On January 7, 2016, Justice Scheinkman of the Westchester County Commercial Division issued a decision in Kallista, S.A. v. White & Williams LLP, 2016 NY Slip Op. 26009, holding that Judiciary Law Section 487 does not apply to proceedings before the US Patent and Trademark Office.
First, the court examined which proceedings were covered by Section 487:
Section 487 of the Judiciary Law provides, in relevant part, that an attorney who is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party is guilty of a misdemeanor and, in addition to the punishment for such crime, forfeits to treble damages to the injured party, recoverable in a civil action.
The statute provides for a cause of action against an attorney in two circumstances: (a) where the alleged deceit or collusion with the intent to deceive any part occurred in a pending judicial proceeding; or (b) where deception is directed against a court and the deception relates to either a prior judicial proceeding or one which may be commenced in the future. This statutory construction dates back to the 1884 decision of the Court of Appeals in Looff v Lawton, where in construing the predecessor statute, the Court stated:
The “party” referred to is clearly a party to an action pending in a court in reference to which the deceit is practiced, and not a person outside, not connected with the same at the time or with the court.
Thus, to make out a claim under the statute the deceit complained of must have occurred during a judicial proceeding to which the plaintiff was a party. . . . .
(Internal quotations and citations omitted) (emphasis added). Second, the court considered whether proceedings before “an administrative agency, the United States Trademark Trial and Appeal Board, which is part of the United States Patent and Trademark Office, a federal agency within the United States Department of Commerce,” were within the scope of Section 487, a question regarding which there is “no authoritative precedent.” The court determined that they were not, explaining:
There is a genuine debate as to whether the court proceedings reached by Section 487 are limited to proceedings in New York state courts or extend further to court proceedings in other places. However, the statute specifically provides criminal and civil sanctions for deception upon the “court”. Doubtless, the statute was enacted before the advent of extensive use of administrative tribunals to adjudicate administrative matters. However, the statute has never been amended to include administrative tribunals. Administrative tribunals are not themselves courts.
It would be an undue construction of the statute to read it so expansively as to bring administrative tribunals within its reach. If the statute were so read, then the statute could be found to reach a multitude of agencies, ranging from federal agencies, to state agencies, to municipal agencies. Further, it is not always necessary for a person who represents a party before an agency to be an attorney; indeed, admission to practice as an attorney may not itself be sufficient to qualify a person to represent a party before an administrative agency. Whether the statute is to be expanded to cover deception before administrative agencies, and if so, whether such coverage should be limited to attorneys, are matters for the Legislature.
The statute is best analyzed in the criminal law context and not within the framework of comparable civil torts. In the criminal law, where two constructions of a criminal statute are plausible, the one more favorable to the defendant should be adopted in accordance with the rule of lenity. Thus, even if it is assumed that it is equally plausible to construe “court” as used in Section 487 to include an administrative tribunal as it is to exclude an administrative tribunal, the latter construction should be preferred.
(Internal quotations and citations omitted).