SAN FRANCISCO — The state Supreme Court Thursday took a step toward allowing lawyers to solicit business by direct mail, but upheld the California State Bar's right to oversee such mailings.
The court said the Bar's regulations are constitutional and akin to consumer protection laws aimed at prohibiting false advertising. The case stemmed from the Bar's effort to discipline a Los Angeles firm that sent out 250,000 letters during a 1 1/2-year period ending in 1980 to people who had been sued in Small Claims and Superior courts.
By a 4-3 vote, the court reprimanded Slate & Leoni, a firm specializing in bankruptcy, saying that the court "strongly disapproved" of the firm's ad campaign. The mailings misled some people and failed to note that they were pitches for business, the majority said in an unsigned opinion.
The case tested a 1977 U.S. Supreme Court decision striking down flat prohibitions against advertising by lawyers. Unlike some past cases where lawyers advertised their services and fees in general terms, Slate & Leoni took its ad campaign a step further by specifically targeting people who had been sued.
The majority rejected a claim by the American Civil Liberties Union that the State Bar rule prohibiting misleading advertising infringes on lawyers' rights to free speech.
"We note, however, that the rule cannot constitutionally be invoked to totally prohibit all future mass advertising which, due to disclaimers or clarifying language, is not false or misleading," the court said.
While it criticized the law firm, the court also chastised the Bar for failing to warn the lawyers that their mailings violated Bar rules.
Not only did the Bar fail to warn the firm, but in 1979, then-Bar President David Levy thanked the lawyers for their "good intentions."
Two years later, however, after receiving seven complaints, the Bar began investigating the firm. That led to a recommendation to the court that lawyers Andrew Leoni and Houston Slate be suspended for a month. The court ruled that only a reprimand was warranted.
The letters explained legal alternatives for small business owners and others who had debts, were being sued for personal injury or other money damages, or had lost a lawsuit.
The firm found the names by combing records in Small Claims and Superior courts and legal notices in newspapers. The letters did not specifically say that the firm was seeking clients but did invite recipients to call the firm for advice.
"This massive advertising campaign, which seemed to personalize letters to individuals named as defendants in pending lawsuits, was almost certain to cause panic and to mislead the recipients," the court said.
One complaint was by a recipient of a letter implying that he would be charged $60 for protection against debts. The letter failed to note that Slate & Leoni would charge 10 times that amount for their service.
Justices Joseph Grodin and Otto Kaus disagreed that Slate & Leoni should be disciplined. Chief Justice Rose Elizabeth Bird also questioned the discipline and suggested that such mailings should be given broader protection under the First Amendment.
Lawyers involved said that although the court ruled that the Bar cannot preclude firms from using direct mail, the ruling may have a chilling effect on such ad campaigns.
"It would take a bolder soul than me to send out mailings if afterward the State Bar would come back and impose discipline," said Ellis Horvitz, an Encino lawyer who represented Slate & Leoni. (Slate & Leoni vs. State Bar, L.A. 31851)
In other actions Thursday, the court:
- Narrowed a provision of the 1982 Victims' Bill of Rights initiative, saying that ex-convicts may testify at their probation revocation hearings without fear that their statements will be used against them in later criminal prosecutions. Justice Malcolm M. Lucas wrote for the majority in the 4-3 opinion. (People vs. Richard N. Weaver, crim. 23932)
- Unanimously concluded that reports by county mental health investigators cannot be introduced as evidence before juries in cases in which people contest that they are in need of conservators. Lucas wrote the opinion. (Conservatorship of Manton, L.A. 31965)