Have You Seen An Elephant In a Mouse Hole?

Lawyers are not financial institutions and therefore are not required to send privacy disclosure notices to clients under the Gramm-Leach-Bliley Act, the D.C. Circuit affirmed.

The question of whether lawyers fall under the Act was raised by two bar associations after the Federal Trade Commission indicated that lawyers were not entitled to an exception under the Act. The trial court had found that the FTC’s attempt to regulate attorneys under the privacy provisions of GLBA was not only inconsistent with the statute but also arbitrary and capricious in violation of the federal Administrative Procedure Act.

The appellate court reviewed the language of GLBA and found no reference to regulating lawyers, noting that “Congress does not hide elephants in mouseholes.” “When we examine a scheme of the length, detail and intricacy of the one before us, we find it difficult to believe that Congress, by any remaining ambiguity, intended to undertake the regulation of the profession of law-a profession never before regulated by ‘federal functional regulators’-and never mentioned in the statute. To find this interpretation deference-worthy, we would have to conclude that Congress not only had hidden a rather large elephant in a rather obscure mousehole, but had buried the ambiguity in which the pachyderm lurks beneath an incredibly deep mound of specificity, none of which bears the footprints of the beast or any indication that Congress even suspected its presence,” the appellate court wrote.

American Bar Association v. Federal Trade Commission, No. 04-5257, D.C. Cir., December 6, 2005.