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FTC
Ruling Applying Gramm-Leach-Bliley Privacy Provisions to Attorneys Rejected
by Federal District Court
8/20/03 The Gramm-Leach-Bliley Act of 1999 applies to financial institutions that form customer relationships with consumers. The Federal Trade Commission (FTC) considers law firms and sole practitioners who are “significantly engaged in financial activities” as financial institutions. In separate actions, the American Bar Association and the New York State Bar Association challenged the FTC ruling that the privacy notice requirements of the Gramm-Leach-Bliley Act apply to certain lawyers and law firms. On June 30, 2003, the FTC announced via an informational letter that it does not intend to bring enforcement actions of the privacy provisions of the Gramm-Leach-Bliley Act against attorneys engaged in the practice of law, pending the decision of Judge Reggie Walton of the Federal District Court of the District of Columbia in ABA v. FTC and NYSBA v. FTC. On August 11, Judge Walton ruled against the FTC’s effort at regulating the ethical conduct of attorneys. In his ruling on the FTC’s motions to dismiss, Judge Walton opined that it was not the intention of Congress to apply the Gramm-Leach-Bliley Act’s privacy provisions to attorneys who provide legal services. According to Judge Walton, the “most convincing evidence” for this ruling was “the absence of any explicit statement by Congress that it intended to legislate in an area that was already regulated by existing state regulatory schemes.
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