A Stitch in Haste

Two separate federal courts, a trial court in Connecticut and an appellate court in the Eighth Circuit, have both ruled that a controversial provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 violates the First Amendment:

Organizations representing thousands of attorneys filed the lawsuit in 2006, objecting to a requirement that they give specific advice to bankruptcy clients, including not to go deeper into debt.

U.S. District Court Judge Christopher Droney in Hartford ruled that the restriction was too broad because it prohibits attorneys from advising their clients to incur any debt, including debts that are legal and desirable in some cases.

“A lawyer who represents consumers contemplating bankruptcy bears the duty of zealous representation and the prohibition on giving legal advice unnecessarily interferes with this duty,” Droney wrote.

The law actually refers not to attorneys, but to “debt relief agencies.” The debate to a large extent was whether attorneys qualified as such “agencies.” The consensus apparently is that they do; as the Eighth Circuit noted:

Congress specifically listed five exclusions from the definition of “debt relief agency,” and if it meant to exclude attorneys from that definition it could have explicitly done so.

File that under “judicial activism,” I suppose.

As with my post yesterday on whether a “hide-the-tax” law infringed commercial or political speech, a similar question arose in the challenge to the bankruptcy gag order:

The parties disagree as to the level of scrutiny we apply to the constitutional analysis of this limitation on speech. Plaintiffs claim that we should review the constitutionality of § 526(a)(4) under the strict scrutiny standard as the restriction on attorney advice is content-based. … In contrast, the government argues that § 526(a)(4)’s restrictions are a type of ethical regulation, invoking [a] more lenient standard[.]

The Eighth Circuit again relies on the plain text of the law:

However, the plain language of the statute does not permit this narrow interpretation. Rather, § 526(a)(4) broadly prohibits a debt relief agency from advising an assisted person (or prospective assisted person) to incur any additional debt when the assisted person is contemplating bankruptcy. [Emphasis in original.]

As with the hide-the-tax ruling yesterday, this court also decides that it doesn’t have to decide:

Thus, regardless of whether the government’s interest in prohibiting the speech was legitimate ([lower] standard) or compelling (strict scrutiny standard), § 526(a)(4) is unconstitutionally overbroad as applied to attorneys falling within the definition of debt relief agencies because it is not narrowly tailored, nor narrowly and necessarily limited, to restrict only that speech that the government has an interest in restricting.

As was the case yesterday, I would have preferred a clear determination that strict scrutiny applies: the more protection for more speech, the better.

I also hope this analysis might have some read-through to challenges of laws that restrict advice by health care providers on topics such as contraception and sexual orientation. Stay tuned…

Finally, although I never closely followed the debate over the bankruptcy bill and have little interest in bankruptcy law generally, I can’t help but wonder whether this insertion of a fairly obviously unconstitutional provision in a controversial bill was yet another example of the wizened sort of congressional statecraft best described as the Specter Doctrine: If parts of the bill are unconstitutional, then pass it anyway and let the courts clean it up.

The cases are:
–Milavetz, Gallop & Milavetz v. U.S., No. 07-2405 (8th Cir., September 4, 2008) (PDF – 24 pages)
–Connecticut Bar Association v. U.S., No. 3:06-CV-729 (D.Conn., 9 September 2008) (PDF – 27 pages)

Filed under: First Amendment - Speech, Law