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2nd Circuit considers Jacoby & Meyers’ challenge to NY ban on outside law firm investment

The appeals court has reserved ruling but is considering remanding to the district court

New York law firm Jacoby & Meyers has asked the 2nd Circuit to breathe some life into its lawsuit challenging the constitutionality of a New York state rule that law firms cannot accept outside investment from non-lawyers. The rule violates both First and Fourteenth Amendment rights, the firm claims.

A district court originally dismissed the suit in March, ruling that the firm lacked standing. When the 2nd Circuit heard the case on Friday, the three-judge panel was perplexed by Jacoby & Meyers’ decision only to challenge the disciplinary rule. The court seemed to think the firm should have pursued claims against the general prohibition of outside law-firm investment.

“It’s kind of a mystery to me why we are debating these arcane questions of standing,” Judge Gerard Lynch said.

The 2nd Circuit reserved ruling, but is seemingly considering remanding the case to the district court for further proceedings, with the understanding that Jacoby & Meyers does not have standing, but allowing it to amend its complaint.

Read more at the Wall Street Journal.


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$17 million malpractice suit against DLA Piper dismissed

Court vacates $10.6 million malpractice judgment against Bryan Cave

HSBC sues Troutman Sanders for negligence

Former client sues Ropes & Gray for professional negligence


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