By Daniel Wiessner

ALBANY, N.Y., Oct 30 (Reuters) - New York City's controversial plan to shift tens of thousands of criminal cases involving indigent defendants from private attorneys to the Legal Aid Society and other institutional defense groups is legal, a divided Court of Appeals ruled Tuesday.

The 2008 plan applies in cases in which assigned counsel has a conflict of interest and must be replaced.

In a 4-3 decision, the high court rejected claims by six bar associations that the plan required their consent under Article 18-B, Section 722, of the County Law, which is the statute that governs the assignment of counsel in indigent defense cases.

"Rather than circumscribe the city's ability to respond to conflicts of interest, we think it more likely ... that the (state) legislature intended to permit the city to create a comprehensive indigent defense plan that accounts for such a frequently occurring circumstance," Judge Carmen Ciparick wrote for the majority.

The plan had been stayed pending appeal.

Since 1965, cases in which court-appointed defense lawyers had a conflict were reassigned to a panel of private attorneys, known as 18-B lawyers, who were appointed by the county bars. Mayor Michael Bloomberg in 2008 established a bidding process to solicit contracts from aid groups to handle conflict cases, while continuing to rely in part on the 18-B panel. Murder cases are exempt under the new plan, in order to give defendants the benefit of having experienced private attorneys.

The new plan was designed to save the city money and recognize the increase in the number of legal aid groups in the city over the last few decades, the court said.

The bar associations claimed that because the city created a "combination plan" that utilized 18-B lawyers and legal aid groups, Article 18-B required the city to obtain the consent of the bar associations.

Last year, Acting Supreme Court Justice Anil Singh in Manhattan dismissed the bar groups' suit.

A divided panel of the Appellate Division, First Department, in March affirmed, finding that the city's new plan did not require the approval of the bar associations.

Jonathan Pressment, who represented county bar associations from each of the five boroughs, urged the Court of Appeals during arguments last month to invalidate the plan, which he called "a race to the bottom."

"This is an attempt to save money and an attempt by an executive to insert himself into the judicial process," Pressment told the court, referring to Bloomberg.

The Court of Appeals on Tuesday sided with the city.

Ciparick wrote that rejecting the city's plan "would be to allow the bar associations to unilaterally block the city from adopting a plan for conflict representation."

"In effect, the bar associations would control the city's ability to fulfill its statutory mandate to formulate a comprehensive plan for indigent defense," Ciparick said. "Rather, County Law 722 appears to contemplate precisely what occurred here -- that the city, in response to needs actual or perceived, could implement a combination plan apportioning conflict representation among both institutional providers and private counsel."

Judges Victoria Graffeo, Theodore Jones and Susan Read concurred.

In dissent, Chief Judge Jonathan Lippman said that because the new plan is "dramatically different" than the plan enacted nearly 50 years ago, the bar groups' consent was required.

"The 1965 bar association plan was not designed like a bit of lego for use in a range of interchangeable settings at the city's option," Lippman wrote, joined by Judges Eugene Pigott and Robert Smith.

Legal Aid participated as an intervenor on the city's side, while the New York Criminal Bar Association was an intervenor on the bar groups' side.

Earlier this year, a spokeswoman for the Legal Aid Society estimated that the city's proposal would affect roughly 44,000 cases. The group's attorney-in-chief, Steven Banks, did not return a request for comment on Tuesday.

Pressment declined to comment on Tuesday. Zoe Jasper, who argued for the Criminal Bar Association, and the City Law Department did not return requests for comment.

The case is the Matter of New York County Lawyers' Association v. Michael Bloomberg, New York State Court of Appeals, No. 155.

For the county bar associations: Jonathan Pressment of Haynes and Boone.

For the New York Criminal Bar Association: Zoe Jasper of Satterlee Stephens Burke & Burke.

For the city: Julian Kalkstein of the New York City Law Department.

For the Legal Aid Society: Daniel Kolb of Davis Polk & Wardwell.

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