NANETTE K. LAUGHREY, District Judge.
Before the Court are the Motion for Summary Judgment [Doc. # 100] filed by Defendant LegalZoom.com, Inc. ("Legal-Zoom"), as well as the Motion for Partial Summary Judgment [Doc. # 88], Motion to Exclude Expert Testimony [Doc. #86], and Motion to Strike [Doc. # 114] filed by the representative Plaintiffs in this class action. For the following reasons, the Court grants LegalZoom's Motion for Summary Judgment with respect to Plaintiffs' claims as they relate to patent and trademark applications and denies it in all other respects. The Court also grants Plaintiffs' Motion for Partial Summary Judgment and denies the Motion to Strike and the Motion to Exclude Expert Testimony as they relate to the Motion for Summary Judgment.
LegalZoom is a privately held corporation with its principal place of business in California. LegalZoom maintains a website—www.legalzoom.com—which offers online legal document forms and services.
First, LegalZoom's website offers blank legal forms that customers may download, print, and fill in themselves. Among the blank legal forms customers may download from the LegalZoom website are affidavits, bills of sale, letters, releases, promissory notes, and various types of agreements. Plaintiffs make no claim with respect to these blank legal forms that customers may download, print, and fill-in themselves.
[Doc. # 119 at 51.] Another LegalZoom advertisement states:
Id. at 52. These advertisements also contain LegalZoom's disclaimer: "LegalZoom isn't a law firm. They provide self-help services at your specific direction." Id.
Among the legal documents available through LegalZoom's internet portal are business formation documents, estate planning documents, pet protection agreements, and copyright, trademark, and patent applications. After making an initial selection, the customer enters answers to questions via a "branching intake mechanism" (or decision tree), referred to on the website as an "online questionnaire." Customers type in answers to the questions contained in the online questionnaire. In some cases, customers select an alternative from a list of choices or checkboxes provided by LegalZoom. The branching mechanism skips questions for sections of the questionnaire that are inapplicable based on the customer's prior answers. For example, the questionnaire for a last will and testament asks if the customer has children; if the customer's answer is "no," questions about the customer's children are skipped and the customer is taken to a different next question than if the customer's answer had been "yes."
The online questionnaire process is fully automated. No LegalZoom employee offers or gives personal guidance on answering the questions, although information relevant to the customer's choice sometimes appears on the screen. For example, when completing the questionnaire to purchase a last will and testament, a question appears: "Would you like to protect your personal representative from liability?" After the question, there appears on the screen: "How did most people answer this question?" followed by "yes."
When the customer has completed the online questionnaire, LegalZoom's software creates a completed data file containing the customer's responses. A LegalZoom employee then reviews that data file for completeness, spelling and grammatical errors, and consistency of names, addresses, and other factual information. If the employee spots a factual error or inconsistency, the customer is contacted and may choose to correct or clarify the answer.
After the review of the data file, LegalZoom's software automatically enters the information provided by the customer via the online questionnaire into the LegalZoom template that corresponds with the type of document sought by the customer. LegalZoom's templates include standardized language created by attorneys (licensed outside the state of Missouri) to apply to common consumer and business situations. The software also removes sections of the template that are inapplicable based on the customer's answers to the
After the customer's data has been input into the template, a LegalZoom employee reviews the final document for quality in formatting—e.g., correcting word processing "widows," "orphans," page breaks, and the like. The employee then prints and ships the final, unsigned document to the customer. In rare cases, upon request, the document is emailed to the customer. A customer does not see the purchased document until it is delivered. All Missouri customers who select a given document and provide the same information will receive an identical final product.
After receiving the document, the customer may review, sign, execute, and use the final document at his convenience. The customer may take the unexecuted document to an attorney for review and choose not to use the document at all. Under LegalZoom's refund policy, customers can obtain a full refund (less charges paid to third parties for filing fees or other costs) for 60 days after their transaction if they are not satisfied.
With respect to some of the intellectual property documents, LegalZoom files the government document for the customer based on the customer's answers to the questionnaire. For example, a copyright application is completed using the information gathered through the customer's answers to the questionnaire and then uploaded directly from LegalZoom to the appropriate government office. In the copyright example, the customer will also, at the time of the application or later, send LegalZoom the work for which copyright protection is sought, and LegalZoom will also provide that material to the appropriate government office for the customer. At the time the copyright application is submitted to the appropriate government office by LegalZoom for the customer, LegalZoom reviews the entire submission to make sure it complies with what the customer wished to copyright as set forth in the answers provided to the questionnaire. Similarly, there are two different methods by which a person may create a trademark. LegalZoom determines the trademark-registration method after the customer that selected a trademark document answers questions in the branching questionnaire developed by LegalZoom for the trademark process. Like a copyright application, the customer never sees the trademark application before it is uploaded to the government office by LegalZoom. For documents in the business-services division, LegalZoom also determines what particular government document to use based on the consumer's answers to the questionnaires.
Limited customer service is available to LegalZoom customers by email and telephone. LegalZoom customer-service representatives receive training concerning the company's policy against providing legal advice and are regularly instructed not to recommend forms or documents or give any legal advice. LegalZoom customer-service representatives are repeatedly informed that giving legal advice to a customer will result in dismissal, and that even approaching giving legal advice to a customer will result in discipline up to and including dismissal.
The named Plaintiffs had no personal interaction with any LegalZoom employee while using the LegalZoom website or afterward. The named Plaintiffs never believed
This action was removed to federal court on February 5, 2010. Plaintiffs' Amended Petition contains four counts. [Doc. # 1, Ex. 1 at 8.] Count I asserts a claim for unlawful practice of law pursuant to Mo. Rev.Stat. § 484.020. Count II asserts a claim for money had and received, under the theory that the money paid by Plaintiffs to LegalZoom "was not used for their benefit because LegalZoom is not authorized to engage in the lawful practice of law in the State of Missouri." Id. at ¶ 42. Count III asserts a claim under the Missouri Merchandising Practices Act ("MPA") and seeks money damages, while Count IV asserts a Missouri MPA claim seeking injunctive relief to bar LegalZoom from collecting money from its Missouri customers.
On June 1, 2010, the Court denied Defendant LegalZoom's Motion to Dismiss for Improper Venue. [Doc. #29.] On July 27, 2010, 727 F.Supp.2d 782 (W.D.Mo. 2010) the Court denied Defendant's Motion to Reconsider or, in the Alternative, to Transfer Venue. [Doc. # 40.]
On December 14, 2010, 271 F.R.D. 506 (W.D.Mo.2010) the Court certified the following class: "All persons and other entities resident within the State of Missouri who were charged and paid fees to LegalZoom for the preparation of legal documents from December 17, 2004 to the present." [Doc. #61.] In certifying the class, the Court noted that Plaintiffs did not argue that any of Defendant's legal documents were in any way flawed. Rather, Plaintiffs stated that the "overarching issue is whether LegalZoom's preparation of legal documents violates Missouri law." [Doc. # 57 at 1.]
Summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party "bears the initial responsibility of informing the district court of the basis for its motion" and must identify "those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party satisfies its burden, Rule 56(e) requires the non-moving party to respond by submitting evidentiary materials that designate "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In determining whether summary judgment is appropriate, a district court must look at the record and any inferences to be drawn from it in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is not proper if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. at 248, 106 S.Ct. 2505.
As Plaintiffs have stated, the overarching issue in this case is whether Defendant LegalZoom has violated Missouri law by
Mo.Rev.Stat. § 484.020. Section 484.010 provides:
Mo.Rev.Stat. § 484.010.
This Court is bound to apply the decisions of the Missouri Supreme Court regarding substantive issues in a diversity case controlled by Missouri law. See Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir.2005). Here, the Court must interpret Missouri's unauthorized practice of law statute as would the Missouri Supreme Court.
The Missouri Supreme Court has repeatedly emphasized that the "judicial branch of government has the power to regulate the practice of law." In re Thompson, 574 S.W.2d 365, 366 (Mo.1978) (en banc) (citing In re Richards, 333 Mo. 907, 63 S.W.2d 672 (1933) (en banc)). When applying Missouri's unauthorized practice of law statute, the Missouri Supreme Court has written:
In re First Escrow, Inc., 840 S.W.2d 839, 843 n. 6, 7 (Mo.1992) (en banc) (internal quotations and citations omitted). Thus, to apply Missouri's unauthorized practice of law statute, this Court must decide whether LegalZoom's conduct fits within the Missouri Supreme Court's definition of the unauthorized practice of law.
Two foundational cases are cited throughout the Missouri Supreme Court's jurisprudence on the unauthorized practice of law. Plaintiffs urge the Court to follow the cases that apply Hulse v. Criger, 363 Mo. 26, 247 S.W.2d 855 (1952) (en banc), which generally involve businesses providing a legal document preparation service for their customers. Meanwhile, Defendant LegalZoom argues that its website providing access to online document assembly software is the functional equivalent of the "do-it-yourself" divorce kit approved for sale by the Missouri Supreme Court in Thompson, 574 S.W.2d at 366.
In 1952, the Missouri Supreme Court decided Hulse, explaining that its regulation of the unauthorized practice of law "is not to protect the Bar from competition but to protect the public from being advised or represented in legal matters by incompetent or unreliable persons." Hulse, 247 S.W.2d at 857-58. In Hulse:
Id. at 856-57 (internal quotation omitted). In other words, customers provided the defendant with information that would allow him to prepare their legal documents, which were ancillary to his real estate business. Indeed, the defendant in Hulse had argued that "preparing and completing instruments necessary to the closing of real estate transactions is one of the most important services performed by realtors. . . ." Id. at 857. Hulse concluded that realtors could perform such a legal document preparation service for customers, but only when ancillary to their main business, and only if they did not charge a separate fee for that service. Id. at 862.
Thompson, in contrast, concerned an Oregon resident sending "do-it-yourself" divorce kits to franchisees in Missouri:
Thompson, 574 S.W.2d at 366.
Thompson began by summarizing Hulse—finding it "generally applicable"— but ultimately looked beyond Missouri for cases decided on analogous facts: "Other jurisdictions have decided cases directly on point and are more persuasive however in light of recent United States Supreme Court cases decided after Hulse." Id. at 367 (citing, inter alia, Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975) (finding that attorney fee schedules constituted price-fixing under the Sherman Act); Faretta v. California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975) (affirming the right of pro se representation)).
Thompson relied most heavily on the Florida Supreme Court's reasoning in Florida Bar v. Brumbaugh, 355 So.2d 1186 (Fla.1978).
Thompson, 574 S.W.2d at 368 (quoting Brumbaugh, 355 So.2d at 1194). The Florida Supreme Court had further concluded:
Brumbaugh, 355 So.2d at 1193-94. While Thompson did not involve notary services of any kind, it reached a similar conclusion as Brumbaugh with respect to the sale of legal self-help goods: "[T]he advertisement and sale by the respondents of the divorce kits does not constitute the unauthorized practice of law so long as the respondents and other[s] similarly situated refrain from giving personal advice as to legal remedies or the consequences flowing therefrom." Thompson, 574 S.W.2d at 369. Thus, it became the law in Missouri, as it is in other jurisdictions, that the practice of law does not include the sale of "do-it-yourself" kits, which include blank legal forms and general instructions.
In 1992, the Missouri Supreme Court decided First Escrow, which involved two escrow companies that provided "real estate closing or settlement services":
First Escrow, 840 S.W.2d at 841. First Escrow applied the principles laid out in Hulse:
Id. at 844 (citation and footnote omitted). However, the finding that the person filling in the document for the customer could have adverse interests was not the end of the analysis:
Id. at 844, 846-47. Still, the Missouri Supreme Court held that escrow companies "may not prepare or complete nonstandard or specialized documents" and "may not charge a separate fee for document preparation. . . ." Id. at 848-49.
In 1996, the Missouri Supreme Court decided In re Mid-America Living Trust Associates, Inc., 927 S.W.2d 855 (Mo.1996) (en banc). The Court first reaffirmed the rules in Hulse and Thompson:
Id. at 859. Under Mid-America's facts, the Missouri Supreme Court found that
Id. at 864-65 (citations omitted).
Most recently, in 2007, the Missouri Supreme Court decided Eisel v. Midwest BankCentre, 230 S.W.3d 335 (Mo.2007) (en banc). There, the defendant bank had charged a separate fee for preparing legal documents for its customers, in violation of the rules laid out in Hulse and reaffirmed in Mid-America. The Missouri Supreme Court wasted little time in affirming the judgment against the bank under Missouri's unauthorized practice of law statute:
Id. at 339; see also Carpenter v. Countrywide Home Loans, Inc., 250 S.W.3d 697 (Mo.2008) (en banc) (related case reaffirming Eisel).
In its Motion for Summary Judgment, Defendant LegalZoom argues that, as a matter of law, it did not engage in the unauthorized practice of law in Missouri. Thus, the Court must decide whether a reasonable juror could conclude that LegalZoom did engage in the unauthorized practice of law, as it has been defined by the Missouri Supreme Court. See First Escrow, 840 S.W.2d at 843 n. 7 ("the
Plaintiffs argue that the Missouri Supreme Court has declared on multiple occasions that a non-lawyer may not charge a fee for their legal document preparation service. Defendant responds that its customers—rather than LegalZoom itself— complete the standardized legal documents by entering their information via the online questionnaire to fill the document's blanks, which it concedes that customers never see. While the parties dispute the proper characterization of the underlying facts, there is no dispute regarding how LegalZoom's legal document service functions.
It is uncontroverted that Defendant LegalZoom's website performs two distinct functions. First, the website offers blank legal forms that customers may download, print, and fill in themselves. Plaintiffs make no claim regarding these blank forms. Indeed, this function is analogous to the "do-it-yourself" kit in Thompson containing blank forms and general instructions regarding how those forms should be completed by the customer. Such a "do-it-yourself" kit puts the legal forms into the hands of the customers, facilitating the right to pro se representation.
It is the second function of LegalZoom's website that goes beyond mere general instruction. LegalZoom's internet portal is not like the "do-it-yourself" divorce kit in Thompson. Rather, LegalZoom's internet portal service is based on the opposite notion: we'll do it for you. Although the named Plaintiffs never believed that they were receiving legal advice while using the LegalZoom website, LegalZoom's advertisements shed some light on the manner in which LegalZoom takes legal problems out of its customers' hands. While stating that it is not a "law firm" (yet "provide[s] self-help services"), LegalZoom reassures consumers that "we'll prepare your legal documents," and that "LegalZoom takes over" once customers "answer a few simple online questions." [Doc. #119 at 51-52.]
None of the Missouri Supreme Court cases cited by the parties are directly on point, due to the novelty of the technology at issue here. However, the weight of the authority that does exist indicates that businesses may not charge fees for a legal document preparation service, although they may sell goods—including blank forms and general instructions—to facilitate the consumer's own preparation of legal documents. The "do-it-yourself" divorce kit in Thompson, upon which Defendant relies so heavily, was not a service but purely a product. Thompson did not even address the question of document preparation in Thompson because the issue was not before it—the purchaser of the kit prepared the document, not the company that sold the kit.
Thompson relied heavily on Brumbaugh, where the Florida Supreme Court allowed not only the sale of self-help legal goods, but also allowed for parallel notary services. Nonetheless, Brumbaugh held that the notary could only "type up instruments which have been completed by clients," and could not "assist them in preparing those forms" or otherwise "engage in personal legal assistance in conjunction with her business activities, including the correction of errors and omissions." Brumbaugh, 355 So.2d at 1194. LegalZoom
Here, LegalZoom's internet portal offers consumers not a piece of self-help merchandise, but a legal document service which goes well beyond the role of a notary or public stenographer. The kit in Thompson offered page upon page of detailed instructions but left it to the purchaser to select the provisions applicable to their situation. The purchaser understood that it was their responsibility to get it right. In contrast, LegalZoom says: "Just answer a few simple online questions and LegalZoom takes over. You get a quality legal document filed for you by real helpful people." [Doc. # 119 at 51.] Thus, LegalZoom's internet portal sells more than merely a good (i.e., a kit for self help) but also a service (i.e., preparing that legal document). Because those that provide that service are not authorized to practice law in Missouri, there is a clear risk of the public being served in legal matters by "incompetent or unreliable persons." Hulse, 247 S.W.2d at 858. "Our purpose must be to make sure that legal services required by the public, and [e]ssential to the administration of justice, will be rendered by those who have been found by investigation to be properly prepared to do so. . . ." Id.
That Defendant's legal document service is delivered through the internet is not the problem. The internet is merely a medium, and LegalZoom's sale of blank forms over the internet does not constitute the unauthorized practice of law. Nor would LegalZoom be engaging in the unauthorized practice of law if it sold general instructions to accompany those blank forms over the internet (as may already be the case).
LegalZoom's legal document preparation service goes beyond self-help because of the role played by its human employees, not because of the internet medium. LegalZoom employees intervene at numerous stages of the so-called "self-help services." [Doc. # 191 at 51.] First, after the customer has completed the online questionnaire, a LegalZoom employee reviews the data file for completeness, spelling and grammatical errors, and consistency of names, addresses, and other factual information. If the employee spots a factual error or inconsistency, the customer is contacted and may choose to correct or clarify the answer. Later in the process, after the reviewed information is inserted into LegalZoom's template, a LegalZoom employee reviews the final document for quality in formatting—e.g., correcting word processing "widows," "orphans," page breaks, and the like. Next, an employee prints and ships the final, unsigned document to the customer. Finally, customer service is available to LegalZoom customers by email and telephone.
As in Brumbaugh:
Brumbaugh, 355 So.2d at 1193-94.
Furthermore, LegalZoom's branching computer program is created by a LegalZoom employee using Missouri law. It is that human input that creates the legal document. A computer sitting at a desk in California cannot prepare a legal document without a human programming it to fill in the document using legal principles derived from Missouri law that are selected for the customer based on the information provided by the customer. There is little or no difference between this and a lawyer in Missouri asking a client a series of questions and then preparing a legal document based on the answers provided and applicable Missouri law. That the Missouri lawyer may also give legal advice does not undermine the analogy because legal advice and document preparation are two different ways in which a person engages in the practice of law. See, Mo.Rev. Stat. § 484.010 (defining law business as giving legal advice for compensation or "assisting in the drawing for a valuable consideration of any paper, document or instrument affecting or relating to secular rights" Id.)
The Missouri Supreme Court cases which specifically address the issue of document preparation, First Escrow, Mid-America and Eisel, make it clear that this is the unauthorized practice of law. The fact that the customer communicates via computer rather than face to face or that the document is prepared using a computer program rather than a pen and paper does not change the essence of the transaction. As in Hulse, First Escrow, Mid-America, and Eisel, LegalZoom's customers are rendered passive bystanders after providing the information necessary to complete the form. Yet LegalZoom charges a fee for its legal document preparation service. Unlike Thompson, the customer does not have to follow directions to fill in a blank legal form. The customer merely provides information and "LegalZoom takes over." [Doc. #119 at 52.]
Defendant LegalZoom also argues that the application of Missouri law prohibiting the unauthorized practice of law to its conduct would raise constitutional issues.
First, Defendant argues that an interpretation of Missouri law as prohibiting its conduct would violate the First Amendment of the U.S. Constitution and Article I, § 8 of the Missouri Constitution. However, LegalZoom cites no caselaw from any jurisdiction where the application of law prohibiting the unauthorized practice of law was found to violate the First Amendment, much less Article I, § 8 of the Missouri Constitution.
LegalZoom relies primarily on a Second Circuit case finding that a self-help book containing blank forms and general instructions was protected by the First Amendment's guarantee of free speech. Dacey v. New York County Lawyers' Ass'n, 423 F.2d 188, 193 (2d Cir.1969). However, the Court has already determined that LegalZoom's sale of such merchandise does not constitute the unauthorized practice of law. Thus, it is not the content of speech at issue here, as there is no dispute regarding what speech could be included in any goods sold over the internet. Rather, LegalZoom's conduct in preparing legal documents is at issue.
Moreover, LegalZoom's customers remain free to represent themselves in any
The Supreme Court has explained that a regulation imposed by the Ohio bar affecting speech involved "a subject only marginally affected with First Amendment concerns." Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 459, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978). There, the Supreme Court held that the bar could discipline a lawyer for soliciting clients under certain circumstances, even though it involved speech, noting that "the State does not lose its power to regulate commercial activity deemed harmful to the public whenever speech is a component of that activity." Id. at 456, 98 S.Ct. 1912. Elsewhere, the Supreme Court has "recognize[d] that the States have a compelling interest in the practice of professions within their boundaries," and that "[t]he interest of the States in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice, and have historically been `officers of the courts.'" Goldfarb, 421 U.S. at 792, 95 S.Ct. 2004 (citations omitted); see also Florida Bar v. Went For It, Inc., 515 U.S. 618, 625, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995) (upholding direct mail restriction on lawyers).
The caselaw on this subject has been well summarized by the Colorado Supreme Court:
People v. Shell, 148 P.3d 162, 173 (Colo. 2006).
Given the weight of these authorities indicating that states have a compelling interest in the regulation of professionals for the protection of the public, as well as the paucity of authority cited by Defendant, the Court declines to alter Missouri law based on inarticulate free speech principles.
LegalZoom also argues that applying Missouri's unauthorized practice of law statute to its conduct would violate due process. LegalZoom argues that the statute should be construed under the rule of lenity because—in addition to providing a private right of action—it states that any person engaging in the unauthorized practice of law "shall be guilty of a misdemeanor and upon conviction therefor shall be punished by a fine not exceeding one hundred dollars and costs of prosecution. . . ." Mo.Rev.Stat. § 484.020.2.
Even when a statute is entirely penal in nature, the Eighth Circuit has
It is often true that past cases have not applied a statute to the particular fact pattern before a court. Here, the statute clearly prohibits the unauthorized "assisting in the drawing for a valuable consideration of any paper, document or instrument affecting or relating to secular rights. . . ." Mo.Rev.Stat. § 484.010.2. As explained above, the application of the statute to LegalZoom's legal document preparation service does not conflict with the Missouri judiciary's regulation of the practice of law. See Eisel, 230 S.W.3d at 339. Additionally, cases such as Hulse, First Escrow, Mid-America, and Eisel put LegalZoom on notice that it could not charge a fee for the preparation of legal documents. Finally, the Missouri Supreme Court rejected a similar argument in Carpenter, 250 S.W.3d at 702 ("Countrywide has not established that sections 484.010 and 844.020 were vague and did not provide it fair notice of the prescribed acts or the penalty associated with those acts."). Here too, LegalZoom's due process argument fails.
LegalZoom's final constitutional argument is that with respect to patent and trademark applications, Plaintiffs' claims are preempted by federal law permitting non-lawyers to practice before the Patent and Trademark Office ("PTO"). LegalZoom cites Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379, 404, 83 S.Ct. 1322, 10 L.Ed.2d 428 (1963), where the Supreme Court held that Florida could not enjoin a non-lawyer registered to practice before the U.S. Patent Office from preparing and prosecuting patent applications in Florida, even though such activity constituted the practice of law. There, the Supreme Court reasoned that states could not review the "federal determination that a person or agency is qualified" or otherwise "impose upon the performance of activity sanctioned by federal license additional conditions not contemplated by Congress." Id. at 385, 83 S.Ct. 1322 (internal quotation omitted).
Congress has authorized the PTO to prescribe regulations "govern[ing] the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office." 35 U.S.C. § 2(b)(2)(D). With respect to patents, 37 C.F.R. § 1.31 states that an applicant may file and prosecute his own case or "may give a power of attorney so as to be represented by one or more patent practitioners or joint inventors." A "patent practitioner" is defined to include a registered patent agent. 37 C.F.R. §§ 1.32(a), 11.6(b). The regulations authorize the PTO to allow a non-registered non-lawyer to serve as a patent agent on designated applications. 37 C.F.R. § 11.9(a). With respect to non-patent
Plaintiffs cite Kroll v. Finnerty, 242 F.3d 1359 (Fed.Cir.2001), where a patent attorney brought suit seeking a declaratory judgment that the Grievance Committee of the Bar of the State of New York lacked subject-matter jurisdiction to bring disciplinary proceedings against him for his failure to keep his clients informed as to the progress or the status of their patent applications. The attorney argued that the state bar's authority was preempted by 35 U.S.C. § 2(b)(2)(D) and 35 U.S.C. § 32, which authorize the PTO to regulate the conduct of patent practitioners. Kroll, 242 F.3d at 1363. The Federal Circuit found that there was no express preemption because the statutory text "gives no indication that either of these statutes are intended to preempt the authority of states to punish attorneys who violate ethical duties under state law." Id. at 1364. Kroll determined that Congress had "not intended to preempt states' authority to discipline attorneys." Id. The Federal Circuit quoted the first paragraph of the PTO's regulations governing the conduct of patent practitioners:
Id. (quoting 37 C.F.R. § 10.1). Kroll continued:
Id. at 1364-65.
Four years later, the Federal Circuit, relying on Sperry, stated clearly that "state licensing requirements which purport to regulate private individuals who appear before a federal agency are invalid." Augustine v. Dep't of Veterans Affairs, 429 F.3d 1334, 1340 (Fed.Cir.2005) (also noting that "states cannot regulate practice before the PTO"). Whereas in Kroll the issue was the conduct of an attorney whose qualifications were not in dispute, in Augustine and Sperry the states' licensing requirements were at issue. Even under the limited field of preemption identified in Kroll, "the PTO has the exclusive authority to establish qualifications for admitting persons to practice before it," and states "may not impose additional licensing requirements beyond those required by federal law to permit a non-lawyer patent agent to practice before the PTO." Kroll, 242 F.3d at 1364.
Here, the issue is whether Missouri can prohibit non-lawyers from practicing law before the PTO. Under Sperry, Kroll, and Augustine, Missouri cannot do so. Even though there is no evidence that LegalZoom is licensed to practice before the PTO, that field of regulation is occupied by federal law. With respect to patent and
Plaintiffs' Motion for Partial Summary Judgment is limited to a single issue: whether the papers, documents, or instruments at issue here affect or relate to secular rights. As explained above, Missouri's unauthorized practice of law statute defines the "law business" as including "the drawing or the procuring of or assisting in the drawing for a valuable consideration of any paper, document or instrument affecting or relating to secular rights. . . ." Mo.Rev.Stat. § 484.010.2.
Defendant LegalZoom characterizes this motion as focused on "a single tangential and ultimately irrelevant issue." [Doc. #112 at 9.] Defendant points out that, as discussed above, the Missouri Supreme Court "requires that the statute's meaning must be informed by Missouri case law." Id. at 12. Indeed, in the above discussion, Missouri cases have informed the Court's reading of Missouri's unauthorized practice of law statute. As explained above, the application of the statute to LegalZoom's legal document preparation service is consistent with the Missouri judiciary's regulation of the practice of law. See Eisel, 230 S.W.3d at 339.
Black's Law Dictionary defines "secular" as "Not spiritual; not ecclesiastical; relating to affairs of the present (temporal) world." Black's Law Dictionary 1353 (6th ed.1990). Plaintiffs cite various cases in which courts from other jurisdictions have interpreted "secular" as meaning rights that are not religious in nature. See Books v. City of Elkhart, 235 F.3d 292, 302 (7th Cir.2000); Espinosa v. Rusk, 634 F.2d 477, 479 (10th Cir.1980); In re Westboro Baptist Church, 40 Kan.App.2d 27, 189 P.3d 535, 548-49 (2008).
Defendant LegalZoom does not maintain that the documents at issue here affect religious rights. However, LegalZoom does maintain that the documents "do not affect any rights at all before the customers themselves sign, execute, and (in some cases) file them." [Doc. # 112 at 11.]
Defendant's argument on this narrow point does not withstand scrutiny. The statute prohibits, inter alia, "assisting in the drawing for a valuable consideration of any paper, document or instrument affecting or relating to secular rights. . . ." Mo. Rev.Stat. § 484.010.2. In other words, there is no requirement that secular rights be affected the moment the document is produced. If that were the case, then the non-lawyers in Eisel, Carpenter, and Hulse could have simply left the room before the legal documents were signed to avoid Missouri's regulation of the practice of law. Moreover, the paper, document, or instrument can either affect or relate to secular rights.
Because Defendant fails to rebut Plaintiffs' claim that the papers, documents, or instruments at issue here "affect[ ] or relat[e] to secular rights," id.—which is quite clear, based on the undisputed facts—the Motion for Partial Summary Judgment is granted. Although Defendant objects that this motion is procedurally inappropriate, it has reduced the number of potential issues for trial.
Additionally, Plaintiffs' Motion to Strike LegalZoom's Summary Judgment Facts 45 through 79 [Doc. #114] and Motion to Exclude Expert Testimony [Doc. # 86] are denied as they relate to the Motion for Summary Judgment.
Accordingly, it is hereby ORDERED that Defendant LegalZoom's Motion for Summary Judgment [Doc. # 100] is
