May 28, 2009 – Under SCR 40.03, a diploma from an ABA-accredited law school whose curriculum includes the specific study of Wisconsin law is sufficient evidence of competency to practice in Wisconsin without a bar examination.

Currently, only graduates of the law schools at Marquette and the University of Wisconsin are asserting the diploma privilege, although the rule is written to theoretically encompass others.

A challenge before the U.S. Seventh Circuit Court of Appeals disputes the premise of special instruction in Wisconsin law for this diploma privilege and charges SCR 40.03 impermissibly discriminates against out-of-state law school graduates. The suit, Wiesmueller v. Kosobucki, 08-2527, was certified as a class action on behalf of recent graduates from ABA-accredited schools outside Wisconsin who seek a law license in Wisconsin.

“Burdensome” bar exam? 

The plaintiffs argue the bar exam is a burden faced by graduates of out-of-state law schools. They note that the fees for admission by bar exam are roughly double the fees for admission by diploma privilege. The plaintiffs allege a disparity of preparation for admission, arguing that the bar examination requires study of all the subjects listed in SCR 40.03 because all are potentially tested, but a Wisconsin law student can graduate without taking classes in all of them. An out-of-state applicant is further hindered in a way the Wisconsin law school graduate is not by the delay created by an exam administered just twice a year, they added.

But the Wisconsin Attorney General, taking up the defense of the diploma privilege, disputes this onerous characterization of the bar exam, noting that 89 percent of the graduates of an ABA-accredited law school passed in 2007. The fees and the delay in admission are merely functions of the time-intensive grading of the exam, the attorney general commented.

Additionally, the defense remarked that the plaintiffs do not claim the bar exam puts them at a disadvantage in the legal market. Moreover, the attorney general said the Seventh Circuit has previously characterized the bar examination as a “small” burden.

Dormant commerce clause challenge 

The challengers’ central argument is that the diploma privilege violates the U.S. Constitution’s dormant commerce clause which prohibits a state from discriminating against similarly-situated articles of commerce simply because they come from outside the state.

Under this analysis, a court looks to see if a law or regulation is facially, effectually, or purposefully “discriminatory” against out-of-state interests to benefit in-state interests. If it is, the state’s enactment is presumed unconstitutional and can only survive a court’s strict scrutiny with a showing of no other nondiscriminatory means to serve a compelling state interest. If it is not, a reviewing court applies a balancing test weighing the law or regulation’s burden on interstate commerce versus the state's purported interest.

The plaintiffs are appealing the commerce clause analysis of US District Judge John Shabaz who found SCR 40 does not discriminate against interstate commerce because its impact is felt by both non-Wisconsin and Wisconsin residents who choose to go outside the state for law school. The plaintiffs argue that ruling misconstrued the focus of the inquiry. They contend that the test under the commerce clause properly considers the location of the school from which a graduate received a law degree. A graduate’s state citizenship is only at issue under a privileges and immunities challenge, they claim.

In rebuttal, the attorney general argues that the lower court correctly concluded that the diploma privilege is not discriminatory because of its availability to residents of any state who attend a school where Wisconsin law is taught.

If the rule has any effect on out-of-state graduates, the attorney general argued that the impact would be shared by in-state Wisconsin interests. “Wisconsin law firms and other employers of lawyers of course have an interest in attracting new members of the Wisconsin bar from as large a pool as possible,” the attorney general wrote in its brief to the Seventh Circuit.

Proceeding to the balancing test, the attorney general said that Wisconsin should prevail because its interest in competent lawyers is a legitimate interest outweighing any incidental burden on interstate commerce.

The attorney general added that Wisconsin’s bar admissions system includes a proof of practice option for out-of-state lawyers which demonstrates its overall openness. With the recent elimination of reciprocity requirements, any lawyer from an American jurisdiction can enter Wisconsin with three years of practice within the last five years prior to filing an application for admission.

Indiana’s admittance without a bar exam of out-of-state lawyers who engage in a predominantly Indiana practice withstood a commerce clause challenge in the Seventh Circuit when the court considered the fairness of Indiana’s admissions system as a whole, the attorney general remarked.

“Justices do not insist that the nondiscriminatory framework be accomplished within a single statute or section; a burden on interstate commerce imposed by one law may be offset by another, if the bottom line is substantially equal burdens,” the attorney general wrote, quoting Travis v. Reno, 163 F.3d 1000 (7th Cir. 1998).

Wisconsin-specific instruction? 

Given that other law schools do not teach Wisconsin law, the attorney general says that there is no discrimination within the meaning of the commerce clause because the educations in question are not similar.

But the plaintiffs charge there is no evidence that Wisconsin law is actually taught and required at Wisconsin law schools. Reading SCR 40.03, the plaintiffs note there is not a single course requirement that includes the word “Wisconsin” such as “Wisconsin Civil Procedure” or “Wisconsin Evidence.” Rather, the rule appears to require completion of general law courses for the diploma privilege. They observe that course credit from outside the state can be transferred to a Wisconsin law school to satisfy as many as 30 or 40 credits of the diploma privilege requirements.

But the attorney general responded that these criticisms “misconceive both the dormant commerce clause’s function and the court’s role in such a case.” “The dormant commerce clause is not a license for free-ranging judicial review of state legislative judgments, even if the federal court believes (and holds a trial to prove) that the state’s policies will be evaded or fail,” the attorney general stated. “Unless the statute is discriminatory, a court may not question the state law’s benefits and burdens.”

The plaintiffs charge that admission by proof of practice without a bar exam undercuts the assertion that the exam is necessary to demonstrate knowledge of Wisconsin law. The attorney general replied that this argument misleadingly equates practitioners whose years of experience demonstrates a competency to learn Wisconsin law with new graduates who can only make such a showing either through law school classes or the bar exam.

In their reply brief, the plaintiffs argue that graduation from any ABA-accredited law school should be sufficient to show a capacity to learn Wisconsin law, given the bar exam’s high passage rate.

Bar exam tests little Wisconsin law? 

Not only do Wisconsin schools teach little or no Wisconsin-specific law, the plaintiffs continue, but the bar exam does not test much Wisconsin law.

The bar exam occurs over two days, one day comprises essay questions that could test legal nuances particular to Wisconsin and the other day is administration of the Multistate Bar Exam (MBE).

Essay questions actually test very little specific Wisconsin law, the plaintiffs contend. They also argue there is no reason to impose the MBE on graduates of an out-of-state, ABA-approved law school. The MBE tests only general legal principles included in any ABA-accredited education that should be presumptively comparable to Marquette or U.W., they say.

But the curriculum of an out-of-state school is not as familiar to the Wisconsin Supreme Court, the attorney general argues. The supreme court “is entitled to take the view that, without requiring [out-of-state graduates] to pass the bar exam, it cannot be sure they know general legal principles or Wisconsin law well enough to represent clients in Wisconsin competently,” the attorney general wrote.

In their reply brief, the plaintiffs reject this argument as “homogeneous intrastate cronyism:”

“[L]aw school familiarity does not justify why the person finishing last in his or her graduating class at Marquette is admitted in Wisconsin without a bar exam, while the valedictorian of the Harvard Law School graduating class (or valedictorian of the other 98 schools ranked the same or higher than Marquette by U.S. News and World Reports) would be forced to take the Wisconsin bar exam,” the plaintiffs charge.

Outside of the commerce clause? 

In the alternative to its commerce clause analysis, the attorney general asserts that bar admissions is a “government function” outside the scope of that clause as discussed in Department of Revenue of Kentucky v. Davis, 128 S. Ct. 1801 (2008), and United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste Management Authority, 127 S. Ct. 1786 (2007).

Specifically, the attorney general argues that the bar admissions system fulfills the longstanding government role of determining who may be an “officer of the court” and does so without imposing any competitive disadvantage on those who enter Wisconsin’s legal marketplace by way of the bar exam. Accordingly, the bar exam is not the “economic protectionism” that offends the commerce clause.

In their reply brief, the plaintiffs assert only when the state is acting as a “market participant” can it be allowed to discriminate under the dormant commerce clause. Wisconsin is acting as a “market regulator” through its admissions system and that role is circumscribed by the commerce clause, they argue.

The plaintiffs add that the “officer of the court” argument has already been rejected in Supreme Court of New Hampshire v. Piper, 470 U.S. 274 (1985), because the practice of law does not involve an agent’s exercise of actual state power.

A three-judge panel of the Seventh Circuit heard arguments in this case in April.