N.Y. State Bar Association Sues Federal Trade Commission Over Privacy Notices - Says Provisions Never Intended to Apply to Lawyers.
ALBANY, N.Y.--(BUSINESS WIRE)--April 29, 2002
Lawyers Say a Misguided Government Effort, as Feds Choose
Bureaucracy Over Common Sense
Arguing that practicing lawyers should be exempt from issuing recently mandated privacy notices to clients because their Code of Professional Responsibility provides far more protections for consumers of legal services legal services n. the work performed by a lawyer for a client. , the New York State Bar Association The New York State Bar Association (NYSBA), with about 72,000 members, is the largest voluntary association of lawyers in the United States. The NYSBA was founded in Albany on November 21 1876. New York lacks an integrated bar, and the NYSBA does not license lawyers in the state. (NYSBA NYSBA New York State Bar Association
NYSBA New York State Brewers Association ) today, Monday, April 29, filed suit against the Federal Trade Commission to stop enforcement of the Gramm-Leach-Bliley (GLB (Gramm-Leach-Bliley Act) Enacted in 1999 and effective in mid 2001, the GLB stipulates that every financial institution shall protect the security and confidentiality of its customers' confidential personal information. ) Act as it applies to lawyers.
"Lawyers are already subject to strict ethical rules, under our Code of Professional Responsibility, requiring us to keep client confidences and secrets. It is bureaucratic, unnecessary and inefficient to require that we send out so-called "privacy notices" as well," said NYSBA President Steven C. Krane of New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (Proskauer Rose LLP LLP - Lower Layer Protocol ).
As outlined in the complaint, filed in U.S. District Court for the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , the action is based on two key points: (1) as it applies to lawyers, the act is unconstitutional under the 10th Amendment; (2) the FTC FTC
See Federal Trade Commission (FTC). has acted arbitrarily and capriciously in refusing to exempt lawyers from compliance with the act. There is no evidence that Congress intended that the GLB Act should apply to lawyers.
The GLB Act, officially known as the Financial Services Modernization Act of 1999, requires financial institutions to provide "a clear disclosure to all their clients concerning privacy policies," as well as to explain how that institution shares information with affiliates and third parties.
This marks only the second time in its 125-year history that the NYSBA has filed suit against the federal government. In 1998, the lawyers' group won its suit against then Attorney General Janet Reno in the "Granny's Advisor Goes to Jail Act." Chief U.S. District Court Judge Thomas J. McAvoy (U.S. District Court for the Northern District of New York) struck down a law that criminalized advising clients of legal asset transfers for Medicaid eligibility.
As defined by the FTC, a financial institution is a company that provides services to clients that are considered "financial activities" within the meaning of the Bank Holding Act of 1956. Lawyers are told they fit that definition.
After a series of meetings with FTC officials, Krane said "it became clear that in the agency's opinion, lawyers engaged in such practice areas as tax planning Tax planning
Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. and transactions, estate planning, real estate closings and personal bankruptcy, at a minimum, are covered by the new law. The estimated one million lawyers affected nationwide by the GLB requirement would risk civil sanctions of up to $10,000 per violation for failure to properly notify past, present and future clients.
"Our clients have always enjoyed far greater privacy protections under the Code than that provided by any policy that has or may now exist in the commercial marketplace," he said. According to Krane, New York's Code, which governs the daily business and ethical practice of lawyers admitted in the state, provides greater protection of a client's personal information and subjects a lawyer who violates that trust to professional disciplinary action, including disbarment disbarment n. the ultimate discipline of an attorney, which is taking away his/her license to practice law often for life. Disbarment only comes after investigation and opportunities for the attorney to explain his/her improper conduct. . A mandatory "Statement of Clients' Rights and Responsibilities" provides this information to all clients of New York lawyers.
The Washington, D.C. office of Proskauer Rose LLP is representing the NYSBA on a pro bono basis. Warren Dennis and Susan Brinkerhoff are lead counsel. Members of the NYSBA's Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. Oversight Committee are A. Thomas Levin of Mineola (Meyer Suozzi English & Klein), Sharon Stern Gerstman of Buffalo (confidential law clerk, Supreme Court, 8th Judicial District) and Susan B. Lindenauer of New York (The Legal Aid Society).
The 70,000-member New York State Bar Association is the official statewide organization of lawyers in New York and the largest voluntary state bar association in the nation.
For this and other related news items go to www.nysba.org and click on "News Bureau."