Roberta L. Cripe v. Thomas E. Leiter

Amicus Curiae on Behalf of the Chicago Council of Lawyers

INTRODUCTION 

The issue presented by this appeal is simple, and begins with the following question: Can it be true that, because lawyers may be disciplined or disbarred for engaging in conduct that violates their professional obligations, they are exempt from generally applicable statutes that also govern their illegal conduct?

The answer must be no. Lawyers, like everyone else, must adhere to generally applicable laws on a daily basis. If they commit crimes, they will be tried and perhaps jailed regardless of the fact that they may also be disbarred. If they fail to act with care and honor, their clients may sue them for malpractice or fraud as well as initiate disciplinary proceedings against them. The existence of this Court's rules for regulating attorney conduct through licensure and disciplinary proceedings, although a powerful and significant tool, does not render attorneys untouchable by any other means.

Accordingly, the same range of statutory and common law remedies that apply to individuals who defraud or deceive consumers, must apply as well to attorneys. That range includes the Consumer Fraud and Deceptive Trade Practices Act (the "Consumer Fraud Act" or the "Act"). The Chicago Council of Lawyers takes no position on the underlying merits of the claims of Plaintiff-Appellee Roberta L. Cripe ("Plaintiff"). Instead, the Chicago Council of Lawyers writes separately as amicus to express its view that application of the Act to attorneys merely recognizes the unremarkable principle that lawyers enjoy no special dispensation from the law.

STATEMENT OF INTEREST

The Chicago Council of Lawyers is a public interest bar association dedicated to improving the justice system by evaluating its participants, studying its functions, speaking out on issues of importance to the legal community, supporting legal services for the poor, and making suggestions for change where appropriate. The Council's membership consists of attorneys in public service as well as private practice, law school professors and students, judges and other public officials. Where, as here, the Chicago Council of Lawyers believes that it can add a valuable perspective to an issue of public interest, the Council offers such perspective through the submission of an amicus brief.

ANALYSIS

I. ATTORNEYS ENJOY NO BLANKET EXEMPTION

FROM LAWS REGULATING CONDUCT.

The Consumer Fraud Act, 815 ILCS 505/1 et seq., creates a cause of action for consumers who allege injury as a result of unfair or deceptive trade practices. 815 ILCS 505/10a. The Act contains specific exemptions for individuals whose activities do not fall under its purview. See 815 ILCS 505/10b. This list of exemptions does not include attorneys. See id.^/ On its face, then, the Act offers no basis for excluding attorneys from its scope, or for denying consumers the right to a statutory remedy against attorneys whose deceptive acts caused them injury. As a matter of policy, this result is clearly correct.

The argument that the Consumer Fraud Act may not apply to attorneys centers on the premise that, because this Court retains authority to regulate and discipline attorneys, and exercises that authority through its promulgation of Rules of Conduct as well as procedures for licensing and discipline, the Legislature cannot constitutionally enact laws which concurrently affect attorney conduct. Thus, according to this logic, because the Rules of Conduct set out parameters for attorney fees, and because the Attorney Registration and Disciplinary Commission is empowered to investigate charges of attorney overbilling, the Legislature exceeds its authority by establishing a statutory cause of action for consumers claiming attorney overbilling.

This analysis cannot be correct. Moreover, it has never been the case. The Illinois General Assembly has enacted a host of criminal statutes -- covering forgery, deceptive practices, subornation of perjury, theft, and financial exploitation of the elderly -- that touch upon conduct governed by the Supreme Court Rules. For example, it is a misdemeanor in Illinois to cause another, "by deception or threat to execute a document disposing of property or a document by which a pecuniary obligation is incurred." 720 ILCS 5/17-1(B)(a). If the Consumer Fraud Act cannot reach attorney overbilling because of this Court's inherent power to regulate attorneys, then it would appear this criminal statute must similarly exempt attorneys. See also 720 ILCS 5/16-1 (theft); 720 ILCS 5/16-1.3 (financial exploitation of the elderly); 720 ILCS 5/17-3 (forgery); 720 ILCS 5/32-3 (subornation of perjury).

II. THERE IS NO BASIS FOR DISTINGUISHING

THE CONSUMER FRAUD ACT FROM OTHER GENERALLY

APPLICABLE LAWS THAT GOVERN ATTORNEY CONDUCT.

It seems clear that the Act, like the statutes discussed above, should and does apply to attorneys absent some countervailing concern. Amici for Defendant, the Illinois State Bar Association and the Illinois Association of Defense Trial Counsel, argue that the constitutional separation of powers provision presents such a concern. The Chicago Council of Lawyers respectfully disagrees. While the separation of powers clause forbids the enactment of statutes that infringe on judicial authority, it does not prevent the legislature from enacting generally applicable statutes that arguably will affect attorney conduct.

A. Separation Of Powers Invalidates Only

Statutes That Encroach On Judicial Authority.

Article II, Section I of the Illinois Constitution forbids any individual branch of government from exercising the powers of another branch. Ill. Const. 1970 art. II, sec. I; see also Best v. Taylor Machine Works, No. 81890-81893, 1997 WL 777822 at *37 (Ill. Dec. 18, 1997). This clause expresses a powerful principle, but a limited one which recognizes that some degree of overlap is inevitable: "The separation of powers provision does not seek to achieve a complete divorce between the branches of the government; the purpose of the provision is to prevent the whole power of two or more branches from residing in the same hands." Kunkel v. Walton, No. 81176, 1997 WL 720867 at *3 (Ill. Nov. 20, 1997); see also People v. Williams, 124 Ill. 2d 300, 306, 529 N.E.2d 558, 561 (1988)(the legislature "may pass legislation which has a peripheral effect on judicial administration"); People v. Walker, 119 Ill. 2d 465, 473-74, 519 N.E.2d 890, 892 (1988)(noting that "the decisions of this court recognize that the separation of powers provision does not prohibit every exercise of functions by one branch of government which ordinarily are exercised by another").

Accordingly, the separation of powers clause is not a machete, blindly hacking through any statutory enactment that happens to touch upon powers arrogated to the Court. Indeed, just the opposite is true: courts must presume the constitutionality of validly enacted legislation, see, e.g., Williams, 124 Ill. 2d at 306-07, 529 N.E.2d at 561; Walker, 119 Ill. 2d at 473-75, 519 N.E.2d at 892, and the party seeking to rebut that strong presumption of constitutionality afforded properly enacted legislation bears the burden of clearly establishing the constitutional violation. Bernier v. Burris, 113 Ill. 2d 219, 227, 497 N.E.2d 763, 767 (1983).

Courts will find such a violation only in certain, narrowly defined circumstances. Specifically, a legislative enactment violates the separation of powers doctrine only where it unduly encroaches upon the inherent powers of the judiciary, or directly and irreconcilably conflicts with a rule of this Court on a matter within the court's authority. Walker, 119 Ill. 2d at 474-75, 519 N.E.2d at 893. Under the facts of this case, the latter is not at issue: consumer causes of action under the Act do not purport to address any rules of this Court, let alone in such a way as to conflict with them.^/ The only question, then, is whether subjecting attorneys to the provisions of the Consumer Fraud Act, just as they are subjected to countless other statutes that govern their conduct, somehow implicates this Court's inherent power.

B. The Consumer Fraud Act Does Not Infringe

On This Court's Inherent Power.

There can be no doubt but that this Court retains exclusive authority to perform specific functions with respect to attorneys: regulation of licensure, promulgation of rules governing conduct, and discipline of misconduct. See, e.g., People ex rel. Brazen v. Finley, 119 Ill. 2d 485, 494, 519 N.E.2d 898 (1988); In re Harris, 93 Ill. 2d 285, 291, 443 N.E.2d 557, 559 (1982); In re Mitan, 75 Ill. 2d 118, 123, 382 N.E.2d 278, 280 (1979). Legislative enactments or actions of subordinate courts that infringe on this authority therefore are impermissible. See Kunkel, 1997 WL 720867 at *3. However, as previous case law from this Court and from the Illinois Appellate Court makes clear, statutes that simply complement Court rules, without purporting to diminish or qualify judicial prerogatives, do not infringe on the Court's inherent authority.

For example, the Third District recently upheld against a separation of powers challenge a local county ordinance that required local lobbyists to satisfy certain reporting requirements. Kavanagh v. County of Will, 689 N.E.2d 299, 303 (Ill. App. 3rd Dist. 1997). The court rejected the claim that this ordinance improperly regulated and disciplined attorneys, noting that it did not limit attorneys' ability to appear and practice before any court.^/ Id.

On numerous other occasions, Illinois courts including this one have rejected separation of powers challenges raised simply because the statute in question claimed some interest in or effect on judicial proceedings. See, e.g., Bernier, 113 Ill. 2d 219, 250-51, 497 N.E.2d 763, 778-79 (1983)(court rejected challenge to Section 2-1114 of the Code of Civil Procedure, which establishes a sliding scale of fees that an attorney may charge in representing a plaintiff in a medical malpractice action, finding that the statute "does not purport to limit the scope of a court's authority over these matters" because the court retained discretion to approve larger fees); Walker, 119 Ill. 2d at 473-82, 519 N.E.2d at 893-97 (automatic substitution of judge statute did not violate separation of powers); Williams, 124 Ill. 2d at 306-307, 529 N.E.2d at 560-61 (same).

The viability of these statutes, which actually do affect the workings of the judiciary, underscores why the Consumer Fraud Act, which has no such impact on the Court's regulation or discipline or attorneys, cannot violate the separation of powers clause.^/

III. APPLICATION OF THE CONSUMER FRAUD ACT TO ATTORNEYS

DOES NOT OPEN THE DOOR TO UNCHECKED LITIGATION,

BUT MERELY PRESCRIBES AN ADDITIONAL REMEDY.

Seemingly underlying the opposition to application of the Act to attorneys is the fear that the Consumer Fraud Act is really a Pandora's box, ready to spread litigation unchecked through a previously pristine universe. This fear is somewhat difficult to comprehend. All that the Act does, in the context of consumers, is to provide them with an alternative -- albeit a more feasible one, in some cases -- to the actions for malpractice, common law fraud, or breach of contract or fiduciary duty that they already possessed. See Kerschner v. Weiss & Co., 282 Ill. App. 3d 497, 667 N.E.2d 1351 (1st Dist. 1996)(setting forth elements of malpractice action against attorney); In re Marriage of Pagano, 154 Ill. 2d 174, 607 N.E.2d 242 (1992)(stating that attorneys have fiduciary obligations toward their clients); Schnidt v. Henehan, 140 Ill. App. 3d 798, 489 N.E.2d 415 (2d Dist. 1986)(clients had action against their attorney for common law fraud). Consumers have never lacked for these remedies against their malfeasant attorneys; the Act simply adds one additional weapon to their arsenal.

It is conceivable, of course, that some consumers might attempt to stretch the Act beyond its natural limits, for example by claiming a cause of action against attorneys on the other side of a case. It is conceivable that some consumers might attempt to extract punitive damages from allegations that amount to no more than innocent mistake. It is conceivable that an unsatisfied client might sue his attorney under the Consumer Fraud Act for arguing a losing position.

However, none of these situations is yet before the Court. And if and when they arise, existing interpretations of the Act, as well as established case law and common sense, provide recourse for each potential horrible in the parade. Individuals who try to use the Consumer Fraud Act to sue attorneys who are not their own will find that their relationship does not meet statutory requirements. See, e.g., Tetrault v. Mahoney, Hawkes & Goldings, 681 N.E.2d 1189, 1195 (Mass. 1997)(proper plaintiff against an attorney in a consumer fraud act case is a client or someone acting in the client's behalf); Klein v. Boyd, 949 F. Supp. 280, 284-85 (E.D. Pa. 1996)(a commercial, buyer-seller relationship is a prerequisite to a consumer fraud act action). Consumers who seek punitive damages under the Act based on any but the most egregious conduct will find this effort prohibited by Illinois case law requiring evil motive or reckless indifference before such damages are available. See Johnston v. Anchor Org., 250 Ill. App. 3d 393, 397-98, 621 N.E.2d 137, 141 (1st Dist. 1993)(citation and internal quotations omitted). Clients who try to turn a bad but defensible outcome to their favor will learn that the Consumer Fraud Act "prohibits deception, not error," and cannot be used to punish an honest difference of opinion. See Stein v. Norwest Mortgage, Inc., 284 Ill. App. 3d 506, 512-13, 672 N.E.2d 296, 302 (1st Dist. 1996), aff'd, 179 Ill. 2d 160, 688 N.E.2d 99 (1997). In short, the prospects for untoward expansion of the Consumer Fraud Act really appear non-existent; much more likely is that the Act will serve simply to augment existing remedies against attorneys who quite deserve to be subject to it.

IV. THE PROFESSIONAL/ENTREPRENEURIAL DISTINCTION

CAN SERVE AS A CHECK ON LITIGATION.

Should the Court so desire, limitation of the Consumer Fraud Act to the business practices of attorneys, as opposed to their professional services, would prevent any untoward expansion of litigation.^/ This is the approach endorsed by a number of courts in recent years, including high courts in Washington and Connecticut as well as intermediate courts in Michigan. See Short v. Demopolis, 691 P.2d 163 (Wash. 1984); Heslin v. Connecticut Law Clinic of Trantolo and Trantolo, 461 A.2d 938 (Conn. 1983); Nelson v. Ho, 564 N.W.2d 482 (Mich. App. 1997). These courts have held that the "entrepreneurial" aspects of law (or, in the case of Ho, medicine) -- "how the price of legal services is determined, billed, and collected, and the way a firm obtains, retains, and dismisses clients," see Short, 691 P.2d at 168 -- properly fall within the purview of consumer protection statutes.

The Illinois Association of Defense Trial Counsel has argued as amicus that this distinction is unworkable, because the decision on how much to bill a client necessarily involves some amount of professional expertise. The Chicago Council of Lawyers agrees that billing decisions may require more than a stopwatch and a calculator, but disagrees that the injection of professional expertise insulates what remains a purely business decision. It is, after all, a decision on how much money to charge for performing a particular task, whether it depends purely on the amount of time spent or factors in other elements. If discounts are made, they are made for the purpose of keeping the customers -- the clients -- happy. In that, the addition of an element of expertise into billing does not differ from the case of an auto mechanic who forgoes his usual hourly rate where he is able to diagnose a problem in a matter of seconds. There is nothing magical, nothing outside the realm of pure business, and nothing protected in either one.

CONCLUSION

For the reasons stated above, the Chicago Council of Lawyers urges this Court to affirm the decision of the appellate court holding that the Consumer Fraud Act, 815 ILCS 505/1 et seq., applies to attorneys.

Dated: February 25, 1998 Respectfully submitted,

_________________________

One of the attorneys for the Chicago Council of Lawyers

Kathleen L. Roach, President

Jennifer L. Sachs, Of Counsel

Chicago Council of Lawyers, One Quincy Court Building, 220 South State Street, Suite 800, Chicago, Illinois 60604