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Enforcement of New York’s unauthorized practice of law statutes enjoined as against a non-profit organization assisting low-income New Yorkers

Federal

,

United States

Background

In Upsolve, Inc. v. James, No. 22-cv-627 (PAC) (S.D. N.Y. 2022), the plaintiff non-profit organization (“Upsolve”) created a program (“AJM”) that aims to help low-income New Yorkers avoid defaulting on debt actions. The program involved training non-lawyers (“Justice Advocates”) to give low-income New Yorkers free advice about how to fill out a State-provided answer form for defendants in debt actions based on those clients' individual circumstances. The clients would then file their forms in court.

The non-profit program encountered one large problem. By giving legal advice about how to fill out the forms, the Justice Advocates would be engaging in the unauthorized practice of law (“UPL”) in New York. The plaintiffs sought a preliminary injunction that prevented the Attorney General from enforcing the UPL rules against the Justice Advocates for implementing the AJM program (at 11).

Law

In order to obtain a preliminary injunction, the party seeking the preliminary injunction must demonstrate: (1) irreparable harm absent injunctive relief; (2) a likelihood of success on the merits; and, (3) public interest weighing in favor of granting the injunction (at 11).

Likelihood of Success on the Merits

The Court determined that the AJM program’s giving of legal advice should be classified as speech as opposed to conduct (at 16-21) and that the government had the burden of proving the UPL rules satisfy the strict scrutiny standard (at 25).

The Court held that the UPL rules likely fail strict scrutiny as applied to the AJM program. The justifications for the UPL rules appeared less compelling in the context of the plaintiffs' specific, narrow mission to assist low-income New Yorkers in not defaulting on debt collection actions against them (at 26-27). Further, the State failed to narrowly tailor the statute and the State could implement less restrictive alternatives to a blanket ban on all unauthorized legal advice (at 28, 30).

The Court held that the UPL rules likely fail strict scrutiny as applied to the AJM program, and that the plaintiffs demonstrated a likelihood of success on the merits of their First Amendment free speech claim (at 30).

Irreparable Injury

With respect to irreparable injury, the Court noted that the loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury and that the plaintiffs' irreparable injury necessarily follows from the likelihood of their success on the merits on the free speech claim (at 30).

Public Interest

Finally, the balance of equities and the public interest favored allowing the plaintiffs to commence their legal program. As for the public interest, the State does not have an interest in the enforcement of an unconstitutional law (at 30-31).

Disposition

The Court granted the requested injunction enjoining the State from enforcing the UPL rules against the Justice Advocates and the AJM program.

June 15, 2022
Upsolve, Inc. v. James, No. 22-cv-627 (PAC) (S.D. N.Y. 2022)
Author: Carli Kadish