Commercial Division Blog
Nonresident Attorneys Must Maintain a Physical Office in New York
On March 31, 2015, the Court of Appeals issued a decision in Schoenefeld v. State of New York, 2015 NY Slip Op. 02674, holding that nonresident attorneys must maintain a physical office in New York.
In Schoenefeld, the Second Circuit "asked [the Court of Appeals] to set forth the minimum requirements necessary to satisfy the statutory directive that nonresident attorneys maintain an office within the State for the transaction of law business under Judiciary Law § 470." The Court of Appeals held "that the statute requires nonresident attorneys to maintain a physical office in New York."
First, the Court held that "[b]y its plain terms . . . the statute requires nonresident attorneys practicing in New York to maintain a physical law office here."
The Court went on to address the defendants' contention that the Court should
construe the statute narrowly in accordance with the doctrine of constitutional avoidance. In particular, they suggest that the provision can be read merely to require nonresident attorneys to have some type of physical presence for the receipt of service — either an address or the appointment of an agent within the State. They maintain that interpreting the statute in this way would generally fulfill the legislative purpose and would ultimately withstand constitutional scrutiny.
The statute itself is silent regarding the issue of service. When the statute was initially enacted in 1862, however, it did contain a service provision. At that time, it essentially required that an attorney who maintained an office in New York, but lived in an adjoining state, could practice in this State's courts and that service, which could ordinarily be made upon a New York attorney at his residence, could be made upon the nonresident attorney through mail addressed to his office. Upon the enactment of the Code of Civil Procedure in 1877, the provision was codified at section 60 of the Code. In 1909, the provision was divided into two parts — a service provision, which remained at section 60 of the Code, and a law office requirement, which became section 470 of the Judiciary Law. Notably, after we invalidated a New York residency requirement for attorneys in Matter of Gordon (48 NY2d 266 ) the legislature amended several provisions of the Judiciary Law and the CPLR to conform to that holding. Section 470, however, was not one of the provisions amended and has remained virtually unchanged since 1909.
Even assuming the service requirement had not been expressly severed from the statute, it would be difficult to interpret the office requirement as defendants suggest. As the Second Circuit pointed out, even if one wanted to interpret the term office loosely to mean someplace that an attorney can receive service, the additional phrase for the transaction of law business makes this interpretation much less plausible. Indeed, the Appellate Division departments have generally interpreted the statute as requiring a nonresident attorney to maintain a physical office space. Defendants' proffered interpretation, on the other hand, finds no support in the wording of the provision and would require us to take the impermissible step of rewriting the statute.
The State does have an interest in ensuring that personal service can be accomplished on nonresident attorneys admitted to practice here. However, it is clear that service on an out-of-state individual presented many more logistical difficulties in 1862, when the provision was originally enacted. The CPLR currently authorizes several means of service upon a nonresident attorney, including mail, overnight delivery, fax and (where permitted) email. Under our own Court rules, the admission of attorneys who neither reside nor have full-time employment in the State is conditioned upon designating the clerk of the Appellate Division in their department of admission as their agent for the service of process for actions or proceedings brought against them relating to legal services offered or rendered. Therefore, there would appear to be adequate measures in place relating to service upon nonresident attorneys and, of course, the legislature always remains free to take any additional action deemed necessary.
(Internal quotations and citations omitted).