The client of a Colorado lawyer who filed an administrative appeal in North Dakota without being admitted there got a harsh result — the North Dakota Supreme Court ruled in Blume Construction v. State that the lawyer’s action was the unauthorized practice of law, and therefore that the client’s appeal was void.
Admission ticket required
Blume Construction had been assigned a penalty tax rate on its unemployment insurance, and hired a Colorado lawyer to appeal the determination. Two days before the appeal deadline, the lawyer signed and submitted an electronic appeal request on behalf of Blume, giving the basis for the appeal, summarizing several statutory provisions and requesting relief. Local practice rules required the lawyer to move for pro hac vice admission within 45 days of filing the appeal request; the lawyer did not do so.
In fact, at least 30 days before the scheduled administrative hearing on the appeal, the lawyer notified the referee that he could not secure a sponsoring attorney licensed in North Dakota, as required for pro hac vice admission, and Blume, the client, told the referee that a North Dakota lawyer would represent Blume instead.
On the morning of the administrative hearing on the appeal, the referee became aware that the notice of appeal had been filed by the Colorado lawyer.
The hearing was cancelled, and the referee ruled that filing an administrative appeal required North Dakota admission, and that Blume’s appeal request was void because it was filed by a nonresident lawyer not admitted to practice in the state; therefore, Blume was stuck with its penalty tax rate. The intermediate court of appeals affirmed the referee’s decision.
No safe harbor
North Dakota’s version of Model Rule 5.5 provides safe harbor for some forms of temporary practice by out-of-state lawyers, including (1) “preparatory” efforts made by lawyers who intend to seek pro hac vice admission for the particular matter; and (2) services that the out-of-state lawyer carries out, but that could also be performed by non-lawyers.
Blume argued that filing the appeal request was merely preparatory, that its lawyer reasonably expected to be granted pro hac vice admission and, therefore, that the lawyer was within the safe harbor. But the state supreme court disagreed, based on a 2009 case in which it had held that filing a request for reconsideration and being designated as counsel were not merely “preparatory.”
Blume also argued that a non-lawyer could have filed its administrative appeal, and therefore, that the Colorado lawyer did not need to be admitted in North Dakota. Not so, said the court. As a corporation, Blume couldn’t act through a non-attorney agent in a legal proceeding. And the Colorado lawyer’s work in filing the appeal was more than clerical or just filling out a form; rather the lawyer applied legal skill and knowledge to the facts of the case.
With its harsh result — dismissal of Blume’s appeal — this case illustrates the risks to the client of unauthorized practice. And, of course, lawyers who engage in unauthorized practice also put their licenses at risk.
Taking any action on behalf of a client before a tribunal in a jurisdiction where you are not admitted — or not yet admitted — requires close attention to several sources of authority in the jurisdiction you are headed for. (Some lawyers make the mistake of looking to their home jurisdiction’s rules.) You need to consider that jurisdiction’s ethics rules, its pro hac vice rules, its statutes, any applicable rules of court and its case law. You may be under time pressure — as the Colorado lawyer was, with the client’s appeal deadline looming — but there is no substitute for knowing whether you have a safe harbor or a sinking boat.