Matthew S. Marrone
In the recent
case of Beyers v. Richmond, 937 A.2d 1082 (Pa. 2007), the Pennsylvania
Supreme Court chose to answer a question which lower courts had struggled with
for quite some time: Should Pennsylvania’s Unfair Trade Practices and Consumer
Protection Law (UTPCPL) apply to the practice of law? Although the Pennsylvania
Supreme Court may be the latest court to address this issue, it certainly isn’t
the first. The vast majority of states have consumer protection laws, and
courts across the country have debated this same issue with regard to all
classes of licensed professionals. The split opinion (5-2) in Beyers
represents the competing viewpoints advanced most often when considering this
issue.
In Beyers,
a woman who had settled her personal injury case sued her attorney, claiming he
improperly siphoned some $26,000 in phantom costs out of her settlement. She
alleged he listed these costs as a loan repayment and various medical bills,
when in fact they didn’t even exist. In addition to various other causes of
action, she claimed he violated the UTPCPL in the process of collecting and
distributing the settlement proceeds.
Generally
speaking, the UTPCPL – like other states’ consumer protection laws – prohibits
unfair or deceptive practices in the trade or commerce in goods or services.
Anyone harmed by such practices may bring a private action against the offending
party, and if successful, may recover costs, attorney fees, and treble damages.
Clearly, the incentive to assert such a cause of action is great.
The narrow
issue presented in Beyers was whether the practice of law falls within
the “services” contemplated by the UTPCPL. The majority found it does not, but
in doing so, chose to view the case more broadly. Attorneys in Pennsylvania are
regulated exclusively by the Pennsylvania Supreme Court. Thus, the majority
ruled, including attorneys’ conduct within the ambit of the UTPCPL would
effectively subject them to regulation by someone else, thereby encroaching upon
the court’s authority. The majority found this unacceptable, and therefore
exempted attorney misconduct from the UTPCPL.
The majority
view in Beyers echoes the rationale used by other courts to exempt
professional misconduct from consumer protection laws. This rationale accepts
that such laws essentially are enacted to keep the conduct of purveyors of goods
and services in check. By contrast, attorneys (and other licensed
professionals) are already subject to licensing bodies which regulate their
conduct and impose disciplinary measures when appropriate. Thus, the reasoning
goes, it would be inappropriate to additionally subject them to consumer
protection laws.
The dissenting
justices in Beyers represented the counterargument, disagreeing with the
micromanagement espoused by the majority. They questioned how licensing bodies
are supposed to police each and every instance of professional misconduct.
Consumer protection laws, they said, are laws of general applicability, and
people should not be exempt just because of their status as (insert: attorneys,
physicians, insurance brokers, real estate agents, etc.).
They further
noted that many jurisdictions which have generally exempted attorneys from
consumer protection laws have refused to exempt their business, non-professional
activities. The dissent argued since the mere distribution of settlement funds
is not a “core function of legal representation” and “does not involve the
exercise of legal judgment,” any court-created exemption to the UTPCPL should
not apply. This point reflects a compromise frequently made by courts when
presented with this issue. (However, it also begs the question: Where do you
draw the line between professional and business activities?)
The Beyers
decision must be considered a victory for all licensed professionals in
Pennsylvania. That the majority did not adopt a compromised approach – even
when faced with the egregious facts presented – bodes very well for the defense
of attorneys. Moreover, by extension of the majority’s rationale, there would
be no reason not to exempt any other professional in Pennsylvania who is
already subject to the regulation of a licensing body.
