As we first blogged here, hours before the last Red Flags enforcement deadline, a federal court judge in the D.C. Circuit ruled from the bench that attorneys would not be subject to the Red Flags Rule. The court released Judge Walton's written opinion was released on December 1, 2009, which provides clarification of his comments from the bench. Click here for the opinion. Walton found the Federal Trade Commission overreached when it tried to define lawyers as "creditors". Walton wrote, "The Court is confident in concluding that the term attorney-client is nuanced enough that if Congress, which is comprised of many members who are themselves attorneys, intended to regulate attorneys and their invoiced billing practices it would have used the appropriate terminology to denote that intent and not hidden it in a statute expressly targeted at the credit industry." Judge Walton further noted, "Attorneys are already obligated to conduct themselves in a manner that promotes the objectives of the Red Flags Rule, and the Commission's position that its regulation is needed to protect third-parties against identity theft is just not the case."
On October 31, the FTC extended the Red Flags enforcement deadline for the fourth time to June 1, 2010.