BILL NUMBER: S2422

SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:

An act to repeal section 470 of the judiciary law, relating to allowing
attorneys having offices in the state to reside in an adjoining state

 
PURPOSE:

The purpose of this bill is to remove the current inability of lawyers
admitted in New York to practice in the State if they neither reside nor
have an office in the state.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill repeals section 470 of the Judiciary law.

Section 2 of the bill is the effective date.

 
JUSTIFICATION:
              

Section 470 of the Judiciary Law, as interpreted by the New York State
Court of Appeals in Schoenefeld v. State of New York, 25 N.Y.3d 22
(2015), requires "nonresident attorneys practicing in New York to main-
tain a physical law officer here." (Pg. 27 of decision). The Court of
Appeals reaffirmed this requirement in Arrowhead Capital Finance, Ltd.
v. Cheyne Specialty Finance Fund L.P. (2019).

Section 470 was enacted in its current form in 1909 following predeces-
sor statutes dating from 1862. A central concern at the time was the
difficulty in serving attorneys not located in New York. The Court of
Appeals noted in the Schoenefeld decision that New York has "an interest
in ensuring that personal service can be accomplished on nonresident
attorneys admitted to practice here."

The Court then considered current law, citing provisions of the CPLR,
including 2103(b), and said that there are "currently several means of
service upon a nonresident attorney, including mail, overnight delivery,
fax and (where permitted) email...." It also noted that Court of Appeals
Rule 520.13(a), dealing with admissions to the Bar, requires nonresident
attorneys to designate the clerk of an Appellate Division as their agent
for service for actions related to legal services offered within the
state. It concluded, "the legislature always remains free to take any
additional action deemed necessary."

While the Court in Schoenefled was concerned with service on an out-of-
state attorney in a pending action, which is governed by CPLR 2103(b),
the law regarding service on an out-of-service party, including an
attorney named as a party, has changed significantly since 1909.  Until
the mid-1940s, there was a significant challenge to obtaining personal
jurisdiction over an attorney who resided and maintained an office out
of state who performed legal services within the state.  Since the
advent of "Long Arm Jurisdiction," and the enactment of CPLR 302(a),
obtaining jurisdiction over such an attorney is no longer problematic.

With modern day mechanisms for serving papers on attorneys not located
in the state and CPLR 302(a) providing a jurisdictional basis for
service outside the state, there is no reason to require a bricks and
mortar office as specified in section 470. The concerns that led to the
adoption of this section more than a century ago no longer exist, and
the current statutory prohibition serves no purpose in today's global
environment. Its repeal would not create any significant difficulties
arising from the lack of an attorney's physical office within the state.

 
LEGISLATIVE HISTORY:

2020: A10425 Referred to Judiciary/S5708 Referred to Judiciary

2021: A5895 Referred to Judiciary/S700 Referred to Judiciary

2023: A2218 Vetoed / S3261 Vetoed

2024: A8879 Referred to Judiciary / S9281 Passed Senate

 
FISCAL IMPLICATIONS: TO STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.