New Hampshire’s House, having “repudiated” an advisory opinion of the state’s Supreme Court, once again appears poised to challenge the court, this time over its rule making authority and Interest on Lawyers Trust Accounts (IOLTA).
First, some background:
Part II, Article 73-a, added in 1978, of the New Hampshire Constitution speaks of the Supreme Court’s rule making power:
The chief justice of the supreme court shall be the administrative head of all the courts. He shall, with the concurrence of a majority of the supreme court justices, make rules governing the administration of all courts in the state and the practice and procedure to be followed in all such courts. The rules so promulgated shall have the force and effect of law.
The legislature has taken up several efforts in the last few years to repeal (CACR 26) or require legislative approval for rules adopted by the supreme court (CACR 22).
On December 29, 2010 the supreme court, citing Article 73-a, issued an order changing existing provisions related to Interest on Lawyers Trust Accounts (IOLTAs). The ABA’s Commission on Interest on Lawyers Trust Accounts defines IOLTAs thusly:
attorneys who handle nominal or short-term client funds that cannot earn net income for the client place these funds in a single, pooled, interest-bearing trust account. Banks in turn forward the interest earned on these accounts to the state IOLTA program, which uses the money to fund a variety of charitable causes.
The rule changes went into effect March 2011.
Despite no clear provision for such a move in Part II, Article 73-a of the state constitution, the House took up an effort to “revoke” the Supreme Court rules changes. Under HB 1395, the legislature seeks to unilaterally declare the changes void.
Pursuant to the authority of the general court under part II, articles 4 and 5 of the New Hampshire constitution, and in the absence of contrary authority of the supreme court under article 73-a thereof, the amendments to supreme court rules 50 and 50-A issued by the New Hampshire supreme court on December 29, 2010, to take effect on March 1, 2011, purporting to require attorneys to create or maintain a pooled interest-bearing trust account for clients’ funds nominal in amount or to be held for a short period of time, and to remit the interest earned thereby to the New Hampshire Bar Foundation, are hereby declared to be unconstitutional and are rescinded and revoked ab initio.
Part II, Article 4, discusses the creation of courts (except the Supreme and Superior Courts) are at the discretion of the legislature, while Article 5 discusses the legislature’s “Power to Make Laws, Elect Officers, Define Their Powers and Duties, Impose Fines and Assess Taxes; Prohibited from Authorizing Towns to Aid Certain Corporations”
Proponents argue the rules changes violate the separation of powers, exceed the court’s power under Article 73-a, creates a “welfare state”, and violate the Thirteen Amendment to the U.S. Constitution which “forbids slavery or involuntary servitude, even of lawyers.”
Opponents are the inherent power of the supreme court to regulate the practice of law includes the power to require attorneys to participate in the IOLTA program.
HB 1395 was approved on 13-4 vote by the House Judiciary Committee on February 7 and is set for a floor vote on February 15.
