Unauthorized Practice of Law (UPL) New Jersey

On January 12, 2010, New Jersey Senator, Nicholas Scutari, introduced a bill in Senate Judiciary Committee (Senate, No.: 184) which upgrades the offense for the unauthorized practice of law or UPL from a disorderly persons offense and a fourth and third degree crime.

If passed, the bill, will make the unauthorized practice of law a crime of the fourth degree or a crime of the third degree if certain other circumstances are present, such as: (1) the creation and/or reinforcement of the impression that the person is licensed to practice law; (2) if the person derives any benefit from the UPL; or (3) causes injury to another person.

A crime of a fourth degree is punishable by a term of imprisonment not to exceed 18 months or a fine of $10,000 or both.  A crime of the third degree is punishable by a term of imprisonment between three to five years or a fine not to exceed $15,000 or both.

Does Sen. Dodd’s Bill seek to overturn Stoneridge v. Scientific Atlanta?

On page 795 of the 1,136 page Bill, Senator Dodd seems to be looking to overturn two important decision.  The Stoneridge and Central Bank cases. In his bill Senator Dodd seems to want to assess liability to third parties who enter into a business transaction with a party who is not acting legally even if the third-party does not take part in the illegal activity.   As reported in the Wall Street Journal on November 13, 2009.

This could present a problem for a clearing firm who is normally the party in a transaction with the most money.  Hmmmm ……