A Correction on LegalZoom Lawsuits

In a post here May 19, LegalZoom Suffers Setback in North Carolina, I wrote about recent legal developments in South Carolina and North Carolina involving claims that LegalZoom is engaged in the unauthorized practice of law. Towards the end of that post, I wrote:

Meanwhile, LegalZoom continues to face challenges in other states, including Alabama and Arkansas. On Oct. 3, 2013, the Supreme Court of Arkansas granted LegalZoom’s request to send a lawsuit pending there to arbitration, pursuant to the mandatory arbitration clause in LegalZoom’s terms of service.

I have since learned that the Alabama matter was dismissed earlier this year, prior to when I wrote that post.

Based on documents and correspondence forwarded to me, the Alabama matter was filed in June 2011 by the DeKalb County (Alabama) Bar Association, alleging that LegalZoom was engaged in the unauthorized practice of law. The trial judge ordered the DCBA to post a $20,000 bond as security for costs. The DCBA filed an interlocutory appeal of the bond (in the form of a petition for writ of mandamus) to the Alabama Supreme Court.

While that was pending, the trial judge dismissed the lawsuit for the DCBA’s failure to post the bond.  The DCBA appealed the dismissal and won permission to consolidate that appeal with the bond appeal. On Jan. 10, 2014, the Supreme Court affirmed the trial court’s dismissal without an opinion.

LegalZoom had previously settled unauthorized practice lawsuits in California, Missouri and Washington. A lawsuit in Ohio was dismissed. With LegalZoom’s win in South Carolina, the Alabama suit dismissed, and the Arkansas case sent to arbitration, the only active court action against LegalZoom over the UPL issue is the North Carolina case.