AMERICAN TRIAL LAWYERS ASSN., NEW JERSEY BRANCH, et al. v. NEW JERSEY SUPREME COURT
No. 72-691.
Decided January 15, 1973
Per Curiam.
On December 21, 1971, the Supreme Court of New Jersey announced the adoption of Rule 1:21-7, effective January 31, 1972, establishing a graduated schedule of maximum contingent fees applicable to tort litigation conducted by New Jersey attorneys. Appellants, representing members of the New Jersey bar, brought this action to enjoin the enforcement of the rules on the grounds that they violate several provisions of the Constitution, including the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The trial judge convened a three-judge court. 28 U. S. C. § 2281.
After hearing argument on the merits, the District Court pointed out that:
“ [Essentially the case poses a dispute between a state’s highest court and those persons authorized by that court to practice law in the state. The relationship between the parties thus is an extremely delicate one. Under such circumstances federal courts generally have considered it appropriate, before attempting any direct federal intervention at the outset, first to permit the state courts to process the dispute. Cf. Reetz v. Bozanich, 397 U. S. 82, 85-87 (1970).”
The court added that “[a]s was true in Reetz the initial issue is whether the state constitution authorized the enactment challenged.” The court therefore granted defendant-appellee’s motion to dismiss.
By timely motion under Fed. Rule Civ. Proc. 59 (e), appellants sought an order amending the judgment by either
“(A) Retaining jurisdiction, but staying proceedings in this Court pending determination of the issues of state law in the courts of New Jersey, or until efforts to obtain such a determination have been exhausted; or
“(B) Ordering that the dismissal be without prejudice, so that the suits for determination of the federal constitutional issues may be reinstituted after exhausting state recourse with respect to state law issues.” Jurisdictional Statement 10.
The motion was denied and appellants brought this appeal.
“[AJbstention 'does not, of course, involve the abdication of federal jurisdiction, but only the postponement of its exercise.’ ” England v. Louisiana State Board of Medical Examiners, 375 U. S. 411, 416 (1964), quoting from Harrison v. NAACP, 360 U. S. 167, 177 (1959). For that reason, we have held that a dismissal on grounds of abstention so as to permit a state court to pass on an issue of state law must not be with prejudice. Doud v. Hodge, 350 U. S. 485 (1956); Lake Carriers’ Assn. v. MacMullan, 406 U. S. 498 (1972). The proper course is for the District Court to retain jurisdiction pending the proceedings in the state courts. Lake Carriers’ Assn. v. MacMullan, supra, at 512-513; Zwickler v. Koota, 389 U. S. 241, 244-245, n. 4 (1967). Although the District Court may have intended its judgment of dismissal to be without prejudice to the right of appellants to litigate their federal claims in federal court at the conclusion of the state proceeding, the court did deny appellants’ motion for an amendment to the judgment making clear that no prejudice would attach. The motion should have been granted. Accordingly, we vacate the judgment of the District Court and remand the case for proceedings consistent with this opinion.
So ordered.
Rule 1:21-7 provides in part:
“(c) In any matter where, a client’s claim for damages is based upon the alleged tortious conduct of another, including products liability claims, and the client is not a subrogee, an attorney shall not contract for, charge, or collect a contingent fee in excess of the following limits:
“(1) 50% on the first $1000 recovered;
“(2) 40% on the next $2000 recovered;
“(3) 33%% on the next $47,000 recovered;
“(4) 20% on the next $50,000 recovered;
“(5) 10% on any amount recovered over $100,000 . . . .”
Appellee maintained below, as it maintains before this Court, that a three-judge court need not have been convened because the constitutional question presented is insubstantial. Bailey v. Patterson, 369 U. S. 31 (1962). It insists, however, that if the claim is substantial then it must be heard by a court of three judges, 28 U. S. C. § 2281. In view of the posture of the case on this appeal, we do not, of course, express any view on the merits of the question presented.
The validity of the District Court’s decision to abstain is not at issue on this appeal.
“It is better practice, in a case raising a federal constitutional or statutory claim [where the doctrine of abstention is applied], to retain jurisdiction, rather than to dismiss . . . .” Zwickler, supra, at 244 n. 4.
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the bases on which the Supreme Court rested its decision with regard to the legal provision that the Court considered in the case. Consider "judicial review (national level)" if the majority determined the constitutionality of some action taken by some unit or official of the federal government, including an interstate compact. Consider "judicial review (state level)" if the majority determined the constitutionality of some action taken by some unit or official of a state or local government. Consider "statutory construction" for cases where the majority interpret a federal statute, treaty, or court rule; if the Court interprets a federal statute governing the powers or jurisdiction of a federal court; if the Court construes a state law as incompatible with a federal law; or if an administrative official interprets a federal statute. Do not consider "statutory construction" where an administrative agency or official acts "pursuant to" a statute, unless the Court interprets the statute to determine if administrative action is proper. Consider "interpretation of administrative regulation or rule, or executive order" if the majority treats federal administrative action in arriving at its decision.Consider "diversity jurisdiction" if the majority said in approximately so many words that under its diversity jurisdiction it is interpreting state law. Consider "federal common law" if the majority indicate that it used a judge-made "doctrine" or "rule; if the Court without more merely specifies the disposition the Court has made of the case and cites one or more of its own previously decided cases unless the citation is qualified by the word "see."; if the case concerns admiralty or maritime law, or some other aspect of the law of nations other than a treaty; if the case concerns the retroactive application of a constitutional provision or a previous decision of the Court; if the case concerns an exclusionary rule, the harmless error rule (though not the statute), the abstention doctrine, comity, res judicata, or collateral estoppel; or if the case concerns a "rule" or "doctrine" that is not specified as related to or connected with a constitutional or statutory provision. Consider "Supreme Court supervision of lower federal or state courts or original jurisdiction" otherwise (i.e., the residual code); for issues pertaining to non-statutorily based Judicial Power topics; for cases arising under the Court's original jurisdiction; in cases in which the Court denied or dismissed the petition for review or where the decision of a lower court is affirmed by a tie vote; or in workers' compensation litigation involving statutory interpretation and, in addition, a discussion of jury determination and/or the sufficiency of the evidence.