HOUSE BILL 752
47th legislature - STATE OF NEW MEXICO - second session, 2006
Hector H. Balderas
RELATING TO THE PRACTICE OF LAW; PROHIBITING THE UNAUTHORIZED PRACTICE OF LAW; PROVIDING CIVIL AND CRIMINAL PENALTIES; PROVIDING A PRIVATE RIGHT OF ACTION; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 36-2-27 NMSA 1978 (being Laws 1909, Chapter 53, Section 26, as amended) is repealed and a new Section 36-2-27 NMSA 1978 is enacted to read:
"36-2-27. [NEW MATERIAL] PRACTICE OF LAW DEFINED--UNAUTHORIZED PRACTICE OF LAW PROHIBITED--PENALTY.--
A. The practice of law is the application of legal principles and judgment with regard to the circumstances or objectives of another person that require the skill of a person trained in the law. The practice of law includes:
(1) giving advice or counsel to another person as to that person's legal rights or responsibilities;
(2) selecting, drafting or preparing any document in any medium intended to affect or secure legal rights or incur legal obligations for another person;
(3) representing a party in a judicial, quasi-judicial or administrative proceeding or other dispute resolution process, including arbitration or mediation; or
(4) negotiating legal rights or responsibilities on behalf of another person.
B. Except as provided in Subsection C of this section, the unauthorized practice of law occurs when a person, without a certificate of admission to the bar pursuant to the provisions of Chapter 36, Article 2 NMSA 1978 and the rules of the supreme court of New Mexico:
(1) engages in the practice of law;
(2) holds himself out as an attorney or counselor at law; or
(3) advertises or displays any matter or medium designed to give the impression that the person is an attorney or counselor at law.
C. The unauthorized practice of law does not include:
(1) the practice of law by a public employee or law professor holding a limited license issued pursuant to rules promulgated by the supreme court;
(2) the provision of services by a paralegal pursuant to rules promulgated by the supreme court;
(3) the provision of services as a mediator, conciliator or facilitator whether in a neutral, non-adjudicative capacity or in an adjudicative capacity;
(4) the participation in a labor negotiation, administrative hearing, arbitration or conciliation arising under collective bargaining rights or agreements, the School Personnel Act, the Personnel Act or other statutes, rules or policies governing labor and employment;
(5) the participation in an administrative hearing, arbitration or mediation arising under the Workers' Compensation Act and in accordance with the rules and policies of the workers' compensation administration;
(6) the provision of services related to intellectual property transactions by a registered patent agent who is generally under the supervision of an attorney and who is reasonably familiar with similar transactions;
(7) the provision of services by an advocate working in a nonprofit capacity, in a pro se clinic or otherwise working for no monetary gain and in the public interest, provided that the advocate is supervised by an attorney licensed in New Mexico;
(8) the provision of a professional service, or preparation of a document, by a certified public accountant or firm of certified public accountants, customarily provided or prepared by a certified public accountant in connection with the certified public accountant's professional work;
(9) the completion by a person holding a valid real estate license pursuant to Chapter 61, Article 29 NMSA 1978 of a legal form prepared by, prepared under the supervision of or reviewed by an attorney licensed in New Mexico;
(10) the participation in an arbitration or mediation arising under the bylaws of a board or association of persons holding valid real estate licenses pursuant to Chapter 61, Article 29 NMSA 1978;
(11) the provision of services by a person holding a valid real estate license pursuant to Chapter 61, Article 29 NMSA 1978 if the services are within the scope of the person's license;
(12) the provision of services performed pursuant to Chapter 59A, Article 13 NMSA 1978 by persons licensed thereunder;
(13) the negotiation and sale of a motor vehicle by a licensed motor vehicle dealer pursuant to Chapter 66, Article 4 NMSA 1978 and the sale of products and services in connection with the negotiation and sale of a motor vehicle by a licensed motor vehicle dealer and its authorized employees;
(14) the preparation of trust instruments or documents for, or the closing of, a loan transaction by a party thereto, or its agent, if the preparation or closing is ordinarily incidental to the loan transaction, notwithstanding any fee charged for document preparation by the party or its agent;
(15) the completion of a legal form prepared by, prepared under the supervision of or reviewed by an attorney licensed in New Mexico;
(16) lobbying activities conducted by a lobbyist registered pursuant to the Lobbyist Regulation Act;
(17) the practice of law before a court or administrative body pursuant to pro hac vice rules of the supreme court; or
(18) the provision of any other service expressly allowed by a law, court rule or federal or state administrative rule or policy.
D. Any person who willfully engages in the unauthorized practice of law is guilty of a misdemeanor and shall be fined an amount not to exceed five hundred dollars ($500) or imprisoned for a period not to exceed six months, or both."
Section 2. A new section of Chapter 36, Article 2 NMSA 1978 is enacted to read:
"[NEW MATERIAL] UNAUTHORIZED PRACTICE OF LAW--PRIVATE REMEDIES.--
A. A person likely to be damaged by an unauthorized practice of law in violation of Section 36-2-27 NMSA 1978 may bring an action for an injunction against the alleged violator. An injunction granted shall be pursuant to the principles of equity and on terms that the court considers reasonable. Proof of monetary damage or loss of profit is not required for an injunction to be granted pursuant to this subsection.
B. A person who suffers a loss of money or other property as a result of an unauthorized practice of law in violation of Section 36-2-27 NMSA 1978 may bring an action for the greater of actual damages or one thousand dollars ($1,000) and the restitution of any money or property received by the alleged violator; provided that, if the court finds that the alleged violator willfully engaged in the unauthorized practice of law, the court may award up to three times the actual damages or three thousand dollars ($3,000), whichever is greater.
C. A person bringing an action pursuant to Subsection A or B of this section shall, if the person prevails, also be awarded attorney fees and costs.
D. The relief provided by this section is in addition to other remedies available at law or equity."
Section 3. A new section of Chapter 36, Article 2 NMSA 1978 is enacted to read:
"[NEW MATERIAL] UNAUTHORIZED PRACTICE OF LAW--ACTION BY ATTORNEY GENERAL.--
A. Whenever the attorney general has reason to believe that a person has engaged in the unauthorized practice of law in violation of Section 36-2-27 NMSA 1978 or has aided or abetted another person in the unauthorized practice of law and that proceedings would be in the public interest, the attorney general may bring an action in the name of the state against the alleged violator. The action may be brought in the district court for the county in which the alleged violator resides or has a principal place of business or in the district court for a county in which the alleged violation took place. In an action brought pursuant to this section, in addition to civil penalties, the attorney general may petition the court for a temporary or permanent injunction and restitution, and, if seeking a temporary or permanent injunction, the attorney general shall not be required to post bond.
B. In lieu of filing or continuing an action pursuant to this section, the attorney general may accept a written assurance of discontinuance of the unauthorized practice of law from the alleged violator. The assurance may contain an agreement by the alleged violator that restitution will be made to all persons of money or property received from them in any transaction related to the unauthorized practice, provided that a person harmed by the unauthorized practice is not required to accept restitution but, if the restitution is accepted, the person accepting the restitution is barred from recovering damages from the alleged violator in an action based upon the same unauthorized practice.
C. In an action brought by the attorney general pursuant to this section, if the court finds that the alleged violator engaged in the unauthorized practice of law, the court may impose a civil penalty not to exceed five thousand dollars ($5,000) per violation. In addition, if the court finds that a person has aided or abetted another to engage in the unauthorized practice of law, the court may impose a civil penalty not to exceed one thousand dollars ($1,000) for the first violation and a civil penalty not to exceed five thousand dollars ($5,000) for each subsequent violation."
Section 4. APPROPRIATION.--Ten thousand dollars ($10,000) is appropriated from the general fund to the corrections department for expenditure in fiscal year 2007 to fund any increase in prison populations or probation caseloads resulting from the creation of a new misdemeanor known as the unauthorized practice of law. Any unexpended or unencumbered balance remaining at the end of fiscal year 2007 shall revert to the general fund.
Section 5. REPEAL.--Section 36-2-28 NMSA 1978 (being Laws 1925, Chapter 100, Section 12) is repealed.
Section 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2006.
- 9 -