New York Law Review

Tag: Judiciary Law § 495

  • Napatco, Inc. v. Lefkowitz, 52 N.Y.2d 86 (1980): Corporate Practice of Law and Patent Application Preparation

    Napatco, Inc. v. Lefkowitz, 52 N.Y.2d 86 (1980)

    A corporation that prepares patent applications through a registered patent attorney or agent at the behest of a general practice attorney is rendering legal services, not clerical services, and may violate prohibitions against the corporate practice of law.

    Summary

    The Attorney General sought to enjoin Napatco, Inc. from preparing patent applications through registered patent attorneys/agents for general practice attorneys, arguing this violated prohibitions against corporate practice of law. Napatco argued it provided only clerical services. The Court of Appeals reversed the lower courts’ dismissal of the complaint, holding that preparing patent applications constitutes a legal service. The court reasoned that federal law restricts who can prepare patent applications, indicating it’s not a mere clerical task. The court also emphasized the need for the general practice attorney to maintain “full professional and direct responsibility” to clients and for discovery regarding the extent of the corporation’s involvement.

    Facts

    Napatco, Inc., a corporation, offered a service to general practice attorneys whereby it would, for a fee, have patent applications prepared by registered patent attorneys or agents. The Attorney General commenced an action to enjoin Napatco from continuing this practice, claiming it constituted the unauthorized corporate practice of law.

    Procedural History

    The Supreme Court, Special Term, granted Napatco’s motion for summary judgment dismissing the complaint and denied the Attorney General’s cross-motion for discovery. The Appellate Division affirmed. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether a corporation that, for a fee, causes a patent application to be prepared by a registered patent attorney or agent at the behest of a general practice attorney renders legal services in violation of New York Judiciary Law § 495.

    Holding

    Yes, because the preparation of a patent application is not a clerical service but a legal service that can only be performed by a registered and qualified patent attorney or agent, or perhaps by a general practice attorney, and because the corporation would then be furnishing attorneys or counsel within the proscription of subdivision 1 of section 495.

    Court’s Reasoning

    The Court of Appeals reasoned that New York Judiciary Law § 495 prohibits corporations from furnishing attorneys or counsel or rendering legal services. The court emphasized that the exception in subdivision 5 for clerical services does not extend to legal services. The court relied on 35 U.S.C. § 33, which restricts who can prepare patent applications, to demonstrate that preparing a patent application is not a clerical service. The court distinguished between merely holding oneself out as qualified versus actually preparing the application, citing conflicting federal cases (United States v. Blasius and Hull v. United States) but found this distinction irrelevant to its determination that preparing a patent application is not clerical. The court also highlighted the importance of the general practice attorney maintaining “full professional and direct responsibility” to clients, a requirement that necessitates scrutiny of Napatco’s arrangements. The court stated, “But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state”. Furthermore, the court addressed the Attorney-General’s entitlement to disclosure concerning what steps defendant has taken to assure that the attorneys receiving its patent application preparation services do in fact maintain “full professional and direct responsibility” to their clients, noting the existing record was insufficiently clear to grant summary judgment to the Attorney-General. The court distinguished this case from its previous affirmance in Matter of Napatco, Inc. v. Lefkowitz, clarifying that the evidentiary standards differ between investigatory subpoenas and complaints against summary judgment motions.

  • Matter of Monroe County Legal Assistance Corp., 39 N.Y.2d 543 (1976): Approvals for Legal Aid Corporations

    Matter of Monroe County Legal Assistance Corp., 39 N.Y.2d 543 (1976)

    A legal services corporation, once approved by the Appellate Division in the department where its principal office is located, does not need additional approval from other Appellate Divisions to operate branch offices elsewhere in New York State, though attorneys remain subject to the disciplinary authority of the jurisdiction in which they practice.

    Summary

    Monroe County Legal Assistance Corporation, initially approved to operate in the Fourth Department, sought to extend services into Sullivan County (Third Department). After prior attempts by other organizations failed, Monroe County opened an office, prompting the Third Department to assert its approval was needed. The Court of Appeals held that only the approval of the Appellate Division where the principal office is located (here, the Fourth Department) is required for statewide operation. While other Appellate Divisions retain supervisory authority over attorneys practicing within their jurisdictions, additional approvals for branch offices are not mandated by Judiciary Law § 495.

    Facts

    The Monroe County Legal Assistance Corporation, based in Rochester (Fourth Department), received approval to provide legal aid. It expanded into Corning and sought to extend operations into Sullivan County (Third Department) due to the withdrawal of federal funding from the Sullivan County Legal Services Corporation. The corporation amended its certificate to operate statewide, approved by a Justice of the Supreme Court of the Seventh Judicial District and a Justice of the Appellate Division, Fourth Department. The corporation then opened an office in Sullivan County under the name of Mid-Hudson Valley Legal Services Project. Federal funding was received to provide services in Sullivan, Orange and Dutchess Counties.

    Procedural History

    The Appellate Division, Third Department, initially asserted its approval was required in an unrelated proceeding (Matter of Ostrander v. Wyman). Temporary approvals were granted and extended until December 31, 1974. Further extensions were denied because the Legal Aid Society of Sullivan County, Inc., had become operational. The Third Department ruled the Legal Aid Society could handle the workload and applied the rule from Matter of Westchester Legal Servs., requiring supervision by the local bar. The Court of Appeals then reviewed the Third Department’s denial of further extensions. The Court of Appeals reversed the order of the Appellate Division.

    Issue(s)

    Whether the approval of the Appellate Division, Third Department, was required before the Monroe County Legal Assistance Corporation, through its subsidiary, the Mid-Hudson Project, could render legal assistance to indigents in Sullivan County.

    Holding

    No, because Judiciary Law § 495(5) requires only the approval of the Appellate Division in the department where the corporation’s principal office is located for statewide operation.

    Court’s Reasoning

    The Court of Appeals focused on the plain language of Judiciary Law § 495(5), which requires a legal services corporation to obtain approval from the Appellate Division in the department where its principal office is located. The Court emphasized that nothing in the law requires additional approvals from other Appellate Divisions for opening branch offices elsewhere in the state. The court noted that, “[n]othing in the Judiciary Law requires any further approvals or consents… The statute does not restrict a legal services organization, once having obtained the approval of one Appellate Division to operate State-wide, from opening a branch office anywhere in the state.” The Court stated that while it was not implying that other Appellate Divisions have no supervisory role with respect to lawyers employed or retained by organizations approved by another Department that operate within their jurisdictions, attorneys are subject to the disciplinary authority of the Appellate Division for the Department in which they are practicing, akin to the rules regulating the admission to the Bar of individual attorneys. The Court held that once approval is obtained from the appropriate Appellate Division, no further consents are necessary for statewide operation. To require additional approvals, the Court reasoned, would require legislative action and not judicial interpretation: “If such a prohibition would be wise or expedient, it is for the Legislature, not for the Judiciary, to add it.”