Mandatory pro hac vice requirement in Michigan arbitration proceedings

By Gene J. Esshaki

Historically, arbitration has not been considered “the practice of law.”  This is best evidenced by the fact that some of the most well recognized arbitrators in the fields of construction, securities and technology, do not hold law degrees.  Their services are valuable, however, because of the expertise in their respective fields.  There is not requirement that an arbitrator must hold a law degree in order to conduct arbitration proceedings.  Additionally, corporations have often participated in arbitration proceedings through corporate representatives that do not hold law degrees.

A recent amendment to Michigan Court Rules now makes it clear that out-of-state attorneys desiring to participate in a Michigan arbitration proceeding must comply with the Temporary Admission Requirements set forth in MCR 8.126.  Michigan Court Rule 8.126 was adopted on June 27, 2008, effective September 1, 2008, and sets forth the procedures by which an attorney licensed in another jurisdiction could obtain temporary admission in a specific case in a court, or before an administrative tribunal or agency, in the State of Michigan.  The rule sets forth very specific requirements for the temporary admission of an out-of-state attorney.  Those requirements included the filing of a temporary admission  motion by a member of the State Bar of Michigan who appears of record in the case.  Further, the out-of-state attorney had to establish he was licensed and in good standing to practice law in another s tate, territory, the District of Columbia, the United States of America, or in any foreign country.  Finally, in order to be entitled to temporary admission in a proceeding in Michigan, the out-of-state attorney was required to pay a fee to the State Bar of Michigan equivalent to the attorney discipline portion of a State Bar member’s annual dues.  MCR 8.216, as originally adopted, set forth specific procedures for obtaining pre-clearance from the State Bar of Michigan Attorney Grievance Commission for Temporary Admission and included filing of a Certificate of Good Standing from the State Bar of the attorney’s home state, as well as a supporting affidavit attesting that the attorney was licensed, had not been disbarred or suspended, and was not subject to any pending disciplinary actions.  The affidavit had to also attest that the attorney was familiar with the Michigan Rules of Professional Conduct, Michigan Court Rules and the Michigan Rules of Evidence.  On ce the affidavit was filed and approved by the Grievance Commission, a letter of approval was issued to the out-of-state attorney.  The approval letter was then attached to the Motion for Temporary Admission filed by the Michigan attorney active in the case and, if granted, the court or administrative agency was required to advise the Grievance Commission that temporary admission had been granted.  An out-of-state attorney was prohibited from participating in more than five (5) active cases in any fiscal year of the Grievance Commission, running from October 1 through September 30.

MCR8.126 was amended on April 5, 2011, effective September 1, 2011, to specifically include arbitration within the definition of proceedings that require an out-of-state attorney to seek temporary admission under the Rule.  As specifically applied to arbitrations, MCR 8.126, as amended, requires each of the following:

• The out-of-state attorney must be associated with a Michigan attorney in good standing in this state.

• The Michigan attorney must appear of record in the arbitration.

• A Motion for Temporary Admission must be filed by the Michigan attorney to which a current Certificate of Good Standing issued by the out-of-state attorney’s licensing jurisdiction is attached attesting the attorney is in good standing and eligible to practice law in that jurisdiction.  The motion must also contain an affidavit of the out-of-state attorney seeking temporary admission attesting that the out-of-state attorney is licensed, or has sought licensure in another jurisdiction; is presently eligible to practice law in that jurisdiction; is not disbarred or suspended in any jurisdiction; is not subject to any pending disciplinary actions; is licensed and is in good standing in all jurisdictions where licensed; and finally, is familiar with the Michigan Rules of Professional Conduct, Michigan Court Rules, and the Michigan Rules of Evidence.

• The out-of-state attorney must also attach to the affidavit copies of any disciplinary dispositions previously issued and a copy of the Acknowledgment Letter supplied by the State Bar of Michigan Attorney Grievance Commission confirming that admission has been approved and the required fee paid.

• In addition, the Michigan attorney must attest in the motion that he as read the out-of-state attorney’s affidavit, made reasonable inquiry concerning the averments contained therein and believes the representations are true and finally, agrees to insure the procedures are followed.  The motion must include the addresses of both attorneys.

• The Michigan attorney is required to send a copy of the motion and supporting Affidavit to the Michigan Attorney Grievance Commission.  Within seven (7) days, the Attorney Grievance Commission must notify the arbitrator and both attorneys when the out-of-state attorney has been granted permission to appear temporarily in the Michigan arbitration.

• If the Motion for Temporary Admission is thereafter granted, the arbitrator is required to send a copy of the order or writing approving the temporary admission to the Michigan attorney, the out-of-state attorney and the Attorney Grievance Commission.  This requirement only arises if an order or other writing granting permission is in fact entered.

• Finally, the out-of-state attorney cannot appear in more than five (5) proceedings in any 365 day period.

In the 2011 Amendment to MCR 8126, the Supreme Court extended the requirements of temporary admissions to out-of-state attorneys participating in arbitration proceedings in this State.  The Rule places a duty upon an arbitrator to inquire into the temporary admission status of an out-of-state attorney, to rule upon a Motion for Admission of such attorney in compliance with the specific terms of the rule and to notify the Attorney Grievance Commission when an Order of Temporary Admission has been granted.

MCR 8.126 does not shed any light upon whether participating in arbitration proceedings on behalf of a client is in fact the practice of law requiring the representative to be licensed to practice law in some jurisdiction.  The rule provides, however, that if an out-of-state attorney desires to participate in a Michigan arbitration, that attorney must comply with the provisions of MCR 8.126 on temporary admissions.  Further, the attorney is prohibited from participating in more than five (5) proceedings, (active cases, administrative or agency proceedings and arbitrations) in any 365 day period.

MCR 8.126 makes arbitrators watchdogs over out-of-state attorneys desiring to practice in Michigan arbitrations.  While there is no penalty on the arbitrator for failing to comply with MCR 8.126, the arbitrator obviously has a duty to the State Bar to insure compliance is achieved.

It is important to note the obligation to insure compliance under MCR 8.126 is placed directly upon the arbitrator and not the Arbitration Association that my be administering the case.  The change in MCR 8.126 extending its coverage to arbitrations has not been widely publicized in the arbitration community in Michigan and arbitrators either are unaware of or not enforcing the requirements of the Rule.  This practice must change.  Arbitrators now have a duty to insure all out-of-state attorneys comply with the requirements of MCR 8.126 and must notify the State Bar of Michigan Attorney Grievance Commission whenever and out-of-state attorney ids granted temporary permission to participate in an arbitration they conduct in this State.
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Gene J. Esshaki is a Graduate of Wayne State University Law School.  Since graduation, he has continuously practiced law in the Detroit metropolitan area, specializing in complex commercial litigation and alternative dispute resolution.  He is a neutral arbitrator on the complex case panels of the American Arbitration Association and the International Center for Dispute Resolution.  He has an active practice in mediation and is appointed frequently by state and federal judges to mediate some of their most complex commercial cases.  Esshaki is a member of the American Board of Trial Advocates and a frequent Lecturer for ICLE on ADR topics.  He is a founding shareholder in Abbott, Nicholson, Quilter, Esshaki, & Youngblood PC located in Detroit.