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State Bar of Michigan Member Advisory
November 3, 2009

Of Interest

Tips and Tools for a Successful Practice Seminar
November 17

July 2009 Bar Exam Results and Admission Ceremonies

Featured Discount Program

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Court Rules Red Flags Rule Does Not Apply to Lawyers

    Following oral argument on October 29, 2009, the U.S. District Court for the District of Columbia ruled that the Federal Trade Commission (FTC) lacks authority to apply the Red Flags Rule to practicing lawyers, offering a reprieve to law firms across the country that faced weekend deadlines to put programs in place to meet the rule’s requirements, scheduled to go into effect on November 1, 2009.

    The Red Flags Rule is an identity-theft prevention measure that requires creditors who defer payments for goods and services to develop and implement written protocols to identify, detect, and respond to warning signs of identity theft. In the spring of 2009, the FTC announced without prior notice or warning that lawyers are considered “creditors” under the rule and thus subject to its provisions. In late July, the FTC, at the request of the American Bar Association, suspended application of the rule to lawyers until November 1, but it rejected the ABA’s argument that the rule did not apply to lawyers. The ABA filed suit against the FTC on August 27, 2009, seeking an injunction to block the application of the rule to lawyers. Judge Reggie B. Walton of the U.S. District Court for the District of Columbia entered an order granting summary judgment as to Count I of the ABA’s complaint alleging that the Commission's application of the Red Flags Rule to attorneys violates 5 U.S.C. § 706(2)(C) as it is "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." A memorandum opinion with points and authorities will issue within 30 days.

    Counsel for the ABA says it has won all the relief it sought in its challenge to the regulation, including injunctive relief. The order in ABA v. FTC was handed down October 30, 2009—two days before the Red Flags Rule was scheduled to go into effect. The FTC is reviewing whether to appeal the decision. It continues to maintain that lawyers are not exempt from the rule.

    In early June and again in late July, the State Bar of Michigan published Member Alerts, providing members information about the rule, the FTC’s position, and the ABA’s response.

    There is also pending federal legislation, H.R. 3763, that would exempt from the rule any legal practice with 20 or fewer employees. The bill was unanimously passed by the House of Representatives on October 20 and is awaiting Senate action.

Judicial Crossroads Task Force Begins Work

    A prominent group of judges and lawyers met Oct. 23 at the State Bar of Michigan in Lansing to set in motion the very crucial work of identifying how Michigan’s justice system can meet the needs of the public in the face of major economic changes in the state. Members of the Judicial Crossroads Task Force heard a presentation from the National Center for State Courts on how other states are grappling with similar issues. The work of the Task Force is supported by four committees: court structure and resources, access to justice, technology, and business impact. The next Task Force meeting has been scheduled for March of 2010.

    For a full list of the Task Force members visit: SBM names members of Judicial Crossroads Task Force.

Casemaker 2.1—Your Newest Legal Research Service

    The State Bar of Michigan has partnered with Casemaker to bring premium state and federal research materials to its membership. The new service provides case law, constitution, and statutes for all 50 states, including the District of Columbia. In addition the service provides Michigan primary law, administrative code, state court rules, federal court rules, attorney general opinions, and the model civil jury instructions. The entire 50-state collection is available until September of 2010 to the entire State Bar membership.

    Members also have access to several advanced legal research tools, including a case citation tool that simultaneously runs a search for secondary and/or third part treatises and publications, and a tool capable of searching all customized books within any state and/or federal library in a single query.

    To access this new member benefit simply log in to our member area and select the Casemaker tab on the left. There are several helpful user guides published within the Casemaker system. In addition, you can click on Live Training at the top of the Casemaker site and then Event Center to sign up for specially designed Michigan Casemaker webinars training.

    Access Casemaker in 4 Simple Steps

Member Advisory is an electronic publication of the State Bar of Michigan

    State Bar of Michigan
    306 Townsend St.
    Lansing, MI 48933-2012
    (517) 346-6300