Legal Non-Profits Win Major Victory At Supreme Court

The California Supreme Court ruled unanimously yesterday to uphold the right of non-profit advocacy groups to practice law, handing a major victory to these non-profits and the people they represent. The case, Frye vs. Tenderloin Housing Clinic, began as an attempt by landlord attorney Andrew Zacks to stop the Clinic from representing low-income tenants. The attempt backfired, however, when more than 70 other non-profit corporations from across the state, ranging from the far-right Pacific Legal Foundation to the American Civil Liberties Union, came out in support of the Clinic’s and non-profits’ right to practice law. The Court took notice, stating in their decision that ruling against the Clinic would defeat “the First Amendment principle that groups can unite to assert their legal rights.”

The Frye decision, the culmination of over eight years of legal battles, turns back a recent Court of Appeals decision that could have put hundreds of non-profit groups across the state out of business.

Frye began in 1993, when Tenderloin Housing Clinic (THC) attorney Steve Collier sued Skyline Realty on behalf of fifteen tenants at the President Hotel and won. When the court awarded THC attorneys fees for the case, prominent Ellis Act eviction attorney Zacks cried foul. Zacks filed suit against THC, claiming that because THC hadn’t registered with the State Bar of California, they broke the law by defending the tenants and accepting legal fees.

The Superior Court shot the suit down, but the plantiffs perservered, and the case moved to the Court of Appeals. When the Court of Appeals sided with Zacks and against THC, it set off a firestorm amongst the non-profit legal community.

The Court of Appeals ruling meant that all non-profit legal firms would have to register with the State Bar. However, only five non-profits had registered with the Bar at that point, and for good reason – to register, all members of the organization’s Board of Directors had to be lawyers, and at least 70 percent of the people served had to be indiginent.

This meant hundreds of organizations that provided vital legal services would have been put out of business. Many legal non-profits, including THC, have community members on their Board of Directors in order to provide perspectives from the population being served. The ruling eliminated that possibility. In addition, while THC serves at least 70 percent indiginent people, organizations like the ACLU and Equal Rights Advocates do not, and requiring them to do so would have shut them down.

The dramatic effect the ruling would have had on so many organizations caused a rash of amicus curaie briefs (opinions offered to the court from parties not directly involved in the case) to the Supreme Court in support of THC’s position. The high number of briefs from such a wide range of the political spectrum obviously had a strong affect on the Supreme Court, as in their decision is mentioned early and often.

In overturning the Court of Appeals decision, the Supreme Court’s ruling will finally halt any requirement that non-profit legal groups registering with the State Bar have all-lawyer Board of Directors and only serve the indigent, which will keep these non-profits open for business for some time to come. THC Executive Director and Beyond Chron publisher Randy Shaw said he felt relief after such a long battle.

“We feel the court has vindicated our position that we’ve held for over eight years,” said Shaw. “We really appreciate all the legal service groups that stood by us in this victory.”

The Supreme Court found that the laws requiring non-profits to register with the State Bar represented a supplement to the general field of non-profit law, created as a way for for-profit organizations serving the working poor to incorporate as a non-profit rather that a statue governing all non-profits. In addition, the Supreme Court disagreed strongly with the Court of Appeals’ claim that THC was not an advocacy group, and thus not covered by the First Amendment.

Sadly, it appears the years of legal battles over Frye ultimately represented little more than a quest for revenge from an attorney who consistently represents landlords sued by tenants represented by THC.

“Roy Frye was represented by landlord attorney Andrew Zacks, who sought to use this litigation to put THC out of business,” said Collier. “Even after Frye died, Zacks continued to pursue the case. The decision is a final repudiation of Zacks’ campaign against THC and San Francisco tenants.”