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ADLER v. ALAN B. EPSTEIN (10/05/78)

decided: October 5, 1978.

ADLER, BARISH, DANIELS, LEVIN AND CRESKOFF, A PARTNERSHIP, APPELLANT,
v.
ALAN B. EPSTEIN, RICHARD A. WEISBORD, ARNOLD J. WOLF AND SANFORD I. JABLON



No. 73 January Term, 1978, Appeal from the Order of the Superior Court, No. 1478 October Term, 1977, reversing the Decree of the Court of Common Pleas of Philadelphia, No. 195 April Term, 1977.

COUNSEL

Drinker, Biddle & Reath, Patrick T. Ryan, Mark M. Wilcox, Ward T. Williams, Philadelphia, for appellant.

Alan M. Lerner, Philadelphia, for appellees.

Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix, Manderino and Larsen, JJ. Manderino, J., filed a dissenting opinion.

Author: Roberts

[ 482 Pa. Page 419]

OPINION OF THE COURT

Appellant, the law firm of Adler, Barish, Daniels, Levin and Creskoff, filed a Complaint in Equity in the Court of Common Pleas of Philadelphia. It sought to enjoin appellees,*fn1 former associates of Adler Barish, from interfering with existing contractual relationships between Adler Barish and its clients. The court of common pleas entered a final decree granting the requested relief, but a divided Superior Court dissolved the injunction and dismissed Adler Barish's complaint. We granted allowance of appeal. We now reverse and direct reinstatement of the decree of the court of common pleas.*fn2

[ 482 Pa. Page 420]

Appellee Alan Epstein's employment relationship with Adler Barish terminated on March 10, 1977.*fn5 At his request, Epstein continued to use offices of Adler Barish until March 19. During this time, and through April 4, when Adler Barish filed its complaint, Epstein was engaged in an active campaign to procure business for his new law firm. He initiated contacts, by phone and in person, with clients of Adler Barish with open cases on which he had worked while a salaried employee. Epstein advised the Adler Barish clients that he was leaving the firm and that they could choose to be represented by him, Adler Barish, or any other firm or attorney.

Epstein's attempt to procure business on behalf of the firm did not stop with these contacts. He mailed to the clients form letters which could be used to discharge Adler Barish as counsel, name Epstein the client's new counsel and create a contingent fee agreement.*fn6 Epstein also provided clients with a stamped envelope addressed to Epstein. Appellees Richard Weisbord, Arnold Wolf, and Sanford Jablon, who left Adler Barish on April 1, 1977, were aware of Epstein's efforts to procure this business on behalf of their new firm and did not attempt to curtail them. Indeed, Weisbord and Wolf, upon leaving Adler Barish, also immediately began to seek business, as did Epstein, for the new firm. They too informed clients of Adler Barish of their plans and that the clients were free to discharge Adler Barish and retain Weisbord and Wolf in its stead. Their efforts continued until Adler Barish filed its complaint.

Thus, clients of Adler Barish served a dual purpose in appellees' effort to start their own law firm. First, while

[ 482 Pa. Page 422]

    appellees still worked for Adler Barish, Adler Barish cases formed the basis for appellees' obtaining bank credit. Then, appellees, as they left Adler Barish, made a concentrated attempt to procure the cases which had been used to obtain credit.

On April 4, the court of common pleas granted Adler Barish preliminary relief, enjoining appellees' campaign to obtain the business of Adler Barish clients.*fn7 One month later, on May 5, the court entered its final decree, which provided:

"[T]he defendants, ALAN B. EPSTEIN, RICHARD A. WEISBORD, ARNOLD J. WOLF and SANFORD I. JABLON, and all persons acting in concert with them or otherwise participating with them or acting in their aid or behalf, are permanently enjoined and restrained from contacting and/or communicating with those persons who up to and including April 1, 1977, had active legal matters pending with and were represented by the law firm of ADLER, BARISH, DANIELS, LEVIN and CRESKOFF, except that:

1. Nothing in this Final Decree shall be construed to preclude the defendants from announcing the formation of their new professional relationship in accordance with the requirements of DR 2-102 of the Code of Professional Responsibility.

2. Nothing in this Final Decree shall preclude those persons who, up to and including April 1, 1977, had active legal matters pending with and had been represented by the law firm of ADLER, BARISH, DANIELS, LEVIN and CRESKOFF from voluntarily discharging their present attorney and selecting any of the defendants, or any other attorney, to represent them."

[ 482 Pa. Page 423]

The court concluded that appellees "engaged in illegal solicitation in complete and total disregard for the Code of Professional Responsibility" and thereby "tortiously interfered with the contractual and business relations that exist between Adler Barish and its clients." It found equitable relief appropriate in view of appellees' "avowed intentions . . . to continue their illegal solicitation."

Appellees appealed to the Superior Court,*fn8 which reversed. In addition to granting Adler Barish's petition for allowance of appeal, we granted a stay and expedited argument.

II. Appellees' Constitutional Claim

The facts found by the court of common pleas, which appellees do not dispute and the Superior Court did not disturb, demonstrate that, while leaving Adler Barish, appellees made numerous contacts with Adler Barish clients on whose active cases appellees were working before leaving Adler Barish. Adler Barish argues that appellees' conduct constitutes an intentional interference with existing contractual relationships between Adler Barish and its clients. According to Adler Barish, appellees' conduct is "deserving of censure, not encouragement." Appellees' on the other hand, contend that their conduct was "privileged," and that therefore no right of action for intentional interference lies. Moreover, they argue that their conduct is protected under the first and fourteenth amendments to the Constitution of the United States.

"[S]peech which does 'no more than propose a commercial transaction'" is no longer outside the protection of the first and fourteenth amendments to the Constitution of the United States. Virginia Pharmacy Board v. Virginia Consumer Council, 425 U.S. 748, 762, 96 S.Ct. 1817, 1825, 48

[ 482 Pa. Page 424]

L.Ed.2d 346 (1976) (striking down state statute deeming licensed pharmacists' advertising of prescription drugs "unprofessional conduct"); see Pennsylvania State Board of Pharmacy v. Pastor, 441 Pa. 186, 272 A.2d 487 (1971) (invalidating Pennsylvania statute prohibiting advertising of "dangerous drugs" dispensible only with a physician's prescription). Accordingly, states are barred from imposing blanket prohibitions against truthful advertising of "routine" legal services. Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977). Such a blanket prohibition "serves to inhibit the free flow of commercial information and to keep the public in ignorance." Id., 433 U.S. at 365, 97 S.Ct. at 2700.

Nothing in the challenged decree prohibited appellees from engaging in the truthful advertising protected under Bates. Appellees could inform the general public, including clients of Adler Barish, of the availability of their legal services, and thus the "free flow of commercial information" to the public is unimpaired. Moreover, the injunction expressly permitted appellees to announce "formation of their new professional relationship in accordance with the requirements of DR 2-102 of the Code of Professional Responsibility." Appellees therefore were permitted to mail announcements to "lawyers, clients, former clients, personal friends, and relatives." Code of Professional Responsibility, DR 2-102(A)(2). This would include the very clients of Adler Barish whose business appellees sought. See Committee on Professional Ethics of the American Bar Association, Informal Decision No. 681 (August 1, 1963) (permitting departing attorney to send announcements "to those clients of the old firm for whom he had worked").

What the injunction did proscribe was appellees' "contacting and/or communicating with those persons who up to and including April 1, 1977, had active legal matters pending with and were represented by the law firm of ADLER, BARISH, DANIELS, LEVIN and CRESKOFF." Our task

[ 482 Pa. Page 425]

    is to decide whether the conduct of appellees is constitutionally subject to sanction.*fn9

The Code of Professional Responsibility, DR 2-103(A) (as adopted, 1974), provides:

"A lawyer shall not recommend employment, as a private practitioner, of himself, his partner, or associate to a non-lawyer who has not sought his advice regarding employment of a lawyer."

See also Code of Professional Responsibility, DR 2-104(A). Appellees clearly violated this "proscription against self-recommendation." Berlant Appeal, 458 Pa. 439, 443, 328 A.2d 471, 474 (1974), cert. denied, 421 U.S. 964, 95 S.Ct. 1953, 44 L.Ed.2d 451 (1975). They recommended their own employment, even though clients of Adler Barish did not seek appellees' advice "regarding employment of a lawyer."

Ohralik v. Ohio State Bar Association, 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978), makes plain that, after Bates, states may constitutionally impose sanctions upon attorneys engaging in conduct which violates these disciplinary rules, even though the conduct involves "commercial speech." In Ohralik, the state bar association suspended an attorney who "solicited" persons injured in an automobile accident by making visits to the hospital room where the persons were recovering. Mr. Justice Powell, speaking for the Court, emphasized that commercial speech does not enjoy the same constitutional protections traditionally afforded other forms of speech:

"In rejecting the notion that such speech 'is wholly outside the protection of the First Amendment,' Virginia Pharmacy, 425 U.S., at 761, 96 S.Ct. at 1825, we were careful not to hold 'that it is wholly undifferentiable from other forms' of speech. Id., at 771 n.24, 96 S.Ct. at 1830. We have not discarded the 'commonsense' distinction between speech proposing a commercial transaction, which occurs in an area traditionally subject to government

[ 482 Pa. Page 426]

    regulation, and other varieties of speech. Ibid. To require a parity of constitutional protection for commercial and noncommercial speech alike could invite dilution, simply by a leveling process, of the force of the Amendment's guarantee with respect to the latter kind of speech. Rather than subject the First Amendment to such a devitalization, we instead have afforded commercial speech a limited measure of protection, commensurate with its subordinate position in the scale of ...


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