The Boston Bar Association and the Massachusetts Bar Association filed amicus briefs with the 1st U.S. Circuit Court of Appeals challenging different aspects of a Boston federal court ruling against the Real Estate Bar Association for Massachusetts Inc.
Both organizations filed briefs on Feb. 12, but they tackle separate orders issued by Judge Joseph Tauro of the District of Massachusetts in The Real Estate Bar Association for Massachusetts Inc. v. National Real Estate Information Services.
The Massachusetts Bar Association primarily challenges Tauro's April 13, 2009, ruling limiting the role lawyers need to perform in residential real estate closings in Massachusetts.
The Boston Bar Association's brief, on the other hand, disputes Tauro's Aug. 17, 2009, order awarding $904,076.17 in fees and costs to National Real Estate Information Services.
According to Tauro's April ruling, lawyers must attend and supervise a residential real estate closing, but need not be involved in other aspects of the real estate transfer.
Tauro sided with the real estate services company's counterclaim that the Real Estate Bar Association's interpretation of the Massachusetts unauthorized practice of law statutes violates the U.S. Constitution's dormant commerce clause.
"REBA's interpretation of the practice of law would be a substantial burden on interstate commerce," Tauro wrote.
Tauro's ruling also barred REBA from enforcing its interpretation of the practice of law on National Real Estate Information Services.
Tauro awarded fees and costs to National Real Estate Information Services because it prevailed in its dormant commerce clause claim.
Aside from appealing Tauro's orders, REBA filed a motion on Oct. 27 asking the appellate court to stay Tauro's order on the legal fees. On the same date, REBA filed a second motion asking the 1st Circuit to certify a question to the Massachusetts Supreme Court about whether evaluating legal rights of real estate under a title and transferring legal ownership of real estate from one person to another constitutes the practice of law in the state.
REBA wants a Supreme Judicial Court opinion because Tauro made his ruling in the absence of a clear Supreme Judicial Court ruling on this issue, said REBA's attorney, Douglas Salvesen, a shareholder at Boston-based Yurko, Salvesen & Remz.
"That begs the question of whether [real estate closings are] the practice of law or not," Salvesen said. "The purchase of a home in Massachusetts, or anywhere, is probably the most important purchase anyone is going to make in their lifetime. The transfer of those legal rights and property is clearly something that can only be done by someone with knowledge of the law."
According to its brief, the Boston Bar Association takes no position on whether defendant National Real Estate Information Services Inc. engaged in the unauthorized practice of law or how the dormant commerce clause applies to the real estate bar group's claims.
Instead, the association is concerned about protecting the rights of bar associations and others to get court rulings on important legal issues without risking liability for the other side's legal bills, said Jon Albano, a Boston partner who co-chairs Bingham McCutchen's entertainment, media and communications practice group and who is a co-author of the Boston Bar Association's brief.
"The BBA thought it was important to defend the principle that going into court to ask for a ruling on an issue, which is what happened here, should not be the basis for any finding of liability as long as there's a reasonable basis for the lawsuit," Albano said.
Salvesen also called the National Real Estate Information Services' argument that it offers lower-cost real estate closings "unsupported."
"It's not really a cost issue," Salvesen said. "Lawyers are doing this cheaper today than they were 20 years ago."
National Real Estate Information Services' general counsel, Tom Lammert, and the company's attorneys at K&L Gates declined to comment.
Robert Muldoon Jr., a litigation partner at Boston's Sherin and Lodgen, and the Massachusetts Bar Association's counsel on the brief, said the group supports REBA's claim that Tauro erred in his finding that the National Real Estate Information Services is not engaged in the unauthorized practice of law.
"The position of the Massachusetts Bar Association is that historically, going back centuries through various statements from the [the Supreme Judicial Court of Massachusetts], the practice of conveyancing real estate, which is just surrounded by all kinds of consequences dealing with rights in land and rights to develop land, these activities historically are the practice of law," Muldoon said. "We're urging the 1st Circuit to reverse Judge Tauro's decision that they are not."
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Two Mass. Bar Associations Challenge Ruling About Role of Lawyers in Real Estate Closings
The National Law Journal
February 18, 2010
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