Lobbying Disclosure Act Is Ruled Unconstitutional

Ridge signed the Lobbying Disclosure Act into law on Oct. 15, 1998, to take effect on Aug. 1, 1999.



Essentially, Section 1302 of the act “sets forth the intent of the General Assembly … to regulate persons engaged in lobbying activities as defined in the act,” the court said.



The act requires registration and quarterly filing of expense reports by lobbyists. It also prohibits certain activities on the part of lobbyists relating to compensation and serving on political committees.



Administration and enforcement of the act is vested in the ethics commission and the attorney general. The act provides for both civil and criminal penalties for noncompliance with its provisions.



“Section 1311 of the act contains a unique severability clause which states that if a provision of the act is held invalid as an improper regulation of the ‘practice of law,’ the remaining provisions of the act are void,” Kelley said.

A Challenge

On May 26, 1999, Gmerek and Artz filed a declaratory judgment action seeking a ruling that the act is unconstitutional because it regulates the practice of law.



“In the petition, [Gmerek and Artz] allege that they are members of the Pennsylvania bar who on behalf of their clients engage in ‘lobbying,’ as that term is defined in the act. [They] also allege that because the act purports to regulate the ‘practice of law’ with respect to these activities, it violates Article 5, Section 10 of the Pennsylvania Constitution which vests all authority over the regulation of the ‘practice of law’ with the Pennsylvania Supreme Court.”



Specifically, Gmerek and Artz claim the act impermissibly regulates the practice of law in the following respects:



* The reporting requirements could require them to disclose their clients’ proprietary and confidential information in violation of Rule 1.6 of the Rules of Professional Conduct and the statutory attorney-client privilege.



* The prohibition of contingent compensation directly contravenes Rule 1.5(c) of the Rules of Professional Conduct.



* The provisions granting the commission and the attorney general the authority to impose sanctions for noncompliance conflicts with the Pennsylvania Supreme Court’s authority to discipline attorneys.



* The payment of a biennial fee could bar them from practicing law as lobbyists and thereby conflict with the Supreme Court’s authority to regulate the practice of law.



* The provision prohibiting lobbyists from serving as officers in a political candidate’s committee or political action committee is a restriction beyond those imposed on attorneys by the Pennsylvania Supreme Court.



The commission and the attorney general each responded that the act does not impermissibly regulate the practice of law or infringe upon the Supreme Court’s authority to regulate the practice.



All three parties filed motions for summary judgment. Also, various senators filed motions to intervene and amicus curiae petitions on behalf of the defendants.



“Respondents, intervenor and amici curiae argue that even though Article 5, Section 10 of the Pennsylvania Constitution vests all judicial powers in the Pennsylvania Supreme Court, the Pennsylvania General Assembly may constitutionally regulate the professional activities of lawyers if the statute is not specifically directed solely at the conduct of lawyers but governs the conduct of both lawyers and nonlawyers,” the majority opinion states.



The defendants cited two state Supreme Court decisions for support.



In Maunus v. State Ethics Commission, 544 A.2d 1324 (Pa. 1988) the commission advised lawyers who were employed by the Pennsylvania Liquor Control Board that they were required to file a statement of financial interest under the provisions of the Ethics Act.



The Commonwealth Court ruled the requirement violated the Pennsylvania Constitution, and the Supreme Court reversed.



“Notwithstanding our substantial authority in this area, it is ludicrous to suggest that employers are constitutionally precluded from imposing ethical and professional requirements on their employees, some or all of whom may be attorneys,” the Maunus court said.



And in P.J.S. v. State Ethics Commission, PICS Case No. 99-0106 (Pa. Jan. 25, 1999) Cappy, J. (9 pages). The high court held 6-0 that the commission could investigate an alleged conflict of interest by an Erie lawyer who was a part-time city solicitor.



The Commonwealth Court concluded that the commission and the other defendants misinterpreted these Supreme Court precedents.



“Our focus is not limited to whether or not its provisions merely regulate the conduct of both lawyers and nonlawyers,” the court said. “Rather, we must consider whether the act purports to control the conduct of lawyers in the rendering of professional legal services to clients. In short, we must examine whether the act regulates activities which constitute the ‘practice of law.’”



The defendants argued that because the activities regulated by the act may be performed by nonlawyers, their performance cannot be considered the ‘practice of law.’” The court was not persuaded.



“In determining whether the activities regulated by the act constitute the ‘practice of law’ when performed by lawyers, it is not dispositive that nonlawyers may also perform such activities,” the court said.



“Thus, it is clear that there are activities that may properly be performed by nonlawyers which are considered to be the ‘practice of law’ when performed by lawyers.”



Gmerek and Artz alleged that when they acted as lobbyists, they “instructed and advised clients in regard to the law, so that they may properly pursue their affairs and be informed as to their rights and obligations.”



“Clearly such professional activity falls within the ambit of the ‘practice of law,’” Kelley said.



“In reaching this conclusion, we also note that the act specifically includes a lawyer’s direct communications with officials in administrative agencies within the ambit of the activities that it regulates,” the judge said. “… It cannot be doubted that such activities, when performed by a lawyer, constitute the ‘practice of law’ and are subject to the exclusive regulation by the Pennsylvania Supreme Court.”

Dissent