by Professor Hazard in the federal context33-might be delegated the task of ensuring adequate levels of public participation in the formulation of most procedural rules. Similarly, committees selected from among state-judiciary administrative officers should exercise responsibility for uncontroversial rulemaking that focuses on court administration. By contrast, rulemaking that implicates sensitive issues of social policy warrants well-publicized open hearings, and perhaps even hearings at multiple locations, in

33 See Hazard, supra note 2, at 1294.

Discussion Notes

1. Professor Parness has written widely about public and legislative participation in judicial rulemaking. See, for example, "The Legislative Roles in Florida's Judicial Rulemaking," University of Florida Law Review 33 (Spring 1981): 359; Jeffrey A. Parness and Curtis B. Copeland, "Access to Judicial Rulemaking Procedures," Arizona State Law Journal 1982 (No. 3, 1982): 641; Jeffrey A.

order to maximize accessibility to potential participants. Finally, the need for differentiated forms of public participation in state rulemaking suggests that the formalization of rulemaking procedures should also receive the careful attention of judicial rulemakers. Unless notice requirements, responsible officials, and the structure of public access to rulemaking will generate uncertainty at best and, at worst, will reduce the very access that it attempts to facilitate. It is my hope that these few observations will help to spur the reform of all American rulemakings systems, now that Judge Weinstein has urged further dialogue.

Parness and Christopher C. Manthey, "Public Process and Ohio Supreme Court Rulemaking," Cleveland State Law Review 28 (No. 2, 1979): 249.

2. Could litigants claim a right to participate in judicial rulemaking?

3. Compare the judicial rulemaking in the following area with that concerning practice and procedure in the courts.

In Petition of Florida State Bar Association, 40 So.2d 902, 905-06 (Fla. 1949) the Florida Supreme Court held it had inherent power to create an integrated bar, with mandatory membership and dues for lawyers. The court relied on a number of cases from other jurisdictions for this proposition. See also Bd. of Overseers of the Bar v. Lee, 422 A. 2d 998 (Me. 1980).

Often state constitutions specifically grant to the highest court the exclusive power to regulate admission to the bar and the practice of law. Many such provisions were adopted after the highest court's ruling that it had such inherent powers.

The United States Supreme Court has indicated it is generally up to the states to define the "practice of law." Ferguson v. Skrupa, 372 U.S. 726 (1963). But see, United Mine Workers v. Illinois State Bar Assoc., 389 U.S. 217 (1967); Sperry v. Florida, 373 U.S. 379 (1963); In re Petition to Amend Code of Professional Responsibility, 327 So.2d 15, 17-18 (Fla. 1976).

See generally Stephen E. Kalish, "The Nebraska Supreme Court, The Practice of Law and the Regulation of Attorneys, Nebraska Law Review 59 (No. 3 1980): 555.

The range of a court's authority in regulating the "practice of law" is illustrated by In re Interest on Trust Accounts, A Petition of the Florida Bar, 356 So. 2d 799 (Fla. 1978). There the Florida Supreme Court authorized lawyers to place their trust accounts in interest-bearing accounts and, with client consent, make the interest revenue available to a non-profit foundation to support programs aimed at improving the administration of justice. See Comment, St. Mary's Law Journal 10 (No. 3 1979): 539; 11(No. 1 1979): 113.

Courts have also ruled that the judicially adopted Canons of Ethics take precedence over statutes seeking to govern lawyers' behavior. Times Publishing Co. v. Williams, 222 So. 2d 470, 475-76 (2d D.C.A. Fla.

1969). The Pennsylvania Supreme Court recently ruled the State Ethics Act, as it applied to retired judges, was an unconstitutional infringement on the Court's authority to regulate the practice of law. Wajert v. State Ethics Comm., 420 A. 2d 439 (Pa. 1980). See also, Ballou v. State Ethics Commission, 424 A. 2d 983 (Pa. Comm. Ct. 1981); Kremer v. State Ethics Commission, 424 A. 2d 968 (Pa. Comm. Ct. 1981) (judges). Criminal statutes proscribing solicitation of legal business, however, have been upheld against the argument that they encroach on the Supreme Court's power to discipline lawyers. Pace v. State, 368 So. 2d 340, 345 (Fla. 1979).

American Trial Lawyers Association v. New Jersey Supreme Court 66 N.J. 258, 330 A.2d 350 (1974)

HUGHES, C.J.

This litigation challenges the authority of the Supreme Court under its rulemaking power, N.J.Const. (1947), Art. VI, sec. II, par. 3,1 to establish a graduated schedule of maximum contingent fees applicable to certain tort litigation conducted by New Jersey attorneys. It thus suggests to the Court an introspective look at its constitutional power to regulate the practice of law as well as its consequent responsibilities in that regard.

1N.J.Const. (1947), Art. VI. sec. II. par. 3. reads:

3. The Supreme Court shall make rules governing the administration of all courts in the State and, subject to law, the practice and procedure in all such courts. The Supreme Court shall have jurisdiction over the admission to the practice of law and the discipline of persons admitted.

The contingent fee rule, R. 1: 21-7, was adopted by this Court in December 1971, to be effective January 31, 1972. Its limitation clause (c) was promptly challenged on federal and state constitutional grounds by litigation instituted by several highly respected associations of trial lawyers (hereafter "plaintiffs"). Plaintiffs may be considered, arguendo, to be representative of a class, namely the entire New Jersey trial bar; we are not so clear as to their standing to represent the poor, but that is not necessary to decide

now....

In 1947, the people of New Jersey adopted a new Constitution to replace that of 1844 (the successor to the Revolutionary Constitution of 1776), recognizing that over the span of that century-plus the state had emerged from its largely agricultural past to become a more complex component of the American community. Heavily industrialized, congested by dynamic population and business growth, suffering pains of unprecedented and largely unplanned urbanization, crisscrossed by the travel of millions of visitors or transients, choked by an archaic tax system, New Jersey had become, in the words of Woodrow Wilson (who served as its Governor part way through that interval) a kind of “laboratory" of the nation's problems and its hopes.

By Article VI of the 1947 Constitution, the people discarded the former court system, attenuated and overburdened as it was by the developments and complexities of the years. The new charter had at its core the creation of a modern system of courts. That court system, in its political independence, its design of administrative self-government, its hoped-for efficiency and consequent productivity potential in the public interest since has come to be regarded as something of a model by other jurisdictions. W.J. Brennan, Jr., After Eight Years: New Jersey Judicial Reform, 43 A.B.A.J. 499 (1957); M. Pirsig, The Proposed Amendment of the Judiciary Article of the Minnesota Constitution, 40 Minn.L.Rev. 815, 823-24 (1956); R. Pound, Procedure Under Rules of Court in New Jersey, 66 Harv.L.Rev. 28 (1952). Central to this system was a unique administrative flexibility, largely accommodated by the rulemaking power, soon to be vindicated (in the context of procedural and practice, vis-a-vis substantive, matters) in Winberry v. Salisbury, 5 N.J. 240, 74 A.2d 406 (1950), cert. den. 340 U.S. 877, 71 S.Ct. 123, 95 L.Ed. 638 (1950).

In this context, then, we come to the basic question of this case: What is the nature and extent of the Court's regulatory power over those who practice law?

One source of the power of the Court to regulate practice and procedure therein, of course, is its traditional, inherent and integral relationship to the very existence and the functioning of the court. But so precisely and unmistakably (as held below) did Article

VI, sec. II, par. 3 of the Constitution, supra, make "the Supreme Court the exclusive repository of the State's power to regulate the practice of the law, investing it 'with exclusive responsibility in this area,' State v. Rush, 46 N.J. 399, 411, 217 A.2d 441, 447 (1966)," American Trial Lawyers Ass'n v. New Jersey Supreme Court, supra, 126 N.J. Super. at 585, 316 A.2d at 23, that the existence and exclusivity of the power would seem quite beyond question.

As to its nature: we must remember that there is a manifest conceptual kinship between "power" as such, and the obligation for responsible use of the power, and that, never from a myopic viewpoint, but fully and truly in the public interest. The people's constitutional reposition of power always carries with it a mandate for the full and responsible use of that power. When the organic law reposes legislative power in that branch, for instance, it is expected that such power will be used, lest it wither and leave the vacuum of a constitutional exigency, requiring another branch (however reluctantly) to exercise, or project the exercise of, that unused power for the necessary vindication of the constitutional rights of the people.... So it is with the unparalleled executive authority vested by the 1947 Constitution.

And so it has been with the judicial branch of this government. Since 1948 (the Judicial Article became effective September 15, 1948, Article XI, sec. IV, par. 14) the Supreme Court has not hesitated to meet its responsibility for the use of the judicial and administrative power reposed in it by Article VI. Thus, it has "legislatively" adopted Rules of general application regulating the professional conduct of attorneys and their relationships to their clients and to the courts. The wide range of such rules was noted by the Appellate Division.5

Nor has the judiciary forgotten to regulate the conduct of its own members, as by our adopting of the Code of Judicial Conduct and our creation of an Advisory Committee on Judicial Conduct to aid in its enforcement. R. 2: 15-1 et seq.

56

rules: regulating bar examinations and the licensing of attorneys (R. 1: 23 to 27); specifying who may practice law and appear in court (R. 1: 21-1 to 4); authorizing attorneys to form 'professional corporations' to engage in the practice of the law (R. 1:21-1A); creating a committee on the unauthorized practice of the law (R. 1:22); setting forth limitations on the practice of law by attorneys holding various public offices and positions (R. 1: 15); adopting a canon of professional ethics (R. 1: 14); creating an advisory committee on professional ethics (R. 1: 19); regulating ethics committees and disciplinary proceedings (R.1: 20); requiring attorneys to maintain separate trustee and business bank accounts and specified bookkeeping records (R. 1: 21-6) and providing for the creation and maintenance of a 'client's security fund' to which each member of the bar must annually contribute the sum of $15 (R. 1: 28)." [126 N.J.Super. at 584-585, 316 A. 2d at 23]

In their able brief, plaintiffs suggest that the nature and reach of the disciplinary power are of "first, critical importance," and we agree. We are also quite clear that the people, in their constitutional grant of the power of superintendence of those admitted to practice law, did not express a mere gesture or formality. On the contrary, we think they intended that responsibility to extend to every area in which unjust or unethical conduct might afflict the public at the hands of those admitted by the Court to the practice of the law. We believe the people intended that the Court should cope as best it might with interstices, wherever they appear, in the pattern of honest and ethical practice of the law. In this grant of power and reposing of responsibility the people of New Jersey trusted and commissioned the Supreme Court, in effect, to "keep the house of the law in order." See, Gair v. Peck, 6 N.Y.2d 97, 111, 188 N.Y.S.2d 491, 502, 160 N.E.2d 43, 51 (1959), appeal dismissed 361 U.S. 374, 80 S.Ct. 401, 4 L.Ed.2d 380 (1960). The Court intends to fulfill that responsibility, and to fulfill it within the framework of constitutional rights. To do less would degrade the Court, weaken the profession and impede the administration of justice, eventualities against which we believe the profession, as well as this Court, to be fully dedicated.

Plaintiffs argue that in its adoption of R. 1: 21-7(c) the Court acted, not in a legislative but in an adjudicatory role, and that an evidentiary hearing should have preceded and justified its action. Again, we think the constitutional grant of power and lodgement of responsibility were not so limited. For instance, the people surely did not intend that the court would require an evidentiary hearing to prove to itself the wrongness and danger of an attorney commingling his personal funds and those entrusted to his care by his client, before it could have guarded against that evil by its adoption of r. 1: 21-6, supra, n. 5....

To adopt the view suggested would seem quite illogical, as though the people intended to vest responsibility for superintendence of the ethical practice of the law, yet to withhold from the Court the power to make rules to effectuate that very superintendence.

Without further examples, we may conceded [sic] at once that the rule here discussed was not bottomed on an evidentiary hearing, nor even on anything approaching the lengthy investigation by Justice Wasservogel to reveal the abuse of the contingent fee system in New York. That scrutiny preceded the adoption there of the control rule later held valid by decision of the Court of Appeals in Gair v. Peck,

Discussion Notes

1. Could the legislature change the rule promulgated by the court and upheld by it in this case?

supra. It is unrealistic to suppose that cupidity and overreaching end at the banks of the Hudson, and we do not indulge that aberration. Our Supreme Court, as the natural recipient of clients' complaints against the conduct of lawyers, has accumulated experience over the years, as briefly mentioned by Chief Justice Weintraub at the November 6, 1971 hearing. This, of course, absent documentation and hearing, could not constitute an evidentiary hearing in the adjudicatory sense. But for the reasons mentioned above, and as carefully explicated by the Appellate Division, we are quite clear that such an evidentiary hearing was not constitutionally required.

Too, it is proposed that the Court has adjudicatory power to discipline a lawyer who violates DR 2-106, overreaching his client unconscionably, even to the extent of disbarment of the attorney, and that this suffices to discharge its constitutional responsibility. But it would appear to require some implementation of this power to reach the otherwise unreported and undiscovered violation. Whatever the enormity or frequency of rarity of such concealed offenses, it is the obligation of the Court to try to prevent them.

We conclude with a word of cautionary explanation. Both this opinion and that of the Appellate Division, here adopted, are carefully confined to the discussion and resolution of two issues: whether this Court possessed the power to adopt R. 1: 21-7 and whether it had the right to do so without first holding an evidentiary hearing. As has been indicated, we have no doubt that the power exists and are equally certain that its exercise need not be conditioned upon or accompanied by such a hearing. The Court remains extremely mindful of the abuse this regulation seeks to control and of the Court's constitutional responsibility in this regard. But whether R. 1: 21-7 should continue as an ongoing rule of court, whether it should be modified or whether it should be repealed and the problem attacked in some other way are matters to which this decision has not addressed itself. Our rules are never immutable. Applications for their review are never foreclosed. In re NBC, 64 N.J. 476,317 A.2d 695 (1974). The Court does not adopt its rules to promote or brook injustice but, as best it can, to secure justice, and justice under Constitution and law.

Affirmed.

8 At an open meeting of the Court with representatives of the Bar to elicit views as to the adoption of the rule.

2. Could the legislature have adopted such a rule, by statute, prior to the promulgation of the court rule?

Commonwealth ex rel. Carroll v. Tate 442 Pa. 45, 274 A.2d 193 (1971)

BELL, Chief Justice.

On June 16, 1970, President Judge Vincent A. Carroll, individually and on behalf of all the Judges of the Court of Common Pleas of Philadelphia, instituted this suit by a Complaint in Mandamus to compel the Mayor and City Council of Philadelphia to appropriate the additional funds requested by them for the important and necessary administration of the Court of Common Pleas of Philadelphia for the fiscal year commencing July 1, 1970 and ending July 1, 1971.

We shall hereinafter set forth the intricate facts involved in this suit, but, initially, we deem it important to focus on the fundamental questions involved: (1) whether the Judicial Branch of our Government has the inherent power to determine what funds are reasonably necessary for its efficient and effective operation; and (2) if the Judiciary has the power to determine what funds are reasonably necessary, does it then have the power to compel the Executive and the Legislative Branches to provide such funds after the requested amount has been reduced in, or wholly or partially eliminated from, the budget proposed by the Executive Branch and approved by the Legislative Branch.

The Court of Common Pleas ... subrnitted to the City's Finance Director (on the necessary forms) its operating budget estimates of the financial needs of the Court of Common Pleas and the Municipal Court. The total amount of requests submitted was $19,706,278. After several meetings between the Finance Director and representatives of the said Court, the sum was reduced to $16,488,263, and, on April 1, 1970, this amount was finally sent to City Council by the Mayor in his proposed annual operating budget message. On May 4, 1970, President Judge Carroll,

Judge D. Donald Jamieson (now President Judge), and Administrative Judge Frank J. Montemuro, together with several members of their administrative staffs, gave extensive testimony before City Council, seeking to document their requests. The Court at this time also requested an increase of $5,230,817 over the amount proposed in the Mayor's aforesaid budget of April 1st. Of this sum of $5,230,817, $2,012,801 had not previously been requested of either the Finance Director or the Mayor prior to the time the Mayor submitted his budget. City Council denied this additional request and approved by ordinance, on May 28, 1970, the amount recommended by the Mayor, i.e., $16,488,263. This total was divided and allocated as follows:

Municipal Court Judicial Staff

$ 451,532 Common Pleas Court Judicial Staff 2,126,839 Common Pleas Court Administration 13.909.892

This present mandamus action was instituted on June 16, 1970 to compel the appropriation and payment of the Court's additional request of $5,230,817.

Proceedings Before Judge Montgomery

On June 23, 1970, Judge Harry M. Montgomery, of the Superior Court of Pennsylvania, was specially designated by this Court to hear and decide this case. Judge Montgomery promptly held a pre-trial conference, at which time the legal issues were delineated and an agreement was worked out by the parties that defendants would hold and keep available sufficient funds to pay any sums ultimately awarded to the Court. On July 27, 1970, Judge Montgomery issued a Pre-Trial Order, ordering the parties to argue and brief certain issues and temporarily enjoining the defendants from enforcing a "job freeze" ordered by the Mayor against the Court, and also from reducing the Court's budget. Oral argument was held on August 4,