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Attorney E-Newsletter

April 2009

Supreme Court Revamps Conservatorship, Suspension, Reinstatement, and Inactive Status Rules

The Supreme Court of Pennsylvania has adopted two packages of rule changes which have a substantial effect in areas of the law relating to regulation of the profession.

1. Conservatorship, No. 72 DD1

On March 19, 2009, the Court adopted an order making numerous changes to the provisions of Rules 321 through 328 of the Pennsylvania Rules of Disciplinary Enforcement (Pa.R.D.E.), dealing with the appointment of conservators for attorneys who abandon their practice, disappear, die or become incapacitated or disabled. Some of the changes relating to conservators not associated with the Office of Disciplinary Counsel include:

  • Provision for payment of the conservator at an hourly rate identical to that received by court-appointed counsel at the non-court appearance rate in the judicial district where the conservator was appointed. Previously, the rule stated that conservators were expected to serve without compensation except under extraordinary circumstances.
  • Payment for expenses may include authorization for payment of attendant staff.
  • If the state of the financial accounts and records of the absent attorney, or other relevant circumstances, make it unreasonable or impractical to determine ownership of funds, a procedure is established for the conservator to request leave of court to deliver the funds in the absent attorney’s possession to the Pennsylvania Lawyers Fund for Client Security.

2. Administrative Suspension and Reinstatement, 75 Disciplinary Rules Docket No. 1

On April 16, 2009, the Court entered an order adopting changes in the Rules of Disciplinary Enforcement which may affect a wider range of attorneys. These rules concern circumstances under which lawyers may be placed on a new category of discipline called administrative suspension, the circumstances under which lawyers placed on this status and others may be reinstated to active status, and the assessment of the annual fee.

Lawyers may be placed on administrative suspension for failing to:

  • pay the annual fee and file the form required by Rule 219, Pa.R.D.E.;
  • comply with continuing legal education requirements imposed by the Pennsylvania Continuing Legal Education Board;
  • pay any expenses taxed in a disciplinary proceeding; or
  • meet the requirements for maintaining a limited law license as a limited in-house corporate counsel, a foreign legal consultant, an attorney participant in defender and legal services programs, or a military attorney.

Previously, attorneys who failed to meet these obligations were “transferred to inactive status.” As the name implies, administrative suspension involves heavier burdens to resume active status than transfer to inactive status did.

Any attorney who has been on inactive status or administrative suspension for three years or more must go through a reinstatement procedure which is set out in the rule, and must pay a reinstatement fee of $300 if under administrative suspension at the time the petition for reinstatement is filed.

An attorney who has been on administrative suspension for less than three years can be reinstated without a formal procedure once the failure that led to the administrative suspension has been corrected and the reinstatement fee is paid.

3. Periodic Assessment and Inactive Status, 75 Disciplinary Rules Docket No. 1

Perhaps the most far-reaching of the rule changes will be changes to Rule 219, Pa. R.D.E., relating to the annual fee or assessment charged to all admitted attorneys.

Three categories of attorneys are exempt from the annual fee:

  • Certain state and federal judges, not including Philadelphia Traffic Court judges, Pittsburgh Municipal Court judges, magisterial district judges, arraignment court magistrates or administrative law judges;
  • Retired attorneys; and
  • Military attorneys with limited admission under Pa.B.A.R. 303.

Attorneys who are administratively suspended for failure to pay the annual fee and file a registration form must pay a reinstatement fee of $300, as well as the registration fee for the year in which he or she was suspended, even if the suspension occurred less than three years earlier.

An attorney who chooses to retire may submit an application for retirement, and will be relieved of the fee when the application is approved. If a retired attorney seeks to resume active status within three years, however, she or he will be required to pay the annual active fee for the three most recent years or such shorter period in which the attorney was on retired status, instead of the amounts required to be paid by an inactive attorney seeking reinstatement.

In perhaps the most dramatic change, attorneys on voluntary inactive status will be required to pay an annual fee of $70. Under prior practice, an attorney who elected inactive status and ceased the practice of law in Pennsylvania was not required to pay any annual fee. Under the new provision, payment of the $70 annual fee is required to assume and continue inactive status, and failure to pay the annual fee and file the form required will result in an order administratively suspending the attorney.

There is language in the rule governing the transition of attorneys currently under various kinds of inactive status to their new status over a one year period, which is too detailed to recite here. Attorneys who believe they may be affected by one of these provisions should check the language of the rule itself.

New Leaders of a Smaller Disciplinary Board

On April 1, 2009, the Supreme Court designated a new Chair and Vice Chair of the Disciplinary Board. William Pietragallo, II, a partner in the Allegheny County firm of Pietragallo Gordon Alfano Bosick & Raspanti, LLP, took the reins as Chair. Francis X. O’Connor of Great Bend, Susquehanna County, became Vice-Chair of the Disciplinary Board.

Messrs. Pietragallo and O’Connor become the big fish in a smaller pond, however. By order dated April 3, 2009, the Supreme Court reduced the membership of the Board from sixteen to fourteen. Twelve members are attorneys, and two members will still be nonlawyer representatives. No one was removed from the Board; the reduction will take place by not filling the seats of two members whose terms expired.

This’ll Hurt a Little

Now for the bad news. By an order dated April 2, 2009, the Supreme Court adopted a new Rule 1.15(u) of the Pennsylvania Rules of Professional Conduct to require that all active Pennsylvania attorneys pay an additional fee of $25 for the 2009-2010 registration year. The additional funds will support the Pennsylvania Interest on Lawyer Trust Accounts (IOLTA) program.

The IOLTA program funds projects to improve access to justice, such as legal aid programs to assist individuals unable to afford legal services. Historically the program has been funded by interest drawn from lawyer trust accounts. However, the program has suffered a severe revenue shortfall due to falling interest rates at a time when the need is greater than ever. The additional assessment will provide an estimated $1.5 million of income, which will not be nearly enough to make up for a fall in revenue from $13 million in 2008 to a projected $6.5 million this year.

The additional sum will be due with the 2009-2010 registration fee which must be paid by July 1, 2009. The new charge brings the total assessment to $200, allocated as $140 for operation of the disciplinary system, $35 to fund the Pennsylvania Lawyers Fund for Client Security, and the new $25 assessment for the Pennsylvania IOLTA fund. The total annual fee is still one of the lowest rates in the nation. The national average is more than $100 higher. Only ten states have lower annual assessments than Pennsylvania’s.

Public De-Fender

All right, we were unable to come up with any rationale to claim that this story has anything to do with legal ethics or the law of lawyers. But after all that heavy rule reporting, we just couldn’t resist passing it along anyway.

New Jersey lawyer Ron Bienstock, a guitarist who tours with his two rock bands when not practicing[1] entertainment law out of Hackensack, New Jersey, was doing due diligence for a client when he discovered that Fender Musical Instrument Corporation had filed three applications with the US Patents and Trademarks Office seeking trademark registration for the two-dimensional body shapes it uses on its Stratocaster, Telecaster and Precision Bass guitars. Bienstock undertook representation of a group of guitar manufacturers opposing the trademarks on the designs, which have been in use for fifty years or more[2]. After a six-year battle, Bienstock won when the Trademark Trial and Appeal Board issued a 75-page decision[3] holding that the designs have become “generic”[4] and are no longer solely associated with Fender in the minds of consumers, and refusing registration of the marks. Reportedly Fender was considering an appeal.

Of course, this organ[5] of the Disciplinary Board takes absolutely no position on the merits of the case or the respective positions of Fender and Bienstock’s clients. But it is our completely unofficial opinion that, legally right or wrong, Mr. Bienstock rocks.

Got a Tip?

Or a question, a comment, an idea you’d like to see addressed? We are always glad to hear from you. Write us at comments@padisciplinaryboard.org.

[1] How do you get to be an entertainment lawyer? Practice, practice, practice.

[2] Since 1954, 1949, and 1951, respectively.

[3] Which contains all sorts of fascinating guitar lore.

[4] All those $99 foreign-made guitars have sculpted double cutaway bodies, large white faceplates, and three diagonally placed single coil pickups because it seemed such an intuitive thing to do.

[5] We fretted about picking a guitar reference to go in here, but we Hammond thought of one so we’re just Roland along.