In a recent decision, a New Jersey court reaffirmed the Judiciary Branch’s exclusive constitutional authority to regulate the practice of law within the state. The case involved a challenge to the “limited attorney exemption” under the Debt Adjustment and Credit Counseling Act (DACCA), which the plaintiffs argued improperly encroached on judicial oversight of attorneys and was impermissibly broad and vague. The ruling underscores the importance of clear boundaries between legislative enactments and judicial authority, offering significant commentary on regulatory overreach and the separation of powers in New Jersey’s constitutional framework.
Originally enacted to protect consumers from predatory practices in the debt adjustment and credit counseling industries, the New Jersey Debt Adjustment and Credit Counseling Act (DACCA) included a broad exemption for “any attorney-at-law of [New Jersey].” In 1986, however, the Legislature narrowed this exemption to apply only to attorneys not “principally engaged” as debt adjusters.
Plaintiffs, a law firm and one of its New Jersey based partners, challenged the revised exemption, arguing it was unconstitutionally vague and overbroad. They contended that the phrase “principally engaged” lacked a clear definition, leaving attorneys without adequate notice of what conduct falls within the statute’s scope. Moreover, they asserted that the exemption unlawfully intruded on the Judiciary’s exclusive authority to regulate the practice of law, violating the separation of powers under the New Jersey Constitution. The New Jersey State Bar Association filed an amicus curiae brief in support of the plaintiffs’ position.
The New Jersey Superior Court sided with the plaintiffs, holding that the narrowed DACCA attorney exemption was unconstitutionally vague and infringed upon the Judiciary’s exclusive authority to regulate the practice of law. The court found that the statute improperly sought to control the scope of legal services attorneys may perform—a function that prior New Jersey Supreme Court decisions have firmly established as solely within the Judiciary's domain.
While the Legislature has broad authority to enact laws in the public interest, including consumer protection statutes like DACCA, the court reiterated that it may not intrude into areas constitutionally reserved for the judicial branch. The exemption’s use of the term “principally engaged,” without further definition, created ambiguity around what conduct was permitted, inviting inconsistent enforcement and legal uncertainty. The ruling thus reinforces both the principle of separation of powers and the constitutional requirement that laws provide clear standards, particularly when regulating professional conduct.
This decision reaffirms the Judiciary’s exclusive responsibility over the legal profession and the practice of law in New Jersey, underscoring the importance of the separation of powers and creating clear regulatory frameworks.
