APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY.
On December 21, 1971, the Supreme Court of New Jersey announced the adoption of Rule 1:21-7, effective January 31, 1972, establishing a graduated schedule of maximum contingent fees applicable to tort litigation conducted by New Jersey attorneys.*fn1 Appellants, representing members of the New Jersey bar, brought this action to enjoin the enforcement of the rules on the grounds that they violate several provisions of the Constitution, including the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The trial
judge convened a three-judge court. 28 U. S. C. § 2281.*fn2
After hearing argument on the merits, the District Court pointed out that:
"Essentially the case poses a dispute between a state's highest court and those persons authorized by that court to practice law in the state. The relationship between the parties thus is an extremely delicate one. Under such circumstances federal courts generally have considered it appropriate, before attempting any direct federal intervention at the outset, first to permit the state courts to process the dispute. Cf. Reetz v. Bozanich, 397 U.S. 82, 85-87 (1970)."
The court added that "as was true in Reetz the initial issue is whether the state constitution authorized the enactment challenged." The court therefore granted defendant-appellee's motion to dismiss.
By timely motion under Fed. Rule Civ. Proc. 59 (e), appellants sought an order amending the judgment by either
"(A) Retaining jurisdiction, but staying proceedings in this Court pending determination of the issues of state law in the courts of New Jersey, or until efforts to obtain such a determination have been exhausted; or
"(B) Ordering that the dismissal be without prejudice, so that the suits for determination of the
federal constitutional issues may be reinstituted after exhausting state recourse with respect to state law ...