According to a press release distributed today, The American Bar Association announced that they have asked the US District Court for the District of Columbia to bar the Federal Trade Commission from applying its Red Flags Rule, designed to prevent identity theft, to practicing lawyers. Because the FTC is exceeding the powers delegated to it by Congress and misinterpreting the Rule, the ABA is seeking declaratory and injunctive relief in advance of pending FTC Rule enforcement on Nov 1, 2009.

The ABA complaint, prepared on a pro bono basis by Proskauer Rose, states that the application of the Rule to practicing lawyers is “arbitrary, capricious and contrary to law,” and that the FTC has failed “to articulate, among other things: a rational connection between the practice of law and identity theft; an explanation of how the manner in which lawyers bill their clients can be considered an extension of credit under the FACTA; or any legally supportable basis for application of the Red Flags Rule to lawyers engaged in the practice of law.”