No. 10-719

In the

upreme ourt of tl e iklnite btate

DAVID H. SCHEFFER, et al.,Petitioners,

V.

CIVIL SERVICE EMPLOYEES ASSOCIATION,LOCAL 828, et alo,

Respondents.

On Petition for Writ of Certiorari to the UnitedStates Court of Appeals for the Second Circuit

BRIEF AMICUS CURIAE OF CENTERFOR CONSTITUTIONAL JURISPRUDENCE,

ATLANTIC LEGAL FOUNDATION, ANDMACKINAC CENTER FOR PUBLIC POLICY

IN SUPPORT OF PETITIONERS

EDWIN MEESE III214 Massachusetts Ave. N.E.Washington D.C. 20002

MARTIN SANDER KAUFMANSenior Vice Presidentand General CounselAtlantic Legal Foundation2039 Palmer Ave., Suite 104Larchmont, New York 10538Telephone: (914) 834-3322

JOHN EASTMANANTHONY T. CASO

Counsel of RecordKAREN J. LUGOCenter for Constitutional

Jurisprudencec/o Chapman Univ. Sch. of LawOne University DriveOrange, California 92886Telephone: (714) 628-2530E-Mail: caso@chapman.edu

Counsel for Amici Curiae Center forConstitutional Jurisprudence, Atlantic Legal

Foundation, and Mackinac Center for Public Policy

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QUESTIONS PRESENTED

1. Are attorneys who have been retained byclass members automatically disqualified fromserving as class counsel under Federal Rule of CivilProcedure 23 if the District Court is of the opinionthat the political viewpoint of the public interestorganization with whom the attorney is associated isnot shared by, or not in the interest of, members ofthe class?

2. May a District Court assume that anattorney will violate the Rules of ProfessionalConduct simply because the attorney is employed bya public interest organization?

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TABLE OF CONTENTS

QUESTIONS PRESENTED ....................................i

TABLE OF AUTHORITIES ...................................iii

IDENTITY AND INTERESTOF AMICI CURIAE ..................................................1

REASONS FOR GRANTING THEPETITION FOR WRIT OF CERTIORARI ............3

I. THE CASE RAISES THEIMPORTANT QUESTIONOF WHETHER ATTORNEYSAFFILIATED WITH PUBLICINTEREST ORGANIZATIONSSHOULD BE PRESUMEDTO VIOLATE THE RULESOF PROFESSIONAL CONDUCT ...........4

II. THE COURT SHOULDRESOLVE THE QUESTION OFWHETHER RULE 23 REQUIRES OREVEN PERMITS A CONTENT-BASEDANALYSIS OF THE SPEECH OF THEPUBLIC INTEREST ORGANIZATIONWITH WHOM PROPOSED CLASSCOUNSEL IS ASSOCIATED ...................9

CONCLUSION .........................................................13

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TABLE OF AUTHORITIES

Cases

Boy Scouts of America v. Dale,530 U.S. 640 (2000) ..............................................1

Brotherhood of R.R. Trainmen v.Virginia ex rel. Virginia State Bar,377 U.S. 1 (1964) ............................................8-10

Carroll v. Blinken, 957 F.2d 991 (2d Cir. 1992) .........2

Elk Grove Unified Sch. Dist. v. Newdow,542 U.S. 1 (2004) ..................................................1

Gafcon, Inc. v. Ponsor & Associates,98 Cal. App. 4th 1388 (2002) ...........................5-6

Galda v. Bloustein, 686 F.2d 159 (3d Cir. 1982) ........2

Galda v. Rutgers, 772 F.2d 1060 (3d Cir. 1985) .........2

Hamdi v. Rumsfeld, 542 U.S. 507 (2004) ...................1

In re Cooperative Law Co.,198 N.Y. 479, 92 N.E. 15 (1910) ......................4-5

In re New Hampshire DisabilitiesRights Center, Inc., 130 N.H. 328,541 A.2d 208 (N.H. 1988) ..................................11

NAACP v. Button, 371 U.S. 415 (1963) ..............10-12

Solid Waste Agency of Northern Cook Countyv. United States Army Corps of Engineers,531 U.S. 159 (2001) ..............................................1

Thomas v. Collins, 323 U.S. 516 (1945) .....................8

United Mine Workers of America, Dist. 12v. Illinois State Bar Ass’n,389 U.S. 217 (1967) ..............................................8

United States v. Morrison, 529 U.S. 598 (2000) .........1

iv

United Transportation Union v. StateBar of Michigan, 401 U.S. 576 (1971) .................8

Zelman v. Simmons-Harris, 536 U.S. 639 (2002) ......1

United States Constitution

U.S. Const. amend. I .....................................10-11, 13

Rules of Court

Fed. R. Civ. P. 23 ...............................................3, 9, 12

N.Y.R. Proi~l Conduct 1.7 ...........................................7

1.8(f) ......................................................................7

Sup. Ct. R. 37.2(a) .......................................................1

37.6 .......................................................................1

W.D.N.Y., L.R. Civ. P. 83.1 .........................................8

Miscellaneous

ABA Comm. on Ethics and Profl Responsibility,Formal Op. 93-374 (1993) ................................7, 9

California State Bar Standing Committee onProfessional Responsibility and Conduct,Cal. Eth. Op. 1987-91,1987 WL 109707 (1987) ...................................4-5

Simon, Roy D., Jr., Fee Sharing BetweenLawyers and Public Interest Groups,98 Yale L.J. 1069 (1989) ............................ 6-8, 11

IDENTITY ANDINTEREST OF AMICI CURIAE

The Center for Constitutional Jurisprudence1 isdedicated to upholding the principles of theAmerican Founding, including separation of powersand due respect for the proper limit on those powers,including the judicial power. In addition to providingcounsel for parties at all levels of state and federalcourts, the Center has participated as amicus curiaebefore this Court in several cases of constitutionalsignificance, including Hamdi v. Rumsfeld, 542 U.S.507 (2004); Elk Grove Unified Sch. Dist. v. Newdow,542 U.S. 1 (2004); Zelman v. Simmons-Harris, 536U.S. 639 (2002); Solid Waste Agency of NorthernCook County v. United States Army Corps ofEngineers, 531 U.S. 159 (2001); Boy Scouts ofAmerica v. Dale, 530 U.S. 640 (2000); and UnitedStates v. Morrison, 529 U.S. 598 (2000).

The Atlantic Legal Foundation is a nonprofit,nonpartisan public interest law firm that provideslegal counsel, without fee, to parents, scientists,educators, and other individuals and tradeassociations. The Atlantic Legal Foundation’smission is to advance the rule of law in courts and

1 Pursuant to this Court’s Rule 37.2(a), all parties have

consented to the filing of this brief. Copies of those consentswere lodged with the clerk. Amici have also given notice ofintent to file this brief to all parties more than 10 days beforethis brief was filed.

Pursuant to Rule 37.6, Amici Curiae affirms that no counselfor any party authored this brief in whole or in part, and nocounsel or party made a monetary contribution intended tofund the preparation or submission of this brief. No personother than Amici Curiae, its members, or its counsel made amonetary contribution to its preparation or submission.

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before administrative agencies by advocating forlimited and efficient government, free enterprise,individual liberty, school choice, and sound science.Atlantic Legal Foundation is guided by a basic butfundamental philosophy: justice prevails only in thepresence of reason and in the absence of prejudice.Accordingly, Atlantic Legal Foundation promotessound thinking in the resolution of legal disputesand the formulation of public policy. AmicusCuriae’s leadership includes distinguished legalscholars and practitioners from across the legalcommunity. The Foundation’s leadership hasdecades of experience in the practice of corporate andcriminal law, as well as the study of legal ethics. Ofparticular significance here, the Atlantic LegalFoundation has served as counsel for studentplaintiffs in a number of cases involvingconstitutional implications of "compelled speech"through mandatory fees, including Carroll v.Blinken, 957 F.2d 991 (2d Cir. 1992); Galda v.Rutgers, 772 F.2d 1060 (3d Cir. 1985); and Galda v.Bloustein, 686 F.2d 159 (3d Cir. 1982);.

The Mackinac Center for Public Policy is aMichigan-based, nonprofit, nonpartisan research andeducational institute that advances policies fosteringfree markets, limited government, personalresponsibility and respect for private property. TheCenter is a 501(c)(3) organization founded in 1988.In 2009, the Center opened the Mackinac CenterLegal Foundation and began representing public-interest legal clients.

In pursuing their missions, amici employattorneys or work with volunteer attorneys torepresent clients in litigation before the state and

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federal courts. In this role, amici and their employedand volunteer attorneys are directly affected by thedecision of the courts below. By disqualifyingattorneys from representing clients in certain typesof cases based solely on the political viewpoint of thepublic interest organization with which the attorneysare associated, the court below presumed a violationof the rules of professional conduct and imposed acontent-based restriction on speech. This Court’sintervention is required to settle the important andtroubling questions raised by the decision below.

REASONS FOR GRANTING THEPETITION FOR WRIT OF CERTIORARI

This case raises a critical issue for attorneysemployed by or affiliated with a public interest orlegal services organization. The court belowassumed that merely because an attorney wasassociated with a public interest organization, theattorney would violate the rules of professionalconduct. Using that assumption, the court thenproceeded to analyze the political viewpoint of thepublic interest organization to decide whether, in thecourt’s opinion, that viewpoint would coincide withthe views of the members of the class---or whetherthat viewpoint would be beneficial to the members ofthe class. The court thus used Rule 23 to decidewhat viewpoints should be orthodox. The courtwould never have reached such a point, however,without the unwarranted assumption that attorneysaffiliated with public interest organizations wouldviolate the rules of professional conduct. Review bythis Court is necessary to determine whether thisideological conformity check will be a necessary stepin future Rule 23 proceedings.

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I. THE CASE RAISES THEIMPORTANT QUESTION OF WHETHERATTORNEYS AFFILIATED WITH PUBLICINTEREST ORGANIZATIONS SHOULDBE PRESUMED TO VIOLATE THERULES OF PROFESSIONAL CONDUCT

The Circuit Court conflated the attorneysemployed by the public interest organization and theorganization itself. Public interest organizations,however, are not attorneys and do not practice in thefederal courts. These organizations are generallynonprofit corporations and such corporations cannotpractice law. Instead, those organizations employattorneys or affiliate with volunteer attorneys torepresent individuals in the courts. Although thepublic interest organization may be paying for therepresentation it is not the represented party andthe attorney’s professional obligations are owed onlyto the client that is the party to the litigation.

There are cases from the early part of the lastcentury that objected to the model of corporationshiring attorneys to represent third parties (e.g., In reCooperative Law Co., 198 N.Y. 479, 92 N.E. 15(1910)). As the California State Bar StandingCommittee on Professional Responsibility andConduct noted, however, those decisions have "notoutlasted the evolution of prepaid medical and legalservice programs which, under these authorities,would theoretically violate the prohibition againstcorporations practicing law." Cal. Eth. Op. 1987-91,1987 WL 109707 at *2.

The California Bar’s opinion came in response tothe question of whether an insurance company canemploy attorneys to represent their insureds. Since

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the attorneys would be employees of the insurancecorporation, the practice would apparently comewithin the prohibition outlined in cases such as In reCooperative Law. The Bar, however, recognized thatmuch had changed in the years since those earlydecisions. The Bar opinion eschewed any bright linedistinction that hinged on the employmentrelationship: "the mere fact that the lawyers areemployees of Insurance Company does notnecessarily compromise the attorney’s independentprofessional judgment." Id. at *3. The opinionfurther noted that "in absence of a conflict ofinterest.., it cannot be presumed that simplybecause the attorneys.., are salaried employees ofInsurance Company that they will act unethically orwill otherwise sacrifice their professional obligationsto the insureds." Id. at *4 (emphasis added). Thatassumption, however, is the basis of the lower court’sdecision in this case.

This California Bar opinion was followed by therecent California Court of Appeal decision in Garcon,Inc. v. Ponsor & Associates, 98 Cal. App. 4th 1388(2002). That case brought the issue of insurancecompanies’ hiring of staff lawyers from thetheoretical basis of the State Bar opinion to thereality of the courtroom. Central to the court’sholding was its view that the nature of an attorney’semployment did not change his or her ethicalobligations. "All lawyers, whether employed by acorporation or by an independent law firm that isretained by a corporate entity, are bound by thesame fiduciary and ethical duties to their clients."Id. at 1412.

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In reaching its holding, the Gafcon courtreviewed how other state courts had handled thisissue and found "that eight of 10 state courtsaddressing the issue and one federal circuit haveconcluded it is permissible for an attorney employedby an insurance company to represent the company’sinsureds." Id. at 1413 n.ll (noting findings by theIndiana Supreme Court reviewing the same issue).The court concluded that the employment of staffattorneys by the insurance corporation did notconstitute the unauthorized practice of law by thecorporation.

As noted above, the early opposition tocorporations employing attorneys was based on thefear that the attorney would fail to act in the client’sbest interest. As one scholar put it:

The hostility to the corporate practice of lawwas explained in In re Co-operative LawCompany [198 N.Y. 479, 92 N.E. 15 (1910)]:The relation of attorney and client...cannot exist between an attorney employedby a corporation to practice law for it, and aclient of the corporation, for he would besubject to the directions of the corporationand not to the directions of the client ....The corporation would control the litigation,the money earned would belong to thecorporation and the attorney would beresponsible to the corporation only.

Roy D. Simon, Jr., Fee Sharing Between Lawyers andPublic Interest Groups, 98 Yale L.J. 1069, 1079(1989) (footnote omitted). To guard against thisdanger, a number of rules of professional conducthave been promulgated.

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Even if organizations would like to controltheir staff attorneys, the rules of legalethics already provide multiple protectionsagainst lay interference with an attorney’sindependent judgment. For example, [ABA]Rule 1.2(a) requires a lawyer to "abide by aclient’s decisions concerning the objectivesof representation," and more specifically to"abide by a client’s decision whether toaccept an offer of settlement of a matter."This rule prohibits a lawyer from allowingan organization to control decisions aboutsettlement. In addition, Rule 1.7 prohibitsa lawyer from representing a client if therepresentation "may be materially limitedby the lawyer’s responsibilities.., to athird person," such as the organization.

Id. at 1113 (footnotes omitted); see ABA Comm. onEthics and Profl Responsibility, Formal Op. 93-374(1993).

New York has adopted these provisions ofthe model rules. New York Rule of ProfessionalConduct 1.8(f) prohibits accepting compensation forrepresenting a client from a third party unless "thereis no interference with the lawyer’s independentprofessional judgment or with the client-lawyerrelationship." New York Rule of ProfessionalConduct 1.7 similarly prohibits representation of aclient in situations where it would result in therepresentation of differing interests. Comment 13 tothis rule specifically notes that the rule does notprohibit the lawyer from being paid for therepresentation "from a source other than the client."Id. These rules apply to practice in the United

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States District Court for the Western District of NewYork. Local Rules of Civil Procedure, Rule 83.1.

These rules protect the constitutional right ofpublic interest organizations and other associationsto provide the means for the exercise of the right ofpetition. United Mine Workers of America, Dist. 12 v.Illinois State Bar Ass’n, 389 U.S. 217, 223 (1967)(quoting Thomas v. Collins, 323 U.S. 516, 531(1945)). Indeed, this Court has held that laborunions can employ staff attorneys for the purpose ofproviding group legal services to their members--without regard to state regulations prohibiting"corporate" practice. E.g., United TransportationUnion v. State Bar of Michigan, 401 U.S. 576, 585-86(1971); United Mine Workers, 389 U.S. at 223;Brotherhood of R.R. Trainmen v. Virginia ex rel.Virginia State Bar, 377 U.S. 1, 5-6 (1964); see alsoSimon, supra, at 1128-29 (noting that the Court’sreview of empirical evidence demonstrated that noneof the harms feared from permitting group legalservice arrangements had, in fact, come to pass). Inthe context of federal legislation the Court noted: "AState could not, by invoking the power to regulatethe professional conduct of attorneys, infringe in anyway the right of individuals and the public to befairly represented in lawsuits authorized byCongress to effectuate a basic public interest."Trainmen, 377 U.S. at 7. This point is no longeropen to question. As the American Bar Associationhas noted: "While it is unnecessary to our conclusionunder the ethics rules, we note that it is now wellsettled, as a matter of constitutional law, that non-profit organizations may employ staff attorneys toprovide legal representation to appropriate

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categories of third persons." ABA Comm. on Ethicsand Profl Responsibility, Formal Op. 93-374.

The decision of the court below, however,resurrects these ancient objections to organizationspaying for the representation of third parties. It isnow well-settled that states may not "infringe in anyway the right of individuals and the public to befairly represented in lawsuits authorized byCongress to effectuatea basic public interest."Trainmen, 377 U.S. at 7.The question raised by thedecision below is whether the Federal Rules of CivilProcedure may infringe on such rights. This is aquestion of critical importance for practice in thefederal courts.

II. THE COURT SHOULD RESOLVETHE QUESTION OF WHETHERRULE 23 REQUIRES OR EVEN PERMITSA CONTENT-BASED ANALYSIS OFTHE SPEECH OF THE PUBLIC INTERESTORGANIZATION WITH WHOM PROPOSEDCLASS COUNSEL IS ASSOCIATED

Having presumed that the attorneys forpetitioner would violate the New York Rules ofProfessional Conduct regarding third partyinterference with the representation, the court belowproceeded to analyze whether that presumedinterference would result in a prohibited conflict. Inmaking this determination, the court did not look toeconomic conflicts. Instead it analyzed the politicalpositions of the public interest organization payingfor the representation and then made adetermination as to whether those positions might bein the best interests of the members of the proposedclass. Interpreting Rule 23 to permit such an

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analysis will necessarily require federal districtcourts to disrupt relationships that this Court hasdetermined are protected by the First Amendmentand will further require those courts to determinewhat political viewpoints are appropriately orthodoxin particular class action litigation.

There is no question that the First Amendmentprotects employment of lawyers as staff attorneys foran organization not licensed to practice law for thepurpose of representing third parties. The NAACP v.Button, 371 U.S. 415 (1963), line of cases recognize aFirst Amendment right to use litigation to securecivil rights. The Brotherhood of R.R. Trainmen v.Virginia ex rel. Virginia State Bar, 377 U.S. 1 (1964),line of cases recognize a First Amendment right toassociate for a common purpose that includes a rightfor unions to employ attorneys for the purpose ofproviding legal representation to union members.Under either theory, the Federal Rules of CivilProcedure ought not to be interpreted in a mannerthat might inhibit exercise of the freedom of speechand association rights at issue in the absence of acompelling governmental purpose.

Further, it is by now well established that apublic interest organization’s pursuit of litigation asa means of affecting public policy is a mode ofexpression protected by the First Amendment. Asthis Court noted with regard to the NAACP morethan 40years ago: "In the context of NAACPobjectives, litigation is not a technique of resolvingprivate differences; it is a means for achieving thelawful objectives of equality of treatment by allgovernment .... It is thus a form of politicalexpression." NAACP v. Button, 371 U.S. at429.

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Thus, the practice is protected by the FirstAmendment. Id. at 429-30; In re New HampshireDisabilities Rights Center, Inc., 130 N.H. 328, 336,541 A.2d 208, 213 (N.H. 1988). State regulationsthat interfere with the right must give way unlesssupported by a compelling interest. In re NewHampshire Disabilities Rights Center, Inc., 130 N.H.at 336, 541 A.2d at 213; Simon, supra, at 1126. Asthen New Hampshire Supreme Court Justice Souternoted:

Organizations, their members and theirstaff lawyers may assert a protected firstamendment right of associating fornoncommercial purposes to advocate theenforcement of legal and constitutionalrights of those members, or of others withina definite class whom the organizationexists to serve. When such advocacy mayreasonably include the provision of legaladvice or take the form of litigation, theorganization may itself provide legalrepresentation to its members orbeneficiaries despite State regulationsrestricting legal practice and the solicitationof clients, provided that the organizationand its lawyers do not engage in the specificevils that the general State regulations areintended to prevent.

In re New Hampshire Disabilities Rights Center, Inc.,130 N.H. at 336, 541 A.2d at 213.

The presumption that the public interestorganization’s political viewpoint may interfere withthe representation has already been rejected by thisCourt as a justification for state regulations that

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interfere with First Amendment rights to pursuelitigation as a mode of expression. NAACP, 371 U.S.at 438-39. Indeed, the Court in NAACP specificallyrejected the fear that nonlawyers would seek tointerfere in the representation as a basis for theregulation. Id. at 441. Yet that very fear was thebasis of the lower court’s ruling in this case.

If public interest organizations have aconstitutional right to provide attorneys to thirdparties as a means of political expression, requiringthe federal district courts to determine whether theviewpoints of the organization are consonant withthe presumed view points of class members invitessuppression of those rights. Review by this Court isnecessary to ensure that federal judges are notrequired or permitted to inquire into the politicalviewpoints of class members in making decisionsunder Rule 23.

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CONCLUSION

The decision of the court below promises toentangle the federal district courts in a thicket ofconstitutional problems that must result in thesuppression of speech and association protected bythe First Amendment. Review by this Court isnecessary to avoid these problems and to reaffirmthe principal that as officers of the Court, attorneyscan be presumed to adhere to the rules ofprofessional conduct.

DATED: January, 2011.

Respectfully submitted,

EDWIN MEESE III214 Mass. Ave. NEWashington, DC 20002

~LkRTIN SANDER KAUFMAN

Senior Vice Presidentand General CounselAtlantic Legal Foundation2039 Palmer AvenueSuite 104Larchmont, NY 10538(914) 834-3322

JOHN EASTMAN

ANTHONY T. CASO

Counsel of RecordKAREN J. LUGO

Ctr. for ConstitutionalJurisprudence

c/o Chapman UniversitySchool of Law

One University DriveOrange, CA 92886(714) 628-2530caso@chapman.edu

Counsel for Amici CuriaeCenter for Constitutional Jurisprudence,

Atlantic Legal Foundation, andMackinac Center for Public Policy

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