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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.

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