VIRGINIA UPL OPINION 58
Agent of Corporate Debtor Preparing Proposed Orders in Bankruptcy Proceeding.
Subject: Agent of corporate debtor preparing proposed orders in bankruptcy proceeding.
Inquiry: In proceedings in the United States Bankruptcy Courts in Virginia, may an employee of a corporate debtor who is not an attorney prepare on behalf of the corporate debtor a proposed order to be entered in the bankruptcy proceeding?
Opinion: Preemption. By virtue of the supremacy clause of the United States Constitution, a state may not regulate the practice of law before a federal tribunal if federal law prescribes the qualifications for practicing before the tribunal. Sperry v. Florida, 373 U.S. 379 (1963). Therefore the Unauthorized Practice of Law Rules do not apply to practice before a tribunal “to the extent that the regulation of practice before such tribunal has been preempted by federal law.??? Rules for Integration of Virginia State Bar, Part Six, Section IV, Paragraph 10, Rule 6.1-1, following UPC 1-1, as amended September 9, 1983, 225 Va.‚ (1983). It is therefore necessary first to determine whether federal law determines the extent to which nonlawyers may practice before the bankruptcy courts.
No provision of the Bankruptcy Code (11 U.S.C.) itself addresses the question of qualification to practice before the Bankruptcy Courts. However, by Title 28, § 2075 of the United States Code, Congress delegated to the Supreme Court “the power to prescribe by general rules, the forms of process, writs, pleadings and motions, and the practice and procedure under title 11.??? Pursuant to this delegation of authority the Court promulgated the Rules of Practice and Procedure in Bankruptcy, which became effective August 1, 1983. Rule 9010 of the Bankruptcy Rules provides in pertinent part as follows:
Rule 9010. Representation and Appearances; Powers of Attorney
(a) AUTHORITY TO ACT PERSONALLY OR BY ATTORNEY. A debtor, creditor, equity security holder, indenture trustee, committee or other party may (1) appear in a case under the Code and act either in his or its own behalf or by an attorney authorized to practice in the court, and (2) perform any act not constituting the practice of law, by an authorized agent, attorney in fact, or proxy.
Rule 9010, by providing that parties to a bankruptcy proceeding may “perform any act not constituting the practice of law??? by agents, attorneys in fact, or proxies, itself recognizes that certain acts and functions constitute the practice of law and may not be performed by nonlawyers. This reading is supported by the Advisory Committee Note to Rule 9010, which states that the rule “is substantially the same as former Bankruptcy Rule 910 and does not purport to change prior holdings prohibiting a corporation from appearing pro se. See In Re Colinas Development Corp., 585 F.2d 7 (1st Cir. 1978).???
Finally, the committee has examined the local rules of the Bankruptcy Courts for the Eastern District and the Western District of Virginia and finds that the local rules prescribe qualifications for attorneys who practice before the court, but do not address the question of the extent, if any, to which nonlawyers may practice before the court. Since neither Congress by statute nor the bankruptcy courts by rules have attempted to regulate the activities of nonlawyers in bankruptcy courts, state law is not preempted in this area.
Virginia Law. UPC 103, 221 Va. 381 (1980) provides as follows:
A corporation (other than a duly registered law corporation) does not have the same right of appearance before a tribunal as an individual and may not be represented before a tribunal by its officers, employees or agents who are not duly authorized or licensed to practice law in Virginia. A corporation can be represented only by a lawyer before a tribunal with respect to matters involving legal conclusions, examination of witnesses or preparation of briefs or pleadings.
A nonlawyer employee of a corporation may represent his employer before a tribunal, including bankruptcy court, so long as his activities before the tribunal are limited to the presentation of facts, figures or factual conclusions, as distinguished from legal conclusions. He may not engage in activities involving the examination of witnesses, the preparation and filing of briefs or pleadings, or the presenting of legal conclusions.
In the opinion of the committee the preparing of proposed orders, like the preparation of pleadings, requires the exercise of legal skill and judgment. The committee is therefore of the opinion that it would constitute the unauthorized practice of law for a nonlawyer employee of a corporation to prepare on behalf of the corporation proposed orders to be entered in proceedings in the bankruptcy courts in Virginia.
Approved by the Supreme Court
Of Virginia, May 1, 1984
Effective July 1, 1984.