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October 30, 1997


Appeal from the Orders of the Court of Common Pleas of Philadelphia County, Criminal Division, Entered June 12, 1995, at Nos. 9500-2665, 9500-2662 and 9500-2636.

Justice Zappala.

The opinion of the court was delivered by: Zappala


DECIDED: October 30, 1997

This is a direct appeal by the Commonwealth of Pennsylvania from the order of the Philadelphia County Court of Common Pleas, which upheld a determination by the Philadelphia County Municipal Court that Section 4117(b)(1) of the Crimes Code, 18 Pa.C.S. § 4117(b)(1), is unconstitutional. *fn1 We affirm.

David J. Stern, Thomas H. Purl, III and Richard Bagenstos (Appellees) were charged with violations of § 4117(b)(1), which prohibits a lawyer from compensating or giving anything of value to a non-lawyer for recommending or securing employment by a client. Stern and Purl are attorneys licensed to practice law in Pennsylvania; Bagenstos is authorized to practice law in Washington, D.C., but not in Pennsylvania.

The criminal complaints filed against Purl and Bagenstos alleged that they violated § 4117 by unlawfully compensating a non-lawyer for having made a referral with respect to an insurance claim. The affidavit of probable cause for the arrest warrant, prepared by Special Agent John Ainsley of the Office of the Attorney General, indicates that the Federal Insurance Fraud Task Force in Philadelphia had referred to the Attorney General an investigation into the use of runners, i.e., non-lawyers who are paid a fee to obtain clients for or make referrals to lawyers and health care providers. According to the affidavit, Special Agent John Jefferson of the Criminal Investigation and Prosecution Section of the Attorney General's office interviewed an unidentified confidential source who had identified himself as a non-lawyer and who had served as a runner for lawyers and health care providers in southeastern Pennsylvania over a period of six years beginning in 1987. The source identified Purl and Bagenstos as individuals who had paid him money for client referrals in the past.

Using the name of John H. Jones, Jr., Special Agent Jefferson posed as an operator of an automobile which had been involved in a collision with a utility company truck in Philadelphia on May 4, 1993. Pretextual documents were provided by the Liberty Mutual Insurance Company of Boston, Massachusetts, a utility company and the Philadelphia Police Department to aid Special Agent Jefferson in his ruse. The confidential source introduced the agent to Purl. Purl interviewed the agent and introduced him to Bagenstos, advising the agent that Bagenstos would be handling the accident case. Subsequent to the initial meeting, the agent signed documents to retain the lawyers to represent him in legal matters relating to the fabricated accident.

The affidavit alleges that on May 14, 1993, the agent searched the confidential source and removed all belongings and money from him. The source went to Purl's law office. Upon his return, the source told the agent that he spoke to Purl and Bagenstos about the accident case of John H. Jones, Jr., and that he received a partial payment of $100 for his referral of that case. The balance of the money owed for the referral was to be paid to the source the following week.

A search warrant was issued on November 18, 1993, by the common pleas court, authorizing the search of the law office of Purl and his associate, Bagenstos. Special Agent Jefferson conducted the search of the premises and seized papers, documents and insurance information relating to the accident case of John Jones. Criminal charges were brought against Purl and Bagenstos alleging violations of § 4117(b)(1) and 18 Pa.C.S. § 903 (criminal conspiracy).

The same confidential source informed Special Agent Jefferson that he had received money from David Stern, Esquire for client referrals over a three-year period. The agent was introduced to Stern and identified as John Jones, a potential client who had been injured in an automobile accident on April 26, 1993. On May 7, 1993, the source went to Stern's office after being searched and discussed the Jones accident case with Stern. Stern gave the source a check in the amount of $500 for the case referral. The check was turned over to the agent. On November 18, 1993, a search warrant was issued for Stern's law office and executed by other special agents of the Attorney General's office. The agents confiscated documents relating to the legal representation of Jones. Stern was charged with violating § 4117.

Stern, Purl, and Bagenstos filed motions to dismiss the charges with the Municipal Court of Philadelphia, challenging the constitutionality of § 4117(b)(1) under the state and federal constitutions. They asserted that the statutory provision was unconstitutional because (1) it violates Article V, Section 10(c) of the Pennsylvania Constitution which grants sole authority to regulate the conduct of attorneys to the Supreme Court of Pennsylvania, (2) it violates the First and Fourteenth Amendments of the United States Constitution, and (3) it lacks the necessary mens rea requirement. The municipal court Judge rejected the latter two assertions, but agreed with Appellees' assertion that § 4117(b)(1) was unconstitutional because it violated the separation of powers doctrine. The charges against the Appellees were dismissed. The Philadelphia County Common Pleas Court denied the Commonwealth's appeal. This direct appeal followed.

The Commonwealth argues that the separation of powers doctrine is not offended by the enactment of a statute that criminalizes conduct of an attorney for compensating a non-lawyer for client referrals because the legislature has the power to classify crimes. Appellees respond that § 4117(b)(1) violates the separation of powers doctrine since the statute infringes on the sole authority of the Supreme Court to regulate the conduct of members of the legal profession.

"A basic precept of our form of government is that the executive, the legislature and the judiciary are independent, co-equal branches of government." Beckert v. Warren, 497 Pa. 137, 144, 439 A.2d 638, 642 (1981) (citations omitted). "Under the principle of separation of the powers of government, . . . no branch should exercise the functions exclusively committed to another branch." Sweeney v. Tucker, 473 Pa. 493, 508, 375 A.2d 698, 706 (1977) (citations omitted). As the ultimate interpreter of the Pennsylvania Constitution, this Court bears the ...

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