California Superior Court Sustains State Bar’s Demurrer to LegalMatch’s Constitutional Challenge to Business and Professions Code § 6155; Second Amended Cross Complaint Pending

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By Kirstin Jensvold-Rumage

On February 3, 2021, San Francisco Superior Court Judge Ethan Schulman sustained the State Bar of California’s demurrer to LegalMatch’s First Amended Cross Complaint (FACC) for Declaratory Relief, with leave to amend, in State Bar of California v. LegalMatch.com, Case No. CGC-20-584278. LegalMatch’s FACC alleged that Business and Professions Code section 6155, which requires that lawyer referral services (LRS) register with the State Bar of California and that such services operate in conformity with certain standards prescribed by the State Bar, is void as unconstitutional because it impermissibly infringes LegalMatch’s right to freedom of speech as guaranteed by the First Amendment to the United States Constitution and by the California Constitution.

This is the latest order in the ongoing legal battle between the State Bar and LegalMatch after the First District Court of Appeal’s December 2019 decision in Jackson v. LegalMatch.com, ruling that LegalMatch operates with the “direct or indirect purpose, in whole or in part, of referring potential clients to attorneys,” and therefore must comply with the LRS requirements as outlined in section 6155. See 42 Cal. App. 5th 760, 778 (2019), as modified on denial of reh’g (Dec. 17, 2019).  Following the Supreme Court’s denial of review, the State Bar filed this action in San Francisco Superior Court seeking an order enjoining LegalMatch.com from operating until it is certified by the Bar as a LRS and meets the necessary requirements. LegalMatch filed a counterclaim in August 2020 and the FACC on November 2, 2020, challenging the constitutionality of section 6155. [26:1 CRLR 117–118]

In its February 3 ruling, the court found that, as alleged, LegalMatch was raising a facial constitutional challenge to section 6155 and applied an intermediate scrutiny test to ascertain whether LegalMatch had sufficiently pled a constitutional violation as a matter of law. Citing Jackson, the court found that “there is plainly a substantial government interest in regulating lawyer referral services,” as section 6155 was enacted to protect consumers and maintain attorney professionalism within a broader framework of regulating unlawful solicitation. Order at p. 3–4 (citing Jackson, 42 Cal. App. 5th at 772–73). The court also cited Jackson in finding that section 6155 directly advances the governmental interests at issue and found that a contrary finding would impermissibly contradict the appellate court’s precedent.  Id.  Even if the Jackson court had not ruled on this issue, however, the court still found that LegalMatch failed to sufficiently allege that its “speech is burdened in an unreasonable manner or that there is not a reasonable fit between the statutory registration requirement and the Legislature’s objectives.” Order at p. 5.

Notably, as this litigation has been proceeding, LegalMatch formed a subsidiary, LegalMatch California, which the State Bar approved as a certified LRS effective September 11, 2020. In a press release announcing the certification, LegalMatch COO, Anna Ostrovsky, expressed that with LegalMatch California, the company “hope[s] to shake up the California legal industry and give consumers better legal choices.”

LegalMatch filed its Second Amended Cross-Complaint asserting four separate causes of action as to the constitutional challenge of section 6155 and adding a claim that the statute is inconsistent with the Federal Communications Act of 1934, 47 USC § 230 on February 23, 2022.  At this writing, the Bar has not filed a responsive pleading. A case management conference is set for May 19, 2021.

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