ABA Files Lawsuit Challenging Privacy Provisions

The American Bar Association has sued the Federal Trade Commission, arguing that attorneys should not be required to send privacy disclosure notices to clients. The lawsuit says the FTC has no authority to regulate the privacy of information that clients share with lawyers. At issue is a provision in the Gramm-Leach-Bliley Act that requires banks and other financial institutions to notify customers of their privacy policies.

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The nation’s largest lawyers’ organization sued the Federal Trade Commission Wednesday, arguing that attorneys should not be required to send privacy disclosure notices to clients. The lawsuit, filed in Washington, D.C., by the American Bar Association, says the FTC has no authority to regulate the privacy of information that clients share with lawyers. At issue is a provision in a 1999 law — the Gramm-Leach-Bliley Act — that requires banks and other financial institutions to send notices to customers outlining their privacy policies and explaining how information is shared with affiliates and other outside companies. FTC officials, charged with enforcing the law, say it also applies to lawyers. The ABA, representing more than 400,000 lawyers, argues the requirement is burdensome for them and confusing for clients because attorneys are already subject to strict ethical codes. “This federal statute that was intended to regulate banks is being used to muddy the waters with respect to the simple rules governing attorney-client confidentiality — rules which virtually everybody understands,” said ABA president Alfred P. Carlton Jr. The New York State Bar Association — representing more than 70,000 lawyers — sued the FTC over the same issue in April. That lawsuit is also pending in federal court in Washington. On Wednesday, Reps. Judy Biggert, R-Ill., and Carolyn Maloney, D-N.Y., introduced legislation supported by the ABA that would exempt lawyers from the law’s disclosure requirements. Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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