STEVEN FRYE v. TENDERLOIN HOUSING CLINIC, INC
Filed 3/9/06
IN THE SUPREME COURT OF CALIFORNIA
)
v. )
) Ct. App. 1 No. A104078
TENDERLOIN HOUSING CLINIC, INC. )
Defendant and Respondent. ) Super. Ct. No. 989-112
__________________________________ )
The present case concerns the authority of nonprofit corporations to practice law. The Court of Appeal held that Corporations Code section 13406, subdivision (b) (section 13406(b)) provides the sole authority under which a nonprofit public benefit corporation is authorized to practice and that, in failing to comply with section 13406(b), defendant Tenderloin Housing Clinic, Inc. (THC), engaged in the unauthorized practice of law.[1] In a significant and unusual instance of unanimity across the political spectrum, THC, joined by organizations as diverse as the Pacific Legal Foundation and the American Civil Liberties Union as amici curiae, urges that we reverse the judgment of the Court of Appeal.
Reviewing the background of the doctrine prohibiting the corporate practice of law, the exceptions to this doctrine that developed prior to the enactment of section 13406(b), the constitutional problems that would be created by the Court of Appeal's interpretation of the statute, and the text and legislative history of the measure, we conclude that section 13406(b) does not occupy the entire field of law governing the corporate practice of law by nonprofit corporations.
The question remains under what authority THC practiced law. THC claims it is authorized to practice law pursuant to an exception to the common law rule against corporate practice of law. THC relies upon United States Supreme Court authority recognizing that First Amendment principles restrict the ability of the state to limit the associative and expressive rights of advocacy groups to employ litigation to further their goals. The Court of Appeal, reaching the issue in the context of THC's claim that section 13406(b) could not be applied retroactively, disagreed with THC's claim that it was authorized to practice law pursuant to this exception, holding that THC failed to establish that its activities warranted protection under the First Amendment of the United States Constitution.
Although the Court of Appeal viewed the applicable constitutional doctrine too narrowly, because of the procedural posture of the case we do not reach a final conclusion respecting the nature of THC's activities or its claim that it enjoyed a right to practice law that is protected by the Constitution. Although we could order a remand for further proceedings in this litigation, which already has consumed many years, we decline to do so, because we agree with the trial court that plaintiff, Roy M. Frye, was not entitled to the remedy he sought.
I
THC was incorporated in 1980 pursuant to the Nonprofit Public Benefit Corporations Law. (§ 5110 et seq.) According to its articles of incorporation, it was incorporated for â€
