It strains reason to contend that listing a law firm's clients is not a method of publicizing the success and expertise of the members of the firm in serving clients, especially well-known corporate enterprises. The discrimination between other commercial media and reputable law lists has no rational basis. It is true that law lists are generally directories furnished to subscribers who are lawyers and other special groups. The record in this case notes that some law lists appear in public libraries. If the information in such directories is not misleading or injurious to the public or to the profession, there appears to be no justifiable reason why such material cannot also be used in the commercial media generally. In summary, the ban on advertising by attorneys contained in DR 2-101(B) is contrary to national policy, is a denial of First Amendment rights, and violates the equal protection provision of the Fourteenth Amendment. This Court should forthrightly declare the rule unconstitutional. We can then attempt to write rules which provide for public access to information about attorneys. It may be that the information currently permitted to be published in "reputable law lists" is also suitable for the members of the public. In any event what we have now is defective. We need to create new guidelines which allow for broader dissemination of information to the public but at the same time protect them from misleading or deceptive statements.