The New Jersey State Bar Association reiterated the Constitutional separation of powers in its request to the Appellate Division to hold the limited attorney exemption in the New Jersey Debt Adjustment and Credit Counseling Act (NJDACCA) unconstitutional as applied to attorneys. The Association participated as amicus curiae in Anchor Law Firm, PLLC v. State of New Jersey, Docket No. A-000052-23 before a three-panel judge on the issue. NJSBA Treasurer Diana C. Manning. argued the matter on behalf of the Association. Manning and Kyle A. Valente wrote the brief.
“The Limited Attorney Exemption impermissibly infringers on the Supreme Court’s exclusive authority to regulate the practice of law,” the NJSBA said in its briefing. It argued that the Limited Attorney Exemption in the NJDACCA violates the separation of powers doctrine because it restricts the amount of “debt adjustment services” that New Jersey attorneys can provide to their clients in connection with legal representation without defining what “debt adjustment” is and without explaining what it means to be “principally engaged” as a debt adjustor.
Judge Jack M. Sabatino focused his questioning on the constitutional issues and the use of the phrase “principally engaged in.” He also questioned the Office of Attorney Ethics investigation into the attorneys, querying whether OAE could sanction a lawyer for the breach of the statute.
“Absolutely,” Manning said. “If you are acting in a nefarious way, inappropriate way, unethical way, the OAE can investigate lawyers. The statute does not create this right, but it does create a mechanism for punishment that is outside what the Supreme Court has set out, whether it is diversion, censure, discipline by consent, disbarment. The OAE does not need the statute to investigate you or discipline you for that conduct.”
The Association pointed out that the Rules of Professional Conduct govern how attorneys conduct the business of practicing law. If the statute is left to stand, it purports to grant the Department of Banking and Insurance and its Commissioner the authority that is constitutionally vested in the Supreme Court to determine what constitutes the practice of law and potentially limiting the ways in which attorneys currently assist in those in need. The NJSBA took no position on the underlying matter regarding attorney conduct.
The state Legislature is considering a bill that would permit for-profit debt adjusters to be licensed to conduct business in New Jersey. S1310 (Singer)/A4598 (Lopez) has passed the Senate and is under review in the Assembly Regulated Professions Committee. The bill amendments would remove the offending language argued in the matter and replaces it with “any person engaged in the practice of law.” The NJSBA, however, opposes other provisions in the bill as unfriendly to consumers.
The NJSBA continues to monitor both the lawsuit and the legislation.