Opinion ID: 2261551
Heading Depth: 1
Heading Rank: 2

Heading: constitutionality of r. 1:20a

Text: There is something almost anachronistic about the challenge to the Court's power to adopt R. 1:20A under the New Jersey Constitution. For 33 years this Court has exercised plenary, exclusive, and almost unchallenged power over the practice of law in all of its aspects under N.J.Const. (1947), Art. VI, § II, par. 3. The enormous scope of this power puts R. 1:20A in proper perspective. Though critically important, it is but a minor regulation of the practice of law compared to others whose validity is beyond dispute. The heart of the constitutional provisions concerning the judicial system was the concentration of responsibility for its proper functioning in the Supreme Court and Chief Justice. Such responsibility requires appropriate power over courts, judges, practice and procedure, and lawyers. Responsibility for an adversarial judicial system requires responsibility for the adversaries, and control over both. In exercising this responsibility, one of the many goals this Court has sought to achieve has been maintaining public confidence in the judicial system. The intended direct beneficiary of that system is the litigant, the client, who can realistically gain access to it only through his relationship with a lawyer. The value of the judicial product depends upon the effectiveness of this access, the effectiveness of this relationship. If lawyers refuse to represent, the judicial system is almost worthless; if the terms and conditions of representation are unfair, the judicial system is impaired to that extent. This dependency of the public's confidence in the judicial system on its satisfaction with lawyer-client relationships is not theoretical: those dissatisfied with the system include a fair proportion dissatisfied with their lawyer. The most common cause of that dissatisfaction concerns fees, see section IIIA, infra. Given the critical importance of the constitutional power of this Court over the practice of law, and its pervasiveness, starting with admission, ending with disbarment, and covering everything in between, we have no doubt that the power extends to every aspect of fee agreements between lawyers and clients. If this Court can set a limit on fees for certain matters, American Trial Lawyers v. New Jersey Supreme Court, 66 N.J. 258 (1974) (upholding the contingent fee schedule promulgated in R. 1:21-7); require service for no fee at all in others, State v. Rush, supra, 46 N.J. at 411-12 (noting this Court's authority to require attorneys to defend indigents without charge); and disregard completely fee agreements in all matters (if they are unreasonable), Steiner v. Stein, 2 N.J. 367, 372 (1949) ( see section IIC, infra ); if, in short, this Court has the authority to control the substance of the fee relationship, then a power of a lesser magnitude  determining the procedure for resolving fee disputes  must also be within our province. [6]
Petitioner maintains that his right to equal protection guaranteed by the Fourteenth Amendment to the United States Constitution is violated by R. 1:20A. This Rule, it is argued, unconstitutionally singles out attorneys from among professionals who provide fee-based services for compulsory arbitration. We find no support for this argument in federal constitutional law. Since lawyers are not a protected suspect class, and since there is no recognized fundamental right being infringed upon by R. 1:20A, there need be only a rational basis supporting the difference in treatment. See San Antonio Ind. School Dist. v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed. 2d 16 (1973). We find that such a rational basis plainly exists in the need to assure the reasonableness of attorney-client fees by providing a swift, inexpensive remedy to correct unreasonable fees. As the United States Supreme Court has recognized, the state has a special interest in regulating the legal profession and attorney-client relationships. Goldfarb v. Virginia State Bar Association, 421 U.S. 773, 792, 95 S.Ct. 2004, 2015, 44 L.Ed. 2d 572 (1975). See In re Logan, 70 N.J. 222, 229-30 (1976).
Petitioner and the Association maintain that R. 1:20A unconstitutionally denies attorneys the right to trial by jury guaranteed by N.J.Const. (1947), Art. I, par. 9. [7] We disagree, on the two grounds that in New Jersey attorneys never had an absolute right to trial by jury in fee dispute cases and that recognizing a jury right in such cases would undermine our constitutional authority to regulate the Bar. N.J.Const. (1947), Art. I, par. 9, provides that [t]he right of trial by jury shall remain inviolate.... This provision guarantees a jury trial only to the extent the right existed at the time of the adoption of the 1947 Constitution. See Steiner v. Stein, supra, 2 N.J. at 378-79. Petitioner therefore must establish that before 1947 attorneys had a right to a jury trial in cases involving fee disputes with their clients. Petitioner and the Association maintain that fee disputes are essentially nothing more than contract disputes for money. Since, they argue, such disputes have always been considered legal as opposed to equitable, and since litigants always had a right to jury trial of legal matters, attorneys always had the right to jury trial in fee dispute cases. Support for this position can be found in Steiner, where this Court stated that [attorney-client fee disputes] are actions for breach of contract and the parties were and are entitled to a trial by jury as of right. 2 N.J. at 372. The Court in Steiner went on, however, to recognize that, because an attorney's position of trust as an officer of the court obligated him to the highest standard of fair dealing, New Jersey courts of equity have traditionally exercised jurisdiction at the behest of the client to revis[e] or cance[l] contracts for services and to determin[e] the just and reasonable sum due the attorney from his client. Id. The Court noted that equity courts have gone so far as to restrain actions at law in order to exercise this jurisdiction, but that the equity courts have stayed their hand when a client has already had his day in a court of law. Id. Our canvass of the pre-1947 case law strongly supports the Court's findings in Steiner that New Jersey equity courts have always had broad powers to adjudicate attorney-client fee disputes on behalf of the client. In Lewis v. Morgan, 132 N.J. Eq. 343 (Ch. 1942), for example, a client brought an action in equity to enjoin prosecution by his attorney of a suit at law to recover attorney fees. The client wanted the Chancery Court to review the reasonableness of the fee his attorney sought. The defendant attorney argued that the Chancery Court lacked jurisdiction over the case and that his suit at law should therefore not be enjoined. The court granted the injunction, holding that the existence of a confidential relationship between an attorney and client has been recognized from the earliest times and it must now be acknowledged that the charges of an attorney are always subject to the scrutiny and review of this court. Id. at 346 (emphasis added). [8] The court added that even if a client agreed to the estimated amount of the fee to be charged, equity will investigate the fairness and reasonableness of the contract. Id. Similarly, in Grimm v. Franklin, 102 N.J. Eq. 198 (Ch. 1928), aff'd p.c.o.b., 146 A. 914 (E. & A. 1929), the Chancery Court enjoined several law suits brought by the defendant attorney against the plaintiff client seeking attorney's fees. There, the court noted the defendant's admission that the charges of an attorney are always subject to scrutiny and review in this court, and that this court has a right now to determine the fairness and reasonableness of the contract [and] the adequacy and propriety of the compensation therein provided for. Id. at 204 (emphasis added). [9] See also Porter v. Bergen, 54 N.J. Eq. 405, 406 (E. & A. 1896) (Even if it be conceded that the [client] agreed to the [fee], yet a court of equity would not sanction it except upon proof of its perfect fairness); Sinisi v. Milton, 107 N.J. Eq. 179 (Ch. 1930); Kelley v. Schwinghammer, 78 N.J. Eq. 437 (Ch. 1911); Lewis, Equity, 4 Rut.L.Rev. 274, 275 (1949). [10] As the Court noted in Steiner, however, equity courts were not permitted to step in after a law court had already adjudicated a fee dispute. See Raimondi v. Bianchi, 102 N.J. Eq. 254 (E. & A. 1928). The rationale behind this broad power exercised by equity courts over attorney-client fee disputes was explained by Justice Heher in Bolte v. Rainville, 138 N.J. Eq. 508 (E. & A. 1946). Courts, Justice Heher pointed out, recognize the position of superiority which the attorney occupies over his client [and] [b]ecause of this dominance [equity] raises a presumption against the validity of the transaction [between attorney and client] and casts upon the dominant party the burden of proving affirmatively his compliance with equitable requisites and thereby overcoming the presumption of invalidity. Id. at 515. [11] These cases establish that prior to 1947 attorneys had no right to prevent their clients from having fee disputes adjudicated without a jury in the courts of equity. They therefore have no such right today since the 1947 Constitution does not purport to add any right to jury trial. Steiner was not wrong, however, in concluding that fee disputes are essentially legal matters for which a jury is normally guaranteed. If the client does not object, an attorney is entitled to have a jury trial. [12] However, if the client wishes to have the dispute adjudicated without a jury, by a Committee  which is now the tribunal with special responsibility over attorney-client fee disputes [13]  the attorney cannot block the Committee's jurisdiction by asserting a right to trial by jury. Our conclusion here is buttressed by the fact that recognizing a right in lawyers to demand a trial by jury when clients seek R. 1:20A arbitration would greatly undermine this Court's constitutional authority to regulate the Bar. As we have determined, see section IIA, supra, N.J.Const. (1947), Art. VI, § II, par. 3, plainly authorizes us to create the R. 1:20A compulsory arbitration scheme. If we were to accept petitioner's interpretation of Art. I, par. 9, however, this authority would be meaningless because lawyers could simply block Committee arbitrations by demanding a jury. We decline so to interpret that provision. Just as we would not view the framers of the 1947 Constitution as intending the prerogative writ clause to undermine our authority to regulate the Bar, see section IID(2), infra, so we decline to ascribe to them an intent to grant lawyers a jury right that would prevent this Court from effectively carrying out its obligation to police the Bar.
The final constitutional challenge made by petitioner and the Association is to the unappealability of Committee determinations. [14] It is alleged that the right to appeal Committee determinations is guaranteed by the due process clause of the Fourteenth Amendment to the United States Constitution and by the New Jersey Constitution. We find no support for a right to appeal here under either Constitution. [15]