Court Holds Gramm-Leach-Bliley Act Not Applicable to Attorneys
There has been considerable debate whether attorneys who practice in the estate planning or tax fields are required to comply with the privacy requirements of the Gramm-Leach-Bliley Act (GLB), 15 U.S.C. §§ 6801-09, such as by providing notices of privacy policies and practices when the attorney-client relationship is established and thereafter on an annual basis.
The Federal Trade Commission ruled that attorneys were within the scope of GLB.
But, in New York State Bar Ass’n v. F.T.C., No. Civ. A. 02-810 (RBW) & Civ. A. 02-1883 (RBW), 2004 WL 964173 (D. D.C. Apr. 30, 2004), the court held that the F.T.C.’s decision that attorneys are covered by GLB and its disclosure requirements was an arbitrary and capricious agency action.
Subsequently, the General Counsel of the F.T.C. stated that “unless and until the district court’s April 30, 2004 order or any judgment embodying that order is reversed, [the F.T.C.] will not bring any enforcement actions or conduct any investigations against practicing lawyers under [GLB] for any action, inaction, or failure to comply by them during the period preceding reversal.” Letter from William E. Kovacic to David L. Roll & Steven C. Krane (May 7, 2004).
On December 6, 2005, the United States Court of Appeals for the District of Columbia Circuit affirmed. American Bar Association v. Federal Trade Commission, No. 04-5257. The court explained:
The Federal Trade Commission (“FTC” or “the Commission”) appeals from an order of the District Court granting summary judgment in consolidated cases brought by the appellees American Bar Association and the New York State Bar Association (collectively, “ABA” or “the Bar Associations”). The Bar Associations sought a declaratory judgment that the FTC’s decision that attorneys engaged in the practice of law are covered by the Gramm-Leach-Bliley Act (“GLBA” or “the Act”) exceeded the statutory authority of the Commission and was therefore invalid as a matter of law. Because we agree with the District Court that the Commission’s attempt to regulate the practice of law under the Act fell outside its statutory authority, we affirm the judgment under review.