Eric M. Berman, P.C., et al., Respondents,v.City of New York, et al., Appellants.BriefN.Y.November 17, 2014CTQ-2014-00007 State of New York Court of Appeals ERIC M. BERMAN, P.C., LACY KATZEN, LLP, Plaintiffs-Respondents, -against- CITY OF NEW YORK, NEW YORK CITY COUNSEL, NEW YORK CITY DEPARTMENT OF CONSUMER AFFAIRS, JONATHAN MINTZ, in his official capacity as the Commissioner of New York City Department of Consumer Affairs, Defendants-Appellants. BRIEF FOR AMICUS STATE OF NEW YORK BARBARA D. UNDERWOOD Solicitor General ANISHA S. DASGUPTA Deputy Solicitor General KAREN W. LIN Assistant Solicitor General of Counsel ERIC T. SCHNEIDERMAN Attorney General of the State of New York 120 Broadway New York, New York 10271 (212) 416-6197 (212) 416-8962 (facsimile) Dated: May 19, 2015 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ............................................................ iii INTEREST OF AMICUS CURIAE .................................................. 1 QUESTIONS CERTIFIED TO THIS COURT................................. 4 STATEMENT OF THE CASE ......................................................... 5 A. Federal, State, and Local Regulation of Debt- Collection Practices in New York .................................. 5 1. New York’s Fair Debt Collection Practices Act ........................................................................... 6 2. The federal Fair Debt Collection Practices Act ........................................................................... 7 3. New York City’s debt collection laws ..................... 9 4. The New York Department of Financial Services’s regulations ........................................... 13 5. New York State court reforms in debt collection cases ...................................................... 14 B. This Proceeding ............................................................ 16 ARGUMENT ................................................................................. 18 LOCAL LAW 15 IS NOT PREEMPTED BY THE STATE JUDICIARY LAW ................................................................... 18 A. The Judiciary Law Regulates Attorneys in their Practice of Law. ......................................... 20 i TABLE OF CONTENTS (cont'd) Page 1. Judiciary Law §§ 53 and 90 do not invest the courts with exclusive authority to license and regulate all professional conduct of attorneys. ..................................... 20 2. Taken as a whole, the Judiciary Law and its related regulations address only certain aspects of attorney professional conduct. .......................................................... 26 B. Local Law 15 Does Not Regulate the Practice of Law. .................................................. 31 CONCLUSION ............................................................................... 39 ii TABLE OF AUTHORITIES Cases Page(s) Castillo v. Balsamo Rosenblatt & Cohen, PC, 33 Misc. 3d 700 (N.Y. Civ. Ct. Kings County June 30, 2011) ............................................................... 38 Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) ..................................................... 35 DJL Rest. Corp. v. City of N.Y., 96 N.Y.2d 91 (2001) ................................................................... 29 Eric M. Berman, P.C. v. City of N.Y., 895 F. Supp. 2d 453 (E.D.N.Y. 2012) ............................ 16, 19, 20 Eric M. Berman, P.C. v. City of N.Y., 770 F.3d 1002 (2d Cir. 2014) ................................................. 4, 17 Forti v. N.Y. State Ethics Comm’n, 75 N.Y.2d 596 (1990) ................................................................. 25 Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti, 374 F.3d 56 (2d Cir. 2004) .................................................... 37-38 Gonzalez v. Kay, 577 F.3d 600 (5th Cir. 2009) ...................................................... 35 Greco v. Trauner, Cohen & Thomas, L.L.P., 412 F.3d 360 (2d Cir. 2005) ................................................. 34, 35 Heintz v. Jenkins 514 U.S. 291 (1995) .................................................................... 36 Hertz Corp. v. City of N.Y., 80 N.Y.2d 565 (1992) ................................................................. 28 Inc. Vil. of Nyack v. Daytop Vill., Inc., 78 N.Y.2d 500 (1991) ................................................................. 19 iii TABLE OF AUTHORITIES (cont’d) Cases Page(s) In re Cohen, 7 N.Y.2d 488 (1960) ................................................................... 22 In re Lenahan, 34 A.D.3d 13 (4th Dep’t 2006) ................................................... 23 In re Levine, 168 A.D.2d 116 (1st Dep’t 1991) ................................................ 28 In re Wong, 275 A.D.2d 1 (1st Dep’t 2000) .................................................... 22 James v. Wadas, 724 F.3d 1312 (10th Cir. 2013) .................................................. 38 Jancyn Mfg. Corp. v. County of Suffolk, 71 N.Y.2d 91 (1987) ....................................................... 18, 19, 30 Lesher v. Law Offices of Mitchell N. Kay, P.C., 650 F.3d 993 (3d Cir. 2011) ....................................................... 35 Matter of Bethpage Water Dist. v. Daines, 67 A.D.3d 1088 (3d Dep’t 2009) .................................................. 26 Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292 (2d Cir. 2003) ....................................................... 35 N.Y. State Club Ass’n, Inc. v. City of N.Y., 69 N.Y.2d 211 (1987), aff’d on other grounds, 487 U.S. 1 (1988) .................................. 18 Nielsen v. Dickerson, 307 F.3d 623 (7th Cir. 2002) ...................................................... 35 People v. Boyaijan Law Offices, P.C., N.Y. Slip Op. 52077(U) .............................................................. 35 iv TABLE OF AUTHORITIES (cont’d) Cases Page(s) People v. Law Offices of Andrew F. Capoccia L.L.C., 289 A.D.2d 650 (3d Dep’t 2001) ........................................... 24, 25 People v. Title Guar. & Trust Co., 227 N.Y. 366 (1919) ................................................................... 27 Town of Concord v. Duwe, 4 N.Y.3d 870 (2005) ................................................................... 30 Federal Laws 15 U.S.C. § 1692 et seq. ................................................................................ 7 § 1692a ....................................................................................... 37 § 1692c.......................................................................................... 7 § 1692d ......................................................................................... 7 § 1692e ................................................................................... 7, 34 § 1692f .......................................................................................... 7 § 1692g ......................................................................................... 7 § 1692i .......................................................................................... 8 § 1692k ......................................................................................... 8 § 1692n ......................................................................................... 9 § 1692o ......................................................................................... 9 Consumer Credit Protection Act, Amendments, Pub. L. No. 95-109, 91 Stat. 874 .......................................................... 7, 8 Fair Debt Collection Practices Act (Amendment) Pub. L. No. 99-361, 100 Stat. 768 ................................................ 8 State Laws General Business Law § 600 ....................................................................................... 7, 29 § 601 ................................................................................... 6, 7, 34 v TABLE OF AUTHORITIES (cont’d) State Laws Page(s) Judiciary Law § 53 ............................................................................................. 21 § 90 ................................................................................. 21, 22, 23 § 460 ........................................................................................... 26 § 463 ........................................................................................... 26 § 464 ........................................................................................... 26 Ch. 753, 1973 N.Y. Laws 2407 ......................................................... 6 Administrative Sources 22 N.Y.C.R.R. § 202.27-a ......................................................................................... 15 § 202.27-b ......................................................................................... 16 § 208.6 .................................................................................. 15, 16 § 208.14-a ......................................................................................... 15 § 210.14-a ......................................................................................... 15 § 210.14-b ......................................................................................... 16 § 212.14-a .................................................................................... 15 § 212.14-b .................................................................................... 16 § 603.1 ........................................................................................ 25 § 691.1 ........................................................................................ 25 § 1022.1 ...................................................................................... 25 pt. 1200.0 .................................................................. 22, 26, 27, 33 23 N.Y.C.R.R. § 1.1 ...................................................................................... 14, 30 § 1.2 ............................................................................................ 13 § 1.3 ............................................................................................ 13 § 1.4 ............................................................................................ 13 § 1.5 ............................................................................................ 13 35 N.Y. Reg. 5 (Aug. 21, 2013) ....................................................... 30 36 N.Y. Reg. 10 (July 16, 2014) ...................................................... 13 vi TABLE OF AUTHORITIES (cont’d) Administrative Sources Page(s) Fed. Trade Comm’n, Statements of General Policy or Interpretation Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50,097, 50,100 (1988) .................................................................................... 36-37 N.Y.C. Admin. Code § 20-489 .................................................................... 12, 29, 32, 36 § 20-493.1 ................................................................................... 11 § 20-493.2 ................................................................................... 11 § 20-494 ...................................................................................... 32 Miscallaneous Authorities Chief Judge Lippman, Law Day Remarks: Consumer Credit Reforms (April 30, 2014), available at http://www.nycourts.gov/whatsnew/pdf/LawDay2014 remarks.pdf ......................................................................... 15, 31 Directives and Procedures DRP-182, GP-20, Civil Court of the City of New York (May 13, 2009), available at http://www.courts.state.ny.us/courts/nyc/SSI/directiv es/DRP/drp182.pdf ..................................................................... 15 FTC, Consumer Sentinel Network Data Book for January - December 2008 (Feb. 2009), available at https://www.ftc.gov/sites/default/files/documents/rep orts_annual/sentinel-cy-2008/sentinel-cy2008.pdf ................... 10 FTC, Federal Trade Commission Annual Report 2008: Fair Debt Collection Practices Act (2008), available at https://www.ftc.gov/sites/default/files/documents/rep orts/federal-trade-commission-enforcement-fair- debt-collection-practices-act-thirtieth-annual- report/p084802fdcpareport.pdf .................................................. 10 vii TABLE OF AUTHORITIES (cont’d) Miscellaneous Authorities Page(s) H. Rep. No. 99-405 (1985), reprinted in 1986 U.S.C.C.A.N. 1752, 1754-55 .................................................. 8, 34 Letter from Eugene Levy, Chairman of the New York State Joint Legislative Committee on Consumer Protection (May 16, 1973), reprinted in Bill Jacket for ch. 753 (1973) ................................................. 6, 10 MFY Legal Services, Justice Disserved: A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York (2008), available at http://www.mfy.org/wp- content/uploads/reports/Justice_Disserved.pdf......................... 14 New York Appleseed, Due Process and Consumer Debt: Eliminating Barriers to Justice in Consumer Credit Cases (2010), available at http://appleseednetwork.org/wp- content/uploads/2012/05/Due-Process-and- Consumer-Debt.pdf .................................................................... 14 Press Release, Governor Cuomo Announces New Regulations Against Abusive and Deceptive Debt Collection Practices (Dec. 3, 2014), available at https://www.governor.ny.gov/news/governor-cuomo- announces-new-regulations-against-abusive-and- deceptive-debt-collection .............................................................. 1 Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Announces Settlement with Two Major Consumer Debt Buyers for Unlawful Debt Collection Actions (May 8, 2014), available at http://www.ag.ny.gov/press-release/ag- schneiderman-announces-settlements-two-major- consumer-debt-buyers-unlawful-debt ......................................... 2 viii TABLE OF AUTHORITIES (cont’d) Miscellaneous Authorities Page(s) Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Commends Chief Judge Lippman for Proposed Reforms to Consumer Debt Litigation Process (April 30, 2014), available at http://www.ag.ny.gov/press-release/ag- schneiderman-commends-chief-judge-lippman- proposed-reforms-consumer-debt-litigati-0 ................................. 1 Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Obtains Settlement From Major Debt Buyer Who Filed Thousands of Time-Barred Debt Collection Actions (Jan. 9, 2015), available at http://www.ag.ny.gov/press-release/ag- schneiderman-obtains-settlement-major-debt-buyer- who-filed-thousands-time-barred ................................................ 2 Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Obtains Settlement with Fourth Debt Buyer Vacating $1.7m in Improperly Obtained Debt-Collection Actions (Apr. 15, 2015), available at http://www.ag.ny.gov/press- release/ag-schneiderman-obtains-settlement-fourth- debt-buyer-vacating-17m-improperly-obtained .......................... 2 Press Release, N.Y. State Unifed Court System, Chief Judge Announces Comprehensive Reforms to Promote Equal Justice for New York Consumers in Debt Cases (Apr. 30, 2014), available at https://www.nycourts.gov/press/PDFs/PR14_03.pdf ................. 31 ix TABLE OF AUTHORITIES (cont’d) Miscellaneous Authorities Page(s) Press Release, New York State Office of the Attorney General, Attorney General Cuomo Sues to Throw Out Over 100,000 Faulty Judgments Entered Against New York Consumers in Next Stage of Debt Collection Investigation (July 23, 2009), available at http://www.ag.ny.gov/press-release/attorney- general-cuomo-sues-throw-out-over-100000-faulty- judgments-entered-against-new .................................................. 2 S. Rep. No. 95-382 (1977), reprinted in 1977 U.S.C.C.A.N. 1695 ............................................................... 6, 7, 8 Urban Justice Center, Debt Weight: The Consumer Credit Crisis in New York City and its Impact on the Working Poor (2007), available at https://cdp.urbanjustice.org/sites/default/files/CDP. WEB.doc_Report_Debt%20Weight_200710.pdf ........................ 14 x INTEREST OF AMICUS CURIAE New York’s Judiciary Law authorizes New York State courts to regulate attorney admissions and the practice of law. This case presents the question of whether that law preempts New York City from regulating the debt-collection practices of attorneys who (1) regularly engage in debt-collecting activities (2) traditionally performed by non-attorney debt collectors. The State of New York as amicus curiae submits this brief to explain that state law does not preclude the City from regulating debt-collection activities that happen to be undertaken by attorneys or employees of law firms, but for which a law license is not required. The State has a strong interest in protecting consumers from abusive, deceptive, and unlawful debt-collection practices. Indeed, complaints about debt collection are among the most common consumer complaints that the State receives.1 The State has 1 See Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Commends Chief Judge Lippman for Proposed Reforms to Consumer Debt Litigation Process (April 30, 2014); see also Press Release, Governor Cuomo Announces New Regulations Against Abusive and Deceptive Debt Collection Practices (Dec. 3, 2014). therefore endeavored to protect consumers by enacting and vigorously enforcing laws aimed at curbing debt-collection abuses. For example, the Attorney General’s ongoing investigations of debt- collection practices that violate state and federal laws have led to litigation and settlements with major law firm debt collectors and debt buyers.2 The State has also sought to ensure that the federal law regulating the practices of debt collectors is construed in a way that effectively protects consumers.3 2 See, e.g., Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Obtains Settlement with Fourth Debt Buyer Vacating $1.7m in Improperly Obtained Debt-Collection Actions (Apr. 15, 2015); Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Obtains Settlement From Major Debt Buyer Who Filed Thousands of Time-Barred Debt Collection Actions (Jan. 9, 2015); Press Release, N.Y. State Office of the Attorney General, A.G. Schneiderman Announces Settlement with Two Major Consumer Debt Buyers for Unlawful Debt Collection Actions (May 8, 2014); Press Release, New York State Office of the Attorney General, Attorney General Cuomo Sues to Throw Out Over 100,000 Faulty Judgments Entered Against New York Consumers in Next Stage of Debt Collection Investigation (July 23, 2009) 3 See Brief for the States of New York, et al. as Amici Curiae in Support of Petitioner, Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (No. 08-1200), 2009 U.S. S. Ct. Briefs Lexis 1002 (Fair Debt Collection Practices Act). 2 The City regulations at issue here are consistent with the long history of federal, state, and local cooperation to deter and remedy abusive debt collection practices. In an area where abuses are so numerous and have such a devastating impact on the lives of so many New Yorkers, the City’s regulations provide critical oversight and enforcement resources. The State also has a strong interest in ensuring that New York’s Judiciary Law is not given overbroad preemptive effect. The Judiciary Law is not the exclusive mechanism by which the State regulates attorney conduct and attorney professional services. The Legislature has also made attorneys subject to many other generally applicable laws and regulations, including the Penal Law, General Business Law, and the Public Officers’ Law. Thus, there is no merit to plaintiffs’ argument that the Judiciary Law confers upon the courts exclusive authority over all aspects of attorney conduct, and that the City’s regulation is preempted for that reason. 3 QUESTIONS CERTIFIED TO THIS COURT The Second Circuit certified the following two questions:4 1. Does Local Law 15, insofar as it regulates attorney conduct, constitute an unlawful encroachment on the State’s authority to regulate attorneys, and is there a conflict between Local Law 15 and sections 53 and 90 of the New York Judiciary Law? 2. If Local Law 15’s regulation of attorney conduct is not preempted, does Local Law 15, as applied to attorneys, violate section 2203(c) of the New York City Charter? By Order dated November 20, 2014, this Court accepted certification of the questions pursuant to § 500.27 of this Court’s rules. This amicus brief addresses the first certified question only. As it explains, the Legislature did not intend to immunize attorneys from all regulation of their conduct by authorities outside of the 4 See Eric M. Berman, P.C. v. City of N.Y., 770 F.3d 1002, 1009-10 (2d Cir. 2014). 4 Judiciary Law and the attorney grievance and disciplinary system. The Judiciary Law regulates attorneys in their practice of law, but does not comprehensively and exclusively regulate their provision of nonlegal professional services. Local Law 15 addresses the important and distinct concern of protecting consumers from abusive debt-collection practices that may be carried out without a law license. Local Law 15 thus does not intrude on or conflict with the State’s regulation of attorneys, or the special authority over that area that the Judiciary Law gives to the courts. STATEMENT OF THE CASE A. Federal, State, and Local Regulation of Debt-Collection Practices in New York Protecting consumers from abusive and unfair debt- collection practices has long been a major policy concern for federal, state, and local governments alike. In the 1970s, New York and the federal government enacted legislation to address the “widespread and serious” problem of debt collector abuse of consumers, which included “obscene or profane language, threats of violence, telephone calls at unreasonable hours, 5 misrepresentation of a consumer’s legal rights, [and] disclosing a consumer’s personal affairs” to others. See S. Rep. No. 95-382 at 2 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1696; Letter from Eugene Levy, Chairman of the New York State Joint Legislative Committee on Consumer Protection (May 16, 1973) (“Levy Letter”), reprinted in Bill Jacket for ch. 753 (1973), at 5-6. In the years since then, federal, state, and local governments have created a network of intersecting regulations to provide stronger consumer protection against continuing abuses by debt collectors. 1. New York’s Fair Debt Collection Practices Act In 1974, New York’s Legislature unanimously passed the state Fair Debt Collection Practices Act (NYFDCPA). See Ch. 753, 1973 N.Y. Laws 2407; see also Levy Letter, supra, reprinted in Bill Jacket for ch. 753 (1973), at 6. The NYFDCPA prohibits “principal creditors” and their agents from engaging in certain activities, including claiming, attempting, or threatening to enforce a right with knowledge or reason to know that the right does not exist. General Business Law § 601. It also prohibits principal creditors 6 and their agents from misleadingly suggesting that a communication is authorized by an attorney. Id. The NYFDCPA does not include an exemption for attorneys. See id. § 600(3). 2. The federal Fair Debt Collection Practices Act By 1977, a Senate Report concluded that “collection abuse has grown from a State problem to a national problem.” S. Rep. No. 95-382, at 2-3, reprinted in 1977 U.S.C.C.A.N. 1965, 1697. Congress therefore enacted the federal Fair Debt Collection Practices Act (FDCPA) to “eliminate abusive debt collection practices by debt collectors.” See Consumer Credit Protection Act, Amendments, Pub. L. No. 95-109, 91 Stat. 874, codified as amended at 15 U.S.C. § 1692 et seq. The FDCPA imposes restrictions and affirmative obligations on debt collectors seeking to communicate with consumers and third parties. See 15 U.S.C. §§ 1692c, 1692g. It prohibits certain harassing, abusive, false or misleading, and unfair practices, including falsely representing or implying that communications are from an attorney. Id. §§ 1692d, 1692e, 1692f. It also limits 7 where a debt collector may sue on a debt. Id. § 1692i. And it prescribes civil penalties for debt collectors who fail to comply with any of its provisions. Id. § 1692k. As originally enacted, the FDCPA exempted “any attorney-at- law collecting a debt as an attorney on behalf of and in the name of a client.” Pub. L. No. 95-109, § 803(6)(F), 91 Stat. 874, 875. Subsequently, Congress’s investigations revealed that attorneys were entering the debt collection industry in ever increasing numbers, and engaging in conduct that would have been prohibited by the FDCPA but for the attorney exemption. H. Rep. No. 99-405 at 3-4 (1985), reprinted in 1986 U.S.C.C.A.N. 1752, 1754-55. Congress therefore repealed the attorney exemption, seeking to “put a stop to the abusive and harassing tactics of attorney debt collectors.” Id. at 5, reprinted in 1986 U.S.C.C.A.N. at 1756; Fair Debt Collection Practices Act (Amendment) Pub. L. No. 99-361, 100 Stat. 768. When it enacted the FDCPA, Congress was well aware of existing state regulations of debt collectors. See S. Rep. No. 95-382, at 2-3, reprinted in 1977 U.S.C.C.A.N. at 1697. Congress made clear 8 that it envisioned a continuing role for States in this field by expressly providing that the FDCPA does not preempt any state regulation of debt collection practices, except to the extent those laws are inconsistent with it. 15 U.S.C. § 1692n. A state law is not inconsistent with the FDCPA “if the protection such law affords any consumer is greater than the protection provided” by the FDCPA. Id. (emphasis added). Furthermore, debt collection practices within a state are exempt from the FDCPA to the extent that they are subject to state law requirements similar to those imposed by the FDCPA and that there is adequate provision for enforcement. Id. § 1692o. 3. New York City’s debt collection laws In 1984, the New York City Council found that debt collection agencies operating locally were continuing to engage in abusive tactics that would “shock the conscience of ordinary people” (A. 166), notwithstanding the FDCPA and NYFDCPA. Accordingly, the City Council passed Local Law 65 of 1984, which sought to make debt collection agencies more responsive to the needs and complaints of City residents by requiring them to 9 obtain a license from the City Department of Consumer Affairs (DCA). (See A. 167, 170-172.) The law did not apply to “any attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client.” (A. 166.) New York’s Legislature had considered a similar licensing requirement but decided against it because of the likely administrative costs. See Levy Letter, supra, reprinted in Bill Jacket for ch. 753, at 5. In the wake of the 2009 financial crisis and resulting increase in consumer delinquency levels, reports of abusive and deceptive debt collection practices skyrocketed.5 (A. 181, 187-188, 448-449). The City Council heard testimony that debt collectors were omitting key information about accounts when communicating with debtors, failing to credit payments and honor settlement agreements, and attempting to collect debts for which the statute of limitations had expired. (A. 189, 222.) 5 See also FTC, Federal Trade Commission Annual Report 2008: Fair Debt Collection Practices Act at 4 (2008); FTC, Consumer Sentinel Network Data Book for January - December 2008, at 50 (Feb. 2009) (listing “Third Party and Creditor Debt Collection” as most common consumer fraud complaint in 2008). 10 In response, the City Council enacted Local Law 15 of 2009, which imposed additional regulatory requirements on debt collection agencies. Agencies must refrain from attempting to collect a debt on which the statute of limitations for initiating legal action has expired, unless the agency first provides the consumer information about the consumer’s legal rights. (A. 100.) See N.Y.C. Admin. Code § 20-493.2(b). When contacting consumers, agencies must provide their name, the originating creditor of the debt, the amount of the debt at the time of the communication, a call-back number to a phone that is answered by a natural person, and the name of the person to call back. (A. 100.) See N.Y.C. Admin. Code § 20-493.1(a). Where the consumer requests verification of the debt, the agency must refrain from collection attempts until it provides written documentation of the debt. (A. 100.) See N.Y.C. Admin. Code § 20-493.2(a). Finally, agencies must confirm in writing to the consumer, within five business days, any debt payment schedule or settlement agreement reached regarding the debt. (A. 100.) See N.Y.C. Admin. Code § 20-493.1(b). 11 The City Council also heard that debt-collection firms were using Local Law 65’s attorney exemption to frustrate the purposes of its debt collector licensing requirement. (A. 89, 185, 187-188.) The City Council therefore revised the definition of covered “debt collection agenc[ies]” to narrow the exception for attorneys.6 Local Law 15 excludes from its licensing requirement attorneys and law firms “collecting a debt . . . in such capacity on behalf of and in the name of a client solely through activities that may only be performed by a licensed attorney.” (A. 99.) See N.Y.C. Admin. Code § 20-489(a)(5). But there is no exemption for attorneys or law firms “who regularly engage[] in activities traditionally performed by debt collectors, including, but not limited to, contacting a debtor through the mail or via telephone with the purpose of collecting a debt or other activities as determined by rule of the commissioner.” (A. 99.) See N.Y.C. Admin. Code § 20-489(a)(5). 6 Local Law 15 also revised the definition of “debt collection agency” to include debt buyers. (See A. 99.) 12 4. The New York Department of Financial Services’s regulations In 2014, the State’s Department of Financial Services (DFS) promulgated regulations that impose state-wide disclosure requirements on debt collectors similar to those required under Local Law 15. The regulations require debt collectors to disclose certain information when contacting consumers, including whether the statute of limitations applicable to the debt has expired. 23 N.Y.C.R.R. §§ 1.2-1.3. They also require debt collectors to substantiate disputed debts, and to provide written confirmation of any agreed-upon payment schedule or settlement agreement. Id. §§ 1.4-1.5. DFS’s regulations contain a limited exemption for individuals undertaking collection actions “relating to or during litigation.” 36 N.Y. Reg. 10, 12 (July 16, 2014). The regulations expressly exclude persons “(i) serving, filing, or conveying formal legal pleadings, discovery requests, judgments or other documents pursuant to the applicable rules of civil procedure; (ii) communicating in, or at the direction of, a court of law or in depositions or settlement conferences or other communications in 13 connection with a pending legal action to collect a debt on behalf of a client; or (iii) collecting on or enforcing a money judgment.” 23 N.Y.C.R.R. § 1.1(e)(7). 5. New York State court reforms in debt collection cases Collection suits comprise a substantial share of the actions brought in New York City Civil Court, and in many instances the defendants have not been properly served and are thus not even aware that they are being sued.7 Until recently, creditors often obtained default judgments without needing to submit valid proof of the debt or the amount owed. Appleseed Report, supra, at 2, 13; see also UJC Report, supra, at 1-2, 7 (finding that 80% of consumer credit cases sampled resulted in default judgments, and 7 See New York Appleseed, Due Process and Consumer Debt: Eliminating Barriers to Justice in Consumer Credit Cases at 1, 12 (2010) (“Appleseed Report”); see also MFY Legal Services, Justice Disserved: A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York 2-9 (2008); Urban Justice Center, Debt Weight: The Consumer Credit Crisis in New York City and its Impact on the Working Poor 8 (2007) (“UJC Report”). 14 that debt buyers submitted facially invalid evidence in support of applications for default judgments in 99% of cases reviewed). In April 2014, after recognizing and applauding the myriad efforts to protect consumers from “debt collection abuses at the pre-litigation stage,” Chief Judge Lippman announced major reforms to address the “inequitable debt collection practices in the courts.” Chief Judge Lippman, Law Day Remarks: Consumer Credit Reforms at 6, 8 (April 30, 2014) (“Law Day Remarks”) (emphasis added). The reforms built on changes recently implemented by the New York City Civil Court. Id. at 7; see also 22 N.Y.C.R.R. § 208.6; Directives and Procedures DRP-182, GP-20, Civil Court of the City of New York (May 13, 2009). Creditors seeking default judgments in consumer debt cases must now submit an affidavit of facts, an affirmation attesting that the statute of limitation has not expired, and certain supporting documents. See 22 N.Y.C.R.R. §§ 202.27-a, 208.14-a, 210.14-a, 212.14-a. To ensure proper service, they must submit a notification of the lawsuit for mailing by the clerk’s office; the envelope must be 15 addressed to the debtor and must bear the return address of the clerk’s office. See id. §§ 202.27-b, 208.6(h), 210.14-b, 212.14-b. B. This Proceeding Plaintiffs are two law firms that engage in the business of seeking to recover amounts due and owing on consumer debt portfolios. (A. 14.) They brought this action in the U.S. District Court for the Eastern District of New York, alleging among other things that Local Law 15 was preempted by New York State’s Judiciary Law §§ 53 and 90. The district court (Vitaliano, J.) granted summary judgment to plaintiffs on their preemption claim. See Eric M. Berman, P.C. v. City of N.Y., 895 F. Supp. 2d 453 (E.D.N.Y. 2012). It held that Local Law 15 directly conflicted with Judiciary Law’s provisions for judicial governance over attorneys’ conduct, and that municipalities do not have the power to regulate attorneys’ conduct. Id. at 469-70. The court rejected the argument that Local Law 15 is not preempted by the Judiciary Law because Local Law 15 regulates only the provision of debt-collection services for which a law license is not required. Id. at 470-72. 16 On appeal, the Second Circuit recognized that many activities, even when performed by an attorney, are so unrelated to the practice of law that a local government can permissibly regulate them. See Berman, P.C., 770 F.3d at 1006. But it expressed uncertainty over whether the State intended to retain exclusive authority to regulate the attorney conduct covered by Local Law 15. Id. at 1006-09. The court accordingly certified to this Court the questions of (1) whether Local Law 15 “insofar as it regulates attorney conduct, constitute[s] an unlawful encroachment on the State’s authority to regulate attorneys”; (2) whether there is “a conflict between Local Law 15 and Sections 53 and 90 of the New York Judiciary Law”; and (3) whether Local Law 15 violates § 2203(c) of the New York City Charter. Id. at 1009-10. By Order dated November 20, 2014, this Court accepted certification of the questions pursuant to § 500.27 of this Court’s rules. 17 ARGUMENT LOCAL LAW 15 IS NOT PREEMPTED BY THE STATE JUDICIARY LAW As the history of debt-collection regulations in New York demonstrates, this is an area in which the local, state, and federal legislatures, agencies, and courts have shared responsibility for protecting consumers from abusive debt-collection tactics. Indeed, New York City’s regulations have been an important part of the backdrop to recent statewide reforms. A local law is preempted if “the State has clearly evinced a desire to preempt an entire field thereby precluding any further local regulation,” or if there is an express conflict with State law. Jancyn Mfg. Corp. v. County of Suffolk, 71 N.Y.2d 91, 96-97 (1987). These two concepts are “often interrelated,” and have as their fundamental goal determining whether the challenged local law is inconsistent with, and therefore frustrates or inhibits, the Legislature’s purpose in enacting a state law. See N.Y. State Club Ass’n, Inc. v. City of N.Y., 69 N.Y.2d 211, 217-18 (1987) (quotation marks omitted), aff’d on other grounds, 487 U.S. 1 (1988); see also 18 Jancyn, 71 N.Y.2d at 97; Inc. Vill. of Nyack v. Daytop Vill., Inc., 78 N.Y.2d 500, 505 (1991). Plaintiffs claim that Local Law 15 is inconsistent with State law in two related ways. First, they argue that Judiciary Law §§ 53 and 90 demonstrate the Legislature’s intention to preclude local regulation of attorney conduct by vesting exclusive authority to regulate attorneys’ professional conduct in the state courts. See Br. for Respondents (“Resp. Br.”) at 20-34; see also Berman, 895 F. Supp. 2d at 469-72. Second, they argue that the Judiciary Law generally—and the regulatory framework promulgated thereunder—governs all aspects of attorney conduct in such detail that there is no room at all for local regulation; any local law would necessarily conflict with the State’s exercise of its authority to supervise attorney conduct. See Resp. Br. at 36-48. In sum, they argue that the professional conduct of attorneys is subject only to regulation by the courts under the Judiciary Law, and that Local Law 15 essentially regulates the practice of law. These arguments misunderstand both the Judiciary Law and Local Law 15. 19 The Judiciary Law does not show a legislative intent to make its provisions the exclusive mechanism for regulating all attorney professional conduct. Rather, the Judiciary Law addresses attorneys’ practice of law, and gives the courts special authority to oversee that conduct. Local Law 15, in contrast, does not regulate the ability of attorneys to practice law. It regulates attorneys and law firms only to the extent that they regularly engage in debt-collection activities that are frequently performed by non-lawyers. Local Law 15 thus does not intrude upon or conflict with the State’s supervision of attorneys through the Judiciary Law. A. The Judiciary Law Regulates Attorneys in their Practice of Law. 1. Judiciary Law §§ 53 and 90 do not invest the courts with exclusive authority to license and regulate all professional conduct of attorneys. Plaintiffs argue—and the district court held—that Judiciary Law §§ 53 and 90 vest exclusive authority to regulate all attorney conduct in the state judiciary. See Resp. Br. at 20-21; Berman, 895 F. Supp. 2d at 469. That is incorrect. Those provisions instead 20 grant the courts the specific authority to regulate the practice of law, without expressly addressing the provision of nonlegal services by attorneys. Section 53 provides that the Court of Appeals may adopt rules “regulating the admission of attorneys and counsellors at law, to practice in all the courts of record of the state” and must “prescribe rules providing for a uniform system of examination of candidates for admission to practice as attorneys and counsellors.” Judiciary Law § 53(1), (3) (emphases added). Section 90—entitled “Admission to and removal from practice by appellate division; character committees”— directs the Appellate Division to “admit [a person] to practice as such attorney and counselor-at-law in all the courts of this state” upon passing the required examination and satisfying other requirements as set forth by courts. Id. § 90(1) (emphases added). It provides Supreme Court with “power and control over attorneys and counselors-at- law.” Id. § 90(2). And it authorizes the Appellate Division to “censure, suspend from practice or remove from office any attorney and counselor-at-law admitted to practice,” and to revoke 21 an attorney’s admission to practice where the attorney has misrepresented or suppressed information in connection with an application for admission to practice law. Id. Thus, §§ 53 and 90 give the courts authority over attorneys in their practice of law. See also In re Cohen, 7 N.Y.2d 488, 495 (1960) (“The court’s control over a lawyer’s professional life derives from his relation to the court.” (quotation marks and ellipses omitted)); In re Wong, 275 A.D.2d 1, 6 (1st Dep’t 2000) (per curiam) (noting court’s authority “to determine the fitness of an officer of the court to continue in that capacity and to protect the courts and the public from the official ministration of persons unfit to practice” (quotation marks omitted)). But attorneys who practice law may also be engaged in the business of providing nonlegal professional services. See N.Y. State Unified Court System, Rules of Professional Conduct (22 N.Y.C.R.R. § 1200.0), Rule 5.7(a)(1) (addressing the provision of “nonlegal services” by lawyers and law firms). And Judiciary Law §§ 53 and 90 do not address, much less exclusively vest in the 22 courts, the authority to regulate attorneys’ provision of nonlegal services for purposes other than regulating the practice of law. The specific nature of the courts’ authority to regulate attorneys is underscored by the types of sanctions available to courts for addressing attorney misconduct. The Judiciary Law authorizes courts to censure, suspend, and disbar attorneys, and to order restitution of money or property willfully misappropriated or misapplied by the attorney in the practice of law. See Judiciary Law § 90(2), (6-a); see also, e.g., In re Lenahan, 34 A.D.3d 13, 15 (4th Dep’t 2006) (per curiam). It does not authorize courts to impose monetary fines or to order restitution to those harmed by attorney conduct that does not constitute the practice of law. Thus, the attorney disciplinary committee could not fine an attorney who employed non-attorneys to harass debtors through high-volume, automated telephone calls without first reviewing the debts. Nor could it compensate the individuals harmed by the attorney’s conduct. The disciplinary committee’s only recourse would be to suspend or revoke the attorney’s law license. But that would not have the effect of prohibiting the attorney from 23 engaging in the activities at issue because the ability to undertake those activities does not depend on the possession of a valid license to practice law. What this shows is that the Legislature did not intend the courts to have exclusive oversight over all aspects of misconduct committed by attorneys, or address all types of harm flowing from that misconduct. As the Appellate Division has observed, “it can hardly be argued that an attorney who misappropriates clients funds from an escrow account and converts them to his or her personal use could not simultaneously be guilty of a violation of the Code of Professional Responsibility as well as the provisions of the Penal Law proscribing larcenous conduct.” People v. Law Offices of Andrew F. Capoccia L.L.C., 289 A.D.2d 650, 650-51 (3d Dep’t 2001) (citations omitted). And indeed, the First Department’s regulations relating to attorney discipline recognize that neither attorney disciplinary proceedings nor the imposition of discipline pursuant to those proceedings “shall preclude the imposition of any further or additional sanctions prescribed or authorized by law” or “be construed to deny to any other court or 24 agency such powers as are necessary for that court or agency to maintain control over proceedings conducted before it.” 22 N.Y.C.R.R. § 603.1(c); see also id. § 691.1(b) (Second Department); id. § 1022.1(b) (Fourth Department). Attorneys are subject to enforcement actions for fraudulent business practices and false, deceptive and misleading advertising under Executive Law § 63(12) and General Business Law article 22-A. See Capoccia, 289 A.D.2d at 650-51. And they are subject to ethics requirements in the Public Officers Law, prohibiting former State officers and employees from appearing before their former agencies on matters in which they had been directly involved for a period of two years after they leave State service. See Forti v. N.Y. State Ethics Comm’n, 75 N.Y.2d 596 (1990) (approving application of Public Officers Law § 73(8) to former Department of Environmental Conservation employee who was an attorney). Thus, Judiciary Law §§ 53 and 90 cannot be said to grant the courts exclusive authority to regulate all aspects of an attorney’s professional conduct. Accordingly, these provisions do not expressly or impliedly preempt the regulation of attorney debt collectors by 25 Local Law 15. See, e.g., Matter of Bethpage Water Dist. v. Daines, 67 A.D.3d 1088, 1092 (3d Dep’t 2009) (rejecting argument that local regulation of public water system was preempted by DOH’s “exclusive authority to regulate the public water supply” where statute did “not expressly cover public water systems”). 2. Taken as a whole, the Judiciary Law and its related regulations address only certain aspects of attorney professional conduct. The other provisions of the Judiciary Law and their related regulations likewise do not purport to govern all aspects of the professional services that an attorney might provide. Like Judiciary Law §§ 53 and 90, they focus primarily on the admission of attorneys to practice law and the provision of legal services by those attorneys.8 8 See, e.g., Judiciary Law § 460 (Examination and Admission of Attorneys; id. § 463 (Time and Places of Examination); id. § 464 (Certification by State Board of Successful Candidates); 22 N.Y.C.R.R. part 1200.0, Rules 1.1-1.18 (rules governing client- lawyer relationship); id. Rules 3.1-3.9 (rules governing advocacy). 26 As noted above (see supra at 21), attorneys engaged in the practice of law may also supply nonlegal professional services. See N.Y. State Unified Court System, Rules of Professional Conduct (22 N.Y.C.R.R. § 1200.0), Rule 5.7(a)(1). Those services may or may not be governed by the Rules of Professional Conduct, depending on the circumstances. Specifically, an attorney or law firm is subject to the Rules of Professional Conduct with respect to nonlegal services only where the attorney’s provision of those services is inextricably intertwined with the provision of legal services, or would lead a client to believe he is receiving legal services. Id. As this Court has recognized, “courts have refused to lay their hands summarily upon an attorney for the purpose of correcting transgressions in a transaction which has not undertaken by him in his character of an attorney.” People v. Title Guar. & Trust Co., 227 N.Y. 366, 374 (1919). The Rules themselves thus acknowledge that attorneys provide nonlegal services that the Rules do not regulate. The State has not enacted a comprehensive and detailed scheme governing attorney professional conduct beyond the practice of law. See 27 Hertz Corp. v. City of N.Y., 80 N.Y.2d 565, 569-70 (1992) (holding that State had not preempted entire field of rental car company practices where state law did not address ability of rental car companies to charge certain rental fees). Moreover, even where nonlegal services are subject to the Rules of Professional Conduct, the Rules do not reflect an intent to preclude the regulation of such services under other legal authorities. The Rules reflect a concern about the effect of the provision of legal services on the provision of nonlegal services. They do not demonstrate any intention to immunize attorneys from all regulation of their conduct outside of the framework of the Judiciary Law and attorney grievance and disciplinary system. Thus, for example, tax attorneys who are also licensed Certified Public Accountants (CPAs) and who provide both legal and nonlegal tax advice are not exempt from regulation by the Board of Regents simply because they are also subject to regulation as attorneys by the courts. See In re Levine, 168 A.D.2d 116, 117-18 (1st Dep’t 1991) (per curiam) (suspending attorney 28 from practice of law based on conduct that had also led to the suspension of his CPA license). Similarly, attorneys “who regularly engage[] in activities traditionally performed by debt collectors,” N.Y.C. Admin. Code § 20-489(a)(5), are not exempt from regulation of those activities merely because the courts also regulate them as attorneys. To the extent plaintiffs are subject to both regulatory schemes, it is because “they simultaneously engage in two distinct activities, each involving an independent realm of governance,” not because the two schemes conflict with each other. DJL Rest. Corp. v. City of N.Y., 96 N.Y.2d 91, 97 (2001). The State’s historical regulation of debt collectors confirms these points. That history demonstrates that state and local legislatures and agencies—as well as the courts—have traditionally worked cooperatively to protect consumers from abusive debt collection, including by attorneys and law firms. See, e.g., General Business Law § 600(3) (omitting any exemption for attorneys from definition of covered “principal creditor[s]”); 29 23 N.Y.C.R.R. § 1.1(e)(7) (exempting only certain actions relating to or during litigation). The State has not generally sought to oust local government regulation. Rather, it has at times built on and complemented New York City’s regulations. For example, Local Law 15 was an important model for DFS’s recent state-wide regulations. See 35 N.Y. Reg. 5, 7 (Aug. 21, 2013) (explaining that regulations were “similar to the requirements set by the New York City Department of Consumer Affairs on debt collectors operating in the city”).9 Similarly, the reforms of consumer credit cases announced by Chief Judge Lippman in April 2014 “buil[t] on the collective efforts of the Attorney General’s Office, the State Department of Financial Services and the State Legislature to combat deceptive debt collection practices and protect consumers, as well as on the best practices being developed and refined in the 9 DFS has never suggested that it intended these regulations to displace and preempt Local Law 15, and there is no merit to plaintiffs’ argument that DFS’s regulations preempt Local Law 15, Resp. Br. at 47 n.4. See also Town of Concord v. Duwe, 4 N.Y.3d 870, 873-74 (2005); Jancyn Mfg., 71 N.Y.2d at 99. 30 New York City Civil Court.” Press Release, N.Y. State Unifed Court System, Chief Judge Announces Comprehensive Reforms to Promote Equal Justice for New York Consumers in Debt Cases at 2 (Apr. 30, 2014); see also Law Day Remarks, supra, at 6, 13. This history of state and local government cooperation on the regulation of attorney debt collectors further confirms that the Judiciary Law and the courts do not exclusively occupy the field of attorney regulation. It also demonstrates the State’s strong and consistently expressed intention that attorneys who regularly engage in the business of debt collection should be generally subject to the laws regulating debt collection agencies overseen and staffed by non-attorneys. B. Local Law 15 Does Not Regulate the Practice of Law. Local Law 15 does not purport to regulate the practice of law, nor does it. Rather, it addresses the important and distinct concern of protecting consumers from abusive debt-collection practices that may be carried out without a law license. Local Law 15 accordingly does not infringe on the State’s laws and policies 31 concerning attorney regulation, or the special authority that the Judiciary Law gives to courts to oversee that area. Local Law 15 expressly states that its requirements do not apply to “any attorney-at-law or law firm collecting a debt in such capacity on behalf of and in the name of a client solely through activities that may only be performed by a licensed attorney.” N.Y.C. Admin. Code § 20-489(a)(5). Furthermore, the penalties it imposes for a violation of its terms do not affect the ability of attorneys to practice law. Id. § 20-494 (penalty of $700-$1,100 per violation). Plaintiffs nonetheless argue that Local Law 15’s exception for attorneys acting “in such capacity” is essentially meaningless because the law states an intention to cover attorneys or law firms “who regularly engage[] in activities traditionally performed by debt collectors, including, but not limited to, contacting a debtor through the mail or via telephone with the purpose of collecting a debt or other activities as determined by rule of the commissioner.” Id. § 20-489(a)(5). Plaintiffs contend that through this provision, Local Law 15 regulates any attorney who contacts a debtor by telephone or mail—and that because contacting debtors by 32 telephone or mail constitutes the practice of law, Local Law 15 impermissibly regulates the practice of law. See Resp. Br. at 22-33. That argument is incorrect and flows from two mistaken premises. First, plaintiffs incorrectly interpret Local Law 15 as regulating all letters and phone calls between attorneys and debtors. Second, they incorrectly presume that every activity performed by a person who is licensed to practice law—including every phone call made and every letter written—constitutes the practice of law. See Resp. Br. at 26-27. As noted earlier (see supra at 21, 26), the Rules of Professional Conduct for attorneys recognize that attorneys or law firms may provide “nonlegal services” to clients or other persons. See 22 N.Y.C.R.R. § 1200.0, Rule 5.7. “Nonlegal services” are defined to mean “those services that lawyers may lawfully provide and that are not prohibited as an unauthorized practice of law when provided by a nonlawyer.” Id. Attorney debt collectors and debt-collection law firms can (and often do) engage in activities of the type traditionally performed by nonlawyer debt collectors. “[A]n attorney can, in 33 fact, send a debt collection letter without being meaningfully involved as an attorney within the collection process . . . .” Greco v. Trauner, Cohen & Thomas, L.L.P., 412 F.3d 360, 364 (2d Cir. 2005). And some debt collection attorneys and firms go so far as to employ nonlawyers as account representatives and debt collectors. See, e.g., H. Rep. No. 99-405 at 3-6, 1986 U.S.C.C.A.N. at 1754-56. Federal and state courts have developed simple and workable standards for determining when an attorney who is engaged in debt collection activities—such as sending out dunning letters—is acting in the nonlegal capacity of a traditional debt- collector, as opposed to in the legal capacity of a practicing attorney. In the context of determining whether an attorney debt collector has falsely represented that a communication was from an attorney,10 numerous federal and New York state courts have held that a letter bearing an attorney’s signature is not a communication from an attorney unless the attorney was meaningfully involved in the creation and sending out of the 10 Both the FDCPA and NYFDCPA prohibit such conduct. See 15 U.S.C. § 1692e(3); General Business Law § 601. 34 letter; for example, by personally reviewing the debtor’s file, determining when particular letters should be sent, or approving the sending of particular letters.11 Under this standard, as the U.S. Court of Appeals for the Second Circuit has observed, “there will be few, if any, cases in which a mass-produced collection letter bearing the facsimile of an attorney’s signature” may properly be considered a communication from an attorney. Clomon, 988 F.2d at 1321. It is precisely these types of nonlegal debt collection activities—the mass sending of dunning letters and the analogous high-volume, automated calling of debtors by non-attorneys—that Local Law 15 seeks to regulate. Local Law 15 does not seek to reach every telephone or mail contact between attorneys and debtors. Rather, it regulates those activities only to the extent they are “traditionally performed by debt collectors.” See N.Y.C. 11 See, e.g., Clomon v. Jackson, 988 F.2d 1314, 1320-21 (2d Cir. 1993); see also Greco, 412 F.3d at 364; Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 301 (2d Cir. 2003); Lesher v. Law Offices of Mitchell N. Kay, P.C., 650 F.3d 993, 1003 (3d Cir. 2011); Gonzalez v. Kay, 577 F.3d 600, 607 (5th Cir. 2009); Nielsen v. Dickerson, 307 F.3d 623, 630-31 (7th Cir. 2002); People v. Boyaijan Law Offices, P.C., N.Y. Slip Op. 52077(U), at *6 (N.Y. Sup. Ct. N.Y. County Sept. 18, 2007). 35 Admin. Code § 20-489(a)(5); see also Br. for Appellants (“App. Br.”) at 26. Local Law 15 thus distinguishes between attorneys acting in a legal capacity and attorneys acting in a nonlegal capacity, and makes clear that only the latter are subject to Local Law 15—to the same extent as non-lawyers engaging in those activities. Indeed, Local Law 15’s language closely tracks language that the FTC has previously used to distinguish between attorneys engaging in legal practice and those who are not. In a commentary issued prior to the U.S. Supreme Court’s decision in Heintz v. Jenkins 514 U.S. 291 (1995),12 the FTC explained its position that the FDCPA applied to “[a]ttorneys or law firms that engage in traditional debt collection activities (sending dunning letters, making collection calls to consumers) are covered by the [Act], but those whose practice is limited to legal activities are not covered.” Fed. Trade Comm’n, Statements of General Policy or 12 In Heintz v. Jenkins, the U.S. Supreme Court held that the FDCPA applied to attorney’s litigation and non-litigation debt collection activities alike. See 514 U.S. at 299. 36 Interpretation Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50,097, 50,100 (1988). Local Law 15 further ensures that attorneys who perform legal services in good faith will not unwittingly trigger application of the law by limiting its application to attorneys and law firms who “regularly engage[]” in traditional, nonlegal debt collection activities. Numerous cases provide guidance on the degree of debt- collection activity that constitutes regular engagement. In interpreting the FDCPA’s intention to regulate a person who “regularly collects or attempts to collect . . . debts,” see 15 U.S.C. § 1692a(6), courts have set forth several straightforward factors bearing on the issue of regularity. Those factors include the absolute number of debt collection communications issued, the frequency of such communications, and whether the entity has personnel specifically assigned to work on debt collection activities.13 See, e.g., Goldstein v. Hutton, Ingram, Yuzek, Gainen, 13 Although the FDCPA differs from Local Law 15 in that it encompasses litigation debt-collection activities as well as non- 37 (continued on next page) Carroll & Bertolotti, 374 F.3d 56, 62-63 (2d Cir. 2004); James v. Wadas, 724 F.3d 1312, 1317-18 (10th Cir. 2013); Castillo v. Balsamo Rosenblatt & Cohen, PC, 33 Misc. 3d 700, 704-05 (N.Y. Civ. Ct. Kings County June 30, 2011). Applying these factors, it is even clearer that Local Law 15 reaches only attorneys or law firms engaged in the business of sending out dunning letters en masse or making high-volume calls to debtors without meaningful attorney involvement. There is no inconsistency between Local Law 15 and the Judiciary Law that would justify a finding that Local Law 15 is preempted. litigation activities, the concept of regularity is no different when applied to only non-litigation activities. 38 CONCLUSION For the foregoing reasons, Local Law 15 does not encroach on the State’s authority to regulate attorneys, nor does it conflict with Judiciary Law §§ 53 and 90. Dated: New York, NY May 19, 2015 BARBARA D. UNDERWOOD Solicitor General ANISHA S. DASGUPTA Deputy Solicitor General KAREN W. LIN Assistant Solicitor General of Counsel Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York By: ____________________________ KAREN W. LIN Assistant Solicitor General 120 Broadway New York, NY 10271 (212) 416-6197 Reproduced on Recycled Paper 39