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January 2015 Legislative Report

The Pennsylvania Supreme Court adopted the Rules of Professional Conduct (the “Rules”) in 1988, setting minimum ethical standards for attorneys admitted to practice in Pennsylvania. By Order dated December 30, 2014, the Supreme Court amended the Rules (“Amendment”) to create financial guidelines including Rule 5.8(a) which states, “A lawyer shall not broker, offer to sell, sell, or place any investment product unless separately licensed to do so.” In most states, attorneys may, without financial licenses, offer financial advice that is incident to legal services otherwise provided. The Amendment also includes Rule 5.8(b) which provides, “A lawyer shall not recommend or offer an investment product to a client or any person with whom the lawyer has a fiduciary relationship [“Other Person”], or invest funds belonging to such a person in an investment product, if the lawyer or a person related to the lawyer: (1) has an interest in compensation paid or provided by a person other than the client or [Other Person], or (2) has an ownership interest in the entity that sponsors, insures, underwrites, manages, or issues the investment product.” This significantly restricts Pennsylvania lawyers more than lawyers or financial advisers licensed under laws of other states and the United States of America where the attorney or other licensed financial advisor may benefit personally from the transaction if he discloses to the client the conflict of interest. The Amendment takes effect February 28, 2015.

The Pennsylvania Supreme Court also determined on December 29, 2015, that the lifetime registration requirement for juvenile sex offenders (“Juveniles”) under the Sex Offender Registration and Notification Act, 42 Pa. C.S. §§ 9799.10-9799.41 (“SORNA”) is unconstitutional as applied to Juveniles. The Court upheld for narrow reasons the decision of the Court of Common Pleas of York County which considered the constitutionality of SORNA under the expost facto clause, the cruel and unusual punishment clause, Pennsylvania’s right to reputation and the due process clause. The Supreme Court made its determination in In the Interest of J.B., A Minor (J-44A – G-2014), a consolidated appeal from the Common Pleas Court regarding 7 Juveniles, on due process grounds alone, saying, “[W]e conclude that SORNA’s registration requirements violate [Juveniles’] due process rights by utilizing the irrebuttable presumption that all [Juveniles] pose a high risk of committing additional sexual offenses, 42 Pa. C.S. §1989.11(a)(4), because that presumption is not universally true and a reasonable alternative mean currently exists for determining which [Juveniles] are likely to reoffend.” Id. at 24. The Supreme Court identified alternative means in SORNA for individual assessments of Juveniles to protect society from repeat offenders without the lifetime registration requirement.

The Pennsylvania Liquor Control Board (“LCB”) advised on December 5, 2014, that a restaurant with a beer license may, under certain circumstances, deliver off-site to a retail customer up to 192 ounces of beer with a food order. LCB Advisory Opinion No. 14-613 (the “Opinion”) is addressed to the licensee of a Philadelphia beer café and restaurant known as “Hawthornes” (“Applicant”), and recites that the Opinion is limited to the Hawthorne facts, but its reasoning could be beneficial to other licensees. Applicant has an Eating Place Retail Dispenser License for premises on South 11th Street in Philadelphia (“Premises”) but asked if it could deliver beer with food. In the Opinion, Chief Counsel for LCB noted that if the food and beer is prepaid at the Premises by credit card or debit card, the delivery of beer to the off-site customer under a supplemental Transporter – For – Hire license would not offend the hawking and peddling restrictions under 40 Pa. Code §9.92(b) because the food and beer would already belong to the off-site customer when it leaves the Premises. Accordingly, the Applicant may make food and beer deliveries but may not use the “licensed vehicle to pick up alcohol that the retail licensee has purchased from a beer distributor.”