Out-of-State Counsel in FINRA California Arbitrations FINRA Dispute Resolution Guidelines for Compliance with Amendments to California Civil Procedure Code Section 1282.4
These guidelines apply to all parties and their counsel whose arbitration cases have been or will be heard by the FINRA Dispute Resolution arbitration forum anywhere in the state of California. On June 26, 2006, the California legislature further amended the California Code of Civil Procedure section 1282.4 ("section 1282.4") to require non-California attorneys to meet certain obligations before they may represent parties in private arbitration proceedings in California. The amendments, which became effective on January 1, 2007, were enacted in response to the California Supreme Court's decision in Birbrower, Montalbano, Condon & Frank v. Superior Court, 17 Cal. 4th 119 (1998) ("Birbrower"), which holds that, under certain circumstances, non-California attorneys who appear in California arbitration proceedings are engaged in the unauthorized practice of law in violation of California Business & Professions Code section 6125.
To assist participants in our arbitration forum to comply with section 1282.4, as amended, FINRA Dispute Resolution has developed the following Guidelines, effective January 1, 2007.
Please note that the statutory amendments address only arbitration, not mediation proceedings.
GUIDELINES FOR APPEARANCE BY ATTORNEYS IN THE FINRA ARBITRATION FORUM IN CALIFORNIA
Attorneys Who Are Admitted to Practice in California
- Attorneys who are admitted to practice in California must include their California bar number on the initial correspondence and the initial pleading submitted to FINRA Dispute Resolution.
Attorneys Who Are Not Admitted to Practice in California
An attorney who is licensed in a state other than California may not appear in the FINRA Dispute Resolution arbitration forum in California in a representative capacity unless he or she associates with a California attorney who will be attorney of record, and provides the Western Regional Office of FINRA Dispute Resolution in Los Angeles, California with a completed Certificate of Out-of-State Arbitration Counsel ("Certificate") and notice of intent to appear at the arbitration.
- A non-California attorney (i.e., out-of-state attorney) may participate fully in the arbitration hearing on the merits, provided that all of the following steps are completed:
- the out-of-state attorney submits a notice of intent to appear at the arbitration to the Western Regional Office when the initial pleading is filed. This notice may take the form of a letter;
- the out-of-state attorney submits a completed Certificate to the Western Regional Office when the initial pleading is filed, and serves it on all arbitrators, parties and their counsel whose addresses are known to the attorney at the time the Form is submitted. The Certificate requests all of the information required by section 1282.4;
- FINRA Dispute Resolution reviews the Certificate submitted by the out-of-state attorney. If the out-of-state attorney does not complete the Certificate or file the Certificate with the initial pleading, the claim will be deemed deficient and will not be served on opposing parties and counsel until the out-of-state attorney has submitted a completed Certificate;
- Once FINRA Dispute Resolution receives the notice of intent to appear and a completed Certificate, it will approve the Certificate and return it to the out-of-state attorney;1
- the out-of-state attorney files the Certificate approved by FINRA Dispute Resolution with the State Bar of California, and serves it upon all parties and their counsel in the arbitration whose addresses are known to the attorney at the time the Certificate is filed; and
- the California attorney has entered an appearance as counsel of record. The California attorney's notice of appearance must be filed with the initial pleading, and should include the attorney's California Bar number, and contact information.
- The State Bar of California requires a filing fee for registration of attorneys who are not admitted to practice in California. Fee information, forms, and other information can be obtained on the web site of the State Bar of California at www.calbar.ca.gov.
Determination of Location of FINRA Dispute Resolution Proceedings
- These Guidelines apply only to FINRA Dispute Resolution arbitration proceedings taking place in California.
- The location of arbitration proceedings is governed by the Uniform Submission Agreement and Code of Arbitration Procedure Rule 10315, which provide that the Director of Arbitration shall set the initial hearing location, and that the arbitrators may set the location thereafter.
How Guidelines Affect FINRA Dispute Resolution Administration of Arbitration Proceedings
- Question: When Must California Counsel Enter an Appearance?
Answer: California counsel must enter their appearance when the initial pleading is filed.
- Question: Under Ca. Civil Procedure Code sec. 1282.4, can the panel require the out-of-state attorneys to verify their compliance with the rules?
Answer: Under the statute, the panel has the authority to request verification of compliance with the Guidelines at any time. Pursuant to this authority, the panel will be instructed to ask out-of-state attorneys on the record, at the initial prehearing conference, whether the Certificate has been filed with the State Bar.
- Question: Do the Guidelines Apply to Mediation Cases?
Answer: No. The statute and these Guidelines apply only to arbitration cases in the FINRA Dispute Resolution arbitration forum. FINRA Dispute Resolution takes no position on the applicability of the statute or Birbrower to mediation cases. Counsel or other representatives participating in mediations should take whatever actions they deem necessary to comply with applicable California law, including but not limited to legal research and consulting with counsel and/or the California State Bar.
- Question: What Happens if an Out-of-State Attorney Fails to Comply with these Guidelines?
Answer: Attorneys who fail to comply with these Guidelines and with the statute are subject to possible penalties under state law, and risk being prohibited from representing their client in arbitration.
- Question: What happens if an out-of-state attorney files a Certificate that is approved by FINRA Dispute Resolution, but an opposing party challenges the out-of-state attorney's participation in the case before the panel?
Answer: FINRA Dispute Resolution's approval of an attorney's appearance does not override the arbitrators' authority to later determine whether an out-of-state attorney may appear in a particular case. Like judges deciding pro hac vice motions, the arbitrators have the ultimate authority to determine whether an attorney has complied with the statute and whether he or she may appear in the case.
- Question: My opponent's counsel is an out-of-state attorney who has not complied with the Guidelines. What can I do?
Answer: You may raise the issue with the arbitrators. You may also notify the State Bar of conduct you believe violates section 1282.4.
- Question: Counsel is an out-of-state attorney, but her law firm has offices in California. Does she need to comply with the Guidelines?
Answer: Before entering an appearance in the case, counsel should consult with the State Bar.
View the Non-California Attorney Certification Form.
1 Section 1282.4 states that, in the in the absence of special circumstances, repeated appearances shall be grounds for disapproval of the appearance and disqualification from serving as an attorney in the arbitration for which the certificate was filed. Also, failure within a reasonable period of time to serve this Certificate on all other parties and counsel in the arbitration whose addresses are known to the Applicant and file the Certificate with the State Bar of California shall be grounds for disapproval of the appearance and disqualification from serving as an attorney in the arbitration for which the certificate was filed.