Dec. 11 --The Nebraska Supreme Court Dec. 6 reaffirmed mandatory membership in the state bar association as a condition of practicing law in that state, but limited the expenditure of compulsory bar dues to specific categories of activities germane to regulation of the legal profession, and made dues for all other bar activities voluntary (In re Petition for a Rule Change to Create a Voluntary State Bar of Neb., Neb., No. S-36-120001, 12/6/13).
In a per curiam opinion, the court turned down a bar member's petition to jettison the mandatory bar and change it to a voluntary association. It said the constitutional legitimacy of mandatory bars is beyond question and that the reasons underlying the court's 1937 decision to integrate the Nebraska bar have even more force today.
Nevertheless, the court decided that bar members will be required to pay dues only to fund the bar's regulatory functions: admissions, membership records, enforcement of ethics rules, continuing legal education, trust fund records and fighting unauthorized practice. A separate fee is already assessed for discipline.
Confining mandatory dues to these expenditures will avoid the protracted litigation experienced in some other states regarding which bar activities lawyers may be compelled to fund without violating the First Amendment, the court explained.
The court's action comes against the backdrop of a pending federal court action against the Nebraska State Bar Association challenging the constitutionality of mandatory dues that bar members are required to pay.
Scott Lautenbaugh, a Nebraska lawyer and state senator, filed a civil rights suit against the bar more than a year ago, alleging that the bar's imposition of mandatory dues to fund activities he does not support violates his First Amendment right to be free from compelled speech and association (Lautenbaugh v. Neb. State Bar Ass'n, D. Neb., No. 4:12-cv-03214, filed 10/10/12).
Lautenbaugh is also the petitioner in the state-court matter. His petition, which he filed before his federal court lawsuit, asked the state supreme court to disunify the mandatory bar.
The court invited public comment and heard oral argument on the issue. The bar association opposed the requested shift to a voluntary bar.
In responding to Lautenbaugh's petition, the court pointed out that the U.S. Supreme Court established more than half a century ago that a state may constitutionally require a lawyer to be a member of a mandatory or unified bar to which compulsory dues are paid. Thirty-two states and the District of Columbia require lawyers to become bar members and pay dues as a condition of practicing law in that jurisdiction, the court said.
As background for its decision, the court recounted recent efforts some have mounted in New Hampshire, New Mexico and Wisconsin to abolish the mandatory state bar. Aside from the temporary suspension of mandatory bar membership in Wisconsin from 1988 to 1992, no state bar association has converted from mandatory to voluntary status, it found.
In addition, the court canvassed constitutional challenges over the years to mandatory bars. The seminal case is Keller v. State Bar of Cal., 496 U.S. 1 (1990), which held that use of compulsory bar dues to finance political and ideological activities with which bar members disagree violates those members' First Amendment free speech rights, to the extent such expenditures are incurred for purposes other than regulation of the legal profession or improvement in the quality of legal services.
Reviewing First Amendment compelled-speech jurisprudence after Keller, the court found that the legal landscape was altered by Knox v. Service Employees, 2012 BL 153979, 80 U.S.L.W. 4512 (U.S. 2012), which involved a challenge to certain fees that a public sector union imposed on employees.
In particular, the court found signals in Knox supporting the view that the constitutional validity of a bar's use of compulsory dues for a particular activity turns on whether the activity is germane to the bar's regulatory purposes, not whether the activity is ideological or political in nature. Moreover, Knox casts doubt on the constitutional validity of an “opt-out” system for dealing with members who object to a bar's expenditures, the court said.
Rather than declaring precisely which activities may be funded with compulsory bar dues or what mechanism the bar association must put in place to accommodate objections, the court focused on the administrative task of how best to structure the Nebraska State Bar Association to meet the needs of the judicial system, lawyers and citizens.
The court decided that the mandatory bar should be preserved for the same reasons it was created: to regulate the profession, ensure that ethics rules are enforced, combat the unauthorized practice of law and maintain the public's favorable view of the practicing bar.
Nebraska statutes and constitutional provisions referring to the bar association indicate that the state's citizens have come to rely on its existence and the court's oversight of the bar, the court said.
The court concluded, however, that the Nebraska rules relating to the bar should be modified to limit the use of mandatory dues to the regulation of the legal profession. Along with discipline, the court said, the regulation of the profession includes these bar functions:
• admitting applicants for bar membership;
• maintaining membership records;
• enforcing ethics rules;
• regulating the continuing legal education mandate;
• keeping records of trust fund requirements; and
• pursuing those who engage in unauthorized practice.
For those activities, the court directed, each bar member will pay a mandatory fee--$98 for 2014--to be collected by the bar association and forwarded to the court. For the bar's other programs and services, it must look to separate sources such as voluntary dues, grants and gifts, the court said.
This approach, the court explained, preserves the mandatory bar while avoiding a burdensome item-by-item analysis of each activity's germaneness to the bar's purposes. The new fee structure draws the line for use of mandatory bar assessments well within the boundaries of compelled-speech jurisprudence, the court emphasized.
“By limiting the use of mandatory assessments to the arena of regulation of the legal profession, we ensure that the Bar Association remains well within the limits of the compelled-speech jurisprudence of the U.S. Supreme Court and avoid embroiling this court and the legal profession in unending quarrels and litigation over the germaneness of an activity in whole or in part, the constitutional adequacy of a particular opt-in or opt-out system, or the appropriateness of a given grievance procedure,” the court stated.
Attached to the court's opinion are extensive rule amendments to implement its decision. Some of them take effect Jan. 1; the rest become effective April 1, 2014.
Scott Lautenbaugh, Omaha, Neb., argued in favor of the petition. Arguing for the Nebraska State Bar Association were Michael Kinney and G. Michael Fenner, both of Omaha.
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