This term, the high court addressed the public’s right to be informed — through trade-name recognition — of the substantive area of law in which a prospective lawyer engages, as well as the lawyer’s right to commercial free speech. The right of clients to change counsel at any time, and the virtues of diligence and promptness in legal practitioners were also winners in this past term’s decisions.
What’s in a Name? (Almost) Everything!
In a fast-changing world, institutional change is all too often either slow or entirely elusive. But time moves on, and the practice of law with its longstanding rules sometimes must give way to the reality of current business models. This is the case with the Supreme Court’s March 2013 opinion in In the Matter of the Letter Decision of the Committee on Attorney Advertising, the latest chapter in a multi-year reconsideration of the rules governing law firm names and the longstanding prohibition on the use of trade names.
The initiating events in the underlying matter were the naming of the “Alpha Center for Divorce Mediation” by its attorney proprietor and a subsequent ruling by the Supreme Court’s Committee on Attorney Advertising (CAA), declaring the name invalid as in violation of RPC 7.1 and 7.5. In addition to its mediation services, the Alpha Center had multiple affiliations with lawyers engaging in the practice of law, thus the propriety of its name came under the auspices of the Rules of Professional Conduct. The established rules required that law firms bear the name or names of law firm attorneys (including those who may be retired or deceased) and not in any fashion use trade names which could mislead or deceive the public.
The CAA, citing RPC 7.1 and 7.5, deemed the name invalid, and the Alpha Center sought Supreme Court review. In a 2009 opinion, the Supreme Court took recognition of the fact that there was a growing leniency in the law as it pertains to the use of trade names by law firms and lawyers (particularly with the advent of Internet advertising), and rather than precipitously decide the issue of Alpha’s name along with its free speech implications, remanded to the CAA for specific findings and recommendations based upon a full record — inclusive of public comment by interested parties.
The CAA undertook this task over the course of several months, while the litigation itself followed a briefing schedule and was set down for oral argument. After developing its record, the CAA recommended an expansion of the rules governing the naming of law firms to include certain trade names, so long as they would not mislead the public, and so long as they were accompanied by the name or names of the lawyers affiliated with the entity.
The Supreme Court, which had retained jurisdiction over the issue, rendered its opinion on March 12, 2013. A unanimous court accepted the recommendations of the CAA, placing its imprimatur on the modified rules regarding the use of trade names. The court analyzed the foundation of RPC 7.5 and the overall desire to preclude names of law firms which could be misleading or deceptive to the public, but further noted the current trend toward the limited use of trade names in sister jurisdictions and the absence of any reported harmful effect upon the public. It therefore approved a modified version of RPC 7.5 (e), to read as follows upon coming into effect:
Use of a trade name shall be permissible so long as it describes the nature of the firm’s legal practice in terms that are accurate, descriptive, and informative, but not misleading, comparative, or suggestive of the ability to obtain results. Such trade names shall be accompanied by the name of the attorney who is responsible for the management of the organization. Any firm name containing additional identifying language such as “Legal Services” or other similar phrases shall inform all prospective clients in the retainer agreement or other writing that the law firm is not affiliated or associated with a public, quasi-public or charitable organization. However no firm shall use the phrase “legal aid” in its name or in any additional identifying language.
By way of examples, the court indicated that under the revised RPC, phrases such as “Tax Law Associates” or “Personal Injury Group” would be permissible, while descriptors such as “Best Tax Lawyers” or “Tax Fixers” would be impermissible.
Applying the newly-established rules (which will not formally be adopted until various procedures are put in place by the CAA), the court deemed the use of the word “Alpha” as a prohibited descriptor, as it had “no informative content other than serving the impermissible purpose of invoking the notion of primacy.” The remainder of the name, changed to include the name of the managing New Jersey attorney, was deemed to be within the new rules.
The rule change strikes the balance between the current marketing needs of the legal profession and maintaining the proscription on the use of improper descriptive terms which could still mislead or deceive the public. While the CAA has been tasked with the responsibility of creating and implementing a registry system, and formal adoption of the new RPC 7.5 awaits completion of that task, this case represents a marked shift in the rules governing legally-acceptable law firm names.
The decision and the rule change are also a plus for the consumers of legal services and is a logical sequel to the Opinion 39 case, which protects commercial free speech and allows publications such as Super Lawyers, which have a bona fide rating methodology, to publish lists of lawyers who are recognized by their peers as among the top lawyers in the state. In re Opinion 39 of the Committee on Attorney Advertising, 197 N.J. 66 (2007). (Bennett Wasserman, one of the authors of this article, was co-lead counsel in the case.) Such publications have been shown to be reliable sources of information for consumers seeking qualified and competent legal services. Having access to such information can only serve the public well in making an informed choice when they need the service of a qualified lawyer in multiple substantive areas — a need that was poorly served before the Super Lawyers case and the RPC rule changes it engendered. The new decision now permits law firms to use descriptive names, thus hopefully informing the public of its areas of specialization.
Tort Claims Act: Malpractice in 90 Days or Less!
D.D. v. University of Medicine and Dentistry of New Jersey, 213 N.J. 130 (2013), decided March 12, presents a case where the time-based strictures of the Tort Claims Act joined with attorney inattention, leading to the forfeiture of a claim. In D.D., the plaintiff had been selected to be the keynote speaker for UMDNJ’s recognition of World AIDS Day. In a subsequent press release about the event and its speaker, UMDNJ, without authorization, released personal, private health information about D.D. That disclosure came to the plaintiff’s attention on Nov. 24, 2009.
D.D. immediately retained counsel, met with counsel, and the two met with UMDNJ officials in December 2009. A cease-and-desist letter was sent. UMDNJ offered apologies and other assurances to the plaintiff and her counsel, leaving the plaintiff to believe that the matter could be privately handled. Following that meeting, the plaintiff’s attorney asked her for additional information, which D.D. supplied. At this point, however, the plaintiff’s attorney, possibly under the impression that a settlement had been achieved, did not pursue the claim any further. He also purportedly did not answer or return as many as 10 phone calls from D.D. Most significantly, he did not file a notice of claim under the Tort Claims Act. N.J.S.A. 59:8-1 et seq.
The plaintiff obtained new counsel in April 2009. At that juncture, the 90-day period for filing a notice of tort claim had expired. In an effort to preserve whatever rights she may still have had, and in recognition of his predecessor’s omission, new counsel immediately filed a notice of claim. The notice of claim set forth that UMDNJ’s actions were tortious, and that disclosure of D.D.’s personal information was alleged to have caused embarrassment as well as substantial adverse physical and psychological impact upon the plaintiff.
Ultimately, a lawsuit was filed on the plaintiff’s behalf, and UMDNJ defended, in part, by asserting that the plaintiff’s notice of claim was untimely. The plaintiff argued that the claim should be allowed under the “extraordinary circumstances” provision of the Tort Claims Act, with D.D. claiming that she had properly relied on her counsel, that she had been assured by her counsel that the matter would be handled and that she had had received such similar assurances from UMDNJ, that she was the victim of attorney inattention while not sitting on her rights, and that she was too “psychologically stymied” to (personally) have made sure that a notice of claim had been filed.
The trial court was persuaded that the circumstances warranted the filing of a late notice of claim, premised upon the aforementioned arguments, buttressed by a physician’s certification and the claimed absence of any prejudice to the defense. In a split decision, the Appellate Division affirmed, and an appeal was taken as a matter of right. The Supreme Court reversed in a 3-2 decision (Justices LaVecchia and Albin dissenting), citing insufficient grounds upon which to establish “extraordinary circumstances,” notwithstanding the fact that the plaintiff had retained counsel in a timely fashion and had not sat on her rights.
With regard to attorney inattention, the Supreme Court distinguished this case from Beauchamp v. Amedio, 164 N.J. 111 (2000), where an attorney’s (justified) confusion over the meaning of a prior Appellate Division decision regarding TCA filing requirements allowed for the filing of a belated notice of claim. The majority ruled that this matter was more in line with Zois v. N.J. Sports and Exposition Authority, 286 N.J. Super. 670, 674 (App.Div. 1996) (counsel’s misplacing of a file did not constitute “extraordinary circumstances” sufficient to permit a late notice of claim); Blank v. City of Elizabeth, 162 N.J. 150, 152-153 (1999); and Leidy v. County of Ocean, 398 N.J. Super. 449, 454, 457-458 (App.Div. 2008) (counsel’s failure to investigate the identity of the tortfeasor does not constitute “extraordinary circumstances” so as to permit the late filing of a notice of claim).
For the practitioner, the lesson to draw from the decision in D.D. v. UMDNJ is that an attorney’s failure to adhere to the strict requirements of the Tort Claims Act will, in all likelihood, result in a bar to the underlying claim in all but the most compelling circumstances. This, in turn, will effectively result in the substitution of a legal malpractice claim for the tort claim. It is thus incumbent upon the prudent practitioner to be cognizant of the strict requirements of the Tort Claims Act and file a notice of claim within the time allotted by N.J.S.A. 59:8-1 et seq. and its interpretive case law, because attorney inattention will not save a claim on behalf of an otherwise blameless client.
Change of Counsel: Tortious Interference or Fair Game?
Clients are the life blood of the legal profession. Lawyers seek to secure clients in furtherance of their practice, including clients who are already represented by counsel. Under what circumstances, however, would the act of soliciting the business of another client create a cause of action for tortious interference with economic advantage? This was the question posed by the Supreme Court in the matter of Nostrame v. Santiago, 213 N.J. 109 (2013).
Natividad Santiago had a cause of action sounding in medical malpractice, and retained Frank Nostrame, Esq., as counsel to pursue the claim on her behalf. Over the course of several months, Nostrame gathered medical records, conducted legal research and consulted with medical experts. Following those efforts, Nostrame arranged a meeting with his then-client, who did not show. Nostrame learned that Santiago had decided to change counsel, and would now be represented by co-defendant Mazie Slater Katz & Slater, LLC. Superseding counsel requested that the file be transferred, and the change was made, with Nostrame asserting a lien for the work he had performed.
Mazie Slater would ultimately settle the malpractice case for $1.2 million. Following resolution of the case, Nostrame’s lien remained in dispute, and money was held in escrow pending resolution of that issue. Beyond the lien, Nostrame filed an action against his former client, her daughter and the Mazie Slater firm, alleging tortious interference with economic advantage, claiming that Mazie Slater used tortious means by which to lure his client from him.
Mazie Slater moved for dismissal of the claim on the pleadings, arguing that Nostrame failed to state a claim upon which relief could be granted, by calling into question the absence of specificity as to the alleged tortious conduct. The trial court denied the motion (in part, allowing for discovery to take place), but leave to appeal was granted and the case moved to the Appellate Division. There, the trial court’s ruling was reversed. The plaintiff’s petition for certification was thereafter granted.
The Supreme Court affirmed the Appellate Division’s directive that the case be dismissed for failure to state a claim upon which relief could be granted. In its opinion, the court first noted that a primary consideration in this analysis was the need to preserve a client’s right to counsel of his or her choice, to be accompanied by the bar’s obligation to comply with and follow the Rules of Professional Conduct and its proscriptions against false or misleading statements about, or improper comparisons to, other attorneys. RPC 7.1(a).
In reviewing these principles, the court noted that attorneys are not competitors for business in the ordinary, commercial sense; they are fellow members of the bar and their conduct is governed by the RPCs. With these respective tenets noted, the court framed the issue of client cultivation as follows: “The issue, then, in the context of successive attorneys, turns on our evaluation of what means are improper or wrongful.”
In deciding the case, the court gave clear notice that when pleading tortious interference with economic advantage in the context of legal clientele, the attorney alleging the intentional tort is obligated to advance pleadings which contain the type of specificity such as required in fraud claims. Plaintiff-attorneys seeking redress for these “stolen” clients may not merely offer general pleading with the idea of using discovery to establish the facts upon which the claim is based, as was the case in the instant matter. They are obligated to discern the facts and place them in a satisfactory, fact-laden pleading.
The significance of the Nostrame decision is the Supreme Court’s recognition that competition among attorneys for clients is a part of the practice of law, and must be viewed in the context of assuring that a client’s choice of counsel is perceived as paramount with due deference to the RPCs. While a claim of tortious interference with economic advantage is not outside the realm of possibility where one attorney procures the client of a second attorney, there are limited circumstances under which such a claim would be deemed viable, and to survive a motion to dismiss, the claim must be brought with particularity and specificity, and likely aided by a sustainable claim that the RPCs, particularly RPC 7.1(a), have been violated.
In sum, during this past term, our Supreme Court gave us important guidance in the contemporary world of legal practice, where the pursuit of new clients has grown in importance and intensity. Whether that pursuit is via mass communication in the form of trade names or in the form of a single client taken from another lawyer, the court has approved the process of client pursuit, but within stringent ethical guidelines. The practitioner is also reminded of the importance of diligence and promptness in protecting clients against the passage of well-established time limits, so that their legal rights can be vindicated. •