A significant ruling from the North Carolina Court of Appeals has clarified the boundaries of the North Carolina State Bar’s disciplinary authority—and the decision has real implications for attorneys, clients, and anyone navigating the intersection of state and federal legal practice in North Carolina. In N.C. State Bar v. Musinguzi, No. COA24-661 (June 18, 2025), the Court of Appeals reversed a disbarment order against a New York-licensed attorney who practiced exclusively in federal immigration court in Charlotte, holding that the State Bar’s Disciplinary Hearing Commission (“DHC”) simply did not have subject matter jurisdiction over him.
What Happened in the Musinguzi Case?
Martin Musinguzi is a licensed New York attorney who maintained a law office in Charlotte, North Carolina, and represented clients before the federal immigration court there. He was never admitted to practice law in North Carolina state courts. In 2017, Bank of America notified the State Bar that Musinguzi’s client trust account had insufficient funds—a mandatory report triggered by North Carolina’s IOLTA rules. The State Bar opened a grievance, and Musinguzi initially cooperated, even signing a consent injunction barring him from handling entrusted funds. New York’s Attorney Grievance Committee separately investigated and issued a Letter of Admonition.
Eventually, Musinguzi stopped participating in the State Bar’s disciplinary process. In 2022, the State Bar filed a formal complaint with the DHC. After Musinguzi failed to respond, the DHC entered a default and, in January 2024, issued an Order of Discipline disbarring him from the practice of law. Musinguzi then challenged the order, arguing the DHC lacked subject matter jurisdiction because he was never admitted to practice in North Carolina.
The Jurisdictional Question: Who Does the State Bar Actually Govern?
The heart of the case was statutory interpretation. The State Bar argued it had broad authority under N.C. Gen. Stat. § 84-23(a), which grants the Council power to “regulate the professional conduct of licensed lawyers.” It also relied on Rule 8.5(a) of the North Carolina Rules of Professional Conduct, which states that a lawyer “not admitted in North Carolina is also subject to the disciplinary authority of North Carolina if the lawyer renders or offers to render any legal services in North Carolina.”
The Court of Appeals disagreed. It focused on N.C. Gen. Stat. § 84-28(a), the statute that specifically grants “disciplinary jurisdiction” to the DHC. That statute plainly limits jurisdiction to “[a]ny attorney admitted to practice law in this State.” Because Musinguzi was licensed only in New York and practiced only before a federal tribunal, he did not fall within that category. The court applied the principle that a more specific statute controls over a more general one—and § 84-28’s specific grant of disciplinary jurisdiction controlled over § 84-23’s broader grant of regulatory authority.
The court also rejected the argument that Rule 8.5 could expand the DHC’s jurisdiction beyond what the statute allows. Administrative agencies, including the State Bar, can only exercise powers granted to them by the General Assembly. The Rules of Professional Conduct cannot enlarge the subject matter jurisdiction that the legislature has defined. As the court put it, if the General Assembly wants to extend the State Bar’s disciplinary reach to attorneys practicing only in federal court, it must do so by amending the statute—that is not a job for the courts or for the State Bar’s rulemaking process.
What This Means for Attorneys Practicing Federal Law in North Carolina
This decision creates an important carve-out for attorneys licensed in other states who limit their North Carolina practice entirely to federal courts—whether immigration court, federal district court, or federal agencies. Such attorneys are not members of the North Carolina State Bar, are not subject to its disciplinary jurisdiction, and cannot be disbarred by the DHC. They remain accountable to their home state bar and to the federal tribunal before which they appear. Musinguzi, for example, remained subject to the New York Bar and the Executive Office for Immigration Review.
The court was careful to note that its ruling does not affect North Carolina’s prohibition on the unauthorized practice of law. An attorney who crosses the line from exclusively federal practice into services constituting the practice of North Carolina state law could still face consequences under N.C. Gen. Stat. § 84-4. For attorneys representing clients before federal courts in North Carolina on an out-of-state license, Musinguzi offers meaningful protection from State Bar overreach—but also underscores the importance of carefully confining one’s practice to the federal forum. We have written previously about defending attorneys in North Carolina State Bar disciplinary proceedings, and this case adds an important jurisdictional dimension to that analysis.
Practical Implications for Professional License Defense
The Musinguzi ruling is a reminder that jurisdiction is never a technicality—it is the foundation of any disciplinary proceeding. Before an attorney, physician, or other licensed professional can be subjected to discipline in North Carolina, the relevant agency must have proper legal authority to act. Challenging subject matter jurisdiction is a legitimate and sometimes decisive defense strategy, and it can be raised at any time, even after a default has been entered. This principle applies equally in the context of professional license consequences arising from criminal charges, where the scope of a board’s authority can be just as important as the underlying facts.
Contact The Chetson Firm
At The Chetson Firm, we represent attorneys and other licensed professionals facing disciplinary proceedings, as well as individuals confronting criminal charges that could affect their professional licenses. Damon Chetson is a Board Certified Specialist in State and Federal Criminal Law—one of fewer than 100 attorneys in North Carolina to hold that distinction—and has extensive experience navigating the procedural and substantive complexities of professional license defense. If you are facing a State Bar complaint, a licensing board investigation, or a criminal matter that threatens your livelihood, contact us today for a consultation.