BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 590
Assemblymember Feuer
As Amended June 30, 2009
Hearing Date: July 14, 2009
Business and Professions Code
SK:jd
SUBJECT
Legal Aid; Pro Bono
DESCRIPTION
This bill would prohibit the use of the term "legal aid" by any
entity unless the entity is a nonprofit organization that
provides civil legal services to the poor without charge. This
bill would also prohibit any person from selling or charging a
fee for legal forms used in court proceedings that are created
by a legal aid organization, court, or state agency and
available to the public for free from that entity.
This bill would also state the intent of the Legislature to
encourage attorneys to make further efforts to meet their
professional responsibilities and other obligations by providing
pro bono legal services and financial support of nonprofit legal
organizations that provide free legal services to underserved
communities.
BACKGROUND
In 2007, the California Commission on Access to Justice
recommended in its Action Plan for Justice that legislation be
considered to regulate the use of the term "legal aid" to
address the problem of fraudulent legal aid businesses. The
report stated:
When people are sued or need legal advice, they are commonly
directed to "legal aid" agencies in court forms and by court
staff, by information and referral lines, or by word of mouth.
Indigent people sued for eviction, divorce, debt collection,
(more)
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or car repossessions, believe that by contacting "legal aid"
they are reaching out to the proper agency that will assist
them for no or low fees. Unfortunately, because the term
"legal aid" is not regulated, anyone can use it as part of
their business name. The result is that unscrupulous people
create companies named "legal aid" and take advantage of the
widely held belief that "legal aid" is the place that
low-income people in legal need should turn to. Other
vulnerable groups such as immigrants are similarly exploited,
both because they are often unfamiliar with the American legal
system and because they are unlikely to approach law
enforcement agencies to report abuses. These companies
defraud our state's most vulnerable populations at a very
precarious time in their lives. They take large deposits and
fail to file responsive pleadings essential to protect
critical rights; they overcharge for services; and they charge
for services that could be obtained at no cost.
Currently, there is no way to control directory assistance
referrals to these "legal aid" listings, and even successful
lawsuits against these businesses only result in temporary
abatement, as they simply change the name and location of
their operations to continue these fraudulent practices. . .
. A statute limiting the use of the term "legal aid" to
nonprofit organizations that provide free or sliding scale
services to low-income, indigent, seniors, and people with
disabilities, would take the term "legal aid" out of the
public domain, thus restricting its use and making it easier
to prosecute fraudulent organizations. As a result,
low-income Californians in need of legal services would be
able to clearly identify, and receive assistance from, legal
aid agencies protecting both consumers and legal aid programs
themselves.
In response to this recommendation, the Legislature passed AB
3050 (Jones) which, among other things, would have prohibited
the use of the term "legal aid" by any entity which was not a
nonprofit organization that provides legal services to the poor
for no charge. AB 3050 was one of many bills vetoed by the
Governor because of the "historic delay in passing the 2008-2009
State Budget." This year, both AB 663 by Assemblymember Jones
(which was approved by this Committee on June 23, 2009) and this
bill contain provisions addressing the fraudulent use of the
term "legal aid." The bills are substantially similar although
this bill contains provisions addressing the sale of free legal
forms created by a legal aid organization, court, or public
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agency and the charging of fees for self-help services that are
otherwise available for free.
CHANGES TO EXISTING LAW
1. Existing law regulates immigration consultants and prohibits
them from literally translating, with the intent to mislead,
from English into another language, the words or titles,
including, but not limited to, "notary public," "notary,"
"licensed," "attorney," "lawyer," or any other terms that
imply that the person is an attorney, in any document, as
specified. (Bus. & Prof. Code Sec. 22442.3.)
This bill would make it unlawful for any person or
organization to use the term "legal aid," "legal aide," or any
confusingly similar name in any firm name, trade name,
fictitious business name, or any other designation, or on any
advertisement, letterhead, business card, or sign, unless the
person or organization is a legal aid organization subject to
fair use principles for nominative, descriptive, or
noncommercial use.
This bill would provide that it is unlawful for any person to
sell or charge a fee for legal forms or other documents
created by a legal aid organization, court, or state agency
for use in a court action or proceeding if the form or
document is available to the public for free from that entity.
This bill would provide that it is unlawful for any person to
assist or offer to assist in the provision of self-help
services for a fee if those services are provided without
charge by a court or legal aid organization.
This bill would define "legal aid organization" to mean a
nonprofit organization that provides civil legal services for
the poor without charge.
This bill would provide that any consumer injured by a
violation of its provisions may file a complaint and seek
injunctive relief, restitution, and damages in the superior
court of any county in which the defendant maintains an
office, advertises, or is listed in a telephone directory.
This bill would provide that any person who violates its
provisions relating to legal aid organizations would be
subject to an injunction against further violations by a legal
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aid organization with an office in any county in which the
defendant maintains an office, advertises, or is listed in the
telephone directory. This bill would provide that, in such an
action, it would not be necessary to allege or prove actual
damage to the plaintiff. Irreparable harm and interim harm to
the plaintiff would be presumed.
This bill would provide that reasonable attorney's fees be
awarded to a prevailing plaintiff in any action brought under
the bill's provisions.
2. Existing law provides that it has been the tradition of those
learned in the law and licensed to practice law in this state
to provide voluntary pro bono legal services to those who
cannot afford the help of a lawyer; that every lawyer
authorized and privileged to practice law in California is
expected to make a contribution; that in some circumstances,
it may not be feasible for a lawyer to directly provide pro
bono services; and that in those circumstances, a lawyer may
instead fulfill his or her individual pro bono ethical
commitment, in part, by providing financial support to
organizations providing free legal services to persons of
limited means. (Bus. & Prof. Code Sec. 6073.)
Existing law provides that a contract with the state for legal
services that exceeds $50,000 shall include a certification by
the contracting law firm that the firm agrees to make a good
faith effort to provide, during the duration of the contract,
a minimum number of hours of pro bono legal services during
each year of the contract and that failure to make a good
faith effort may be cause for nonrenewal of a state contract
for legal services, and may be taken into account when
determining the award of future contracts with the state for
legal services. Existing law also provides that in awarding a
contract with the state for legal services that exceeds
$50,000, the awarding department shall consider the efforts of
a potential contracting law firm to provide, during the
12-month period prior to award of the contract, the minimum
number of hours of pro bono legal services. (Bus. & Prof.
Code Sec. 6072.)
This bill would state that it is the intent of the Legislature
to encourage the legal profession to make further efforts to
meet its professional responsibilities and other obligations
by providing pro bono legal services and financial support of
nonprofit legal organizations that provide free legal services
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to underserved communities.
COMMENT
1. Stated need for the bill
The author explains that this bill is intended to carry out
recommendations of the California Commission on Access to
Justice and also notes that a "November 2005 informational
hearing jointly sponsored by the Assembly Judiciary Committee
and the Judicial Council touched on the issues of legal aid
fraud and the need for additional pro bono contributions to meet
the large and growing 'justice gap'."
2. This bill would restrict use of the term "legal aid;" similar
provisions exist in current law regulating immigration
consultants
As described above, this bill implements a 2007 recommendation
of the California Commission on Access to Justice to consider
legislation to regulate the use of the term "legal aid" to
address the problem of fraudulent "legal aid" businesses. The
bill aims to address the harm caused when unscrupulous
individuals who create fraudulent "legal aid" companies defraud
low-income people in need by restricting the use of the term
"legal aid" to legal aid organizations.
The fraudulent use of the term "legal aid" also has impacts
beyond the harms directly inflicted on the people who seek these
services. On this point, the report stated:
The harm caused by these fraudulent practices has consequences
far beyond the harm they directly inflict on the consumers who
employ their services. By presenting themselves as "legal
aid" and then not fulfilling their promise and overcharging
clients, these businesses cause the public to distrust legal
aid agencies generally, not realizing that these for-profit
businesses are not true legal aid organizations. This
distrust can have far reaching effects if the poor do not seek
the assistance of legal aid under the belief that it will cost
them money they do not have and will not adequately assist
them with their legal problems.
In its report, the Access Commission also noted that existing
law regulating immigration consultants contains similar
restrictions that limit how an immigration consultant may define
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himself or herself or describe the services he or she offers.
Specifically, current law provides that immigration consultants
may not literally translate, with the intent to mislead, from
English into another language, the words or titles, including,
but not limited to, "notary public," "notary," "licensed,"
"attorney," "lawyer," or any other terms that imply that the
person is an attorney, in any document, as specified.
3. Injunctive relief and other remedies provided under bill's
"legal aid" provisions
Under this bill, any person who violates its provisions relating
to legal aid organizations would be subject to an injunction
against further violations by a legal aid organization with an
office in any county in which the defendant maintains an office,
advertises, or is listed in the telephone directory. The bill
would also provide that, in such an action, it would not be
necessary to allege or prove actual damage to the plaintiff, or
irreparable harm to the plaintiff. Irreparable harm and interim
harm to the plaintiff would be presumed.
In the analysis of last year's AB 3050, which is substantially
similar to this bill, this committee noted that the general
standard employed by a court for providing injunctive relief is
whether the plaintiff is likely to prevail on the merits of the
case and whether there is a likelihood of irreparable harm in
the absence of the injunction. By presuming irreparable harm
and interim harm, this bill would appear to set a different
standard for injunctive relief under its provisions. Last year,
the committee analysis noted that the injunctive relief language
in AB 3050 was based on SB 1150 (Burton, Ch. 197, Stats. 2004),
which contained substantially similar injunctive relief
provisions concerning the names, trade names, logos, and tag
lines used in consumer solicitations for financial services from
anyone other than the lender. (Bus. & Prof. Code Sec. 14704.)
In that case, the author and sponsor of SB 1150 argued that the
bill's departure from ordinary preliminary injunction law was
appropriate because it would help prevent harm to consumers.
(See Senate Judiciary Committee analysis, SB 1150, April 20,
2004.) That same argument would apply here with respect to AB
590. In addition, it is also likely that it would be very
difficult for a legal aid organization to meet the existing
standard in these cases because-as noted by the Access
Commission above-violations committed by an unscrupulous person
or business posing as a "legal aid" organization can cause
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public distrust of legal aid organizations in general, an
amorphous concept.
4. Pro bono provisions
This bill would state the intent of the Legislature to encourage
attorneys to make further efforts to meet their professional
responsibilities and other obligations by providing pro bono
legal services and financial support of nonprofit legal
organizations that provide free legal services to underserved
communities. The author's office indicates that this language
is intended to serve as a placeholder as the author works with
committee staff, the Access Commission, State Bar, Legal Aid
Association of California, the Judicial Council, and other
interested stakeholders to explore specific mechanisms to
promote these critical pro bono services and related financial
support of nonprofit legal organizations that provide free legal
services to underserved communities.
The Access Commission has also recommended measures to promote
pro bono by lawyers, noting:
Every year, tens of thousands of California lawyers provide
pro bono legal services in conjunction with over 100
California legal services programs or other public interest
groups. They represent low-income families in child custody
and support, eviction, debt collection, bankruptcy,
immigration and other matters. They litigate larger cases
seeking to redress widespread, systemic problems affecting the
poor. They provide business law assistance to non-profit
organizations and micro-entrepreneurs. They staff clinics at
senior centers, family resource centers and homeless shelters
where they offer brief advice, counsel and information. They
assist in community education and outreach programs designed
to inform and enable low and moderate- income individuals to
resolve their own legal issues.
Pro bono has become such an important part of legal services
delivery in California that many legal services organizations
blend together the efforts of paid staff and pro bono
volunteers. While the efforts of volunteer lawyers,
paralegals and law students will never fill all of the unmet
legal needs facing low and moderate-income Californians, they
are a crucial element in the network of attorney-staffed legal
services programs. However, there remains significant
capacity for the legal community to provide more pro bono
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legal services. Therefore, it is important that pro bono and
legal services programs have the resources to successfully
recruit, train, mobilize and mentor California pro bono
lawyers.
Existing law currently embraces the longstanding principle
contained in the American Bare Association's Model Rule 6.1 by
strongly encouraging lawyers to provide voluntary pro bono legal
services to those who cannot afford it and providing that a
lawyer may fulfill his or her ethical commitment to provide pro
bono services, in part, by providing financial support to
organizations providing free legal services to persons of
limited means.
5. Most recent amendments narrow bill
The most recent amendments to this bill delete the provisions
creating a pilot project to provide legal counsel to
unrepresented low-income parties in civil cases to be funded by
an increase in fees for certain civil law matters. As a part of
a negotiated agreement with legislative and judicial leadership
to address how the judicial branch will absorb reductions of
general fund support, these provisions were deleted from the
bill, with the commitment that the pilot will be implemented in
two years pursuant to the agreement.
6. Opposition by California Association of Collectors based on
language recently deleted from the bill
The committee received one letter of opposition to this bill.
The California Association of Collectors opposes the bill's fee
provisions. As noted in Comment 5, however, the most recent
amendments deleted these provisions from the bill. As a result,
it would appear that the association's concerns should be
addressed.
Support : AIDS Legal Referral Panel; Bet Tzedek Legal Services;
California Advocates for Nursing Home Reform; California
Alliance for Retired Americans; California Commission on Access
to Justice; California Indian Legal Services; California Rural
Legal Assistance Foundation; Center for California Homeowner
Association Law; Central California Legal Services, Inc.; City
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of Santa Monica; Congress of California Seniors; Consumer
Attorneys of California; Disability Rights Education and Defense
Fund (DREDF); Inner City Law Center; Legal Aid Association of
California; Legal Aid Society of San Diego; Legal Services of
Northern California; Legal Services for Prisoners with Children;
Los Angeles Center for Law and Justice; Neighborhood Legal
Service of Los Angeles County; Public Advocates; Public Counsel;
Public Interest Clearinghouse; State Bar of California;
Watsonville Law Center; Western Center on Law and Poverty
Opposition : California Association of Collectors (See Comment 6)
HISTORY
Source : Author
Related Pending Legislation : AB 663 (Jones). See Background.
Prior Legislation : AB 3050 (Jones, 2008). See Background.
Prior Vote :
Assembly Judiciary Committee (Ayes 7, Noes 2)
Assembly Appropriations Committee (Ayes 12, Noes 5)
Assembly Floor (Ayes 50, Noes 29)
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