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Powell v. Unemployment Compensation Board of Review

Supreme Court of Pennsylvania

March 28, 2017


          SUBMITTED: September 14, 2016

         Appeal from the Order of the Commonwealth Court at No. 1704 CD 2014 dated November 6, 2015 Vacating & Remanding the Order of the UCBR at No. B-13-09-D-B064 dated August 13, 2014.




         We granted discretionary review to consider whether an attorney who has been suspended from the practice of law by this Court may represent a claimant in unemployment compensation proceedings. A divided three-judge panel of the Commonwealth Court determined the claimant is entitled to his choice of representative, even if that representative is a suspended attorney, and remanded for a new hearing. We affirm the decision to remand, but reverse the Commonwealth Court's holding that a suspended attorney may represent claimants in unemployment compensation proceedings.

         This case arises from the unemployment compensation claim filed by appellee Gary H. Powell.[1] The Unemployment Compensation Service Center determined appellee was ineligible to receive benefits pursuant to Section 402(b) of the Unemployment Compensation Law (the UC Law) because he voluntarily quit his job with Joe Krentzman & Sons (employer), without "cause of a necessitous and compelling nature." See 43 P.S. §802(b) (employee ineligible for compensation when unemployment is due to voluntarily leaving work without cause of necessitous and compelling nature). Appellee challenged the finding and referee Brian L. Parr scheduled a hearing to review appellee's claim. Appellee arrived at the hearing on December 5, 2013, with Donald A. Bailey, who stated he was present as appellee's pro bono advocate. Bailey admitted he was suspended from practicing law, by order of this Court dated October 2, 2013, for a period of five years.[2] Original Record (O.R.) at Item 12, Notes of Testimony (N.T.) 12/5/13 at 1. Referee Parr allowed Bailey to participate in the hearing, which proceeded until Parr continued the matter to allow service of subpoenas on necessary fact witnesses.

         Prior to further proceedings on appellee's claim, however, employer, which had been previously acting pro se, obtained counsel. Employer's counsel promptly objected to Bailey's participation, asserting Pennsylvania Rule of Disciplinary Enforcement 217(j)(4)(vii), Pa.R.D.E. 217(j)(4)(vii), prohibits a suspended attorney from appearing in any hearing or proceeding before a referee.[3] Bailey was given the opportunity to rebut employer's argument that Disciplinary Enforcement Rule 217 prohibited his participation and he did so by letter, directing employer's attorney to review the language of the notice of hearing sent to each party, which expressly advised appellee he could "represent [him]self or [he] may be represented by an attorney or any other advocate of [his] choice." O.R. at Items 7, 14. See also Section 214 of the UC Law, 43 P.S. §774 ("Any party in any proceeding under this act before the department, a referee or the board may be represented by an attorney or other representative.").

         After consulting with Unemployment Compensation Board of Review (UCBR) counsel, newly assigned referee Susan G. Hess, by letter dated February 6, 2014, informed Bailey he would not be allowed to represent appellee and directed Bailey to notify appellee he could engage other representation. O.R. at Item 22. Referee Hess then conducted further proceedings on March 26, 2014, which appellee attended with Andrew J. Ostrowski. Referee Hess determined through questioning that Ostrowski's attorney license had also been suspended.[4] O.R. at Item 30, N.T. 3/26/14 at 1. Referee Hess then gave Ostrowski the opportunity to argue why Disciplinary Enforcement Rule 217 did not preclude his participation in the hearing, id., N.T. at 1-2, and ultimately concluded Ostrowski would be permitted only to observe the proceedings. Appellee thereafter represented himself, and following the hearing, Referee Hess determined appellee was ineligible to receive benefits.

         On appeal, the UCBR affirmed the denial of benefits and also concluded the referee properly excluded Bailey and Ostrowski from representing appellee. The UCBR opined Referee Hess had correctly addressed the representation issue by notifying Bailey and the parties that appellee was not permitted to have a suspended attorney as a representative at the continued hearing. UCBR Decision at 3. The UCBR concluded Disciplinary Enforcement Rule 217(j)(4)(vii) barred Ostrowski from participating in the hearing, appellee had a sufficient opportunity to find proper legal or non-legal representation, and appellee received a full and fair hearing, with the opportunity to testify and submit evidence and cross-examine the employer's witnesses. Id.

         Appellee filed a pro se petition for review in the Commonwealth Court and employer intervened. A divided panel of the Commonwealth Court vacated the UCBR's ruling and remanded the matter for a new hearing. Powell v. UCBR, 128 A.3d 315 (Pa. Cmwlth. 2015).[5] The majority analyzed the interplay between Section 214 of the UC Law, the reasoning of the Opinion Announcing the Judgment of the Court (OAJC) in Harkness v. UCBR, 920 A.2d 162 (Pa. 2007), [6] and Disciplinary Enforcement Rule 217.

         The Commonwealth Court acknowledged Disciplinary Enforcement Rule 217 specifically prohibits formerly admitted or suspended attorneys - such as Bailey and Ostrowski - from "appearing on behalf of a client in any hearing or proceeding or before any judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, hearing officer or any other adjudicative person or body." Powell, 128 A.3d at 320, quoting Pa.R.D.E. 217(j)(4)(vii) (emphasis omitted). The court also recognized Section 214 of the UC Law allows a party in unemployment compensation proceedings to be represented by "an attorney or other representative, " including non-attorneys. The court then noted that, in Harkness, the OAJC concluded representation of a party before a unemployment compensation referee does not constitute the practice of law because such proceedings are "largely routine and primarily focused on creating a factual basis, or record, by which the referee can render a decision" and the nature of the proceedings is remedial and designed to be brief and informal. Powell, 128 A.3d at 320, quoting Harkness, 920 A.2d at 166, 168-69 (OAJC).

         The Commonwealth Court concluded the UCBR improperly precluded suspended attorneys Bailey and Ostrowski from representing appellee because Section 214 of the UC Law gives a party the statutory right to choose his representative before an unemployment compensation referee, and under Harkness such representation does not constitute the practice of law. Powell, 128 A.3d at 320. The court rejected the UCBR's reliance upon the Disciplinary Enforcement Rules for its contrary decision because, in its view, enforcement of the Disciplinary Enforcement Rules falls within the exclusive authority of the Pennsylvania Supreme Court and the Disciplinary Board. Id. at 321, citing Pa.R.D.E. 201(a) (exclusive disciplinary jurisdiction of Supreme Court and Disciplinary Board under these rules extends to attorney admitted to practice law in Commonwealth and formerly admitted attorney). The court acknowledged this Court previously held a suspended attorney in contempt for violation of Disciplinary Enforcement Rule 217(j) for representing claimants in unemployment proceedings. Powell, 128 A.3d at 321, citing In the Matter of David Louis Bargeron, No. 1073 DD3, 2011 Pa. LEXIS 1695, at *1 (Pa. July 27, 2011) (per curiam) (holding suspended attorney in contempt of Rule 217(j) and ordering attorney to immediately cease and desist from all activities in connection with representation of claimants and employers in unemployment compensation proceedings and comply with all provisions of Rule 217). The Commonwealth Court nevertheless concluded it was more consistent with Section 214 of the UC Law and Disciplinary Enforcement Rule 217(j) for the referee to allow a suspended attorney to participate, advise him that his continued representation could subject him to sanctions for violation of Disciplinary Enforcement Rule 217, and report the attorney to the Disciplinary Board for further action as in Bargeron. Powell, 128 A.3d at 321.

         The UCBR filed a petition for allowance of appeal, and we granted review of the following question: "Should a Commonwealth agency be required to allow a suspended attorney to represent a party in its hearings and proceedings?" Powell v. UCBR (Joe Krentzman & Sons, Inc.), 134 A.3d 448 (Pa. 2016).

         The UCBR asserts the Commonwealth Court's decision undermines the attorney disciplinary system created to protect legal consumers from persons found unqualified to serve as attorneys. The UCBR argues the Commonwealth Court ignored the plain language of Section 214 of the UC Law which authorizes representation by either an "attorney" or "other representative" and Bailey and Ostrowski fall in neither category as they are "formerly admitted attorneys." UCBR Brief at 12-13. In the UCBR's view, the court's reliance on Harkness is misplaced because the two-Justice OAJC addressed representation by non-attorneys, but did not account for "formerly admitted attorneys" who have been suspended and therefore are prohibited by the Disciplinary Enforcement Rules from appearing before a referee. According to the UCBR, the Disciplinary Enforcement Rules do not simply govern the practice of law, but also the conduct of attorneys and formerly admitted attorneys. Id. at 13-14, citing Pa.R.D.E. 201(a) (exclusive jurisdiction of Supreme Court and Disciplinary Board extends to any formerly admitted attorney whose actions constitute violation of Disciplinary Enforcement Rules). The UCBR argues this Court - through disciplinary proceedings - determined Bailey and Ostrowski were unqualified to represent clients when they purported to represent appellee, and the ruling below subverts this determination.

         In addition, the UCBR rejects the Commonwealth Court's conclusion that Referee Hess, by precluding Bailey and Ostrowski from representing appellee, was improperly prosecuting and enforcing the Disciplinary Enforcement Rules. The UCBR argues instead the referee was simply honoring this Court's suspension orders. The UCBR contends this Court's disciplinary authority will be undermined if an agency allows a suspended attorney to violate the Disciplinary Enforcement Rules by appearing before the agency as a party's representative. The UCBR further argues the Commonwealth Court's decision frustrates the public protection aspects of those Rules. The UCBR asserts the process outlined by the Commonwealth Court involving an after-the-fact complaint to the Disciplinary Board about a suspended attorney's participation in agency proceedings does not undo or mitigate harm that may have occurred to the parties or to the timeliness and accuracy of the unemployment compensation adjudicative process. The UCBR posits allowing representation of a party by a suspended attorney creates potential error in agency proceedings and undermines the finality of agency decisions.

         The Office of Disciplinary Counsel (ODC) filed an amicus curiae brief in support of the UCBR's position. The ODC argues the UCBR is authorized to prohibit suspended attorneys from representing clients in unemployment compensation proceedings and the UCBR did not invade this Court's jurisdiction in affirming the referee's decision to do so here. The ODC notes suspended attorneys are qualitatively different from non-lawyer representatives who may otherwise appear before agencies on behalf of claimants - suspended attorneys are not only prohibited from the practice of law, but also from conducting other law-related activities. Amicus Brief at 19-20, citing Pa.R.D.E. 217(j)(4)(vii) (formerly admitted attorney prohibited from appearing before administrative referees or boards). According to the ODC, the distinction between suspended attorneys and non-lawyer representatives is based not on legal ability, a characteristic rendered immaterial by the Harkness plurality's conclusion that proceedings before the UCBR do not constitute the practice of law, but on the basis of the lack of ethical fitness to act as an advocate. The ODC argues the UCBR properly exercised its authority pursuant to Section 503 of the Administrative Agency Law, which provides an "agency may, upon hearing and good cause shown, preclude any person from practice before it." See 2 Pa.C.S. §503. The ODC posits the Commonwealth Court's decision actually contravenes this Court's authority by permitting a suspended attorney to ignore the Court's suspension orders. Further, the Commonwealth Court's decision places referees in an ethical quandary because allowing a suspended attorney to violate Disciplinary Enforcement Rule 217 may be seen as assisting in a violation of the Rules of Professional Conduct, which itself may be professional misconduct. Amicus Brief at 22-23, citing Pa.R.P.C. 8.4 (professional misconduct includes engaging in conduct prejudicial to administration of justice). The ODC also contends the Commonwealth Court's analysis is faulty based upon an overly broad interpretation of the term "enforce, " as used in the court's theory the referee and UCBR overstepped their bounds by "enforcing" the Court's order. The ODC asserts a referee's refusal to participate in or to allow a violation of the law does not amount to unauthorized "enforcement" of this Court's order.

         Appellee argues the UCBR was without jurisdiction to deny him his right to the representative of his choice and by doing so violated his rights under Pennsylvania law, the Pennsylvania Constitution and the First, Seventh and Fourteenth Amendments to the United States Constitution. Appellee argues pursuant to Harkness and Bargeron he was entitled to be represented by Bailey and Ostrowski and that the referee had no right to determine who "any other representative was." Appellee's Brief at 7, 9. Appellee asserts the referee's decision left him unable to "defend" himself or "present his case" and "denied [him] a lawful hearing." Id. at 4, 7. Appellee summarily alleges the UCBR violated his rights to equal protection and substantive due process by denying him the representation of his choice. He further "objects to the unconstitutional nature of the vaguely and in-artfully composed" Disciplinary Enforcement Rules and the unconstitutional way those rules were applied to him by the UCBR, which did not have the authority to deny him "the representation of 'other representatives' such as Mr. Bailey and Mr. Ostrowski." Id. at 10.

         As the issue before us involves a pure question of law, our standard of review is de novo and our scope of review is plenary. Harkness, 920 A.2d at 166 n.2, citing Buffalo Twp. v. Jones, 813 A.2d 659, 664 n.4 (Pa. 2002). Our careful review reveals the Commonwealth Court erred in reversing the UCBR and directing it to allow individuals who have been suspended from the practice of law to participate in unemployment compensation proceedings on behalf of a claimant. We consider suspended attorneys to be different from non-lawyer representatives who are authorized to participate in unemployment compensation matters pursuant to Section 214 of the UC Law. Instead, suspended attorneys are individuals who have actually been sanctioned by this Court for violations of the Rules of Professional Conduct and now are "formerly admitted attorneys" who are expressly prohibited from appearing on behalf of a client "in any hearing or proceeding" pursuant to Disciplinary Enforcement Rule 217(j)(4)(vii). Suspended attorneys may therefore not act as the non-lawyer representatives referred to in Section 214. We reject appellee's claim he has a constitutional right to be represented by suspended attorneys who have been specifically precluded by this Court's rules from acting as his representative.

         The Pennsylvania Constitution vests this Court with the authority to regulate the practice of law. Pa. Const. art. V, §10(c) ("The Supreme Court shall have the power to prescribe general rules governing practice, procedure and the conduct of all courts, …including the power to provide for...admission to the bar and to practice law…."). Pursuant to its authority, "this Court has adopted Rules of Professional Conduct and Rules of Disciplinary Enforcement, which govern the conduct and discipline of attorneys." Commonwealth v. Stern, 701 A.2d 568, 571 (Pa. 1997); see also Pa.R.D.E. 103 ("The Supreme Court declares that it has inherent and exclusive power to supervise the conduct of attorneys who are its officers (which power is reasserted in Section 10(c) of Article V of the Constitution of Pennsylvania) and in furtherance thereof promulgates these rules.").

         We first review this Court's OAJC in Harkness, on which the Commonwealth Court relied but which we conclude is inapposite. In Harkness, the employer was represented in unemployment compensation proceedings by a tax consultant who was not - and never was - an attorney. The referee allowed the representation over the claimant's objection, and the UCBR affirmed on appeal. The en banc Commonwealth Court reversed, determining it was error to allow a non-attorney tax consultant to represent the employer. Harkness v. UCBR, 867 A.2d 728 (Pa. Cmwlth. 2005) (en banc), rev'd by Harkness v. UCBR, 920 A.2d 162 (Pa. 2007). The court ruled the employer's tax consultant was improperly engaging in the practice of law because he conducted cross-examination of witnesses, made decisions regarding evidentiary matters and offered closing legal arguments; the court found such practice by a non-lawyer was prohibited by Shortz v. Farrell, 193 A. 20 (Pa. 1933), [7] and the UC Law, as well as regulations promulgated pursuant to the UC Law. Harkness, 867 A.2d at 731, citing 43 P.S. §862 (limiting fees charged by counsel or other duly authorized agent representing individuals); 34 Pa. Code §101.41 (approval of counsel fees for individuals represented by counsel or authorized agent). Notably, the court examined Section 702 of the UC Law, 43 P.S. §862, which addresses limitations on fees sought by a claimant's counsel or duly authorized agents, and concluded because Section 702 addressed only fees for a claimant's counsel or agent, the UC Law did not authorize non-lawyer representation for employers. Id. at 732 n.6. Thus, the Commonwealth Court held only a claimant - and not an employer - could be represented by a non-lawyer in unemployment compensation proceedings. Id. at 731-32.

         This Court granted allocatur to consider "whether a non-employee, non-lawyer may represent an employer in unemployment compensation proceedings." Harkness, 920 A.2d at 166 (OAJC). A plurality reversed the Commonwealth Court, with two justices reasoning that a non-attorney representing an employer in unemployment compensation proceedings does not constitute the unauthorized practice of law, and otherwise does not violate the relevant UC Law provisions. Id. at 169 (OAJC). First, the Harkness OAJC states the character of the activities performed in unemployment compensation proceedings, together with the informal nature of those proceedings, the minimal monetary amounts at issue and the long history of non-lawyer representative participation suggested the public did not need the protection that serves as the basis for classifying certain activities as the practice of law. Id. at 168. Second, the OAJC notes the wording of other provisions of the UC Law demonstrates both employers and claimants may be represented by non-lawyers. Id. at 170-71, citing 43 P.S. §822 (parties and their attorneys or other representatives of record shall be notified of time and place of hearing and referee's decision).[8]

         The legal conclusions expressed in the Harkness OAJC in no way alter our analysis of the issue before us because that case is distinguishable on its facts. Harkness involved a non-lawyer tax consultant and the case revolved, in substantial part, around the distinction between who may represent claimants and who may represent employers. Moreover, the critical question regarding which party may engage a non-lawyer representative in unemployment compensation proceedings was definitively resolved by the General Assembly after the hearing in that case, and while the matter was on appeal. See 43 P.S. ยง774 ("Any party in any proceeding under this act before the ...

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