Litigation

Arkansas Deceptive Trade Practices Act Cannot Apply to the Practice of Law

By H. William Allen et al.

The Arkansas Supreme Court affirmed dismissal in Preston v. Stoops, No. 07-805 (6/5/08). Stoops filed a lawsuit on behalf of Preston in Pulaski County. The case was dismissed because Stoops, an Oklahoma attorney, was not licensed to practice in Arkansas. Preston filed this action, claiming violation of the Arkansas Deceptive Trade Practices Act, Ark. Code Ann. § 4-88-101, et seq. Preston also included a count for breach of the covenant of good faith as a tort. The trial court dismissed both claims.

Addressing the ADTPA claim, the supreme court held that oversight and control of the practice of law is the exclusive authority of the judiciary. Any action by the General Assembly to control the practice of law would violate the separation-of-powers doctrine. The court did not go so far as to say parties cannot use the ADTPA to circumvent traditional causes of action, a position advocated in 29 U. Ark. Little Rock L. Rev. 283 (2007).

The supreme court dodged the good faith issue. In Country Corner Food & Drug, Inc. v. First State Bank, 332 Ark. 645 (1998), the court held that breach of duty of good faith could not be a separate tort. There has been a dispute over whether Country Corner precludes a separate cause of action for breach of contract. The supreme court did not decide this issue because Preston pled his claim as a tort.

Full post as published by Arkansas Business Litigation Blog on June 06, 2008 (boomark / email).