United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 07-2405

___________

Milavetz, Gallop & Milavetz, P.A.; * 

Robert J. Milavetz; Barbara N. Nevin; *

John Doe; Mary Doe, *

* 

Appellees, * 

* Appeal from the United States

v. * District Court for the 

* District of Minnesota.

United States of America, * 

* 

Appellant, * 

____________________ *

* 

Commercial Law League of America, * 

* 

Amicus on Behalf * 

of Appellee. *

___________

 Submitted: March 11, 2008

 Filed: September 4, 2008 (Corrected September 23, 2008)

___________

Before BYE, SMITH, and COLLOTON, Circuit Judges.

___________

SMITH, Circuit Judge.
1

The client-plaintiffs sought prebankruptcy advice regarding the incurrence of

additional debt prior to filing bankruptcy. The Bankruptcy Code precludes a debt

relief agency from advising an assisted person from incurring additional debt in

contemplation of bankruptcy. 11 U.S.C. § 526(a)(4). Thus, these client-plaintiffs are

appearing on behalf of themselves and all others similarly situated who desire to

exercise their First Amendment rights with attorneys regarding bankruptcy

information.

2

Prior to BAPCPA, the term "debt relief agency" did not exist in the Code.

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Milavetz, Gallop & Milavetz, P.A., a law firm that practices bankruptcy law,

the firm's president, a bankruptcy attorney within the firm, and two clients1

 who

sought bankruptcy advice from the firm brought suit against the United States seeking

a declaratory judgment that certain provisions of the Bankruptcy Abuse Prevention

and Consumer Protection Act of 2005 (BAPCPA)—11 U.S.C. §§ 526(a)(4) and

528(a)(4) and (b)(2)—did not apply to attorneys and law firms and are

unconstitutional as applied to attorneys. The district court granted summary judgment

to the plaintiffs and issued an order declaring that: (1) attorneys in the District of

Minnesota were excluded from the definition of a "debt relief agency" as defined by

BAPCPA; and (2) the challenged provisions were unconstitutional as applied to

attorneys in the District of Minnesota. We affirm in part and reverse in part.

I. Background

On April 20, 2005, BAPCPA was signed into law, amending and adding

multiple sections of the Bankruptcy Code ("the Code"). While some of these

amendments became effective immediately, the vast majority became effective on

October 17, 2005. See Pub. L. No. 109-8, § 1501(a), 119 Stat. 23 (2005) ("Except as

otherwise provided in this Act, this Act and the amendments made by this act shall

take effect 180 days after the date of enactment of this Act").

One BAPCPA amendment added a new term, "debt relief agency," which is

defined in § 101(12A) of the Code. 11 U.S.C. § 101(12A).2

 The amended Code
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restricts some actions of debt relief agencies, while requiring them to do others. See

11 U.S.C. § 526 ("Restrictions on debt relief agencies"); 11 U.S.C. § 528

("Requirements for debt relief agencies"). For example, § 526(a)(4) bars a debt relief

agency from advising a client "to incur more debt in contemplation" of a bankruptcy

filing, 11 U.S.C. § 526(a)(4), while §§ 528(a)(4) and (b)(2) require debt relief

agencies to include a disclosure in their bankruptcy-related advertisements directed

to the general public declaring: "'We are a debt relief agency. We help people file for

bankruptcy relief under the Bankruptcy Code[,]'or a substantially similar statement."

11 U.S.C. § 528(a)(4), (b)(2). The plaintiffs sought alternative remedies. First,

plaintiffs requested a declaratory judgment that attorneys did not fall within the

definition of "debt relief agency." If the court determined that attorneys fell within the

definition of debt relief agency, they challenged the constitutionality of §§ 526(a)(4)

and 528(a)(4) and (b)(2), as applied to attorneys.

II. Discussion

A. Debt Relief Agencies

Initially, we address whether attorneys fall within the Code's definition of debt

relief agencies. If they do not, we will have no need to address the constitutionality

of §§ 526(a)(4) and 528(a)(4) and (b)(2), which only apply to debt relief agencies. See

Holtan v. Black, 838 F.2d 984, 986 n.3 (8th Cir. 1988) ("Federal courts must avoid

passing upon constitutional questions unless they are essential to the disposition of the

issues before them.") (citing Three Affiliated Tribes v. Wold Engineering, 467 U.S.

138, 157 (1984) ("It is a fundamental rule of judicial restraint, however, that this Court

will not reach constitutional questions in advance of necessity of deciding them")).

The term "debt relief agency" means any person who provides any

bankruptcy assistance to an assisted person in return for the payment of

money or other valuable consideration, or who is a bankruptcy petition

preparer under section 110, but does not include–
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(A) any person who is an officer, director, employee, or

agent of a person who provides such assistance or of the

bankruptcy petition preparer;

(B) a nonprofit organization that is exempt from taxation

under section 501(c)(3) of the Internal Revenue Code of

1986;

(C) a creditor of such assisted person, to the extent that the

creditor is assisting such assisted person to restructure any

debt owed by such assisted person to the creditor;

(D) a depository institution (as defined in section 3 of the

Federal Deposit Insurance Act) or any Federal credit union

or State credit union (as those terms are defined in section

101 of the Federal Credit Union Act), or any affiliate or

subsidiary of such depository institution or credit union; or

(E) an author, publisher, distributor, or seller of works

subject to copyright protection under title 17, when acting

in such capacity.

11 U.S.C. § 101(12A) (emphasis added). 

Further, the Code defines the term "bankruptcy assistance" to mean: 

any goods or services sold or otherwise provided to an assisted person

with the express or implied purpose of providing information, advice,

counsel, document preparation, or filing, or attendance at a creditors'

meeting or appearing in a case or proceeding on behalf of another or

providing legal representation with respect to a case or proceeding under

this title.

Id. at § 101(4A) (emphasis added).
3

When this suit was commenced, the dollar amount in § 101(3) was $150,000.

Subsequently, on April 1, 2007, the amount was adjusted pursuant to 11 U.S.C. § 104.

The change, however, is inconsequential for purposes of this case.

4

"The term 'attorney' means attorney, professional law association, corporation,

or partnership, authorized under applicable law to practice law." 11 U.S.C. § 101(4).

This definition makes no reference to "debt relief agencies" or to subsection (12A).

5

"'[B]ankruptcy petition preparer' means a person, other than an attorney for the

debtor or an employee of such attorney under the direct supervision of such attorney,

who prepares for compensation a document for filing [by the debtor in connection

with his bankruptcy case]." 11 U.S.C. § 110(a)(1) (emphasis added); see also id. at §

110(a)(2) (defining "document for filing" as used in § 110(a)(1)).

-5-

Additionally, the Code defines the term "assisted person" as "any person whose

debts consist primarily of consumer debts and the value of whose nonexempt property

is less than $164,250."3 Id. at § 101(3).

The plaintiffs argue that attorneys are not "debt relief agencies" because the

definition of debt relief agencies makes no direct reference to attorneys, even though

"attorney" is a defined term in the Code, id. at § 101(4),4

 but does include the term

"bankruptcy petition preparer" which, by definition, excludes debtor's attorneys and

their staff. See 11 U.S.C. § 110(a)(1).5

 Plaintiffs contend that the omission of any

reference to attorneys or lawyers while specifically including bankruptcy petition

preparers shows Congress's intent to exclude attorneys from the definition of debt

relief agencies. Because the plaintiffs contend that constitutionality issues arise in §§

526(a)(4) and 528(a)(4) and (b)(2) if attorneys are debt relief agencies, they assert that

the doctrine of constitutional avoidance should be used to interpret "debt relief

agency" to exclude attorneys and thus avoid the potential constitutional issues.

Conversely, the government argues that attorneys are debt relief agencies

because the broadly worded definition of the term plainly includes attorneys, see 11
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U.S.C. § 101(12A) (defining "debt relief agency" as "any person who provides any

bankruptcy assistance to an assisted person in return for the payment"), and providing

legal representation is included in definition of bankruptcy assistance. See id. at

101(4A) ("bankruptcy assistance means any goods or services sold or otherwise

provided to an assisted person with the express or implied purpose of providing . . .

advice, counsel, . . . or legal representation with respect to a case or proceeding under

this title").

Whether attorneys fall within the Code's definition of debt relief agencies is an

issue of first impression among the Courts of Appeals. Although the plain language

of the definition appears to include bankruptcy attorneys and does not appear to be

ambiguous, lower "[c]ourts that have addressed the issue of whether attorneys are debt

relief agencies have not been unanimous." In re Irons, 379 B.R. 680, 685 (Bankr. S.D.

Tex. 2007) (citing cases). Nevertheless, the majority of courts have held that

compensated bankruptcy attorneys are debt relief agencies as that term is defined in

the Code. Id. (finding debtor's counsel was a debt relief agency); Olsen v. Gonzales,

350 B.R. 906 (D. Or. 2006) (same); In re Robinson, 368 B.R. 492 (Bankr. E.D. Va.

2007) (finding debtor's counsel was debt relief agency); Hersh v. United States, 347

B.R. 19 (N.D. Tex. 2006) (finding that bankruptcy attorneys are debt relief agencies);

In re Norman, No. 06-70859, 2006 WL 3053309 (Bankr. E.D. Va. 2006) (finding

debtor's counsel qualified as a debt relief agency); but see In re Attorneys at Law and

Debt Relief Agencies, 332 B.R. 66 (Bankr. S.D. Ga. 2005) (holding that attorneys are

not debt relief agencies); In re Reyes, 361 B.R. 276 (Bankr. S.D. Fla. 2007) (finding

that attorneys, generally, are not debt relief agencies, but ruling that debtor's counsel

in case at bar was not a debt relief agency because service was provided pro bono and

thus counsel did not receive valuable consideration in return for the bankruptcy

assistance provided).

In this case, the district court acknowledged that the definition of debt relief

agency, "at first glance," appeared to include attorneys, but it ultimately relied on the
-7-

doctrine of constitutional avoidance to conclude that attorneys did not fall within the

definition because if they did portions of §§ 526 and 528 would be unconstitutional

as applied to attorneys. The doctrine of constitutional avoidance dictates that "where

an otherwise acceptable construction of a statute would raise serious constitutional

problems, the Court will construe the statute to avoid such problems unless such

construction is plainly contrary to the intent of Congress." Edward J. DeBartolo Corp.

v. Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575 (1988).

Thus, if interpreting "debt relief agency" to include attorneys "would raise serious

constitutional problems," then we should look for another interpretation "that may

fairly be ascribed" to the definition that does not raise these concerns. Id. at 576–77.

We will not, however, adopt an alternative interpretation that is "plainly contrary to

the intent of Congress." Id. at 575.

"We review the district court's statutory interpretation de novo." United States

v. Mendoza-Gonzalez, 520 F.3d 912, 914 (8th Cir. 2008). To interpret the statute we

first "determine whether the language at issue has a plain and unambiguous meaning

with regard to the particular dispute in the case." Id. (quoting Robinson v. Shell Oil

Co., 519 U.S. 337, 340 (1997)). "If so, we apply the plain language of the statute." Id.

"A mere disagreement among litigants over the meaning of the statute does not prove

ambiguity; it usually means that one of the litigants is simply wrong." Bank of Am.

Nat'l Trust & Sav. Ass'n v. 203 N. LaSalle St. P'ship, 526 U.S. 434, 461 (1999).

The plain reading of the definition of debt relief agency, and the defined terms

that make up that definition, leads us to conclude that attorneys who provide

"bankruptcy assistance" to "assisted persons" are unambiguously included in the

definition of "debt relief agencies." See Olsen, 350 B.R. at 912 ("[I]t is the plain

language of the Act that leads to the conclusion that attorneys are to be included in the

definition of 'debt relief agency,'" and "[t]hus, further use of the tools of statutory

construction is not necessary"). The statutory language sweeps broadly and clearly
6

Additionally, while we recognize that the Supreme Court has stated that "failed

legislative proposals are a particularly dangerous ground on which to rest [a statutory

interpretation]," Lockhart v. United States, 546 U.S. 142 (2005) (internal quotation

marks and brackets omitted), we note that on March 9, 2005, Senator Feingold

proposed amendment No. 93 to Congress which would have excluded attorneys from

the definition of debt relief agencies, see 151 Cong. Rec. S2306–02, 2316 (daily ed.

Mar. 9, 2005) (statement by Sen. Feingold) ("This amendment would exclude lawyers

from the provisions dealing with 'debt relief agencies' . . . ."), but the Senate did not

address the proposal.

-8-

covers the legal services provided by attorneys to debtors in bankruptcy unless

excluded by another provision. 

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. Id.; 11 U.S.C. § 101(12A). Moreover, if attorneys were not

included in the definition of debt relief agencies, Congress would have had no reason

to include § 526(d)(2), which expressly provides that nothing in §§ 526, 527, or 528

(the sections covering debt relief agencies) "shall be deemed to limit or curtail the

authority or ability of a State . . . to determine and enforce qualifications for the

practice of law under the laws of that State; or of a Federal court to determine and

enforce the qualifications for the practice of law before that court." 11 U.S.C. §

526(d)(2)(A) and (B). The legislative history provides further indication that attorneys

are included in the definition. See H.R. Rep. No. 109-31, 109th Cong. 1st Sess. at 4

(April 8, 2005) ("The bill's consumer protections include provisions strengthening

professionalism standards for attorneys and others who assist consumer debtors with

their bankruptcy cases") (emphasis added).6

Because attorneys were not specifically excluded from the definition of debt

relief agencies, we hold that attorneys that provide "bankruptcy assistance" to

"assisted persons" are "debt relief agencies" as that term is defined by the Code.
7

Even though a more narrowly drawn version of § 526(a)(4) would likely be

valid as applied to the plaintiffs in this case, our analysis applies to all attorneys

falling within the definition of debt relief agencies, not merely the plaintiff-attorneys.

See Members of City Council of City of Los Angeles v. Taxpayers for Vincent, 466

U.S. 789, 798–99 (1984) (explaining that the overbreadth doctrine allows a party to

challenge a broadly written statute "even though a more narrowly drawn statute would

be valid as applied to the party in the case," as "the statute's very existence may cause

others not before the court to refrain from constitutionally protected speech or

expression") (internal quotations and citation omitted).

-9-

Interpreting the definition of "debt relief agency" to exclude bankruptcy attorneys

would be contrary to Congress's intent.

B. Constitutionality of § 526(a)(4)

Having concluded that attorneys providing bankruptcy assistance to assisted

persons are debt relief agencies under the Code, we now must determine whether the

challenged provisions placing restrictions and requirements on debt relief agencies are

unconstitutionally overbroad as applied to these types of attorneys.7

 One of the

sections challenged by the plaintiffs in this case is § 526(a)(4), which states:

(a) A debt relief agency shall not–

. . . 

(4) advise an assisted person or prospective assisted person to

incur more debt in contemplation of such person filing a case

under this title or to pay an attorney or bankruptcy petition

preparer fee or charge for services performed as part of preparing

for or representing a debtor in a case under this title.

11 U.S.C. § 526(a)(4).

Plaintiffs assert that the prohibition against advising an assisted person or

prospective assisted person to incur more debt in contemplation of bankruptcy violates
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the First Amendment. 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. See Turner Broad. Sys., Inc. v. FCC,

512 U.S. 622, 642 (1994) ("Our precedents thus apply the most exacting scrutiny to

regulations that suppress, disadvantage, or impose differential burdens upon speech

because of its content"). Under strict scrutiny review, the government has the burden

to prove that the constraints on speech are supported by a compelling governmental

interest and are narrowly tailored, such that the statutory effect does not prohibit any

more speech than is necessary to serve the governmental interest. Republican Party

of Minnesota v. White, 536 U.S. 765, 774–75 (2002).

In contrast, the government argues that § 526(a)(4)'s restrictions are a type of

ethical regulation, invoking the more lenient standard outlined in Gentile v. State Bar

of Nev., 501 U.S. 1030 (1991). Under the Gentile standard, we would balance the First

Amendment rights of the attorneys against the government's legitimate interest in

regulating the activity in question—the prohibition of advising assisted persons to

incur more debt in contemplation of bankruptcy—and then determine whether the

regulations impose "only narrow and necessary limitations on lawyers' speech." Id.

at 1075.

 According to the government, § 526(a)(4) should be interpreted as merely

preventing an attorney from advising an assisted person (or prospective assisted

person) to take on more debt in contemplation of bankruptcy when the incurrence of

such debt is done with the intent to manipulate the bankruptcy system, engage in

abusive conduct, or take unfair advantage of the bankruptcy discharge. 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. The statute's blanket prohibition applies even if the
8

Several bankruptcy courts are in agreement with our decision. See Zelotes, 363

B.R. at 667 ("Because § 526(a)(4) is not sufficiently 'narrowly tailored to achieve the

desired objective,' it is unconstitutional as applied to bankruptcy attorneys."); Hersh,

347 B.R. at 25 (concluding that § 526(a)(4) is unconstitutional because: "(1) it

prevents lawyers from advising clients to take lawful actions; and (2) it extends

beyond abuse to prevent advice to take prudent actions," and therefore imposes

"limitations on speech beyond what is 'narrow and necessary'"); Olsen, 350 B.R. at

916 ("[S]ection 526(a)(4) is overly restrictive in violation of the First Amendment"

even if reviewed under Gentile standard).

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additional debt would not be discharged during the bankruptcy proceedings. 11 U.S.C.

§ 526(a)(4).

Thus, regardless of whether the government's interest in prohibiting the speech

was legitimate (Gentile 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.

Instead, § 526(a)(4) prohibits attorneys classified as debt relief agencies from advising

any assisted person to incur any additional debt in contemplation of bankruptcy; this

prohibition would include advice constituting prudent prebankruptcy planning that is

not an attempt to circumvent, abuse, or undermine the bankruptcy laws. Section

526(a)(4), as written, prevents attorneys from fulfilling their duty to clients to give

them appropriate and beneficial advice not otherwise prohibited by the Bankruptcy

Code or other applicable law.8

There are certain situations where it would likely be in the assisted person's, and

even the creditors', best interest for the assisted person to incur additional debt in

contemplation of bankruptcy. However, under § 526(a)(4)'s plain language an attorney

is prohibited from providing this beneficial advice—even if the advice could help the

assisted person avoid filing for bankruptcy altogether. For instance, it may be in the

assisted person's best interest to refinance a home mortgage in contemplation of
9

See Erwin Chemerinsky, Constitutional Issues Posed in the Bankruptcy Abuse

Prevention and Consumer Protection Act of 2005, 79 Am. Bankr. L.J. 571, 579

(Summer 2005).

[Section 526(a)(4)'s] prohibition is particularly troubling when it might

be completely legal and even desirable for the client to incur such debt.

For example, there may be instances where it is advisable for a client to

obtain a mortgage, to refinance an existing mortgage to obtain a lower

interest rate, or to buy a new car on time. There would be no fraud in

doing so if the client intended to pay such debt notwithstanding the filing

of a contemplated bankruptcy case. For example, the client may intend

to keep all payments fully current and to reaffirm such debt once the case

is filed.

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bankruptcy to lower the mortgage payments. This could free up additional funds to

pay off other debts and avoid the need for filing bankruptcy all together. Hersh, 347

B.R. at 24. Moreover, it may be in the client's best interest to incur additional debt to

purchase a reliable automobile before filing for bankruptcy, so that the debtor will

have dependable transportation to travel to and from work, which will likely be

necessary to maintain the debtor's payments in bankruptcy. Id. Incurring these types

of additional secured debt, which would often survive or could be reaffirmed by the

debtor, may be in the debtor's best interest without harming the creditors.9

Factual scenarios other than these few hypothetical situations no doubt exist and

may further illustrate why incurring additional debt in contemplation of bankruptcy

may not be abusive or harmful to creditors. Nonetheless, § 526(a)(4), as written, does

not allow attorneys falling within the definition of debt relief agencies to advise

assisted persons (or prospective assisted persons)—i.e. clients (or prospective clients)

meeting the definition of assisted person—to incur such debt. Thus, § 526(a)(4) is not

narrowly tailored nor narrowly and necessarily limited to prevent only that speech

which the government has an interest in restricting. Therefore, we hold that §
10See Veneklase v. City of Fargo, 248 F.3d 738, 747 (8th Cir. 2001) ("For us to

find a statute unconstitutionally overbroad, its 'overbreadth . . . must not only be real,

but substantial as well, judged in relation to the statute's plainly legitimate sweep.'")

(quoting Broadrick v. Oklahoma, 413 U.S. 601, 615 (1973)).

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526(a)(4) is substantially overbroad,10 and unconstitutional as applied to attorneys

who provide bankruptcy assistance to assisted persons, as those terms are defined in

the Code.

C. Constitutionality of § 528(a)(4) and (b)(2)

The plaintiffs also challenged the constitutionality of §§ 528(a)(4) and

(b)(2)(B), claiming that the advertising disclosure requirements mandated by those

sections violate the First Amendment rights of bankruptcy attorneys through

compelled speech. The disclosure requirements of § 528(a)(4) are supplemented by

§ 528(a)(3). These sections state:

(a) A debt relief agency shall–

. . . 

(3) clearly and conspicuously disclose in any advertisement of

bankruptcy assistance services or of the benefits of bankruptcy

directed to the general public (whether in general media, seminars

or specific mailings, telephonic or electronic messages, or

otherwise) that the services or benefits are with respect to

bankruptcy relief under this title; and

(4) clearly and conspicuously use the following statement in such

advertisement: "We are a debt relief agency. We help people file

for bankruptcy relief under the Bankruptcy Code." or a

substantially similar statement.

11 U.S.C. § 528 (a)(3), (4).
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Similarly, § 528(b)(2)(B) states:

(2) An advertisement, directed to the general public, indicating that the

debt relief agency provides assistance with respect to credit defaults,

mortgage foreclosures, eviction proceedings, excessive debt, debt

collection pressure, or inability to pay any consumer debt shall–

. . .

(B) include the following statement: "We are a debt relief agency.

We help people file for bankruptcy relief under the Bankruptcy

Code." or a substantially similar statement.

11 U.S.C. § 528(b)(2)(B).

As both §§ 528(a)(4) and (b)(2)(B) require debt relief agencies—which includes

attorneys providing bankruptcy assistance to assisted persons—to disclose in their

advertising that "'We are a debt relief agency. We help people file for bankruptcy

relief under the Bankruptcy Code.' or some substantially similar statement," the

statutes compel speech that, similar to a restriction on speech, receives constitutional

protection under the First Amendment. See Wooley v. Maynard, 430 U.S. 705, 714

(1977) ("[T]he right of freedom of thought protected by the First Amendment against

state action includes both the right to speak freely and the right to refrain from

speaking at all"); Turner Broad. Sys., Inc., 512 U.S. at 642 (stating that "[l]aws that

compel speakers to utter or distribute speech bearing a particular message are subject

to" constitutional scrutiny).

The government contends that Congress enacted § 528's disclosure

requirements to address problems with deceitful or unclear advertising by bankruptcy

attorneys, bankruptcy petition preparers, or other debt relief entities. This position is

supported by legislative history. See 151 Cong. Rec. H2063-01, 2066 (daily ed. Apr.

14, 2005) (statement by Rep. Moran) (stating that certain BAPCPA provisions are

intended to "[p]revent deceptive and fraudulent advertising practices by debt relief
-15-

agencies . . ."). But before we can determine whether the government's justification

for mandating the disclosures passes constitutional scrutiny, we must first decide the

appropriate standard for reviewing the constitutionality of the required disclosures.

We find guidance for this issue from the Court in Zauderer v. Office of

Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985). In

Zauderer, the Supreme Court considered the constitutionality of a state bar

disciplinary regulation requiring attorneys that advertised contingent-fee

representation to disclose in their advertisements that clients may still have to bear

certain costs even if the case was unsuccessful. Id. at 633. As the regulation only

required an attorney to "include in his advertising purely factual and uncontroversial

information about the terms under which his services w[ould] be available," and "the

extension of First Amendment protection to commercial speech is justified principally

by the value to consumers of the information such speech provides, [the attorney's]

constitutionally protected interest in not providing any particular factual information

in his advertising is minimal." Id. at 651. The Court "recognize[d] that unjustified or

unduly burdensome disclosure requirements might offend the First Amendment by

chilling protected commercial speech," but held "that an advertiser's rights are

adequately protected as long as disclosure requirements are reasonably related to the

State's interest in preventing deception of consumers." Id. (emphasis added).

On the other hand, restrictions on non-deceptive advertising are reviewed under

intermediate scrutiny. See Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of

New York, 447 U.S. 557, 564 (1980) (ruling that restrictions on commercial speech

that is neither misleading nor related to unlawful activity must assert a "substantial

interest to be achieved by [the] restrictions" and "the restrictions must directly advance

the state interest involved"). Under this standard, the limitation must be narrowly

drawn. Id. ("[I]f the governmental interest could be served as well by a more limited

restriction on commercial speech, the excessive restrictions cannot survive").
11Without ruling on the issue, we note that at least one lower court has held that

§ 528's disclosure requirements are constitutionally valid even under the stricter

intermediate scrutiny analysis, as the government's interest in protecting consumer

debtors from misleading advertising is substantial, the disclosure requirements placed

on bankruptcy attorneys directly advances the government's asserted interest, and the

disclosure requirements are narrowly drawn to serve the government's interest. See

Olsen, 350 B.R. at 920 (concluding that § 528 "passes constitutional muster" under

either rational basis review or intermediate scrutiny review).

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The district court in this case reviewed § 528's disclosure requirements under

the intermediate scrutiny standard, but we conclude that rational basis review is

proper. The disclosure requirements here, like those in Zauderer, are intended to avoid

potentially deceptive advertising. See Zauderer, 471 U.S. at 651, n.14 (rejecting a

more strict analysis of the disclosure requirements at issue in that case, and noting that

"the First Amendment interests implicated by disclosure requirements are

substantially weaker than those at stake when speech is actually suppressed . . .").

By definition, debt relief agencies provide bankruptcy assistance to assisted

persons (or prospective assisted persons) "with respect to a case or proceeding under

[the Bankruptcy Code]." 11 U.S.C. §§ 101(4A), (12A). Section 528 generally requires

debt relief agencies to disclose on its advertisements of bankruptcy assistance services

directed to the general public that their services do in fact relate to bankruptcy and that

they assist people in filing for bankruptcy. 11 U.S.C. § 528. As in Zauderer, the

plaintiffs' "constitutionally protected interest in not providing [such] factual

information in [their] advertising is minimal." 471 U.S. at 650. Further, the disclosure

requirements are reasonably and rationally related to the government's interest in

preventing the deception of consumer debtors, as the disclosure requirements are

directed precisely at the problem targeted by Congress: ensuring that persons who

advertise bankruptcy-related services to the general public make clear that their

services do in fact involve filing for bankruptcy.11
12We recognize that the broad definitions of debt relief agency, bankruptcy

assistance, and assisted persons, might result in certain attorneys meeting the

definition of debt relief agencies even though they do not represent debtors in

bankruptcy nor help people file for bankruptcy relief under the Code. Nevertheless,

these attorneys are still subjected to the disclosure requirements of § 528(a)(4) when

they advertise "bankruptcy assistance services or . . . the benefits of bankruptcy

directed to the general public," 11 U.S.C. § 528(a)(3),(4), or when they advertise to

the general public that they "provide[] assistance with respect to credit defaults,

mortgage foreclosures, eviction proceedings, excessive debt, debt collection pressure,

or inability to pay any consumer debt." Id. at § 528(b)(2). But because § 528 permits

a "substantially similar" disclosure to the one suggested by the Code, these attorneys

can and should tailor their advertisement disclosure statements to factually represent

the "bankruptcy assistance" they provide. These tailored disclosures will meet the

requirements of § 528(a)(4) and (b)(2) as long as they are "substantially similar" to the

suggested disclosure, a decision which will require a case-by-case determination. See

Olsen, 350 B.R. at 919–20 (dismissing plaintiffs' claim that § 528 was

unconstitutional, rejecting argument that attorney who met definition of debt relief

agency but did not represent bankruptcy debtors was precluded from § 528's

disclosure requirements because § 528 permits a "substantially similar" disclosure,

-17-

Section 528 requires debt relief agencies to disclose: "'We are a debt relief

agency. We help people file for bankruptcy relief under the Bankruptcy Code.' or a

substantially similar statement," in all of their bankruptcy-related advertising materials

directed to the general public. 11 U.S.C. §§ 528(a)(4), (b)(2). The requirement does

not prevent those attorneys meeting the definition of debt relief agencies "from

conveying information to the public; it . . . only require[s] them to provide somewhat

more information than they might otherwise be inclined to present." Zauderer, 471

U.S. at 650. Moreover, if any of these attorneys are concerned that the required

disclosures will confuse the public, we note that nothing in the Code prevents them

from identifying themselves in their advertisements as both attorneys and debt relief

agencies. Olsen, 350 B.R. at 920. Simply put, attorneys that provide bankruptcy

assistance to assisted persons are debt relief agencies under the Code, and the

disclosure requirements of § 528 only require those attorneys to disclose factually

correct statements on their advertising.12 This does not violate the First Amendment.
which could be tailored to disclose that attorney advised clients about bankruptcy

assistance matters but did not represent people in bankruptcy or file bankruptcy

petitions, and stating that whether disclosure was "substantially similar" would require

case-by-case determination).

-18-

Id.; see also In re Robinson, 368 B.R. at 500–502 (finding that debtor's counsel was

a debt relief agency subject to the strictures of § 528, and that § 528(a)(1)'s

requirement for a written contract is constitutional); In re Norman, 2006 WL 3053309

at *4 (finding that debtor's counsel qualified as a debt relief agency and thus must

comply with the requirements of § 528(a)(1)).

The challenged sections of § 528 only require debt relief agencies to include a

disclosure on certain advertisements. Although less intrusive means may be

conceivable to prevent deceptive advertising, § 528's disclosure requirements are

reasonably related to the government's interest in protecting consumer debtors from

deceptive advertising, and thus the section passes constitutional muster.

III. Conclusion

In sum, attorneys who provide bankruptcy assistance to assisted persons are

debt relief agencies under the Bankruptcy Code, and § 526(a)(4) is unconstitutional

as applied to these attorneys, but §§ 528(a)(4) and (b)(2) are constitutional.

Accordingly, we affirm in part and reverse in part.

COLLOTON, Circuit Judge, concurring in part and dissenting in part.

I concur in all but Part II.B of the opinion of the court. I disagree, however,

with the court’s holding that 11 U.S.C. § 526(a)(4) is unconstitutionally overbroad in

violation of the First Amendment, and I would therefore reverse the district court’s

decision declaring this statutory provision unconstitutional.
13The district court purported to consider only an “as-applied” challenge to

§ 526(a)(4), rather than an overbreadth challenge, and ultimately declared the section

“unconstitutional as applied to attorneys.” Milavetz, Gallop & Milavetz, P.A. v.

United States, 355 B.R. 758, 766 n.4, 769 (D. Minn. 2006). The majority correctly

recognizes that the district court’s approach is really an overbreadth analysis, and

considers the statute under that framework. See ante, at 9 & n.7, 11, 13 & n.10. The

“as applied” method of analysis, by contrast, considers the statute’s application to a

“particular claimant” based on “harm caused to the litigating party.” Turchick v.

United States, 561 F.2d 719, 721 n.3 (8th Cir. 1977). “The ‘as applied’ method

vindicates a claimant whose conduct is within the First Amendment but invalidates

the challenged statute only to the extent of the impermissible application.” Id.

(emphasis added). The district court and the majority have declared § 526(a)(4)

unconstitutional in all of its applications to all attorneys, and the supporting reasoning

is thus consistent with “facial overbreadth analysis.” Id. (punctuation omitted).

-19-

Milavetz, Gallop, & Milavetz, P.A., mounts a facial attack on § 526(a)(4),

arguing that the section’s potential application to attorneys in hypothetical situations

requires that the statute be declared impermissibly overbroad and unconstitutional.

This case involves a facial challenge in the First Amendment context, “under which

a law may be overturned as impermissibly overbroad because a substantial number of

its applications are unconstitutional, judged in relation to the statute’s plainly

legitimate sweep.” Wash. State Grange v. Wash. State Republican Party, 128 S. Ct.

1184, 1190 n.6 (2008). This “overbreadth doctrine,” however, is “strong medicine

that is used sparingly and only as a last resort.” New York State Club Ass’n, Inc. v.

City of New York, 487 U.S. 1, 14 (1988) (internal quotations omitted). It should be

applied only when there is “a realistic danger that the statute itself will significantly

compromise recognized First Amendment protections of parties not before the Court.”

 City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789, 801 (1984). The

Supreme Court recently emphasized that it has “vigorously enforced the requirement

that a statute’s overbreadth be substantial, not only in an absolute sense, but also

relative to the statute’s plainly legitimate sweep.” United States v. Williams, 128 S.

Ct. 1830, 1838 (2008).13
-20-

To resolve the constitutional challenge brought by Milavetz, we must first

construe the disputed statute. When presented with a constitutional challenge to an

Act of Congress, we have not only the power, but the duty, to adopt a narrowing

construction that will avoid constitutional difficulties whenever possible. Boos v.

Barry, 485 U.S. 312, 330-31 (1988). In Boos, for example, the Court considered a

provision of federal legislation that made it unlawful “to congregate within 500 feet

of any [embassy, legation, or consulate] and refuse to disperse after having been

ordered so to do by the police.” Id. at 329 (internal quotation omitted). The Court

observed that “[s]tanding alone, this text is problematic because it applies to

any congregation within 500 feet of an embassy for any reason.” Id. at 330 (first

emphasis added). Nonetheless, citing the “duty to avoid constitutional difficulties by

[adopting a narrowing construction] if such a construction is fairly possible,” the

Court construed the statute narrowly to permit the dispersal of only congregations that

are directed at an embassy, and to allow dispersal “only when the police reasonably

believe that a threat to the security or peace of the embassy is present.” Id. at 330-31

(internal quotation omitted). Similarly, in United States v. X-Citement Video, Inc.,

513 U.S. 64 (1994), the Court emphasized that “it is incumbent upon” a federal court

to read a statute to eliminate constitutional doubts, “so long as such a reading is not

plainly contrary to the intent of Congress.” Id. at 78.

The challenged provision in this case provides in part that “[a] debt relief

agency shall not . . . advise an assisted person or prospective assisted person to incur

more debt in contemplation of such person filing a case under this title.” 11 U.S.C.

§ 526(a)(4). Milavetz argues that according to this provision, a debt relief agency may

not advise a client to incur any debt for any purpose when the client is contemplating

the filing of a petition for bankruptcy. As such, Milavetz contends that an attorney

could be sanctioned for “fulfilling his duty to his client to give legal and appropriate

advice not otherwise prohibited by the Bankruptcy Code.” (Brief of Appellee 30).

Even under Milavetz’s broad construction of the statute, a facial challenge resting on

a “few hypothetical situations,” ante, at 12, is unlikely to justify invalidating a statute
-21-

in all of its applications, because “the mere fact that one can conceive of some

impermissible applications of a statute is not sufficient to render it susceptible to an

overbreadth challenge.” Vincent, 466 U.S. at 800. 

It is unnecessary to resolve whether § 526(a)(4) is impermissibly overbroad

when given its broadest reading, however, because the government suggests an

acceptable narrowing construction of the statute that would avoid most constitutional

difficulties. The government contends that “in contemplation of” filing for

bankruptcy is a term of art that denotes an action taken with the intent to abuse the

protections of bankruptcy laws. Under this view, the statute should be construed to

prohibit only advice that a client engage in conduct for the purpose of manipulating

the bankruptcy system.

The text, structure, and legislative history of § 526(a)(4) provide adequate

support for a narrowing construction. Particularly given the latitude of federal courts

to narrow a text to avoid constitutional difficulties, see Boos, 485 U.S. at 330-31, the

words “in contemplation of . . . filing a case” need not create impermissible

overbreadth. Rather, we may recognize that the phrase “in contemplation of” has been

construed in the bankruptcy context to mean actions taken with the intent to abuse the

protections of the bankruptcy system. Black’s Law Dictionary reflects this

understanding, defining “contemplation of bankruptcy” as “the thought of declaring

bankruptcy because of the inability to continue current financial operations, often

coupled with action designed to thwart the distribution of assets in a bankruptcy

proceeding.” Black’s Law Dictionary 336 (8th ed. 2004) (emphasis added).

American and English authorities construing the bankruptcy laws also support the

proposition that the words “in contemplation of” may be understood to require an

intent to abuse the bankruptcy laws. In re Pearce, 19 F. Cas. 50, 53 (D. Vt. 1843)

(No. 10873) (concluding that an act was done “in contemplation of bankruptcy” if it

was done “in anticipation of breaking or failing in his business, of committing an act

of bankruptcy, or of being declared bankrupt at his own instance, on the ground of
-22-

inability to pay his debts, and intending to defeat the general distribution of effects,

which takes place under a proceeding in bankruptcy.”) (emphasis added); Morgan v.

Brundrett, 5 Barn. & Ad. 289, 296, 110 Eng. Rep. 798, 801 (K.B. 1833) (Parke, J.)

(interpreting “in contemplation of bankruptcy” to mean that “the payment or delivery

must be with intent to defeat the general distribution of effects which takes place

under a commission of bankruptcy.”); Fidgeon v. Sharpe, 5 Taunt. 539, 545-46, 128

Eng. Rep. 800, 802-03 (C.P. 1814) (Gibbs, C.J.) (An act made in contemplation of

bankruptcy “must be intended in fraud of the bankrupt laws.”); cf. Buckingham v.

McLean, 54 U.S. 151, 167 (1851) (“To give to these words, contemplation of

bankruptcy, a broad scope, and somewhat loose meaning, would not be in furtherance

of the general purpose with which they were introduced.”); id. at 169 (relying on

English bankruptcy decisions as instructive authority on meaning of the former

Bankrupt Act). Our duty to construe the statute to avoid constitutional difficulties

counsels that we should look to these authorities for a plausible alternative to the

broad construction urged by Milavetz.

The structure of § 526(a)(4) also supports a narrowing construction. The

prohibitions of this statute can be enforced only through the civil remedies provided

in § 526(c). An attorney who violates § 526(a)(4) can be sanctioned in just three

situations: if a debtor sues the attorney for the available remedies – remittal of fees,

actual damages, and reasonable attorney’s fees and costs; if a state attorney general

sues for a resident’s actual damages; or if a court finds that the attorney intentionally

violated § 526(a)(4), and chooses to “impose an appropriate civil penalty.” 11 U.S.C.

§ 526(c). The remedies for a violation thus emphasize actual damages. But legal and

appropriate advice that would be protected by the First Amendment, yet prohibited by

a broad reading of § 526(a)(4), should cause no damage at all. If an attorney advises

a debtor to refinance his home to lower mortgage payments, or to purchase a reliable

car to enable him to pay off his debts, see ante, at 11-12, then a debtor following that

advice would suffer no damage. There is no reason to believe that a client could

recover the remittal of attorney’s fees or that a court would find a civil penalty
-23-

“appropriate” as a remedy for legal advice that benefits both the debtor and his

creditors. Rather, a debtor is likely to have a remedy against an attorney only in the

case of an abusive bankruptcy petition, where the debtor may suffer damages if the

petition is dismissed as abusive, see 11 U.S.C. § 707(b)(1), and where an attorney

general or a court has reason to seek or impose sanctions against an abusive debt relief

agency. The remedial focus of § 526 thus bolsters the proposition that § 526(a)(4)

was aimed only at advice given by a debt relief agency that is designed to abuse the

bankruptcy process.

The incorporation of an abusive purpose requirement into § 526(a)(4) is also

consonant with the evident purpose of the statute. The government argues, and

Milavetz acknowledges, that a principal goal of Congress in passing the statute was

to “preclude debtors from taking on more debt knowing that it will later be discharged

during bankruptcy.” (Brief of Appellee 34). A narrowing construction of § 526(a)(4)

is in accord with expressions of desire in the legislative history to address

“misconduct by attorneys and other professionals,” and “abusive practices by

consumer debtors who, for example, knowingly load up with credit card purchases or

recklessly obtain cash advances and then file for bankruptcy relief.” H.R. Rep. No.

109-31, pt.1, at 5, 15 (2005) (internal quotation omitted), as reprinted in 2005

U.S.C.C.A.N. 88, 92, 101. Milavetz itself argues that a broad construction of

§ 526(a)(4) “goes beyond” this congressional purpose, and is “absurd,” because it

would prevent an attorney from advising a client to take actions that might avoid the

need for filing bankruptcy altogether. (Brief of Appellee 34). Given our duty to

construe an Act of Congress in a manner that eliminates constitutional doubts, there

is no need to adopt a construction that one party says is absurd, that the other party

says was unintended by Congress, and that sweeps in salutary legal activity that would

be a strange target for a statute entitled the Bankruptcy Abuse Prevention and

Consumer Protection Act of 2005. 
-24-

For these reasons, I would reverse the district court’s decision declaring

unconstitutional the provision codified at 11 U.S.C. § 526(a)(4).

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