I Am Pleased to Advise You Ofanorder Issued on April 30By Judge Reggie Walton of the U.S

Dear Member

I am pleased to advise you ofanorder issued on April 30by Judge Reggie Walton of the U.S. District Courtforthe District of Columbia inasuitinstituted by theAmerican Bar Associationagainst theFederal Trade Commission.The case brought by the ABAchallenged the FTC's decision that the privacy provisions of the Gramm-Leach-Bliley Act apply to attorneys. Inhisorder, which also applies to a similar suitfiled by the New York State Bar Association, Judge Walton says that the FTC's decision to subject attorneys to the Act was beyond its statutory authority and constituted arbitrary and capricious agency action.

Consequently, while Judge Walton's order is in effectthe FTCwill notenforce the Act against attorneys engaged in the practice of law; and attorneys who in the course of their law practiceschoose not to comply with the privacy provisions of theGramm-Leach-Bliley Act need not fear enforcement actions or investigations by the FTC. To view a copy of this decision please go to http://www.abanet.org/poladv/abasjorder.pdf.

The ABA had challenged the FTC's interpretation of congressional intent in the application of Title V of the Gramm-Leach-Bliley Act. The Commission had sought to apply the written privacy notice and the record keeping provisions applicable to banks and financial institutions to attorneys engaged in the practice of law, despite complaints from the ABA, the NYSBA and other state and local bar associations that state level enforceable mandatory rules of professional conduct protected client confidentiality better. Had the FTC's interpretationof the Gramm-Leach-Bliley Actnot been challenged, the result would have meant expense, waste and confusion for clients and attorneys.

This victory was a victory of the whole organized bar. More than 26 bar associations joined the suits; these included bars as diverse as the Pennsylvania Bar Association and the Beverly Hills Bar Association, who signed on as amici to the ABA suit. Bar associations contacted the FTC prior to our filing suit and contacted their Congressional delegation afterwards. The efforts continue and we appreciate the support of all in this endeavor.

This effort does not end here.After entry of a judgment by the district court, the FTC will have 60 days to decide whether to appeal Judge Walton's decision, and Congress is considering whether to amend the Act,as well. We will keep you posted on these developments. The ABA will continue to pursue a just result for the sake of attorneys and our clients, and we hope you will continue to work with us.

Sincerely,

Dennis W. Archer
ABA President