******************************************************

The ‘‘officially released’’ date that appears near the

beginning of each opinion is the date the opinion will

be published in the Connecticut Law Journal or the

date it was released as a slip opinion. The operative

date for the beginning of all time periods for filing

postopinion motions and petitions for certification is

the ‘‘officially released’’ date appearing in the opinion.

In no event will any such motions be accepted before

the ‘‘officially released’’ date.

All opinions are subject to modification and technical

correction prior to official publication in the Connecticut Reports and Connecticut Appellate Reports. In the

event of discrepancies between the electronic version

of an opinion and the print version appearing in the

Connecticut Law Journal and subsequently in the Connecticut Reports or Connecticut Appellate Reports, the

latest print version is to be considered authoritative.

The syllabus and procedural history accompanying

the opinion as it appears on the Commission on Official

Legal Publications Electronic Bulletin Board Service

and in the Connecticut Law Journal and bound volumes

of official reports are copyrighted by the Secretary of

the State, State of Connecticut, and may not be reproduced and distributed without the express written permission of the Commission on Official Legal

Publications, Judicial Branch, State of Connecticut.

******************************************************
PERSELS AND ASSOCIATES, LLC v. BANKING

COMMISSIONER

(SC 19359)

Rogers, C. J., and Palmer, Zarella, Eveleigh, Espinosa, Robinson and

Vertefeuille, Js.
Argued April 23—officially released September 15, 2015

Robert M. Frost, Jr., for the appellant (plaintiff).

Patrick T. Ring, assistant attorney general, with

whom were Matthew J. Budzik, assistant attorney general, and, on the brief, George Jepsen, attorney general,

for the appellee (defendant).
Opinion

VERTEFEUILLE, J. Connecticut’s debt negotiation

statutes, General Statutes §§ 36a-671 through 36a-671e,1

authorize the defendant, the Banking Commissioner

(commissioner), to license and regulate persons

engaged in the debt negotiation business. Attorneys

who provide debt negotiation services are not exempted

generally from such regulation, except those attorneys

‘‘admitted to the practice of law in [Connecticut] who

[engage] or [offer] to engage in debt negotiation as an

ancillary matter to such [attorneys’] representation of a

client . . . .’’ General Statutes § 36a-671c (1) (attorney

exception). The dispositive question presented by this

appeal2is whether the debt negotiation statutes unduly

permit the commissioner to interfere with the Judicial

Branch’s regulation of the practice of law and, therefore, violate the separation of powers provision contained in article second of the constitution of

Connecticut.3 We conclude that § 36a-671c offends the

state constitution. We therefore reverse the judgment

of the trial court, which rejected the plaintiff’s constitutional challenge and dismissed its administrative

appeal.

The present appeal arises from a petition for a declaratory ruling that the plaintiff, Persels & Associates, LLC,

a national consumer advocacy law firm, filed with the

commissioner in 2012, seeking a determination that the

plaintiff is exempt from the debt negotiation statutes.

Before reviewing the procedural history of the case,

it will be instructive to consider briefly the relevant

statutory scheme, its history, and the mischief to which

it is directed.

Section 36a-671 (a) (1) defines debt negotiation as

‘‘for or with the expectation of a fee, commission or

other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor

the terms of a debtor’s obligations with one or more

mortgagees or creditors of the debtor, including the

negotiation of short sales of residential property or

foreclosure rescue services . . . .’’ In his declaratory

ruling on the plaintiff’s petition, the commissioner

described the origins of Connecticut’s debt negotiation

statutes: ‘‘Since the economic downturn in 2007, the

[Department of Banking (department)] has seen a rising

number of complaints against debt negotiation firms.

. . . Connecticut residents and consumers struggling

financially are turning to debt negotiators as an alternative to bankruptcy and as a potential solution to their

increasing consumer debt levels. . . . [M]any debt

negotiators mislead debtors, collecting thousands of

dollars in [up-front] fees without performing any debt

negotiation work and often making a debtor’s circumstances worse. . . . [T]he most common business

model in the industry . . . requires consumers to stop

paying their debts, during which time the debtor falls
[further] behind in his or her bills, the debt itself

increases through interest and collection fees, lawsuits

may be brought against the debtor, and the debtor’s

already weak creditrating will be damaged even further.

. . . Unfortunately, enrolling in a debt negotiation program worsens the family’s financial situation in the

overwhelming majority of cases . . . . [C]ompanies

like [the plaintiff] . . . lure in new customers, take

hard-working consumers’ limited funds, and ultimately

provide little or no value for that money. . . .

‘‘Because of these serious problems, [the commissioner] sought statutory authority to regulate the debt

negotiation industry in 2009. . . . [Number 9-208, §§ 29

through 32, of the 2009 Public Acts, which was codified

as § 36a-671 et seq., was intended to] update and

increase the power of the [c]ommissioner to try to protect people who find themselves in difficult times and

dealing with these kinds of organizations.’’ (Citations

omitted; internal quotation marks omitted.)

There are four principal components to the regulatory

scheme that the legislature enacted in 2009 to address

these concerns. First, any person wanting to offer or

provide debt negotiation services in Connecticut must

first obtain a license from the department. See General

Statutes § 36a-671 (b). Before issuing such a license,

the commissioner must approve the ‘‘financialresponsibility, character, reputation, integrity and general fitness’’ of the applicant; General Statutes § 36a-671 (d)

(1); and the applicant must pay a fee of $1600; General

Statutes § 36a-671 (e); and obtain a surety bond. General

Statutes § 36a-671d. Second, General Statutes § 36a671a (b) authorizes the commissioner to conduct an

investigation into any debt negotiation transaction, and

to discipline anyone he finds to have violated the debt

negotiation laws, committed fraud, misappropriated

funds, or failed to perform any debt negotiation

agreement with a debtor. Specifically, the commissioner may suspend, revoke, or refuse to renew a debt

negotiation license; General Statutes § 36a-671a (a);

order financial restitution and disgorgement of fees;

General Statutes § 36a-50 (c); and assess a civil penalty

of up to $100,000 per violation. General Statutes § 36a50 (b). Third, the debt negotiation statutes prohibit the

charging of up-front fees for such services, and authorize the commissioner to establish a schedule of maximum fees.4 General Statutes § 36a-671b (b). The

commissioner also may review the fees charged by a

person offering debt negotiation services and order the

reduction of excessive fees. General Statutes § 36a-671a

(c). Fourth, the statutes establish various contractual

protections that must be afforded to a debt negotiation

consumer; General Statutes § 36a-671b (a); and provide

that any contract that fails to provide such protections

is voidable by the consumer. See General Statutes § 36a671b (c). For example, each debt negotiation customer

must be provided a contract that contains: ‘‘(1) a state-
ment certifying thatthe person offering debt negotiation

services has reviewed the consumer’s debt . . . (2) an

individualized evaluation of the likelihood that the proposed debt negotiation services would reduce the consumer’s debt or debt service or, if appropriate, prevent

the consumer’s residential home from being foreclosed

[and (3) a prominent notice that] the consumer [may]

cancel or rescind such contract within three business

days after the date on which the consumer signed the

contract.’’ General Statutes § 36a-671b (a).

Other states enacted similar protections in the wake

of the residential mortgage crisis of the last decade,5

and the Federal Trade Commission passed amendments

to its Telemarketing Sales Rule to curb deceptive and

abusive debt negotiation practices. Among otherthings,

the new Federal Trade Commission regulations ‘‘set

forth disclosure requirements for the industry, prohibited certain misrepresentations in the telemarketing of

debt relief services, and banned debt relief service companies . . . from charging fees to consumers in

advance of renegotiating, settling or reducing unsecured debt balances. 16 C.F.R. [§ 310.1 et seq.], 75 Fed.

Reg. [48458] 48460 ([August] 10, 2010) . . . .’’ (Citation omitted.)

Connecticut’s debt negotiation statutes contain a provision that exempts certain persons from the scope

of these regulations and licensing requirements. See

General Statutes § 36a-671c. As initially enacted, § 36a671c provided in relevant part: ‘‘The provisions of sections [36a-671 to 36a-671d], inclusive . . . shall not

apply to the following: (1) Any attorney admitted to the

practice of law in this state, when engaged in such

practice . . . .’’ Public Acts 2009, No. 09-208, § 31; see

General Statutes (Rev. to 2011) § 36a-671c. This attorney exception presumably reflected the legislature’s

recognition that, under article second of the state constitution, the Judicial Branch has the exclusive authority to license and regulate the practice of law in this

state. See Lublin v. Brown, 168 Conn. 212, 228, 362

A.2d 769 (1975).

In 2011, however, the legislature amended § 36a-671c

so that the attorney exemption now extends only to an

‘‘attorney admitted to the practice of law in this state

who engages or offers to engage in debt negotiation as

an ancillary matter to such attorney’s representation

of a client . . . .’’ (Emphasis added.) Public Acts 2011,

No. 11-216, § 43. The legislative history is silent as to

the rationale for this amendment. The commissioner,

however, indicates that the department itself lobbied

the legislature for the amendment, with the purpose

of clarifying and narrowing the scope of the attorney

exemption ‘‘[t]o combat abuse of the statutory exemption . . . .’’

In his declaratory ruling, the commissioner described

these alleged abuses as follows: ‘‘The increase in state
[and federal] regulation . . . caused a paradigm shift

in the industry whereby debt relief companies changed

their business models in an attempt to avoid the [new

Federal Trade Commission rules] and state regulation.

. . . One of these models is the so-called ‘attorney

model,’ whereby a debt relief company affiliates itself

with local attorneys who purport to do ‘legal services’

on behalf of clients. . . . The attorney model has not

alleviated the problems in the debt negotiation industry,

but at times has created another avenue to mislead

consumers. Consumers are told that an attorney will

represent them in negotiations with creditors and provide legal assistance when, in fact, the attorney’s

involvement is minimal or nonexistent. . . . In many

cases, newly admitted attorneys are employed by

national debt negotiation firms and consumers are

charged excessive [up-front] fees for legal services that

consist only of debt negotiation services.’’ (Citations

omitted.) The commissioner’s findings in this respect

echo those of a report recently published by the New

York City bar, which report is part of the administrative

record in this case. See Association of the Bar of the

City of New York, ‘‘Profiteering from Financial Distress:

An Examination of the Debt Settlement Industry’’ (May

2012) pp. 77–94 (New York City Bar Report). In any

event, it is this amended attorney exemption that is the

subject of the present appeal.

In 2012, pursuant to General Statutes § 4-176, the

plaintiff petitioned the commissioner for a declaratory

ruling stating that, pursuant to the attorney exception,

‘‘a law firm that offers debt negotiation services to its

clients using Connecticut attorneys is not required to

have a debt negotiation license from the department,

when the debt negotiation services are delivered in aid

of an attorney’s representation of a client, as evidenced

by a retainer agreement, the offering of legal advice,

and the delivery of other services constituting the practice of law.’’ In support of its petition, the plaintiff

alleged the following facts. ‘‘[The plaintiff] is a Maryland-based, national consumer advocate law firm that

offers legal services to its clients in connection with

compromises of unsecured debt, defense of creditor

collection [lawsuits], protection from creditor harassment, and bankruptcy. The firm uses Connecticut lawyers working in tandem with paraprofessional staff to

provide these services. The Connecticut lawyers are

actively involved in representing the clients and are

responsible for the actions of the paraprofessional staff

under the Rules of Professional Conduct applicable to

lawyers. Although the Connecticut attorneys that provide services on behalf of [the plaintiff] are licensed

by the Judicial Branch and regulated by the Statewide

Grievance Committee and the Office of Chief Disciplinary Counsel,[the plaintiff] and itsConnecticut attorneys

do not have a separate license from the [department]

to provide debt negotiation services.
‘‘In its retainer agreements with clients, [the plaintiff]

agrees to provide, inter alia, debt negotiation services,

but it also agrees to provide other legal services clearly

constituting the practice of law. As part of the representation, the [plaintiff] assigns a Connecticut attorney to

consult with each client about their legal options. This

includes legal advice on topics such as the applicable

statute of limitations, the advantages and disadvantages

of bankruptcy, garnishment exemptions, and litigation

options and strategies. If litigation develops, the

assigned Connecticut attorney assists the client in preparing answers to complaints and arbitration demands,

drafts responses to discovery (if applicable), drafts

cease and desist letters to creditors, and, when appropriate, helps the client assert claims against creditors

who violate the law on collection practices. For an

additional fee, the [plaintiff] also offers to provide bankruptcy consultations to those clients who cannot settle

their debts outside of bankruptcy. Thus, while it is true

that [the plaintiff] specializes in debt-relief matters and

most ofits clients receive debt-relief services,[the plaintiff] does so in the context of providing legal advice

and legal work that goes beyond mere debt negotiation

and settlement. . . .

‘‘[The plaintiff] keeps records detailing each attorney’s and paralegal’s work on behalf of each of its

clients. Each attorney is required to make an electronic

record of the advice given. A database is used to keep

detailed records of every interaction between the clients and the [the plaintiff’s] attorney, and [the plaintiff]

has agreed to make these records available to the Office

of Chief Disciplinary Counsel in the event a grievance

is filed by a client to confirm that a Connecticut attorney

was actively involved and supervised the paraprofessional staff during the representation.’’

The plaintiff also submitted with its petition an October, 2011 settlement agreement between the plaintiff

and the Office of Chief Disciplinary Counsel, which

agreement disposed of grievances that had been

brought against three of the plaintiff’s attorneys. Under

the settlement, the plaintiff agreed, among other things,

that: (1) ‘‘For each Connecticut client that hires [the

plaintiff] to perform, inter alia, debt settlement services,

[the plaintiff] will have procedures and policies in place

to ensure that an initial consultation occurs between

the Connecticut client and a [plaintiff’s] attorney admitted to practice law in Connecticut’’; (2) ‘‘[the plaintiff]

will have procedures and policies in place to ensure

that the initial consultation fee is not collected until

such time as the initial consultation has occurred and

the fee is earned’’; and (3) ‘‘[the plaintiff] will have

[policies], training, and procedures in place to ensure

that there is adequate supervision of paralegals and

other [nonlawyer] assistants . . . .’’ The Office of Chief

Disciplinary Counsel also recognized that ‘‘the nature
of[the plaintiff’s] practice and the mannerin which legal

services are rendered through Connecticut attorneys is

relatively new . . . .’’

Before ruling on the plaintiff’s petition, the commissioner invited public comment thereon. Thirteen comment letters were filed in response. One letter,

submitted by the Deputy Chief Court Administrator for

the Connecticut Judicial Branch, indicated that ‘‘[t]he

Judicial Branch shares the [department’s] concerns

regarding the infiltration of debt negotiation firms into

our state and the goal of protecting our citizens from

unscrupulous tactics used and ineffective services rendered by these unlicensed entities.’’ The Deputy Chief

Court Administrator also expressed the concern, however, that the department not unduly encroach on the

Judicial Branch’s authority to regulate attorney conduct. A second comment letter, submitted on behalf

of other national law firms offering debt negotiation

services, broadly supported the plaintiff’s petition.

The other eleven comment letters opposed the petition and alleged that the plaintiff had omitted material

facts about its business operations. These comments

were submitted by members of the Connecticut bar,

including various consumer protection, bankruptcy,

and debt collection/settlement attorneys; a former Chief

Disciplinary Counsel of the State of Connecticut; and

six government agencies and nonprofit organizations

that serve the interests oflow income and other vulnerable consumers. For the most part, these letters echoed

four themes.

First, members of the Connecticut bar and consumer

advocate organizations alleged that the plaintiff and

other national debt negotiation companies prey on uninformed consumers whose financial problems leave

them desperate for assistance and vulnerable to false

or misleading marketing claims. The comments alluded

to ‘‘numerous reports and consumer complaints that

unscrupulous entities holding themselves out as debt

negotiation firms frequently take advantage of consumers by charging large, [up-front] fees while providing

little or no relief . . . .’’

The second theme that repeatedly emerged from the

public comment letters was that, in its petition, the

plaintiff materially misrepresented the nature of its

business model. Specifically, commenters alleged that

the plaintiff and its affiliates do not in fact engage in

the practice of law, they are simply debt negotiation

companies masquerading as law firms, and they use

attorneys as a facade to circumvent state regulations

such as § 36a-671 et seq. The substance of the charge is

that although Connecticut attorneys ostensibly oversee

the plaintiff’s debt negotiation services, in fact these

attorneys do little actual work and the arrangement is

devoid of any of the indicia of the bona fide practice

of law. The public comment letters further contend that,
because most established attorneys refuse to lend their

support to such a scheme, debt negotiation companies

such as the plaintiff are forced to target newly minted

attorneys, whom they can more easily exploit.

As a result of these practices, the commenters contend, financially troubled Connecticut consumers have

suffered a range of harms. They are deprived of their

limited funds, and are subjected to lawsuits, bank executions, and wage garnishments. In addition, because

they are falsely assured that the debt negotiation companies and their attorneys will handle any litigation and

settle outstanding debts prior to judgment, consumers

are deterred from seeking out bona fide legal assistance.

A third theme frequently echoed by the public comment letters was that these various complaints and allegations have been the subject of numerous legal and

administrative actions against the plaintiff in otherjurisdictions. The commenters referred the commissioner

to individual lawsuits, consumer class actions, attorney

grievances, and administrative actions that have been

brought against the plaintiff, its officers, or affiliated

entities in Florida, Kansas, Maryland, Missouri, North

Carolina, and Washington, as well as Connecticut. In

particular, they emphasized one decision of the United

States Bankruptcy Court for the District of Kansas,

which concluded that ‘‘[the plaintiff] and [its local Kansas counsel] may hold themselves out as lawyers providing unbundled, limited legal representation, but there

is plenty of evidence . . . that they walk, swim, and

quack like a credit services organization that supplies

debt settlement services while posing as a law firm.’’

(Internal quotation marks omitted.)In re Kinderknecht,

470 B.R. 149, 185 (Bankr. D. Kan. 2012), objections

overruled sub nom. Parks v. Persels & Associates, LLC,

509 B.R. 345 (Bankr. D. Kan. 2014). Commenters also

submitted the results of a Freedom of Information Act

request to the Federal Trade Commission that disclosed

seventy-four administrative complaints against the

plaintiff and approximately 200 complaints against its

various affiliates. The commenters contend that these

cases cast serious doubt on the plaintiff’s claim that

its local attorneys are actively involved in each debt

negotiation representation.

The fourth concern raised by many of the public

comment letters submitted to the commissioner is that

if the tail is truly wagging the dog here, and nonlawyer

debt negotiation entities or personnel are both directing

the plaintiff’s debt negotiation business and performing

the majority of the allegedly legal work, then affording

firms such as the plaintiff immunity under § 36a-671c

will create a regulatory void. Such firms will be exempt

from regulation by the department, because they purport to provide legal services under the supervision of

Connecticut attorneys. Because they themselves are not

Connecticut attorneys, however, they also fall beyond
the reach of the Statewide Grievance Committee and

the Office of Chief Disciplinary Counsel. Although the

local Connecticut attorneys who do such firms’ bidding

will, of course, be subject to discipline, if those attorneys are merely pawns of the debt negotiation companies, and are not the ones who are managing and

profiting from those businesses, then disciplining them

will do little either to deter abuses or to protect and

recompense vulnerable consumers.

Lastly, one commenter submitted to the commissioner the previously referenced New York City Bar

Report, which reiterates and documents many of these

allegations. That report concludes, among other things,

that: (1) ‘‘thousands of New Yorkers have . . . experienced net financial loss and lasting financial harm due

to their involvement with debt settlement service providers’’; New York City Bar Report, supra, p. 1; (2)

‘‘enforcement agencies have filed dozens of enforcement actions against unscrupulous operators’’; id.; (3)

‘‘[a]n extensive public record details widespread and

systematic deceptive and abusive practices’’; id.; and

(4) providers’ use of the ‘‘ ‘purported attorney model’ ’’

to take advantage of loopholes in consumer protection

regulations is ‘‘especially troubling.’’ Id., p. 2.

Turning to the statutory language, the commissioner

determined, as a matter of law, that the attorney exemption contained in § 36a-671c ‘‘provides an exemption

. . . only for a natural person who: (a) is an attorney

admitted to the practice of law in Connecticut; and (b)

is not retained to perform, and does not perform, debt

negotiation services . . . as the primary purpose of

the representation, which shall be determined on a caseby-case basis in light of all of the facts and circumstances.

‘‘In addition, [the] [d]epartment will take a no-action

position for a law firm that is a partnership, limited

liability company or professional corporation engaging

or offering to engage in debt negotiation services . . .

to be performed and performed exclusively by an attorney admitted to the practice of law in Connecticut who

is: (a) a partner or shareholder of the law firm, as the

case may be; and (b) the only contact with the debtor

and the debtor’s mortgagee(s) or creditor(s), as the

case may be; and provided that the firm is not retained

to perform, and does not perform, debt negotiation

services as the primary purpose of the representation,

which shall be determined on a case-by-case basis in

light of all of the facts and circumstances.’’ (Emphasis added.)

On the basis of the facts alleged in the petition, the

commissioner concluded that the plaintiff does not

qualify for exemption from the debt negotiation statutes

under the attorney exception, because the plaintiff is

not a natural person and it performs debt negotiation

services, including communications with clients and
creditors, through paraprofessional employees who are

not attorneys admitted to the practice oflaw inConnecticut and who are neither shareholders nor partners

of the firm. Accordingly, the commissioner ruled that,

under its alleged business model, the plaintiff would

require licensure in order to offer its debt negotiation

services to Connecticut consumers, and its provision

of those services would be subject to oversight by

the department.6

The plaintiff appealed from the commissioner’s ruling

to the Superior Court, challenging the commissioner’s

interpretation and application of § 36a-671c. The court,

Prescott, J., affirmed the commissioner’s declaratory

ruling, concluding, as a matter of law, that: (1) the

attorney exception applies only to natural persons; (2)

it was not improperfor the commissioner, in construing

§ 36a-671c, to adopt a ‘‘primary purpose’’ test pursuant

to which the department will take enforcement action

for unlicensed debt negotiation activity against an otherwise qualifying attorney or law firm where debt negotiation is, or reasonably could be understood by the

debtor to be, the primary purpose of the relationship

or the actual services performed; (3) the commissioner

did not abuse his discretion in adopting a no action

position that exempted only those law firms that provide debt negotiation services solely via partners or

shareholders; (4) the plaintiff lacked standing to challenge this no action policy; and (5) because debt negotiation does not constitute the practice of law, § 36a-671c

does not unconstitutionally delegate to the department

the authority to license and regulate the practice of law.

On appeal to this court, the plaintiff challenges each

of these conclusions. Because we agree with the plaintiff as to its fifth challenge, and conclude that the attorney exemption violates the constitutional separation of

powers, we need not address the plaintiff’s other

claims.7

The following principles govern the disposition of

the plaintiff’s constitutional challenge. In reviewing a

trial court’s dismissal of an appeal from an administrative declaratory ruling, we must take the facts to be

those alleged in the complaint, construing them in the

manner most favorable to the pleader. See Pamela B.

v. Ment, 244 Conn. 296, 308, 709 A.2d 1089 (1998). Our

review of a claim that a legislative delegation of authority violates the constitutional separation of powers is

plenary. See Perry v. Perry, 222 Conn. 799, 802, 611

A.2d 400 (1992), overruled on other grounds by Bryant

v. Bryant, 228 Conn. 630, 636 n.4, 637 A.2d 1111 (1994),

and Tomasso Bros., Inc. v. October Twenty-Four, Inc.,

230 Conn. 641, 658–59, 646 A.2d 133 (1994).

With respect to the plaintiff’s constitutional claim,

we have explained that ‘‘[t]he primary purpose of [the

separation of powers] doctrine is to prevent commingling of different powers of government in the same
hands. . . . The constitution achieves this purpose by

prescribing limitations and duties for each branch that

are essential to each branch’s independence and performance of assigned powers. . . . It is axiomatic that no

branch of government organized under a constitution

may exercise any power that is not explicitly bestowed

by that constitution or that is not essential to the exercise thereof. . . . [Thus] [t]he separation of powers

doctrine serves a dual function: it limits the exercise of

power within each branch, yet ensures the independent

exercise of that power. . . .

‘‘In the context of challenges to statutes whose constitutional infirmity is claimed to flow from impermissible

intrusion upon the judicial power, we have refused to

find constitutional impropriety in a statute simply

because it affects the judicial function . . . . A statute

violates the constitutional mandate for a separate judicial magistracy only if it [1] represents an effort by the

legislature to exercise a power which lies exclusively

under the control of the courts . . . or [2] if it establishes a significant interference with the orderly conduct of the Superior Court’s judicial functions.’’

(Citation omitted; internal quotation marks omitted.)

State v. McCahill, 261 Conn. 492, 505, 811 A.2d 667

(2002). In the present case, the plaintiff alleges that

the debt negotiation statutes violate the first prong of

this test.

We have held unconstitutional underthis test statutes

that: interfered with the authority of the Superior Court

to set postconviction bail; see id., 520–20A, 520F;

infringed on the Superior Court’s control over the discovery process; see State v. Clemente, 166 Conn. 501,

516, 353 A.2d 723 (1974); imposed nonjudicial duties

on a judge of the Superior Court; see Adams v.

Rubinow, 157 Conn. 150, 175, 251 A.2d 49 (1968); and

intruded on the power of the judiciary to fix the qualifications for admission to the practice of law. See Heiberger v. Clark, 148 Conn. 177, 191, 169 A.2d 652 (1961);

see also State ex rel. Kelman v. Schaffer, 161 Conn.

522, 529, 290 A.2d 327 (1971) (noting that ‘‘General

Assembly lacks any power to make rules of administration, practice or procedure which are binding on . . .

constitutional courts’’), overruled on other grounds by

Serrani v. Board of Ethics, 225 Conn. 305, 309 n.5, 622

A.2d 1009 (1993); Macy v. Cunningham, 140 Conn. 124,

132, 98 A.2d 800 (1953) (noting that supervision of

trusts, including appointment of successor trustees, is

purely judicial function, statutory abridgement of which

would be unconstitutional). We emphasize that ‘‘[i]t has

been the policy of our courts more often than not to

defer to the legislature, especially in that indefinable

area of power that exists between these two departments of government. In those instances, however,

where there was a clear invasion of judicial power by

the legislature, these cases illustrate that the courts

have not hesitated to step in. This was not done as a
manifestation of the court’s own power but as a duty

imposed by the constitution to keep the three great

departments of the government separate. Otherwise,

acquiescence to a gradual invasion of the judiciary by

the legislature would eventually render the former little

more than a judicial staff of the legislature. All pretense

of independence would disappear and the judicial

power would come to rest again in the hands of the

General Assembly as it did prior to the year 1818.’’ State

v. Clemente, supra, 515.

In the present case, the plaintiff contends that, under

the facts as alleged, the debt negotiation statutes impermissibly intrude on the judiciary’s exclusive authority

to regulate attorney conduct and licensure. For example, the plaintiff argues that subjecting Connecticut

licensed debt negotiation attorneys, and those persons

whom they supervise pursuant to rules 5.3 and 5.5 of

the Rules of Professional Conduct, to the licensing and

regulatory requirements imposed by the debt negotiation statutes would, among other things, improperly:

(1) give the commissioner the authority to determine

which attorneys in this state have the ‘‘character, reputation, integrity and general fitness’’ to provide debt

negotiation services in conjunction with their practice

of law; General Statutes § 36a-671 (d) (1); (2) require

that Connecticut attorneys obtain additional licenses

from and pay hefty licensing fees to agencies outside

the Judicial Branch in order to offer traditional legal

services; and (3)impinge on the Judicial Branch’s exclusive authority to suspend or disbar attorneys who have

engaged in professional misconduct. We agree.

‘‘The judicial power includes such power as the

courts, under the English and American systems of

jurisprudence, have always exercised in legal and equitable actions.’’(Internal quotation marks omitted.) State

v. Clemente, supra, 166 Conn. 509. This power includes

the exclusive authority to ‘‘[fix] qualifications for, as

well as [admit] persons to, the practice of law in the

state . . . .’’ (Citations omitted.) Id., 514–15; accord

State Bar Assn. v. Connecticut Bank & Trust Co., 145

Conn. 222, 231, 140 A.2d 863 (1958). The control of the

judiciary over standards for admission to the bar is a

matter of long tradition; it reflects and is justified by

the unique status of attorneys as commissioners of the

Superior Court and the special role they play in the

administration of justice. See generally In re Application of Griffiths, 162 Conn. 249, 294 A.2d 281 (1972),

rev’d on other grounds, 413 U.S. 717, 93 S. Ct. 2851, 37

L. Ed. 2d 910 (1973); Heiberger v. Clark, supra, 148

Conn. 186–89; see also O’Brien’s Petition, 79 Conn. 46,

49–50, 63 A. 777 (1906) (exclusive power of admitting

attorneys has resided with Connecticut judiciary since

early eighteenth century), overruled on other grounds

by In re Application of Dinan, 157 Conn. 67, 72, 244

A.2d 609 (1968). For these reasons, we have made clear

that ‘‘[n]o statute can control the judicial department
in the performance of its duty to decide who shall enjoy

the privilege of practicing law’’; (internal quotation

marks omitted) State Bar Assn. v. Connecticut Bank &

Trust Co., supra, 232; and that ‘‘[a]ny attempt on the

part of the legislative department to direct what the

rules [for attorney admission] shall be, and to determine

what qualifications applicants for admission shall possess, transgresses the constitutional power of that

department.’’ Heiberger v. Clark, supra, 191.

It also is well established that the ‘‘authority to discipline and regulate the conduct of counsel’’; Bartholomew v. Schweizer, 217 Conn. 671, 677, 587 A.2d 1014

(1991); is a ‘‘fundamental judicial power . . . .’’ Id.,

681. Although we have recognized that the legislature

exercises concurrent jurisdiction over certain aspects

of attorney conduct; see Heslin v. Connecticut Law

Clinic of Trantolo & Trantolo, 190 Conn. 510, 461 A.2d

938 (1983) (attorneys not exempt from Connecticut

Unfair Trade Practices Act, General Statutes § 42-110a

et seq.); we since have clarified that the authority of

the legislature to regulate attorney conduct is limited

to ‘‘the entrepreneurial or commercial aspects of the

profession of law.’’ Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 35, 699 A.2d 964 (1997). Regulation

of the actual practice of law, by contrast, remains the

sole province of the judiciary. See Lublin v. Brown,

supra, 168 Conn. 228 (‘‘[attorneys’] admission to practice and their professional conduct after admission are

essentially matters to be regulated by the judicial

department of the state’’ [internal quotation marks omitted]); but see Massameno v. Statewide Grievance Committee, 234 Conn. 539, 568, 663 A.2d 317 (1995)

(judiciary has inherent power to regulate attorney conduct but such power overlaps that of executive branch

with respect to discipline of prosecutors); Lublin v.

Brown, supra, 228 (recognizing that ‘‘inherent power

of the judicial department to control admission to the

bar, to discipline its members, and to prescribe rules

fortheir conduct as officers of the court does not confer

upon those members immunity or exemption from tax

assessments or civil and criminal statutes of general

application’’).

It is clear, then, that the judiciary wields the sole

authority to license and regulate the general practice

of law in Connecticut. It is equally clear, however, that

the judiciary does not exercise exclusive control over

attorney conduct insofar as an attorney is not engaged

in the practice of law. Accordingly, the central question

presented by this appeal is whether an attorney who

provides debt negotiation services as characterized by

the plaintiff in this declaratory action is thereby

engaged in the practice of law.

Practice Book § 2-44A defines the practice of law

broadly. That section provides in relevant part: ‘‘(a)

General Definition: The practice of law is ministering
to the legal needs of another person and applying legal

principles and judgment to the circumstances or objectives of that person. This includes, but is not limited to:

‘‘(1) Holding oneself out in any manner as an attorney,

lawyer, counselor, advisor or in any other capacity

which directly or indirectly represents that such person

is either (a) qualified or capable of performing or (b)

is engaged in the business or activity of performing any

act constituting the practice of law as herein defined.

‘‘(2) Giving advice or counsel to persons concerning

or with respect to their legal rights or responsibilities

or with regard to any matter involving the application

of legal principles to rights, duties, obligations or liabilities.

‘‘(3) Drafting any legal document or agreementinvolving or affecting the legal rights of a person.

‘‘(4) Representing any person in a court, orin a formal

administrative adjudicative proceeding or other formal

dispute resolution process orin any administrative adjudicative proceeding in which legal pleadings are filed

or a record is established as the basis forjudicialreview.

‘‘(5) Giving advice or counsel to any person, or representing or purporting to represent the interest of any

person, in a transaction in which an interest in property

is transferred where the advice or counsel, or the representation or purported representation, involves (a) the

preparation, evaluation, or interpretation of documents

related to such transaction or to implement such transaction or (b) the evaluation or interpretation of procedures to implement such transaction, where such

transaction, documents, or procedures affect the legal

rights, obligations, liabilities or interests of such person . . .

‘‘(6) Engaging in any other act which may indicate

an occurrence of the authorized practice of law in the

state of Connecticut as established by case law, statute,

ruling or other authority.

‘‘ ‘Documents’ includes, but is not limited to, contracts, deeds, easements, mortgages, notes, releases,

satisfactions, leases, options . . . and any other papers

incident to legal actions and special proceedings. . . .’’

Practice Book § 2-44A. Section 2-44A, in defining what

constitutes the unauthorized practice of law, also provides for certain exceptions, which we discuss hereinafter.

The plaintiff contends, and we agree, that this definition of the practice of law is sufficiently capacious to

encompass the various types of services that the plaintiff purports to provide under the auspices of its debt

negotiation business. First, the services that the plaintiff

provides bear all the external indicia of the practice of

law. The plaintiff is a law firm; it purportedly enters

into retainer agreements through which it expressly
purports to provide legal services; and it alleges in the

present action that its Connecticut attorneys enter into

attorney-client relationships with each Connecticut client. On the basis of these representations, we must

conclude that the plaintiff ‘‘[holds itself] out . . . as

an attorney, lawyer, counselor, advisor [or otherwise]

. . . (a) qualified or capable of performing or (b) . . .

engaged in the business or activity of performing any

act constituting the practice of law . . . .’’ Practice

Book § 2-44A (a) (1).

Second, the plaintiff alleges that it provides debt

negotiation services in the context of ‘‘consult[ing] with

each client about their legal options . . . [including

providing] legal advice on topics such as the applicable

statute of limitations, the advantages and disadvantages

of bankruptcy, garnishment exemptions, and litigation

options and strategies.’’ This is consistent with the public comment letters received by the commissioner

acknowledging that many Connecticut attorneys frequently assist their clients in negotiating mortgage, consumer, and other forms of debt in the context of

providing quintessential legal services such as advice

as to the enforceability of debts, defense of collection

suits, and representation in bankruptcy proceedings.

See also New York City Bar Report, supra, p. 77 (‘‘[f]or

many practitioners, legitimate debt settlement negotiation comprises a part of their bona fide practice of

law through which clients resolve debt issues’’). The

plaintiff’s representations, if true, thus indicate that the

debt negotiation services that it provides are inseparably bound together with giving legal advice as to the

transfer of property interests, preparing and evaluating

related documents, and assisting with potential litigation arising from such transactions. See Practice Book

§ 2-44A (a) (5).

Third, the plaintiff represents that ‘‘[i]If litigation

develops, the assigned Connecticut attorney assists the

client in preparing answers to complaints and arbitration demands, drafts responses to discovery (if applicable), drafts cease and desist letters to creditors, and,

when appropriate, helps the client assert claims against

creditors who violate the law on collection practices.

For an additional fee, the [plaintiff] also offers to provide bankruptcy consultations to those clients who cannot settle their debts outside of bankruptcy.’’ Although

it is not entirely clear from the complaint, it appears,

based on these representations, that the plaintiff also

may draft legal documents or agreements for its debt

settlement clients; see Practice Book § 2-44A (a) (3);

and represent those clients in court or in other formal

dispute resolution processes. See Practice Book § 2-44A

(a) (4). At the very least, such services would appear to

qualify as ‘‘other act[s] which may indicate an occurrence of the authorized practice of law . . . .’’ Practice

Book § 2-44A (a) (6).
The plaintiff further represents that, under its business plan, all of these legal services are provided either

directly by Connecticut attorneys or by paralegals and

other support staff under the direct supervision and

control of Connecticut attorneys. Accordingly, taking

the allegations in the complaint as true, as we must,

we are compelled to conclude that the debt negotiation

services that the plaintiff provides are inextricably

bound together with the practice of law by licensed

Connecticut attorneys. See, e.g., Kowaleski v. Rabel,

Statewide Grievance Committee, Opinion No. 13-0267

(April 17, 2014) (concluding that Pennsylvania attorney

who assisted Connecticut resident in debt modification

and reworking of mortgage engaged in unauthorized

practice of law). Accordingly, their regulation falls

under the exclusive authority of the Judicial Branch.

In their current form, the debt negotiation statutes

therefore offend the separation of powers provision of

article second of the state constitution and are unenforceable with respect to Connecticut attorneys

engaged in the bona fide practice of law.8

Two points bear further discussion. First, we consider the commissioner’s argument that debt negotiation services cannot constitute the practice of law

because such services legally may be provided by nonattorneys without running afoul of General Statutes § 51-

88, which prohibits the practice of law by persons not

admitted as attorneys. The trial court found this argument persuasive, as have certain of our sister courts.

See, e.g., Erwin & Erwin v. Bronson, 117 Or. App. 443,

446–47, 844 P.2d 269 (1992), review denied, 317 Or. 271,

858 P.2d 1313 (1993). We, however, do not.

Even if we were to assume that the commissioner’s

premise is true, and that nonattorneys may legally provide basic debt negotiation services in Connecticut

without violating § 51-88, the conclusion does not follow that such services do not constitute the practice

of law when performed by Connecticut attorneys

within the context of an attorney-client relationship.

Rather, it is well established that there are a number

of services that may legally be provided by laypeople

but, when performed by attorneys, constitute the practice oflaw. PracticeBook § 2-44A,for example, contains

an ‘‘[e]xceptions’’ section, which lists a dozen activities

that are permitted to be performed by any person

‘‘[w]hether or not [they constitute] the practice of law

. . . .’’ Practice Book § 2-44A (b). Those activities

include but are not limited to: acting as an authorized

representative before administrative agencies or in

administrative hearings; Practice Book § 2-44A (b) (2);

‘‘[s]erving in a neutral capacity as a mediator, arbitrator,

conciliator or facilitator’’; Practice Book § 2-44A (b)(3);

‘‘[p]articipating in labor negotiations, arbitrations, or

conciliations arising under collective bargaining rights

or agreements’’; Practice Book § 2-44A (b) (4); ‘‘[a]cting
as a legislative lobbyist’’; Practice Book § 2-44A (b) (6);

‘‘[p]erforming statutorily authorized services as a real

estate agent or broker licensed by the state of Connecticut’’; Practice Book § 2-44A (b) (9); and ‘‘[p]reparing

tax returns . . . .’’ Practice Book § 2-44A (b) (10). Section 2-44A therefore implicitly recognizes that these

activities, although permissible for nonattorneys, may

constitute the practice of law when performed by attorneys in the context of an attorney-client relationship.

Indeed, some of these practices are ‘‘commonly understood to be the practice of law’’; Statewide Grievance

Committee v. Patton, 239 Conn. 251, 254, 683 A.2d 1359

(1996); and were traditionally considered to be quintessentially legal services.

The official commentary to rule 5.5 (c) (4) of the

Rules of Professional Conduct likewise recognizes the

existence of ‘‘services that nonlawyers may perform

but that are considered the practice of law when performed by lawyers.’’ See also In re Darlene C., 247 Conn.

1, 16, 717 A.2d 1242 (1998) (Borden, J., concurring)

(activities such as filing papers in court may constitute

practice of law when performed by attorneys but not

when permissibly performed by laypeople). Accordingly, the fact that laypeople legally may perform debt

negotiation services does not mean that such services

do not constitute the practice of law when engaged in

by a Connecticut attorney in the context of an attorneyclient relationship.9

Second, we hasten to emphasize that our conclusion

thatthe commissionerlacks the constitutional authority

to license and regulate the provision of debt negotiation

services as characterized by the plaintiff is predicated

on the plaintiff’s representation that its employees and

affiliates provide such services to Connecticutresidents

only (1) under the direct supervision and control of

licensed Connecticut attorneys, pursuant to rules 5.3

and 5.5 of the Rules of Professional Conduct, and (2)

only in conjunction with the bona fide practice of law.

If the commissioner were to determine, however, that,

in a particular case, the plaintiff or another debt negotiation company was merely using Connecticut attorneys

as a front or facade to circumvent the debt negotiation

statutes, then there would be no separation of powers

problem and the commissioner would not be barred

from exercising his full statutory authority. The plaintiff

itself appears to concede this point, and our sister

courts have concluded likewise. See, e.g., In re Kinderknecht, supra, 470 B.R. 172; see also New York City Bar

Report, supra, p. 3 (‘‘[t]o the extent attorneys engaged

in these enterprises are not acting as attorneys, their

conduct would fall outside the scope of the Rules of

Professional Conduct and should therefore be included

in the statutory scheme’’).

Although the separation of powers provision of the

state constitution requires that the commissioner pre-
sume, forthe purposes of § 36a-671c, that a Connecticut

attorney who purports to provide debt negotiation services within the context of an attorney-client relationship is actually engaged in the practice of law, that

presumption may be overcome where, for example, the

commissioner determines that theConnecticut attorney

has failed to (1) exercise meaningful oversight over

debt negotiation staff, (2) provide any genuine legal

advice or other legal services, and/or (3) maintain a

bona fide attorney-client relationship with the client.

In such cases, the person or persons providing debt

negotiation services would not qualify for the attorney exemption.

Finally, we note that the Office of Chief Disciplinary

Counsel is well aware of its duty to regulate lawyers

when they are acting as debt negotiators, and we trust

that it will continue to monitor vigilantly their activities

and fees in this area of practice. We expect that that

office, if asked to pass upon the fees charged by the

plaintiff or other debt negotiation companies, will take

the statutory fee cap and the commissioner’s maximum

fee schedule into consideration in determining whether

the fees charged are reasonable. We likewise trust that

Connecticut attorneys, both newly admitted and experienced, will remain mindful of the potential ethical pitfalls they may encounter in this area of practice.

The judgment is reversed and the case is remanded

to the trial court with direction to render judgment

sustaining the plaintiff’s appeal.

In this opinion the other justices concurred.

1 The debt negotiation statutes were amended since the plaintiff initiated

this declaratory judgment action in 2012; see, e.g., Public Acts 2014, Nos.

14-7, 14-89 and 14-122; however, the changes are not relevant to this appeal.

For the sake of convenience and clarity, we refer to the current revision of

the statutes.

2 The plaintiff appealed from the judgment of the trial courtto theAppellate

Court, and we transferred the appeal to this court pursuant to General

Statutes § 51-199 (c) and Practice Book § 65-1.

3 Article second of the constitution of Connecticut, as amended by article

eighteen of the amendments, provides in relevant part: ‘‘The powers of

government shall be divided into three distinct departments, and each of

them confided to a separate magistracy, to wit, those which are legislative,

to one; those which are executive, to another; and those which are judicial,

to another. . . .’’

4 Pursuant to this authority, the commissioner has established a schedule

of maximum debt negotiation fees. See Connecticut Dept. of Banking, ‘‘Debt

Negotiation: Schedule of Maximum Fees,’’ (last modified September 28,

2009), available at http:///www.ct.gov/dob/cwp/view.asp?a=2232&q=447776

(last visited August 27, 2015). The schedule provides, among other things,

that: (1) an initial debt negotiation set-up fee may not exceed $50; (2) a

monthly service fee may not exceed $8 per creditor and $40 total; and (3)

total aggregate fees may not exceed 10 percent of the amount by which a

consumer’s debt is reduced as part of each settlement. Id.

5 See Association of the Bar of the City of New York, ‘‘Profiteering from

Financial Distress: An Examination of the Debt Settlement Industry’’ (May

2012) Appendix E, pp. 171–84 (New York City Bar Report) (chart depicting

current state regulations).

6 The commissioner did not determine either (1) whether the plaintiff’s

business model for providing debt negotiation and related services would

qualify for the attorney exemption under the commissioner’s ‘‘primary purpose’’ test, or (2) whether § 36a-671c violated the separation of powers

provisions of the state constitution.
7 Ordinarily, it is the practice of this court to resolve all of an appellant’s

statutory and administrative claims before considering any constitutional

challenges. We have made exception to that rule, however, when ‘‘sufficient

public interest warrants such a review’’; State v. DellaCamera, 166 Conn. 557,

561, 353 A.2d 750 (1974); and when the appellant’s constitutional challenge is

clearly meritorious. See, e.g., Leydon v. Greenwich, 257 Conn. 318, 333 n.20,

777 A.2d 552 (2001) (concluding that challenged ordinance violated federal

and state constitutional rights to engage in protected expressive and associational activities, rather than addressing merits of Appellate Court’s determination that ordinance violated state common-law doctrine governing

municipal parks). We conclude that both conditions are satisfied here, and

we therefore resolve this appeal on the constitutional issue. Cf. Heiberger

v. Clark, 148 Conn. 177, 184, 191, 169 A.2d 652 (1961) (reaching question

whether statute that abridged qualifications for admission to Connecticut

bar for attorneys admitted to practice in other states violated separation of

powers, despite procedural defects in appeal, because matter was one of

great public importance).

8 The commissioner has directed our attention to several cases in which

sister courts considering similar challenges have reached contrary conclusions. See, e.g., Brown v. Consumer Law Associates, LLC, 283 F.R.D. 602,

609 (E.D. Wash. 2012); Hays v. Ruther, 298 Kan. 402, 411, 313 P.3d 782

(2013); Eric M. Berman, P.C. v. New York, 2015 N.Y. Slip Op. 05594, 2015

WL 3948182 (N.Y. June 30, 2015). Those cases are factually distinguishable,

however, or employ reasoning with which we disagree. For example, the

New York Court of Appeals relied on the fact that the debt collection

practices at issue did not constitute the practice of law and, in fact, the

local law itself ‘‘clearly states that it does not pertain to attorneys who are

engaged in the practice of law on behalf of a particular client.’’ Eric M.

Berman, P.C. v. New York, supra, *4. In the present case, by contrast, we

have concluded that debt negotiation, as characterized by the plaintiff, does

constitute the practice of law when performed by an attorney.

9 The commissioner’s reliance on Bysiewicz v. DiNardo, 298 Conn. 748,

6 A.3d 726 (2010), is misplaced. In that case we addressed the inverse

question, namely, whether the mere fact that an attorney engages in certain

conduct thereby renders it the practice of law. In concluding that conduct

in which an attorney engages outside the context of an attorney-client

relationship does not constitute the practice of law, we did not address the

issue of whether an attorney may, as part of the practice of law, engage in

conduct that would not qualify as the practice of law if performed by a

layperson. Indeed, in Bysiewicz, we observed that nonattorneys historically

were permitted to engage in various conduct that was ‘‘commonly understood to be the practice of law’’ when performed by attorneys. (Internal

quotation marks omitted.) Id., 768.