The Feds are Coming after State Bar Authorities, and the Lawfulness of this Effort is Unclear

The DoJ has proposed a rule that would possibly displace state bar authorities in making ethics violation decisions for DOJ lawyers. The “possibly” qualification is added only because, in its lengthy memo explaining the rule, the DOJ insists that this rule is principally procedural, and leaves more or less intact state bar authority. Still and all, the explanation for the rule rests on the Trump administration’s claim that ethics complaints have been weaponized against government lawyers who are simply trying to do their job. Naturally, heated partisan politics suffuse these efforts, and we will continue to see politics pull and tug at this matter in the coming weeks and months. Indeed, Congressional Democrats are prominently decrying all this as we speak.

In nearly 50,000 comments submitted in response to the proposed rule, a number of individuals and groups, including state bar associations, insist that the government is acting outside the scope of its constitutional authority in seeking to interfere with state bar regulation. It is not clear that they are right in these claims; but it is not clear that they are wrong.

Why this uncertainty? Why is this a difficult question? One might think that with more than two centuries of experience with deep matters of constitutional federalism, the question of whether and to what extent the federal government can displace state regulation in matters of bar regulation would be rather settled. But settled it is not. As Stanford law professor David Engstrom and I have discussed in a recent chapter to a book entitled Rethinking the Lawyers’ Monopoly, one of the key features of the bar regulation ecosystem (an ecosystem that includes matters ranging from licensing to ethics to the unauthorized practice of law, among other matters) is that is traditionally managed entirely by state government officials and, in particular, state supreme courts. Federal law in this space is rare, and most of it is focused on ethics/professional responsibility rules pertaining to government lawyers, rules that basically supplement what state bar authorities require of lawyers who are licensed to practice in their states. There are other procedural rules dealing with various aspects of practice in federal courts and while such rules are certainly important, they do not disturb the essential hegemony of state supreme courts (and bar authorities to whom the justices have delegated rulemaking and enforcement power) in matters of ethics regulation. State law, not federal law, governs lawyers’ conduct, and that is generally how it has always been.

One key condition on such regulation, to be sure, is that these state-level schemes of regulation cannot interfere with rights guaranteed by the U.S. Constitution, an issue that was central to the Supreme Court’s decision several decades back in New Hampshire v. Piper, wherein the Court struck down a state residency requirement for lawyers on the grounds that this would interfere with the 14th amendment (focusing on the right to travel). Nor will state regulations stand where it would interfere with the so-called dormant commerce clause. But this condition has remained rather abstract, in the absence of major federal court rulings invalidating state bar rules on these grounds — even rules such as restrictions on interstate lawyer mobility or Wisconsin’s unique diploma privilege which, on the face of it, would seem to raise at least plausible dormant commerce clause concerns. Moreover, where the Court has weighed in, usually in dicta, it has opined that states get to make the fundamental choices about how to structure lawyer and legal services regulation in their states. To summarize, state bar regulatory authority must meet constitutional requirements, as must all state-level regulation of course, must these requirements are not all that onerous, and, in any event, most of the myriad rules governing lawyers do not threaten constitutional rules or values.

But what happens when the feds get into the act by doing their own regulating? Does the U.S. Constitution, through the 10th amendment, give the states any sort of safe harbor in constructing and implementing regulation? No blockbuster case has answered this question either way, puzzling as that might seem, given how important is the ecosystem of legal practice, legal ethics, and the national impact of what lawyers do and how they do it.

Prof. Engstrom and I insist in our chapter that the balkanization of state legal services regulation — what we call, with a nod to Justice Hugo Black’s famous phrase, “our bar federalism” — raises some important concerns, especially in an age in which legal practice is increasingly national and even global in scope, in which developments in AI and other technologies are flattening the geographical (among other) differences in how legal services are and ought to be delivered, and, perhaps most critically, where the access to civil justice crisis makes the need for collective national strategies so very urgent. We equivocate in our chapter on the question of whether comprehensive national regulation is the best answer to these problems, recommending more hybrid schemes of regulation that calls upon states and the federal government to work more collaboratively in this space. Likewise, we equivocate on the hard constitutional questions of how much latitude the feds have to interfere with state-level authority.

On this constitutional question, my considered, but still somewhat tentative view (how is that for more equivocation?!) is that the federal government has more authority than it has traditionally exercised to craft and implement regulatory schemes that would apply to lawyers working for the federal government. State bar rules governing legal ethics are more than interstitial to be sure, but are only part of the overall ecosystem, if and insofar as the federal government undertakes their own strategies of regulation and regulatory enforcement.

Many of the bar association comments directed toward this regulation — which, to be clear, I cannot be enthusiastic about, given its motivation and also what its ideologically laden attempt to look hard to solve a problem that does not seem to really exist, or at least is not especially pressing — make claims about the lack of federal authority that are little more than ipse dixit. Urging a greater federal role in situations involving the functions and performance of federal government lawyers are in issue, and where there exists mechanisms in the Department of Justice to examine matters of misconduct seem plausible as a constitutional matter, given the clear interest of the national government in ensuring that government lawyers are acting ethically and, further, are not being subject to a patchwork quilt of state-level regulations. Suppose a state acting under the aegis of its own regulatory rubric insisted that federal government lawyers be disbarred if a federal court had ruled that a matter they have brought was frivolous or because (to take a current hot topic) they filed a brief on behalf of the United States that contained hallucinations? While we might be sympathetic to state decisions to punish these lawyers for their bad behavior, we might also understand why the Department of Justice would be concerned about inequities in enforcement and targeted attacks on lawyers taking positions on behalf of the Administration that were incongruous with state officials’ view of what the rule of law demands and forbids. Politics presents a two-way street after all. We can well imagine Red state officials getting their dander up about Democratic DoJ conduct; and we can also see, as the Trump administration insists is happening now, Blue states having the same essential reaction. At bottom, the federal government’s interest in creating regulatory structures and tactics that push for a more comprehensively uniform scheme is an understandable strategy, and one that makes some sense within the ambit of our constitutional values and our traditions of American federalism.

This is not a knock-down constitutional argument, however; and we should think more about how exactly to ground the federal government’s power in crafting such an approach. Is this within the scope of Congress’s commerce power? Insofar as it deals with lawyers in practice before federal courts, does it derive from some principles embedded in Article III? And, beyond that, does the connection between DoJ decisionmaking and decisionmaking within the state government implicate some of the anticommandeering doctrine that has meaningfully limited the federal government viz. the 10th amendment? If this DoJ proposal goes forward in this form, we can expect to see litigation along these lines. For now, I want to say just this: 1) The move on the part of the federal government to establish some schemes of national lawyer ethics regulations is not a crazy venture, given all the deficits associated with our balkanized (and potentially weaponized) system of bar federalism we have now; and 2) the DoJ effort implicates some difficult constitutional issues, but we should definitely not leap to the conclusion so prominently made by state bar authorities and others in their comments that this is clearly unconstitutional. Hard questions make bad law for sure, but hard questions benefit from being answered, and this hard question is well worth addressing after so long slumbering.