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MATTER CHARLES A. A'HEARN v. COMMITTEE ON UNLAWFUL PRACTICE LAW NEW YORK COUNTY LAWYERS' ASSOCIATION (05/03/68)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, THIRD DEPARTMENT 1968.NY.41482 <http://www.versuslaw.com>; 289 N.Y.S.2d 994; 30 A.D.2d 47 May 3, 1968 IN THE MATTER OF CHARLES A. A'HEARN, APPELLANT,v.COMMITTEE ON UNLAWFUL PRACTICE OF THE LAW OF THE NEW YORK COUNTY LAWYERS' ASSOCIATION, RESPONDENT Matter of A'Hearn v. Committee on Unlawful Practice of Law of N. Y. County Lawyers' Assn., 55 Misc. 2d 540, affirmed. Vollmer, Wildermuth & McCarty (Charles M. McCarty of counsel), for appellant. Daniel M. Shientag for respondent. Gibson, P. J. Reynolds, Staley, Jr., and Gabrielli, JJ., concur with Gibson, P. J.; Herlihy, J., dissents and votes to reverse, in an opinion. Author: Gibson


Matter of A'Hearn v. Committee on Unlawful Practice of Law of N. Y. County Lawyers' Assn., 55 Misc. 2d 540, affirmed.

Gibson, P. J. Reynolds, Staley, Jr., and Gabrielli, JJ., concur with Gibson, P. J.; Herlihy, J., dissents and votes to reverse, in an opinion.

Author: Gibson

 The petitioner appeals from an order of the Supreme Court at Special Term in New York County, which denied his motion for an order quashing or, in the alternative, modifying a subpoena duces tecum issued to him by respondent Committee on Unlawful Practice. The appeal was transferred to this court from the Appellate Division of the Supreme Court in the First Judicial Department pursuant to CPLR 5711. The petitioner, according to his affidavit submitted in support of the motion, is a licensed life insurance agent and broker, is not a lawyer and has long been "engaged in the business of pension and profit sharing planning", presently with offices in New York County. The respondent Committee on Unlawful Practice of the Law of the New York County Lawyers' Association caused the subpoena now in question to be issued over the signature of its attorney, that of the Clerk of the Appellate Division and the printed attestation of the Presiding Justice and caused it to be served upon petitioner, who was thereby directed to appear before a subcommittee of respondent "to testify and give evidence in a certain investigation now being conducted by said Committee with regard to the practice of Charles A. A'Hearn [petitioner] and others in Violation of Sections 90 and 750B of the Judiciary Law of the State of New York". The subpoena required, also, that petitioner produce copies of advertisements placed by him offering his "services in connection with pensions, pension plans, profit sharing plans, stock pension plans and deferred compensation plans of every nature and description between January 1, 1966 and May 31, 1967"; as well as copies of brochures and similar writings issued or distributed by him during the same period, and, finally, copies of pension and other plans prepared by him, copies of agreements made by him with his customers and various business records and files.

The subpoena was issued in purported compliance with rule XII-A of the Special Rules of the Appellate Division First Department in regard to conduct of attorneys, providing as follows:

"Rule XII-A. Preliminary Investigation of Persons, Firms or Corporations Unlawfully Practicing or Assuming to Practice Law. Upon application by the Chairman or Acting Chairman of the Committee on Unlawful Practice of the Law of the New York County Lawyers' Association, the Association of the Bar of the City of New York, or the Bronx County Bar Association, disclosing that such Committee has reason to believe that a person, firm or corporation is unlawfully practicing or assuming to practice law, and that such Committee desires that an investigation thereof be conducted, or upon application by any such person, firm or corporation under such investigation, the clerk of this court shall issue subpoenas in the name of the Presiding Justice for the attendance of witnesses and production of books and papers before such Committee, or any subcommittee of such Committee designated in such application at the time and place within the First Judicial Department that said Committee or subcommittee regularly meets.

"Each Committee or subcommittee conducting such a preliminary investigation is empowered to take and transcribe the evidence of witnesses who may be sworn by any person authorized by law to administer oaths."

The subpoena now under attack was issued following an exchange of letters between the parties, commencing with the subcommittee's letter of November 21, 1966, stating that the services offered by petitioner to the public "in the designing and drafting of pension, profit-sharing, and employee benefit plans and programs" may constitute the unauthorized practice of law, within the prohibitions of sections 270 and 280 of the Penal Law and subdivision B of section 750 of the Judiciary Law, and requesting that petitioner arrange to meet with the subcommittee to "discuss and supply a representative sampling of" advertisements, records and other papers of the nature subsequently specified in the subpoena. The correspondence concluded with a letter from petitioner to the subcommittee, dated December 27, 1966, stating that petitioner had "no desire to cooperate with a Committee unwilling to state its aims, purposes and objectives", although these would appear evident from the prior correspondence if they were not, indeed, reasonably inferable from the committee's title.

In its application to the Appellate Division for the issuance of the subpoena, the committee stated, substantially in the language of rule XII-A: "This application is made by reason of the fact that the Committee on Unlawful Practice of the Law of the New York County Lawyers' Association has cause to believe that the above named party [petitioner] is unlawfully practicing or assuming to practice law and said committee desires to conduct an investigation thereof."

The thrust of petitioner's primary attack is to the authority upon which the subpoena is purportedly based; but we can examine petitioner's contention that no authority exists only by first exploring the sources of the court's power generally, in respect of non-lawyers assuming to practice law. Such power clearly exists, being conferred by the provision that: "The supreme court shall have power and control over attorneys and counselors-at-law and all persons practicing or assuming to practice law". (Judiciary Law, § 90, subd. 2; emphasis supplied.) Implementation of the power is provided with equal clarity by subdivision B of section 750 of the Judiciary Law, which states: "B. In addition to the power to punish for a criminal contempt as set forth in subdivision A, the supreme court has power under this section to punish for a criminal contempt any person who unlawfully practices or assumes to practice law; and a proceeding under this subdivision may be instituted on the court's own motion or on the motion of any officer charged with the duty of investigating or prosecuting unlawful practice of law, or by any bar association incorporated under the laws of this state." The court's specific powers, in these and other respects, are complemented and implemented by the provisions of section 216 of the Judiciary Law, headed, "Additional powers and duties of the appellate divisions", which, so far as here pertinent, provides that: "In addition to the powers and duties elsewhere enumerated in this chapter, each appellate division, with respect to the courts in its department, shall have power to: 1. Adopt, promulgate, supplement, rescind and modify rules and orders necessary to implement its powers and duties hereunder including the supervision of the administration and operation of the courts in its department, not inconsistent with any statute hereafter adopted and the standards, policies, rules and orders of the administrative board."

It was, of course, to effectuate these powers, as granted by sections 90, 750 and 216, that rule XII-A, concerning, among other things, the investigation of any "person, firm or corporation * * * unlawfully practicing or assuming to practice law", was promulgated. So clearly does the quoted reference include non-lawyers "practicing or assuming to practice law" that we mention only in passing petitioner's insubstantial contention to the contrary, predicated on the perhaps inappropriate placement of rule XII-A, a later promulgation, in Part 4 of the special rules, headed "Attorneys", in which it is (by rule I) provided that the "rules shall apply to attorneys and counselors-at-law who have their offices in the First Judicial Department." The Appellate Division's right to exert control in this field, whether by rule XII-A or otherwise, being thus established, we turn to the subsidiary issue of the subpoena power asserted in furtherance of such control.

Essentially, petitioner's argument is that the purported power of subpoena so plainly conferred by rule XII-A is ineffective because unauthorized by statute. The general statutory power is to be found in section 2-b of the Judiciary Law providing that, "A court of record has power 1. to issue a subpoena requiring the attendance of a person found in the state to testify in a cause pending in that court". Petitioner contends, first, that here the subpoena was not issued in a pending action or proceeding, i.e., "a cause pending" in the Appellate Division, and, second, that this provision of section 2-b must be read with that of CPLR 2302 (subd. [a]), authorizing the issuance of subpoenas "without a court order by the clerk of the court", with the effect, in petitioner's view, of limiting the clerk's power -- which is, of course, the court's power -- to issue subpoenas only in "a cause pending". Reason and precedent alike deny so narrow a view of the court's authority. It is true that the present inquiry is not a judicial proceeding in the ordinary sense. However, it differs in no material particular from the ambulance chasing investigations of the past and the present, in which the power of subpoena is implicit. Like them, it is "a preliminary inquisition, without adversary parties, neither ending in any decree nor establishing any right * * * it is a quasi-administrative remedy whereby the court is given information that may move it to other acts thereafter (Cf. Matter of Richardson, 247 N. Y. 401, at pp. 413, 418). The closest analogue is an inquisition by the grand jury for the discovery of crime." (People ex rel. Karlin v. Culkin, 248 N. Y. 465, 479.) From our conclusion that the Appellate Division had the right to order, conduct or sanction the investigation undertaken by respondent, the court's power of subpoena follows as a matter of course. (People ex rel. Karlin v. Culkin, supra ; Matter of Bar Assn. of City of N. Y., 222 App. Div. 580, 590; Matter of Brooklyn Bar Assn., 19 Misc. 2d 491.)

It is further argued, in answer to appellant's contentions, that section 2-b of the Judiciary Law does not restrict or limit the operation of CPLR 2302 (subd. [a]) and that the clerk was authorized to act under subdivision (a), whether or not there was "a cause pending" and, indeed, could have acted pursuant to inherent authority (8 Wigmore, Evidence [3d ed.], § 2195, p. 78) exercised in aid of the court's inherent power to investigate matters concerning the practice of law (Matter of Bar Assn. of City of N. Y., supra, pp. 586-590); and it is further asserted that, within the contemplation of the statutory subpoena power, the investigation is, in fact and in law, a proceeding and "a cause pending", commenced simply by respondent's application for the subpoena, as would have been the case in a Grand Jury investigation, which Karlin (supra, p. 479) found analogous (cf. People ex rel. Van Der Beek v. McCloskey, 18 A.D.2d 205); but the determination which we have reached on broader grounds renders consideration of these additional contentions unnecessary.

Petitioner's final attack is directly upon the rule itself. He contends that rule XII-A, unless construed to apply only to pending actions or proceedings, contravenes his rights and immunities under the Federal and State Constitutions. He stresses, in particular, the supposed violation of the prohibition against unreasonable searches and seizures imposed by the Fourth Amendment to the Constitution of the United States (and by section 12 of article I of the Constitution of the State of New York) arising out of the issuance of the subpoena without a prior showing of good cause. As to this, appellant contends that respondent committee's unverified and factually unsupported statements in its letter to the Appellate Division that the committee "has cause to believe that [petitioner] is unlawfully practicing or assuming to practice law and said committee desires to conduct an investigation thereof" fail to demonstrate good cause.

We find nothing in the constantly expanding body of the pertinent decisional law constraining us to impose upon a judicial inquiry under section 90 of the Judiciary Law the rigid test or good cause standard for which appellant contends; nor do we perceive any element of public policy pointing to the necessity of such a requirement in this or future cases. Section 90 vests the court with broad supervisory authority over persons who practice or assume to practice law. Recognizing this authority and the further responsibility imposed by subdivision B of section 750, it would be unreasonable indeed to deny to the court inquisitorial powers at least equal to those possessed by a Grand Jury and by the Attorney-General (Judiciary Law, § 476-c; and see, e.g., Dunham v. Ottinger, 243 N. Y. 423, app. dsmd. 276 U.S. 592). The objection urged by this appellant was advanced and overruled in the recent case of United States v. Powell (379 U.S. 48), in which Powell, in resisting a subpoena of certain tax records by the Commissioner of Internal Revenue, contended unsuccessfully that the Government was required to make a showing of probable cause for suspecting fraud, the court holding (p.57): "This view of the statute is reinforced by the general rejection of probable cause requirements in like circumstances involving other agencies. In Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 216, in reference to the Administrator's subpoena power under the Fair Labor Standards Act, the Court said 'his investigative function, in searching out violations with a view to securing enforcement of the Act, is essentially the same as the grand jury's, or the court's in issuing other pretrial orders for the discovery of evidence, and is governed by the same limitations,' and accordingly applied the view that inquiry must not be '"limited * * * by forecasts of the probable result of the investigation."' In United States v. Morton Salt Co., 338 U.S. 632, 642-643, the Court said of the Federal Trade Commission, 'It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function. It is more analogous to the ...


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