Court Opinion

ID: 2899985
Source: CourtListenerOpinion
Date Created: 2015-09-09 13:02:35.561762+00
Date Added: 2024-06-11T11:34:48.747750
License: Public Domain

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 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 gen-
eral, 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
appeal2 is whether the debt negotiation statutes unduly
permit the commissioner to interfere with the Judicial
Branch’s regulation of the practice of law and, there-
fore, violate the separation of powers provision con-
tained 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 constitu-
tional challenge and dismissed its administrative
appeal.
   The present appeal arises from a petition for a declar-
atory 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 nego-
tiating 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 alterna-
tive 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 circum-
stances 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 credit rating will be damaged even further.
. . . Unfortunately, enrolling in a debt negotiation pro-
gram 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 commis-
sioner] 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 pro-
tect 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 ‘‘financial responsi-
bility, character, reputation, integrity and general fit-
ness’’ 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 § 36a-
671a (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 commis-
sioner 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 § 36a-
50 (b). Third, the debt negotiation statutes prohibit the
charging of up-front fees for such services, and autho-
rize the commissioner to establish a schedule of maxi-
mum 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 § 36a-
671b (c). For example, each debt negotiation customer
must be provided a contract that contains: ‘‘(1) a state-
ment certifying that the person offering debt negotiation
services has reviewed the consumer’s debt . . . (2) an
individualized evaluation of the likelihood that the pro-
posed debt negotiation services would reduce the con-
sumer’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 other things,
the new Federal Trade Commission regulations ‘‘set
forth disclosure requirements for the industry, prohib-
ited certain misrepresentations in the telemarketing of
debt relief services, and banned debt relief service com-
panies . . . from charging fees to consumers in
advance of renegotiating, settling or reducing unse-
cured debt balances. 16 C.F.R. [§ 310.1 et seq.], 75 Fed.
Reg. [48458] 48460 ([August] 10, 2010) . . . .’’ (Cita-
tion omitted.)
   Connecticut’s debt negotiation statutes contain a pro-
vision that exempts certain persons from the scope
of these regulations and licensing requirements. See
General Statutes § 36a-671c. As initially enacted, § 36a-
671c provided in relevant part: ‘‘The provisions of sec-
tions [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 attor-
ney exception presumably reflected the legislature’s
recognition that, under article second of the state con-
stitution, the Judicial Branch has the exclusive author-
ity 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 exemp-
tion . . . .’’
  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 pro-
vide 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 prac-
tice of law.’’ In support of its petition, the plaintiff
alleged the following facts. ‘‘[The plaintiff] is a Mary-
land-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 harass-
ment, and bankruptcy. The firm uses Connecticut law-
yers 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 pro-
vide services on behalf of [the plaintiff] are licensed
by the Judicial Branch and regulated by the Statewide
Grievance Committee and the Office of Chief Disciplin-
ary Counsel, [the plaintiff] and its Connecticut 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 represen-
tation, 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 pre-
paring answers to complaints and arbitration demands,
drafts responses to discovery (if applicable), drafts
cease and desist letters to creditors, and, when appro-
priate, helps the client assert claims against creditors
who violate the law on collection practices. For an
additional fee, the [plaintiff] also offers to provide bank-
ruptcy 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 of its clients receive debt-relief services, [the plain-
tiff] 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 attor-
ney’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 cli-
ents 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 paraprofes-
sional staff during the representation.’’
   The plaintiff also submitted with its petition an Octo-
ber, 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 admit-
ted 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 manner in which legal
services are rendered through Connecticut attorneys is
relatively new . . . .’’
  Before ruling on the plaintiff’s petition, the commis-
sioner invited public comment thereon. Thirteen com-
ment 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 ren-
dered by these unlicensed entities.’’ The Deputy Chief
Court Administrator also expressed the concern, how-
ever, that the department not unduly encroach on the
Judicial Branch’s authority to regulate attorney con-
duct. 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 peti-
tion 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 of low income and other vulnera-
ble 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 unin-
formed 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 consum-
ers 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 con-
tend, financially troubled Connecticut consumers have
suffered a range of harms. They are deprived of their
limited funds, and are subjected to lawsuits, bank exe-
cutions, and wage garnishments. In addition, because
they are falsely assured that the debt negotiation com-
panies 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 com-
ment letters was that these various complaints and alle-
gations have been the subject of numerous legal and
administrative actions against the plaintiff in other juris-
dictions. 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 Kan-
sas counsel] may hold themselves out as lawyers provid-
ing 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 pur-
port 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 attor-
neys are merely pawns of the debt negotiation compa-
nies, 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 commis-
sioner 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 . . . experi-
enced net financial loss and lasting financial harm due
to their involvement with debt settlement service pro-
viders’’; New York City Bar Report, supra, p. 1; (2)
‘‘enforcement agencies have filed dozens of enforce-
ment 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 exemp-
tion 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 case-
by-case basis in light of all of the facts and circum-
stances.
   ‘‘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 attor-
ney 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.’’ (Empha-
sis 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 of law in Connect-
icut 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 improper for 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 oth-
erwise qualifying attorney or law firm where debt nego-
tiation 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 pro-
vide debt negotiation services solely via partners or
shareholders; (4) the plaintiff lacked standing to chal-
lenge this no action policy; and (5) because debt negoti-
ation 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 plain-
tiff as to its fifth challenge, and conclude that the attor-
ney 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 administra-
tive 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 author-
ity 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 commin-
gling 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 perfor-
mance 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 exer-
cise 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 consti-
tutional 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 judi-
cial 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 estab-
lishes a significant interference with the orderly con-
duct 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 under this 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 dis-
covery 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 qualifi-
cations for admission to the practice of law. See Hei-
berger 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 administra-
tion, 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 depart-
ments 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 imper-
missibly intrude on the judiciary’s exclusive authority
to regulate attorney conduct and licensure. For exam-
ple, 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 negotia-
tion statutes would, among other things, improperly:
(1) give the commissioner the authority to determine
which attorneys in this state have the ‘‘character, repu-
tation, 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 exclu-
sive 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 equi-
table 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 Applica-
tion 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 pos-
sess, transgresses the constitutional power of that
department.’’ Heiberger v. Clark, supra, 191.
   It also is well established that the ‘‘authority to disci-
pline and regulate the conduct of counsel’’; Bartholo-
mew 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 Hospi-
tal, 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 prac-
tice and their professional conduct after admission are
essentially matters to be regulated by the judicial
department of the state’’ [internal quotation marks omit-
ted]); but see Massameno v. Statewide Grievance Com-
mittee, 234 Conn. 539, 568, 663 A.2d 317 (1995)
(judiciary has inherent power to regulate attorney con-
duct 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
for their 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 objec-
tives 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 lia-
bilities.
  ‘‘(3) Drafting any legal document or agreement involv-
ing or affecting the legal rights of a person.
  ‘‘(4) Representing any person in a court, or in a formal
administrative adjudicative proceeding or other formal
dispute resolution process or in any administrative adju-
dicative proceeding in which legal pleadings are filed
or a record is established as the basis for judicial review.
   ‘‘(5) Giving advice or counsel to any person, or repre-
senting 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 repre-
sentation or purported representation, involves (a) the
preparation, evaluation, or interpretation of documents
related to such transaction or to implement such trans-
action or (b) the evaluation or interpretation of proce-
dures to implement such transaction, where such
transaction, documents, or procedures affect the legal
rights, obligations, liabilities or interests of such per-
son . . .
  ‘‘(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, con-
tracts, 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 pro-
vides for certain exceptions, which we discuss here-
inafter.
   The plaintiff contends, and we agree, that this defini-
tion of the practice of law is sufficiently capacious to
encompass the various types of services that the plain-
tiff 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 cli-
ent. 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 pub-
lic comment letters received by the commissioner
acknowledging that many Connecticut attorneys fre-
quently assist their clients in negotiating mortgage, con-
sumer, 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 negotia-
tion 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 insepara-
bly bound together with giving legal advice as to the
transfer of property interests, preparing and evaluating
related documents, and assisting with potential litiga-
tion 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 arbitra-
tion demands, drafts responses to discovery (if applica-
ble), 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 pro-
vide bankruptcy consultations to those clients who can-
not 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 occur-
rence of the authorized practice of law . . . .’’ Practice
Book § 2-44A (a) (6).
  The plaintiff further represents that, under its busi-
ness 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 unen-
forceable with respect to Connecticut attorneys
engaged in the bona fide practice of law.8
   Two points bear further discussion. First, we con-
sider the commissioner’s argument that debt negotia-
tion services cannot constitute the practice of law
because such services legally may be provided by nonat-
torneys 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 argu-
ment 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 pro-
vide basic debt negotiation services in Connecticut
without violating § 51-88, the conclusion does not fol-
low 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 prac-
tice of law. Practice Book § 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 Connecti-
cut’’; Practice Book § 2-44A (b) (9); and ‘‘[p]reparing
tax returns . . . .’’ Practice Book § 2-44A (b) (10). Sec-
tion 2-44A therefore implicitly recognizes that these
activities, although permissible for nonattorneys, may
constitute the practice of law when performed by attor-
neys in the context of an attorney-client relationship.
Indeed, some of these practices are ‘‘commonly under-
stood 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 quintes-
sentially 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 per-
formed 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). Accord-
ingly, 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 attorney-
client relationship.9
   Second, we hasten to emphasize that our conclusion
that the commissioner lacks 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 Connecticut residents
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 negotia-
tion 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 Kinder-
knecht, 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, for the purposes of § 36a-671c, that a Connecticut
attorney who purports to provide debt negotiation ser-
vices within the context of an attorney-client relation-
ship is actually engaged in the practice of law, that
presumption may be overcome where, for example, the
commissioner determines that the Connecticut 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 attor-
ney 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 experi-
enced, will remain mindful of the potential ethical pit-
falls 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 court to the Appellate
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 pur-
pose’’ 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 associa-
tional activities, rather than addressing merits of Appellate Court’s determi-
nation 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 conclu-
sions. 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 under-
stood to be the practice of law’’ when performed by attorneys. (Internal
quotation marks omitted.) Id., 768.