April 21, 2017
On April 17, 2017, the United States Supreme Court declined to review a challenge to New York Judiciary Law Section 470, which requires non-resident New York attorneys to maintain a physical office in New York State "for the transaction of law business." A year ago, the Second Circuit ruled that Judiciary Law Section 470, which exempts New York residents from the physical office requirement, passed Constitutional muster. See Schoenefeld v. Schneiderman, et al., 11‐4283‐cv; [MAY 2016 CLIENT ALERT].
Judiciary Law Section 470 had been challenged by lawyer Ekaterina Schoenefeld, a New Jersey resident who is admitted to practice law in New York, New Jersey and California. Schoenefeld claimed that she was forced to turn down business from New York clients because she did not maintain a physical office in New York State. Schoenefeld asserted that requiring non-resident New York attorneys to maintain a physical office in New York State, while not requiring the same of resident New York attorneys, violated the Privileges and Immunities Clause of the U.S. Constitution by favoring New York residents in their ability to practice law.
On April 22, 2016, A divided panel of the Second Circuit had ruled that the law does not violate the Privileges and Immunities Clause because it was not enacted for protectionist purposes. Rather, the Court ruled that the law put non-resident attorneys on equal footing as resident attorneys by facilitating in-state service of process on all attorneys. Notably, the Court’s majority opinion concluded that the Privileges and Immunities Clause does not require that it be as easy for non-residents as it is for residents to comply with the law; it requires only that state law not favor residents over non-residents for protectionist purposes. “The fact remains that the law was enacted for [a] nonprotectionist purpose” said the Court, “and Schoenefeld has adduced no evidence of a protectionist intent to afford some economic advantage to resident New York lawyers.” The Court’s lengthy dissent stated that New York “has chosen to discriminate against nonresident attorneys with regard to their right to pursue a common calling, and it has failed to provide a substantial justification for that discrimination.”
The Supreme Court did not comment in turning away Schoenefeld’s petition.