A recent legal development in New Jersey has declared parts of the Debt Adjustment and Credit Counseling Act (DACCA) unconstitutional, impacting the sector of debt adjustment law. At the center of the case is attorney Andrew M. Carroll and Anchor Law Firm, who faced disciplinary actions under DACCA, which restricts credit adjusters from operating for profit and imposes limitations on attorneys involved in debt adjustment without a clear definition of “principally engaged.” The New Jersey Appellate Division overturned a previous dismissal of Carroll’s challenge, asserting that these constraints on attorneys violate separation-of-powers principles, emphasizing the judiciary’s role in overseeing legal practice.
Judge Jack Sabatino noted the negative impact DACCA’s restrictions might have on public interest by deterring lawyers from specializing in debt adjustment, a field where their expertise significantly aids clients. Consequently, the Appellate Division has paused the ethics investigation against Carroll’s firm. The matter is redirected to the trial court regarding fee applications under the Federal Civil Rights Act.
The New Jersey State Bar Association supported Carroll, arguing against the limitations on judicial authority. Conversely, the Attorney General’s Office defended DACCA’s constitutionality but refrained from commenting post-ruling. This ruling reinforces the judiciary’s oversight and highlights potential challenges to legislative overreach, impacting the regulation of legal practice in broader contexts.
